Slide 1: We're a company that delivers: HY19 Presentation
WE’RE A COMPANY THAT DELIVERS HY19 PRESENTATION
Slide 2: Agenda
Agenda IN SO − − Highlights Operating Performance MANY − − Interim Dividend Business Strategy WAYS − Outlook − Conclusion · FRE Half Year Results Presentation · AGENDA · Slide 2
Slide 3: Highlights
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Slide 4: General Highlights
General Highlights − Half on half revenue, earnings and dividend growth − Productivity growth through the courier fleet in residential areas − Development of IT capability to enable Pricing for Effort initiatives − New scanning technology for courier fleets implemented in Castle Parcels − Three acqu
Slide 5: Financial Highlights
Financial Highlights Dec-18 Dec-17 Increase NOTES Note $M $M % (i) Operating profit before interest, tax and amortisation, Revenue 314.8 292.1 7.7 before non-recurring items (ii) Operating profit before interest, tax and amortisation EBITA (before non-recurring items) (i) 50.7 49.2 3.0 (iii) Net pro
Slide 6: Non-Recurring Items
Non-Recurring Items 2018: Non-recurring benefit before tax of $1.4 million (no tax applicable) in respect of the gain arising during the half year upon the progressive recording of the replacement of earthquake-related damaged racking funded by insurance proceeds. A gain on the racking replacement a
Slide 7: Operating Performance
e;'4 OPERATING PERFORMANCE Freightways
Slide 8: Operating Revenue
Operating Revenue 700 1H 600 2H 500 400 $M 300 200 100 - 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Year Ended 30 June · FRE Half Year Results Presentation · OPERATING PERFORMANCE · Slide 8
Slide 9: EBITA
EBITA 100 1H 90 2H 80 70 NOTES This graph represents the 60 operating profit before interest, tax and amortisation of $M 50 intangibles, exclusive of any non-recurring items 40 30 20 10 - 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Year Ended 30 June · FRE Half Ye
Slide 10: Divisional Operating Performance
Divisional Operating Performance IM EP&BM Revenue EBITA* NOTES * Excluding non-recurring items 26% 28% 74% 72% · FRE Half Year Results Presentation · OPERATING PERFORMANCE · Slide 10
Slide 11: HY19 Express Package & Business Mail
HY19 Express Package & Business Mail Operating Revenue EBITDA $233.5m 7.8% $42.4m 6.6% EBITA EBITA Margin $38.6m 6.1% 16.5% · FRE Half Year Results Presentation · OPERATING PERFORMANCE · Slide 11
Slide 12: HY19 Information Management
HY19 Information Management * EBITDA, EBITA and EBITA Margin represent the operating results of the division, exclusive of any non-recurring items. Operating Revenue EBITDA $82.2m 7.6% $17.6m 1.5% EBITA EBITA Margin $14.7m 0.5% 17.9% · FRE Half Year Results Presentation · OPERATING PERFORMANCE · Sli
Slide 13: Balance Sheet – Key Points
Balance Sheet – Key Points − Total Assets have increased since FY18 by $17m, with higher trade and other receivables due to increased activity ($13m) contributing to higher recorded assets − Total Liabilities have increased since FY18 by $8m, with higher activities resulting in trade and other payab
Slide 14: Cash Flow – Key Points
Cash Flow – Key Points − Cash generated from operations of $52m was $2m below the PCP, reflecting timing of receipts from customers and payments to suppliers. Net cash inflows from operating activities (i.e. after deducting interest and tax payments) were also $2m below the PCP at $32m − Cash outflo
Slide 15: Capital Expenditure & Depreciation
Capital Expenditure & Depreciation 2019 2019 Half Year Full Year Actual Forecast $M $M Capital Expenditure 11 20 - 22 Depreciation 7 16 · FRE Half Year Results Presentation · OPERATING PERFORMANCE · Slide 15
Slide 16: Interim Dividend
INTERIM DIVIDEND
Slide 17: Interim Dividend
Interim Dividend − Interim dividend: 15 cps − Imputation credits: 5.8333 cps (at 28% tax rate) − Supplementary dividend: 2.6471 cps − Record date: 15 March 2019 − Payment date: 1 April 2019 − No DRP was offered in respect of this dividend · FRE Half Year Results Presentation · INTERIM DIVIDEND · Sli
Slide 18: Business Strategy
iia | $ mS Ur BUSINESS STRATEGY Freightways
Slide 19: Express Package & Business Mail: Residential Network Review
Express Package & Business Mail 1. Residential Network Review − Assess the opportunities across all of our brands to improve our delivery density, productivity and courier earnings Our objective is to improve our residential delivery productivity by at least 5% − Restructured 80 runs which resulted
Slide 20: Before Run Rationalisation – July 2018
Before Run Rationalisation – July 2018 East Coast Bays Deliveries by Courier Company · FNZC North Harbour Site Visit · EP OVERVIEW · · FRE Half Year Results Presentation · BUSINESS STRATEGY · Slide 20
Slide 21: After Run Rationalisation – November 2018
After Run Rationalisation – November 2018 East Coast Bays Deliveries by Courier Company · FRE Half Year Results Presentation · BUSINESS STRATEGY · Slide 21
Slide 22: Express Package & Business Mail: Pricing for Effort
Express Package & Business Mail 2. Pricing for Effort (PFE) − Recognise the lower density, the extra effort required, and therefore the higher cost incurred, for delivering to residential addresses and price these items accordingly. Our objective is to improve our pricing per item to fund higher cou
Slide 23: Business Delivery Zone Mapping
Business Delivery Zone Mapping · FRE Half Year Results Presentation · BUSINESS STRATEGY · Slide 23
Slide 24: Express Package & Business Mail: Visibility and Data Analytics
Express Package & Business Mail 3. Visibility and Data Analytics − Improve visibility for customers and receivers on the progress of their deliveries and improve reporting on every aspect of our business for our teams Our objective is to improve customer and receiver satisfaction and enable our team
Slide 25: Information Management
Information Management · FRE Half Year Results Presentation · BUSINESS STRATEGY · Slide 25
Slide 26: IM – Strong Market Position
IM – Strong Market Position New Zealand − Largest market share across core services − All-of-government contract renewed through to 2021 − Credibility with customers is helping to scale-up our emerging digital solutions − Archive volumes still growing – customer mix / pricing / risk all contribute t
Slide 27: Information Management: Facility Utilisation
Information Management 1. Facility Utilisation − Improve facility utilisation to achieve increased margins in the AU business, in particular. Our objective: 83% 70% FY19 NZ FY19 AU − Warehouse utilisation was 81% in NZ and 65% in Australia at the end of half year · FRE Half Year Results Presentation
Slide 28: Information Management: Growth in Digital Services
Information Management 2. Growth in Digital Services − Invest in further sales & marketing resource to be able to scale-up our digital revenue streams, which are currently ~ 10% of revenue for this division Our objective is to grow the revenue for these services and, through that scale, drive improv
Slide 29: Digital Growth Strategy – Digitalisation
Digital Growth Strategy – Digitalisation Scanning Data Extraction Data cleansing Data hosting or Paper remit to client • Surveys • OCR • In AU this • Within • Engineering • Delimiting involves E internal • Land & • Objective Discovery systems survey Coding tools • Or secure • Legal • Data entry back
Slide 30: Secure Destruction / Medical Waste
Secure Destruction 3. Secure Destruction / Medical Waste − Develop the niches within Secure Destruction and Medical Waste through start-ups, alliances and acquisitions to provide a national, high quality service offering to our customers Our objective is to establish a new arm of growth for Freightw
Slide 31: Medical Waste
Medical Waste − Strategic Rationale − Complementary to Secure Destruction (SD) Leverages SRX capabilities - fleets, facilities and systems First observed in North America (Stericycle) − Future off-set revenue stream if SD declines − Large market with many adjacencies. (e.g. nappy & hygiene, quar
Slide 32: Acquisitions & Alliances
Acquisitions & Alliances 1. Acquisitions completed during half year (Q1) − Bolt-on Secure Destruction business in WA − Medical Waste business in VIC − 75% share in a Digital Online back-up business servicing NZ & Australia 2. Continue to explore opportunities to add bolt-on acquisitions to current l
Slide 33: Outlook
Outlook image to go here OUTLOOK
Slide 34: Outlook
Outlook 1. Increased demand for services in both divisions 2. Continue to target year on year earnings growth for FRE 3. Expect that in FY20 our pricing and efficiency initiatives for B2C have gained greater traction 4. Investing for the future in terms of IT, sales and marketing resource 5. Capital
Slide 35: Conclusion
CONCLUSION @g Freightways he
Slide 36: Conclusion
Conclusion − FRE will continue to invest in its businesses to generate growth − There are opportunities in all lines of business to continue to grow and evolve services to meet customer demand − FRE remains entrepreneurial and resilient in the face of external factors − We are committed to improving
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