Slide 1: Half Year Presentation
Half Year Presentation 7 February 2006
Slide 2: Relation to NZX announcement and media release
This presentation relates to the Freightways Limited NZX announcement and media release of 7 February 2006. As such it should be read in conjunction with, and is subject to the explanations and views contained in, those releases.
Slide 3: Presentation
Presentation 2006 Half year highlights Operating performance Business strategy Outlook
Slide 4: Freightways
Freightways
Slide 5: 2006 Half Year Highlights
2006 Half Year Highlights
Slide 6: General Highlights
General Highlights • All subsidiaries delivered improved year on year performance • Strategies continue to realise profitable growth in both ‘Core’ Express Package and ‘Emerging’ Business Mail and Information Management markets • Kiwi Express has performed fully to expectation since acquisition in O
Slide 7: Financial Highlights
Financial Highlights Dec-05 Dec-04 variance $000 $000 % Operating revenue 129,796 117,226 11% EBITDA 31,043 28,212 10% EBITA 28,668 26,000 10% NPAT 13,536 11,238 20% NPATA 16,006 13,785 16% Earnings per share (NPAT) 11 cents 9 cents 20%
Slide 8: Operating Performance
Operating Performance
Slide 9: Operating Revenue
Operating Revenue 250 200 150 $M 2nd Half 100 1st Half 50 - Jun99 Jun00 Jun01 Jun02 Jun03 Jun04 Jun05 Jun06 Year Ended • 11% revenue growth compared to Dec 2004 • 5-year compound average annual revenue growth of 8%
Slide 10: Where Revenue Growth Has Come From
Where Revenue Growth Has Come From 135 5% 1% 130 130 125 4% 120 117 1% $M 115 110 105 100 2005 Organic Pricing New business A cquisition 2006 Growth drivers
Slide 11: EBITA
EBITA 50 40 30 2nd Half $M 20 1st Half 10 - Jun99 Jun00 Jun01 Jun02 Jun03 Jun04 Jun05 Jun06 Year Ended • 10% EBITA growth compared to Dec 2004 • 5-year compound average annual EBITA growth of 18%
Slide 12: Drivers of EBITA Growth
Drivers of EBITA Growth • Successful implementation of growth strategies • Disciplined margin focus relating to new business • Successful implementation of pricing strategies to lessen the impact of increased costs
Slide 13: Balance Sheet
Balance Sheet • Continuation of negative working capital position • Increase in intangibles of $1m (net of amortisation), due to Kiwi Express acquisition for $3.5m • Goodwill amortised over 20 years ($2.5m half year charge) • Net bank borrowings increased by $2m only
Slide 14: Cash Flows
Cash Flows • Cash generated from operations of $27m reflects strong trading result • Interest paid at expectation and below last year • Capital expenditure at expectation of $4m for the half year • Acquisitions for the half year were $3.6m in total
Slide 15: Dividends
Dividends Dec-05 Dec-04 Dec-03 Dividend declared $10.90m $9.45m $7.25m Cents per share 8.50 7.50 5.85 Key points: • Increase of 13% compared to 2004 • Fully Imputed • Record date 17 March 2006 • Payable 31 March 2006
Slide 16: Finance Facilities
Finance Facilities • Finance facilities include $140m core debt facility and $15m acquisition facility • Net debt of $126m at 31 December 2005 • Acquisition of Kiwi Express funded using core debt facility
Slide 17: Business Strategy
Freightways Business Strategy Hubs Shuttle Links Courier "Spoke" to/from area Geographic Area
Slide 18: Business strategy
Business strategy • Continued development of growth opportunities in Freightways’ existing three core markets • Positioning, People, Performance, Profit • Explore complementary growth opportunities
Slide 19: Outlook
Freightways Outlook
Slide 20: Capital expenditure
Capital expenditure 2006 Half Year Full Year Actual Forecast Capital expenditure $4.0m$7.8m Depreciation $2.4m$4.8m • 2005/06 includes stepped investment in core IT infrastructure
Slide 21: Outlook
Outlook • Existing customers are expected to continue to grow at a lower rate than the previous year • Investment in people and infrastructure to drive/support growth • Characteristics of competitive environment expected to remain unchanged • FRE competitive advantage will be further enhanced throug
Slide 22: Summary
Summary Strong successful business Positioned to deliver continuing earnings growth Delivering an attractive dividend yield