Freightways Group Limited · NZX:FRW
Freightways — H1 FY2022 Earnings Presentation
36 slides from Freightways's earnings presentation, Feb 21, 2022
Slide 1: HY22 Results
HY22 RESULTS For the six months ending 31 December 2021 21 February 2022 Mark Troughear | Chief Executive Stephan Deschamps | Chief Financial Officer NZX | FRE
Slide 2: Disclaimer
Disclaimer PLEASE READ THIS PAGE BEFORE THE REST OF THE PRESENTATION READ THIS PRESENTATION WITH THE FINANCIAL STATEMENTS The financial results in this presentation should be read in conjunction with the abridged financial statements for the six months ended 31 December 2021 which can be found in th
Slide 3: Agenda and Presenters
Agenda Presenters 1. Introduction and Highlights 2. Financial Summary 3. Business Performance 4. Outlook 5. Conclusion Mark Troughear Stephan Deschamps Chief Executive Chief Financial Officer HY22 Results Presentation Neil Wilson Steve Wells General Manager General Manager of Express Package Slide 3
Slide 4: HY2022 Highlights
HY2022 Highlights Strong recovery, after Covid lockdowns, in the 2nd quarter Market share gains in all businesses as result of service performance Q2 EBITA growth of 20% (before change in fair value of contingent consideration – BCD) H1 revenue growth of 7.7% H1 EBITA growth of 5.6% and NP
Slide 5: Impact of COVID-19
Impact of COVID-19 HY COVID LOCKDOWN IMPACT OMICRON As discussed in the quarterly update on 28th October, in August AU has felt the impact of Omicron in January and February this 2021, New Zealand entered an alert level 4 lockdown. year. Under alert level 4, activity levels are significantly i
Slide 6: Financial Summary
Financial Summary FOR THE SIX MONTHS ENDED 31 DECEMBER 2021 (UNAUDITED) HY22 HY21 Change Note $m $m % Revenue 442.0 410.3 7.7 EBITA, before change in fair value of contingent consideration – Big Chill Distribution i. 74.4 70.5 5.6 Limited (BCD) (non-GAAP) Change in fair value of contingent considera
Slide 7: Revenue Segmentation
Revenue Segmentation FOR THE SIX MONTHS ENDED 31 DECEMBER 2021 (UNAUDITED) HY22 HY21 Change $m $m % Express package & refrigerated transport 321.3 296.0 8.6 Postal 23.8 24.8 (4.3) Storage & handling 29.8 30.0 (0.8) Destruction activities 42.0 35.5 18.2 HY22 Results Presentation Other 25.1 23.9 4.9 T
Slide 8: Express Package & Business Mail
Express Package & Business Mail FOR THE SIX MONTHS ENDED 31 DECEMBER 2021 (UNAUDITED) HY22 HY21 Change $m $m % Operating Revenue 351.1 327.7 7.2 EBITDA 76.3 73.9 3.3 EBITA 59.8 56.9 5.1 EBITA Margin 17.0% 17.4% HY22 Results Presentation The New Zealand Covid Level 4 lockdown in August - September
Slide 9: Information Management
Information Management FOR THE SIX MONTHS ENDED 31 DECEMBER 2021 (UNAUDITED) HY22 HY21 Change $m $m % Operating Revenue 90.0 84.9 6.0 EBITDA 29.3 26.5 10.6 EBITA 18.6 15.6 19.3 EBITA Margin 20.7% 18.4% HY22 Results Presentation The New Zealand Covid Level 4 lockdown in August - September 2021 is e
Slide 10: Capital Expenditure
Capital Expenditure FOR THE SIX MONTHS ENDED 31 DECEMBER 2021 (UNAUDITED) 2022 Full Year Forecast 2021 Full Year Actual $m $m Capital Expenditure 24 – 26 18 Depreciation and software amortisation (including impact of NZ IFRS 16) 59 57 Depreciation and software amortisation (excluding impact of NZ IF
Slide 11: Capital Management Policy
Capital Management Policy CAPITAL MANAGEMENT PRINCIPLES Targeting solid Investment Grade credit profile, at a level that INTERIM DIVIDEND 18 CPS minimises the cost of capital. Range of Net Debt / EBITDA between 2x and 3x. 7.00 CPS (FULLY IMPUTED AT 28% TAX IMPUTATION CREDITS RATE) DIVIDEND POLICY
Slide 12: The Freightways Blueprint
Slide 12 HY22 Results Presentation The Freightways Blueprint
Slide 13: Express
EXPRESS HY22 Results Presentation Slide 13 Steve Wells| General Manager of Express Package Scott Hedgman| General Manager of Express Package Sales
Slide 14: Express Package Highlights
Express Package Highlights NETWORK EXPRESS COURIERS POINT TO POINT EXPRESS TEMPERATURE CONTROLLED EXPRESS In late 2021 we took on a number of contingency sites Revenue growth of 9% on the pcp. Expansion of the transport and 3PL footprint into the in Auckland and Christchurch to cope with volum
Slide 15: Express Package: B2C Network Item Growth
Express Package B2C NETWORK ITEM GROWTH: 2021 V 2019 Alert Level 4 17 August 2021 120% 100% 80% HY22 Results Presentation 60% 104% 93% 40% 85% 58% 48% 51% 20% 37% 25% 25% 25% 28% 27% 0% JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC 21 v 19 2021 vs 2019 Slide 15
Slide 16: Express Package: B2C Proportion
Express Package B2C PROPORTION 2021 CALENDAR YEAR Alert Level 4 17 August 2021 30% 25% 20% HY22 Results Presentation 15% 27% 26% 24% 24% 24% 10% 19% 18% 18% 18% 17% 18% 17% 5% 0% JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC Slide 16
Slide 17: Express Package: B2B Item Growth
Express Package B2B ITEM GROWTH 2021 VS 2019 Alert Level 4 1 2 34 5 20% 15% 10% 16% 14% 5% 9% 8% 6% 6% 6% HY22 Results Presentation 5% 3% 0% 0% JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC -5% 21 v 19 -3% -10% -15% -20% -25% -27% -30% NOTES 1. NZ Moves to AL4 17 August 2021 Slide 17 2. NZ Moves t
Slide 18: EP Total Item Growth YoY
EP Total Item Growth YoY (NETWORK COURIERS ONLY) Items: YoY Growth 2021 v 2020 2021 v 2019 60% 40% HY22 Results Presentation 20% 0% Wk 27 Wk 28 Wk 29 Wk 30 Wk 31 Wk 32 Wk 33 Wk 34 Wk 35 Wk 36 Wk 37 Wk 38 Wk 39 Wk 40 Wk 41 Wk 42 Wk 43 Wk 44 Wk 45 Wk 46 Wk 47 Wk 48 Wk 49 Wk 50 Wk 51 Wk 52 Jul Aug Sep
Slide 19: Business
BUSINESS HY22 Results Presentation Slide 19 Neil Wilson | General Manager
Slide 20: Business Mail Highlights
Business Mail Highlights DESPITE COVID IMPACTS AND DECLINING OVERALL MARKET 3 Year First Half Delivery Growth in DX Mail Network VOLUMES DX MAIL CONTINUES TO GROW 7% Increased market share by offering premium postal delivery services and expanding breadth of services. 6% of first half revenue for
Slide 21: Information
INFORMATION HY22 Results Presentation Slide 21 Mark Troughear | Chief Executive Neil Wilson | General Manager
Slide 22: Information Management Highlights
Information Management Highlights POSITIONING FOR DIGITAL GROWTH Scanning and digitalisation revenues during period were strong, up 39% on the pcp. Both NZ and AU have secured large government Digital Revenue TIMG NZ & AU projects which are expected to deliver $10m incremental revenue in FY22 and
Slide 23: Information Management Highlights: Storage Revenue
Information Management Highlights Storage Revenue TIMG NZ & AU STORAGE REVENUES RESILIENT, ACTIVITY COVID IMPACTED ~80% of document and media business relates to physical storage which provides sticky annuity revenues. Physical storage revenues have not been impacted by Covid. Activity revenue h
Slide 24: Waste
WASTE HY22 Results Presentation Slide 24 Mark Troughear | Chief Executive Officer Neil Wilson | General Manager
Slide 25: Waste Renewal Growth
Waste Renewal Growth POSITIONING FOR A SUSTAINABLE FUTURE Current State Future Strategy PAPER MEDICAL E-WASTE PRODUCT LIQUID PAPER Liquid SOFT FOOD TEXTILES WASTE DESTRUCTION BOARD Paper PLASTICS WASTE Board HY22 Results Presentation INTEGRATED LOGISTICS COLLECTION SERVICE AUTOMATED CUSTOMER REPORTI
Slide 26: Medical Waste Highlights
Medical Waste Highlights Growth over H1 was strong as a result of new business gains, solid organic volume and strong pricing. This continues the momentum built up over the previous financial year. Med-X Revenue Growth FY18-FY22 While we expect some pricing to moderate in H2 as supply and demand
Slide 27: ESG Update
ESG Update KEY AREAS OF FOCUS 3. GOOD HEALTH AND WELLBEING A strong focus on injury reduction, effective rehabilitation and mental wellbeing. 8. DECENT WORK AND ECONOMIC GROWTH Providing opportunities for career advancement and earnings improvement for our staff and contractors. HY22 Results Pre
Slide 28: Director Changes
DIRECTOR CHANGES At the end of March, Mark Verbiest will step down as chair and retire from the board as part of our director succession programme. Mark has served as a director of Freightways since 2010 and as Chair since 2018. Mark Cairns will take up the role of Chair. Mark has significant tr
Slide 29: Outlook & Conclusion
OUTLOOK & HY22 Results Presentation Slide 29 Mark Troughear | Chief Executive Officer
Slide 30: Outlook
Outlook Q2 delivered strong volume growth after the lockdowns of August and September. We expect that the impact of Covid-19 will continue in this financial year through: ‒ Higher volumes of home delivery (B2C) in periods of increased in-home isolation, ‒ Potential restrictions to either our cus
Slide 31: Conclusion
Conclusion To date FY22 has been "a half of two quarters" with the first quarter impacted by lockdowns and the 2nd quarter reflecting higher levels of residential express package delivery and strong medical waste growth. While the short term still has a level of uncertainty due to the impact of
Slide 32: Appendices
Slide 32 HY22 Results Presentation APPENDICIES
Slide 33: Reconciliation of Post-NZ IFRS16 to Pre-NZ IFRS16: Group
APPENDIX: RECONCILIATION OF POST-NZ IFRS16 to PRE-NZ IFRS16 FOR THE SIX MONTHS ENDED 31 DECEMBER 2021 (UNAUDITED) HY22 HY21 Change FREIGHTWAYS GROUP $m $m % Operating Revenue 442.0 410.3 7.7 EBITDA 102.3 80.0 27.9 Add back: Change in fair value of contingent consideration – BCD - 19.2 (100) Less: NZ
Slide 34: Reconciliation: Express Package & Business Mail
APPENDIX: RECONCILIATION OF POST-NZ IFRS16 TO PRE-NZ IFRS16 (UNAUDITED) HY22 HY21 Change EXPRESS PACKAGE & BUSINESS MAIL $m $m % Operating Revenue 351.1 327.7 7.2 EBITDA (after NZ IFRS16) 76.3 73.9 3.3 Less: NZ IFRS16 adjustment (12.4) (12.7) (2.3) EBITDA (before NZ IFRS16) 63.9 61.2 4.4 HY22 Result
Slide 35: Reconciliation: Information Management
APPENDIX: RECONCILIATION OF POST-NZ IFRS16 TO PRE-NZ IFRS16 (UNAUDITED) HY22 HY21 Change INFORMATION MANAGEMENT $m $m % Operating Revenue 90.0 84.9 6.0 EBITDA (after NZ IFRS16) 29.3 26.5 10.6 Less: NZ IFRS16 adjustment (8.4) (8.7) (4.4) EBITDA (before NZ IFRS16) 20.9 17.8 17.9 HY22 Results Presentat
Slide 36: HY22 Results Presentation
Slide 36 HY22 Results Presentation