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Freightways Limited NZX 2005 Year Presentation

This presentation showcases 2005 highlights, financial performance, business strategy, and outlook for Freightways Limited. It discusses operating revenue, EBITA growth, cash flows, balance sheet, dividends, finance facilities, and capital expenditure. The business strategy focuses on growth opportunities and investing in IT and infrastructure. The outlook includes a forecast for capital expenditure and expectations for the economy and competitive environment.

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Freightways Limited NZX 2005 Year Presentation

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  1. Full Year Presentation 8 August 2005

  2. This presentation relates to the Freightways Limited NZX announcement and media release of 8 August 2005. As such it should be read in conjunction with, and is subject to the explanations and views contained in, those releases.

  3. Presentation • 2005 highlights • Operating performance • Business strategy • Outlook

  4. 2005 Highlights

  5. General Highlights • All subsidiaries have performed very well • Strategies continue to realise profitable growth in both ‘Core’ Express Package and ‘Emerging’ Business Mail and Information Management markets • Archive Security acquisition performed fully to expectation during first full year of ownership

  6. Financial Highlights

  7. Operating Performance

  8. 2nd Half 1st Half Operating Revenue • 9% revenue growth compared to 2004 • 5-year compound average annual revenue growth of 7%

  9. Where Revenue Growth Has Come From

  10. 2nd Half 1st Half EBITA • 24% EBITA growth compared to 2004 • 5-year compound average annual EBITA growth of 19%

  11. Drivers of EBITA Growth • Good cost control • Disciplined margin focus relating to new business • Favourable business mix • Leverage gained by adding revenue to established nationalinfrastructure

  12. Cash Flows • Cash generated from operations of $55m reflects strong EBITDA result • Capital expenditure at expectation of $8.6m • Borrowings reduced by $4m during the year

  13. Balance Sheet • Continuation of strong negative working capital position • Increase in fixed assets of $4m (net of depreciation) • Reduction in bank borrowings of $4m • Goodwill amortised over 20 years ($5m annual charge)

  14. Dividends • Key points: • Increase of 26% compared to 2004 • Fully Imputed • Record date 16 September 2005 • Payable 30 September 2005

  15. Finance Facilities • Refinancing completed November 2004 to replace subordinated debt with core bank debt • Interest savings of approximately $500k p.a. flow from 1 July 2005 • New finance facility provides $140m core debt and $15m acquisition facility • Debt drawn to $127m at 30 June 2005

  16. Business Strategy

  17. Business strategy • Continued development of growth opportunities in Freightways’ existing three core markets • Positioning, People, Performance, Profit • Explore incremental and complementary growth opportunities • Invest in IT and infrastructure

  18. Outlook

  19. Capital expenditure 2006 2005 Forecast Actual Capital expenditure $7.2m $8.6m Depreciation $5.3m $4.5m • 2005/06 includes stepped investment in core IT infrastructure

  20. Outlook • A less buoyant economy is expected • Investment in people and infrastructure • Characteristics of competitive environment expected to remain unchanged • Consistent application of proven market strategies • All subsidiaries well positioned to accommodate growth • Positive outlook for shareholders and all other stakeholders

  21. Summary • Strong successful business • Positioned to deliver continuing earnings growth • Delivering an attractive dividend yield

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