Transcript Document
Half Year Presentation 7 February 2006 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. Presentation 2006 Half year highlights Operating performance Business strategy Outlook 2006 Half Year 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 October 2005 Financial Highlights Dec-05 Dec-04 $000 $000 129,796 117,226 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% 11 cents 9 cents 20% Operating revenue Earnings per share (NPAT) variance % Operating Performance 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% Where Revenue Growth Has Come From 135 5% 130 130 4% 125 120 1% 117 1% $M 115 110 105 100 2005 Org a nic P ric ing N e w b us ine s s Growth drivers A c q uis it io n 2006 EBITA 50 40 $M 30 2nd Half 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% 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 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 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 Dividends Dividend declared Cents per share Dec-05 Dec-04 Dec-03 $10.90m $9.45m $7.25m 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 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 Business Strategy Business strategy • Continued development of growth opportunities in Freightways’ existing three core markets • Positioning, People, Performance, Profit • Explore complementary growth opportunities Outlook Capital expenditure 2006 Half Year Actual Full Year Forecast Capital expenditure $4.0m $7.8m Depreciation $2.4m $4.8m • 2005/06 includes stepped investment in core IT infrastructure 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 through additional customer-oriented technology solutions • Consistent application of proven market strategies Summary Strong successful business Positioned to deliver continuing earnings growth Delivering an attractive dividend yield