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 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%

Operating Performance

• 11% revenue growth compared to Dec 2004

• 5-year compound average annual revenue growth of 8%

Operating Revenue

-

50

100

150

200

250

Jun99 Jun00 Jun01 Jun02 Jun03 Jun04 Jun05 Jun06

Year Ended

$M 2nd Half

1st Half

Where Revenue Growth Has Come From

100

105

110

115

120

125

130

135

2005 Organic Pricing New business Acquisition 2006

Growth drivers

$M

117 1%

4%

5% 1% 130

EBITA

• 10% EBITA growth compared to Dec 2004

• 5-year compound average annual EBITA growth of 18%

-

10

20

30

40

50

Jun99 Jun00 Jun01 Jun02 Jun03 Jun04 Jun05 Jun06

Year Ended

$M2nd Half

1st Half

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

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

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

2006Half 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

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