Full Year Presentation 8 August 2005
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Transcript of Full Year Presentation 8 August 2005
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Full Year Presentation
8 August 2005
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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.
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Presentation
2005 highlights
Operating performance
Business strategy
Outlook
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2005 Highlights
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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
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Financial Highlights
2005 2004 variance
$000 $000 %
Operating revenue 233,725 214,498 9%
EBITDA 54,996 45,618 21%
EBITA 50,539 40,714 24%
NPAT 21,991 16,137 36%
NPATA 26,948 21,081 28%
Earnings per share (NPAT) 17 cents 13 cents 30%
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Operating Performance
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• 9% revenue growth compared to 2004
• 5-year compound average annual revenue growth of 7%
Operating Revenue
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50
100
150
200
250
Jun99 Jun00 Jun01 Jun02 Jun03 Jun04 Jun05
Year Ended
$M 2nd Half
1st Half
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Where Revenue Growth Has Come From
180
190
200
210
220
230
240
2004 Organic Pricing Market share Acquisition 2005
Growth drivers
$M
214
4.5%3% 0.5% 1% 234
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EBITA
• 24% EBITA growth compared to 2004
• 5-year compound average annual EBITA growth of 19%
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10
20
30
40
50
Jun99 Jun00 Jun01 Jun02 Jun03 Jun04 Jun05
Year Ended
$M 2nd Half
1st Half
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Drivers of EBITA Growth
• Good cost control
• Disciplined margin focus relating to new business
• Favourable business mix
• Leverage gained by adding revenue to established national infrastructure
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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
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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)
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Dividends
Jun-05 Dec-04 Jun-04 Dec-03
Dividend declared $10.7m $9.45m $8.55m $7.25m
Cents per share 8.50 7.50 6.90 5.85
Full year (cps) 16.00 12.75
Key points:• Increase of 26% compared to 2004• Fully Imputed• Record date 16 September 2005• Payable 30 September 2005
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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
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Business Strategy
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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
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Outlook
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Capital expenditure
2006 2005Forecast Actual
Capital expenditure $7.2m $8.6m
Depreciation $5.3m $4.5m
• 2005/06 includes stepped investment in core IT infrastructure
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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
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Summary
Strong successful business
Positioned to deliver continuing earnings growth
Delivering an attractive dividend yield