Trading Update

NZX Announcement & Media Release


26 October 2017
Trading Update

An update on the unaudited trading performance of Freightways Limited (Freightways) for the three
months ended 30 September 2017 is provided below.

Freightways’ 1
st
quarter result (unaudited):


Quarter ended:


Note
Sep-17
$000
Sep-16
$000
Variance
Operating revenue

143,236 133,868 7.0%
EBITDA*
(i)
26,938 24,917 8.1%
EBITA*
(ii)
23,561 22,137 6.4%
NPATA*
(iii)
15,515 14,566 6.5%
NPAT*
(iv)
15,051 14,148 6.4%

Notes:
(i) Operating profit before interest, tax, depreciation and amortisation. (ii) Operating profit before
interest, tax and amortisation. (iii) Net profit after tax (NPAT), before amortisation. (iv) Profit for the
period attributable to shareholders.

* To enable an accurate comparison of the underlying operating performance of the company, the 2016
EBITDA and EBITA results are presented exclusive of a net $542k benefit, being the difference between
a $934k non-cash benefit relating to earn-out payments not required to be paid and $392k of one-off
costs relating to the relocation of our Sydney businesses. The net benefit after tax excluded from the
2016 NPATA and NPAT is $660k.

This first quarter result represents a sound start to the financial year, the highlights being; the strong
revenue growth in the express package & business mail division, the completion of our transition to new
premises in Christchurch and the stepped earnings improvement in the information management
division.

Express Package & Business Mail division
This division’s unaudited result is as follows:


Quarter ended:


Sep-17
$000
Sep-16
$000
Variance
Operating revenue
105,340 98,218 7.3%
EBITDA
18,185 17,317 5.0%
EBITA
16,537 16,159 2.3%
EBITA Margin
15.7% 16.5%


Revenue growth in this first quarter has increased above the positive growth experienced throughout the
prior comparative period (pcp). Operating costs include the higher cost of recent investment in additional
airfreight capacity and premises, including related one-off transition costs during the quarter to complete
the merger of the operations of four of our businesses in Christchurch into a single operating team. When
compared to the pcp, there has been an increase of approximately $0.3m in depreciation relating to our
newly-commissioned automation equipment and related IT. The EBITDA and EBITA increases above
the pcp reflect a sound first quarter start to the 2018 financial year.

Information Management division
This division’s unaudited result is as follows:


Quarter ended:


Sep-17
$000
Sep-16
$000
Variance
Operating revenue
38,379 35,937 6.8%
EBITDA*
9,245 7,995 15.6%
EBITA*
7,923 6,783 16.8%
EBITA Margin*
20.6% 18.9%


* The 2016 earnings results above have been adjusted, as discussed in the aforementioned consolidated
result.

Sound revenue growth and improved performance at TIMG AU, including from its subsidiary business
of LitSupport, contributed to this strong earnings result. Also included in this quarter’s result is the first
month’s trading from our new Medical Waste business that was acquired effective from 1 September
and which is trading to expectation.

Corporate
Corporate costs continue to be well-contained and first quarter capital expenditure is within budgeted
expectations.

Freightways' financial performance over the longer term
The graphs below demonstrate the strong historical performance of Freightways:

Freightways Operating Revenue



Freightways EBITA*


* This EBITA graph represents the operating results of the company, exclusive of any non-recurring
items.




-
100
200
300
400
500
600
20042005200620072008200920102011201220132014201520162017
$M
Year Ended 30 June
-
10
20
30
40
50
60
70
80
90
100
20042005200620072008200920102011201220132014201520162017
$M
Year Ended 30 June
1
st
half 2
nd
half

Outlook
The markets in which Freightways operates in both New Zealand and Australia remain positive. The
increased volume and activity, compared to the pcp, that is evident in this trading update has provided a
sound start to the 2018 financial year. Accordingly, Freightways continues to target year-on-year
earnings growth.

Within the express package & business mail division, investment has been made in capacity for both
airfreight and larger premises on Auckland’s North Shore. New Zealand Couriers will relocate there
during October 2017, followed by Post Haste and Castle Parcels in July 2018. This capacity, which is
initially not fully-utilised, comes at some cost, but enables us to better service current volumes and
projected growth. Within the information management division, the better results currently being
achieved at TIMG Australia, compared to the pcp, are expected to continue to contribute to the overall
positive performance of this division.

Overall capital expenditure for the 2018 financial year is now expected to be approximately $14 million.
Operating cash flows are expected to remain strong throughout the 2018 financial year.

Strategic growth opportunities, including acquisitions and alliances that complement existing
capabilities, will be executed where they make commercial sense.

ENDS

For further information please contact
Dean Bracewell
Managing Director
Freightways Limited
+64 274 528 327