Trading Update and 1H20 Guidance

17 January 2020
Company Announcement




TIL LOGISTICS GROUP: TRADING UPDATE AND 1H20 GUIDANCE

New Zealand freight and logistics company, TIL Logistics Group Limited (NZX:TLL, “TIL”) is today providing
a trading update and guidance for the six months ended 31 December 2019 (1H20) and an outlook for
the full year ending 30 June 2020. The update follows the completion of the Christmas trading period
and a detailed performance review across the business.

As noted at the Annual Meeting in October 2019, the higher cost environment and softening business
confidence continue. While market share has been retained across all divisions, sales volumes have been
affected, particularly in the Freight division, with increasing competitive pricing pressure, lower sales
across a range of customers and a softer Christmas trading period than anticipated, as well as the loss of
a significant customer for NZL
1
. Overall, 1H20 EBITDA for the Freight division is expected to be
approximately $4.1m lower than 1H19.

Revenue for the Bulk Liquids division is in line with the prior year, however the expected uplift from a
major new contract has not yet eventuated. Additional costs have been incurred to serve this key
customer and TIL is progressing discussions with that customer to recover those costs under the terms of
its contract.

Significant investment has been made into new warehouse builds in 2019 and 2020. These are resulting
in significant additional capacity in both the North and South Islands which will assist future sales, with a
corresponding increase in overheads as expected.

Specialised Lifting and Transport continues to be a solid acquisition, with a number of large windfarm
projects underway or in the pipeline, in addition to other specialised moving projects. A strong first half
performance is predicted to improve further in the second half as new major projects come onstream.

The International division’s 1H20 performance is above the prior year and it continues to deliver a
consistent trading performance, with a large event logistics project pre-Christmas, on top of the normal
seasonal lift in inbound volumes.

Taking the above into account, TIL is expecting 1H20 EBITDA of approximately $8.4 - $8.8 million
(1H19: $14.1 million). This excludes the impact of IFRS16. Given the reduction in expected 1H20
earnings, and in line with its dividend policy, the Company is not expecting to declare an interim
dividend. Dividends are expected to resume in 2H20.

TIL has initiated a number of cost savings initiatives and management changes in response to the
performances of the Freight and Bulk Liquid divisions in the first six months of FY20. Several roles have
been disestablished from 1 January 2020 and a new management structure has been proposed for the
Freight division that will refresh TIL’s customer and sales focus. In addition, a new position of Company

1
Following a restructure, from 1 July 2019 the NZL Group Limited freight and warehousing services were separated into the
relevant TIL divisions. Previously NZL Group was reported as part of the Warehousing & Logistics division.

Secretary & General Counsel has been created, which will be filled by Charles Bolt (most recently
Company Secretary & General Counsel of Fletcher Building) from the end of January 2020. Charles’
appointment is expected to result in further improvements in TIL’s management of its customer
contracts and commercial matters.

TIL retains the support of its banking partner and is in discussions with ASB on amendments to the terms
of its funding arrangements to ensure it remains in compliance with its banking covenants.

Management’s focus is on using the expanded capacity and services across the group to grow revenue
from new and existing customers; and to drive further efficiencies and cost savings, a task that will be
assisted by the new technology system which is currently being implemented. A number of new and
growth opportunities have been identified across a range of sectors and TIL is currently tendering for a
number of multi-million dollar contracts with new and existing customers.

A stronger FY20 second half is anticipated with 2H20 EBITDA expected to be in line with the prior
comparative period (2H19: $14.0m). This is principally due to significant new work being secured by TIL’s
Specialist division as well as anticipated improvements in the Freight business.

TIL will be releasing its half year results to 31 December 2019 to the market in mid/late February 2020.

ENDS

For further information and media assistance, please contact:

Alan Pearson
Chief Executive Officer
Phone: +64 6 7559457
Email: alan.pearson@til.kiwi

Lee Banks
Chief Financial Officer
Phone: +64 27 525 2876
Email: lee.banks@til.kiwi
Jackie Ellis
Media Liaison
Phone: + 64 27 246 2505
Email: jackie@ellisandco.co.nz
About TIL Logistics Group Limited (TLL)

TLL is one of the largest domestic freight and logistics businesses in New Zealand, with a nationwide
network of branches, depots and warehouses. TLL’s activities include transporting and warehousing
freight throughout New Zealand and co-ordinating freight movements offshore with the assistance of
international alliances. TLL also has a specialist road tanker division which is one of the largest operators
in the New Zealand fuel delivery market.