Trading Update and Completion of Big Chill Acquisition

NZX RELEASE

1 April 2020

TRADING UPDATE AND COMPLETION OF BIG CHILL ACQUISITION

Trading Update

Freightways’ businesses in NZ are all classed either as essential services or suppliers to an essential service
(such as our Information Management businesses which support hospitals and Government Departments).
This means that our networks are open for business for medical and pharmaceutical markets, as well as the
movement of perishable food items and home delivery of groceries.

In March, prior to Level 4 lockdown, we experienced strong trading, with volume up 3% YoY in Express
Package (EP). It is early into the lockdown, but we have seen a 65% decrease in hub & spoke EP volumes in
the first few days of lockdown. We expect our dedicated networks to remain at constant levels and home
delivery of food to increase. We expect business mail volumes to decline. Information Management will
have a drop in activity (which is 67% of the division’s total revenue), but storage revenue (which is 33% of
the division’s total revenue) will remain intact.

We are able to reduce our direct cost structure to reflect the reduced volumes and have taken decisive action
on this, including accessing Government subsidies.

It is too early to predict the impact on full year results, as essential services definitions are changing almost
daily – which affects our customers’ ability to operate. We will provide an update when we know more. In
the interim the company has good cash and committed funding availability and the ability to pull levers to
increase liquidity if the lockdown is extended significantly.

Completion of Big Chill Acquisition

On 30 October 2019, Freightways announced it had entered into a sale & purchase agreement to acquire Big
Chill Distribution Limited (Big Chill, or the Acquisition).

Further to the Overseas Investment Office approval announced on 16 March 2020, Freightways now
announces that the acquisition of Big Chill was completed today. To support our liquidity during this
disruptive period, we have agreed with the vendors of Big Chill to part settle the acquisition with $30m of
Freightways shares.

Freightways Chief Executive Officer, Mark Troughear, said “we are pleased to have completed the
acquisition of Big Chill and look forward to working alongside Big Chill’s founders and senior management
as we integrate the business into Freightways and develop a strategic new vertical for our business. In these
challenging times, Big Chill is demonstrating strong earnings resilience, which was a factor in our investment
decision. We are proud to now own a critical component of New Zealand’s food supply chain”

The attached presentation sets out additional information on the trading update and the Big Chill acquisition.

For further information please email:
Kelli-Anne.Ball@freightways.co.nz

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1
1 April2020
FREIGHTWAYS
TRADING UPDATE AND COMPLETION
OF ACQUISITION OF
BIG CHILL DISTRIBUTION LIMITED
1 April 2020

TRADINGUPDATE
Slide 2| © Freightways 2020
COVID-19
and
“Essential
Service”
provision
Lockdown
Impacts
•It is early days, but we have seen a 65% decrease in hub & spoke EP volumes in the first few days of lockdown
•We expect our dedicated networks to remain at constant levels and home delivery of food to increase
•We expect business mail volumes to decline
•Information Management will have a drop in activity (affecting the 67% of the division’s total revenue), while
storage revenue (which represents 33% of the division’s total revenue) will remain intact
•It is too early to predict the impact on the FY results as essential services definitions are changing almost daily –
which affects our customers’ ability to operate
•Freightways’ businesses in NZ are all classed either as essential services or suppliers to an essential service
(such as our Information Management businesses which support hospitals and Government Departments)
•This means that our networks are open for business for medical and pharmaceutical markets, as well as the
movement of perishable food items and home delivery of groceries
•In March, prior to lockdown, we experienced strong trading, with volume up 3% YoY in Express Package (EP)

TRADINGUPDATE
Slide 3| © Freightways 2020
Cost levers
Opportunity
•There are a number of opportunities that FRE is pursuing, including; increases in grocery home deliveries and
providing care packages to elderly via Countdown, exploring international air freight opportunities and servicing
the increasing demand for medical waste in Australia.
•The large Australian digitisation contract has commenced with digital data processing, however there may be
some delays in collection of hard copy records for digitisation
•Big Chill is trading well –it is also an essential service.
•We are able to reduce our direct cost structure to reflect the reduced volumes, including:
-Reducing our wage/salary bill to 80% of normal levels for April and applying for the government wage
subsidy scheme to help fund a portion of employees’ costs in NZ and AU
-Reduce air and road linehaulcapacity to match demand
-Contractors will access the wage subsidy in their own right to offset their reduction in earnings and we
will adjust routes to help reduce their costs

TRADING UPDATE
Slide 4| © Freightways 2020
Capital
Management
Debt
Outlook
•Following the acquisition of BCD, FRE retains in excess of $50m of debt headroom in its committed facilities
and is comfortable with headroom against bank covenants
•FRE’s banking syndicate remains supportive and we are currently exploring increases to existing facilities
should these be required
•Given the active scaling down of cash outflows, wherever practicable, FRE is expected to have debt headroom
for the foreseeable future, based on a sustained Level 4 lockdown
•Fully settled the interim dividend, payable 1 April 2020, with shares using the DRP and a placement for shares
not participating in the DRP; preserved $23m in cash
•Amended agreement to settle Big Chill acquisition with payment of $30m in FRE shares, balance in cash
•Management and the Board continue to monitor forecast cash flows and projected debt headroom and will
consider all available initiatives that will alleviate future pressure on cash and banking covenants
•There are a number of options for FRE to preserve cash if level 4 operates for an extended period of time
•It is too difficult to predict outcomes for FY20 at this early stage. We will provide an update when we know more,
but in the interim the company has good cash and committed funding availability and the ability to pull levers if
the lockdown is extended significantly.

5
1 April2020
COMPLETION OF
ACQUISTION OF BIG CHILL
DISTRIBUTION
1 April 2020

DEMONSTRATING RESILIENCE
Slide 6| © Freightways 2020
Fresh food is a necessity -Big Chill is demonstrating its resilience to economic cycles
Big Chill is critical to the security of New Zealand’s food supply chain and accordingly is
fully operational during the Level 4 shut down
Big Chill will outperform its profit expectations for its financial year ended 31 March
2020
Big Chill has a diversified range of customers who distribute their products to a broad
base of supermarkets, food service, service stations, meal kits and retail outlets across
New Zealand -accordingly, any reduction in demand by individual customers or
channels is mitigated

MARKET LEADING OPERATOR
Big Chill is New Zealand’s leading temperature-controlled transport operator
200+
Chiller / freezer truck
and trailer fleet
2.24million
Shipments in 2019
500+
Active customers with
long tenure.Average
association of top 10
customers > 10 years
11,000sqm
Purpose-built depots
over 9sites nationwide,
growing 3PL facilities
Highly experienced
management with long
tenure
Over 95 years sector
experience across
management and vendor
shareholders
370+
Full time staff and
contractors
Slide 7| © Freightways 2020

OPPORTUNITIES
•Auckland facility expansion opening mid-April, will
be 20% utilised upon opening.
•There is soliddemand in the current temperature-
controlled 3PL market
New freezer
extension
New freezer
extension
Existing chiller
Existing chiller
Auckland expansion
Existing office
with new fit out
Cold 3PL
expansion
EP
Collaboration
•Explore last mile service / temperature-controlled
fleets
•Linehaul, procurement and technology opportunities
•Cross-selling across respective customer bases and
utilisation of respective network strengths


Slide 8| © Freightways 2020

FINANCIAL PERFORMANCE
Revenue
Year ending 31 March
Slide 9| © Freightways 2020
EBIT
Year ending 31 March
Assets
The expanded Auckland 3PL
operation will be operational mid-
April
Two further facility expansions in
Wellington and Hastings totalling
$1.5m over FY20/21 to support
revenue growth
Approximate 1/3 : 2/3 leased
owned fleet split. Freightways will
assess the potential benefits of
conversion to an owner-driver
model
Other than new facilities, forecast
capital expenditure is expected to
be approximately equal to
depreciation (currently $4m p.a.)
•FY18: Step-change in growth from new customer contracts, which caused a temporary reduction in profit as
the new network was established, reduction in profit from the closure of SH1 at Kaikoura which incurred
costs greater than those recovered from surcharges.
0
20
40
60
80
100
120
FY17FY18FY19FY20
Revenue ($m)
0
2
4
6
8
10
12
14
FY17FY18FY19FY20
EBIT ($m)

TRANSACTION FUNDING
•Initialpurchasepricepaymentincashof$117mforthebusinesshasbeenpaidbyacombinationofusingcommitted
debtfacilitiesand,inanamendmenttotheagreement,byissuingFreightwaysshares($30m)
•Thefinalpurchasepricepaymentexpectedtobepaidinlate2022willrepresent20%ofBigChill’sEnterpriseValue
asat30June2022,calculatedusingactualFY22EBITatanagreedmultipledeterminedbyEBITgrowthachieved
forFY21
•Post-acquisitionFreightwayshasapro-formanetdebt/LTMEBITDAofapproximately2timesandcommitteddebt
facilityheadroomof~$50m
Slide 10| © Freightways 2020
3.Earnings before interest and tax (not adjusted for IFRS16 lease accounting)

THANK YOU
Slide 11| © Freightways 2020
Disclaimer: This presentation has been prepared by Freightways Limited ("Freightways") for information purposes only. This presentation is not a product disclosure statement, prospectus or investment statement. Nothing in
this presentation constitutes an invitation to subscribe for shares, securities or financial products in Freightways. Nothinginthis presentation constitutes legal, accounting, financial or taxation advice or any other advice of
any kind. Any investor should consult their own professional advisors and conduct their own independent investigation of Freightways and the information contained in this presentation, including any statements relating to
the future performance of Freightways. The information in this presentation is given in good faith and has been obtained fromsources believed to be reliable and accurate at the date of this presentation. This presentation
includes forward‐looking statements regarding future events and the future financial performance of Freightways and Big Chill Distribution (“Big Chill”). Such forward‐looking statements are based on current expectations and
involve risks and uncertainties. Actual results may be materially different from those stated in any forward‐looking statements. Nothing contained in this document is or should be relied on as a promise as to the future
performance or condition of Freightways or Big Chill or as to any other future events. Except as required by law or the NZX Listing Rules, Freightways undertakes no obligation to update any forward‐looking statements,
whether as a result of new information, future events or otherwise or to report against any forward‐looking statements. None of Freightways, their affiliates, or their respective advisers or representatives, give any warrantyor
representation as to the accuracy or completeness of the information contained in this presentation, and exclude their liabilityto the maximum extent permitted by law.