Mainfreight Half Year 2021 Presentation

MAINFREIGHT
 
LIMITED
HALF
 
YEAR
 
RESULT
TO
 
30
 
SEPTEMBER
 
2020

Page
 
2
Result
 
Summary
Revenue
 
up
 
7.2%
 
to
 
$1.61
 
billion
 
(excluding
 
FX
 
up
 
5.2%)
An
 
increase
 
of
 
$108.39
 
million,
 
compared
 
to
 
the
 
same
 
period
 
last
 
year
Offshore
 
revenues
 
made
 
up
 
76.4%
 
of
 
total
 
revenue
 
Profit
 
before
 
tax
 
at
 
$102.26
 
million,
 
up
 
23.4%
 
or
 
$19.42
 
million
Excluding
 
FX
 
up
 
21.7%
REVENUE
PBT

Page
 
3
Dividend
 
/
 
Net
 
Debt
 
/
 
Discretionary
 
Bonus
Interim
 
dividend
 
of
 
30.0
 
cents
 
per
 
share
Books
 
close
 
11
 
December
 
2020;
 
payment
 
on
 
18
 
December
 
2020
Increase
 
of
 
20.0%
 
over
 
the
 
previous
 
year’s
 
interim
 
dividend
Gearing
 
ratio
 
improved
 
from
 
14.0%
 
at
 
31
 
March
 
2020
 
to
 
10.4%
Net
 
debt
 
reduction
 
of
 
$41.90
 
million
 
(since
 
31/3/20)
 
to
 
$115.48
 
million
DIVIDEND
NET DEBT

Page
 
4
First
 
Half
 
2021
 
Review

Results
 
in
 
line
 
with
 
October
 
trading
 
update

Satisfactory
 
result
 
reflecting
 
strong
 
performance
 
in
 
Australia
 
and
 
New
 
Zealand,
 
supported
 
by
 
improvement
 
from
 
Asia

Europe
 
and
 
Americas
 
are
 
behind
 
the
 
previous
 
comparable
 
period;
 
Oct/Nov
 
trading
 
showing
 
improvement

Second
 
half
 
expected
 
to
 
remain
 
ahead
 
of
 
prior
 
year

Page
 
5
Capital
 
Management
NZ$
 
MILLION
THIS
 
YEAR
LAST
 
YEAR
Operating
 
cash
 
flow
$188.51
$123.08

Capital
 
expenditure
 
totalled
 
$54.83
 
million
 
for
 
the
 
six
‐
month
 
period,
 
including

Land
 
&
 
Buildings
$31.32
 
million

Plant
 
&
 
Equipment
$16.01
 
million

Information
 
Technology
$
 
7.50
 
million

Page
 
6
Capital
 
Expenditure
 
Update
NZ$
 
MILLION
Half
 
Year
Est.
 
Full
 
Year Est.
 
Next
 
Year
Total
 
Capital
 
Expenditure
$55
$103
$114

Additional
 
land
 
in
 
Auckland
 ‐
$23.5
 
million
 
in
 
current
 
year

Next
 
year
 
– significant
 
property
 
projects:
Australia

Adelaide
 
$27
 
million

South
 
Dandenong
 
(start)
$7
 
million
New
 
Zealand

Auckland
$18
 
million

Other
 
North
 
Island
$7
 
million

South
 
Island
$6
 
million

Page
 
7
Half
 
Year
 
Analysis:
 
Revenue
 
$000
THIS
 
YEAR
LAST
 
YEAR
VARIANCE
New Zealand:
 
NZ$
378,895
362,571
4.5%

Australia:
 
AU$
403,210
360,423
11.9%

Asia:
 
US$
42,942
35,991
19.3%

Americas:
 
US$
248,016
244,039
1.6%

Europe:
 
EU€
193,779
193,766
0.0%
‐
Total
 
Group:
 
NZ$
$1,608,861
$1,500,466
7.2%

(excl
 
FX)
 
5.2%


Page
 
8
Half
 
Year
 
Analysis:
 
Profit
 
Before
 
Tax
$000
THIS
 
YEAR
LAST
 
YEAR
VARIANCE
New Zealand:
 
NZ$
37,500
34,632
8.3%

Australia:
 
AU$
30,559
14,960
104.3%

Asia:
 
US$
3,976
2,497
59.2%

Americas: US$
8,500
9,769
(13.0)%

Europe:
 
EU€
7,069
8,046
(12.1)%

Total
 
Group:
 
NZ$
$102,265
$82,848
23.4%

(excl
 
FX)
 
21.7%


Page
 
9
Product
 
Performance
 
NZ$000
THIS
 
YEAR
LAST
 
YEAR VARIANCE VAR
 
ex
 
FX
Group
Revenue
1,608,861
1,500,466
7.2%

5.2%

PBT
102,265
82,848
23.4%

21.7%

Transport
Revenue
746,578
746,241
0.0%
‐
(1.7)%

PBT
57,446
45,673
25.8%

24.4%

Warehousing Revenue
214,503
192,457
11.5%

8.8%

PBT
16,124
12,692
27.0%

24.6%

Air
 
&
 
Ocean
Revenue
647,780
561,768
15.3%

13.2%

PBT
28,695
24,483
17.2%

15.2%


Page
 
10
New
 
Zealand

Strong
 
domestic
 
consumer
 
demand
 
has
 
seen
 
freight
 
tonnage
 
internationally
 
and
 
domestically
 
increase

Ongoing
 
new
 
customer
 
gains
 
(flight
 
to
 
quality)
 
and
 
volume
 
increases
 
from
 
existing
 
customers
 
sees
 
record
 
freight
 
tonnage
 
in
 
Transport
division

Consumer
 
demand
 
and
 
congestion
 
in
 
supply
 
chain
 
has
 
created
 
inventory
 
shortages.
  
New
 
significant
 
customer
 
gains
 
to
 
benefit
 
Warehousing
utilisation
 
from
 
November
 
onwards

Air
 
&
 
Ocean
division
 
benefiting
 
from
 
import
 
and
 
export
 
volumes.
  
Shipping
 
and
 
airline
 
space
 
difficult
 
to
 
access

Expect
 
pre
‐
Christmas
 
volume
 
surge,
 
likely
 
across
 
a
 
shorter
 
timeframe
 
due
 
to
 
congestion
 
issues
Revenue:
 
$379m
     
4.5%
PBT:
 
$37m
  
8.3%

Page
 
11
Australia

Sustained
 
market
 
share
 
growth
 
and
 
improved
 
network
 
efficiency
 
has
 
produced
 
a
 
strong
 
first
‐
half
 
result

Transport
division
 
has
 
improved
 
gross
 
margin,
 
managed
 
overhead
 
costs
 
well,
 
and
 
continues
 
to
 
find
 
sales
 
growth.
  
Network
 
intensification
 
to
 
continue

Warehousing
has
 
maintained
 
good
 
utilization
 
across
 
the
 
6
‐
month
 
period,
 
albeit
 
the
 
last
 
3
 
months
 
has
 
seen
 
inventory
 
levels
 
deteriorate.
  
3
rd
Sydney
 
warehouse
 
(15,000
 
m
2
)
 
to
 
open
 
Dec
‐
2020

Improving
 
Air
 
&
 
Ocean
 
profitability
 
has
 
been
 
pleasing;
 
margins
 
under
 
some
 
pressure

Expect
 
ongoing
 
improvement,
 
particularly
 
with
 
the
 
re
‐
opening
 
of
 
Victoria
Revenue:
 
AU$403m 11.9%
PBT:
 
AU$31m
 
104.3%

Page
 
12
Asia

Airfreight
 
development
 
has
 
assisted
 
the
 
improved
 
Asian
 
performance

Strong
 
air
 
charter
 
work
 
related
 
to
 
Covid
‐
19
 
supplies
 
assisted
 
early
 
in
 
the
 
half

Southeast
 
Asian
 
branches
 
performing
 
better

Hong
 
Kong
 
still
 
recovering,
 
particularly
 
Seafreight
 
due
 
to
 
border
 
closure

Whilst
 
equipment
 
and
 
space
 
shortages
 
continue,
 
we
 
still
 
expect
 
ongoing
 
improvement
 
for
 
remainder
 
of
 
the
 
year
Revenue:
 
US$43m 19.3%
PBT:
 
US$4m 59.2%

Page
 
13
The
 
Americas

Q1
 
performance
 
lower
 
than
 
expected;
 
Q2
 
has
 
seen
 
improvement

Whilst
 
Transport
volumes
 
have
 
been
 
difficult
 
to
 
grow
 
during
 
lockdowns,
 
this
 
is
 
now
 
improving
 
alongside
 
healthy
 
customer
 
gains
 
in
 
LTL
 
sector

Air
 
&
 
Ocean
activity
 
strengthening
 
in
 
the
 
last
 
month
 
or
 
two

Warehousing
has
 
seen
 
good
 
growth,
 
and
 
has
 
increased
 
footprint
 
to
 
110,000m2.
  
Additional
 
site
 
development
 
likely
 
based
 
on
 
increased
 
customer
 
enquiry

Expect
 
Q2
 
improvements
 
to
 
flow
 
through
 
into
 
full
‐
year
 
result
Revenue: US$248m 1.6%PBT:
  
US$9m
  
(13.0)%

Page
 
14
The
 
Americas

CaroTrans

Wholesale
 
LCL
 
trade
 
impacted
 
globally,
 
and
 
has
 
reduced
 
revenue
 
and
 
profitability

Renewed
 
focus
 
on
 
container
 
loading
 
efficiency
 
and
 
increased
 
sales
 
activity
 
to
 
combat
 
poor
 
performance

Small
 
improvements
 
in
 
August/September

Expect
 
full
‐
year
 
result
 
to
 
be
 
less
 
than
 
prior
 
year

Page
 
15
Europe

A
 
steady
 
performance
 
from
 
Transport
 
and
 
Air
 
&
 
Ocean
 
has
 
offset
 
poor
 
Warehousing
 
activity

Transport
in
 
line
 
with
 
year
 
prior
 
after
 
good
 
improvements
 
previously.
  
Covid
‐
19
 
lockdown
 
has
 
stalled
 
the
 
momentum

Warehousing
inventory
 
levels
 
have
 
declined,
 
due
 
to
 
consumer
 
demand,
 
shipping
 
delays
 
and
 
manufacturing
 
capacity.
  
Some
 
improvement
 
through
 
September/October

Air
 
&
 
Ocean
performance
 
continues
 
to
 
improve

Domestic
 
freight
 
volumes
 
have
 
continued
 
despite
 
current
 
European
 
lockdowns.
  
Monitoring
 
closely
 
and
 
will
 
adjust
 
overheads
 
should
 
we
 
see
 
activity
 
levels
 
decline
 
into
 
Christmas
Revenue:
 
€194m 0.0%
PBT:
 
€7m (12.1)%

Page
 
16
Group
 
Outlook

Satisfactory
 
first
 
half

Expect
 
these
 
current
 
trends
 
to
 
continue
 
into
 
an
 
improved
 
full
‐
year
 
result

Australasian
 
activity
 
remains
 
strong
 
with
 
pre
‐
Christmas
 
volumes
 
expected
 
to
 
be
 
similar
 
or
 
above
 
the
 
prior
 
year’s

Supply
 
chain
 
congestion
 
widespread;
 
impact
 
felt
 
across
 
domestic
 
and
 
international
 
networks

New
 
customer
 
growth
 
pleasing
 
across
 
all
 
regions,
 
providing
 
further
 
confidence

Reinvigorating
 
land
 
and
 
building
 
projects
 
in
 
line
 
with
 
expectations
 
for
 
ongoing
 
growth

Page
 
17
Financial
 
Calendar
 
F21/22
DATE
F21 – 12
 
months
 
ended
 
31
 
March
 
2021
26
 
May
 
2021
Annual
 
Meeting
 
of
 
Shareholders
29
 
July
 
2021
F22
 
–6
 
months
 
ended
 
30
 
September
 
2021
11 November
 
2021

“It
 
is
 
not
 
necessary
 
to
 
do
extraordinary
 
things
 
to
 
get
 
extraordinary
 
results”