Mainfreight Annual Shareholders Meeting 2021

M A I N F R E I G H T L I M I T E D

Mainfreight Lane | off Saleyards Road | Otahuhu 1062 | New Zealand
Tel +64 9 259 5500 | Fax +64 9 270 7400
PO Box 14-038 | Panmure | Auckland 1741 | New Zealand


Supporters of
MAINFREIGHT – GLOBAL LOGISTICS





MAINFREIGHT LIMITED



SCRIPTED ADDRESS
AND
PRESENTATION




26
th
Annual Meeting of Shareholders

4.00 pm, Thursday 29
th
July 2021

- 2 -

CHAIRMAN’S ADDRESS

The year ended March 2021 produced the continuation of 11 consecutive years of
record results.

• Record after tax profits, up $29M to $188M

• Global sales increased by $449M to $3.5B – this represents sales of $68M per
week

• Income Tax payable for the year increased by $16M to $74M

• The discretionary bonus payable to our worldwide team increased by $17M
to $44M

• Our 2021 annual dividend to shareholders increased by $16M to $75M

We increased our number of branches worldwide from 282 to 297 – with our presence
still in 26 countries.

Climate change and the Covid-19 pandemic are creating huge challenges for the world;
further complicated with growing aggression between some of the biggest countries.

Closer to home in New Zealand – with all our best efforts in education, only 60% of
children are regularly attending school. In the past 20 years, we have dropped from
being near the top of the world in reading and maths, to now being close to the
bottom rung.
This is and will be a great catastrophe for New Zealand – if we are unable to produce
the next generations of inventors, scientists, IT professionals, doctors, researchers,
builders, engineers, farmers and entrepreneurs.

We are seeing reports daily in the media of a significant shortage of skilled workers,
but also what are described as unskilled workers. Overseas countries have been
supplying these additional people to our workforce temporarily, and we have grabbed
them because they have skills and work attitudes and behaviour far superior to what
we are producing in New Zealand.

If we do not reverse our declining allegiance to better and better education, over the
next 25 years we risk becoming another rogue state, run by crime, gangs and
corruption – already endemic in a number of small countries, which do not value or
promote education.

- 3 -


We in New Zealand can do only so much to allay the bombast between the big and
powerful countries – but we can, and must, succeed in massively increasing New
Zealand’s commitment to attainment in education.

In closing, we acknowledge that it has been a very difficult year – particularly in the
front line of our operations, and in countries where the Coronavirus was not as well
controlled as here in New Zealand. Our thoughts and gratitude go to our global team
for their outstanding performance in succeeding against so many difficulties.

We also acknowledge that at times our service levels were not up to the standard we
are used to. We sincerely thank our many customers for their understanding and
continued allegiance.

We would also repeat – as at our last AGM – that deep in our culture is a strength to
challenge and overcome whatever circumstances are put in front of us. We are used
to it, we enjoy it and it is why we come to work.


Group Managing Director’s Presentation

Please refer to separate PowerPoint slide presentation.



For further information, please contact Don Braid, Group Managing Director,
telephone +64 9 259 5503, +64 274 961 637 or email don@mainfreight.com.

---

MAINFREIGHT LIMITED
ANNUAL MEETING OF SHAREHOLDERS
29 JULY 2021
“Times of change unlock new value”

Page 2
A quick look back at F21 ...
9,240 Team membersup 609
297 Branchesup 15
26 Countriesno change ... for now
Revenue up 14.5% to $3.54 billion
An increase of $448.4 million
PBT up 27.2% to $262.4 million
An increase of $56.2 million
Net surplus after tax before abnormal items: $188.11 million
Up 27.1%, an increase of $40.1 million
REVENUE
NET SURPLUS
GROWTH
“Satisfactory”
PROFIT
BEFORE TAX

Page 3
Discretionary Bonus/ Dividend / Earnings Per Share
Payable at Board’s discretion to qualifying team members (5,243 people)
$43.9 million, an increase from $27.3 million in the prior year
(for payment in July/August)
Total dividend for year 75.0 cents per share, up 16.0 cents or 27.1%
from 59.0 cents in the previous year
Adjusted earnings per share 187 cents, up 27.1%
DIVIDEND
EARNINGS
BONUS
“We like to share”

Page 4
EUROPE
REVENUE:EU€428M
2,915
TEAM MEMBERS
REVENUE:NZ$846M
83BRANCHES
NEW ZEALAND
2,627TEAM MEMBERS
REVENUE:AU$877M
62BRANCHES
AUSTRALIA
2,142 TEAM MEMBERS
48BRANCHES
THE AMERICAS
1,131TEAMMEMBERS
77BRANCHES
REVENUE:US$577M
ASIA
REVENUE:US$104M
425
TEAM MEMBERS
27 BRANCHES
Contribution: New Zealand vs Offshore

Page 5
Trading Update: Revenue*
NZ$000THIS YEARLAST YEARVAR %
New ZealandNZ$366,459268,59436%

AustraliaAU$
352,827287,90423%

AsiaUS$
132,63551,776156%

Europe
EU€
204,585145,21041%

AmericasUS$
285,351167,74170%

GroupNZ$1,675,2701,188,63841%

“We have plenty to do”
May actuals plus June/July “weeklies”
17 weeks of trading (1 April to 25 July)
* Includes inter-company revenue

Page 6
Trading Update: PBT
NZ$000THIS YEARLAST YEARVAR %
New ZealandNZ$29,54217,34770%

AustraliaAU$
25,34218,15140%

AsiaUS$
6,2172,537145%

Europe
EU€
8,4683,873119%

AmericasUS$
18,6593,722401%

GroupNZ$105,86253,67397%

May actuals plus June/July “weeklies”
17 weeks of trading (1 April to 25 July)
“Profit matters”

Page 7
Trading Update: Our 3 Core Products
Revenue:$691.2 millionup 27%
PBT:$47.2 millionup 65%
Revenue:$173.5 millionup 24%
PBT:$13.6 million up 49%
Revenue:$810.6 millionup 61%
PBT:$45.0 millionup 184%
Air & Ocean revenue is inflated by air and
ocean carriers’ rate increases
WAREHOUSING
AIR & OCEAN
TRANSPORT
Note: Prior period impacted by lockdowns

Page 8
Trading Update: Total Company
Inflated air and shipping line freight rates are
artificially increasing sales revenues for Air & Ocean:
This may last well into 2022
Across all trade-lanes
Volumes are increasing for us in this sector
Via market share; and
Increased consumer demand
Warehousing development pleasing
New customers means new, larger facilities
“Disruption brings opportunity”

Page 9
Trading Update: Total Company
Transport volumes across all networks are
increased:
Consumer demand
Market share opportunities
Prior period comparisons are not helpful
Lockdowns prior year
Expect half-year to be satisfactorily improved on
prior period
Full-yearresult should be satisfactory
“Let’s get on with it”

Page 10
Trading Update: Regions
New Zealand
Network development/new sites key to improving service levels; Air & Ocean solutions assisting our
customers
Australia
Regional Transport development and Warehousing initiatives provide very competitive advantages
Asia
Southeast Asia performance and in-country sales improving; Warehousing development underway
Europe
Transport volumes increasing via market share; network intensification is a very key “work in progress”
Americas
Air & Ocean contribution very satisfactory; Transport and Warehousing with plenty of opportunity
“Busy people get things done”

Page 11
Capital Expenditure
$119 million, of which $74.5 million on land & buildings
(including racking & fit-out) primarily across New Zealand and
Australia
$226 million
including $181 million for expected property capital investment
$203 million
including $158 million for expected property capital investment
F22
F23
F21
“Network expansion andgrowth”

Page 12
Property Initiatives: Land / Building / Leases
NZ$ MillionF22
Planned Capital Expenditure$226.2
NZ$ MillionF23
Planned Capital Expenditure$202.7
Property Projectsfor 2022 and 2023
New Zealand
Land
Buildings
Leases
4
12
11
Australia
Buildings
Leases
2
4
AmericasLeases3
Europe
Buildings
Leases
1
5
AsiaLeases2
44
“Fattening the Network”
Key initiative is to intensify our
networks
Be closer to our customers
Gain efficiency
New country expansion on hold until
post-Covid-19

Page 13
Our Customers: Top 1000 Analysis
Our customer market verticals remain a core focus for our
growth
“We love our customers”

Retail15.4%

DIY12.0%

Food9.5%

Technology/Electronics9.0%

Medical/Healthcare8.6%

Beverage5.1%

Chemicals5.0%
Total64.6%
Perishable and pharmaceutical segment development

Page 14
Sustainability –Emission Reduction: 15% 2020
“It matters to us”
Solar power capable generation –2,855 kW (9,830 panels)
Rainwater capture to potable standards
Electric truck trials:
Auckland –3
Hamilton –1
Christchurch –1
Australia –to come
Consideration of other alternative fuel options
Electric forklifts
Recycling of waste –including compression of
polystyrene for raw material production
Road to rail/sea conversions
Carbon usage by consignment note
Vegetable gardens/scrap composting
Our capital –no pine trees on our watch

Page 15
Global Supply Chain Status
Over-ordering/demand/space availability
Most trade-lanes affected (Trans Pacific East Bound
the worst)
Continued increases for shipping and air line pricing:
Port congestion globally
last count 300 ships waiting to berth
Equipment shortages
Port rotations changing regularly
Air freight space limited due to lack of passenger
flights
“Our focus is on making things better”

Page 16
Global Supply Chain Status ... continued
Mainfreight network assisting
Preferred long-term air and shipping line relationships
Smaller shipping lines in niche markets
Bulk Space Agreements and Charter Agreements for
Air and Sea
Our ability to manage smaller LCL shipments
Expect demand/shortages and pricing issues to
continue to at least early 2022
“We’re taking the opportunities”

Page 17
Priorities and Actions
Strong focus on assisting and retaining our
customers with solutions across congested supply
chains
High quality services/standards are our priority
There is more to do here
Manage cost structures as we manage growth
Workplace Covid-19 vaccination trials for
New Zealand team
Sales focus continues as a key strategy for growth
“Get the mahidone”

Page 18
Mainfreight Corporate Governance
Corporate governance seems to remain a topic of discussion –when will
performance be recognised?
Board membership and succession are front of mind
Discussions with potential candidates continue, as we look to future-proof
our Board, secure ongoing balance and diversity, and the appropriate skill-
sets to help guide the business
We will never make a “convenient” Board appointment; every Director
must be the right fit for the business, and be prepared to make a
significant contribution
Tenure and experience are a key part of who we are –at Board,
Management and Team level
“It ain’tbroke mate”

Page 19
We Continue To ...
Be optimistic and confident about what’s in front
of us
Be conscious of supply chain congestion and the
issues it is causing for our customers including
pricing
Develop our network intensity within each region –
get closer to our customers
Know that our people make the difference and we
need to look after them
“Being useful feels good”