Mainfreight Annual Shareholders Meeting 2022

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




27
th
Annual Meeting of Shareholders

4.00 pm, Thursday 28
th
July 2022

- 2 -

CHAIRMAN’S ADDRESS

E te Whanau o Mainfreight, E te Kuia Ma, E te Koro Ma. Nau Mai, Haere Mai,
Whakataumai.

The year to March 2022 produced the continuation of 12 years of record results,
with a stunning after tax profit of $355.4 million dollars, an increase of 90% on
the previous year.

We have a level of satisfaction in the major continents in which we operate,
including China and South East Asia. We are able to take advantage of our global
network of over 300 branches to grow and give high quality supply chain services
to much of the world.

Our culture continues to define us in many areas such as payment of creditors on
time every time, internal promotion and minimal use of casual labour, so that all
team members can see themselves as being on a career path, the payment of an
annual discretionary bonus, healthy meals, the payment of company tax in the
countries in which we operate, and widespread belief that we as individuals and
as a company are helping to make a better world.

We are saddened by the brutal Russian invasion of Ukraine and the loss of
friendships and relationships that were contributing to better understanding
between people and nations.

It is difficult to comprehend that the bloated egos of a few can cause the death of
thousands of innocent people, and the destruction of billions of dollars of
infrastructure.

- 3 -

2022 is only marginally easier to operate in than 2021. There is a fairly wide
number of people affected by Covid, Omicron or flu in many of our operations
and that is also true amongst our customers and suppliers. We are indebted to
the commitment of our global teams who continue to cope and improve our
operational performance under changeable and trying conditions.

As you will see from Don Braid’s presentation we have great confidence in our
ability to grow and learn and prosper in the next year and in years ahead. We
look forward to our next 100 years.

Thank you to the worldwide Mainfreight family.




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
28 JULY 2022

Page 2
The Numbers ... Financial Year 2022
Revenue up 47.2% to $5.22 billion
PBT up 86.5% to $489.4 million
Net profit up 88.9% to $355.4 million
REVENUE
NET POFIT
“Produced by 10,393 passionate Mainfreight people
in 305 branches across 25 countries”
PROFIT
BEFORE TAX

Page 3
Our 3 Core Products
Revenue:$1,915 millionup 18.9%
PBT:$ 184 millionup 30.8%
Revenue:$ 583 millionup 29.1%
PBT:$ 55 million up 30.9%
Revenue:$2,720 millionup 83.6%
PBT:$ 250 millionup 214.1%
WAREHOUSING
AIR & OCEAN
TRANSPORT

Page 4
Global Growth Outperforming NZ’s Influence
NZ$20172022
New Zealand:$0.61B$1.13B
Offshore:$1.72B$4.09B
New Zealand:$ 69m$136m
Offshore:$ 78m$353m
Offshore Profit now 72% of total (in 2017 53%)
Note: USA Revenue NZ$1.56B PBT NZ$145m
All organic growth!!
REVENUE
PROFIT
BEFORE TAX

Page 5
Results Achieved by the Team
▪Strong economic activity
▪Produced increased freight volumes
▪Internationally and domestically
▪Congested supply chains
▪More stock being held in warehouses
▪Greater levels of activity to get product to retail shelves
▪Inflated shipping and airfreight rates
▪Limited capacity to manage the increased volumes
▪Offered solutions to our customers
▪Long-term relationships with service providers assisted
▪Extraordinary efforts by our people
“Across all three core products”

Page 6
Where we are now and opening next

Page 7
Capex/Lease Investments for the Network
▪$540m next two years:
▪$450m land and buildings
▪$90m technology and other
▪Land and building projects/owned
▪Primarily NZ/Australia –Transport facilities
▪Leases
▪Worldwide –Warehouses/Transport facilities
▪In total: 3 x land acquisitions
13 x new buildings
61 x new lease facilities
▪Property portfolio now at $1.03B land and buildings
▪Good defensive position in this current environment
Bigger warehouses and more efficient cross-docks

Page 8
Zaltbommel, Netherlands
“Our biggest and one of our best”

Page 9
Dallas, USA Cross-Dock
“Efficient end-loading cross-docks”

Page 10
Melbourne, South Dandenong
“Warehousing and Transport together”

Page 11
Hobsonville –Opens 1 August 2022
“Intensifying the network”

Page 12
Favona, Auckland
40,000 sq metrewarehouse
5-star energy rating

Page 13
Northlake, Texas Warehouse
“Our biggest in the USA, so far!”

Page 14
Sustainability
“It matters to us”
▪Gross carbon emissions have increased 200,000 tonnes
CO
2
-e reflecting growth and market share gains
▪All 5 tracked emissions intensity measures have
improved
▪Intensity = emissions generated per tonneof freight moved
▪Doubling branch solar generation capacity over the next
2 years
▪All major new builds will incorporate rainwater capture
and purification to drinkable stand
▪Counting allemissions –indirect and direct
▪Accounting for only direct emissions is rubbish

Page 15
Tools for Decarbonisation
▪Battery Electric Vehicles: expect our electric fleet to increase substantially
▪Fleet consisting of:
▪New Zealand 5
▪Australia8
▪Europe2
▪USA (on order)
▪Developing technology
▪Current limitations in range, pay
load and charging time

Page 16
Tools for Decarbonisation
▪Hydrogen: we continue to investigate
▪Fuel Cell Electric Vehicles –expensive
▪Hydrogen Combustion –dual fuel alongside diesel
▪Biofuels: a transitionary tool... maybe
▪Biofuel mandates –NZ and EU
▪“Low” but not “no” emission
▪Supply is difficult
▪Modal Shifts: the role for rail and coastal
▪Immediately available
▪We invest heavily here:
▪13 rail sidings in NZ
▪Coastal shippingcommitted

Page 17
Core Strategies –Future
▪Growth –organic
▪Network expansion/intensification –domestically and globally
▪Regionally within our network
▪Internationally –Indonesia (Jakarta)/India –more to follow
▪3 core products
▪Transport
▪Warehousing
▪Air & Ocean
Convincing our customers to use all three services and across all our regions
▪Quality
▪It means everything
▪Whilst we have performed OK in the last two years, we can do better for our customers

Page 18
Current Trading Environment
NZ$000REVENUE*VAR %PBTVAR %
New ZealandNZ$340,12828.7%

42,03055.9%

AustraliaAU$
298,59328.2%

37,11154.9%

AmericasUS$
257,51141.4%

37,196122.6%

Europe
EU€
164,65222.1%

14,51977.8%

AsiaUS$
33,3214.9%

9,74571.9%

GroupNZ$1,385,54732.5%

178,82682.9%

“We have plenty to do”
Results last 16 weeks of trading
* Inter-company revenue excluded

Page 19
Trading Update: 3 Core Products
Revenue:$577.1 millionup 18%
PBT:$ 66.0 millionup 51%
Revenue:$158.5 millionup 30%
PBT:$ 15.8 million up 22%
Revenue:$650.0 millionup 50%
PBT:$ 97.1 millionup 136%
WAREHOUSING
AIR & OCEAN
TRANSPORT
Results last 16 weeks of trading
“A competitive advantage”

Page 20
Air & Ocean Environment
▪Port congestion / inland transport issues remain –
USA/Europe
▪Long-term fix
▪No short-term resolutions
▪A reduced peak season (Aug-Oct) may assist
▪Sea Freight
▪Contract rates / spot rates @ parity –while these
rates are decreasing they remain inflated on
pre-2019 levels
▪Capacity determines price levels

Page 21
Air & Ocean Environment
▪Air Freight
▪Capacity improving albeit passenger baggage
affecting space availability
▪Supply chain security of importance
▪Less reliance on China manufacturing
▪Manufacturers finding alternative countries to
ensure continuity of supply

Page 22
Summary
▪First 16 weeks’ performance pleasing
▪Expectation of softening demand –Internationally, uncertain of “Peak”
season Aug/Oct –particularly Asia to USA
▪Retail stock holdings at elevated levels and expect consumer spend to alter
towards services/travel sector/inflationary pressures
▪May impact domestic volumes and warehousing inventory
▪Growth continues across all regions and in all three core products
▪New customer gains and activity
▪Investment in property infrastructure, technology and our people continues
▪Staying well prepared for long-term growth
▪Expect our decentralised approach to assist managing recessionary issues
“We remain an ambitious bunch of so and so’s”

Page 23
“Thanks for being part
of our family”