Full Year Results to 30 June 2022 and Final Dividend

Section 1: Issuer information
Name of issuer Freightways Limited
Financial product name/description Fully Paid Ordinary Shares
NZX ticker code FRE
ISIN (If unknown, check on NZX
website)
NZFREE0001S0
Type of distribution
(Please mark with an X in the
relevant box/es)
Full Year X Quarterly
Half Year Special
DRP applies
Record date 16 September 2022
Ex-Date (one business day before the
Record Date)
15 September 2022
Payment date (and allotment date for
DRP)
3 October 2022
Total monies associated with the
distribution
1

$31,502,000
Source of distribution (for example,
retained earnings)
Current earnings for the year ending 30 June 2022
Currency NZD
Section 2: Distribution amounts per financial product
Gross distribution
2
$0.26388889
Gross taxable amount
3
$0.26388889
Total cash distribution
4
$0.19000000
Excluded amount (applicable to listed
PIEs)
$-
Supplementary distribution amount $0.03352941
Section 3: Imputation credits and Resident Withholding Tax
5

Is the distribution imputed

Fully imputed

1
Continuous issuers should indicate that this is based on the number of units on issue at the date of the form
2
“Gross distribution” is the total cash distribution plus the amount of imputation credits, per financial product, before the deduction of
Resident Withholding Tax (RWT).
3
“Gross taxable amount” is the gross distribution minus any excluded income.
4
“Total cash distribution” is the cash distribution excluding imputation credits, per financial product, before the deduction of RWT.
This should include any excluded amounts, where applicable to listed PIEs.
5
The imputation credits plus the RWT amount is 33% of the gross taxable amount for the purposes of this form. If the distribution is
fully imputed the imputation credits will be 28% of the gross taxable amount with remaining 5% being RWT. This does not constitute
advice as to whether or not RWT needs to be withheld.

If fully or partially imputed, please
state imputation rate as % applied
6

28%
Imputation tax credits per financial
product
$0.07388889
Resident Withholding Tax per
financial product
$0.01319444
Section 4: Distribution re-investment plan (if applicable)
DRP % discount (if any)
N/A
Start date and end date for
determining market price for DRP
N/A N/A
Date strike price to be announced (if
not available at this time)
N/A
Specify source of financial products to
be issued under DRP programme
(new issue or to be bought on market)
N/A
DRP strike price per financial product
N/A
Last date to submit a participation
notice for this distribution in
accordance with DRP participation
terms
N/A
Section 5: Authority for this announcement
Name of person

authorised to make
this announcement
Stephan Deschamps

Contact person for this
announcement
Stephan Deschamps

Contact phone number
+64 27 562 5666

Contact email address
stephan.deschamps@freightways.co.nz

Date of release through MAP

22 August 2022






6
Calculated as (imputation credits/gross taxable amount) x 100. Fully imputed dividends will be 28% as a % rate applied.

---

Media release

22 August 2022

Freightways result coincides with major trans-Tasman transaction

Freightways has today announced its annual result, reporting profits of $70.2 million for the FY22
1

year as well as a A$160 million transaction with Allied Express, one of Australia’s largest
independently owned courier and express freight providers.

Overall FY22 revenue reached $873.1 million, a 9 per cent increase year-on-year, with EBITA of
$130.2 million, a 1 per cent increase year-on-year. Profit for the year was also up by 4.1 per cent
(this excludes the impact of the last payment due for the 2020 acquisition of Big Chill Distribution),
and total CapEx for the year was $24.7 million.

Freightways will be paying a final dividend of 19cps, bringing the full year dividend to 37cps, 3.5cps
higher than last year.

The company is confident that the transaction with Allied Express sets the platform for future growth
as it marks not only a significant entry point to the Australian market but a step into a new niche or
third horizon of growth thanks to the specialised logistics capabilities of Allied Express.

“This transaction gives us a successful model for enhancing our offering on both sides of the Tasman,
leveraging Freightways’ core capabilities in express pick up, processing and delivery while creating a
niche in oversized freight at the same time,” says Freightways CEO Mark Troughear.

He comments on the results that; despite challenges with frontline workforce numbers, supply chain
and the labour market due to Covid-19, surges in demand and spikes in new customers following
lockdowns provided a reasonable year-end result for the NZX-listed company and increased the
company’s market share overall.

“As with many other businesses, our frontline workforce was heavily impacted by Omicron and labour
shortages with our teams affected by up to 30 per cent absenteeism through contracting the virus at
times. Our customers were also affected, and it resulted in softer volumes in the 2
nd
half of the year.”

“This impact was offset to a large extent by market share gains, surges in volume when restrictions
lift ed and tailwinds from businesses in our network including Big Chill Distribution and Med-X which
continue to be standout performers,” he says.

He also credits the result with the escalation of the listed company’s three horizons of growth strategy.

“Freightways never stands still. Our first horizon services, developed over decades, are the backbone
of our business, but our team is also focused on the future. Looking at how we grow 2
nd
and 3
rd
horizon
businesses is important for the company so that we can serve Kiwis better while growing our revenue.”




1
Freightways’ FY22 year ends 30 June 2022

Allied Express
Allied Express boasts a national presence in Australia with the ability to deliver 98 per cent of its
volume within its own infrastructure, alongside a network of agents capable of servicing smaller towns
and rural areas allowing an opportunity to enter the Australian express package market at scale.

“Allied Express has established a strong and highly competitive position in the Australian market over
40 years in specialised logistics. Its ability to handle larger items sets it apart from others with a service
that is highly desired by both SMEs and large corporates and has benefitted from the recent
acceleration of eCommerce,” says Troughear.

The McDowell family (the shareholders of Allied Express) will become substantial shareholders in
the enlarged Freightways group (with an approximately 6% shareholding in Freightways on
completion of the transaction) and will continue to work in the business to support growth plans and
ensure continuity of personnel for all key stakeholders.

Subject to customary completion adjustments the transaction price of A$160 million will be funded
by A$100 million Freightways share issuance to the McDowell family and A$60 million of cash
drawn from Freightways’ debt facilities.

“We look forward to welcoming the Allied Express team to the Freightways family and leveraging each
other’s experience and know-how” says Mark.

Freightways expects the transaction to complete on or after 30
th
September 2022.

Freightways FY22 Results by the Numbers:
• FY22 profit: $73.9 million, and FY22 EBITA: $130.2 million (both excluding the impact of the
last payment due for the 2020 acquisition of Big Chill Distribution)
• FY22 year-on-year profit increase: 4%
• FY22 CapEx: $24.7 million
• Dividend: 19cps, bringing the full year dividend to 37cps, 3.5cps higher than last year

The Allied Express Transaction:
• A$160m Transaction price for 100% of the shares in Allied Express. The Freightways shares
will be issued to the McDowell family at an issue price of $9.66 per share, based on the
VWAP of Freightways shares calculated over the period of 10 trading days up to and
including 18 August 2022, adjusted to exclude the cash amount of the dividend payable on 3
October 2022. A$50m of the shares issued to the McDowell family will be subject to an
escrow on sale for a period of 12 months following completion, and A$25m of those shares
will then remain subject to an escrow on sale for a further period of 12 months thereafter.
• is expected to be EPS accretive to Freightways from completion
• is expected to deliver in excess of A$20m EBITA in FY23 on a full year basis

Subject to customary completion adjustments the Transaction price of A$160m will be funded by:
• A$100m Freightways share issuance to the McDowell family; and
• ~A$60m of cash drawn from Freightways debt facilities

Allied Express by the numbers:
• FY23 forecast revenue: A$215m and EBITA: A$20.5m
• National footprint with leased depots in all major Australian cities
• 700 contractors
• 450 staff
• 1,750 clients ranging from SMEs to large corporates

Disclaimer
Certain statements in this release constitute forward-looking statements. Forward-looking statements
are statements (other than statements of historical fact) relating to future events and the anticipated
or planned financial and operational performance of Freightways and Allied Express.

Although Freightways believes that the expectations reflected in these forward-looking statements
are reasonable, such forward-looking statements involve known and unknown risks, uncertainties and
other important factors that could cause the Freightways' actual results, performance, operations or
results, to differ materially from any future results, performance, operations or achievements
expressed or implied by such forward-looking statements. Accordingly, you should not place undue
reliance on any forward-looking statements.

Freightways does not intend, and does not assume any obligation, to update any forward-looking
statements in this release, except as may be required by law.

For further information please contact:
Matt Ward
Undertow Media
Ph: +64 21 025 65537
matt@undertowmedia.com

About Freightways
Freightways Limited (NZE: FRE) has varied business operations in New Zealand and Australia all
focussed on pick up, process and delivery. They encompass: Express Logistics, Waste Renewal
and Information Management. Split into three core portfolios, Express Package, Business Mail and
Information Management. Listing on the NZX in September 2003, today its portfolio of brands
includes: New Zealand Couriers, Post Haste Couriers, Big Chill, Produce Pronto, Dataprint, DX
Mail, SUB60, Stuck, Now Couriers, Kiwi Express Couriers, Castle Parcels, Security Express, Pass
The Parcel, Lit Support, Shred-X, Med-X, TIMG, Freightways Information Services, Fieldair
Holdings Limited and Parceline.

---

1

Results for announcement to the market
Name of issuer FREIGHTWAYS LIMITED
Reporting Period 12 months to 30 June 2022
Previous Reporting Period 12 months to 30 June 2021
Currency New Zealand dollars
Amount (000s) Percentage change
Revenue from continuing
operations
$873,094 9.1%
Total Revenue $873,094 9.1%
Net profit/(loss) from
continuing operations
$70,182 46.4%
Total net profit/(loss) $70,182 46.4%
Final Dividend
Amount per Quoted Equity
Security
$0.26388889
Imputed amount per
Quoted Equity Security
$0.07388889
Record Date 16 September 2022
Dividend Payment Date 3 October 2022
Current period Prior comparable period
Net tangible assets per
Quoted Equity Security
$(0.80) $(0.85)
A brief explanation of any
of the figures above
necessary to enable the
figures to be understood
Refer to the section “Full Year Review” for commentary.
Authority for this announcement
Name of person

authorised
to make this announcement
Stephan Deschamps
Contact person for this
announcement
Stephan Deschamps
Contact phone number +64 27 562 5666
Contact email address stephan.deschamps@freightways.co.nz
Date of release through MAP

22 August 2022

Audited financial statements accompany this announcement

2
FINANCIAL SUMMARY
FOR THE YEAR ENDED 30 JUNE 2022




Note

2022

2021 Increase

$000 $000
%

(restated)

Operating revenue

873,094 800,533 9.1%

EBITA (i) 126,522 105,839 19.5%

NPAT (ii) 70,182 47,929 46.4%

EBITA, excluding other income & expenses


130,222 128,885 1.0%

NPAT, excluding other income & expenses, net of tax

73,882 70,975 4.1%

Other income and expenses:

- Change in fair value of contingent consideration –
Big Chill Distribution Limited

(3,700) (23,046)

Total (3,700) (23,046)
Tax benefit applicable to other income and expenses - -
Other income and expenses, net of tax (3,700) (23,046)


Note:

(i) Operating profit before interest, income tax and amortisation of intangibles
(ii) Profit for the year attributable to the shareholders

The Directors believe that the other income and expenses detailed above should not be included when
assessing the underlying trading performance of the Group.

3
FULL YEAR REVIEW
From the Chairman and Chief Executive Officer


SEEING PROGRESS, LOOKING AHEAD

The energy and focus of our teams continues to see us strongly advance our businesses across different horizons.
The challenges of the year were balanced by clear evidence that we have exciting opportunities to explore in the
years ahead. In a year marked by further COVID-19 disruptions and a changing economic background, we have
increased our revenue by 9% from last year and our profit by 4% (if we exclude the impact of the increased
accrual for the final payment related to the acquisition of Big Chill Distribution).

COVID-19 variants maintained their grip on our workforce this year, at times reducing our frontline numbers
by as much as 30%, and impacting not just our customers’ businesses but also our branches which form a key
part of our distribution network. The resulting staff absences, combined with lower consumer confidence in the
later part of the year over inflation, rising costs and labour constraints, moderated the volume growth - and
ultimately the full year result.

Overall, volumes were similar to last year’s, with periods of particularly high activity pre-Xmas offset by lower
volume during lockdowns and the impact of the Omicron variant on New Zealand businesses. The second half
was characterised by a very tight and expensive labour market, ongoing supply chain issues globally and
possibly the first signs of a flattening of the NZ economy. Despite this, there were some significant spikes in
demand, particularly at the end of calendar year 2021, when the team emerged from lockdowns to cope with a
sudden surge in volumes. It was a massive effort from staff and contractors and we also thank those who also
swapped their office roles to help sort and deliver freight through these tough times. The quality of our services
allowed us to increase our overall market share, with new customers offsetting declines in existing business.
Our contractors also stayed with us through the ups and downs and that stability absolutely contributed to
continuing high levels of service.

Not all businesses were negatively impacted by the pandemic. Our Big Chill business, for example, continued
its strong growth and was largely unaffected by changes in volumes, although did feel the impacts of a tight
labour market. Our Med-X business in Australia also continued to build its market presence and revenue at an
accelerated rate.

Building through horizons
Last year’s report spoke to how our purpose of “moving you to a better place” drives us to grow our revenue
and earnings from our existing businesses via organic growth, margin management and efficiency gains. At the
same time, we keep finding ways to improve - we look for new ways to pick up, process and deliver that add
value. This year, we escalated that “three horizons” approach to four key areas of activity: Express Package &
Business Mail; Temperature Controlled Logistics; Information Management; and Waste Renewal.

In our application of the 3 horizons model, we aim to:

- Extend and defend our first horizon revenue streams (i.e. business-to-business (B2B) deliveries,
temperature-controlled transport, archive storage and document destruction);
- Nurture and grow our horizon 2 services (business-to-consumer (B2C) deliveries, temperature-
controlled 3PL, digitisation and medical waste); and
- Generate genuinely new opportunities in horizon 3 (oversize express courier, same day temperature-
controlled deliveries, high-value recycling, eCommerce 3PL).

4

Our first horizon services are the backbone of our business often built up over decades of operating and they
provide the infrastructure and national network capability on which we establish our second horizon
opportunities.

Second horizon revenue streams will typically have faster growth prospects and utilise the fixed cost base
established in horizon one. In Express Package our B2C growth leverages the digital platforms, teams of people
and physical infrastructure developed over years of B2B deliveries. Enhanced by our unique Pricing for Effort
initiative, this service has developed strongly on the back of a sizeable lift in market demand, delivering strong
revenue growth for the Group and fairer earnings for our contractors. Similarly, our Medical Waste operation in
Australia has been built upon our national network established from Document Destruction and the capabilities
that allow us to collect bins from customers and process them in a safe, secure and efficient manner.

Finally, there are our third horizon opportunities. Here, we use our innovation hub The Startery to identify
emerging niches that have the potential to deliver tangible long-term revenue streams. In the case of the Express
Package businesses, that’s enabled us to identify the “Oversize parcels” market as a niche driven by proven
need. These parcels include items like bikes, prams and flat pack furniture. They’re generally between 25kg and
50kg in weight, too big for the traditional courier network but generally too small to suit heavy freight transport
operators. Right now, oversized parcels make up about 5% of our delivered items. Our goal now is to use our
Kiwi Express Oversize brand to develop this into a national express delivery service. Repriced to reflect the
effort required, this new service will give customers simpler ways to move goods and pay our drivers a fair
delivery fee for doing so.

We’re seeing the same value progression in our Waste Renewal business. That business began by centring on
document destruction. From there, we evolved into medical waste. Now, as a third horizon, we’re adding a high-
value recycling proposition covering everything from coffee cups to textiles to e-waste and our 100% recycled
building product, SaveBoard. The most powerful aspect of all this is that the underlying infrastructure is the
same across all three horizons. Our Waste Renewal business uses the same staff, trucks, facilities, shredders,
and systems across everything it does to generate increased revenue and returns.

Our 3 horizons approach is attractive because it identifies complementary markets that are under-served, where
we have proven capability and generally requires less capital by leveraging existing assets. Evolving our
businesses from first horizon to third makes the most of our capabilities (Act like an entrepreneur, Strive for
efficiency, Deliver reliably and Love our customers) and assists us in achieving sustainable growth.

A major acquisition in Australia
Of course, having an horizons approach does not preclude us from accelerating the process to acquire a business
that has already got there. At year end, we put the finishing touches to an acquisition that has built a successful
“Oversize parcels" courier business.

Allied Express is one of the largest, independently owned, specialised express freight operators in Australia,
with a national presence which enables it to deliver 98% of their volume utilising their own infrastructure and
the balance through a network of 48 agents. They offer both point to point same day metro delivery services and
interstate delivery across Australia.

Allied differentiates themselves from the mainstream players by being market leaders in the delivery of items
over 22kg in weight. The acquisition:

 Provides us with a scale entry point into the Australian express package market and a platform to grow from;
 Complements our core capabilities in express pick up, processing and delivery; and

5
 Provides a backbone network that we can leverage for growth from existing and new customers as well as
the potential for service extension.

Allied has a team of around 1,150 people including 700 contractors and 450 staff, with clients ranging from
large corporates to SMEs operating across a wide range of industries including online retailing, automotive,
trade supplies and manufacturing. The sector also has higher barriers to entry because of the complexity
associated with moving larger courier items.

We have looked for many years for an Express Package opportunity in Australia before choosing Allied and are
excited by this acquisition. This deal has fast-tracked our horizons agenda in Australia exponentially and, of
course, progressed our third horizon strategy in our Express Package business overall.

On track in terms of our sustainability goals
This year we will release our third Sustainability Report, having developed a science-based target for emissions
reduction last year that will see us targeting a 50% drop in scope 1, 2 and 3 emissions by 2035. We have been
Toitu certified since 2014.

Well over 95% of our emissions come from the fuel we use across our vehicles and aircraft. Our 2030 target of
35% reduction in CO2e and our 2035 target of 50% reduction in C02e (both for scope 1, 2 and 3) align with
what society needs to achieve globally to keep global warming to within 2 degrees Celsius.

We continue to keep close to the progress being made in emerging technologies that are aimed to reduce carbon
emissions. Based on current progress, our current strategy will commence with company owned vehicles -
starting with 25% of company cars being PHEV by 2025 and 100% either PHEV, EV or hydrogen by 2030. We
expect that our contractors’ light vehicles will begin to meaningfully transition to EVs from 2028 enabled by
the rates of remuneration we provide, with a goal to having our entire light vehicle fleet made up of low emission
vehicles by 2035. We anticipate that our heavy transport fleet will commence using alternative fuels from 2030,
and by 2035 we expect that half of these vehicles will have transitioned. We expect our aircraft fleet will
modernise at the end of the current decade. Having said this, the landscape is changing rapidly and we will be
flexible in our approach as the emerging technologies are proven, including continuing to closely monitor and
assess the availability of alternate low emissions fuels through this period.

We have already significantly reduced our use of plastics by adopting recycled satchels and fabric freight bags
and developed solutions to enable our customers to recycle their soft plastics as well as diverting tens of
thousands of tonnes of paper away from landfill and increasing our SaveBoard capability.

As part of our ongoing reporting, we will also refresh our Sustainable Development Goals (SDG) materiality
over the next year to ensure that our SDGs continue to align with the interests of our stakeholders.

Full year review
Business unit performances

Financial performance
Express Package and Business Mail
Lockdowns and peak season surges resulted in overall revenue growth of 8.8% for FY22 with volume
moderating as the Omicron variant hit and the economy began to flatten toward the end of the financial year.
Operating costs were significantly higher in the second half – primarily due to the cost of labour to cover for
COVID related absences, increased sick leave payments and the tighter labour market. Profit was largely flat
because of these costs and the ongoing lag effect of higher fuel prices, where we give our customers the benefit
of a 2-month lag before our FAF (variable fuel adjustment factor) reflects prevailing fuel rates.

6


Information Management
Strong growth in digitisation and medical waste drove divisional revenue growth of 9.6% for FY22 despite
periods of lockdown in both NZ and Australia which restricted archive related activity and eDiscovery services.
This strong revenue growth delivered a 14.3% increase in EBITA over the period.

Capex and Dividend
Total capital expenditure for the year was $24.7m. In line with our Capital Management Policy, the Board
declared a final dividend of 19cps, bringing the full year dividend to 37cps, 3.5cps higher than last year.

Outlook FY23
We complete the year feeling confident that we have a successful platform for growth and profitability, both
now and in the future. Over the year, we will continue to look after the first horizon of each business activity,
further scale our second horizon initiatives and work with The Startery to foster those future third horizons. The
successful integration of Allied Express, and the growth opportunities this will generate both in Australia and
New Zealand, will be a key focus.

The first 6 weeks of FY23 have been characterised by a slight 1% decline in Express Package items consigned,
on the prior comparative period (pcp). Existing customers are trading 5% lower than in the pcp offset largely by
a net 4% market share gain. B2B is down 5% and B2C up 11% reflecting the nature of those market share gains
over the past year. While comparing COVID impacted periods is challenging (for example there are far less
COVID related personal protective equipment (PPE) and PCR tests traveling through the network compared to
the previous year) a comparison to 2019 pre COVID levels reveals total item growth of 12%.

We believe the current impact on customer trade we are seeing is driven by a range of factors including a chronic
shortage of labour which is restricting businesses from reaching their optimal output, continued disrupted supply
chains and some slowing of economic activity. While same customer trade is slightly lower, we have seen no
adverse change to our debtors profile.

We expect operational labour costs to increase by around 11% on the pcp reflecting a tight market and the need
to secure quality people, as well as higher sick leave and costs related to filling those gaps. Fuel prices have had
their first material fall in the last year and if this trend is maintained we expect that the fuel lag will allow us to
recoup some of the losses we experienced in FY22.

Our General Rate Increase for most lines of business was implemented in July and is expected to largely offset
the increased costs of operating.

Despite the present challenges in NZ and Australia for the businesses we operate - primarily the scarcity and
increased cost of labour and some signs of an economic slowdown impacting consumption - we remain confident
in our ability to manage the impact of these conditions on each part of our business.

Our people remain our greatest asset. We have a highly experienced and committed team, many of whom have
been with us for decades. Our team got us through the challenges of the last two years and they will continue to
be our greatest strength regardless of the economic climate. As we enter a new year their safety and well-being
remains foremost in our minds.

7



We have implemented new pricing from July to offset the impact of a higher cost base. One critical advantage
we have is that our cost base is highly variable, and this gives us the ability to profitably adjust to a deteriorating
economic environment. As always, we will react decisively to any change in volumes while maintaining the
service, safety and environmental standards that our customers, investors and other stakeholders expect. We will
also prioritise the best strategies to deliver value to shareholders over the long term.

Finally, our thanks to all our teams for everything you’ve done this past year and to our shareholders and
customers for sharing this journey with us and for your continuing support.







Mark Cairns Mark Troughear
Chairman Chief Executive Officer

22 August 2022

8
INCOME STATEMENT
FOR THE YEAR ENDED 30 JUNE 2022


Group
2022
$000
2021
$000
(restated)
Operating revenue


873,094 800,533

Transport and logistics expenses (344,534) (309,318)
Employee benefits expenses
(252,488) (226,669)
Occupancy expenses
(6,857) (7,063)
General and administration expenses
(80,634) (71,647)
Change in fair value of contingent consideration –
Big Chill Distribution Limited
(3,700) (23,046)
Depreciation and software amortisation (58,359) (56,951)
Amortisation of intangibles (7,528) (7,652)
Operating profit before interest and income tax
118,994 98,187
Net interest and finance costs

(20,292) (22,667)
Profit before income tax 98,702 75,520
Total income tax (28,520) (27,591)
Profit for the year
70,182 47,929
Profit for the year is attributable to:
Owners of the parent 70,095 47,851
Non-controlling interests 87 78
70,182 47,929

9
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2022

Group

2022
$000
2021
$000
(restated)
Profit for the year (NPAT)
70,182 47,929
Other comprehensive income
Items that may be reclassified subsequently to profit
or loss:


Exchange differences on translation of foreign
operations


2,858 (2,310)
Cash flow hedges taken directly to equity, net of tax

3,373 880
Total other comprehensive income after income
tax

6,231 (1,430)
Total comprehensive income for the year 76,413 46,499
Total comprehensive income for the year is
attributable to:

Owners of the parent 76,326 46,421
Non-controlling interests 87 78
76,413 46,499

10

STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2022



GROUP

Contributed
equity
Retained
earnings
Cash flow
hedge
reserve
Foreign
currency
translation
reserve
Non-
controlling
interests
Total equity


$000 $000 $000 $000 $000 $000
Balance at 1 July 2020

180,630
142,746
(2,075)
(4,635)
114
316,780
Impact of restating accounting treatment of cloud
computing arrangement
- (1,417) - - - (1,417)
Restated balance at 1 July 2020

180,630
141,329
(2,075)
(4,635)
114
315,363
Profit for the year (restated)

-
47,851
-
-
78
47,929
Exchange differences on translation of foreign operations

-
-
-
(2,310)
-
(2,310)
Cash flow hedges taken directly to
equity, net of tax

-
-
880
-
-
880
Total Comprehensive Income (restated)

-
47,851
880
(2,310)
78
46,499
Dividend payments

-
(25,658)
-
-
(44)
(25,702)
Shares issued

1,941
-
-
-
-
1,941
Balance at 30 June 2021 (restated)

182,571 163,522 (1,195)
(6,945) 148 338,101
Profit for the year

-
70,095

- - 87 70,182
Exchange differences on translation of foreign operations

-
-
-
2,858
-
2,858
Cash flow hedges taken directly to e
quity, net of tax

-
-
3,373
-
-
3,373
Total Comprehensive Income

- 70,095 3,373 2,858
87 76,413
Dividend payments

-
(59,678)
-
-
-
(59,678)
Shares issued

1,778
-
-
-
-
1,778
Balance at 30 June 2022

184,349
173,939
2,178
(4,087)
235
356,614

11
BALANCE SHEET
AS AT 30 JUNE 2022

Group
2022
$000
2021
$000
(restated)
Current assets

Cash and cash equivalents 24,137 19,940
Trade and other receivables 127,072 103,947
Inventories 8,674 7,438
Contract assets 1,332
- 
Derivative financial instruments 963
-
Total current assets 162,178 131,325

Non-current assets
Trade receivables and other non-current assets 6,070 6,825
Property, plant and equipment 134,180 128,338
Right-of-use assets 271,020 275,849
Intangible assets 501,668 491,382
Investment in associates and joint venture 11,407 7,510
Derivative financial instruments 2,061 -
Total non-current assets 926,406 909,904
Total assets 1,088,584 1,041,229

Current liabilities
Trade and other payables 172,822 102,944
Lease liabilities 34,735 31,078
Income tax payable 7,209 11,982
Provisions 1,550 1,562
Derivative financial instruments - 1,082
Contract liability 15,876 14,593
Total current liabilities 232,192 163,241

Non-current liabilities
Trade and other payables 3,709 51,352
Borrowings (secured) 176,210 163,696
Deferred tax liability 37,087 36,726
Provisions 7,382 6,979
Lease liabilities 275,390 280,557
Derivative financial instruments - 577
Total non-current liabilities 499,778 539,887
Total liabilities 731,970 703,128
NET ASSETS 356,614 338,101

EQUITY
Contributed equity 184,349 182,571
Retained earnings 173,939 163,522
Cash flow hedge reserve 2,178 (1,195)
Foreign currency translation reserve (4,087) (6,945)
356,379 337,953
Non-controlling interests 235 148
TOTAL EQUITY 356,614 338,101

12

STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2022


Group
2022
$000
2021
$000
(restated)
Inflows

(Outflows)
Inflows

(Outflows)
Cash flows from operating activities

Receipts from customers
851,573 792,279
Payments to suppliers and employees
(672,075) (596,493)
Cash generated from operations
179,498 195,786
Interest received 83 22
Interest and other costs of finance paid
(20,375) (22,748)
Income taxes paid
(35,522) (39,835)
Net cash inflows from operating activities


123,684 133,225

Cash flows from investing activities
Payments for property, plant and equipment


(23,020) (12,360)
Payments for software
(4,098) (3,857)
Proceeds from disposal of property, plant and equipment
1,148 399
Payments for businesses acquired (net of cash acquired)


(12,070) -
Payments for investment in associates (2,674) -
Receipts from joint venture and associate 2,930 3,354
Cash flows from other investing activities
2 (213)
Net cash outflows from investing activities (37,782) (12,677)

Cash flows from financing activities
Dividends paid
(59,678) (25,702)
Increase (decrease) in bank borrowings
9,803 (58,985)
Proceeds from issue of ordinary shares


1,778 799
Principal elements of lease payments
(34,008) (33,319)
Net cash outflows from financing activities


(82,105) (117,207)

Net increase in cash and cash equivalents 3,797 3,341
Cash and cash equivalents at beginning of year
19,940 16,686
Exchange rate adjustments 400 (87)
Cash and cash equivalents at end of year 24,137 19,940

13
ACCOUNTING TREATMENT OF CLOUD COMPUTING ARRANGEMENTS

The Group previously capitalised costs incurred in configuring or customising certain suppliers’ application
software in certain cloud computing arrangements as intangible assets, as the Group considered that it would
benefit from those costs to implement the cloud-based software over the expected terms of the cloud computing
arrangements. Following the International Financial Reporting Standards Interpretations Committee (IFRIC)
agenda decision on Configuration or Customisation Costs in a Cloud Computing Arrangement in March 2021
(ratified by the International Accounting Standards Board (IASB) in April 2021), the Group has completed a
review of these capitalised costs to determine whether they would need to be expensed or reclassified as
prepayments. The IFRIC concluded that costs incurred in configuring or customising software in a cloud
computing arrangement can be recognised as intangible assets only if the activities create an intangible asset
that the entity controls and the intangible asset meets the recognition criteria. Costs that do not result in intangible
assets are expensed as incurred, unless they are paid to the suppliers of the cloud-based software to significantly
customise the cloud-based software for the Group, in which case the costs paid upfront are recorded as
prepayments for services and amortised over the expected terms of the cloud computing arrangements.

As a result of the IFRIC clarification, the Group has determined that certain costs relating to the implementation
of cloud-based software would need to be expensed when they were incurred, as the amounts were paid to third
parties who were not subcontracted by the supplier of the cloud-based software and did not create separate
intangible assets controlled by the Group, or significantly customise the cloud-based software for the Group.

The change has been applied retrospectively and comparative information has been adjusted. The impact on the
consolidated financial statements is as follows:

• General and administrative expenses in the consolidated income statement for the year ended 30 June 2021
has increased by $1.8 million.
• Depreciation and software amortisation in the consolidated income statement for the year ended 30 June
2021 has decreased by $0.1 million.
• Intangible assets in the consolidated balance sheet at 30 June 2021 has reduced by $3.1 million.
• Retained earnings in the consolidated balance sheet at 30 June 2021 has reduced by $3.1 million.
• Payments for software on the statement of cash flows has been reduced by $1.8 million and payments to
suppliers and employees has been increased by $1.8 million.
• Basic earnings per share (EPS) for the year ended 30 June 2021 has reduced from 30.0 cents per share
(CPS) to 29.0 CPS.
• Diluted EPS for the year ended 30 June 2021 has been reduced from 29.9 CPS to 28.9 CPS.
• Basic EPS excluding change in fair value of contingent consideration (Big Chill Distribution Limited) and
other income and expenses, net of tax, for the year ended 30 June 2021 has been reduced from 43.9 CPS to
42.9 CPS.
• Diluted EPS excluding change in fair value of contingent consideration (Big Chill Distribution Limited)
and other income and expenses, net of tax, for the year ended 30 June 2021 has been reduced from 43.8
CPS to 42.8 CPS.
• Net tangible assets per fully paid ordinary share as at 30 June 2021 has reduced from ($0.83) to ($0.85).


SEGMENT REPORTING

A segment is a component of the Group that can be distinguished from other components of the Group by the
products or services it sells, the primary market it operates in and the risks and returns applicable to it. Operating
segments are reported upon in a manner consistent with the internal reporting used by the Chief Executive
Officer, as the chief operating decision maker, and the Board for allocating resources, assessing performance
and strategic decision making.

The Group is organised into the following reportable operating segments:

Express package & business mail
Comprises network (hub & spoke) courier, refrigerated transport, point-to-point courier and postal services.

14
Information management
Comprises secure paper-based and electronic business information management services. This segment also
comprises secure handling, treatment and disposal of clinical waste and related services.

Corporate and other
Comprises corporate, financing and property management services.

The Group has no individual customer that represents more than 4% of external sales revenue.


As at and for the year ended 30 June 2022:

Express
Package &
Business Mail
Information
Management
Corporate Inter-
Segment
Elimination
Consolidated
Operations

$000 $000 $000 $000 $000
Income statement
Sales to external customers
687,023 186,071 - - 873,094
Inter-segment sales
2,009 996 5,639 (8,644) -
Total revenue
689,032 187,067 5,639 (8,644) 873,094


Operating profit (loss) before
change in fair value of contingent
consideration, interest, income tax,
depreciation and software
amortisation and amortisation of
intangibles




142,156



55,232



(8,807)



-



188,581
Change in fair value of contingent
consideration – Big Chill
Distribution Limited
- - (3,700) - (3,700)
Operating profit (loss) before
interest, income tax, depreciation
and software amortisation and
amortisation of intangibles




142,156



55,232



(12,507)



-



184,881
Depreciation and software
amortisation

(34,687) (22,105) (1,567) - (58,359)
Operating profit (loss) before
interest, income tax and
amortisation of intangibles



107,469


33,127


(14,074)


-


126,522
Amortisation of intangibles (5,195) (2,333) - - (7,528)
Profit (loss) before interest and
income tax

102,274 30,794 (14,074) - 118,944
Net interest and finance costs (6,200) (4,804) (9,289) - (20,292)
Profit (loss) before income tax
96,074 25,990 (23,362) - 98,702
Income tax (26,067) (7,745) 5,292 - (28,520)
Profit (loss) for the year attributable
to the shareholders

70,007 18,245 (18,070) - 70,182


Balance sheet

Segment assets 702,906 344,361 41,317 - 1,088,584
Segment liabilities 315,888 185,085 230,997 - 731,970

15

As at and for the year ended 30 June 2021:

Express
Package &
Business Mail
Information
Management
Corporate Inter-
Segment
Elimination
Consolidated
Operations

$000 $000 $000 $000 $000

(restated) (restated)
Income statement

Sales to external customers
629,760 170,770 3 - 800,533
Inter-segment sales
3,254 (104) 4,795 (7,945) -
Total revenue
633,014 170,666 4,798 (7,945) 800,533


Operating profit (loss) before other
income and expense, interest,
income tax, depreciation and
software amortisation and
amortisation of intangibles




141,029



50,849



(6,042)



-



185,836
Change in fair value of contingent
consideration – Big Chill
Distribution Limited
- - (23,046) - (23,046)
Operating profit (loss) before
interest, income tax, depreciation
and software amortisation and
amortisation of intangibles




141,029



50,849



(29,088)



-



162,790
Depreciation and software
amortisation

(33,239) (21,876) (1,836) - (56,951)
Operating profit (loss) before
interest, income tax and
amortisation of intangibles



107,790


28,973


(30,924)


-


105,839
Amortisation of intangibles (5,280) (2,372) - - (7,652)
Profit (loss) before interest and
income tax

102,510 26,601 (30,924) - 98,187
Net interest and finance costs (6,290) (4,881) (11,496) - (22,667)
Profit (loss) before income tax
96,220 21,720 (42,420) - 75,520
Income tax (27,208) (6,509) 6,126 - (27,591)
Profit (loss) for the year attributable
to the shareholders

69,012 15,211 (36,294) - 47,929


Balance sheet

Segment assets 638,459 360,217 42,553 - 1,041,229
Segment liabilities 257,853 171,871 273,404 - 703,128

Segment assets and liabilities are disclosed net of inter-company balances.

For the year ended 30 June 2022, external revenue from customers in the Group's New Zealand and Australian
operations was $730.1 million and $142.4 million, respectively (2021: $672.1 million and $128.4 million,
respectively). As at 30 June 2022, non-current assets in respect of the New Zealand and Australian operations
(excluding deferred tax assets and financial assets) were $707.8 million and $259.8 million, respectively (2021
restated: $454.7 million and $172.5 million, respectively).

16

REVENUE FROM CONTRACTS WITH CUSTOMERS

The Group derives revenue from the transfer of goods and services over time and at a point in time in the
following major product lines:

Express
Package and
Refrigerated
Transport &
Storage
Postal Storage &
Handling
Destruction
Activities
Other Total
$000 $000 $000 $000 $000 $000
2022
Revenue from external
customers
641,410 45,613 59,319 83,521 43,231 873,094
Timing of revenue
recognition:

At a point in time - 2,540 - 22,033 13,406 37,979
Over time 641,410 43,073 59,319 61,488 29,825 835,115
641,410 45,613 59,319 83,521 43,231 873,094

2021
Revenue from external
customers
581,285 48,475 60,694 70,616 39,463 800,533
Timing of revenue
recognition:

At a point in time - 2,706 - 20,492 11,009 34,207
Over time 581,285 45,769 60,694 50,124 28,454 766,326
581,285 48,475 60,694 70,616 39,463 800,533

17

INCOME AND EXPENSES

Profit before income tax includes the following specific income and expenses:

(i) The estimated discounted future final payment for the BCD has been increased from $51.3 million as at 30
June 2021 to $56.2 million as at 30 June 2022. This increase of $3.7 million (2021: $23 million) (net of
impact of unwinding of discount on acquisition earn-out liability of $1.2 million (2021: $1 million)) reflects
the strong performance of BCD, which will determine the final payment for the acquisition of the company,
to be made in August 2022.



IMPACT OF COVID-19

The sustained COVID-19 pandemic and the public health response to the virus have continued to impact
Freightways’ operations. The pandemic has had both positive and negative impacts on Freightways with
increased adoption of online shopping compared to pre-pandemic levels partly negated by a high number of
customers working from home negatively impacting the volume of services provided by our Information
Management businesses, although the trend is slowly improving. The Omicron variant of the COVID-19 virus
has had a significant impact on absenteeism, leading to higher than usual costs as Freightways’ businesses
were relying on temporary workers. The risk of a resurgence of COVID-19 in New Zealand or Australia creates
a continued level of uncertainty, although Freightways’ businesses are well prepared to operate efficiently
despite the impact of the pandemic and the public health response.


Group

Note
2022
$000
2021
$000

Change in fair value of contingent consideration – Big
Chill Distribution Limited (BCD)
(i) 3,700 23,046

18


LEASES

The following tables show the movements and analysis in relation to the ROU assets and lease liabilities under
NZ IFRS 16.

The balance sheet shows the following amounts relating to leases:

Right-of-use assets:
Group
2022 2021
$000 $000
Opening net book value 275,849 278,142
Lease additions, modifications and terminations 29,719 32,671
Depreciation for the yea
r (36,909) (35,148)
Exchange rate movement 2,361 184
Closing net book value 271,020 275,849

Cost 420,968 393,757
Accumulated depreciation (149,948) (117,908)
Closing net book value 271,020 275,849


Lease liabilities:
Group
2022 2021
$000 $000
Opening lease liabilities 311,635 311,072
Lease additions, modifications and terminations 29,818 32,929
Interest for the yea
r 10,864 11,111
Lease repayments (44,815) (43,725)
Exchange rate movement 2,623 248
Closing lease liabilities 310,125 311,635


Right-of-use assets:
Buildings
248,950 257,385
Equipment
7,630 3,647
Motor vehicles 14,440 14,817
271,020 275,849
Analysis of lease liabilities:
Curren
t 34,735 31,078
Non-curren
t 275,390 280,557
310,125 311,635

19


Lease liabilities maturity analysis:

Group
2022
Minimum lease
payments

Interest

Present value
$000 $000 $000
Within one yea
r 46,710 10,575 36,135
One to five years 144,045 31,986 112,058
Beyond five years 189,784 27,855 161,932
Total 380,539 70,416 310,125


Group
2021
Minimum lease
payments

Interest

Present value
$000 $000 $000
Within one yea
r 41,674 10,599 31,075
One to five years 137,308 33,456 103,852
Beyond five years 210,064 33,356 176,708
Total 389,046 77,411 311,635

Lease related expenses included in the income statement:

Total cash outflow in relation to leases is $43.1 million (2021: $43.7 million).


INTANGIBLE ASSETS

(i) Goodwill
Goodwill represents the excess of the consideration transferred in an acquisition over the fair value of the
Group’s share of the net identifiable assets of the acquired business at the date of acquisition. Goodwill is
not amortised but is tested for impairment annually or whenever events or changes in circumstances
indicate that it might be impaired and is carried at cost less accumulated impairment losses. Goodwill is
allocated to cash-generating units for the purpose of impairment testing.

(ii) Brand names
Acquired brand names are recognised at cost, being their fair value at the date of acquisition if acquired
in a business combination. Brand names with indefinite useful lives are not subject to amortisation but are
tested for impairment annually or whenever events or changes in circumstances indicate that they might
be impaired and are carried at cost less amortisation and impairment losses. Brand names with finite
useful lives are amortised over their expected useful lives. The useful lives and amortisation methods are
reviewed and adjusted, if appropriate, at each balance sheet date.

Brand names are allocated to cash-generating units for the purpose of impairment testing. The allocation
is made to those cash-generating units or groups of cash-generating units that are expected to benefit from
the brand names.

Group

Depreciation charge for right-of-use assets
2022

$000
2021

$000
Buildings
28,122 26,244
Motor vehicles 5,991 6,502
Equipment 2,494 2,402
36,607 35,148

Interest on leases 10,864 11,111

20


(iii) Computer software
External software costs, together with payroll and related costs for employees directly associated with the
development of software, are capitalised if the development creates an intangible asset that the Group
controls and the intangible asset meets the recognition criteria. Cloud-based software costs that do not
result in intangible assets are expensed as incurred, unless the costs are paid to the suppliers of the cloud-
based software to significantly customise the cloud-based software for the Group, in which case the costs
paid upfront are recorded as prepayments for services and amortised over the expected terms of the cloud
computing arrangements. Amortisation is charged on a straight-line basis over the estimated useful life
of the software which ranges between 3 and 10 years. Included in the cost of software is work in progress
of $0.1 million (2021: $1.4 million) for which amortisation has not commenced. Software under
development not yet available for use is tested annually for impairment.

(iv) Customer relationships

 Contractual
An intangible asset is recorded at fair value in respect of the amount of any contractual termination fees
payable by customers of businesses acquired in respect of their document holdings. As it is not known
when permanent retrieval fees may arise, this asset is only amortised upon the actual retrieval fee being
charged to the respective customer.

 Other
Non-contractual customer relationships acquired in a business combination are recognised at fair value at
the acquisition date. These customer relationships have an estimated finite useful life and are carried at
cost less accumulated amortisation. Amortisation is calculated using the straight-line method over the
expected useful life of the customer relationship which ranges between 10 and 20 years.

Group Goodwill

Brand
names


Software

Customer
relationships

Other Total
2022 $000 $000 $000 $000 $000 $000
Opening net book value 295,505 126,869 12,872 52,568 3,568 491,382
Additions
- - 3,788 - 310 4,098
Acquisition through
business combinations
7,549 873 - 4,554 525 13,501
Amortisation expense - (51) (3,650) (6,549) (928) (11,178)
Written-off - - (144) - - (144)
Exchange rate movement
3,062 595 30 241 81 4,009
Closing net book value 306,116 128,286 12,896 50,814 3,556 501,668

As at end of year
Cost
324,778 128,337 36,171 75,772 8,047 573,105
Accumulated amortisation
and impairmen
t
(18,662) (51) (23,275) (24,958) (4,491) (71,437)
Net book value 306,116 128,286 12,896 50,814 3,556 501,668

21


Group Goodwill

Brand
names


Software

Customer
relationships

Other Total
2021 $000 $000 $000 $000 $000 $000
(restated) (restated)
Opening net book value
295,163 126,807 14,345 58,683 4,931 499,929
Additions - - 3,774 - 68 3,842
Acquisition through
business combinations
- - - 61 - 61
Transferred from property,
plant and equipmen
t
- - 1,115 - - 1,115
Amortisation expense
- - (4,803) (6,214) (1,438) (12,455)
Written-off - - (1,565) - - (1,565)
Exchange rate movement
342 62 6 38 7 455
Closing net book value 295,505 126,869 12,872 52,568 3,568 491,382

As at end of year
Cost
314,167 126,869 34,507 70,605 7,103 553,251
Accumulated amortisation
and impairmen
t
(18,662) - (21,635) (18,037) (3,535) (61,869)
Net book value 295,505 126,869 12,872 52,568 3,568 491,382



Impairment tests for indefinite life intangible assets
Goodwill and brand names are allocated to those cash-generating units (CGU) or groups of CGU that are
expected to benefit from them. The carrying amount of intangible assets allocated by CGU or group of CGU
is outlined below:


Goodwill Brand names

2022
$000
2021
$000
2022

$000
2021
$000
Big Chill 85,183 77,635 14,714 14,000
Messenger Services
8,766 8,766 5,100 5,100
New Zealand Couriers 47,752 47,752 58,500 58,500
New Zealand Document Exchange and Dataprint 15,092 15,092 7,318 7,210
Post Haste, Castle Parcels and NOW Couriers 27,159 27,159 18,395 18,395
Total Express Package & Business Mail 183,952 176,404 104,027 103,205
The Information Management Group (New Zealand) 17,577 17,577 4,400 4,400
The Information Management Group (Australia)* 58,478 56,798 16,438 15,945
Shred-X* 46,109 44,726 3,421 3,319
Total Information Management 122,164 119,101 24,259 23,664
Total
306,116 295,505 128,286 126,869

* The increases in goodwill and brand names in The Information Management Group (Australia) (TIMG AU)
and Shred-X are due to foreign currency translation.

22


New Zealand Document Exchange (NZDX) and Dataprint (DAP) were previously accounted for as two
separate CGU’s, reflecting the fact that these businesses were managed and operated as independent
businesses. In the current financial year, NZDX and DAP organisational structure was changed to reflect an
integrated business. The changes include:
 common management and back-office teams;
 common technology being implemented across both businesses; and
 customers being jointly approached by both businesses to provide integrated solutions with a significant
percentage of revenue being generated through joint contracts.

As NZDX and DAP are now closely integrated, these two businesses have been combined into a single CGU
in the current year.

(i) Key assumptions used for value-in-use calculations

On an annual basis, the recoverable amount of goodwill and brand names is determined based on the greater
of value-in-use and fair value less costs of disposal calculations specific to the CGU or group of CGUs
associated with both goodwill and brand names.

The value-in-use calculations use post-tax cash flow projections based on financial budgets prepared by
management and approved by the Board for the year ended 30 June 2023. Cash flows beyond June 2023 have
been extrapolated using growth rates which take into consideration current and forecast economic conditions
for the relevant products and industries. A probabilistic approach was also adopted where a number of different
growth scenarios were considered and weighted by likelihood of achievement. In addition, the sensitivity of
the main financial variables was tested and considered in the final estimation. No adjustments have been made
to forecast cash flows for the unknown impacts of future legislative changes in relation to climate change, as
further disclosed in the note “Climate change” below.

Revenue growth rates and a consistent EBITDA margin assuming costs increase in line with revenue, reflecting
both historical and expected growth, have been applied to the value-in-use calculation with the same scenarios
and sensitivities applied as described in the Significant estimate – sensitive to changes in assumptions section
below. Growth rates have been aligned with the observed long-term inflation for each geographic region and
each CGU’s ability to increase customer prices and grow with nominal GDP. Post-tax discount rates, reflecting
the current environment in financial markets and the countries each CGU or group of CGUs operates in, have
been used. The CGU or group of CGUs specific growth rates and post-tax discount rates applied are:


Growth rate beyond
next financial year,
including terminal
growth
Post-tax discount rate
2022 2021 2022 2021
Big Chill 2.0% 1.0% 9.2% 7.0%
Messenger Services 2.0% 1.0% 8.4% 7.5%
New Zealand Couriers 2.0% 1.0% 8.4% 7.5%
New Zealand Document Exchange and Dataprint 2.0% 1.0% 12.5% 11.4%
Post Haste, Castle Parcels and NOW Couriers 2.0% 1.0% 8.4% 7.5%
The Information Management Group (New Zealand) 2.0% 2.0% 8.4% 7.5%
The Information Management Group (Australia) 2.5% 2.0% 9.9% 6.9%
Shred-X 2.5% 2.0% 9.9% 6.9%

23


(ii) Significant estimate - Sensitivity to changes in assumptions

From the value-in-use assessment for all CGU’s, management believes that no reasonably possible change in
any of the above key assumptions would cause the carrying values of goodwill and brand names to exceed
their respective recoverable amounts.

COVID-19 has particularly impacted the financial performance of NZDX and TIMG AU, which are more
sensitive to changes in the key assumptions. Revenue of the two businesses have decreased and in the case of
NZDX, costs have increased due to inefficiencies arising from operating in the COVID-19 environment,
especially due to staff absenteeism. The value-in-use analysis prepared for NZDX and TIMG AU assume the
FY23 financial performance returns to pre COVID-19 level, through higher volume and significant price
increases that are already being implemented. Growth rate of 2.0% for NZDX and 2.5% for TIMG AU is then
assumed from FY24.

The value-in-use analysis prepared for NZDX is based on the following key assumptions:
- 100% achievement of FY23 budgeted revenue;
- 2% Revenue growth per year (with a range of scenarios from -4% to 4% p.a considered);
- 2% terminal EBITDA growth rate; and
- post-tax discount rate of 12.5%.

The recoverable amount of NZDX would equal its carrying amount if any of the key assumptions were to
change as follows:


2022 2021
From To From To
Achievement of FY23 budgeted revenue 100% 72% 100% 73%
Revenue growth per year (FY24-FY27) 2% (8.8%) 1% (9.1%)
Terminal EBITDA growth rate 2% (5.8%) 1% (6.1%)
Post-tax discount rate 12.5% 17.0% 11.4% 15.6%

The value-in-use analysis prepared for TIMG AU is based on the following key assumptions:
- 100% achievement of FY23 budgeted revenue;
- 2.5% Revenue growth per year (with a range of scenarios from -4% to 4% p.a considered);
- 2.5% terminal EBITDA growth rate; and
- post-tax discount rate of 9.9%

The recoverable amount of TIMG AU would equal its carrying amount if any of the key assumptions were to
change as follows:


2022 2021
From To From To
Achievement of FY23 budgeted revenue 100% 81% 100% 84%
Revenue growth per year (FY24-FY27) 2.5% (3.9%) 2% (3.1%)
Terminal EBITDA growth rate 2.5% 0% 2% 0.8%
Post-tax discount rate 9.9% 11.7% 6.9% 7.9%

Climate change
Freightways strongly believes that sustainable business practices are fundamental to our future. These include
minimising the environmental impact of our daily operations and actively seeking initiatives to protect the
environment.

24

More than 95% of Freightways’ emissions come from the combustion of transport fuel, including that of our
contracted couriers. The most significant financial impact would therefore be due to an increase to the cost of
fuel and the cost of carbon credits linked to the volume of fuel used. Freightways would expect, however, to
be able to recoup most of that impact as mechanisms are already in place to adjust prices for movement of the
price of fuel. The risk of disruption due to natural events linked to climate change can be managed through the
flexibility of our network across New Zealand. Finally, most of the vehicles used in the Express Packaging
businesses are owned by contractors and Freightways is exploring ways through which it will be able to
facilitate the transition of the vehicles to electric or hydrogen.


EARNINGS PER SHARE

Basic earnings per share
Basic earnings per share is calculated by dividing the profit for the year attributable to shareholders by the
weighted average number of ordinary shares outstanding during the year:
Group
2022 2021
(restated)
Profit for the year attributable to shareholders ($000) 70,18247,929
Weighted average number of ordinary shares (‘000) 165,739165,502

Basic earnings per share (cents) 42.329.0

Diluted earnings per share
Diluted earnings per share is calculated by dividing the profit for the year attributable to shareholders by the
weighted average number of ordinary shares outstanding during the year, adjusted to include all dilutive
potential ordinary shares (for example, partly-paid shares and share rights on issue) as if they had been
converted to ordinary shares at the beginning of the year:

Group
2022 2021
(restated)
Profit for the year attributable to shareholders ($000) 70,18247,929
Weighted average number of ordinary shares (‘000) 165,739165,502
Effect of dilution (‘000) 403509
Diluted weighted average number of ordinary shares (‘000) 166,141166,011

Diluted earnings per share (cents) 42.228.9

* Basic and diluted earnings per share calculated on the profit for the year attributable to shareholders,
excluding change in fair value of contingent consideration (Big Chill Distribution Limited) and other income
and expenses, net of tax, are 44.6 and 44.5 cents, respectively (2021 restated: 42.9 and 42.8 cents,
respectively).


NET TANGIBLE ASSETS PER SECURITY

Net tangible assets (liabilities) per security at 30 June 2022 was ($0.80) (2021 restated: ($0.85)). Net tangible
assets exclude intangible assets but includes software. There were 165,803,446 shares issued and fully paid
as at 30 June 2022 (2021: 165,538,104).

25

BUSINESS COMBINATIONS

Acquisition of ProducePronto (“PP”)

Effective 1 November 2021, the Group acquired the business and assets of PP for an initial consideration of
approximately $12.1 million and future earn-out of up to $3.8 million over 3 years. PP operates fourth party
logistics (4PL) services with 365 day/year, same-day fresh and frozen delivery to convenience outlets
nationally and businesses across Auckland. This acquired business operates within the Group’s express
package & business mail operating segment.

The contribution of PP to the Group results for the year ended 30 June 2022 was revenue of $5.2 million,
operating profit before interest, income tax and amortisation of intangibles of $0.9 million and net profit after
tax of $0.2 million. If this acquisition had occurred at the beginning of the year, the consolidated pro-forma
revenue and net profit after tax for the year is estimated at $881 million and $70.3 million respectively.

The following table summarises the amounts determined for purchase consideration and the fair value of assets
acquired and liabilities assumed:

Purchase consideration $000
Cash paid during the yea
r 12,070
Fair value of future earn-out paymen
t 3,709
Total purchase consideration 15,779

Fair value of assets and liabilities arising from the acquisition
Contract assets 1,301
Plant and equipmen
t 2,562
Righ
t-of-use assets 499
Software 250
Brand name 765
Customer relationships 4,554
Non-compete agreemen
t 525
Trade and other payables (126)
Deferred tax liability (1,601)
Lease liabilities (499)
Net identifiable assets acquired 8,230
Add: Goodwill 7,549
Net assets acquired 15,779

The estimated discounted future earn-out payment of $3.7 million may be payable in August 2024 and has
been accrued for in the financial statements, but is contingent upon certain financial performance hurdles,
predominantly earnings before interest, tax and amortisation growth, being achieved over the years ending 30
June 2022, 2023 and 2024. The potential undiscounted amount of the future earn-out payment that the Group
expects could be required to be made in respect of this acquisition is between nil and $3.8 million. The Group
has forecast several scenarios and probability-weighted each to determine a fair value for this contingent
payment arrangement.

The goodwill of $7.5 million arising upon this acquisition is attributable to the business know-how and the
premium paid for strategic reasons, including acquiring an entry point into the 4PL temperature-controlled
transport and facilities industry.

Prior year acquisition - Big Chill Distribution Limited (“BCD”)

On 1 April 2020, the Group acquired 100% of BCD, a company operating in the New Zealand temperature-
controlled transport and facilities market, for an initial consideration of $114.6 million and future contingent
consideration representing 20% of BCD Enterprise Value as at 30 June 2022.

26

At 30 June 2022 the estimated discounted future payment for the acquisition of BCD was $56.2 million (30
June 2021: $51.3 million), with the change during 30 June 2022 arising from unwinding of discount on the
future payment increasing by $1.2 million (2021: $1 million) and an increase in the estimated future final
payment for the acquisition by $3.7 million (2021: increased by $23 million). The Group has forecast several
scenarios and probability-weighted each to determine an updated fair value for this contingent payment
arrangement. The liability is presented within current trade and other payables in the balance sheet.


SIGNIFICANT EVENTS AFTER BALANCE DATE

Dividend declared
On 22 August 2022, the Directors declared a fully imputed final dividend of 19 cents per share (approximately
$31.5 million) in respect of the year ended 30 June 2022. The dividend will be paid on 3 October 2022. The
record date for determination of entitlements to the dividend is 16 September 2022.

Acquisition
On 19 August 2022, Freightways entered into a sale and purchase agreement to acquire 100% of Allied Express
Transport Pty Limited, an express package business based in Australia, for aggregate purchase consideration
totalling approximately A$160 million. Completion and settlement are expected to occur on 30 September
2022. The purchase consideration will be settled by issue of A$100 million worth of Freightways Limited
ordinary shares and A$60 million in cash. There is no contingent consideration arrangement in place for this
acquisition.

Incremental annual revenue of $237.6 million and operating profit before interest, income tax and amortisation
of intangibles of $22.7 million is expected to be generated after the business has been fully integrated into
Freightways. The initial accounting for this business combination is incomplete at this point in time given the
relatively short period between finalising the acquisition and the issuance of the financial statements. The fair
value of assets and liabilities acquired, including identifiable intangible assets, will be disclosed in the financial
statements for the half year ended 31 December 2022 on a provisional basis and finalised by 30 June 2023.

At the date of this report, there have been no other significant events subsequent to the reporting date.

---

ANNUAL REPORT
FINANCIAL YEAR ENDED 30 JUNE 2022
Driving
Growth
Responsibly

To each horizon,
and beyond...
At Freightways, we’ve always
had an entrepreneurial spirit.
The quest for new opportunities
gives us energy and enthusiasm.
It’s seen us through some
challenging times recently and
continues to drive how we work
and the futures we imagine for
our businesses.




Our growth path is framed around three
horizons, improving the present, scaling what’s
next, and looking out beyond that to what
our customers will need five, seven, ten years
from now.
Strong growth in our courier, temperature-
controlled and digital volumes this year was
matched by a powerful expansion in waste
renewal. But just as exciting was our new
acquisition, ProducePronto, and market-ready
innovations like Stocka which see us continuing
to expand where we operate and add value.
Careful capital management and active portfolio
review mean we have the capacity and resources
to push the potential of each of our operating
areas as far as we can to drive growth.
We’ll do so ambitiously – and responsibly.
That’s the Freightways’ way.
Positive Outlooks:
1
|
Freightways Limited and its subsidiaries
freightways.co.nz

04 Highlights
06 Freightways' Growth Strategy
08 The Freightways' Family
10 Chairman and CEO’s Report
18 Spotlight on our Capabilities
34 Our People
36 Responsibility Framework
48 Our Community
50 Climated-related Financial Disclosures
70 Board and Leadership
73 Financial Summary
74 Directors’ Report
85 Financial Statements and Notes
Contents
Capability two: Strive for efficiency.
Deep smarts with business intelligence.
Capability three: Deliver reliably.
Staying reliable in an unpredictable world.
2226
Capability four: Love our customers.
Wrap-around services for a Royal Commission.
Who we are. Our people.
Progression, acknowledgements and celebrations.
3034
Our Chair and CEO’s report.
Seeing progress, looking ahead.
Capability one: Act like an entrepreneur.
Kiwi Express takes up the challenge.
1018
Our board. Our leadership team.Our sustainable development goals: SDG’s.
Incorporating non-financial criteria in our decision making.
3670
2
freightways.co.nz
3
|
Freightways Limited and its subsidiaries
Annual Report
Financial Year ended 30 June 2022|

Tonnes of waste to
be converted into
SaveBoard in 2022
4,000
The topline of FY 22
Acquisition,
increased market
share and product
innovation in
uncertain times.
We demonstrated our resilience again this year as we dealt
with volumes that ebbed and flowed, tight labour markets and
absenteeism brought on by the Omicron variant.
Through product innovation and entrepreneurism, we realised third
horizon goals in all four business activities and gained market share
in our Express Package and Waste Renewal businesses during
unprecedented times.
Environmental 
ProducePronto
welcomed to the
Freightways’ family
Pricing for Effort
(PFE)
37
C
Per share total
dividend for FY22
$
1.521
Financial
NPAT growth
in FY22
Basic earnings
cents per share
9.1
%
Operating revenue
growth for FY22
42.3
C
46.4
%
DX Mail and Data Print
collaborate to create
efficiencies
Kiwi Express
goes 25kg+
56,000
Tonnes of paper
shredded and
recycled in FY22
25
KG+
Collab
increases market share in
medical waste collection
and processing services
The new 3PL
product for TIMG
Efficient
Increased
items per
courier in FY22
StockaMed-X
TOITŪ certified
since 2014
Reduction of
CO2e by 2035
50
%
8
YEARS
4 5
|
Freightways Limited and its subsidiaries
freightways.co.nz
Annual Report
Financial Year ended 30 June 2022|

The Freightways’
Growth Strategy
Our purpose:
What we do
Freightways is a business that is always on the move.
Across the Group, we pick-up, process and deliver physical
and digital items with a view to delivering them reliably and
efficiently for our customers. We look to develop our people
through career opportunities. We seek appropriate and
sustainable returns for our investors. And we look to move
the dial for communities through the causes we support by
reducing our emissions and employing or contracting
local people.
Our strategy on a page:
Take
ownership
Think
commercially
Work as
a family
Strive for
efficiency
Deliver
reliably
Love our
customers
Act like an
entrepreneur
Express
Package
Business
Mail
Information
Management
Waste
Renewal
“We move you
to a better place”
Pick-up, Process and Deliver
What we do
Our capabilities
Our principles
Our vision
Stakeholders:
Our customers
Our team
Our shareholders
Our communities
Our principles & capabilities:

How we work
Three principles guide how our teams and our partners deliver.
• We take ownership and responsibility at every level for what
we do and what we can improve.
• We think commercially about the deals we make so that
they make sense for our customers, our contractors, our
business and our shareholders.
• We work as a family by supporting people, by prioritising
their safety and wellbeing and by doing everything we can
to ensure they get home safe each day.
We depend on our capabilities to deliver what our customers,
investors and communities expect. We’re efficient. This critical
capability enables us to move around 100,000,000 items through
our various businesses every year. We are reliable.
We target flawless execution which enables us to shift multiple
items through multiple touchpoints in our network, across two
nations, every day. We act like entrepreneurs. We recognise and
execute on high-value opportunities. We always look forward
and up. We love our customers, both internal and external
because we know they’re crucial to our commercial survival.
Our vision:
Why we do this
Better outcomes won’t just happen. It takes a conscious effort
from our team to move things forward for our customers, our
team, our shareholders and our communities.
Our “why” is to move you to a better place.
6 7
|
Freightways Limited and its subsidiaries
freightways.co.nz
Annual Report
Financial Year ended 30 June 2022|

P
i
c
k

-
u
p

D
e
l
i
v
e
r
P
r
o
c
e
s
s
I
n
f
o
r
m
a
t
i
o
n

M
a
n
a
g
e
m
e
n
t
W
a
s
t
e

R
e
n
e
w
a
l
B
u
s
i
n
e
s
s

M
a
i
l
E
x
p
r
e
s
s

P
a
c
k
a
g
e
Product Destruction
and Renewal
A family
of brands
Our organisational diagram:
Our market-leading brands combine
shared infrastructure with specialist
knowledge in each niche.
We work across a range of business
sectors, achieving high levels of quality
and efficiency, through our focus on
adding value to how we pick-up, process
and deliver.
Our strong culture and commitment
unifies our people and feeds our deep
team spirit. We draw on all of that to
continue to evolve our businesses to meet
the changing needs of our customers.
Express Package
Our multi-brand strategy in the New Zealand courier market
caters to a range of customer needs and delivery timeframes.
All share branch networks, air and road linehaul, and IT.
These brands include New Zealand Couriers, Post Haste,
Castle Parcels, NOW Couriers, SUB60, Security Express,
Kiwi Express, Stuck, Pass the Parcel, Big Chill Distribution
and ProducePronto. We also offer airfreight capability for our
overnight Express Package delivery service through our joint
venture airline, Parcelair, and our linehaul partner, Parceline.
This year we continued to implement our Pricing For Effort
(PFE) approach.
Business Mail
DX Mail is New Zealand’s only dedicated Business Mail
specialist; offering time-sensitive physical postal services
from both door-to-door and box-to-box.
Dataprint offers mailhouse-print services and digital mail
presentation platforms across New Zealand. Our technology
and solutions transform data into effective communications
for customers.
Information Management
The Information Management Group (TIMG) helps businesses
protect and add value to the data they entrust us with. It offers
physical storage and information management services, as well
as digital information processing services such as digitalisation,
business process outsourcing, online back-up and eDiscovery
services. This year we increased the utilisation of our storage
facilities by leasing out spaces for 3PL and other uses.
Waste Renewal
Shred-X offers document destruction, eDestruction and product
destruction services. We also provide medical waste collection
and processing services under the Med-X brand. This year we
continued to find new ways to transform what would once have
been waste into new products.
8 9
|
Freightways Limited and its subsidiaries
freightways.co.nz
Annual Report
Financial Year ended 30 June 2022|

B
2
B
S
e
c
u
r
e

d
e
s
t
r
u
c
t
i
o
n
S
t
o
r
a
g
e
T
r
a
n
s
p
o
r
t
B
2
C
M
e
d
i
c
a
l
D
i
g
i
t
a
l
3
P
L
2
5
K
g
+
H
i
g
h

V
a
l
u
e

R
e
c
y
c
l
i
n
g
3
P
L
S
a
m
e

D
a
y
/
V
a
n

D
e
l
i
v
e
r
y
R
e
n
e
w
a
l
&

B
u
s
i
n
e
s
s

M
a
i
l
E
x
p
r
e
s
s

P
a
c
k
a
g
e
W
a
s
t
e
M
a
n
a
g
e
m
e
n
t
I
n
f
o
r
m
a
t
i
o
n
C
o
n
t
r
o
l
l
e
d
T
e
m
p
e
r
a
t
u
r
e
L
o
v
e

o
u
r

c
u
s
t
o
m
e
r
s
S
a
l
e
s

a
p
p
r
o
a
c
h

a
n
d

c
u
l
t
u
r
e
S
t
r
i
v
e

f
o
r

e
f
f
i
c
i
e
n
c
y
N
e
t
w
o
r
k

d
e
n
s
i
t
y
M
&
A

g
r
o
w
t
h

/

T
h
e

S
t
a
r
t
e
r
y
A
c
t

l
i
k
e

a
n

e
n
t
r
e
p
e
n
e
u
r
A
l
w
a
y
s

d
e
l
i
v
e
r

o
n

t
i
m
e
D
e
l
i
v
e
r

r
e
l
i
a
b
l
y
• Horizon One
• Horizon Two
• Horizon Three
Mark Troughear | CEO
Seeing progress,
looking ahead
Chair and CEO’s Report:
The energy and
focus of our teams
continues to see us
strongly advance our
businesses across
different horizons.
The challenges of the
year were balanced
by clear evidence
that we have exciting
opportunities to
explore in the

years ahead.
In a year marked by further COVID-19
disruptions and a changing economic
background, we have increased our
revenue by 9% from last year and our
profit by 4% (if we exclude the impact
of the increased accrual for the final
payment related to the acquisition of
Big Chill Distribution).
COVID-19 variants maintained their
grip on our workforce this year, at times
reducing our frontline numbers by as
much as 30%, and impacting not just
our customers’ businesses but also
our branches which form a key part of
our distribution network. The resulting
staff absences, combined with lower
consumer confidence in the later part
of the year over inflation, rising costs
and labour constraints, moderated the
volume growth - and ultimately the full
year result.
Overall, volumes were similar to last
year’s, with periods of particularly
high activity pre-Christmas then offset
by lower volume during lockdowns
and the impact of Omicron on New
Zealand businesses. The second half
was characterised by a very tight and
expensive labour market, ongoing supply
chain issues globally and possibly the
first signs of a flattening of the
New Zealand economy. Despite this,
there were some significant spikes,
particularly at the end of calendar year
2021, when the team emerged from
lockdowns to cope with a sudden surge
in volumes. It was a massive effort from
staff and contractors and we also thank
those who also swapped their office
roles to help sort and deliver freight
through these tough times. The quality
of our services allowed us to increase
our overall market share, with new
customers offsetting declines in existing
business. Our contractors also stayed
with us through the ups and downs and
that stability absolutely contributed to
continuing high levels of service.
Not all businesses were negatively
impacted by the pandemic. Our Big Chill
business, for example, continued its
strong growth and was largely unaffected
by changes in volumes, although did feel
the impacts of a tight labour market.
Our Med-X business in Australia also
continued to build its market presence
and revenue at an accelerated rate.
Building through horizons
Last year’s report spoke to how our
purpose of “moving you to a better
place” drives us to grow our revenue and
earnings from our existing businesses
via organic growth, margin management
and efficiency gains.
At the same time, we keep finding ways
to improve - we look for new ways to pick
up, process and deliver that add value.
This year, we escalated that
“three horizons” approach to four key
areas of activity: Express Package &
Business Mail; Temperature Controlled
Logistics; Information Management; and
Waste Renewal.
In our application of the three horizons
model, we aim to:
• Extend and defend our first horizon
revenue streams (i.e. business-
to-business (B2B) deliveries,
Temperature-Controlled Transport,
Archive Storage and Document
Destruction
• Nurture and grow our horizon two
services (business-to-consumer
(B2C) deliveries,
Temperature-Controlled 3PL,
Digitisation and Medical Waste)
• Generate genuinely new
opportunities in horizon three
(Oversize express courier,
Same day temperature-controlled
deliveries, High-value recycling,
eCommerce 3PL).
Our first horizon services are the
backbone of our business often built
up over decades of operating and they
provide the infrastructure and national
network capability on which we establish
our second horizon opportunities.
Second horizon revenue streams will
typically have faster growth prospects
and utilise the fixed cost base established
in horizon one. In Express Package
our B2C growth leverages the digital
platforms, teams of people and physical
infrastructure developed over years of
B2B deliveries.
Enhanced by our unique Pricing for Effort
initiative, this service has developed
strongly on the back of a sizeable lift
in market demand, delivering strong
revenue growth for the Group and fairer
earnings for our contractors.
Similarly, our Medical Waste operation
in Australia has been built upon
our national network established
from Document Destruction and the
capabilities that allow us to collect bins
from customers and process them in a
safe, secure and efficient manner.
11
|
Freightways Limited and its subsidiaries
freightways.co.nz
10
Annual Report
Financial Year ended 30 June 2022|

Finally, there are our third horizon
opportunities. Here, we use our innovation
hub The Startery to identify emerging
niches that have the potential to deliver
tangible long-term revenue streams.
In the case of the Express Package
businesses, that’s enabled us to identify
the “Oversize parcels” market as a niche
driven by proven need. These parcels
include items like bikes, prams and flat
pack furniture. They’re generally between
25kg and 50kg in weight, too big for the
traditional courier network but generally
too small to suit heavy freight transport
operators. Right now, oversized parcels
make up about 5% of our delivered items.
Our goal now is to use our Kiwi Express
Oversize brand to develop this into a
national express delivery service. Repriced
to reflect the effort required, this new
service will give customers simpler ways
to move goods and pay our drivers a fair
delivery fee for doing so.
We’re seeing the same value progression
in our Waste Renewal business. That
business began by centring on document
destruction. From there, we evolved into
medical waste. Now, as a third horizon,
we’re adding a high-value recycling
proposition covering everything from
coffee cups to textiles to e-waste and
our 100% recycled building product,
SaveBoard. The most powerful aspect of
all this is that the underlying infrastructure
is the same across all three horizons.
Our Waste Renewal business uses the
same staff, trucks, facilities, shredders
and systems across everything it does to
generate increased revenue
and returns.
Our three horizons approach is attractive
because it identifies complementary
markets that are under-served, where
we have proven capability and generally
requires less capital by leveraging existing
assets. Evolving our businesses from first
horizon to third makes the most of our
capabilities (Act like an entrepreneur,
Strive for efficiency, Deliver reliably and
Love our customers) and assists us in
achieving sustained growth.
A major acquisition
in Australia
Of course, having a horizons approach
does not preclude us from accelerating
the process to acquire a business that has
already got there. At year end, we put the
finishing touches to an acquisition that
has built a successful “Oversize parcels”
courier business.
Allied Express is one of the largest,
independently owned, specialised
express freight operators in Australia,
with a national presence which enables
it to deliver 98% of their volume utilising
their own infrastructure and the balance
through a network of 48 agents. They
offer both point to point same day metro
delivery services and interstate delivery
across Australia.
Allied differentiates themselves from the
mainstream players by being market
leaders in the delivery of items over 22kg
in weight. The acquisition:
• Provides us with a scale entry point
into the Australian express package
market and a platform to grow from;
• Complements our core capabilities
in express pick up, processing and
delivery; and
• Provides a backbone network that we
can leverage for growth from existing
and new customers as well as the
potential for service extension.
Allied has a team of around 1,150 people
including 700 contractors and 450
staff, with clients ranging from large
corporates to SME’s operating across a
wide range of industries including online
retailing, automotive, trade supplies
and manufacturing. The sector also has
higher barriers to entry because of the
complexity associated with moving larger
courier items.
We have looked for many years for an
Express Package opportunity in Australia
before choosing Allied and are excited
by this acquisition. This deal has fast-
tracked our horizons agenda in Australia
exponentially and, of course, progressed
our third horizon strategy in our
Express Package business overall.
On track in terms of our
sustainability goals
This year we will release our third
Sustainability Report, having developed
a science-based target for emissions
reduction last year that will see us
targeting a 50% drop in Scope 1, 2 and 3
emissions by 2035. We have been TOITŪ
certified since 2014.
Well over 95% of our emissions
come from the fuel we use across our
vehicles and aircraft. Our 2030 target
of 35% reduction in CO2e and our 2035
target of 50% reduction in C02e align with
what society needs to achieve globally
to keep global warming to within two
degrees Celsius.
We continue to keep close to the progress
being made in emerging technologies that
are aimed to reduce carbon emissions.
Based on current progress, our current
strategy will commence with company
owned vehicles - starting with 25% of
company cars being PHEV by 2025 and
100% either PHEV, EV or hydrogen by
2030. We expect that our contractors’
light vehicles will begin to meaningfully
transition to EV’s from 2028 enabled by
the rates of remuneration we provide,
with a goal to having our entire light
vehicle fleet made up of low emission
vehicles by 2035. We anticipate that our
heavy transport fleet will commence
using alternative fuels from 2030, and by
2035 we expect that half of these vehicles
will have transitioned. We expect our
aircraft fleet will modernise at the end
of the current decade. Having said this,
the landscape is changing rapidly and
we will be flexible in our approach as
the emerging technologies are proven,
including continuing to monitor and
assess the availability of alternate low
emissions fuels through this period.
We have already significantly reduced
our use of plastics by adopting recycled
satchels and fabric freight bags and
developed solutions to enable our
customers to recycle their soft plastics
as well as diverting tens of thousands of
tonnes of paper away from landfill and
increasing our SaveBoard capability.
As part of our ongoing reporting, we will
also refresh our Sustainable Development
Goals (SDG) materiality over the next year
to ensure that our SDGs continue to align
with the interests of our stakeholders.
1150
People including
700 contractors
and 450 staff
98
%
Of volume delivered
utilising their own
infrastructure
22
KG
+
Allied Express are
market leaders in
handling items over 22kg
VIC
SA
NSW
QLD
WA
Allied
Express
Targeting a
50
%
drop in carbon
emissions by 2035
12 13
|
Freightways Limited and its subsidiaries
freightways.co.nz
Annual Report
Financial Year ended 30 June 2022|

Business unit
performances
Full year in review:
Strong growth
in digitisation
and medical
waste drove
Information
Management
divisional
revenue growth
of 9.6% over the
past year...
Our businesses continued to

adapt to market changes.
Here are some highlights.
Express Package and Business Mail
Lockdowns and peak season surges resulted in overall
revenue growth of 8.8% for the year with volume moderating
as Omicron hit and then the economy began to flatten
toward the end of the financial year. Operating costs were
significantly higher in the second half – primarily due to the
cost of labour to both cover for COVID-19 related absences,
increased sick leave payments and the tighter labour
market. Profit was largely flat as a result of these costs and
the ongoing lag effect of higher fuel prices, where we give
our customers the benefit of a two month lag before our FAF
(variable fuel adjustment factor) reflects prevailing fuel rates.
Information Management
Strong growth in digitisation and medical waste drove
divisional revenue growth of 9.6% for FY22 despite periods
of lockdowns in both New Zealand and Australia which
restricted archive related activity and eDiscovery services.
This strong revenue growth delivered a 14.3% increase in
EBITA over the period.
Capex and Dividends
Total capital expenditure for the year was $24.7m.
In line with our Capital Management Policy, the Board
declared a final dividend of 19cps, bringing the full year
dividend to 37cps, 3.5cps higher than last year.
14
freightways.co.nz
15
|
Freightways Limited and its subsidiaries
Annual Report
Financial Year ended 30 June 2022|

"Our thanks to all our teams
for everything you’ve done
this last year and to our
shareholders and customers
for your continuing support."
Mark Cairns & Mark Troughear |
Chairman of the Board & CEO
Outlook FY23
We complete the year feeling
confident that we have a
successful platform for
growth and profitability,
both now and in the future.
Over the year, we will continue to look
after the first horizon of each business
activity, further scale our second horizon
initiatives and work with The Startery to
foster those future third horizons.
The successful integration of Allied
Express, and the growth opportunities
this will generate both in Australia and
New Zealand, will be a key focus.
The first 6 weeks of FY23 have been
characterised by a slight 1% decline in
Express Package items consigned on the
prior comparative period (pcp). Existing
customers are trading 5% lower than in
the pcp offset largely by a net 4% market
share gain. B2B is down 5% and B2C up
11% reflecting the nature of those market
share gains over the past year. While
comparing COVID-19 impacted periods
is challenging (for example there are far
less COVID-19 related personal protective
equipment (PPE) and PCR tests travelling
through the network compared to the
previous year) a comparison to
pre COVID-19 levels reveals total item
growth of 12%.
We believe the current impact on
customer trade we are seeing is driven
by a range of factors including a chronic
shortage of labour which is restricting
businesses from reaching their optimal
output, continued disrupted supply chains
and some slowing of economic activity.
While same customer trade is slightly
lower, we have seen no adverse change to
our debtors profile.
We expect operational labour costs
to increase by around 11% on the pcp
reflecting a tight market and the need to
secure quality people as well as higher
sick leave and costs related to filling those
gaps. Fuel prices have had their first
material fall in the last year and if this
trend is maintained we expect that the
fuel lag will allow us to recoup some of
the losses we experienced in FY22.
Our General Rate Increase for most lines
of business was implemented in July
and is expected to largely offset the
increased costs of operating. Despite the
present challenges in New Zealand and
Australia for the businesses we operate -
primarily the scarcity and increased cost
of labour and some signs of an economic
slowdown impacting consumption - we
remain confident in our ability to manage
the impact of these conditions on each
part of our business.
Our people remain our greatest asset.
We have a highly experienced and
committed team, many of whom have
been with us for decades. Our team got
us through the challenges of the last
two years and they will continue to be
our greatest strength regardless of the
economic climate. As we enter a new
year their safety and well-being remains
foremost in our minds.
We have implemented new pricing from
July to offset the impact of a higher cost
base. One critical advantage we have is
that our cost base is highly variable, and
this gives us the ability to profitably adjust
to a deteriorating economic environment.
As always, we will react decisively to any
change in volumes while maintaining
the service, safety and environmental
standards that our customers, investors
and other stakeholders expect. We will
also prioritise the best strategies to
deliver value to shareholders over the
long term.
Finally, our thanks to all our teams for
everything you’ve done this past year and
to our shareholders and customers for
sharing this journey with us and for your
continuing support.
16 17
|
Freightways Limited and its subsidiaries
freightways.co.nz
Annual Report
Financial Year ended 30 June 2022|

Act like an
entrepreneur
Capability one:
Responding to COVID-19 and maintaining business as usual has consumed
a lot of energy over the last two years. Nevertheless, our entrepreneurial
nerve centre, The Startery, has held its own, working up new business
ideas in various areas and bringing them through to investment.
Stocka finds its place
Stocka is a new 3PL service developed
by TIMG to serve small eCommerce
businesses that have outgrown their
start-up premises and now need efficient
ways to warehouse and deliver their
stock to their customers. Until now, this
natural change point in developing an
eCommerce business has been fraught
with frustration. Traditionally these small
business customers looked to third-
party logistics providers to help them
store, stock and then utilise that storage
facility as a delivery hub. But large 3PL
companies are often only interested in
palletised stock, meaning they aren’t
well equipped to help a growing business
warehouse, pick, pack and send items.
Using existing space in TIMG
warehouses in Wellington and Auckland,
Stocka was developed to service this
segment with innovative flat fee pricing
offering one fee for warehousing and
sending items New Zealand-wide.
New Zealand Couriers and Post Haste
take care of deliveries.
The business has found a strong
target market and has the potential
for significant scalability. A lot of new
business is coming from Australia,
with customers looking for easy and
inexpensive ways to launch into the
New Zealand market with reasonable
cost controls. We will start to fill out the
product offering over the next year.
My Checks looks up
My Checks launched in 2020.
The business offers comprehensive
background checks for recruitment
companies, enabling them to check
clients without having to import and store
sensitive data. COVID-19 and lockdowns
made for a tough start as the sector
slowed and recruiters were reluctant to
pick up a new tool during stressful times.
Since then, the business has picked up
and continued to grow, posting a profit
this year.
Kiwi Express puts on weight
Oversized items are an under-served
market segment in New Zealand,
but globally this has proven to be a
successful and expandable market.
The opportunity was spotted and tested
by The Startery process and Kiwi Express
is now moving into the 25kg+ courier
items segment to fulfil a need to move
items that are too big for a traditional
courier and too small for a traditional
transport provider.
SaveBoard keeps building
SaveBoard is already operating in
New Zealand, with our Te Rapa facility
opening in June 2022. SaveBoard’s rigid
air barrier makes the product absorbent
and dry, and a great substitute in a tight
market. We will sell all our capacity this
year, with demand significantly exceeding
supply at the moment. The partnership
is a win/win for Freightways because
we earn revenue from transporting
materials, and we can sell the end
product at a highly competitive rate.
With significant State funding, SaveBoard
is all set to open plants in Australia.
The first plant will open in Sydney in
October 2022, followed by Queensland
in 2023 and Victoria in 2024. There is a
lot of interest because of the worldwide
shortage of building materials and
because of the significant environmental
benefits, with queries from as far afield
as South Korea.
SaveBoard is in partnership with
Freightways, Tetra Pak and Closed Loop.
TIMG’s logistics expertise
TIMG Australia completed a two-year
project at the end of 2021, helping
auditors gather, clean, discover
and collate evidence for the Royal
Commission into banking, started by
Prime Minister Scott Morrison in 2019.
A national-scale project for TIMG,
covering 190 locations across seven
states, required wrap-around security,
logistical expertise and high-digitisation
skills. Due to the project’s high profile,
multiple touch points and logistic
complexity, TIMG needed to ensure that
all aspects were managed effectively
and efficiently via detailed SLAs with all
parties to deliver the project to brief by
the required deadline. At its peak, the project
employed 330 staff in all states working on a
rolling delivery, scanning and delivering over
30 million digitised images to auditors for
forensic research purposes.
Since the successful delivery of this project in
2021, TIMG Australia has gone on to provide
several similar large-scale information
management projects.
Post Haste wins by
looking one mile out
Over the last year, Post Haste has been
growing their dedicated solutions product (a
direct, regular contract delivery between two
points) by approaching businesses close to
their 16 national branches.
Dubbed their “One Square Mile” strategy,
sales teams approached business categories
the business was familiar with and had a
history of serving well. The result was strong
returns with little investment and minimal
strain on the existing network.
Hello ProducePronto
Freightways welcomed ProducePronto
to the family in 2021, via acquisition.
ProducePronto provides national delivery of
fresh food for consumption the same day to
business and convenience outlets.
ProducePronto fulfils the temperature-
controlled distribution hub-to-consumer
arm, fitting perfectly alongside the larger
scale, cross-country Big Chill. Presently
ProducePronto delivers fresh fruit, milk,
bread, flowers and lunches. An opportunity
exists to grow the business by widening
the consumer target to include other small
businesses and homes.
Med-X scales quickly
Australian-based Med-X had another
strong year of growth in FY22, with demand
for medical waste disposal threatening to
overwhelm their existing systems. PPE,
sharps and other medical waste increased
exponentially as Med-X grew to serve
quarantine hotels and vaccination stations in
the major cities. To scale up, fleet and staff
increased by up to 4 times in some states.
Using BI data Med-X also studied data outputs
to find out where opportunities lay to place
more medical waste bins, and rental fees, with
their existing clients. Through this simple act,
Med-X added an extra $1m of revenue to the
FY22 financials.
18 19
|
Freightways Limited and its subsidiaries
freightways.co.nz
Annual Report
Financial Year ended 30 June 2022|

Ugly leads to a
beautiful opportunity
Case study. Act like an entrepeneur:
It started with
COVID-19 and the
boom in eCommerce.
People were buying
washing machines
and BBQ’s, bar fridges
and lawn mowers.
However couriers
were struggling to
deliver them because
traditional economies
of scale, based on a
rate card that charged
for smaller items,
didn’t work in the
25kg+ segment.
Freight and logistics people call these
items “ugly”, meaning they don’t fit the
usual freight profile. That’s because
traditional couriers cannot move items
that are heavy or large. Not only are
they uneconomic to move, but there are
health and safety risks.
A sizeable unmet need
Our team at The Startery saw a natural
opportunity. Globally, courier companies
that deal with oversized items have done
very well. So, there was a precedent.
But it would need a focussed brand to
serve this niche properly.
The more The Startery looked into this,
the more interesting the opportunity
became. The 25kg+ market accounted
for 6% of items but required more than
25% of the overall space inside the
Freightways courier networks. So, that
was a significant discrepancy.
Transport providers were also less
interested in this segment. People often
used such companies for delivery but
were frustrated by the lack of speed and
visibility as their goods moved through
the network.
The opportunity existed not just to service
this market but to do so in a courier-
type way, with speed, track and trace,
and easy despatch. We recognised two
more things. With the right equipment
and health and safety training, we could
specialise in this space, and the service
itself needed to be national, starting in
the main centres of Auckland, Wellington
and Christchurch.
Kiwi Express takes up
the challenge
Kiwi Express was chosen as the brand
to take this offering forward because
they already worked as a point-to-point
courier business in Auckland, Wellington,
and Christchurch and they had the
nimbleness and energy to grow into
the role while continuing with business
as usual. Adopting the new category
would give the brand a single-minded
proposition they could own and a place in
the market to maximise their experience
and intellectual property.
The new offering would continue using
our proven hub and spoke network
but would take on more of the 25kg+
business from across our brands. Trucks
and vans would be fitted with tailgates,
and two-person teams, trained in health
and safety, equipped with heavy-duty
trolleys that could walk stairs. Included
is a dedicated freight sort at each end
and an amended rate card to reflect
the Pricing for Effort required to deliver.
Deliveries between cities would make
use of the Parceline linehaul network.
The service is currently available in the
three main centres, potentially expanding
to Hamilton and Tauranga later. We can
also deliver outside these areas using a
traditional courier and amended rate. So
far, we’re very pleased with our progress.
In fact, we expect the new offering to hit
budget within the first 12 months.
AKLWGNCHCHAMTGA
20 21
|
Freightways Limited and its subsidiaries
freightways.co.nz
Annual Report
Financial Year ended 30 June 2022|

Strive for
efficiency
Capability two:
Attention to detail is a critical part of
our customer service. The balance
we’re always looking to strike is
ensuring things are working as
efficiently as possible and getting the
appropriate level of return where
extra effort is required. This year
we’ve continued to look for ways to
channel resources more efficiently.
Addressing the lack
of validation
Incorrectly validated addresses add
significantly to the workload of our
Express Package businesses. These
packages need more handling and are
often returned to us, meaning addresses
must to be manually checked, sorted
and corrected. In the new year, we’ll start
including an extra charge of $0.25 per
item for deliveries going to residential
addresses that haven’t been validated.
Our Corelogic address validation system
accurately validates and categorises
addresses based on their latitude and
longitude and gives certainty about which
services are available at that address.
These details are updated in real-time
and are available on the home page of all
Express Package product websites.
Specific increases
Not all residential deliveries are equal
and this year we will be using the data
at our disposal to assess those which
require more time and complexity to
ensure we are recovering appropriately
to reward our couriers and recover
our margins.
All sorts of help
A new sorting machine at DX Mail has
automated our mail sorting for the
first time. The automated mail sorting
technology takes a photo of each
item, reads the addresses and sorts it
accordingly, meaning customers can
now give us all their mail, and we can
separate and post it for them. Faster
sorting also means we can handle more
significant volumes.
Post Haste Group made another
significant shift in sorting and distributing
freight at their main depot in Penrose.
By separating their consolidation
activities from their deconsolidation
activities, they’ve split their fleet and
distribution operations, reducing the
overall sort time and allowing them
to handle volume surges better. It’s
also safer for staff who are completely
separated from the comings and goings
of large linehaul vehicles.
Reviewing a range of
our rates and processes
Our Pricing for Effort initiative is now in
its third year and has been responsible
for solid courier pay and per item
margin improvement rises across our
Express Package brands. This year we’re
focusing on the carriage of dangerous
goods. These types of goods require 17
specific actions to be taken to ensure
their packaging, handling, carriage
and delivery are completed inside the
regulations of the Dangerous Goods Act.
When we move such goods, we’re also
responsible for educating our customers
about what’s needed. We’re repricing the
carriage of these goods to reflect the real
cost of delivery better.
Non-conveyables are items that pose
problems for our automated conveyer
belt systems because of the way they
are packed. A good example is products
packed in glass and then packed in boxes
without proper internal packaging such
as cardboard inserts.
Wine bottles are a great example of
goods which if not packaged correctly
can cause damage not only to the bottle
but also other customers’ freight.
Presently New Zealand Couriers is
working with a packaging company to
design packaging for wine bottles that is
safe to handle and conveyable.
We’ve also been reviewing across-town
deliveries. Local rates for these journeys
need to reflect the extra effort, traffic
congestion, and travel distances as our
towns and cities continue to expand.
We’re also reviewing our rates for
rural deliveries in the year ahead.
Before COVID-19, deliveries that required
the driver to leave the city and town
boundaries were a low percentage of our
overall activity. However, the explosion
in online shopping has seen rural
percentages almost double in the last
18 months, making them a more costly
and time-consuming part of our
couriers’ days.
Systematic advances
This year, we reviewed our approach
to invoicing to make the process more
efficient. The review was an opportunity
to better cope with volumes and
introduce automation where it made
sense to do so. Involving our Sales,
Finance and Operations teams will
ensure the new system answers all
our existing issues at once rather than
addressing them individually.
A key goal for the review is aligning our
invoicing with our wider Pricing for Effort
strategy. By getting this right, we ensure
our courier partners achieve a fairer
allocation of each invoice to match the
effort it took for each delivery.
Freightways Information Services
has also been hard at work across
the business:
• Developing ways to bulk scan multi-
pick-ups from one customer
• Developing a web tool that will help
couriers and depot sorting staff use
their phones to sort freight in every
depot in the country accurately.
• Looking at ways to increase the uptake
of our API integration. By encouraging
our customers, regardless of
business size, to integrate directly
with our courier mainframe, get
better information and achieve more
automation. In turn, decreasing errors
and increasing efficiencies, volumes
and reliability.
TCPs are the containers used to
sort and consolidate freight for their
inter-city journey. With the rapid increase
in volumes over the last 18 months,
we’ve been looking at how we can use our
Power BI system to pre-emptively track
where these TCPs might be needed so
we can move them around our network.
Barcoding the TCPs means we can track
and plan where these vital resources are
and where they will most be needed.
Our Waste Renewal businesses
Shred-X and Med-X are currently
onboarding a new multi-user IT platform
that has helped them consolidate their
activities with one overarching platform.
The new platform will improve how
we manage our inventory and supply
chain. But it will also lessen the load
on our call centres by enabling our
customers to login and self-manage their
requirements and billing.
Bagging up the savings
Post Haste Group is looking to reduce
the number of plastic satchels they
manufacture for their three
Express Package brands.
Presently each brand manufactures up
to 5 plastic satchels of differing sizes.
By shifting to one set of 7 multi-branded
satchels, the business intends to reduce
its manufacturing and printing plate costs
by two-thirds annually.
22 23
|
Freightways Limited and its subsidiaries
freightways.co.nz
Annual Report
Financial Year ended 30 June 2022|

Using BI to create
smarter efficiencies
Case study. Strive for efficiency:
Four years on from
when we launched
our BI (Business
Intelligence) system,
we’re still finding new
ways to make the most
of the data we now have
available to us.
Every day, as we create and track
journeys for the many things we move,
we also generate data about those
journeys. For example, we use tracking
data at every critical point in a
parcel’s journey:
• when it’s collected; as it passes
through our depots;
• when it’s onboarded and,
• of course, when it’s delivered.
Barcode readers and scanners are used
by a number of our businesses, including
all our Express Package couriers, Waste
Renewal operators and our Information
Management services teams.
Seeing from the
present into the future
We collect various streams of operational,
financial and customer data across
our businesses. Recently we have
been repurposing that information into
valuable insights that are changing how
we do business.
Today, we’re using data to manage
our real-time workflow, monitor our
performance by customer and aggregate
customer and receiver details to help
with returns and lost items. Also, we are
using data to generate customer insights
to tailor our approach and help our
customers get more out of our systems
and processes.
As our data grows, our ability to forecast
more accurately will grow – meaning we
will be better able to plan our businesses
and project our futures.
Easier than ever to excel
One of the significant advantages of our
BI system is that its a Microsoft product –
so our people can continue to use all the
tools they are familiar with, such as Excel,
to build reports themselves, test and run
data sets, analyse results and present
back findings to the business. The idea
has caught on so strongly that some
systems teams are now holding training
sessions with awards handed out to the
most improved “ Reporting Power User”
every quarter.
Seeing what we didn’t know
Power BI allowed us to really understand
what is happening for our customers at
a granular level. Over the last 12 months,
our Express Package businesses, for
example, have been using the data from
their scanning hardware to run reports
based on customer segmentation by
run, region, destination, origin and price.
Those reports allowed us to see which
customers were profitable for us and
which weren’t, which in turn gave us
the opportunity to tailor proposed price
increases and service level changes to
each customer financially
and operationally.
For our profitable customers, we have
aligned our service and product to
perfectly match their freight profiles
and worked with our relationship
managers to reinforce communication
with them and deepen the relationship.
For our lower margin accounts, we’ve
used the opportunity to address rate
card increases individually rather than
implementing rate card changes across
the board.
Our couriers are also benefitting. We’ve
started to map, collect and analyse data
around courier runs – specifically, the
number of deliveries made against the
distance of kilometres travelled. This data
can then be fed into scenarios that add
and subtract streets to/from a courier
run to ensure our contractors are being
offered the best opportunities to optimise
their earnings.
24 25
|
Freightways Limited and its subsidiaries
freightways.co.nz
Annual Report
Financial Year ended 30 June 2022|

Deliver
reliably
Capability three:
Reliability has been a particular
focus for our Express Package and
Waste Renewal businesses this year,
with each company creating bespoke
responses to staff absenteeism,
volume surges and continuing
COVID-19 restrictions.
Taking our network status to new levels
The health and pharmaceutical sectors both rely heavily on
New Zealand Couriers. With the impact of COVID-19 causing
potential disruption, New Zealand Couriers have developed a
network status framework that enables customers to see what’s
happening in their areas and the areas they are sending to.
The framework is updated daily and offers individual status
levels for all branches and linehaul networks.
There are four levels:
1. Standard
Our network and branches can deliver to our usual service
standards, with no expected disruptions.
2. High Pressure
There is a level of disruption and some delays.
3. Very High Pressure
Restrictions are in place that may mean changes for pick-up times
and the volume of courier items we can accept. Under this level,
we may limit collections, for example, and provide branch drop-
offs for critical items only.
4. Network Contingency
Significant restrictions are in place, and medical necessities are
the priority. Under such conditions, it may not be possible for
courier items to be picked up or dropped off.
So far, the Network Contingency level has yet to be evoked,
but the framework ensures we have a plan in place should up to
40% of our national workforce be absent due to COVID-19.
No surprises approach
New Zealand Couriers are working on their third iteration of
forecasting models to predict freight volumes. The tool monitors
parcel movements every hour and then compares those volumes
with the same data one hour ago or for data sets up to 10 weeks
in advance. An algorithm then predicts how the future might
look. The business can use data to manage volumes, resources
and performance.
Outperforming under pressure
This year’s pressure test focused on the performance of our
residential network. The tests are conducted by an independent
third party and compare New Zealand Couriers’ performance for
overnight delivery of 189 courier items with that of their biggest
competitor. The results proved that New Zealand Couriers is
still the premium provider in the market, with the best service
standard in this category. This year’s test ran during difficult
times due to Omicron and absenteeism to see how the
network performed.
Post Haste acts quickly to
address volume surge
Post Haste Group too, had challenges with unprecedented
volumes - up by more than 100% in December 2021 in some
areas. Post Haste responded by leasing space at Captain Springs
Road, Otahuhu, to house and sort the extra freight. To protect
items, a large canopy was erected between the Post Haste and
New Zealand Couriers depots at our Penrose site. The canopy
allows extra freight sorting room when volumes are high
and an all-weather area to load and unload linehaul vehicles.
Then, to ensure they would be more prepared for high volume
fluctuations, they secured a third Auckland depot location in Wiri.
People remain the critical component
This year, the key to delivering reliably has been securing labour
and talent in a tight market. While shortages challenged all our
businesses, our courier brands were arguably the hardest hit,
developing and activating several strategies in response.
• As a Group, we worked with HainesAttract to build a relief
team of casual staff to support the permanent sortation
teams across the Express Package brands
• We continued to promote people internally, and this has
continued to be a solid and valuable strategy
• Remaining competitive with salary packages continues to be
a high priority for all businesses inside the Group
• The success of our Pricing for Effort initiative meant we
retained our contractors - courier pay saw an average rise of
7.2% in FY22
• Post Haste offered secondments and developed their own
cadetship for business graduates while promoting from
within, where possible
• New Zealand Couriers launched their internal
communication strategy “Driven to be the best” to
acknowledge the efforts of their people and to rally the team
behind the ongoing challenges of being fast and reliable in
the current environment
• Shred-X / Med-X highlighted flexibility by encouraging their
teams to work from home
• Ensuring capability and resources can cycle between both
brands effectively and safely, across all states, has also
proven to be a helpful strategy.
26 27
|
Freightways Limited and its subsidiaries
freightways.co.nz
Annual Report
Financial Year ended 30 June 2022|

Staying reliable in an
unpredictable world
DIFOT (delivering
in full, on time) is
critical in our world.
Our depots, van runs,
shuttle trucks and
linehaul have been
purposefully designed
to fulfil a reasonably
priced, national
expectation of next-
day delivery, to and
from anywhere in
the country.
Two types of network
Our courier brands use either hub-
and-spoke (New Zealand Couriers,
Post Haste, NOW Couriers) or point-
to-point (SUB60 and Kiwi Express)
network frameworks. Hub-and-spoke
accounts for deliveries from local to
nationwide (and international in some
cases ), usually delivered overnight at a
reasonable rate card. Point-to-point is
an item picked up and delivered by one
courier in one trip, at a higher rate card,
in our larger cities only.
In the case of our hub-and-spoke
network, profitability depends on
strategising, planning and executing
to the centre of the bell curve – where
the majority of freight sits in terms
of volumetric weight and reachable,
accurate delivery address locations.
That’s because our hub-and-spoke
network uses national airways and roads
to connect branches and depots across
the country. This interconnectedness
makes rapid and reliable delivery
possible, but it also means our deliveries
are susceptible to factors like weather.
This year, those factors were complicated
by staffing shortages, volume surges and
COVID-19.
We have sortation systems at strategic
points in our network to help deal with
more volume – but people are still
integral to driving, loading, sorting, and
problem-solving deliveries to keep the
network moving.
If people are affected on a large scale –
as with COVID-19 – the courier network,
indeed the global supply chain, is deeply
affected. Absenteeism, labour shortages
and the ensuing need to secure
temporary staff had a massive effect
on the ability of our couriers to achieve
DIFOT reliability during the COVID-19
peak in FY22.
A new normal
The courier industry is growing,
powered mainly by online shopping and
consumer need for immediacy. But
volume surges are problematic because
they require us to resource up on various
fronts. Bigger teams, sorting space
(depots) and equipment (sorting cages,
conveyors, trucks and vans) all take time
to set up. Unplanned surges like the one
we had at the end of 2021 mean we must
work harder than ever to counter delays
in delivery and stress on resources, depot
space, staff and couriers.
COVID-19 brought many of these
pressures together at one time. We had
volume surges caused by lockdowns
and people staying home. Issues
around high Christmas deliveries were
accentuated by unreliable supply chains
internationally. We had high absenteeism
due to sickness and stay-at-home
rules. Deliveries were more complex,
with a higher percentage of residential
deliveries compounded by the need
to follow COVID-19 health guidelines.
And on top of all this, we had abnormal
weather conditions. The result was a
new normal that has required our
courier businesses to rethink how we
reliably deliver.
Customer engagement
Being upfront and honest about the
state of play of the courier network with
customers was critical to preserving our
brands’ reputations. All our businesses
front-footed communications to their
customers, ensuring they knew precisely
what would happen to their deliveries.
During the lengthy lockdowns and strict
health and safety regulations, all our
brands kept up regular communication
with customers via their digital channels,
updating them on what was happening,
how to get more information and what
to expect from their courier brand over
the coming weeks and months. We did
this using a combination of website
homepage updates, landing pages
and electronic direct mail.
A strong, ‘get it done’ culture
But if people were our greatest
vulnerability, they were also our enduring
strength. Perhaps our biggest weapon
in the battle to secure DIFOT was our
deep sense of working like a family. That
commitment saw people helping out
colleagues when things suddenly got
busy or stepping out of their roles to help
in other parts of the business.
We made plenty of operational changes
to keep pace with what was happening –
but ultimately, the commitment of people
to each other, our reputation,
and our customers proved our greatest
reliability asset in a challenging and
unpredictable year.
Case study. Deliver reliably:
28 29
|
Freightways Limited and its subsidiaries
freightways.co.nz
Annual Report
Financial Year ended 30 June 2022|

Love our
customers
Capability 4:
Part of our commitment to loving our customers is looking for opportunities
to add value for them in their businesses and their lives. Increasingly that
commitment revolves around data and providing customers with insights
that improve their understanding.
Parcelling up insights
Our New Zealand Couriers teams are using data extracted from
our hand-held scanning hardware to compile a new report pack
called My Parcel Insights. The report uses the customer’s data
to help them better understand where they are being efficient
and where there’s room for improvement in terms of their parcel
handling. We can also easily compare their data against our
national data averages to show where customers are not hitting
national benchmarks.
The Report can also calculate GHG (greenhouse gas emissions)
for courier deliveries for customers that they can then use for
their public reporting. New Zealand Couriers is TOITŪ verified,
which means we can calculate and publish GHG emissions by
weight, origin or destination and assign carbon to each delivery.
Love with an emphasis on the ‘e’
eCommerce is where the new business is for our courier brands.
Positioning ourselves as an eCommerce expert enables us to
help eCommerce business owners looking for insights into how
to better run their business. We’re not the only business doing
this of course. Courier brands around the world are becoming
eCommerce insight providers. New Zealand Couriers is no
different. Through insight reports, blogs and information via
our customer services and sales teams, we’re engaging with
eCommerce business owners early in the cycle of business
development - from start up - as they look to grow.
What we’re finding is that business owners are asking for
thought leadership, ‘how to’ guides, top tips, market research
and reports.
Woo is just the start
CX (customer experience) is the term on every digital marketer’s
lips right now. Presently, our Express Package courier brands
have a sophisticated level of API integration for larger to
enterprise level eCommerce businesses. But for start-ups and
smaller eCommerce businesses, integration and CX with our
courier mainframes is more challenging. We are now looking
to resolve this. Recently we developed integration with Woo
Commerce (Wordpress eCommerce platform) and are looking to
move to more eCommerce platforms this year.
Helping customers to help themselves
Self service is another way that we are helping customers find
what they are looking for. Over the last few years, New Zealand
Couriers have been building up their Help Centre content. This
cache of information pertains to all things courier – educating
our customers on how to get the best out of us.
In the last 12 months alone over 150 articles have been posted
to the Help Centre and take-up has been high as customers
prefer to self-solve their problems rather than call Customer
Services. To date, the Help Centre has had more than 470,000
views – which represents a significant number of queries that
our Customer Services have not had to deal with.
Helping the banks to box clever
TIMG Australia have just completed a large customer-focused
two-year project with a number of Australian banks. As part of
the Royal Commission enquiry into banking, our TIMG teams
uplifted large swathes of documents from 190 bank locations
across all states, digitising and cataloguing thousands and
thousands of archive boxes for the inquest. At its peak, we had
more than 300 staff around the country working on this.
The project required lengthy collaboration with both customers
and auditors.
Putting the customer first
Dataprint has been nominated for the Westpac Business
Awards for 2022. These high-profile awards have been
part of Auckland’s business calendar for over 15 years
and celebrate innovation, creativity and service amongst
nominated businesses.
Two recent NPS surveys, carried out six months apart, scoring
over 70, verify Dataprint’s supportive culture, customer-first
ethos and nomination in these prestigious awards.
Chilled future
Big Chill announced the development of their new cold
storage facility in Ruakura this year. Expected to open in July
2023, this world-class facility will be capable of storing up to
16,000 pallets inside its 13,000m2 footprint. Positioned inside
Ruakura’s new SuperHub precinct, the location will help
Big Chill bolster its links to the Port of Tauranga, Waikato
and Bay of Plenty with crucial overnight and same-day links to
Auckland customers.
The new facility will also set the benchmark for environmental
performance - achieving at least a 4-star green building rating.
Growing produce demand
ProducePronto deliver perishables to businesses in metro
areas via a fleet of temperature-controlled vans and small
trucks. Fresh delivery is essential to their customers, as is
being reliable. Business growth is generated by fulfilling
these capabilities like clockwork. Delivering fresh flowers
well every day becomes flowers and sandwiches, then flowers,
sandwiches and doughnuts - through well-executed
customer service and smart logistics platforms.
30 31
|
Freightways Limited and its subsidiaries
freightways.co.nz
Annual Report
Financial Year ended 30 June 2022|