Annual Shareholders Meeting – including trading update

DRIVING GROWTH RESPONSIBLY:
FREIGHTWAYS ANNUAL
SHAREHOLDERS
MEETING 2022
27 OCTOBER 2022 | NZX FRE

Mark Cairns
Chairman’s Introduction
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CHAIRMAN’S INTRODUCTION
CEO’S STRATEGY & TRADING UPDATE
VOTING & QUESTIONS
RESOLUTIONS
APPENDICES

Shareholder and Proxyholder Q&A Participation
How to submit QUESTIONS
Questions may be submitted ahead of the meeting. If you have a question to submit during the live meeting, please select the Q&Atab on the
right half of your screen at anytime. Type your question into the field and press submit. Your question will be immediately submitted.
Help
The Q&A tab can also be used for immediate help. If you need assistance, please submit your query in the same manner as typing aquestion
and a Computershare representative will respond to you directly.
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CHAIRMAN’S INTRODUCTION
CEO’S STRATEGY & TRADING UPDATE
VOTING & QUESTIONS
RESOLUTIONS
APPENDICES

Shareholder and Proxyholder Voting
How to VOTE
Once the voting has been opened, the resolutions and voting options will allow voting.
To vote, simply click on the Vote tab, and select your voting direction from the options shown on the screen. You can vote for al
l resolutions at
once or by each resolution.
Your vote has been cast when the tick appears. To change your vote, select ‘Change Your Vote’.
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CHAIRMAN’S INTRODUCTION
CEO’S STRATEGY & TRADING UPDATE
VOTING & QUESTIONS
RESOLUTIONS
APPENDICES

The Board and Management Team
1.Chairman’s Introduction
2.CEO’s Strategy and Trading Update
3.Voting and Questions
4.Resolutions
Mark Cairns
Chairman
Abby Foote
Director
Fiona Oliver
Director
Mark Rushworth
Director
David Gibson
Director
Peter Kean
Director
Mark Troughear
CEO
Stephan Deschamps
CFO
Nicola Silke
General Counsel and
Company Secretary
AGENDA
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CHAIRMAN’S INTRODUCTION
CEO’S STRATEGY & TRADING UPDATE
VOTING & QUESTIONS
RESOLUTIONS
APPENDICES

14.3
%
4.1
%
EBITA
GROWTH
NPAT Growth
(before change in fair value of
contingent consideration –
BCD
)
9.1
%
ACROSS
FREIGHTWAYS
8.8
%
REVENUE
GROWTH
Market share
gains driven
byservice
performance
Express
Package
Information
Management
Revenue
Growth
FY22 HIGHLIGHTS:
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CHAIRMAN’S INTRODUCTION
CEO’S STRATEGY & TRADING UPDATE
VOTING & QUESTIONS
RESOLUTIONS
APPENDICES

$1.52
JUNE 2022
Pricing for
Effort achieved
7.2
%
vs. prior comparative
period (PCP)
Contractor
earnings up
Growth in BCD & 3PL
Revenue of
14
%
Over the PCP
Strongdigital
growth on
both sides of
Tasman
Express Package
Express Package
Express Package
Information Management
$26m
Up 67% on the PCP
FY22 Revenue
increased to
New automated
sortation is
driving better
run optimisation
and labour
efficiencies
Business MailWaste Renewal
FY22 HIGHLIGHTS:
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CHAIRMAN’S INTRODUCTION
CEO’S STRATEGY & TRADING UPDATE
VOTING & QUESTIONS
RESOLUTIONS
APPENDICES

H1Impact
Under alert level4,activity levelsare significantly impactedacross
our New Zealand businesses.
Themo
vefrom level4tolevel3inSeptember 2021sawthe
express package businesses recover and experiencea significant
increasein volumes.
DuringH1, so
meareas ofAustraliaalsosawincreased restrictions
because ofa resumption ofCOVID-19 cases. Weestimatethecost
of level4 in NZ,anda range ofrestrictionsin AU,at around$5min
earningsin H1(and allin thefirstquarter).
H2Impact
Asupdatedin our May 2022 trading update:
Omicronha
d a significant effect on our businessinJanuary and
Februaryin Australiaand then fromMarchonwardsin NZ.
Atit
speakwesawaround 30%of our team absent fromwork
through contracting thevirus.
This i
mpacted not only our abilitytooperate efficiently and at
maximumcapacity, but also the ability of ourcustomerstobe able
toconsign 100%of their freight.
Omicronbec
amea handbrake not only on volume but also resulted
in significantly higher employmentcostsandlowerefficiencyas our
experienced teamsweresupplemented by temporarystaff.
Covid Impact
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CHAIRMAN’S INTRODUCTION
CEO’S STRATEGY & TRADING UPDATE
VOTING & QUESTIONS
RESOLUTIONS
APPENDICES

Dividend
19 CPS
FINAL DIVIDEND
7.39 CPS (FULLY IMPUTED AT 28% TAX RATE)IMPUTATION CREDITS
3.3529 CPS
SUPPLEMENTARY DIVIDEND
16 SEPTEMBER 2022RECORD DATE
3 OCTOBER 2022PAYMENT DATE
DividendPolicyalignedwithCapital ManagementPolicy,balancinga number ofobjectives:
1.The s
etting of the dividendis subordinatedtothe overall capitalstructureof Freightways. When debtis considered high, thecashdividendwillbe
reducedtoallow for faster debt reduction
2.The di
videndis set ata level that the Board expectstobe sustainablein the medium term
3.Subjectto t
hefirsttwoprinciples, the Boardwillaimtopay 75%to80%of theNPATAadjusted for significant one-offs
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CHAIRMAN’S INTRODUCTION
CEO’S STRATEGY & TRADING UPDATE
VOTING & QUESTIONS
RESOLUTIONS
APPENDICES

Mark Troughear
CEO's Strategy and Trading Update
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CHAIRMAN’S INTRODUCTION
CEO’S STRATEGY & TRADING UPDATE
VOTING & QUESTIONS
RESOLUTIONS
APPENDICES

GROWTH STRATEGY:
Three Horizons
of Growth
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CHAIRMAN’S INTRODUCTION
CEO’S STRATEGY & TRADING UPDATE
VOTING & QUESTIONS
RESOLUTIONS
APPENDICES

Express Package and Business Mail
Horizon 1: B2B
EXTEND AND DEFEND
Expansion of facilities in
m
ain metro cities
Contractor earnings up
7.2% v the prior
comparative period (pcp)
Strong service performance
t
hroughout the year despite
COVID enforced
absenteeism
Horizon 2: B2C
GROW SCALE
Pricing for Effort (PFE) hit
$1.
52 in July FY23
B2C volumes are more than
doubl
e 2019 due to organic
growth and market share
gains
Opportunity for further gains
as
this market grows and as
we attract niches of B2C
who value a superior
service proposition
ESTABLISH NEW LINES OF
BUSINESS
Launch of Kiwi Express
O
versize service in 2022
Allied Express joins FRE in
O
ctober 2022 with a focus
on 22kg+
Allied moves into larger
pr
emises in NSW and WA
with automated sortation
commissioned for NSW in
2023
Horizon 3: Oversize
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CHAIRMAN’S INTRODUCTION
CEO’S STRATEGY & TRADING UPDATE
VOTING & QUESTIONS
RESOLUTIONS
APPENDICES

Temperature Controlled Logistics
Horizon 1: National Delivery
EXTEND AND DEFEND
Growth in core national
t
ransport through organic
and market share gains
Expansion of facilities in
W
ellington, Hawkes Bay
Horizon 2: 3PL
GROW SCALE
Utilisation of 95% in
A
uckland
Commissioning of new 3PL
s
ite in Ruakura, Hamilton
capable of storing 16,000
pallets
ESTABLISH NEW LINES OF
BUSINESS
•Acquisition of
P
roducePronto in 2021
•Roll out of national delivery
for convenience stores
•Leverage the Big Chill
D
istribution network for
storage, linehaul and depots
Horizon 3: Same Day
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CHAIRMAN’S INTRODUCTION
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RESOLUTIONS
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Information Management
Horizon 1: Storage
EXTEND AND DEFEND
Improvement in utilisation of
ex
isting warehouses
through market share gains
Horizon 2: Digitisation
GROW SCALE
Leverage TIMG’s credibility
t
o win new contracts in
digitalisation
ESTABLISH NEW LINES OF
BUSINESS
Establish STOCKA – an
of
fering for SME’s who
require eCommerce
fulfilment by leveraging
existing facilities, systems
and teams
Horizon 3: eCommerce 3PL
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CHAIRMAN’S INTRODUCTION
CEO’S STRATEGY & TRADING UPDATE
VOTING & QUESTIONS
RESOLUTIONS
APPENDICES

Waste Renewal
Horizon 1: Secure Destruction
EXTEND AND DEFEND
Build density using existing
net
works to maintain the
lowest activity cost in the
market
Focus on market share
gai
ns
Refine paper grades to
optimise returns
Horizon 2: Medical Waste
GROW SCALE
Build out the processing
f
ootprint in VIC and QLD
Gain new customers in
Ea
stern-seaboard markets
Differentiate our product
offering
ESTABLISH NEW LINES OF
BUSINESS
Expand S
aveBoardfrom NZ
only to establish plants in
Australia over the next 2
years
Continue to grow other niche
high value waste streams
where our assets and
capabilities support pick up,
processing and delivery to
final markets of recycled
products
Horizon 3: High Value Waste
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CHAIRMAN’S INTRODUCTION
CEO’S STRATEGY & TRADING UPDATE
VOTING & QUESTIONS
RESOLUTIONS
APPENDICES

3. GOOD HEALTH AND WELLBEING
•Health and safety in employment –i
njury reduction. LTIFR reduced from 12 to 11 in FY22
•Deployment of advanced in cab road safety technology in linehaul vehicles
•Employee wellness programme and mental health awareness training rolled out to all
m
anagement staff
•Commissioned NZ’s first virtual forklift simulator
8. DECENT WORK AND ECONOMIC GROWTH
•Introduction of literacy and numeracy training to operational teams
•Professional development and management/leadership training implemented
•Rewarding contractors for their efforts through PFE
9
. INDUSTRY, INNOVATION AND INFRASTRUCTURE
•Continual strengthening of reliable operations through expanded network infrastructure
•Horizon 2 and 3 opportunities developed through The Startery
1
3. CLIMATE ACTION
•GHG Emissions reduction with a target to reduce scope 1, 2 & 3 emissions by 50% by 2035
•Reducing plastic usage and waste by 75% through our EP Brands
•Introduced our Enviro 360 pack to enable recycling of soft plastics into SaveBoard
1
6. PEACE, JUSTICE AND STRONG INSTITUTIONS
•Ethics and integrity
•Transparency – e
arly disclosure of FRE TCFD report in 2021
ESG Update
Key areas of focus
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CHAIRMAN’S INTRODUCTION
CEO’S STRATEGY & TRADING UPDATE
VOTING & QUESTIONS
RESOLUTIONS
APPENDICES

INITIATIVETIMELINECOMMENT
100% of company cars are PHEV or EV
2029
Charging infrastructure and increasing supply + operating costs are currently barriers to progress.
Expect this to improve by 2025.
Light commercial fleet (vans) transitions to
alternate fuel cell
2028-2035
Charging infrastructure, limited-supply and high operating costs are still barriers to progress.
Funding options to bridge additional cost of ownership being explored.
Close monitoring of new van models to assess for time/weight/range capabilities – current available
options are very limited.
Contractor incomes well-aligned to be able to transition.
Metro truck fleet are EV or alternate fuel2030
Charging infrastructure, limited-supply and high operating costs are still barriers to progress. Funding
options to bridge additional cost of ownership being explored.
• Fuso E-Canter has the most suitable vehicle offering in this space currently, but cost per unit is
$294k vs $95k for the ICE equivalent. Range is also an issue with the E-Canter struggling to
achieve 100km per charge when under load and driving up hills.
Linehaul truck fleet begins to transition to
alternate fuel cell
2030
Hydrogen fuelling infrastructure, limited-supply and high operating costs are still barriers to progress.
Funding options to bridge additional cost of ownership being explored.
Close monitoring of new technologies in terms of: capability, safety, commerciality
Rollover current aircraft fleet to new jets that
achieve greater fuel efficiency
2027
Currently exploring newer jet options that are more fuel efficient.
A potential hurdle is a number of late-model jets burn more fuel on take off and landing, but are very
efficient when cruising, meaning fuel savings are limited in shorter routes..
A number of potential aircraft types being explored currently.
Green building specification for new
buildings
2023
Discovery being completed on specification standards for all new buildings, including:
• Solar Panels
• EV charging stations
• Reticulating storm water
• Recycled building materials
Carbon Emissions Reduction – Progress Update
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CHAIRMAN’S INTRODUCTION
CEO’S STRATEGY & TRADING UPDATE
VOTING & QUESTIONS
RESOLUTIONS
APPENDICES

Q1 Trading
Update
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CHAIRMAN’S INTRODUCTION
CEO’S STRATEGY & TRADING UPDATE
VOTING & QUESTIONS
RESOLUTIONS
APPENDICES

Q1 Consolidated Performance
Unaudited
Note
Q1 FY23
$m
Q1 FY22
$m
Change
%
Operating Revenue
237.4203.116.9
EBITDA (non-GAAP)(i)
49.545.58.8
EBITA (non-GAAP)(ii)
34.031.67.6
NPATA (non-GAAP)(iii)
21.019.95.5
NPAT (GAAP)(iv)
19.318.16.6
NOTES
i.Operating profit before interest, tax, depreciation and amortisation
ii.Operating profit before interest, tax and amortisation
iii.Net profit after tax before amortisation
iv.Net profit after tax
•GAAP – G
enerally Accepted Accounting Principles (IFRS-compliant)
•Results in this table are after NZ IFRS16 (Leases). Refer to appendices for reconciliation to results before NZ IFRS16.
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CHAIRMAN’S INTRODUCTION
CEO’S STRATEGY & TRADING UPDATE
VOTING & QUESTIONS
RESOLUTIONS
APPENDICES

Q1 Express Package & Business Mail
Unaudited and excludes lease accounting
Q1 FY23
$m
Q1 FY22
$m
Change
%
Operating Revenue
184.8160.515.1
EBITDA (non-GAAP)
31.128.011.1
EBITA (non-GAAP)
27.925.111.2
EBITA Margin
15.1%15.6%
Results in this table are before NZ IFRS16 (Leases) and are accordingly non-GAAP. Refer to appendices for reconciliation to results after NZ IFRS16.
GAAP – Generally Accepted Accounting Principles (IFRS-compliant)
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CHAIRMAN’S INTRODUCTION
CEO’S STRATEGY & TRADING UPDATE
VOTING & QUESTIONS
RESOLUTIONS
APPENDICES

Q1 Information Management
Unaudited and excludes lease accounting
Q1 FY23
$m
Q1 FY22
$m
Change
%
Operating Revenue
53.643.024.7
EBITDA (non-GAAP)
9.79.07.8
EBITA (non-GAAP)
7.57.15.6
EBITA Margin
14.0%16.5%
Results in this table are before NZ IFRS16 (Leases) and are accordingly non-GAAP.Refer to appendices for reconciliation to results after NZ IFRS16.
GAAP – Generally Accepted Accounting Principles (IFRS-compliant)
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CHAIRMAN’S INTRODUCTION
CEO’S STRATEGY & TRADING UPDATE
VOTING & QUESTIONS
RESOLUTIONS
APPENDICES

-5.00%
0.00%
5.00%
10.00%
15.00%
20.00%
123456789101112131415
Financial Week
Growth FY23 v FY20 (pre Covid)
-30%
-20%
-10%
0%
10%
20%
30%
40%
50%
60%
123456789101112131415
Financial Week of Year
Growth FY23 v FY22
Express Package Item Growth YOY (Network Couriers Only)
Alert Level 4, 2021Queens Memorial Day
(Public Holiday) 2022
Alert Level 3, 2020
Queens Memorial Day
(Public Holiday) 2022
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CHAIRMAN’S INTRODUCTION
CEO’S STRATEGY & TRADING UPDATE
VOTING & QUESTIONS
RESOLUTIONS
APPENDICES

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CHAIRMAN’S INTRODUCTION
CEO’S STRATEGY & TRADING UPDATE
VOTING & QUESTIONS
RESOLUTIONS
APPENDICES
Outlook

•We expect item count v the pcpfor H1 to be slightly negative
due to a strong comparative period in the last 15 weeks of
FY22;
•While we are mindful of the economic environment and a
pos
sible recession we have yet to see any material impact on
our customers;
•The labour market remains tight and the cost of labour
c
ontinues to be a source of pressure;
•The General Rate Increase levied from July 1 has generated
an es
timated net return of 6.2% in EP;
•Wehav
e a platform for growth and profitability in FY23, both
through existing businesses and new initiatives and the ability
to flex our cost base if volumes decline;
•We are excited to welcome Allied Express to the Freightways
f
amily. We see growth opportunities resulting from this on
both sides of the Tasman.
Conclusion and Outlook
“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”
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CHAIRMAN’S INTRODUCTION
CEO’S STRATEGY & TRADING UPDATE
VOTING & QUESTIONS
RESOLUTIONS
APPENDICES

Questions

Resolutions
Shareholders will be asked to
consider, and if thought fit, pass the
following ordinary resolutions:
1.That David Gibson be elected as a Director of Freightways.
2.That the Directors are authorised to fix the Auditors’ remuneration.
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CHAIRMAN’S INTRODUCTION
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RESOLUTIONS
APPENDICES

David Gibson
RESOLUTION ONE:
That David Gibson be elected as a
Director of Freightways.
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CHAIRMAN’S INTRODUCTION
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RESOLUTIONS
APPENDICES

Resolutions
Resolution Two
That the Directors are authorised to fix the Auditors’ remuneration.
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CHAIRMAN’S INTRODUCTION
CEO’S STRATEGY & TRADING UPDATE
VOTING & QUESTIONS
RESOLUTIONS
APPENDICES

Readthispresentationwiththefinancial statements
Thefinancial resultsin this presentation should be readin conjunctionwiththe financial statements for theyearended 30 June 2022,whichcan be foundin theNZX
preliminary results announcement.
No offerorinvestment advice
Thispresentationis for information purposes only. Itis not a product disclosure statement, prospectus or investment statement. Nothingin itconstitutes an invitation
to subscribe for shares, securities or financial productsinFreightways,orinvestmentorany other kind of advice. Any investor should consult their own professional
advisors and conduct theirownindependent investigation of Freightways and the information containedinthis presentation, including any statements relating to the
future performance of Freightways.Theinformationin this presentationis givenin good faith and has been obtainedfromsources believed to be reliable and accurate
at the date of this presentation.
Our non-GAAPinformation
Certain items of financial informationincludedinthis presentationare"non-GAAP"financial measures. These non-GAAPfinancial measures do not have a
standardised meaning prescribedbyNew Zealand Accounting Standards andsomaynot be comparable tosimilarlynamed measures presentedbyother
entities.Freightways believes that these measures provide useful informationinmeasuring the financialpositionand performanceofthe Freightways
business. However, undue reliance should not be placed on non-GAAPfinancial measures includedin this presentation.
Forward lookingstatements
Thispresentationmayinclude forward‐looking statements regarding future events and the future financial performance of Freightways. Such forward‐looking
statementsarebased on current expectations andinvolverisksand uncertainties. Freightways cautions investors not to place undue reliance on these forward-
looking statements,whichreflect Freightways’viewsonly as of the date of this presentation. Actual results may be materially differentfromthose statedinany
forward‐looking statements. Freightways gives nowarranty orrepresentation as to its future financial performance or any future matter. ConsistentwiththeNZXand
ASXlistingrules Freightwayswillcommunicatewiththe marketif thereis a material change, howeverit willnot update this presentation.
Disclaimer
None of Freightways, its affiliates, or their respective advisers or representatives, give any warranty or representation as to theaccuracyorcompleteness of the
information containedin this presentation, and exclude theirliabilityto the maximum extent permitted by law.
Disclaimer
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CHAIRMAN’S INTRODUCTION
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RESOLUTIONS
APPENDICES

Appendices

Financial Summary
For the financial year ended 30 June 2022
Note
FY22
$m
FY21
$m
Change
%
Revenue873.1800.59.1
EBITA, before change in fair value of contingent consideration – Big Chill
Distribution Limited (BCD) (non-GAAP)
i.130.2128.91.0
Change in fair value of contingent consideration – BCD(3.7)(23.0)
EBITA (non-GAAP)ii.126.5105.819.5
NPAT, before change in fair value of contingent
consideration – BCD (non-GAAP)
iii.73.971.04.1
Change in fair value of contingent consideration – BCD
(3.7)(23.0)
NPAT (GAAP)
iv.70.247.946.4
Basic EPS (cents)
(after change in fair value of contingent consideration – BCD)
42.329.045.9
Basic EPS (cents)
(before change in fair value of contingent consideration – BCD)
44.642.94.0
NOTES
i.Operating profit before interest, tax and amortisation, before change in fair value of contingent consideration – B
CD.
ii.Operating profit before interest, tax and amortisation.
iii.Net profit after tax (NPAT), before change in fair value of contingent consideration – B
CD.
iv.Profit for the half year attributable to shareholders.
v.GAAP – G
enerally Accepted Accounting Principles (IFRS-compliant)
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CHAIRMAN’S INTRODUCTION
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APPENDICES

Express Package & Business Mail
For the financial year ended 30 June 2022
NOTES
i.Results in this table are after NZ IFRS16 (Leases).
FY22
$m
FY21
$m
Change
%
Operating Revenue
689.0633.08.8
EBITDA (non-GAAP)
142.2141.00.8
EBITA (non-GAAP)
107.5107.8(0.3)
EBITA Margin
15.6%17.0%
NPAT (GAAP)
70.069.01.4
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CHAIRMAN’S INTRODUCTION
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APPENDICES

Information Management
For the financial year ended 30 June 2022
NOTES
i.Results in this table are after NZ IFRS16 (Leases).
FY22
$m
FY21
$m
Change
%
Operating Revenue
187.1170.79.6
EBITDA (non-GAAP)
55.250.88.6
EBITA (non-GAAP)
33.129.014.3
EBITA Margin
17.7%17.0%
NPAT (GAAP)
18.215.219.9
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CHAIRMAN’S INTRODUCTION
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RESOLUTIONS
APPENDICES

NOTES
i.Operating profit before interest, tax, depreciation and amortisation
ii.Operating profit before interest, tax and amortisation
iii.Net profit after tax before amortisation
iv.Net profit after tax
G
AAP – Generally Accepted Accounting Principles
Appendix
Unaudited
FREIGHTWAYS
GROUP
Note
Q1 FY23
$m
Q1 FY23
$m
Q1 FY23
$m
Q1 FY22
$m
Q1 FY22
$m
Q1 FY22
$m
Post NZ IFRS16NZ IFRS16
adjustment
Pre NZ IFRS16
(non-GAAP)
Post NZ IFRS16NZ IFRS16
adjustment
Pre NZ IFRS16
(non-GAAP)
Operating Revenue
237.4-237.4203.1-203.1
EBITDA (non-GAAP)(i)
49.5(11.7)37.845.5(10.4)35.1
EBITA (non-GAAP)(ii)
34.0(2.0)32.031.6(1.7)29.9
NPATA (non-GAAP)(iii)
21.00.521.519.90.720.6
NPAT(iv)
19.30.519.818.10.718.8
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CHAIRMAN’S INTRODUCTION
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Appendix
Reconciliation of Pre-NZ IFRS16 to Post-NZ IFRS16 (Unaudited)
EXPRESS PACKAGE & BUSINESS MAIL
Q1 FY23
$m
Q1 FY22
$m
Change
%
Operating Revenue184.8160.515.1
EBITDA (before NZ IFRS16)31.128.011.1
Add: NZ IFRS16 adjustment6.96.211.3
EBITDA (after NZ IFRS16)38.034.211.1
EBITA (before NZ IFRS16)27.925.111.2
Add: NZ IFRS16 adjustment1.00.911.1
EBITA (after NZ IFRS16)28.926.011.2
NOTES
EBITDA and EBITA are non-GAAP measures
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CHAIRMAN’S INTRODUCTION
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Appendix
Reconciliation of Pre-NZ IFRS16 to Post-NZ IFRS16 (Unaudited)
INFORMATION MANAGEMENT
Q1 FY23
$m
Q1 FY22
$m
Change
%
Operating Revenue53.643.024.7
EBITDA (before NZ IFRS16)9.79.07.8
Add: NZ IFRS16 adjustment4.84.214.3
EBITDA (after NZ IFRS16)14.513.29.8
EBITA (before NZ IFRS16)7.57.15.6
Add: NZ IFRS16 adjustment1.00.825.0
EBITA (after NZ IFRS16)8.67.98.9
NOTES
EBITDA and EBITA are non-GAAP measures
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THANK YOU

---

ANNUAL SHAREHOLDERS MEETING


A. CHAIRMAN’S INTRODUCTION

Slide 2. Freightways - 27 October 2022, Annual Shareholders
Meeting

Slide 3. Mark Cairns, Chairman

Nau mai, haere mai. Tena tatou katoa.
Good morning Ladies and Gentlemen and fellow shareholders. I am
Mark Cairns, the Chairman of Freightways.
Welcome to our Annual Shareholders Meeting. It’s great to be able to
meet again in person, and a very warm welcome to the people joining
us online also.
With us today are my fellow directors; Mark Rushworth, Peter Kean,
Abby Foote, Fiona Oliver, and David Gibson. David Gibson joined the
Board in April earlier this year and will address the meeting a little later
today on his election.

We will shortly be hearing from our Chief Executive, Mark Troughear.
Up on the stage, we also have our Chief Financial Officer, Stephan
Deschamps and our General Counsel and Company Secretary, Nicola
Silke. Other members of our Executive are also present in the room
today, keen for a chat with you over a cup of tea after the Annual
Meeting.

A welcome to the Company’s Auditors, PricewaterhouseCoopers and
the Company’s external legal advisors, Russell McVeagh, who are also
with us today.

We have a quorum of shareholders, so I declare the meeting open.

Firstly a few housekeeping matters: The bathrooms are located in the
western foyer area – near where you entered. In the unlikely event of
an emergency, you will be required to evacuate and gather at the
nominated assembly point over on Reimer’s Avenue. Should this occur
please exit the room through the rear doors and follow the directions of
Eden Park staff or security. Please also take this opportunity to switch
your mobile phones to silent.

Slide 4. How to ask questions

As set out in your meeting guide, any shareholder or proxy attending
the meeting or participating online, is eligible to ask a question.
Can I ask please that shareholders give their name when speaking
asking questions, and to confirm if they are a shareholder or proxy
holder. As usual, during question time, roving microphones will be
available to ensure that your questions are conveyed to everyone
present and online. Please wait for the microphone prior to asking your
question.

If you are attending online, please select the Q&A tab on the right half
of your screen anytime, then type your question into the field and press
'Send'. Please note that while you can submit questions from now on, I
will not address them until the relevant time in the meeting.

Please also note that your questions may be moderated or amalgamated
if we receive multiple questions on the same topic. Finally, due to time
constraints we may run out of time to answer all your questions. If this
happens, we will answer them in due course via email. Should you
require any assistance using the Computershare Online Platform, you
can type your query and one of the Computershare team will assist with
the chat function and reply to your query. Alternatively, you can call
Computershare on 0800-650-034.

All of the resolutions put to shareholders today will be decided by way
of a poll.

The polls will be administered by our share registry and the results of
the polls will be announced via the stock exchange after the close of the
meeting.

Slide 5. How to vote

If you are attending the meeting virtually, when asked at the relevant
time that resolutions are put, if you are eligible to vote at this meeting,
you will be able to cast your vote under the Vote tab. Once the voting
has opened, the resolutions will allow votes to be submitted. To vote,
simply select your voting direction from the options shown on screen.
You can vote for all resolutions at once or by each resolution. Your vote

has been cast when the tick appears. To change your vote, simply select
‘Change Your Vote’. You have the ability to change your vote, up until
the time I declare voting closed. In order to provide you with enough
time to vote, I will shortly open the voting for all resolutions.

Persons attending the meeting, who are not shareholders, proxy holders
or corporate representatives of a shareholder, may not vote.

I now declare voting open on all items of business. The resolutions will
now be open in the vote tab, please submit your votes at any time. I will
give you a warning before I move to close voting.

I will remind everyone again of these two processes when we come to
vote on the resolutions later in the meeting.

Slide 6. Meeting Order

I would now like to run through the structure of the meeting:

The Notice of Meeting, which includes the explanatory notes, was
circulated to all shareholders and I intend to take this as read.

I will begin with procedural matters, and then summarise some of
the Company’s highlights over the last Financial Year. I will then
ask Mark Troughear, your Chief Executive to provide an overview
of the Company, an update on current trading performance, and a
commentary on our outlook for the rest of the financial year.

Following the CEO’s presentation and questions relating to the
management of the company, I will then introduce the formal
resolutions as outlined in the Notice of Meeting.

Proxies have been appointed for the purpose of this meeting in respect
of approximately 67 million ordinary shares. As was indicated on the
proxy form, where proxy discretion has been given, as Chairman, I
intend to vote those proxies in favour of the two resolutions set out in
the Notice of Meeting. I also note that as set out in the proxy form, the
director standing for election will abstain from voting discretionary
proxies in respect of his appointment. As requested by the New Zealand
Shareholders Association, we will not disclose the voting of valid
proxies received for each resolution before shareholders vote today, and
as usual we will declare the outcome of the polls after the meeting on the
NZX.

The Financial Statements for the year ended 30 June 2022 are set out in
the Company’s Annual Report, released to shareholders in August.

Covid19 remained a significant factor during the year, both in NZ and in
Australia. In the Annual Report, we provide information on how the
Company was impacted and how we continue to respond. I would like
to convey the Board’s immense gratitude for the commitment of each
and every employee and contractor of Freightways, who went above and
beyond to ensure our staff, customers, communities and shareholders
were all well looked after.

We were pleased to complete the acquisition of Allied Express in
Australia in late September, which gives Freightways its first Express
Package footprint outside of NZ. We welcome the McDowell’s into the
Freightways family.


I would now like to speak briefly to some of the financial highlights of
Freightways’ 2022 year. I will then ask your Chief Executive, Mark
Troughear to address the meeting.

Slide 7. General highlights – Financials 2022

The financial year has continued to be disrupted by Covid-19, and I will
come back to that in a moment. Despite this, I am proud to report that
the business still managed to generate a significant revenue increase,
reflecting both organic growth with existing customers and on-going
market share gains on the back of our superior service levels.

Overall, revenue increased by 9%, across our Express Package business.
Outside of Express Package, we experienced very significant growth in
our Waste Renewal business in Australia, mostly thanks to very strong
medical waste activity in the context of Covid.

Our earnings growth was slightly lower, at 4%, impacted by a number
of additional costs in the second half of the year. I want to highlight a
few of the cost headwinds facing the business:

Firstly fuel: fuel prices increased significantly throughout the year. We
do have a mechanism to pass this cost increase on to customers, but there
is a 2 month lag to implement the fuel escalation. The impact of this lag
was approximately 5 million dollars.

Secondly staff costs. With the Omicron wave significantly impacting our
workforce, we increasingly had to use temporary labour and also paid
Covid premiums to our teams, in order to maintain our levels of service.

Finally network capacity: the growth that we have experienced over the
last two years did stretch our network in our main centres. We have
subsequently invested in new depots, which will position us well, to
manage both the current and growing volumes into the future.

We are focused on restoring Express Package margins to pre-Covid
levels over the next two years.

Slide 8. Divisional highlights - 2022

In addition to the financials, there were a number of achievements I
would like to call out.

With Business to Customer or B2C volumes now at a higher level than
pre-covid, our Pricing for Effort has now reached our target of $1.52 per
item. This has allowed us to make sure that B2C delivery provided a
comparable return to our Business to Business deliveries, but
importantly this has allowed us to reward drivers commensurately, with
contractors’ earning 7% higher than the previous year.

Amongst the Express Package businesses, our recent acquisition of Big
Chill Distribution is also continuing exceed expectations, with strong
revenue growth and reasonable margins.

Finally we are seeing a number of new initiatives growing across the
businesses, with strong digital growth in our Information Management
businesses, continued growth in our Waste Renewal businesses, as well
as investments to improve productivity in our Business Mail operations.

Slides 9. – Covid impact

I mentioned earlier that this year had continued to be impacted by
Covid19. We started the financial year with an alert level 4 lockdown of
4 weeks in Auckland, and slightly less in the rest of the country. At alert
level 4, our activity is significantly impacted.

The largest impact was related to the Omicron wave of the virus. With
almost a third of our staff in depots unable to work, we had to rely
extensively on temporary workers to maintain service levels that our
customers are accustomed to, and this came at a cost. This additional
cost is now unwinding, but remains impacted by the scarcity of workers
in New Zealand.

Slides 10. – Dividend

Whilst many New Zealand Companies were forced to recapitalise and
suspend dividend payments throughout Covid, Freightways were
pleased to announce a 10% increase in Total Dividends from the
previous year, with a Final Dividend of 19 cents per share, bringing the
total annual dividend to 37 cents per share.

I will now hand over to our Chief Executive, Mark Troughear, to give
his address.

Slide 11. Freightways – Mark Troughear, Chief Executive Officer

B. CHIEF EXECUTIVE OFFICER’S REVIEW AND
TRADING UPDATE


Thankyou Mark.

Welcome to all shareholders joining us for our 2022 ASM.

Also welcome those from the FRE team in the room, i would like to
express my thanks to you and your teams for the outstanding work you
have done over the past year.
I’ll talk to a brief summary of;
- FRE Growth Strategy
- Our high level ESG goals, and

- Provide a trading update for Q1 along with some comments on the
outlook for the year ahead

Slide 12. Freightways Growth Strategy

FRE operates a number of specialist logistics businesses which at their
core: pick-up, process and deliver collectively over 100m items per
annum
These operations span express package & business mail, temperature-
controlled distribution, information management and waste renewal.

The core capabilities that underpin our success in these markets are;
- A focus on striving for efficiency: (100m items, 500m individual
movements)
- Delivering reliably for our customers – where accuracy is
paramount
- Loving our customers – retaining their loyalty, understanding their
needs – both now and in the future, and
- Acting like entrepreneurs across all of our businesses activities,
investing money as if it were our own, constantly searching for
new horizons of growth

We consider each of these activities has 3 horizons of growth as depicted
in the diagram.
- The first horizon, in green, is the base from which we established
our operations. It provides the infrastructure, customer base and
resources for our networks.

- The second, in light blue, represents the activities we are rapidly
scaling, leveraging the base established in horizon 1
- Horizon 3, in dark blue, responses future revenue streams which
we are currently developing now, and that we expect to be material
in 5 years’ time.

Slide 13. Strategy – Express Package and Business Mail
Horizon One: B2B
EXTEND AND DEFEND
- Expansion of facilities in main metro cities
- Contractor earnings up 7.2% v the prior comparative period (pcp)
- Strong service performance throughout the year despite COVID
enforced absenteeism
Horizon Two: B2C
GROW SCALE
- Pricing for Effort (PFE) hit $1.52 in July FY23
- B2C volumes are more than double 2019 due to organic growth
and market share gains
- Opportunity for further gains as this market grows and as we attract
niches of B2C who value a superior service proposition
Horizon Three: Oversize
ESTABLISH NEW LINES OF BUSINESS
- Launch of Kiwi Express Oversize service in 2022
- Allied Express joins FRE in October 2022 with a focus on 22kg+
- Allied moves into larger premises in NSW and WA with
automated sortation commissioned for NSW in 2023

Slide 14. Strategy – Temperature Controlled
Horizon One: National Delivery
EXTEND AND DEFEND
- Growth in core national transport through organic and market share
gains
- Expansion of facilities in Wellington, Hawkes Bay
Horizon Two: 3PL
GROW SCALE
- Utilisation of 95% in Auckland
- Commissioning of new 3PL site in Ruakura, Hamilton capable of
storing 16,000 pallets

Horizon Three: Same Day
ESTABLISH NEW LINES OF BUSINESS
- Acquisition of ProducePronto in 2021
- Roll out of national delivery for convenience stores
- Leverage the Big Chill Distribution network for storage, linehaul
and depots

Slide 15 Strategy – Information Management
Horizon One: Storage
EXTEND AND DEFEND
- Improvement in utilisation of existing warehouses through market
share gains
Horizon Two: Digitisation
GROW SCALE
- Leverage TIMG’s credibility to win new contracts in digitalisation

Horizon Three: eCommerce 3PL
ESTABLISH NEW LINES OF BUSINESS
- Establish STOCKA – an offering for SME’s who require
eCommerce fulfilment by leveraging existing facilities, systems
and teams

Slide 16 Strategy – Waste Renewal
Horizon One: Secure Destruction
EXTEND AND DEFEND
- Build density using existing networks to maintain the lowest
activity cost in the market
- Focus on market share gains
- Refine paper grades to optimise returns
Horizon Two: Medical Waste
GROW SCALE
- Build out the processing footprint in VIC and QLD
- Gain new customers in Eastern-seaboard markets
- Differentiate our product offering

Horizon Three: High Value Waste
ESTABLISH NEW LINES OF BUSINESS
- Expand SaveBoard from NZ only to establish plants in Australia
over the next 2 years
- Continue to grow other niche high value waste streams where our
assets and capabilities support pick up, processing and delivery to
final markets of recycled products

Slide 17 ESG Update
FRE approach to ESG has us target our work on those areas where we
and our stakeholders feel we can move the dial. As a result the 5 SDG’s
presented on this slide are our primary areas of focus.

3. GOOD HEALTH AND WELLBEING
Health and safety in employment – injury reduction. LTIFR reduced
from 12 to 11 in FY22
- Deployment of advanced in cab road safety technology in linehaul
vehicles
- Employee wellness programme and mental health awareness
training rolled out to all management staff
- Commissioned NZ’s first virtual forklift simulator

8. DECENT WORK AND ECONOMIC GROWTH
- Introduction of literacy and numeracy training to operational teams
- Professional development and management/leadership training
implemented
- Rewarding contractors for their efforts through PFE

9. INDUSTRY, INNOVATION AND INFRASTRUCTURE
- Continual strengthening of reliable operations through expanded
network infrastructure
- Horizon 2 and 3 opportunities developed through The Startery

13. CLIMATE ACTION
- GHG Emissions reduction with a target to reduce scope 1, 2 & 3
emissions by 50% by 2035
- Reducing plastic usage and waste by 75% through our EP Brands
- Introduced our Enviro 360 pack to enable recycling of soft plastics
into SaveBoard

16. PEACE, JUSTICE AND STRONG INSTITUTIONS
- Ethics and integrity
- Transparency – early disclosure of FRE TCFD report in 2021

Slide 18 Carbon Reduction

Slide 19. Q1 Trading Update (cover)
Slide 20. Consolidated Trading Performance - Q1 Unaudited and
includes lease accounting
- The 1st quarter of FY23 saw revenue up 17%, EBITDA up 9% and
EBITA up 8% on the pcp
The key features of the trading result were:
- Higher revenue – driven by market share gains in most businesses and
the impact of fuel surcharges which were materially higher than in the
pcp, but also significant price increases implemented in July
- Labour costs were also higher reflecting the tight labour conditions that
exist on both sides of the Tasman as well as additional sick leave
provisions
- An additional public holiday in September
- This result does not include any contribution from Allied Express,
which was acquired on Oct 1. In the first few weeks of October, has
tracked to expectation.
Slide 21 Q1 Express Package & Business Mail Unaudited and excludes
lease accounting
- The 1st quarter of FY23 saw revenue up 15%, EBITDA and EBITA up
11% on the pcp
- The 1
st
quarter overlapped a portion of the Auckland lockdown in the
previous period where volume were subdued for 3 weeks in 2021
- While fuel prices briefly fell, they have risen again providing little
margin relief
- Labour costs are higher than the pcp, this gap will reduce as the year
goes on with many of the wage increases given in the pcp taking effect
around the end of the first half. The labour market remains tight for

employees (less so for contractors), particularly our waged truck drivers
and freight sorters.
- MSL’s performance through the quarter was strong despite the
commencement of a large dedicated contract transitioning away in July.

Slide 22 Q1 Information Management - Unaudited and excludes lease
accounting
- The 1st quarter of FY23 saw revenue up 25%, EBITDA up 8% and
EBITA up 6% on the pcp
- While revenue benefitted from a bounce back in NZ in particular, with
more people working from offices, margins were compressed in
Medical Waste as we signalled at the full year, as the higher rates we
enjoyed in the first half of FY22 returned to normal
- In addition, the cost to serve – particularly the cost of drivers - is
significantly higher this year due to the shortage of labour in AU.
- TIMGAU experienced a slight decline in margins, reflecting the mix of
work won, as well as an increase in its cost base through wage increases
and a higher headcount to support digitisation projects.

Slide 23 EP Item Growth YOY (Network Couriers Only)

The graph illustrates the growth in items for our network Express Package
businesses (consistent with previous presentations) over the first 15 weeks of
FY23.
The two lines show FY23 growth on FY22 and also on FY20 (pre covid).
This period spans the lockdowns that began mid-August

In the first graph, volumes have largely tracked last year with the obvious
exception of last years’ 3-week lockdown.
- From week 12 last year volumes increased dramatically as NZ came out
of lockdown and eCommerce sales boomed. We expect we will track
around 7% below this 15-week period.
The second graph show the first 15 weeks of this year v pre-Covid FY20
to illustrate the volume trend excluding covid disruptions;
- With the exception of the one-off public holiday in week 13 volumes
are on average 12% above FY20 levels

Slide 24. Outlook (cover)

Slide 25. Outlook
- We expect item count v the pcp for H1 to be slightly negative due to a
strong comparative period in the last 15 weeks of FY22;
- While we are mindful of the economic environment and a possible
recession we have yet to see any material impact on our customers;
- The labour market remains tight and the cost of labour continues to be
a source of pressure;
- The General Rate Increase levied from July 1 has generated an
estimated net return of 6.2% in EP;
- We have a platform for growth and profitability in FY23, both through
existing businesses and new initiatives and the ability to flex our cost
base if volumes decline;
- We are excited to welcome Allied Express to the Freightways family.
We see growth opportunities resulting from this on both sides of the
Tasman.

- I'd like to once again thank our teams of staff and contractors who have
contributed to a successful year for FRE.