Mainfreight Annual Shareholders Meeting 2023

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

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


Supporters of
MAINFREIGHT – GLOBAL LOGISTICS





MAINFREIGHT LIMITED



SCRIPTED ADDRESS
AND
PRESENTATION




28
th
Annual Meeting of Shareholders

4.00 pm, Thursday 27
th
July 2023

- 2 -

CHAIRMAN’S ADDRESS


The year to March 2023 produced the continuation of 13 years of record results,
resulting in a profit after tax of $426 million, an improvement on the previous
year of $71 million.

These results have all come from the effort and dedication of our teams around
the world (now in 331 branches) and to whom we are extremely grateful. Despite
declining freight tonnage as the world’s supply chain congestion unwinds, we
have been able to build a bigger and better business through a difficult
environment. Our network intensity has increased. Having a network across 26
countries is attracting customers to Mainfreight. We will continue to invest our
Capital in development of our network. It is a key competitive advantage for us.

In most years we attempt to interest developers, local businesses, and councils in
making use of rainwater from the rooves of large buildings. Many of us treat
rainwater as if it is an endless resource; in Auckland forgetting we had drought
conditions in 2018, 2019 and 2020 which involved water rationing. A few weeks
ago, all on the same day, the New York Times, the Financial Review and Dublin’s
The Guardian, all reported problems with water shortages, river contamination,
or suspected profiteering from water supply. The cost of collecting and purifying
rainwater off the roof is minor to the total build of new facilities and the
contribution to nature. Be confident that not only is Mainfreight ensuring all our
new builds incorporate water collection, filtered to drinkable standards, but are
also retrofitting our other large sites where it is possible and viable.

- 3 -

We have a sobering year or more ahead of us as we cope with a global recession.
We are likely to have to work with ever increasing effectiveness and disciplines,
added to an increased understanding of those less able to cope with declining
circumstances. We see this as an opportunity to increase market share as
competitors struggle in a tougher environment.

We look forward to our Group Managing Director Don Braid’s presentation. We
have great confidence in Mainfreight’s ability to learn and prosper in the next
year, and in the 100 years ahead.

Thank you and much aroha to the worldwide Mainfreight family.


Group Managing Director’s Presentation

Please refer to separate PowerPoint slide presentation.



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

---

ANNUAL MEETING OF SHAREHOLDERS
MAINFREIGHT LIMITED
27 JULY 2023

The Numbers ... Financial Year 2023
•Revenueup 8.8% to $5.68 billion from $5.22 billion
•PBTup 20.0% to $587 million from $489 million
•Net Profit up 20.0% to $426 million from $355 million
•People–11,311 up 918
•Branches–331 up 26
•Countries–26 up 1
•Dividend–final dividend of 87.0 cents per share
•Takes full year to $1.72 per share up 21%
•Discretionary Bonus -$79.8 million, a reduction of 15.2%

2 Year Comparison
“Extraordinary period of development”
REVENUES
2023
$000
Variance
2022
$000
Variance
2021
$000
%
Increase
Over 2 Yrs
Total Group Full Year
5,675,7098.8%5,218,25947.2%3,543,83860.2%
PBT
2023
$000
Variance
2022
$000
Variance
2021
$000
% Increase
Over 2 Yrs
Total Group Full Year
587,39820.0%489,38186.5%262,407123.8%
Offshore Profit $418 million vs $353 million –now 71% of total profit

Full Year Overview
•A satisfactory result dominated by a very good first half and a
deteriorating second half
“A game of two halves”
•One off costs:
•Australia A$4m
•USA US$3m
•Poor performance across all USA business units
•Business benefited during Air & Ocean supply chain congestion
•Customer portfolio not strong enough to withstand recessionary
spending decline
•Too much exposure to Trans-Pacific trade (China-USA)
“When the tide went out, we were left exposed”
•Increased our network development
•Continued our capital investment in land and buildings
•Improved customer activity across all divisions

Capital Management
Operating Cash Flow $757 million v $504 million
“Better cash collection and improved profitability”
Net Capex $314 million -$233 million on property
Net Debt reduction to $123 million in funds
“Cash at hand”
Debt facilities $510 million, undrawn $323 million
$
•Bank Facilities extended to 2028 in July

The Network:
The power of our network, both within regions and between them, is a key competitive strength.
Our global team works together, trusting each other to deliver a quality service for our customers.
THE AMERICAS
1,765
Team members
US$959.9m
Revenue
EUROPE
3,392
Team members
EU€630.7m
Revenue
ASIA
539
Team members
US$152.8m
Revenue
AUSTRALIA
2,616
Team members
AU$1,417.3m
Revenue
NEW ZEALAND
2,999
Team members
NZ$1,284.9m
Revenue
BRANCHES
331
COUNTRIES
26
PEOPLE
11,311

New Branches 2023
12
6
8
TRANSPORT
WAREHOUSING
AIR & OCEAN

...
ADELAIDE TRANSPORT -Completed

ADELAIDE WAREHOUSING -Completed

PERTH WAREHOUSING -Completed

FAVONA, Auckland –Completed

BEACH ROAD, Auckland

ALDERMAN PLACE, Auckland

OWENS –HUGO JOHNSON, Auckland

CHICAGO NEW TRANSPORT DOCK –ARTIST IMPRESSION

CHICAGO NEW TRANSPORT DOCK –ARTIST IMPRESSION

Future Capital Expenditure Update: F24 -25
“High quality facilities and intensifying our network”
2024
2025
NZ$ MILLIONF24
Planned Capital Expenditure
$381
▪Property
▪Fit-out costs
▪Non-property capex
$237
$84
$60
NZ$ MILLIONF25
Planned Capital Expenditure
$295
▪Property
▪Fit-out costs
▪Non-property capex
$192
$43
$60
Property and Fit-out costs F24-F25
New Zealand
Australia
Americas
Europe and Asia
$192million
$176million
$97million
$91million
$556million

•14 Owned / 36 Leased
•25 Transport cross-docks
•14 Warehouses
•11 Air & Ocean
•Opening in India
•Property portfolio $ 1.3 billion
•Expect our new cross-docks for Transport to be smaller
and more efficient, incorporating more rear-loading and
unloading of hard-sided trailer units
Planned Development for 2024 / 2025

Sustainability
Investing in Sustainable Infrastructure
•5.8 MW in solar generation (2.7MW added over the past year)
•5 MW in battery storage
•Rainwater capture, storage and filtration
Lowering the Impact of our Operations
•80% (2156) of forklifts electric
•43% (432) of car fleet hybrid and electric
•1% (26) of truck fleet hybrid and electric –more on order
•Solid state batteries offer future promise
Bringing our Partners Along for the Journey
•First 50 customers using our Carbon Tracking Platform
Assessing and Disclosure of Climate Risks
•Climate Risks report to be released this year

DANDENONG SOUTH, AUSTRALIA

Current Trading Environment (June Quarter Trading)
“We have plenty to do”
NZ$000REVENUE*VAR %
PROFIT
BEFORE TAX
VAR %
New ZealandNZ$
287,9169.2%

27,80018.4%

AustraliaAU$315,7205.4%

27,3117.3%

AmericasUS$164,76443.5%

6,14380.6%

Europe
EU€
149,1809.0%

5,65751.2%

AsiaUS$24,12353.8%

3,63455.1%

GroupNZ$
1,187,85819.2%

83,06643.3%

* Inter-company revenue excluded
** Prior period (our first quarter) our best-ever performance

Trading Update: Our 3 Core Products (June Quarter)
TRANSPORT
WAREHOUSING
AIR & OCEAN
Revenue:$450.9 milliondown 40.6%
PBT:$ 37.4 milliondown 53.6%
Revenue:$538.4 milliondown 0.3%
PBT:$ 34.0 milliondown 35.9%
Revenue:$198.7 millionup 15.2%
PBT:$ 11.6 million down 9.4%

Trading Update Summary
•Globally
•Reduced volumes –slowing economies
•Freight congestion issues unravel
•Swift reduction in sea and air freight rates
•Inflationary pressures in all markets
•Transport
•Reasonable activity across Australia
•Poorer performances USA/Europe/New Zealand
•Warehousing
•Reasonable performances all regions
•Air & Ocean
•Better defensive performances New Zealand/Australia
•USA/Asia hit hard by falling volumes and rates –particularly on the Transpacific

Trading Update Summary: Our Response
•Strong sales activities to attract more customers across the full supply chain
•Management of overhead cost structures
•Hiring freeze
•More with less –efficiencies Branch by Branch
•Ongoing investment in our network and infrastructure
•Preparing to take advantage of economic improvement
•We continue to strive for growth and development of our global network
•Focus on customer verticals we excel at
•DIY, Beverage, Food, Retail and Perishables
•A better distribution of trade lane focus for Air & Ocean
•Increasing our range of services for customers
“A privilege to have supportive customers”

To Close
We have taken advantage of the last two years to grow bigger and better
We have the capabilities, energy and passion to keep growing this wonderful company of ours
We are in this for the long haul –100-year focus
Thanks for being on the journey with us
“Expect some form of normality to resume”