Mainfreight Annual Shareholders Meeting 2024

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




29
th
Annual Meeting of Shareholders

4.00 pm, Thursday 25
th
July 2024

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CHAIRMAN’S ADDRESS


E Te whanau O Mainfreight, e te kuia ma, e te koro ma, nau mai, haere mai,
whakataumai.

The year to March 2024 was the first year in 14 years where our net profit after
tax fell from the previous year. That reduction in profit was some 35% but was
against an all-time record high to March 2023. The decline in tax paid profits
continues into the current year, but at a lower level than the past year. In NZ and
Australia, where we have been for many years, we expect further profitability
improvements in this current year. Our other regions, Asia, Europe and the USA
will take time to find meaningful improvements.

It is important for shareholders to understand that the Western world and most
other countries, have the same problems as NZ: faltering education standards,
particularly amongst young people; significant inflation flowing into most family
costs; growing poverty and levels of crime and homelessness on the streets. The
upcoming USA election does not give much confidence of a settled future, neither
the behaviours of some of the world’s biggest egos.

Your company is increasing market share in most countries where we operate,
and our long-term vision is assisting us to keep growing where there is
opportunity.

It is regretful, if not appalling, in NZ where Mainfreight is the 4th largest customer
of KiwiRail (behind coal, forestry and milk), that we are not included in the group
making decisions for the future of the Cook Strait rail ferry services.

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We are so grateful and proud of our international team keeping the freight
moving, not just physically, but in keeping us up-to-date and ahead of the market,
in knowing where it is at all times, with new equipment and systems.

We would like to take this opportunity to acknowledge Richard Prebble, our
board member since listing on the NZX in 1996, for his wonderful contribution to
our company. Richard’s insights and deep intuitive understanding of our business
and culture have been invaluable. We will be making a special presentation to
Richard at the conclusion of the meeting.

We welcome two new directors to our board: Hayley Buckley and Annie Steel.
We are very pleased with contributions both have made in the short time they
have been with us. Their intellect and commercial acumen will serve Mainfreight,
its people, its shareholders, and stakeholders, very well over time. We look
forward to hearing their addresses to you later in the meeting.

We do have an interesting year or two ahead of us, but with efforts and goodwill,
and a vision for the future – your company will prevail – likely in more countries,
servicing more customers, and growing this wonderful business of ours.

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.

---

MAINFREIGHT LIMITED
ANNUAL MEETING OF SHAREHOLDERS
25 JULY 2024

The Numbers ... Financial Year 2024 (last year)
•Revenue down 17% to $4.72 billion from $5.68 billion
•PBT down 33% to $395 million from $587 million
•Net Profit down 35% to $278 million from $426 million
- Deferred Tax on buildings - $69 million (noncash)
•People down 667 to 10,644
•Branches up 6 to 337
•Countries up 1 to 27
•Dividend – final dividend of 87 cents per share
- Takes full year dividend to $1.72 per share
•Discretionary Bonus - $25 million, down 68%

Full Year Overview
•We expected to do better
-New Zealand and Australia were OK
-Asia/The Americas/Europe disappointed
•Why?
-Lease obligations on overflow warehousing
-Decreasing freight volumes saw utilisation across all products decline
-Overhead cost structures inflated as a consequence of historical growth
-Team members
-Owner drivers
•However
-We continue to invest capital to expand and improve our network
-Despite the demanding operating environment, we are experiencing improvement
-We have grown a bigger business, with more customers, and greater capability
-The results of 2024 surpass results from 2021 significantly
-2022/2023 abnormally high increases in revenue and profit

“A new base to grow from”
REVENUES
2021
NZ$
2024
NZ$
% Increase
over 3 years
Total Group Full Year
3.54b4.72b28.6%
PBT
2021
NZ$
2024
NZ$
% Increase
over 3 years
Total Group Full Year
262.4m395.4m40.4%
3 Year Comparison

Capital Management – Financial Year 2024
Net Capex $254 million - $128 million on property
“Still investing in the future”
Net funds (debt) reduction to $22 million in funds
“Cash at hand”
Bank debt of $148 million – from a total available facility of $501 million
$
“Balance sheet looks OK!”
Operating Cash Flow $505 million v $757 million
“Cash collection was satisfactory”

Network Growth
Branches
337 - up 6
Countries
27 – up 1
People
10,644
Team members
Americas1,659
Europe3,072
Asia509
Australia2,543
New Zealand2,861
“667 people less as freight volumes reduced”

The Network – “A strategic advantage”
“The Mainfreight team helping each other”
Revenue
Australia AU$1,294.2m
New Zealand NZ$1,124.1m
The Americas US$ 639.1m
Europe EU€ 557.2m
Asia US$ 96.5m

Future Capital Expenditure Update: FY25 - 26
NZ$ MILLIONFY25
Planned Capital Expenditure$255
▪Property
$149
▪Fit-out costs
$ 47
▪Non-property capex
$ 59
NZ$ MILLIONFY26
Planned Capital Expenditure$254
▪Property
$152
▪Fit-out costs
$ 42
▪Non-property capex
$ 60
Property and Fit-out costs FY25-26
New Zealand
$159 million
Australia
$104 million
Americas
$ 83 million
Europe and Asia
$ 44 million
$390 million
“High quality facilities and intensifying our network”

Planned Development for FY 2025 / 2026
•7 Transport facilities
•New Plymouth – Extension (Owned)
•Palmerston North – Additional (Owned/leased)
•Auckland Daily Freight (Owned)
•Nelson (Owned)
•Blenheim (Owned)
•Hastings (Owned)
•Whanganui (Leased)
•3 Warehouses
•Beach Road, Auckland (Owned)
•Savill South, Auckland (Leased)
•Christchurch (Leased)
New Zealand

BEACH ROAD, Auckland
Hazardous facility – all classes
34,108 sqm
Completion expected early 2025
“Provides opportunity alongside Chemcouriers”

Container handling facility
Wharf /Tankers/CaroTrans
47,147 sqm
Rail served ex Ports of Auckland
ALDERMAN PLACE, Auckland
“The link between Transport and Air&Ocean”
Completed

“Long awaited improvements for Daily Freight and Owens”
OWENS – HUGO JOHNSON DRIVE, Auckland
Transport Cross-Dock
Daily Freight 1 year / Owens future site
Rail served
35,197.9 sqm
Completed

“Meeting the demands of our developing consumer goods division”
2HOME, SAVILL DRIVE, Auckland
M2Home Cross-Dock and Warehouse
27,570 sqm Cross-Dock
10,500 sqm Warehouse
Completion expected August 2024

Planned Development for FY 2025 / 2026
Australia
•2 Transport Cross-Docks
•Townsville (Leased)
•Willawong (Owned)
•2 Air & Ocean / Wharf facilities
•Melbourne Airport (Leased)
•Port of Brisbane (Leased)

“Less square metres – more efficient and better use of capital”
BRISBANE NEW TRANSPORT CROSS-DOCK
– ARTIST IMPRESSION
Transport Cross-Dock
34 rear loading doors
15,298 sqm
Completion expected early 2026

“70% utilized with more inquiry than we can handle”
SYDNEY, MOOREBANK, AUSTRALIA’S
LARGEST INTERMODEL PRECINCT
Sydney Warehouse
55,000 sqm, 66,000 plts
Rail and Road served
Temp controlled / Hazardous goods capable
Completed

Planned Development for FY 2025 / 2026
•2 Transport Cross-Docks
•Dallas (Leased)
•Chicago (Leased)
Americas
• 2 Transport Cross-Docks
•Amsterdam (Leased)
•Mechelen, Belgium (Leased)
Europe

“A bold step forward in the USA”
DALLAS TEXAS NEW TRANSPORT CROSS-DOCK
Transport Cross-Dock
78 Doors
5,387 sqm
Completion expected late 2024

“And another step forward”
CHICAGO NEW TRANSPORT DOCK
Transport Cross-Dock
74 Doors
4,374 sqm
Completion expected late 2024

Investing in sustainable infrastructure
•8.4 MW in solar generation (2.6MW added over the past year)
•9.5 MWh in battery storage (4.5 MWh added over the past year)
•Rainwater capture and filtration (over seven million litres in storage added
over the past two years)
Lowering the impact of our operations
•84% (up 4%) of forklifts electric
•46% (up 3%) of car fleet hybrid and electric
•1% (33) of truck fleet hybrid and electric – more on order
Bringing our partners along for the journey
•Over 500 customers using our Carbon Tracking Platform (up from 50)
Assessment and disclosure of climate risks
•NZ Climate related disclosure report published
•Work underway for Australian and European disclosures
“Since 2018, we have reduced gross emissions by 10% while doubling the size of our business”
Sustainability

“Revenue growth is pleasing. Management of margin and overheads will be the magic”
Current Trading Environment (15 Weeks: 1 April - 14 July 2024)
NZ$000REVENUE*VAR %
PROFIT BEFORE
TAX
VAR %
New ZealandNZ$
315,114-1.3%

25,092-20.1%

AustraliaAU$428,55817.5%

32,7547.0%

AmericasUS$194,0343.4%

3,231-52.1%

Europe
EU€
176,5123.4%

6,507-3.2%

AsiaUS$37,64031.4%

3,318-17.9%

GroupNZ$
1,478,7368.5%

83,164-11.2%

* Inter-company revenue excluded

Trading Update: Our 3 Core Products (15 weeks) NZ$
Transport
Warehousing
Air & Ocean
Revenue: $573.3 million up 11.2%
PBT: $34.5 million down 19.0%
Revenue: $672.1 million up 8.3%
PBT: $ 39.3 million up 4.1%
Revenue: $233.4 million up 3.0%
PBT: $9.4 million down 30.0%

Trading Update Summary
•Transport
•Satisfactory growth across Australia
•New Zealand experienced reduction in volumes post May. Higher Transport costs
•European Transport has seen reasonable improvement in volumes and profitability
•USA Transport seeing marginal improvement. Still a long-term fix
•Warehousing
•Satisfactory performances in New Zealand / USA
•Australian improvements satisfactory – more is expected
•European utilisation disappointing – customer gains assisting
•Air & Ocean
•Australian performance a highlight – Project business assisting
•New Zealand activity is disappointing with export volumes lower than expected
•USA/Asia volumes improving – margins under pressure
•European development continues
•Expecting an earlier peak season
•Ocean freight rates have increased, but not to levels of 2022/2023
•Equipment shortages from Asia remains frustrating

Trading Update Summary: Our Progress
•Concerted sales activities / campaigns across network
•June sales activity a highlight
•3,892 new business opportunities
•307 new customer gains
•Good momentum in Australia – expect Australia to become our biggest
profit earner
•Improvements in European Transport, USA Warehousing and Air & Ocean
•New Zealand increasing range of services and improving linehaul
efficiencies
•Asia focused on margin improvement
•Network expansion to be carefully managed as we look to improve returns

Thank you
•Sales opportunities in all markets are substantial
•We continue to remain confident in our medium to long
term growth opportunities
To Close