fisher funds annual roadshow august 2004. presentation introduction to freightways industry,...
TRANSCRIPT
Fisher Funds Annual Roadshow
August 2004
Presentation
Introduction to Freightways
Industry, business description and strategy
Financial performance
Recent events and outlook
Introduction
• Listed on the NZX September 2003
• Established in 1964
• Express package, mail, information management
• Approx. 7,000 retail and institutional shareholders
• Revenue $214m, EBITA $41m, NPAT $16m
A Survivor
• Freightways’ businesses have survived:
- Regulated / deregulated road transport industry
- Substitute services: fax machine and email
- Many competitors
- Three owners in the last two years
Express Package Industry Overview and Business Description
Express Package Industry
• Two segments to Express Package industry– Network couriers 90% of industry revenue– Point-to-point couriers 10%
• Services embedded in supply chains of businesses
• Consolidated industry structure
• Growth underpinned by demand for Just in Time supply
Business Description - Strengths
• Network of independent contractors
• Dedicated express package linehaul network
• Operational excellence and profit culture
• Experienced people
• Established multi-brand strategy
Multi-Brand Strategy
Price
Service
Three major brands:
– Differentiated by price and service
– Captures growth across entire market
– Provides defence against competitive threats
Freightways’ Network Courier Brands
Information Management and Business MailIndustry Overview and
Business Description
• Well positioned in each niche
• Offers a total information management solution
• Integrated with express package operations
• Records management growth opportunity
Information Management
Business Mail
• Niche player in deregulated postal services industry
• Postal deregulation enabled expansion of DX Mail
• Growth opportunities in business mail segment
• Drives volume to New Zealand Couriers
Business Strategy
• Revenue growth from existing and complementary markets:– Increase volumes from existing customers– Gain new customers– Achieve some price improvements
• Converted into strong earnings growth:– Ability to grow volume at low incremental cost– Volume growth drives efficiencies/productivity gains – Maintenance of margin integrity– Continued focus on cost control
• Explore incremental acquisition opportunities
Business Strategy
Financial Performance
• 10% revenue growth in 2004
• 5 year compound average revenue growth of 7%
Operating Revenue
-
50
100
150
200
250
Jun99 Jun00 Jun01 Jun02 Jun03 Jun04
Year Ended
$M
EBITA
• 27% EBITA growth in 2004
• 5 year compound average EBITA growth of 18%
-
5
10
15
20
25
30
35
40
45
Jun99 Jun00 Jun01 Jun02 Jun03 Jun04
Year Ended
$M
Recent Events and Outlook
Recent Events
• Transition to a listed NZ company Sept. 2003
• Acquisition of Archive Security
• Actual 2004 financial performance exceeded IPO forecasts on all fronts
Outlook
• Economy favourable from Freightways’ perspective
• No change expected in Freightways’ operating environment
• Sustained focus on core business / core strategies
• Business as usual
Summary
Strong successful business
Positioned to deliver continuing earnings growth
Delivering an attractive dividend yield