Mainfreight Limited · NZX:MFT

Mainfreight — H1 FY2017 Earnings Presentation

19 slides from Mainfreight's earnings presentation, November 2016

1. Slide 1: Mainfreight Limited Half Year Result to September 2016

   MAINFREIGHT LIMITED HALF YEAR RESULT TO SEPTEMBER 2016

2. Slide 2: Result Summary

   Result Summary Revenue up 2.5% to $1.14 billion REVENUE Excluding foreign exchange effects, 4.2% increase An increase of $28.3 million EBITDA at $86.35 million; increase of 20.6% EBITDA Excluding foreign exchange effects, 22.1% increase Net surplus after tax before abnormal items up 27.7% to $42.33

3. Slide 3: Dividend

   Dividend Final dividend of 17.0 cents per share DIVIDEND Books close 9 December 2016; payment on 16 December 2016 3.0 cent increase reflects increased profitability

4. Slide 4: Capital Management

   Capital Management NZ$ MILLION THIS YEAR LAST YEAR Operating cash flow 52.03 45.93  Net capital expenditure totalled $27.91 million; of which $11.78 million was property development  Expected full year capital expenditure ~$50 million

5. Slide 5: Half Year Analysis: Revenue

   Half Year Analysis: Revenue $000 THIS YEAR LAST YEAR VARIANCE New Zealand: NZ$ 287,546 270,957  6.1% Australia: AU$ 257,650 248,584  3.6% USA: US$ 226,097 228,172 (0.9)  Asia*: US$ 31,448 21,650  45.3% Europe: EU€ 136,475 130,771  4.4% Total Group: NZ$ 1,142,437 1,114,141  2.5% (excl FX) 4.2%

6. Slide 6: Half Year Analysis: EBITDA

   Half Year Analysis: EBITDA $000 THIS YEAR LAST YEAR VARIANCE New Zealand: NZ$ 37,163 28,989 28.2%  Australia: AU$ 16,092 13,184 22.1%  USA: US$ 9,812 9,385 4.5%  Asia: US$ 4,729 3,546 20.7%  Europe: EU€ 7,650 5,900 29.7%  Total Group: NZ$ 86,348 71,582  20.6% (excl FX) 22.1% 

7. Slide 7: Domestic vs Air & Ocean Performance

   Domestic vs Air & Ocean Performance NZ$000 THIS YEAR LAST YEAR VARIANCE VAR EX FX Group Revenue 1,142,437 1,114,141 2.5% 4.2% EBITDA 86,348 71,582 20.6% 22.1% Domestic Revenue 669,998 639,444 4.8% 6.2% EBITDA 60,562 47,448 27.6% 28.8% Air & Ocean Revenue 472,439 474,697 (0.5)% 1.5% EBITDA 25,786 24,

8. Slide 8: New Zealand

   New Zealand  Revenue growth dominated by Domestic Transport and Logistics  EBITDA improvement across all divisions  Better gross margins  Improved warehouse utilisation  Tighter control of overhead costs  Transport  Freight volumes continue to be strong  Market share gains  Increased tradin

9. Slide 9: New Zealand

   New Zealand  Logistics  Utilisation much improved  Development costs in prior year assist  New customer gains continuing  Air & Ocean  Revenue increases minimal – ocean freight rate effect  Import volumes stronger than exports  Currency  Network effects

10. Slide 10: Australia

    Australia  Revenue growth dominated by Domestic and Logistics operations  EBITDA improvements across all divisions  However dominated by Logistics through efficiency and utilisation improvements  Transport  Sales growth  Gross margin improvement  Overhead costs still require better management

11. Slide 11: Australia

    Australia  Logistics  Utilisation of facilities at all time high  Efficiencies improving margins  Customer demand and new customer gains requiring expansion into new facilities (Sydney)  Additional 25,000m2 – early 2018 (temporary premises leased until then)  Air & Ocean  Gross margin improve

12. Slide 12: The Americas

    The Americas  Regional revenue growth impacted by a decline in revenue from CaroTrans  EBITDA growth driven by a strong performance in Air & Ocean and improvement from Domestic Transport  Domestic Transport  Better overhead cost management and improving sales assisting net margins  Line‐haul ut

13. Slide 13: The Americas

    The Americas  Air & Ocean  Strong profit performance added by airfreight volume from Asia in first three months  Market share gains continuing  Emphasis on development of European and Asian trade lanes  Logistics  Still not yet profitable regionally, but utilisation improving – Los Angeles bes

14. Slide 14: The Americas

    The Americas  CaroTrans  Revenue decline  Shipping rate deterioration and loss of LCL TEU volumes  Shippers loading more FCL than LCL freight due to ocean rate levels  Gross margin increase as loading efficiencies improve  October and November booking statistics improving

15. Slide 15: Asia

    Asia  Air export volumes and revenues significant part of regional revenue growth  EBITDA improvement driven by air export volume during first three months of period, however air export volumes declined in second three‐month period as customer requirements changed to seafreight  Hong Kong warehou

16. Slide 16: Europe

    Europe  Revenue improvement across all three divisions – dominated by Logistics performance  EBITDA performance aided by improving margins (particularly in Logistics) and improved cost management  Forwarding/Transport  Better margins, and improvements in Belgian operations, are assisting  Sales

17. Slide 17: Europe

    Europe  Logistics  Excellent utilisation and customer gains have supported increased profitability  Construction of additional leased warehousing in Netherlands underway, expect completion mid‐2017  12,000m2 already committed  Air & Ocean  Network coverage remains high priority  London profit

18. Slide 18: Group Outlook

    Group Outlook  October trading mirrors that of the previous six months; expecting this to continue into the second half  Pre‐Christmas volumes already strong within Domestic operations in New Zealand and Australia  Likely rail capacity issues for New Zealand  Network sales activities  Supply ch

19. Slide 19: Financial Calendar F17

    Financial Calendar F17 DATE F17 – 12 months ended 31 March 2017 30 May 2017 Annual Meeting of Shareholders 27 July 2017 F18 – 6 months ended 30 September 2017 15 November 2017

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