CTI LOGISTICS LIMITED — Annual Report 2021

Sep 27, 2021

Providing Essential Services to Australia

ASX: CLX

	2 1. HIGHLIGHTS 03 2. SUSTAINABILITY 04 3. PERFORMANCE 07 4. FUTURE DIRECTION 14 5. APPENDIX 16 CTI Results 30 June 2021

FY21 HIGHLIGHTS

• COVID­19 free

Transport (Interstate, Regional WA and Metro WA)

• Increased freight volumes into WA from VIC and NSW

• Significant operating leverage realised

• Revenue $239m, up 11% pcp

• EBITDA $38m, up 31% pcp[(1)]

• Net debt reduction of $11m (to $25m)[(2)]

• Improved WA freight margins from higher utilisation, productivity gains and new clients

Logistics (Warehousing, GMK Specialised Flooring Logistics)

• Higher stock levels at all sites from existing clients

• New warehousing clients, particularly in QLD

• Market strength, higher utilisation and systems capability at GMK

• Hazelmere development to start in 2021

• Full Year Dividend: 4cps fully franked ($3m)

Property

• Hazelmere development application submitted, finalising plans

• • Significantly deleveraged balance sheet to support development

Note 1: Excluding non­cash impact of $5.8m impairment of properties (non tax deductible) in the comparative period Note 2: Net debt relates to bank borrowings net of cash

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CTI Results 30 June 2021

SUSTAINABILITY

SUSTAINABILITY

31 sites across Australia

550,000 sqm footprint

>1300 employees and contractors

Focus on Safety

• 30% improvement in LTIFR from 2019 to 2021

• Technology driving continuous improvements

• 16,596 learning events completed in FY21[(1)]

…Compliance

• Chain of Responsibility, Whistleblowing and Modern Slavery

• Heavy Vehicle Accreditation from Main Roads WA and National Heavy Vehicle Regulator

…and Environment

• Ongoing fleet renewal to reduce emissions intensity

• Sustainable property developments reducing energy footprint

Note 1: Online virtual (10,515) and face­to­face (6,081) training, includes safety and compliance

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CTI Results 30 June 2021

CTI COMMUNITY ENGAGEMENT

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CTI Results 30 June 2021

FY21 PERFORMANCE CTI Results 30 June 2021 7

FINANCIAL PERFORMANCE SUMMARY

Strengthening Balance Sheet and operating margins

EBITDA Revenue NPBT $239.0m $11.3m[(1)] $37.8m[(1)] Up 11% on FY20 Up 496% on FY20[(2)] Up 31% on FY20[(2)] NPAT EPS $8.2m[(1)] 10.9 cps Operating Up 474% on FY20 Up 474% on FY20 Cashflow NTA DPS 31.1m[(1)] $ 87.5 cps[(3)] 4.0 cps Up 33% on FY20 Up 12% on FY20 FY20 was 0.0 cps

Leasing standard AASB 16 adopted

Note 1: Includes JobKeeper receipts of $1.3m (pre tax)

Note 2: Excludes non­cash impact of $5.8m impairment of properties (non tax deductible) in the comparative period Note 3: Net Tangible Asset cps includes property uplift from book value to market value

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CTI Results 30 June 2021

TRANSPORT SEGMENT PERFORMANCE

	Transport P&L($m) FY21 FY20 Variance
	Revenue 139.6 126.8 12.8
	Transport Revenuegrowth % 10.1%
	EBITDA 13.2 10.8 2.4
	Transport EBITDA margin % 9.5% 8.5%
	Depreciation and amortisation 7.2 6.2
	EBIT 6.0 4.5 1.5
	Transport PBT margin % 4.3% 3.6%
	Interest expense 0.6 0.6 0.0 ­
	PBT 5.5 3.9 1.5
	Transport PBT margin % 3.9% 3.1%

� Strong revenue growth of 10% on last year

• Interstate freight grew across all lanes into WA, in particular from VIC and NSW, supported by new sites in WA and NSW

• WA freight benefited from higher WA inbound volumes and mining projects, supported by new sites in Karratha and Broome

• WA courier volumes stabilised and expect some improvement as supply chains decongest and people return to the CBD

� Margin improvement despite cost pressures

• Interstate freight margins improved, although offset by natural disasters and rail disruption

• WA regional freight benefited from a focus on quality revenue, cost control and improved utilisation of equipment

• WA metro freight impacted by driver shortages

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CTI Results 30 June 2021

LOGISTICS SEGMENT PERFORMANCE

Logistics P&L($m)	FY21	FY20		Variance
Revenue	93.1	82.1		11.0
Logistics Revenuegrowth %	13.3%
EBITDA	22.4	16.5		5.9
Logistics EBITDA margin %	24.0%	20.0%
Depreciation and amortisation	13.3	13.2
EBIT	9.1	3.3		5.8
Logistics PBT margin %	9.8%	4.0%
Interest expense	2.6	3.1	­	0.5
PBT	6.5	0.2		6.3
Logistics PBT margin %	7.0%	0.2%

• Strong revenue growth of 13% on last year

• Construction driving up volumes in specialised flooring logistics

• Volumes up across all warehouse sites, expansion in QLD

• COVID­19 disruption to supply chains resulted in higher inventory

• Growth in high volume cross­dock work and mining projects

• New site in SA to consolidate previous sites and support growth

• Margin improvement driven by utilisation, productivity and systems

• Specialised flooring logistics benefited from operating leverage as a result of higher utilisation and ERP system improvements

• Focused on improving revenue quality, facilitating competition for warehouse space and labour productivity initiatives

• Improved utilisation of warehousing sites combined with project work in VIC to accommodate online retail growth

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CTI Results 30 June 2021

REVENUE AND EARNINGS

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Revenue ($m)
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EBITDA ($m) [(1)]
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NPAT ($m)[(1)]

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8.2
239.0 22.0
212.0 215.2
182.9 16.2
15.2 15.2
154.4 14.0
3.8
3.2 3.1
1.4
FY17 FY18 FY19 FY20 FY21 FY17 FY18 FY19 FY20 FY21 FY17 FY18 FY19 FY20 FY21
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Note 1: Excludes AASB 16, acquisition, sale of property and impairment adjustments

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CTI Results 30 June 2021

CASH FLOW AND FINANCIAL RISK MANAGEMENT

Hazelmere development supported by strong cash flow and reduced debt

Borrowings Maturity

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(excluding guarantees
and lease liabilities)
42.9
32
0.6 0.3 0.1
<1 Yr 1­2 Yrs 2­5 Yrs >5Yrs
2020 2021
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Strong cash generation

• Operating leverage, focus on quality revenue, cost control and systems

• $31.1m operating cash flow and strong conversion of EBITDA to cash

• Receivables written­off consistently low at 0.02% of revenue

Balance sheet positioned for growth

• Stable liquidity position with cash of $6.5m

• Net Assets increased by 8% to $88m

• Net debt down by $10.9M to $25.4M reflecting robust cash flow

• Available borrowing facility of $16.7m plus cash of $6.5m

• Gearing down from 58% to 54%[(1) ] , supported by property portfolio

Note 1: Gearing ratio calculated as net debt (including borrowings, trade and other payables less cash and cash equivalents) divided by total capital (equity plus net debt)

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CTI Results 30 June 2021

Cash and cash equivalents Receivables and prepayments Inventories Property, plant and equipment Investment properties Deferred tax assets Right­of­use assets Intangibles Other Trade and other payables Lease liabilities Provisions Lease liabilities Loans and borrowings Provisions and other liabilities CONSOLIDAT

6.5 7.6 �Strong cash generation with focus on available cash for increased liquidity 33.1 29.9 �Debtors include trade and other receivables, prepayments and expected tax refunds 0.3 0.2 88.1 90.0 �$6.3m of asset additions (net of disposals and depreciation for the period) 2.2 2.2 �One remaining non­core investment property 3.2 4.0 �Deferred tax asset including asset related to AASB 16 45.3 43.2 �Right­of­use asset per AASB 16 31.1 32.8 �Goodwill, customer relationships, brand and trade names (net of amortisation of intangible assets) 0.1 0.1 20.2 17.7 �Increase in trade payable, accruals and current tax liability 17.4 14.9 �Short term portion of lease liabilities per AASB 16 (including hire purchase liabilities) 6.9 6.7 �Short term portion of leave provisions 42.5 44.1 �Long term portion of lease liabilities per AASB 16 (including hire purchase liabilities) 31.9 42.8 �Repayment of $10.9m of bank borrowings 2.6 2.2 �Long term portion of leave provisions 88.4 81.6 �Increase in net assets from profit after tax 77.9 0.87 77.7 0.78 �Issue of DRP and BSP shares �$10.8m of property value not recognised on the Balance Sheet ED BALANCE SHEET

CONSOLIDATED BALANCE SHEET

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CTI Results 30 June 2021

FUTURE DIRECTION

FUTURE DIRECTION

COVID-19

• Continuing uncertainty due to COVID­19 where focus remains on keeping our people well, collaborative customer relationships and maintaining safe and reliable operations

SUSTAINABLE

• Robust operating model through economic cycles with a capability to take advantage of significant operating leverage

• • Labour shortages to be addressed with attraction and retention initiatives

• • Emission intensity reduction initiatives, including vehicle upgrades and sustainable developments, as well as continually improving disclosures

• • Obtain ISO certification for quality, safety and environment

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GROWTH
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• Leverage 3PL/4PL partner network to capitalise on a growing pipeline of national opportunities

• Assess opportunities for expansion and growth, including acquisitions

• • Target opportunities consistent with current work profiles to improve utilisation and productivity

• Seamless integrated distribution pathway from the East coast into WA metro and regional markets

PROPERTY

SYSTEMS

• Start development of a fit for • Continued investment in purpose transport hub in 2021 cyber security to protect our on company owned vacant operations and stakeholders land at Hazelmere WA • Investment in operating

• • Identify site consolidation systems to support opportunities across Australia productivity, compliance,

• • Continually assess operating reporting and data analysis sites for conversion of leases to drive performance into company owned sites where long term strategic footprints are required

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CTI Results 30 June 2021

APPENDIX

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CTI Results 30 June 2021

CORPORATE	CORPORATE	DASHBOARD	DASHBOARD	DASHBOARD
1	David R Watson	25,335,776	32.53%
2	Dynamic Supplies Investments Pty Ltd	9,708,025	12.47%
3	Simon Dirk Kenworthy­Groen	3,863,536	4.96%
4	Parmelia Pty Ltd	3,568,747	4.58%
5	CITI Corp Nominees Pty Ltd	3,508,785	4.51%
6	David A Mellor	3,390,944	4.35%
7	Bruce E Saxild	3,014,725	3.87%
8	Dixson Trust Pty Ltd	1,686,633	2.17%
9	NCH Pty Ltd	1,154,691	1.48%
10	Coram Pty Ltd	701,718	0.90%
	Other	21,943,089	28.18%
	Total	77,876,669	100.00%
ASX	Code		CLX
Shares on Issue			77.9M
Options on Issue			Nil
Share Price at 6 September 2021			$0.90
Market Capitalisation			$70.1M
				Source: asx.com.au

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CTI Results 30 June 2021

DIVERSE CUSTOMER BASE

CTI Results 30 June 2021

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TRANSPORT SERVICES

Couriers � On­demand express metro and outer metro services Parcels � Same day and overnight distribution, E­commerce “last mile” B2B / B2C and one to two runs per day services Taxi Trucks � On demand express services and exclusive hourly hire services; vehicles include two tonne to semi­trailers Fleet Management � Provision of dedicated trucks and trailers on permanent hire Regional Freight � Scheduled road services to South West and North West of WA; vehicles include rigids to triple road trains Specialised Services � Rail and wharf container handling, truck mounted cranes, tail lift vehicles and hot shot services Interstate Freight � Scheduled road and rail services to and from Perth, Adelaide, Melbourne, Sydney and Brisbane

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CTI Results 30 June 2021

LOGISTICS SERVICES

Warehousing	�Australia wide 3PL, 4PL, supply chain and	�Cross Docking
	overflow warehousing	�Temperature controlled and food grade
	�Contracted distribution centre services	(HACCAP)
	�Bulk product storage	�Specialised warehousing
	�Consolidation services
E-commerce Fulfilment	�Inventory storage and management	�Order shipments
	�Pick and pack	�Reverse logistics management
	�Labelling, reworking and kitting
CTI Projects	�Supply base warehousing and asset	�Quarantine cleaning and fumigation
	management	�Asset preservation shrink wrapping
	�Project labour services	�Minerals and energy projects
	�Plant and equipment hire
Flooring Services (GMK)	�Specialised warehousing	�Specialised Australia­wide distribution
	�Carpet and vinyl cutting services	network

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CTI Results 30 June 2021

OTHER SERVICES

Document

Management

Security

� Document and Sample Storage Secure storage, cataloguing and retrieval of documents, computer media and mineral samples

� Monitoring

ASIAL A1 graded 24/7 control room providing monitoring of alarms, lone worker protection, medical alerts and CCTV video verification for CTI Security clients and third party security

� Document Destruction

On­site destruction of documents/media and recycling within a closed loop service utilising CTI transport and warehousing facilities

� Installation

Installation and servicing of monitored alarms, CCTV and access control products for residential and commercial markets

businesses

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CTI Results 30 June 2021

DISCLAIMER

This presentation contains general and background information about CTI Logistics Limited (CTI, the Company) current as at the date of the presentation and should not be considered to be comprehensive or complete or to comprise all the information that an investor should consider when making an investment decision. It should be read in conjunction with the information provided to ASX. CTI is not responsible for providing updated information and assumes no responsibility to do so, except as required by the Corporations Act.

This presentation is not financial product advice, investment advice or a recommendation to acquire securities and has been prepared without taking into account the objectives, financial situation or needs of individuals.

This presentation is not, and should not be considered as, an offer or an invitation to acquire securities in CTI or any other financial products and neither this document nor any of its contents will form the basis of any contract or commitment. This presentation is not a prospectus.

Neither this presentation nor any of its contents may be reproduced or used without the prior written consent of CTI.

This presentation may contain forward looking statements and opinion. Any forward looking statements, opinion or estimates provided in this presentation are based on assumptions and contingencies which are subject to change without notice, as are statements about market and industry trends, which are based on interpretation of current market conditions. Any forward looking statements, including projections, forecasts and estimates, are provided as a general guide only and should not be relied on as an indication or guarantee of future performance and involve known and unknown risks, uncertainties and other factors, many of which are outside the control of CTI. Past performance is not necessarily a guide to future performance and no representation or warranty is made as to the likelihood of achievement or reasonableness of any forward looking statement or other forecast.

CTI and its related bodies corporate and each of their respective directors, agents, officers, employees and advisers expressly disclaim, to the maximum extent permitted by law, all liabilities (however caused, including negligence) in respect of, make no representations regarding, and take no responsibility for, any part of this presentation and make no representation or warranty as to the currency, accuracy, reliability or completeness of any information, statements, opinions, conclusions or representations contained in this presentation. In particular, this presentation does not constitute, and shall not be relied upon as, a promise, representation, warranty or guarantee as to the past, present or the future performance of CTI.

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CTI Results 30 June 2021

Contact Us

corporate@ctilogistics.com

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CTI Results 30 June 2021