Mainfreight Limited — Interim / Quarterly Report 2020

Nov 10, 2020

MAINFREIGHT LIMITED HALF YEAR RESULT TO 30 SEPTEMBER 2020

==> picture [721 x 203] intentionally omitted <==

Result Summar y

Revenue up 7.2% to $1.61 billion (excluding FX up 5.2%) REVENUE An increase of $108.39 million, compared to the same period last year Offshore revenues made up 76.4% of total revenue

PBT

Profit before tax at $102.26 million, up 23.4% or $19.42 million Excluding FX up 21.7%

Page 2

==> picture [134 x 23] intentionally omitted <==

Dividend / Net Debt / Discretionary Bonus

Interim dividend of 30.0 cents per share DIVIDEND Books close 11 December 2020; payment on 18 December 2020 Increase of 20.0% over the previous year’s interim dividend Gearing ratio improved from 14.0% at 31 March 2020 to 10.4% NET DEBT Net debt reduction of $41.90 million (since 31/3/20) to $115.48 million

Page 3

==> picture [134 x 23] intentionally omitted <==

First Half 2021 Review

• Results in line with October trading update

• Satisfactory result reflecting strong performance in Australia and New Zealand, supported by improvement from Asia

• Europe and Americas are behind the previous comparable period; Oct/Nov trading showing improvement

• Second half expected to remain ahead of prior year

Page 4

==> picture [218 x 152] intentionally omitted <==

==> picture [218 x 152] intentionally omitted <==

==> picture [134 x 23] intentionally omitted <==

Ca ital Mana ement p g

NZ$ MILLION THIS YEAR LAST YEAR Operating cash flow $188.51 $123.08

 Capital expenditure totalled $54.83 million for the six‐month period, including  Land & Buildings $31.32 million  Plant & Equipment $16.01 million  Information Technology $ 7.50 million Page 5

Ca ital Ex enditure U date p p p

• NZ$ MILLION Half Year Est. Full Year Est. Next Year Total Capital Expenditure $55 $103 $114  Additional land in Auckland ‐ $23.5 million in current year  Next year – significant property projects: Australia  Adelaide $27 million  South Dandenong (start) $7 million New Zealand  Auckland $18 million  Other North Island $7 million  South Island $6 million

Page 6

==> picture [134 x 23] intentionally omitted <==

Half Year Analysis: Revenue

==> picture [674 x 245] intentionally omitted <==

----- Start of picture text -----

||||||
|---|---|---|---|---|
|$000|THIS YEAR|LAST YEAR|VARIANCE|
|New Zealand: NZ$|378,895|362,571|4.5%||
|Australia: AU$|403,210|360,423|11.9%||
|Asia: US$|42,942|35,991|19.3%||
|Americas: US$|248,016|244,039|1.6%||
|Europe: EU€|193,779|193,766|0.0%|‐|
|Total Group: NZ$|$1,608,861|$1,500,466|7.2%||
|(excl FX) 5.2%||

----- End of picture text -----

Page 7

==> picture [134 x 23] intentionally omitted <==

Half Year Analysis: Profit Before Tax

==> picture [674 x 240] intentionally omitted <==

----- Start of picture text -----

||||||
|---|---|---|---|---|
|$000|THIS YEAR|LAST YEAR|VARIANCE|
|New Zealand: NZ$|37,500|34,632|8.3%||
|Australia: AU$|30,559|14,960|104.3%||
|Asia: US$|3,976|2,497|59.2%||
|Americas: US$|8,500|9,769|(13.0)%||
|Europe: EU€|7,069|8,046|(12.1)%||
|Total Group: NZ$|$102,265|$82,848|23.4%||
|(excl FX) 21.7%||

----- End of picture text -----

Page 8

==> picture [134 x 23] intentionally omitted <==

Product Performance

==> picture [673 x 298] intentionally omitted <==

----- Start of picture text -----

|||||||||
|---|---|---|---|---|---|---|---|
|NZ$000|THIS YEAR|LAST YEAR|VARIANCE|VAR ex FX|
|Group|Revenue|1,608,861|1,500,466|7.2%||5.2%||
|PBT|102,265|82,848|23.4%||21.7%||
|Transport|Revenue|746,578|746,241|0.0%|‐|(1.7)%||
|PBT|57,446|45,673|25.8%||24.4%||
|Warehousing|Revenue|214,503|192,457|11.5%||8.8%||
|PBT|16,124|12,692|27.0%||24.6%||
|Air & Ocean|Revenue|647,780|561,768|15.3%||13.2%||
|PBT|28,695|24,483|17.2%||15.2%||

----- End of picture text -----

Page 9

==> picture [134 x 23] intentionally omitted <==

New Zealand

Revenue: $379m 4.5% PBT: $37m 8.3%

• Strong domestic consumer demand has seen freight tonnage internationally and domestically increase

• Ongoing new customer gains (flight to quality) and volume increases from existing customers sees record freight tonnage in Transport division

• Consumer demand and congestion in supply chain has created inventory shortages. New significant customer gains to benefit Warehousing utilisation from November onwards

• Air & Ocean division benefiting from import and export volumes. Shipping and airline space difficult to access

• Expect pre‐Christmas volume surge, likely across a shorter timeframe due to congestion issues

Page 10

==> picture [218 x 152] intentionally omitted <==

==> picture [218 x 152] intentionally omitted <==

==> picture [134 x 23] intentionally omitted <==

Australia

Revenue: AU$403m 11.9% PBT: AU$31m 104.3%

==> picture [218 x 152] intentionally omitted <==

• Sustained market share growth and improved network efficiency has produced a strong first‐half result

• Transport division has improved gross margin, managed overhead costs well, and continues to find sales growth. Network intensification to continue

• Warehousing has maintained good utilization across the 6‐month period, albeit the last 3 months has seen inventory levels deteriorate. 3[rd] Sydney warehouse (15,000 m[2] ) to open Dec‐2020

• Improving Air & Ocean profitability has been pleasing; margins under some pressure

==> picture [218 x 152] intentionally omitted <==

• Expect ongoing improvement, particularly with the re‐opening of Victoria

==> picture [134 x 23] intentionally omitted <==

Page 11

Asia

Revenue: US$43m 19.3% PBT: US$4m 59.2%

• Airfreight development has assisted the improved Asian performance

• Strong air charter work related to Covid‐19 supplies assisted early in the half

• Southeast Asian branches performing better

• Hong Kong still recovering, particularly Seafreight due to border closure

• Whilst equipment and space shortages continue, we still expect ongoing improvement for remainder of the year

==> picture [34 x 9] intentionally omitted <==

----- Start of picture text -----

Page 12
----- End of picture text -----

==> picture [218 x 151] intentionally omitted <==

==> picture [218 x 152] intentionally omitted <==

==> picture [134 x 23] intentionally omitted <==

The Americas

Revenue: US$248m 1.6% PBT: US$9m (13.0)%

• Q1 performance lower than expected; Q2 has seen improvement

• Whilst Transport volumes have been difficult to grow during lockdowns, this is now improving alongside healthy customer gains in LTL sector

• Air & Ocean activity strengthening in the last month or two

• Warehousing has seen good growth, and has increased footprint to 110,000m2. Additional site development likely based on increased customer enquiry

• Expect Q2 improvements to flow through into full‐year result

==> picture [218 x 152] intentionally omitted <==

==> picture [218 x 152] intentionally omitted <==

==> picture [134 x 23] intentionally omitted <==

Page 13

The Americas

• CaroTrans

• Wholesale LCL trade impacted globally, and has reduced revenue and profitability

• Renewed focus on container loading efficiency and increased sales activity to combat poor performance

• Small improvements in August/September

• Expect full‐year result to be less than prior year

==> picture [34 x 9] intentionally omitted <==

----- Start of picture text -----

Page 14
----- End of picture text -----

==> picture [218 x 152] intentionally omitted <==

==> picture [218 x 152] intentionally omitted <==

==> picture [134 x 23] intentionally omitted <==

Europe

Revenue: €194m 0.0% PBT: €7m (12.1)%

==> picture [218 x 151] intentionally omitted <==

• A steady performance from Transport and Air & Ocean has offset poor Warehousing activity

• Transport in line with year prior after good improvements previously. Covid‐19 lockdown has stalled the momentum

• Warehousing inventory levels have declined, due to consumer demand, shipping delays and manufacturing capacity. Some improvement through September/October

==> picture [218 x 152] intentionally omitted <==

• Air & Ocean performance continues to improve

• Domestic freight volumes have continued despite current European lockdowns. Monitoring closely and will adjust overheads should we see activity levels decline into Christmas

==> picture [134 x 23] intentionally omitted <==

==> picture [34 x 9] intentionally omitted <==

----- Start of picture text -----

Page 15
----- End of picture text -----

Grou Outlook p

• Satisfactory first half

• Expect these current trends to continue into an improved full‐year result

• Australasian activity remains strong with pre‐Christmas volumes expected to be similar or above the prior year’s

• Supply chain congestion widespread; impact felt across domestic and international networks

• New customer growth pleasing across all regions, providing further confidence

• Reinvigorating land and building projects in line with expectations for ongoing growth

==> picture [34 x 9] intentionally omitted <==

----- Start of picture text -----

Page 16
----- End of picture text -----

==> picture [217 x 151] intentionally omitted <==

==> picture [217 x 152] intentionally omitted <==

==> picture [134 x 23] intentionally omitted <==

Financial Calendar F21/22

DATE F21 – 12 months ended 31 March 2021 26 May 2021 Annual Meeting of Shareholders 29 July 2021 F22 – 6 months ended 30 September 2021 11 November 2021

Page 17

==> picture [134 x 23] intentionally omitted <==

==> picture [314 x 135] intentionally omitted <==

==> picture [314 x 135] intentionally omitted <==

==> picture [314 x 135] intentionally omitted <==

“It is not necessary to do extraordinary things to get extraordinary results”

==> picture [134 x 23] intentionally omitted <==