QUBE HOLDINGS LIMITED — Interim / Quarterly Report 2012

Feb 29, 2012

FY 2012 Interim Results Briefing QUBE LOGISTICS HOLDINGS LIMITED

Disclaimer – Important Notice

• The information contained in this Presentation has been furnished by the Parties and other sources deemed reliable but no assurance can be given by the Parties as to the accuracy or completeness of this information.
• To the full extent permitted by law:
• (a) no representation or warranty (express or implied) is given; and
• (b) no responsibility or liability (including in negligence) is accepted,
• by the Parties as to the truth, accuracy or completeness of any statement, opinion, forecast, information or other matter (whether express or implied) contained in this Presentation or as to any other matter concerning them.
• To the full extent permitted by law, no responsibility or liability (including in negligence) is accepted by the Parties:
• (a) for or in connection with any act or omission, directly or indirectly in reliance upon; and
• (b) for any cost, expense, loss or other liability, directly or indirectly, arising from, or in connection with, any omission from or defects in, or any failure to correct any information, in this Presentation or any other communication (oral or written) about or concerning them.
• The delivery of this Presentation does not under any circumstances imply that the affairs or prospects of Qube or any information have been fully or correctly stated in this Presentation or have not changed since the date at which the information is expressed to be applicable. Except as required by law and the ASX listing rules, no responsibility or liability (including in negligence) is assumed by the Parties for updating any such information or to inform the recipient of any new information of which the Parties may become aware.

Notwithstanding the above, no condition, warranty or right is excluded if its exclusion would contravene any applicable law or cause an exclusion to be void.

The provision of this Presentation is not and should not be considered as a recommendation in relation to an investment in Qube or that an investment in Qube is a suitable investment for the recipient.

Agenda

• Half-Year in Review
• Financial Performance
• Operational Performance
• Giacci Acquisition
• Key Drivers and Outlook
• Questions
• Appendices

Half-Year in Review

• Delivered very strong earnings growth in the operating businesses
• Built upon track record of complementary, value-adding acquisitions
• Continued focus on safety
• Completed restructure of Qube and commenced rebranding
• Interim dividend of 2.0 cents per share to be paid (fully franked)
• Well positioned for continued earnings growth
• Statutory results were impacted by the Qube restructure completed in the period which involved significant one-off costs and changes to accounting policies. Therefore, the statutory results do not reflect the underlying financial performance of Qube and are not comparable to the prior year's results.

Financial Performance Pro-forma / Statutory

Six Months to 31 December	2011	2010	Change	2011
	Pro-forma		%	Statutory
Operating Revenue	397.5	290.8	37%	347.4
EBITDA	54.4	30.5	78%	0.2
EBIT	37.7	23.0	64%	(15.0)
NPBT and Associates	32.0	19.8	62%	(20.5)
Share of Profit of Associates	10.1	9.3	9%	6.7
Profit (Loss) Before Tax	42.1	29.0	45%	(13.8)
Profit After Tax Attributable to Shareholders	31.8	22.2	43%	8.2
All figures A$m

References to 'pro-forma' information are to non-IFRS financial information prepared in accordance with ASIC Regulatory Guide 230 (Disclosing non-IFRS financial information) issued in December 2011. Non-IFRS financial information has not been subject to audit or review. See Appendix 1 for further details on the preparation of the pro-forma information.

The statutory results for the six months to 31 December 2011 were impacted by the Qube restructure completed in the period which involved significant one-off costs and changes to accounting policies. Therefore, the statutory results do not reflect the underlying financial performance of Qube in the period and are not comparable to the prior year's results. Accordingly the 2010 statutory results have not been provided.

The statutory EBITDA and EBIT figures contained in the ASX release of 24 February included the share of profit of associates as per the segment information. The statutory results outlined above exclude share of profit of associates consistent with the pro-forma information.

Financial Performance Segment Overview

Six Months to 31 December 2011	QubeLogistics	QubePorts &Bulk	QubeStrategicAssets	Corporateand Other	Total
	$m	$m	$m	$m	$m
Statutory
Revenue	244.7	99.0	2.7	1.0	347.4
EBITDA	32.3	16.2	1.9	(50.2)	0.2
Adjusted EBITDA*	32.5	21.1	3.5	(2.7)	54.4
Pro-forma
Revenue**	244.5	150.4	2.7	(0.1)	397.5
EBITDA	32.3	23.9	1.9	(3.7)	54.4
Pro-forma Proportional
Revenue**	244.5	193.9	6.3	0.0	444.7
EBITDA	32.5	37.9	4.2	(3.8)	70.8
* Adjusted EBITDA excludes non-recurring costs associated with the Qube restructure and includes share of net profit of associates
** Pro-forma and Pro-forma Proportional revenue excludes interest income

See Appendix 1 for further details on the preparation of the pro-forma and pro-forma proportional information.

Financial Performance Pro-forma / Statutory

SixMonths to 31 December	2011($m)	2010($m)	Change(%)	2011Statutory($m)
Revenue
Qube Logistics Division	244.5	164.3	49%	244.7
Qube Ports & Bulk Division	150.4	123.9	21%	99.0
Total ConsolidatedOperatingDivisions	394.9	288.2	37%	343.7
EBITDA
Qube Logistics Division	32.3	19.3	67%	32.3
Qube Ports & Bulk Division	23.9	14.7	63%	16.2
Total ConsolidatedOperatingDivisions	56.2	34.0	65%	48.5
EBIT
Qube Logistics Division	22.7	14.7	54%	21.8
Qube Ports & Bulk Division	17.2	12.0	43%	11.7
Total ConsolidatedOperatingDivisions	39.9	26.7	49%	33.5

See Appendix 1 for further details on the preparation of the pro-forma information.

Financial Performance – Revenue

Continued revenue growth from operating businesses

All figures A$m

Financial Performance - EBITDA

EBITDA growth reflects efficiencies and benefits from investment

All figures A$m

Financial Performance - EBIT

EBIT increased significantly despite impact of $2.9 million amortisation expense of identifiable intangible assets

All figures A$m

Financial Performance Balance Sheet

• Gross debt of around $200 million at 31 December 2011
• Net debt of approximately $57 million
• Gearing (ND / ND + E) of around 5%
• New $100 million bridge facility executed in February to assist funding acquisitions
• Progressing to a longer term, larger syndicated debt facility to provide additional debt funding capacity and flexibility for further growth
• Qube will continue to maintain a conservative balance sheet

Financial Performance Balance Sheet

As at	31 Dec 2011($m)	30 June 2011($m)
Cash and Equivalents	142.2	78.9
Receivables	117.3	63.6
Other Current Assets	2.4	9.6
TotalCurrent Assets	261.9	152.1
Investment in Associates	254.8	0
FinancialAssets at Fair Value	1.1	398.9
PropertyPlant and Equipment	234.2	121.3
Investment Property	48.2	0
IntangibleAssets	511.4	198.4
Other Non-CurrentAssets	20.7	10.1
TotalNon-Current Assets	1070.4	728.7
Total Assets	1332.3	880.8
Tradeand Other Payables	75.9	37.2
Borrowings	37.1	7.6
Provisions	31.7	30.2
Other CurrentLiabilities	5.1	0.1
Total CurrentLiabilities	149.8	75.1
Borrowings	162.9	103.1
Other Non-CurrentLiabilities	8.0	16.2
Total Non-Current Liabilities	170.9	119.3
Total Liabilities	320.7	194.4
Net Assets	1011.6	686.4

Key movements from June 2011 to Dec 2011:

• Cash increased due to December placement less net cash outflow associated with the Qube restructure

• Assets and liabilities include consolidation of Qube Ports & Bulk as at 31 December 2011

• Reclassification of non-controlled entities from Financial Assets to Investments in Associates

• Reclassification of Minto Properties from Financial Assets to Investment Property

• Intangibles increased as a result of acquisition of controlling interests in Qube Ports & Bulk and Mackenzie Intermodal

• Borrowings have increased due to consolidation of debt within Qube Ports & Bulk and Minto Properties and use of debt to fund growth

Financial Performance - Cashflow

Key movements in the six months to 31 Dec 2011:

• Payment of cash costs relating to Qube restructure

• Payment of cash component of KFM performance fee for Y/E FY 11

• Cash inflow of around $28.4 million from entities acquired as part of the Qube restructure

• Purchase of new rolling stock by Qube Logistics of around $16 million

• Cash outflow relating to purchases of businesses (Mackenzie Intermodal - approx $16 million and POAGS – approx $5 million)

• Cash inflow from completion of December 2011 placement

• Net increase in borrowings within the three divisions to finance growth

Six MonthsEnding	31 Dec 2011($m)
Receipts from customers	384.3
Payments to suppliers	(346.1)
Dividends and DistributionsReceived	6.9
Net InterestExpense	(5.1)
Tax Paid	(7.1)
Paymentsto KFM	(19.7)
Other	7.0
Net Cash InflowFrom Operating Activities	20.2
Cash inflow from acquisitions	28.4
Payments forproperty, plant and equipment	(26.1)
Payments for acquisitions	(21.0)
Payment for investments	(9.9)
Other	(13.3)
Net Cash Inflow / (Outflow) fromInvesting Activities	(41.9)
Proceeds fromshare issues	83.8
Proceeds from borrowings	28.4
Repayment of borrowings	(7.0)
Finance leasepayments	(6.0)
Dividends /distributions paid	(13.8)
Other	(0.4)
Net Cash InflowFrom Financing Activities	85.0
Opening Cash	78.9
Net Increasein cash and equivalents	63.3
Closing Cash	142.2

Operational Performance Ports & Bulk Division

• Stevedoring of bulk products increasing part of the business. Focus on "mine to port" solutions
• Leading market share in stevedoring of vehicle imports
• Strong revenue growth but impacted by slowdown in steel imports and vehicle imports due to Thailand floods
• Earnings margin impacted by costs relating to industrial relations

Operational Performance Ports & Bulk Division

Operational Performance Safety, People, Sustainability Ports & Bulk Division

• Business has historically had a high level of LTI
• Significant expenditure and resources allocated to developing, implementing and monitoring safety processes
• Investment has yielded recent improvement in safety performance
• Expect further improvement going forward

Operational Performance Logistics Division

• Results benefitted from container volume growth of 7.3% in the six months to December 2011
• Continued focus on integrated logistics solutions
• Qube Rail continues to experience strong demand for port and regional services with organic growth of around 20% in the period
• Expansion of North Dynon rail terminal to provide capacity for new rail contracts
• Integration of recent acquisitions largely complete
• Further acquisitions targeted to increase scale and secure strategic locations
• Further investment in rolling stock and facilities to expand capacity
• Seasonal skew to H1

Operational Performance Logistics Division

Operational Performance Logistics Division

Operational Performance Safety, People, Sustainability Logistics Division

• Strong focus on OH&S processes and policies yielding pleasing results

• Expect further improvement going forward

Operational Performance Strategic Assets Division

• Generated reliable income during the period
• Planning continuing for future development into intermodal terminals
• Moorebank approvals delayed due to Commonwealth planning process
• Clarity on timing and process expected post the May budget

Moorebank Precinct

Acquisition of Giacci Holdings, a leading provider of transport and logistics solutions for the bulk sector.

• Excellent strategic fit for Qube and Giacci

• Based in Bunbury, WA with operations in WA, NSW, SA and NT

• Key strategic sites 10 freehold properties, 22,000m2 of bulk mineral storage sheds, head office plus workshop. Surplus land for development in both Bunbury and Geraldton

• Provides Qube with expanded capabilities and strengthens ability to offer complete "mine to port" logistics solutions

• Diversified customer base with a range of commodities including mineral sands, concentrates and coal

• Significant "cross sell" opportunities across respective customer bases

• Existing management to remain with the business

• Purchase Price of $119 million inclusive of around $18 million expected to be payable in two years linked to earnings and growth targets

• Qube to assume net debt of around $26.6 million

• Funded from existing cash and debt facilities and $20 million in Qube scrip

• Expected to be earnings per share accretive in first full year of operations

• Transaction expected to be completed by the end of March 2012

Y/E30 June	2011 ($m)
Revenue	85.7
EBITDA	21.2
EBIT	10.7
Source: ASICAccounts

Key Drivers and Outlook

• Key drivers of Qube's business include:
  • Global and domestic economic growth
  • Container volumes
  • Demand for soft commodities
  • Demand for hard commodities
  • New vehicle sales
  • Resource related infrastructure expenditure
  • Modal shift to rail

Key Drivers and Outlook

• Subject to economic conditions and the industrial relations environment, Qube expects continued revenue and earnings growth from its operating divisions in the second half of FY 12
• Growth rate from the existing businesses is expected to be lower than that achieved in the first half
• Qube is reviewing additional acquisitions and development projects that complement its existing operations and/or provide it with strategic locations
• Giacci is expected to contribute to earnings in the last quarter of FY 12
• Qube is well-positioned to continue to deliver earnings growth over the medium to long-term

Appendix 1

• The pro-forma information has been prepared on the following basis:
• 1. Qube owned its current interest in each of the logistics businesses for the entire reporting period.
• 1. Qube operated as a company for the entire reporting period.
• 1. The one-off costs relating to the restructure have been excluded.
• 1. Other non-recurring items relating to the two month period prior to the restructure have been excluded.
• The pro-forma proportional information has been prepared on the same basis as the pro-forma information, however, Qube's share of associates' revenue, EBITDA and EBIT has been included in the figures.

Appendix 2 Pro-forma / Proportional Information

Six Months to 31 December	2011	2010	Change	2011	2011	2010	Change
		Pro-forma	%	Statutory		Pro-forma	%
Operating Revenue	397.5	290.8	37%	347.4	444.7	332.1	34%
EBITDA	54.4	30.5	78%	0.2	70.8	45.8	55%
EBIT	37.7	23.0	64%	(15.0)	51.4	35.4	45%
NPBT and Associates	32.0	19.8	62%	(20.5)	45.4	32.0	42%
Share of Profit of Associates	10.1	9.3	9%	6.7			0%
Profit (Loss) Before Tax	42.1	29.0	45%	(13.8)	45.4	32.0	42%
Profit After Tax Attributable to Shareholders	31.8	22.2	43%	8.2	31.8	22.2	43%
All figures A$m

References to 'pro-forma' information are to non-IFRS financial information prepared in accordance with ASIC Regulatory Guide 230 (Disclosing non-IFRS financial information) issued in December 2011. Non-IFRS financial information has not been subject to audit or review. See Appendix 1 for further details on the preparation of the pro-forma and pro-forma proportional information.

Appendix 3 Reconciliation of 31 December 2011 Pro-forma Result to Statutory Result

	$m
Net Profit After Tax Attributable to Members	8.2
Add: Non-Controlling Interest Share of Profit	0.7
Statutory Net Profit After Tax	8.9
Add: Tax Expense (Benefit)	(22.7)
Statutory Net Profit (Loss) Before Tax	(13.8)
Add:Non-Recurring Items and Restructure Costs	47.5
Add: Earningsfor 2 months to 31 August	7.5
Add: Other Adjustments	0.9
Pro-forma Net Profit Before Tax	42.1
Tax Expense	(10.3)
Pro-forma Net Profit AfterTax	31.8

Appendix 4 Reconciliation of 31 December 2011 Tax Benefit

	$m
Net LossBefore Tax	(13.8)
Tax Benefit on net loss before tax	(4.1)
Non-deductiblepermanent differences-KFM Termination Fee-Dividend Rebates	9.6(1.9)
Movements in deferred tax balances	(26.3)
Total Tax Benefit	(22.7)