WISEWAY GROUP LIMITED — Interim / Quarterly Report 2021

Mar 21, 2021

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Contents

1H21 result overview	3
Company overview	11
Questions	19
Appendix	20

Presenters	Presenters
Roger Tong	Chief Executive Officer
Florence Tong	Managing Director
James Zhu	Group Financial Controller
Michael Hughes	Chairman

Company/investor enquiries: admin@wiseway.com.au Media/investor enquiries: +61 449 571 078 Wiseway@symbolstrategic.com.au

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1H21 result overview

Ke Metrics 1H21 y

• Revenue of $69.7 million, up 54% from $45.1 million

• Gross profit of $18.1 million, up 60% from $11.3 million, reflecting an increase in gross margin

• Gross margin of 26%, up 100 basis points from 25% in 1H20

• EBITDA of $6.5 million increased from $0.1 million in 1H20

• Net profit/(loss) after tax (NPAT) was $3.4 million from the -$4.9 in 1H20

• Net debt has fallen from $4.9 million (1H20) to $0.4 million (1H21)

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Revenue ($ million) Gross margin (%)
+55% +100 bps
1H21 1H20 1H21
69.7 25% 26%
1H20
45.1
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EBITDA ($ million) NPAT
+6600%
1H21
3.4
1H20
1H21
6.5 -4.9
1H20
0.10
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Overview of 1H21 result

Group result 1H21 1		Revenue Gross profit Gross margin EBITDA EBITDA margin	$69.7m in 1H21 up 54% from $45.1m in 1H20 $18.1m in 1H21 up 60% from $11.3m in 1H20 26% in 1H21 up 100bps from 25% in 1H20 $6.5m in 1H21 up from $0.1m in 1H20 9.3% in 1H21 up 914bps from 0.22% in 1H20	Operating environment: • Continued import and export services between Australia and Asia despite international travel and cargo challenges • Increased capabilities by offering customers alternative cargo solutions to address COVID-19 related challenges • Investment in staff, infrastructure and operating platform supported multiple logistics services that contributed to diversifying the income streams
Growth in sales across all divisions 2		Air freight - cargo Air freight - perishables Sea freight Road freight Imports and distribution	Up 25%vs pcp Up 363%vs pcp Up 93% vs pcp Up 64%vs pcp Up 139%vs pcp	Strong growth across both business divisions: • 25% increase in trading income from Wiseway’s core air freight - cargo business of $45.4 million (pcp $36.2 million) • New business divisions almost tripled revenue to $24.0 million (pcp $8.5 million)
1H21 operational milestones 3		✓ We have diversified our business and our income streams ✓ We have opened an office in Guangzhou in China – this is in addition to the Shanghai office

3

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Cash flow

Cash and cash equivalents ($m unless stated otherwise)	1H21	1H20	Change %
Net cash from operating activities	7.5	(3.1)	342
Net cash from investing activities	(1.5)	(0.7)	-114
Net cash used for financing activities	(2.4)	2.8	186
Net increase/(decrease) in cash	3.6	(1.0)	460
Cash at the beginning of the period	8.6	4.6	87
Effects of movement in exchange rates	0.2	0	N.m
Cash at the end of the period	12.4	3.6	244

Operating cash flow:

• Higher proportional levels of cash received from customers driven by growth of new business division sales and increased collections from corporate and larger credit account customers.

Investing cash flow:

• Final payments for property improvements, x-ray scanning machines, and increasing the fleet of trucks committed during 1H20.

Financing cash flow:

• $2.6 million in finance lease payments during 1H21.

Note: In the table, cash refers to cash and cash equivalents. Note : N.m. = not meaningful.

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Ca ital mana ement p g

Balance sheet ($m unless stated otherwise)	31 Dec 2020	30 Jun 2020	Change %
Total equity	27.2	23.7	15
Cash and cash equivalents	12.4	3.6	244
Total assets	68.0	63.2	8
Secured bank loan	5.0	5.0	0
Finance leases	7.4	7.6	- 3
Total liabilities	40.8	39.4	4
Net debt	0.4	4.9	- 92
Financial position:
Shares on issue (#)	140,318,769	140,318,769	0
Gearing ratio (%)	60%	62%	- 3
Earning Per Share (EPS), cents	2.45	-3.63
Net tangible assets/share (cents)	19.42	15.87	18%

Financial position:

• Cash and cash equivalents as at 31 December 2020 were $12.4 million (pcp: $3.6 million).

Capital management:

• Prudent financial debt levels.

• The secured bank loan of $5,000,000 was fully repaid on 4 January 2021, and is available fore redraw.

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O eratin environment p g

Macro-environment:

• Demand for logistics services remains high.

• Wiseway helped Australian and Asian customers overcome the logistics and cargo challenges presented by COVID-19.

Operational:

• Wiseway has continued to successfully operate its import and export services between Australia and Asia despite international travel and cargo challenges.

• Driven by our integrated platform which supports multiple logistics services that contributed to diversifying our income stream.

• These services have diversified our income streams.

Wiseway is at the forefront of changing freight dynamics of import-export demand

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Outlook

Business:

• Cautiously optimistic as demand for logistics services remains high but this may vary as the COVID-19 related international travel, transport and logistics are modified.

• The Board and Management of Wiseway continue to prioritise supporting our customers and employees in these challenging times.

• We are well positioned to face the challenges ahead.

Macro-economic:

• The macro-economic outlook remains volatile.

• Wiseway is positioned to actively manage its operations and maximise its outcomes.

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Company overview

10

Overview of key milestones

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2005
- IPO 2020
2017
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Founded the business	Founded the business	Strategy of revenue diversification	Strategy of revenue diversification	Wiseway’s integrated platform	Wiseway’s integrated platform
✓	Wiseway founded	✓	IPO on 31 October 2018 raised $20 million	supporting multiple logistics services
✓ ✓ ✓	Sydney warehouse Customs and quarantine depot Melbourne warehouse	✓ ✓	100+ fleet including roller trucks, B-Double, semi-trailer, container and rigid trucks Accredited Regulated Air Cargo Agent	✓ ✓	Investments in people, infrastructure and our operating platform Strategic partnerships with several airlines to provide interstate trucking services
✓ ✓	Dairy export approved Brisbane warehouse	✓	Achieved national bonded warehouse footprint with fumigation and cold-treatment facilities to support Wiseway’s perishables business division	✓	Leveraging of relationships with airlines, shipping lines and local trucking companies, to offer an integrated service package
✓	GSA agreements	✓	Accredited for fruit exports from Australia to Asia	✓	Opened a Business Support Office in
✓	Adelaide and Perth warehouses	✓	Customs clearance warehouses/facilities Australia-wide	✓	Guangzhou, China Growing market share in new business
✓	Darwin warehouse¹	✓	Strategic partnership with airlines to provide		divisions
✓	Leading air freight forwarder in Australia-		interstate trucking services	✓	Essential service provider during COVID
	the Asia-Pacific region	✓	Expanded to New Zealand with Auckland
			warehouse facility
		✓	Shanghai office established

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Note:

1. Darwin branch is managed by an exclusive local agent

Wiseway: Leading Australia-Asia air freight forwarder and provider of integrated logistics

ANZ footprint:

• 9 accredited Regulated Air Cargo Agent locations in Australia and New Zealand

• Customs-bonded warehouse capability

• Accreditation to export perishables to China

Growth areas:

• Perishables (fresh produce, food, wine)

• Airtruck – interstate road transportations ‘food movers’

• Imports

• Sea freight export

• Airnex – cargo sales agent

Customers:

• Diversified business shipping to 100 destinations

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39,300 tonnes of
Darwin [1] cargo in 1H21
Brisbane
1 warehouse facility
Shanghai
Perth Wiseway office
1 warehouse facility Sydney Auckland
Adelaide 3 warehouse 1 warehouse
1 warehouse facilities facility
facility Melbourne
2 warehouse
facilities
Full-time employees: ~ 130
100 + fleet
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Growing presence in Asia: Wiseway’s Australia-New Zealand footprint of warehousing facilities connect with Asia-bound destinations via 100 routes

Note:

1. Darwin branch is managed by an exclusive local agent

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Wisewa ’s strate ic focus and values y g

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Focus:
- Export
-Import
-Domestic
transport
Diversification:
- Cargo sales Innovation:
- Growth in
- Products
operations
outside dry air - Services
freight
- Delivery
- Shipping to 100
- Technology
destinations Strategic
focus and
values
Sustainable Integrity:
growth: - IATA accredited
- Asian demand - RACA accredited
for Australian and
- Approved
New Zealand facilities for
products Efficiency and customs & AQIS
flexibility:
- Process
improvement
- Technology
- Fast turnaround
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Income diversification through eight business divisions: opened a second business su ort office in China pp

Wiseway Group Limited

Export	Export	Export	Import	Domestic transport	GSA/CSA	Regional	Regional
Dry cargo (air freight)	Perishables (air freight)	Sea freight	General cargo & e-commerce	Airtruck	Airnex	Auckland	Shanghai & Guangzhou
• Platforms • Suppliers • Parcel consolidators • Infant milk formula, vitamins, health and skin-care products, honey, wine	• Fresh produce • Seasonal fruit • Seafood • Meat • Fresh milk and dairy	• General food commodities • Australian produce • Wine	• General cargo imports clearance and delivery • E-commerce parcel imports and distribution	• Interstate and road transport business – ‘food movers’ • Servicing wholesalers, manufacturers and airlines	• Cargo sales for airlines • Managing more than 70 flights per week from Sydney, Melbourne, Brisbane, Perth, Darwin, Cairns and Auckland • Servicing third- party freight forwarders	• IATA accredited • Operations and Business team built up • Designated Customs Controlled Area (CCA)	• Assisting businesses from China to Australia • Shanghai office • Guangzhou office

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Diversified business shipping to 100 destinations

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Asiafocused specialist provider

Scale advantage

Wisewa ’s stren ths y g

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Strategic relationships with airlines

• ✓ Long-standing relationships with major international airlines, particularly on Australia to Asia routes

• ✓ Wiseway has been appointed GSA (exclusive) and CSA (non-exclusive) for major Asian airlines

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Long-standing customer relationships

• ✓ Wiseway has supported the growth of many suppliers, distributors and parcel express companies from infancy to established market players

• ✓ New customers, particularly the larger Australian importers and exporters

• ✓

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Unique service provider

Wiseway has a unique understanding of cross-border e-commerce market and perishables regulation

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Trans-Tasman footprint

Competitive freight rates

One-stop shop logistics provider

✓ Presence in six Australian capital cities and Auckland

✓ Can attract large suppliers, distributors and parcel express companies who require multi-city services

• ✓ Top one Australia-Asia air freight forwarder

• ✓ Top three Australia-worldwide air freight forwarder

• ✓ Services in export air freight, sea freight, perishables, customs clearance, warehousing, import e-commerce and domestic transportation

• ✓ RACA designated and permitted

• ✓ Customs bonded warehouse Australia-wide and in New Zealand

Defensible and growing market position with high barriers to entry

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Wisewa is strate icall ositioned for lon -term rowth y g y p g g

Wiseway’s growth strategy is focused on three key components

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1 2
Maintain core growth Accelerate new growth
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3
Regional business
development
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• Continue to offer customer-first multiple and integrated services

• Investment in digital processes and automation

• Leverage its Trans-Tasman presence to deepen its relationships with Asian e- commerce platforms and suppliers

• Continue strong organic growth from expanded warehouses and facilities

• Leveraging partnerships in the AsiaPacific region

• Established outbound perishables and bounded warehouses

• Operating platform for e-commerce parcels from the greater Asian region via bonded warehouse facilities across Australia

• RACA designated and fully accredited

• International expansion in the AsiaPacific region by leveraging extensive expertise in our core business and new

• ANZ footprint with a presence in seven capital cities

• Opened a Business Support Office in Guangzhou

• Identified Los Angeles as a site for our expansion into the United States

Successful strategy of growth

The scale and breadth of Wiseway’s business will enable it to take advantage of emerging trends and growing demand for logistics services

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Questions

17

Appendix

18

Financial erformance p

Profit and loss ($m unless stated otherwise)	1H21	1H20	Change %
Revenue	69.7	45.1	55%
Direct expenses	(51.6)	(33.8)	53
Gross profit	18.1	11.3	60
Gross profit margin	26%	25%	100 BPS
Operating expenses:
Employment costs	(9.4)	(8.8)	6.8%
Occupancy costs	(0.5)	(0.4)	11.7%
Administrationand otherexpenses	(1.8)	(1.8)	0
Total operating expenses	11.7	11.0	5
EBITDA	6.5	0.1	N.m
EBITDA margin	9.3%	0.22%	914 bps
Depreciation	(2.6)	(2.5)	4
EBIT
Finance costs	(0.7)	(0.9)	(13)
Income tax expense	0.3	(1.6)	(120)
NPAT	3.4	(4.9)	170

Revenue

• Revenue increased by $24.6 million or 54% to $69.7 million.

Gross profit

• Gross profit was $18.1 million up by $6.8 million (60% pcp). This resulted in a 100 basis point (bps) improvement in gross margin to 26% for the half.

Operating expenses

• Operating expenses were $11.7 million up 6% pcp.

Earnings Before Interest, Taxes, Depreciation and Amortisation (EBITDA)

• EBITDA increased significantly from $0.1 million in the pcp to $6.5 million.

Income tax expense

• There was a change in income tax income/expense of $1.9 million.

NPAT

• There was an improvement in NPAT to $3.4 million from a loss of $4.9 million in the pcp.

bps = basis points N.m. = Not meaningful

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Balance sheet

Financial position ($m unless stated otherwise)	31 Dec 2020 30 Jun 2020 Change %
Current assets: Cash and cash equivalents Trade and other receivables Inventories Current tax assets Other assets Total current assets	12.4 8.6 44 8.7 0.1 8.3 0.1 4 0 0 0.9 N.m 2.7 1.7 59 23.9 19.6 22
Non-current assets: Financial assets Property, plant and equipment Deferred tax assets Total non-current assets	0.4 0.4 0 42.4 43.2 -1.8 1.3 0 N.m 44.1 43.6 1.1
Total assets	68.1 63.2 7.8
Liabilities: Trade and other payables Loans and borrowings Employee benefits Current tax liabilities Total current liabilities	8.8 6.5 35 9.7 10.2 4.9 1.2 1.0 20 0.1 0 N.m 19.8 17.7 12.0
Non-current liabilities: Loans and borrowings Employee benefits Total non-current liabilities	20.9 21.6 4.5 0.2 21.2 0.2 21.8 0 -2.3
Total liabilities	41.0 39.5 4
Total Equity	27.2 23.7 15
Total Liabilities and Equity	68.1 63.2

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N.m. = Not meaningful

Assets

• Cash and cash equivalents increased as a result of better cash flow management.

• Current tax assets were utilised in December 2020

• Trade receivables were down as the result of increased collections from corporate and larger credit account customers

Liabilities

• Trade payables were down from prior period with DPO of approximately 30 days

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Cash flow

Cash flow ($m unless stated otherwise)	1H21	1H20	Change %
Net cash from operating activities	7.5	(3.1)	342
Net cash used in investing activities	(1.5)	(0.7)	-114
Net cash used in financing activities	(2.4)	2.8	186
Net increase/decrease) in cash and cash equivalents	3.6	-1.0	460

Cash from operating activities

• The higher proportional levels of cash received from customers was driven by growth of new division sales and increased collections from corporate and larger credit account customers

Cash used in investing activities

• Final payments for property improvements, x-ray scanning machines, and increasing the fleet of trucks committed during 1H21.

Cash used in financing activities

• There were finance lease payments of $2.6 million made in 1H21

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Disclaimer

This presentation contains summary information about Wiseway Group Limited (Wiseway) and its subsidiaries and their activities. The information in this presentation does not purport to be complete. It should be read in conjunction with Wiseway’s other periodic and continuous disclosure announcements lodged with the Australian Securities Exchange, which are available at www.asx.com.au.

The information contained in this presentation is not investment or financial product advice and has been prepared without taking into account the investment objectives, financial situation or particular needs of any particular person. Before making an investment decision, investors should consider the appropriateness of the information having regard to their own investment objectives, financial situation and needs and seek independent professional advice appropriate to their jurisdiction and circumstances.

To the maximum extent permitted by law, no responsibility for any loss arising in any way from anyone acting or refraining from acting as a result of this information is accepted by Wiseway, any of its related bodies corporate or its directors, officers, employees, professional advisers and agents (Related Parties). No representation or warranty, express or implied, is made by any person, including Wiseway and its Related Parties, as to the fairness, accuracy, completeness or correctness of the information, opinions and conclusions contained in this presentation.

An investment in Wiseway securities is subject to investment and other known and unknown risks, some of which are beyond the control of Wiseway or its directors. Wiseway does not guarantee any particular rate of return or the performance of Wiseway securities.

Past performance information given in this presentation is given for illustrative purposes only and should not be relied upon as (and is not) an indication of future performance. This presentation contains certain forward ‐ looking statements with respect to the financial condition, results of operations and business of Wiseway and associated entities of Wiseway and certain plans and objectives of the management of Wiseway. Forward ‐ looking statements can be identified by the use of forward ‐ looking terminology, including, the terms “believes”, “estimates”, “anticipates”, “expects”, “predicts”, “intends”, “plans”, “goals”, “targets”, “aims”, “outlook”, “guidance”, “forecasts”, “may” or “will”, and similar expressions. These forward ‐ looking statements include all matters that are not historical facts. Such forward ‐ looking statements involve known and unknown risks, uncertainties and other factors which because of their nature may cause the actual results or ‐ performance of Wiseway to be materially different from the results or performance expressed or implied by such forward looking statements.

Such forward ‐ looking statements are based on numerous assumptions regarding Wiseway’s present and future business strategies and the political, regulatory and economic environment in which Wiseway will operate in the future, which may not be reasonable, and are not guarantees or predictions of future performance. No representation or warranty is made that any of these statements or forecasts (express or implied) will come to pass or that any forecast result will be achieved. Forward ‐ looking statements speak only as at the date of this presentation and to the maximum extent permitted by law, Wiseway and its Related Parties disclaim any obligation or undertaking to release any updates or revisions to information to reflect any change in any of the information contained in this presentation (including, any assumptions or expectations set out in this presentation).

All figures in this presentation are A$ unless stated otherwise and all market shares are estimates only. A number of figures, amounts, percentages, estimates, calculations of value and fractions are subject to the effect of rounding. Accordingly, the actual calculations of these figures may differ from figures set out in this presentation.

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