Full Year Presentation 8 August 2005

Full Year Presentation

8 August 2005

This presentation relates to the Freightways Limited NZX announcement and media release of 8 August 2005.

As such it should be read in conjunction with, and is subject to the explanations and views contained in, those releases.

Presentation

2005 highlights

Operating performance

Business strategy

Outlook

2005 Highlights

General Highlights

• All subsidiaries have performed very well

• Strategies continue to realise profitable growth in both ‘Core’ Express Package and ‘Emerging’ Business Mail and Information Management markets

• Archive Security acquisition performed fully to expectation during first full year of ownership

Financial Highlights

2005 2004 variance

$000 $000 %

Operating revenue 233,725 214,498 9%

EBITDA 54,996 45,618 21%

EBITA 50,539 40,714 24%

NPAT 21,991 16,137 36%

NPATA 26,948 21,081 28%

Earnings per share (NPAT) 17 cents 13 cents 30%

Operating Performance

• 9% revenue growth compared to 2004

• 5-year compound average annual revenue growth of 7%

Operating Revenue

-

50

100

150

200

250

Jun99 Jun00 Jun01 Jun02 Jun03 Jun04 Jun05

Year Ended

$M 2nd Half

1st Half

Where Revenue Growth Has Come From

180

190

200

210

220

230

240

2004 Organic Pricing Market share Acquisition 2005

Growth drivers

$M

214

4.5%3% 0.5% 1% 234

EBITA

• 24% EBITA growth compared to 2004

• 5-year compound average annual EBITA growth of 19%

-

10

20

30

40

50

Jun99 Jun00 Jun01 Jun02 Jun03 Jun04 Jun05

Year Ended

$M 2nd Half

1st Half

Drivers of EBITA Growth

• Good cost control

• Disciplined margin focus relating to new business

• Favourable business mix

• Leverage gained by adding revenue to established national infrastructure

Cash Flows

• Cash generated from operations of $55m reflects strong EBITDA result

• Capital expenditure at expectation of $8.6m

• Borrowings reduced by $4m during the year

Balance Sheet

• Continuation of strong negative working capital position

• Increase in fixed assets of $4m (net of depreciation)

• Reduction in bank borrowings of $4m

• Goodwill amortised over 20 years ($5m annual charge)

Dividends

Jun-05 Dec-04 Jun-04 Dec-03

Dividend declared $10.7m $9.45m $8.55m $7.25m

Cents per share 8.50 7.50 6.90 5.85

Full year (cps) 16.00 12.75

Key points:• Increase of 26% compared to 2004• Fully Imputed• Record date 16 September 2005• Payable 30 September 2005

Finance Facilities

• Refinancing completed November 2004 to replace subordinated debt with core bank debt

• Interest savings of approximately $500k p.a. flow from 1 July 2005

• New finance facility provides $140m core debt and $15m acquisition facility

• Debt drawn to $127m at 30 June 2005

Business Strategy

Business strategy

• Continued development of growth opportunities in Freightways’ existing three core markets

• Positioning, People, Performance, Profit

• Explore incremental and complementary growth opportunities

• Invest in IT and infrastructure

Outlook

Capital expenditure

2006 2005Forecast Actual

Capital expenditure $7.2m $8.6m

Depreciation $5.3m $4.5m

• 2005/06 includes stepped investment in core IT infrastructure

Outlook

• A less buoyant economy is expected

• Investment in people and infrastructure

• Characteristics of competitive environment expected to remain unchanged

• Consistent application of proven market strategies

• All subsidiaries well positioned to accommodate growth

• Positive outlook for shareholders and all other stakeholders

Summary

Strong successful business

Positioned to deliver continuing earnings growth

Delivering an attractive dividend yield