Toll Holdings Limited
New Zealand Union Conference 14 June 2005
Wellington
Mark Rowsthorn – Executive Director, Toll Group David Jackson – CEO, Toll NZ Paul Garaty – General Manager, Toll Shipping TheThe ChangingChanging FaceFace ofof TollToll Toll Today
LBO 1986 IPO 1993 2005
Annual Revenue ($Am) 16 118 4.000+
Purchase Price ($Am) 1.5 - -
Market Capitalisation ($Am) - 63 4,311+
Strategic Acquisitions - 6 43
Employees 95 350 20,000+
Sites 4 28 450+
Our commitment to growth 40% Revenue Contribution by Activity 30%
10% 9% 7% 4%
Road Rail Warehousing & Sea Air Stevedoring Distribution Includes 50% PNL and Toll NZ Revenue Growth 3,271 Revenue Full Year Revenue Interim 2,570 $Am 2,038 1,925 1,603 1,582 1,296 1,360 1,237 1,023 854 731 651 686 470 234 292 179 237 95 107
94 / 95 95 / 96 96 / 97 97 / 98 98 / 99 99 / 00 00 / 01 01 / 02 02 / 03 03 / 04 04 / 05 Acquisitions – 43 in 16 Years 1989 Merricks Transport 2001 Int Corporate Relocations 1990 Barretts Transport 2001 ARN Logistics 1991 Tasmania Express 2001 Finemore Holdings 1992 MBCV / Recycling 2001 Strang Stevedoring 1993 Railor 2001 Autotrans 1993 West Bros 2001 Wesfarmers Transport 1994 Freshmark Ltd 2002 National Rail & FreightCorp (50%) 1994 Sibcot 2002 BHP Stevedoring 1995 Brambles Nth Qld 2002 BHP Transport & Logistics (NZ) 1995 Interlink 2002 SDC New Zealand 1996 Brambles 2002 AUSDOC DX Businesses 1996 Compack Packaging 2002 Brambles Shipping 1997 Fruitexpress 2002 Mayne Express 1997 John Nash Transport 2003 Zari Haulage 1997 TNT 2003 Tranz Rail 1998 UTO / MIM 2004 Leonard & Dingley 1998 IPEC / Jetsroad 2004 Australian Transport Network (ATN) 1999 Malleys Transport 2004 Freight Australia 2000 Removals Australia 2004 Western Stevedores Group 2000 AWX (20%) 2004 Owens 2000 movinghome.com.au 2005 JD Lyons 2000 Hile Carrying Company Shareholder Returns – December 2004 EPS Full Year (fully diluted) 50.1 EPS Interim All figures adjusted for 4:1 share split (Oct 2002) Cents 34.6 30.0 26.4
26.3 19.4 16.6 18.8 12.9 14.3 10.8 9.3 6.7 7.9 4.5 4.3 5.6 4.0 2.9 2.4 2.1 94 / 95 95 / 96 96 / 97 97 / 98 98 / 99 99 / 00 00 / 01 01 / 02 02 / 03 03 / 04 04 / 05 Toll’sToll’s VisionVision forfor thethe FutureFuture DirectionDirection ofof thethe TransportTransport andand LogisticsLogistics IndustryIndustry Global Snapshot – Major Providers USA Europe Asia Arkansas Best Business Post Exel CH Robinson Christian Salvesen Fukuyama CNF Deutsche Post Hitachi Transport EGL Inc DPWN Kamigumi Expeditors DSV Kerry Logistics FedEx Exel Linforx Forward Air Frans Maas Lin-Fung Forwarding JB Hunt Geodis Logistics Mitsubishi Logistics Logista Hays Logistics Nippon Express Roadway Express Kuhne & Nagel Seino Ryder System Norbert Dentressangle Sembcorp Logistics Swift Transportation P&O Nedlloyd Singapore Post UPS Schenker Sinotrans USF TDG Sumitomo Warehouse Uti TPG Toll Yellow Transportes Azkar TPG / TNT Listed in alphabetical order Wincanton Yamato Transport Opportunities and Industry Growth Aust & NZ Now - $66b 12 Yrs Time - $130b
In-House In-House A$33b A$40b Maj Log Maj Log 50% A$15b 30% A$40b
Med Cos Med Cos A$18b A$50b Industry Composition Aust & NZ - $A66b $A Billion Tol l 4. 20 Includes 50% PNL
Pa trick 2. 00 Includes 50% PNL & Virgin Li nFox 1. 50 TNT 1. 40 Scott / K &S 1. 30 Ma infreight 0. 80 St ar track 0. 45 Total = $A15 b or 22.7% A dst eam M arine 0. 30 B ram bles 0. 25 Frei ghtw ay s 0. 23 Ot hers 2. 57 Road
8,000 employees drive trucks 5,000 registered prime movers and rigid vehicles Road transport revenue - $1.6 billion 30 road based services in Australia # 1 operator in Australia - FTL / LTL / Parcel Express # 2 operator in New Zealand - FTL / LTL / intermodal movements Thailand and Malaysia – 300+ rigid and articulated vehicles RailRail
Toll Rail operations in Australia begun in1986 Successful JV with Patrick Corporation in 2002 # 1 operator in Australia # 1 operator in New Zealand Current Market Share (long distance – excluding bulk)
Sea and Air Rail 30% 27%
Road 43% WarehousingWarehousing andand DistributionDistribution
2m+ sqm –New Zealand and Australia Developing key innovative distribution facilities Long term contracts Generates many other opportunities SeaSea -- CoastalCoastal Shipping,Shipping, PortsPorts andand StevedoringStevedoring
Roll on / roll off vessels – Bass Strait, Australia Freight and passenger ships – Cook Strait, New Zealand # 1 operator for intermodal traffic Stevedoring services – 22 ports – Australia and New Zealand AirAir
Growing air freight services 2002 acquired Australian Air Freight and courier business from Mayne Group - $300m pa Significant contracts in banking and automotive industries AAE under review Unique value proposition Acquisitions to create scale AsiaAsia
Toll Thailand trading well Existing oil and gas sector contracts expanded New contracts underway in Malaysia Increased forwarding activities in the region TollToll NZNZ
Track infrastructure transitioned to Crown (NZRC) Committed to working with customers and the Crown to introduce urgently needed reforms Land based operations in NZ – strong revenues Vessel ‘Arahura’ refurbishment completed Vessel ‘Aratere’ operational issues TollToll inin NewNew ZealandZealand Northport Auckland Kawerau Growing presence – 12 ports Murupara Tauranga Kaingaroa JV with Port of Tauranga Kinleith Gisborne Acquired JD Lyons Napier Westgate Developing air freight services Nelson
New contracts – underpinned by MTS Picton Centreport Solid Energy, Fonterra and Genesis Energy Lyttleton Timaru Tapanui Port Current Toll National Coverage Chalmers Bluff StenaStena ChallengerChallenger IndustryIndustry SettingsSettings andand DynamicsDynamics
Supply chain re-engineering Offshore sourcing momentum More complex customer demands Significant barriers to entry and industry failures Narrow focussed suppliers under pressure Capacity constraints StrategicStrategic IssuesIssues forfor RoadRoad StrategicStrategic IssuesIssues forfor RailRail EconomicEconomic ConditionsConditions
Economic environment – stable and strong Interest rate increases absorbed Management practices to reduce impact of increasing fuel costs EBAs finalised for next three years WhatWhat NextNext forfor TollToll