Toll Global Forwarding – Strategy Rollout Continued, Earnings and Margins Improving
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Toll Holdings Limited ABN 25 006 592 089 Level 7/380 St Kilda Road Melbourne Victoria 3004 Tel: 61 3 9694 2888 Fax: 61 3 9694 2880 25 March 2011 The Manager Australian Stock Exchange Company Announcement Office Level 4 20 Bridge Street Sydney NSW 2000 Lodged Through ASX On Line Total No. of Pages: 35 Dear Sir PRESENTATION SLIDES – INTERNATIONAL ROADSHOW, INCLUDING UPDATE ON EARTHQUAKE IMPACT ON FOOTWORK EXPRESS Please find attached for immediate release to the market, Presentation Slides for an International Roadshow commencing 28 March 2011. The presentation includes an update on the Earthquake Impact on Footwork Express (refer slide 23), which identifies, based on current knowledge, the event is not expected to have a material impact on the Toll Group 2011 results. Yours faithfully TOLL HOLDINGS LIMITED Bernard McInerney Company Secretary Encl. Toll Group International Roadshow March-April 2011 Operating Divisions Toll Group Toll Toll Toll Toll Toll Toll Specialised Global Global Global Domestic & Domestic Resources Logistics Forwarding Global Express Forwarding Freight Provides logistics World class International Market leading Domestic freight Provides a services to the oil contract logistics freight forwarding express freight forwarding across comprehensive & gas, mining, and solutions provider and advanced operator in Australia and New suite of options government and in the Asia Pacific supply chain Australia providing Zealand Australia-wide for defence sectors in region management time sensitive palletised freight, Australia Asia and services freight distribution, liquids distribution, Africa and top ten through to express logistics relocation services provider in Japan Toll Group 2 Toll Growth Pathways . Secure and organically grow our valuable Australian market position . Build global scale and yield in the high growth global forwarding market . Increase exposure to large and growing resource logistics market . Leverage our Australian expertise to build a regional global express network . Grow market leading contract logistics offer in target geographies and market segments . Leverage Group scale to build competitive advantage Toll Group 3 Toll Geographic & Divisional Revenue Split Australian Revenue Total Revenue Non Australian Revenues TDF TGX 20% 26% Japan 23% 40% Singapore 12% 60% US 12% TSDF China 10% 22% TGL 16% New Zealand 9% Other 34% Australia TGF TGR Offs hore 8% 8% H1 = 51% H2 = 49% Note: All of the above percentages are indicative of normalised trading volumes Toll Group 4 Group Financial Year 2011 Interim Results Toll Group 5 Highlights of Financial Year 2011 Interim Result . Toll Global Forwarding – strategy rollout continued, earnings and margins improving . Toll Global Resources – ongoing growth in revenue and earnings, strong pipeline of opportunities, TOPS progressing well . Toll Global Express – improved margins in Australia, planned operational improvements in Footwork Express gaining traction . Toll Global Logistics – growth from Australian businesses, significant contract retention in Asia . Toll Domestic Forwarding and Toll Specialised and Domestic Freight – challenging conditions continue, good progress on cost reductions . Strong balance sheet supported by issue of notes in the US Private Placement market . Outstanding response from our people in dealing with the impact of recent natural disasters Toll Group 6 Financial summary 6 months ended 31 December 2010 2011 Variance % Revenue $3,305m $4,239m 28% EBITDA* $319m $371m 16% EBIT** $211m $254m 20% Reported Profit (pre non $147m $173m 18% recurring items) Reported Profit $110m $175m 59% Gearing 22% 26% 4pp EPS* 22.1cps 25.5cps 15% Dividends 11.5cps 11.5cps - * Pre acquisition accounting amortisation and investment writedowns / non recurring items ** Pre non recurring items Toll Group 7 Organic revenue growth positive $ Billion Revenue for 6 months ended December 2009 3.3 - Acquisitions 0.7 - Foreign exchange impact -0.1 - Organic growth 0.3 Revenue for 6 months ended December 2010 4.2 . Significant benefit from acquisitions for Toll Global Forwarding . Footwork Express and Summit included for the full period . Contract wins and improved domestic volumes provide growth for Toll Specialised and Domestic Freight, Toll Global Resources and Toll Global Express Toll Group 8 Recent acquisitions and contracts Underpinning further growth Acquisitions DPEX TGX July 2010 Genesis Forwarding TGF July 2010 WT Sea Air TGF Aug 2010 North Queensland Couriers TGX Sep 2010 Truck Gleam TGL Oct 2010 Magpie Couriers TGX Nov 2010 McLaughlin Freightlines TDF Dec 2010 SAT Albatros TGF Feb 2011 Major Contract Wins/Renewals Coles (Australia) Ingram Micro (Australia) Woolworths (Australia) Ford (Australia) BHP Billiton (Australia) National Foods (Australia) Nike (Australia) Fosters (Australia) Johnson & Johnson (China) Cadbury (Australia) Australian Defence OneSteel (Australia) SC Johnson (China) Unilever (Singapore) Proctor & Gamble (India, Vietnam and Indonesia) Toll Group 9 Strategic acquisitions Building on existing strength McLaughlin Freightlines completed 8 December 2010 . Well developed business in the rapidly expanding poultry transport sector . Adds strength to existing Toll Refrigerated, Toll SPD and Toll QRX businesses SAT Albatros completed 1 February 2011 . Dubai based provider of Sea-Air services . Further cements Toll’s strategic position in the Middle East and in the Asia to Europe (particularly Germany) trade lane . Unique integrated offering provides customers significant cost savings . Well established customer base principally in fashion, electronics and consumer goods Mitchell Corporation announced 11 March 2011 . Western Australia’s second largest mining services provider is a strategic addition to Toll Global Resources . Strong base in WA resources market complimenting Toll mining services operations in other States . Mitchells provides its customers with transport services in bulk resources, hydrocarbons and dangerous goods market segments Toll Group 10 Safety Performance Continuing to build on past gains Lost Time Injury Frequency Rate 60 50 40 30 20 10 . Continuation of long term improvement in 0 LTIFR to 2.9 at December 2010 compared with 4.4 at December 2009 (a 34% Toll GroupJun-01 improvement) . Jun-02 Improvements in performance across all Jun-03 Divisions, includi Jun-04 . Jun-05 Safety leadership training provided for senior executives Jun-06 . Jun-07 Additional focus and resources applied to Jun-08 most common causes Jun-09 motor vehicle incidents ng acquired businesses Jun-10 Dec-10 - manual handling and 11 Toll and the Environment . Toll is tackling environmental issues across its operations . In the short term this means improving efficiency in the use of non renewable resources such as diesel, gas and electricity which reduces greenhouse gas emissions . In the long term this means increased focus on renewable energy sources . Smarter Green is Toll’s environmental program managing these environmental risks and opportunities . Measuring environmental impacts and reducing green house has intensity . Target reductions ↓ 10% by 2013-14 ↓ 20% by 2019-20 . Inclusion in short term incentives Toll Group 12 Divisional 2011 Interim Results Toll Group 13 Toll Global Resources Marine, Mining, TOPS, Energy, Remote Logistics, Perkins Revenue – $ million $M . Strong contribution from Toll Energy, including 400 ongoing ramp up of the Gorgon contract 200 . Focus on new opportunities from LNG and CSG developments 0 1H09 1H10 1H11 . Toll Remote Logistics generated strong results EBITA – $ million with a number of changes to key contracts $M 50 . Marine Logistics significantly affected by bad 25 weather in Indonesia . Perkins experienced solid revenue growth 0 1H09 1H10 1H11 . TOPS development in line with plan. Imminent EBITA Margin * completion of new wharf facility will create a 16% valuable revenue stream 12% 8% 4% 0% * Excludes PPA amortisation and profits from associates 1H09 1H10 1H11 Toll Group 14 Toll Offshore Petroleum Services base (TOPS) . Strategically positioned deep water facility in Singapore, servicing offshore oil and gas sector . Development is progressing in line with plan . Capital expenditure for the period was $36 million – total capital expenditure to date of $100 million . Increased business development to better utilise the ramp up warehouse . Imminent completion of new wharf facility will create a valuable revenue stream . Significant progress with tenants . Full take up of design specific buildings Toll Group 15 Toll Global Logistics AutoLogs, SE Asia, Sing/Malaysia, North Asia, Contract Logistics, Government Business Group, in2store, Chemical Logistics Revenue – $ million $M 800 . Strong performance from in2store, Chemical Logistics and Contract Logistics driven by new 400 contract wins and cost improvements 0 . Rebranding in China complete. Awarded ‘Best 1H09 1H10 1H11 3PL Supply Chain Provider in Asia’ EBITA – $ million $M . Asian logistics activities progressing well 60 generating new contract wins and increased 40 opportunities with multinational companies 20 . Result reflected scheduled reduced scope of 0 services provided to Singapore Government, 1H09 1H10 1H11 prior period sale of investment in Pacorini Toll EBITA Margin * and Cambodian railway commencement costs 10% 8% 6% 4% 2% 0% * Excludes PPA amortisation and profits from associates 1H09 1H10 1H11 Toll Group 16 Toll Global Forwarding Asia, ANZ, Americas, Africa, Europe & Middle East, Projects Revenue – $ million $M . Revenue growth both organic and