2013 Annual Results Investor Relations Presentation New Zealand - - PowerPoint PPT Presentation
September 2013 2013 Annual Results Investor Relations Presentation New Zealand Post Group: New Zealand Post Limited. Headline results FY 2013 FY 2012 Variance Revenue 1,688 1,309 379 Expenditure 1,623 1,224 399 Reported EBIT 148
New Zealand Post Group: New Zealand Post Limited.
September 2013
Investor Relations Presentation
FY 2013 FY 2012 Variance Revenue 1,688 1,309 379 Expenditure 1,623 1,224 399 Reported EBIT 148 205
One off impacts (15) 90
Operating EBIT 163 115 48 Reported NPAT 121 170
One off impacts 10 90
Operating NPAT 111 80 31 Total Equity 1,089 959 130 Net debt 186 393
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Strategic
Changes to Deed of Understanding proposed to Government and opened to public submission. Full scale economic cost modelling of the business completed with results being used to influence future strategic decisions Reorganisation of internal business units into Mail and Communications; and Channels and Digital Planned closure of 3 out of 6 national mail processing centres in Wellington, Dunedin and Hamilton Retail Transformation Project progressed with the first new retail stores resulting opened on the North Shore just after financial year end
Operational
First full year of ECL and CouriersPlease ownership – strong performance particularly from the NZ business Re-forged business alliance with Australia Post, including winning back trans Tasman parcel volumes Integrated delivery agent model trialled in Tauranga with results being used to inform future integration strategy between letters and parcels Sequence sorting end-to-end process launched - over 5 million pre-sorted mail items in the first month YouShop launched allowing customers to create a US postal address and use NZ Post to deliver from the US to New Zealand homes – over 40,000 sign ups to date RealMe identity platform partnership with the Department of Internal Affairs went live
Portfolio
Sale of 35% stake in Datacom to the NZ Superfund for $142m Sale of NZ Post House and Courier Post House – total proceeds of $92m Sale of ECL’s subsidiary Roadstar to Transport International Limited Airpost assets moved to ECL control and the remaining assets to be amalgamated back in the Group Converga’s NZ and Australian operations have all been brought under one umbrella
Operating NPAT trend
Source: NZP
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2008 2009 2010 2011 2012 2013
Reported NPAT
110.2 71.8 1.3
169.7 120.9
Christchurch earthquake
20.4
Property depreciation and other writedowns
13.6 2.8
Restructuring & Impairments
3.8 11
6.3 47.9
Property & Investment gains
Employee Related Provision
14.4
Australian courier divestment gains
Operating NPAT 89.2 77.6 73.6 41.7 79.8 111.2
25 50 75 100 125 150 175
2006 2007 2008 2009 2010 2011 2012 2013
$m
Operating NPAT Reported NPAT
Operating NPAT increased from $80m to $111m, driven by:
─ 100% consolidation of ECL and CouriersPlease holdings vs. last year, in addition to a strong performance from ECL ─ A strong performance from Kiwibank driven by strong net interest income and bad debts reversal
Reported NPAT is $121m, down from last year’s $170m due to:
─ The absence of the one off gain on sale from ECL and CPH of $96m ─ Benefit of Datacom and NZP House gain on sale of $75m ─ Restructuring and impairment costs of $48m
Dividend declared of $5m, allowing for re- investment in the business
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Instrument Facility (NZDm) Drawn (NZDm) Maturity Coupon Cash advance 100 1-2 years n/a Commercial paper 200 30 < 94 days ~2.80% NZP Bonds 200 150 Nov-16 5.225% NZP Hybrid Notes 200 200 Nov-39 7.50%
The sale proceeds from the Datacom and property sales have primarily been used to pay down debt – a total of $159m has been repaid this year:
─ The $54m of drawings under the ECL facility were paid down in full in March and the facility closed ─ The aircraft owned by AirPost was sold to ECL and the USD facility of US$4m was also closed ─ CP on issue has been paid down from $130m to $30m
Hybrid bonds first re-set date in November 2014 with a 1% step up margin – the option to remarket the bonds at this time is being considered Undrawn liquidity lines of $320m in addition to the Crown uncalled capital facility of $300m
NZP debt maturity (at 30 June 2013)
Source: NZP 50 100 150 200 250 2013 2016 2039 Commercial paper Wholesale bond Hybrid bond
NZP funding lines (at 30 June 2013)
Division Description
Mail & Logistics
Mail Parcels Digital Platforms
Financial services
Kiwibank Kiwi Wealth and Kiwi Insurance New Zealand Home Loans
Annual Results Presentation - September 2013
Brand Highlights
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Business Description NZ Post delivers more than 700m items of mail each year to c. 1.9m homes around New Zealand. It also provides postal and bill payment services via a store network over 880 stores, processing more than 21m financial transactions each year. ECL, through its brands Courier Post, Pace and Contract Logistics is an express courier, logistics and courier business delivering 42m courier parcels around New Zealand. In Australia, CouriersPlease is a leading provider of metro courier services in all major cities and towns. Converga is a leader in advanced information logistics, Software as a Service (SaaS) and Business Process Outsourcing (BPO), delivering strategic advantages and cost savings solutions. Localist is an online service that uses social media to enable locals to recommend local
Kiwibank provides a range of financial services across personal markets, business markets and wealth and insurance. It has 10% main bank share in personal markets and its acquisition of GMI last year propelled the bank’s combined KiwiSaver funds under management to #6 in New Zealand. Annual Results Presentation - September 2013 Page 7
The new proposed new Deed will provide New Zealand Post with the flexibility to respond to the challenges faced by the Mail & Communications business Our objective is to achieve a sustainable commercial model for the basic letter service without the need for shareholder support to meet the obligations imposed by the Crown via the Deed:
─ Flexibility around delivery days for standard items – not less than 3 days a week to 99% of delivery points ─ No fewer than 140 outlets where bill payment services are available through a combination of branches, hosted services and self-service kiosks
Public consultation on the proposed changes closed in March 2013 and the Government is currently considering the feedback
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The core postal business performed well against market conditions, maintaining its divisional contribution (excluding one-off costs) vs. last year Ongoing operational cost cutting measures have netted off the decline in postal volumes (down 7.5% year on year) Strategic initiatives are beginning to tackle costs more rapidly, starting with the announcement to reduce the number of mail processing centres from six to three Future initiatives will be announced soon leveraging off the economic cost analysis undertaken over the past year Any changes to the Deed of Understanding will also help to provide the flexibility to respond to customer and market demand however NZ Post is moving to make changes now within its current contract Retail transformation project has entered its second phase with the opening of new stores in North Shore in July and August
The first full year of ownership of both ECL and CouriersPlease has had a strong positive impact for the Group, including a $17m NPAT contribution from ECL Growth in parcels volume, driven by express parcels and time sensitive documents, have helped Courier Post to beat its plan by c. 10% despite the market environment remaining competitive Integration of mail and parcels operations continuing to be implemented to access the synergies of full ownership CouriersPlease in Australia performed to plan and continues to deliver strong returns for the Group
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2013 NPAT increased by 23% to $97m driven by increased net interest income and strong bad debt performance:
─ Personal Markets – main bank share up from 9.5 to 10.3%. Lending grew 9% to $10.7bn despite the static credit environment ─ Business Markets – bad debt release drove the business markets performance resulting in a strengthened credit book of SME businesses. Focus is on building the customer platform with 8% customer growth year on year ─ Wealth & Insurance – strong first year’s contribution from GMI. Total FUM of over $2bn with c. $1bn in the growing KiwiSaver market. Kiwi Insurance launched Life & Living – the first in-house manufactured life product for Kiwibank
Customer deposits continue to account for the majority of bank funding (84%) with wholesale funding sources continuing to diversify:
─ Successful raising $150m of Basel III compliant subordinated debt ─ NZ$3bn covered bond programme launched with first issue of CHF150m in Switzerland
Capital from self generation, market issuance and NZ Post will support the capital demands of the bank in the short to medium term
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Good 2013 performance from the investments portfolio
Further investment and portfolio alignment opportunities will be investigated on a case by case basis
Converga Performed strongly throughout the year, positioning them with
Philippines and North America Localist Re-defining the business model on a purely digital offering has provided better than plan performance on the path to profitability in the near term Reachmedia As the largest catalogue distributor in the country, Reachmedia has proved a successful 50%-owned investment, with more volume flowing through our networks than traditional mail
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2008 2009 2010 2011 2012 2013 Profitability
Revenue 1,290.0 1,253.8 1,204.2 1266.8 1,309.4 1,687.8 Operating profit 114.4 90.4 24.4
85.8 65.2 Profit before tax 136.8 93.5 34.1
190.1 122.2 Profit after tax 110.2 71.8 1.3
169.7 120.9 Extraordinary items 21.0 (5.8) (72.3) (77.3) (89.9) (9.7) Normalised PBT 115.8 99.3 106.4 42.7 100.2 137.5 Normalised PAT 89.2 77.6 73.6 41.7 79.8 111.2
Balance Sheet
Kiwibank banking assets 7,138 10,259 12,141 13,753 14,575 15,024 Total assets 8,037 11,304 13,075 14,682 15,851 16,140 Kiwibank banking liabilities 6,778 9,799 11,457 13,075 13,861 14,048 Total liabilities 7,370 10,635 12,243 13,888 14,892 15,050 Total voting equity 667 669 539 686 813 942 Preference shares
147 146 147
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2008 2009 2010 2011 2012 2013 Core Post
Domestic postal volumes millions of items 951 887 843 805 751 697 International postal volumes millions of items 101 99 96 102 84 75 Postal delivery points millions 1.869 1.886 1.893 1.905 1.910 1,914 Standard letter service performance % 96.5 94.4 95.9 95.5 93.9 93.2
Store network
PostShops 325 326 307 287 280 277 PostCentres 656 627 626 609 614 604
Couriers
Road on time performance %
95.7 95.0 92.8 90.7 Air on time performance %
88.5 87.0 83.0 78.8
Kiwibank Banking Group
Tier 1 capital (%) % 8.3 7.7 9.8 9.0 10.4 10.4 Growth in Banking Group assets (%) % 50.1 27.4 18.0 13.0 6.0 3.1 Main bank market share % 6.1 7.3 7.8 8.2 9.0 10.3
Employees
Kiwibank Banking Group FTE's 871 934 953 1,030 1,024 1,189 Postal Group FTE's 8,752 8,088 7,757 6,838 7,328 8,543 Lost time injury frequency rate per 1,000,000 hours worked 17.15 9.70 7.44 6.27 5.64 7.20
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Mark Yeoman
Chief Financial Officer DDI: +64 4496 4099 Mobile +64 21 778 404 Email: mark.yeoman@nzpost.co.nz
Rhiannon McKinnon
Corporate Finance Manager DDI: +64 4496 4096 Mobile: +64 212 488 882 Email: rhiannon.mckinnon@nzpost.co.nz
Kevin Hastings
Investor Relations DDI: +64 4496 4923 Mobile: +64 27 706 6485 Email: kevin.hastings@nzpost.co.nz Investor Centre http://www.nzpost.co.nz/about-us/investor-centre
This presentation provides information in summary form only and is not intended to be complete. This presentation may contain information (including information derived from publicly available sources) that has not been independently verified by NZP. Some statements in this presentation are forward‐looking statements regarding future events and the future financial performance of NZP. These statements can be identified by the use of forward‐looking terminology such as ‘may’, ‘will’, expect’, ‘anticipate’, ‘estimate’, ‘continue’, ‘plan’, ‘intend’, ‘believe’ or other similar words. No representation, warranty or assurance (express or implied) is given or made in relation to any forward looking statement by any person (including NZP). In particular, no representation, warranty or assurance (express or implied) is given that the occurrence of the events expressed or implied in any forward looking statements in this presentation will actually occur. Actual results, performance or achievement may vary materially from any projections and forward looking statements and the assumptions on which those statements are based. Given these uncertainties, no reliance should be placed on the fairness, accuracy, completeness or reliability of the information contained in this presentation. The forward‐looking statements in this document speak only as of the date of this presentation. To the maximum extent permitted by law, NZP and its respective directors, officers, employees or advisors do not accept any liability for any errors,
contained in this presentation.
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