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 148 205 -57 One off impacts (15) 90 -105 Operating EBIT 163 115 48 Reported NPAT 121 170 -49 One off impacts 10 90 -80 Operating NPAT 111 80 31 Total Equity 1,089 959 130 Net debt 186 393 -207 Page 2 Annual Results Presentation - September 2013
Highlights of 2013 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 Strategic 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 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 Operational 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 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 Portfolio 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 Page 3 Annual Results Presentation - September 2013
Profitability Continued improvement in operating NPAT Operating NPAT trend Operating NPAT increased from $80m to 175 $111m, driven by: 150 125 ─ 100% consolidation of ECL and 100 CouriersPlease holdings vs. last year, in $m 75 addition to a strong performance from ECL 50 25 ─ A strong performance from Kiwibank driven by 0 2006 2007 2008 2009 2010 2011 2012 2013 -25 strong net interest income and bad debts -50 reversal Source: NZP Operating NPAT Reported NPAT 2008 2009 2010 2011 2012 2013 Reported NPAT is $121m, down from last year’s $170m due to: 110.2 71.8 1.3 -35.6 169.7 120.9 Reported NPAT Christchurch 20.4 ─ earthquake The absence of the one off gain on sale from Property depreciation ECL and CPH of $96m - - 72.3 13.6 2.8 and other writedowns Restructuring & ─ Benefit of Datacom and NZP House gain on 3.8 11 - 8.1 6.3 47.9 Impairments sale of $75m Property & Investment -74.8 gains ─ Restructuring and impairment costs of $48m Employee Related 14.4 Provision Australian courier Dividend declared of $5m, allowing for re- -24.8 -5.2 - 35.2 -96.2 divestment gains investment in the business Operating NPAT 89.2 77.6 73.6 41.7 79.8 111.2 Page 4 Annual Results Presentation - September 2013
Strengthened balance sheet The sale proceeds from the Datacom and NZP funding lines (at 30 June 2013) property sales have primarily been used to pay Facility Drawn down debt – a total of $159m has been repaid Instrument (NZDm) (NZDm) Maturity Coupon this year: Cash advance 100 0 1-2 years n/a ─ The $54m of drawings under the ECL facility were Commercial paper 200 30 < 94 days ~2.80% paid down in full in March and the facility closed NZP Bonds 200 150 Nov-16 5.225% ─ The aircraft owned by AirPost was sold to ECL and NZP Hybrid Notes 200 200 Nov-39 7.50% the USD facility of US$4m was also closed ─ CP on issue has been paid down from $130m to NZP debt maturity (at 30 June 2013) $30m 250 200 Hybrid bonds first re-set date in November 2014 150 with a 1% step up margin – the option to 100 remarket the bonds at this time is being 50 considered 0 2013 2016 2039 Undrawn liquidity lines of $320m in addition to Commercial paper Wholesale bond Hybrid bond Source: NZP the Crown uncalled capital facility of $300m Page 5 Annual Results Presentation - September 2013
The shape of NZ Post NZ Post is now focused on two key business clusters: Brand Highlights Division Description Mail Mail & Parcels Logistics Digital Platforms Kiwibank Financial Kiwi Wealth and Kiwi Insurance services New Zealand Home Loans Page 6 Annual Results Presentation - September 2013
What we do 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 businesses. It started in Auckland and now is expanding to Wellington and across the country. 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. Page 7 Annual Results Presentation - September 2013
Deed of Understanding 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 Page 8 Annual Results Presentation - September 2013
Core postal business 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 Page 9 Annual Results Presentation - September 2013
Couriers 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 Page 10 Annual Results Presentation - September 2013
Recommend
More recommend
