Looking closer at the big picture ANNUAL REPORT 2019 MaxiTRANS - PDF document

Looking closer at the big picture ANNUAL REPORT 2019 MaxiTRANS Industries Limited ACN 006 797 173

2019 Financial Highlights 340 340 409 352 8.8 10.7 10.1 4.8 3 3.5 3.5 0 329 6.3 2 15 16 17 18 2019 15 16 17 18 2019 15 16 17 18 2019 Revenue Underlying net profit after tax Ordinary dividends ($m) ($m) declared per share (cents) You’ll see a company that is much more than the sum of its parts Contents 2019 Highlights 1 Who we are 2 Chairman’s Report 4 Managing Director’s Review 5 Our Strategy 6 Safety and People 8 MaxiPARTS 10 Australian Trailers 12 International 14 Board of Directors 16 Executive Leadership Team 17 Financial Report 18

ANNUAL REPORT 2019 1 2019 Highlights Our People & Community Total Recordable Injury Frequency Rate (TRIFR) 48% From FY18 to current rolling 12 month TRIFR Women in senior 2018 Employee management roles Engagement Score 24.4% 9% Our Business Programs & systems launched FY19 Revenue • Launched leadership development programs $352m for all frontline Managers, as well as Executive and Senior Management Teams • Management ERP system went live 2 October 2018 Capital Reallocation Sale of MTC • Launched employee recognition and acquisition program (recognising employees of Trout River living the MaxiTRANS values) Australia Manufacturing efficiency MaxiPARTS Revenue 7% 4.9% in last 12 months on PCP

2 MAxITRANS INDUSTRIES We are Australasia’s largest trailer equipment & support distribution network Our businesses regional footprint • One of the largest suppliers of truck and trailer parts to the road transport industry in Australia through the MaxiPARTS wholesale and retail network • Australia’s largest supplier of locally manufactured, high quality engineered road transport trailer solutions including trailer repairs, service and rental • A major player in the New Zealand road transport trailer industry Trailer Dealers MaxiPARTS Outlets Our purpose At MaxiTRANS, we are leading our industry to become safer and more efficient, so that our customers can better deliver the needs of a nation

ANNUAL REPORT 2019 3 We are well positioned and ready for growth MaxiPARTS Business Trailers Business • A national store footprint in the • Strong brand heritage and right locations reputation • Technology enabled customer • Broadest range of products, solutions national distribution and service capability • Scale benefits from being associated with the largest • Innovation driving leadership trailer manufacturer in product safety and quality • Breadth of range and product • Multiple manufacturing sites across expertise two Australian states and NZ 36% 51% FY19 Segment FY19 Segment Revenue Contribution Profit Contribution 64% 49% Our values Send all our people A balanced focus on Enable and empower home safely customers and results people to achieve results Be honest, forthright Encourage collaboration Become better every and ethical in our and deep seated day in all that we do dealings accountability

4 MAxITRANS INDUSTRIES Chairman’s Report volumes the Ballarat plant recorded MaxiPARTS continues to grow in excellent efficiencies in quarter strength and demonstrates itself 4 of the financial year. Perhaps even as a first class distribution asset more pleasing was a 48% reduction representing 49% of Group underlying in recordable injuries in the year, an Net Profit Before Tax (NPBT) after example of our value of “sending our corporate allocation. This growth people home safely” in action. goes some way in offsetting the softer order intake for new trailers being Notwithstanding, it has indeed been a experienced during this downturn. challenging time, out of which we have found ourselves entering into weaker Moreover, we can be further confident trading conditions with the drought, in relation to the introduction of Trout difficult financing environments, housing River Live Bottom Trailers into the Dear Shareholder, construction decline and reducing group – expanding our portfolio of Last year we talked of our focus on consumer confidence impacting both market leading brands and meeting our operations to improve efficiencies as the Trailer and to a lesser extent the internal expectations since acquisition. well as establishing the safety of our MaxiPARTS businesses . As self-regulation increases within the people as a daily priority. We also set out infrastructure sector, it is resulting in The decision not to pay an interim the pillars of our strategy and developing greater demand for safer solutions, such dividend was driven by a combination a diverse organisation capable to carry as that provided by live bottom trailers. of heavy TRANSform Capital us forward into the next phase. expenditure over the prior year In summary, the directors acknowledge While our performance this year did not and weaker trading due to a and accept that our shareholders will meet our expectations, we did make challenging economic environment. be disappointed with this year’s result. progress on these, which I will discuss a little later. Having experienced a difficult first half MaxiTRANS has experienced a challenging year and due to the implementation of the ERP System we expected a strong second recognizes the pain this is causing our shareholders. half. However the weak economic In closing out the second half we have strengthened conditions in our end markets resulted in our balance sheet position and the manufacturing a downturn in orders with an associated operations are now working well. reduction in revenue. We regard the annual result overall as unacceptable. Looking ahead, the end market for trailers and parts is I feel it incumbent upon me to speak challenging and we expect these external conditions to in more depth about the TRANSform continue for some time to come, we will be in a much better project (new IT/ERP system). As you position though to respond when conditions do change. are aware, the core of the new ERP system has now been implemented but not without significant costs to the business, exacerbated by the amount of time, that was not foreseen, to We are also committed to weathering We thank you for your ongoing support. complete its long overdue introduction. through the current environment as we We remain resolute and confident The final module will be delivered in have done so many times before and that we are correctly positioned to FY20. The previous systems were at we maintain a level of focus to be ready come through this period stronger and an end of life point and replacement to take advantage of positive market better prepared and look forward to an was essential in order to mitigate changes when they come as they improving market. significant risk to the business. undoubtedly will. However, once we embarked on this journey, it became clear that the The ability to be well positioned trajectory could neither be adapted for economic recovery, in part lies midway, nor its costs curtailed. We with ensuring MaxiTRANS retains do remain bolstered by the fact that and develops our diverse skillbase, Robert H. Wylie the new system has removed the improving manufacturing technology and Chairman existing risk to the business and has continually improving other processes to been a necessary step in delivering bring about further efficiencies. the benefits of our operational In spite of the current difficult climate, excellence strategy in the longer-term. there are several positives about which As was the goal for FY19, manufacturing we can be confident and together still efficiency improved in both NZ and deliver on our strategy of growth in Ballarat plants and despite reducing existing markets.