Annual Report 2013 - Mainfreight

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Margin levels have been impacted as competitive tension has increased due to market and economic conditions. 2013 Will see our first Mainfreight-branded vehicles on the road in Europe. This is our most challenging business unit, as we confront and guide the business through a series of issues – including high-margin earning customer losses, poor economic trading conditions, and the transition from private ownership to being a contributing member of the Group. All this with the expectations that our culture brings: placing value on team members and customers, and striving for ever-improved performance. We have been able to minimise revenue loss as increased sales activities to replace lost customers have been moderately successful. Unfortunately fixed costs and the competitive environment contributed to a decrease of 42.7% in this year’s €9.46 million EBITDA figure. Whilst our financial results are less than satisfactory (poor), they certainly do not reflect the effort and contribution from our team to position this business for growth and improved profitability. During the year we have extended our network, adding seven new branches: > > Paris, France: for Airfreight, with the establishment of an office at Charles de Gaulle Airport in Paris > > St. Petersburg and Moscow, Russia: opened sales and customs offices > > Transport operations in Cluj-Napoca, Romania; Kiev, Ukraine; Hamina, Finland; and Katowice, Poland Our European Transport operations have undergone a full reorganisation, now utilising a common management structure, and the rationalisation of agency agreements to reflect Group trading over country support. We expect to launch the first of our Mainfreight-branded vehicles in June 2013. We have been able to secure the Mainfreight brand in the Netherlands after a legal challenge and subsequent settlement of €1.5 million. In our Logistics operations we have been successful in retaining long-term contracts with a number of our larger customers, and once again received “Partner Status” with John Deere, making this the fourth year in a row. Whilst utilisation of all our warehouses has improved considerably with the gaining of new customers, margin levels have certainly been impacted as competitive tension has increased due to market and economic conditions. Efficiency gains that we are able to introduce for these customers will reflect in better margin management over time. Our Air & Ocean business, whilst still small in comparison to the other European divisions, is well positioned for more growth with a comprehensive six office network across France, Netherlands and Belgium. Crossselling across our European customer base is well advanced and improvement in Airfreight growth has been seen, particularly from the USA. Again it is our intention to focus our development on our own global network, particularly from and to Asia and the United States. Whilst we are unhappy with the financial return since acquisition, we are confident of our presence and potential in Europe, the strategic positioning towards a stronger, more global logistics capability and the customer relationships we are forging. As a Company we cannot ignore Europe. We expect that further progress will be made over the next 12 months towards improved returns, and we are committed to this business becoming a larger, stronger contributor to the Group. 20 Mainfreight | Annual Report 2013
Europe total {eu€000} Revenue EBITDA 30,458 9,456 244,740 244,802 16,492 Bertil ter Maat, European Fleet Manager (right) with Barry Notten, Driver 2013 2012 2013 2012 Group Managing Director's Report 21
Page 1 and 2: Mainfreight Annual Report 2013 Recr
Page 3 and 4: The Mainfreight business has become
Page 5 and 6: Facts & Figures Our operations are
Page 7 and 8: Wherever we are in the world, all o
Page 9: on any given day We're tackling our
Page 12 and 13: Group Managing Director's report As
Page 14 and 15: Continued investment in facilities
Page 16 and 17: once again working to provide Austr
Page 18 and 19: We continue to work hard to further
Page 20 and 21: We have increased our trans-border
Page 24 and 25: Laurie McMahon, Mainfreight Christc
Page 26 and 27: Environment Mainfreight has always
Page 28 and 29: Our people We have no widgets or ga
Page 30 and 31: 28 Mainfreight | Annual Report 2013
Page 32 and 33: Kelvin Teasdale, Lee Tuhura, Chris
Page 34 and 35: Wim Bosman Genk Steven Bleys, Rosol
Page 36 and 37: on any given day Behind the scenes
Page 38 and 39: Marcel ter Heerdt, Driver in Domest
Page 40 and 41: on any given day Mainfreight has he
Page 42 and 43: Executive Team Carl George National
Page 44 and 45: Executive Team continued Carl Howar
Page 46 and 47: Targets & Achievements Recent Curre
Page 48 and 49: Capital Expenditure This year’s f
Page 50 and 51: Corporate Governance THE ROLE OF TH
Page 52 and 53: on any given day Wherever we are in
Page 54 and 55: on any given day Whatever we do, wh
Page 56 and 57: Board of directors Emmet Hobbs Inde
Page 58 and 59: 60 As we drive ourselves hard in th
Page 60 and 61: Operating Statistics How we measure
Page 62 and 63: Financial Contents 65 Income Statem
Page 64 and 65: Balance Sheet as at 31 March 2013 N
Page 66 and 67: Statement of Changes in Equity for
Page 68 and 69: Cash Flow Statement for the Year En
Page 70 and 71: 2 Summary of Significant Accounting
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2 Summary of Significant Accounting
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3 Financial Risk Management Objecti
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3 Financial Risk Management Objecti
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5 Segmental Reporting The Group ope
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6 Expenses and Other Income The Pro
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7 Income Tax (continued) Recognised
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9 Earnings Per Share The following
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13 Investment in Subsidiary Compani
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14 Non-current Assets - Property, P
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15 Non-current Assets - Intangible
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15 Non-current Assets - Intangible
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20 Leases At balance date the Group
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21 Contributed Equity (continued) C
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23 Related Parties (continued) Tran
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25 Share-based Payment Plans (conti
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30 Abnormal Items During the year t
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of Directors’ financial Responsib
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Donations and Auditors’ Fees Dona
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Interests Register The following en
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Glossary Air & Ocean C&F EBIT EBITA
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Annual Report 2013 - Mainfreight

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