Full Year Results to 30 June 2026 and Final Dividend

FULL YEAR REVIEW From the Chairman and Chief Executive Officer Freightways delivered a resilient performance in FY26 despite operating conditions becoming more challenging during the second half of the financial year. Economic activity had shown encouraging signs of improvement through much of the year before being disrupted by the conflict in the Middle East, which drove a sharp increase in fuel prices. The combination of higher fuel costs and softer customer demand created a drag during the final quarter on a result which was otherwise strong for the group. Against this backdrop, we remained focused on the areas within our control. We maintained high service standards, continued to win market share, invested in improving our operating platforms and facilities, and maintained disciplined capital allocation. These actions continue to position the business well for when economic conditions improve. Higher fuel prices affect our business in two ways. First, rapid increases temporarily compress margins because fuel recovery mechanisms inevitably lag underlying fuel costs. Secondly, higher fuel costs reduce discretionary spending across the economy, lowering freight volumes as consumer and business activity slows. After modest same-customer volume growth during the second and third quarters, volumes within our New Zealand Express Package and Temperature Controlled divisions softened from April as these factors took effect. The tightening of monetary conditions by the RBNZ also contributed to a softer economic environment. During the year we improved one of our key commercial levers. Historically, a number of our fuel recovery mechanisms incorporated a two-month lag between movements in fuel prices and customer pricing. While this had long reflected customer requirements, the sharp increase in fuel prices highlighted the need for a more responsive approach. From April we substantially reduced this lag to around one week across most of the network, which will improve our ability to recover rapid movements in fuel costs in future periods. Despite weaker market conditions, our businesses remained focused on growing through market share gains, winning new customers and improving pricing to recover our cost input increases. This approach has become increasingly important during periods of limited same-customer growth. Pricing discipline was a key priority, with annual pricing reviews and pricing-for-effort initiatives helping to recover increases in the cost base while ensuring customers continue to receive appropriate value for the services provided. Across our express businesses, Allied Express, DX Mail and Post Haste all performed well. Each business increased its share of customer spend while securing new business from both new-to-market customers and from competitors. Post Haste benefited from its range of economy services and experienced relatively higher demand during the year. In tighter times some customers expressed a preference for express road freight over overnight airfreight within New Zealand. The business also benefitted from the cross-border eCommerce growth during the year. Big Chill experienced solid utilisation in its storage facilities and improving transport volumes around Christmas but this momentum was trumped by higher fuel prices impacting demand for the premium food products they distribute. In Australia, Allied Express improved its results with a continuous improvement approach to service helping strong delivery in full on time performance (DIFOT). Allied is a brand which is squarely focussed on its niche and has built systems and processes to provide a premium service for its customers. The acquisition of VTFE, completed on 30 January 2026, represents an important step in expanding Freightways’ presence in the business-to-business express freight Australia market. VTFE provides road-based express services into attractive industry sectors and broadens our capability within the Australian transport market. During the year we also commenced operations in Queensland. While the Queensland business incurred some initial start-up costs in the first month, trading thereafter was profitable. We expect further growth during FY27 as customer volumes build across both local and interstate services. DX Mail has continued to streamline its operational processes with the use of automation and AI deployment. This has assisted it to improve its margins and continue to offer a premium mail delivery experience to its target customer base. Operational efficiency continued to receive significant attention across the Group. Our focus was on increasing utilisation of existing networks and infrastructure so that incremental volume was handled with limited additional fixed cost. This operating leverage has been an important contributor to Freightways' long-term earnings growth and remains a priority across all businesses. The rollout of Evolve, our new billing and rating platform for the New Zealand Express Package business, progressed during the year, although implementation has taken longer than originally anticipated. Phase one of the project is now being deployed across the New Zealand Express Package businesses and will provide improved billing and collection processes for our largest customer bases. We expect the majority of the pricing and efficiency benefits from this investment to be realised during FY28. Airwork, our joint venture partner in Parcelair, was placed into receivership in July 2025; however, the business has continued to operate as a going concern throughout the sale process. During FY26, both Airwork and Texel delivered strong reliability across our air freight network. We expect to be able to maintain continuity of service regardless of the future provider of air network services. By the end of 2026, we anticipate the network will be operated entirely with Boeing 737-800 aircraft, providing greater fuel efficiency and additional payload capacity. The transition is expected to be largely cost neutral for Freightways, apart from one-off costs that have already been provided for. Changes to New Zealand inbound low-value goods customs charges have to-date not resulted in a material shift in customer behaviour towards mail-based alternatives, although some customers are increasingly seeking lower-cost transport options as higher fuel prices and customs charges place additional pressure on their own operating costs. Shred-X performance also improved through the year as the effects of our reset programme began to restore margins. We have shed the negative margin products we were collecting and right sized the business for the new volume profile. Whilst TIMG New Zealand delivered a significant margin improvement, the Australian business was impacted by lower digitisation work. In response, a number of cost improvement initiatives have been implemented. Capital allocation remained disciplined throughout the year. Capital expenditure continued at approximately 2.3% of revenue, reflecting ongoing investment in our networks while maintaining financial flexibility. Following the acquisition of VTFE, leverage remained comfortably within our target range at approximately 2.4x. We expect to remain within our stated policy while still exploring acquisitions that can augment our Australian Express Package businesses. Outlook The positive trend that had started early in FY26 was sharply interrupted by the conflict in the Middle East. The significant increase in fuel prices for a period of time, combined with much higher uncertainty and a contracting monetary policy negatively impacted demand. Our businesses have demonstrated their resilience through the last three years of economic recession in New Zealand and we expect they will continue to do so until economic activity recovers. As fuel prices moderate, we expect same-customer volumes to improve progressively in Australia and New Zealand, although the pace of recovery will remain dependent on broader economic conditions. We expect to complete two important network investments during the year with expanded and new hub facilities in Christchurch and Palmerston North respectively. These facilities will improve operational efficiency and provide significant additional capacity to support future growth. In Christchurch, approximately $8.2 million will be invested in FY27 to expand the existing automated sortation system that processes all freight transiting into and out of the South Island. Overall, capital expenditure is expected to be approximately 3% of FY27 revenue. Implementation of Evolve is expected to be continued in FY27 – with a projected cost of approximately $5.5 million. The operational and commercial benefits will increasingly emerge during FY28, particularly through more sophisticated pricing capability and improved billing efficiency. In Australia, we will continue to integrate and grow VTFE while actively evaluating further acquisition opportunities that strengthen our position in the express freight market. Within our Information Management and Waste Renewal businesses, the actions taken during FY26 to exit unprofitable work and align operating costs provide a stronger foundation for improved performance during FY27. While demand currently continues to favour economy road services over premium overnight airfreight, we expect the mix to progressively normalise as economic conditions strengthen. Across the Group, pricing initiatives implemented at the beginning of the financial year are expected to offset increases in our operating cost base. Freightways has consistently demonstrated its ability to perform through varying economic conditions. Our strategy remains unchanged: continue investing in our networks and technology, maintain financial discipline, deliver high service standards for customers and create sustainable long-term value for shareholders. Climate Statement Freightways’ FY26 Climate Statement will be released alongside the Annual Report on 17 August 2026.