Freightways Limited, Annual Meeting 2025

October 13^th 2025

Freightways Limited (FRW)

The company will hold its Annual Shareholders Meeting at 10.00am Thursday 30 October 2025.

The location is Hyundai Marine Sports Centre 8/10 Tamaki Drive, Orakei Auckland.

You can also join the meeting online at this link.

Company Overview

The company operates a specialist logistics and mail delivery service across New Zealand and Australia. It has four divisions:

• Express Package and Business Mail with brands including New Zealand Couriers, Post Haste, Castle Parcels, NOW Couriers, SUB60, Security Express, Kiwi Express, Stuck, Pass the Parcel. DX Mail is New Zealand’s only dedicated business mail specialist and Dataprint offering mail house-print services and digital mail presentation platforms.
• Temperature Controlled. Big Chill Distribution and ProducePronto are national temperature-controlled businesses, together servicing the chilled logistics needs of New Zealand businesses. Combining chilled national linehaul with an urban, chilled van network allows for national delivery, same day delivery, 3PL & 4PL under one umbrella.
• Information Management: The Information Management Group (TIMG) also operating in Australia offers physical storage and information management services, as well as digital information processing services such as digitalisation, business process outsourcing, online back-up, and eDiscovery services.
• Waste Renewal:  Shred-X offers document destruction, eDestruction and product destruction services. It also provides medical waste collection and processing services under the Med-X brand.

In October 2024 Mark Rushworth retired from the Board having served since 2015 and in November 2024 Grant Devonport was appointed to the Board.

Current Strategy

The company describes itself as being in the business of “picking up, processing and delivering” adding value with a strap line “We move you to a better place.”

Previous Year Shareholder Meeting

NZSA recorded the following key items at last year’s annual shareholder meeting:

1. The new medical waste facility in Melbourne is now licensed and fully operational.
2. The establishment of the Big Chill warehouse in Ruakura.
3. The company is hopeful that lowering interest rates will result in a more positive economy soon.

The meeting report is available at this link.

Disclaimer

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Key

The following sections calculate an objective rating against criteria contained within NZSA policies.

Governance

NZSA assessment against its key policy criteria are summarised below.

Directors Fees:  Excellent disclosure. We note there is a provision in the Fee Pool for additional Committee work however no payments were made in FY25.

Director Share Ownership:  While NZSA encourages independent Directors to own shares, we do not support compulsion, based on maximising Director diversity and independence. Freightways does not disclose whether it compels Directors to own shares – although we note from the table of Director’s interests that all do. Following a discussion with the company, NZSA understands there is no compulsion, although we would prefer more explicit disclosure.

CEO Remuneration:  The company discloses its remuneration policy on its website, which includes an overview of the remuneration philosophy applicable to the company. The People and Safety Committee are responsible for implementing the policy.

Incentives: The CEO is paid a short-term incentive (STI) in cash and a long-term incentive LTI in shares.

NZSA encourages fulsome disclosure in relation to any incentive payments made to the CEO, including disclosure of measures (or measure ‘groups’), weightings, targets, and the level of achievement versus target for each component associated with any awards. This methodology is supported by the NZX Remuneration Reporting Template.

The maximum STI is 55% of base salary. The measures, weightings, and level of achievement against each component are well-disclosed, with the overall STI payment of 45% of base salary.

The maximum LTI at 50% of base salary. Vesting then occurs after a three-year performance assessment period. Measures and weightings are relative shareholder returns, and absolute shareholder returns which are favoured by NZSA. No award was made for FY25. We appreciate the improved disclosure around the LTI.

We note the maximum STI is slightly more than the maximum LTI. NZSA prefer a weighting to the LTI to ensure the CEO is aligned with long-term shareholders’ interests.

The company does not disclose the gender pay gap and CEO/employee remuneration ratio/

Golden Parachutes: In the interests of transparency, NZSA believes there should be explicit disclosure around the severance terms and notice periods associated with the CEO, including whether specific termination payments are offered. There is no disclosure in the Annual Report.

Director Independence:  All Directors are independent.

Board Composition:  The Annual Report includes a collective skills matrix. NZSA prefers a skills matrix that attributed skill sets to individual Directors to demonstrate how they contribute to the governance of the company.

The company does not participate in the IoD’s Future Director programme designed to develop and mentor the next generation of Directors. NZSA expect NZX50 companies to participate as part of a responsibility to develop and mentor the next generation of Directors.

Director Tenure:  NZSA looks for evidence of ongoing succession or ‘staggered’ appointment dates that reduce the risks associated with effective knowledge transfer in the event of succession. We also prefer a term maximum of 9-12 years, unless there are exceptional circumstances that may apply.

Director appointments range from 2016 to 2024 indicating a commitment to succession planning.

ASM Format: Freightways Limited is holding a ‘hybrid’ meeting, (i.e., physical, and virtual), a format preferred by NZSA as a way of promoting shareholder engagement while maximising participation.

Independent Advice for the Board & Risk Management:  NZSA looks for evidence, through disclosures, that a Board has access to appropriate internal and external expertise to support Board assurance activities. We also look for evidence that Boards are across their risk management responsibilities.

It is unclear as to the extent to which Directors can seek internal or external advice to support decision-making, nor the extent to which assurance staff have unfettered access to the Board. We note there is an internal audit function, but its reporting lines are not clear.

Freightways offers good disclosure of financial and environmental sustainability risks. The company discusses key strategic or business risk through a materiality matrix, although it is not clear as to whether this the full extent of risks and mitigations. There is thorough disclosure of the risk management process in the Annual Report. We note the Risk Management Policy on the company’s website. The company publishes a separate 47-page Climate Statement.

Audit

NZSA assessment against its key policy criteria are summarised below.

Audit Independence:  Good disclosure.

Audit Rotation:  The company ensures the Lead Audit Partner is rotated at 5 years as required by the NZX Listing Rules. There is no disclosure as to the tenure of the current audit firm. We note the company conducted a Request for Proposal in 2024 and as a result re-appointed PwC with the current Lead Audit Partner commencing in FY25.

Environmental Sustainability

Overall approach: Freightways’ FY2025 disclosures demonstrate progression under the New Zealand Climate Standards. The company has reduced its reliance on adoption provisions compared with the prior year, signalling a gradual build in reporting capability. While some provisions remain (notably particular Scope 3 categories), the Climate Statement shows improved integration of climate considerations into strategy and operations. Freightways also discloses a Group-wide Transition Plan approved in July 2025, an important step towards embedding sustainability beyond a compliance exercise. Waste handling practices are noted in subsidiaries.

Sustainability Governance: Governance structures are set out. The Board updated its Charter to include climate oversight, with climate now a standing agenda item. The Audit & Risk Committee oversees climate risks and reporting, while the People & Safety Committee considers climate within remuneration. The appointment of a Head of Sustainability & Climate in 2025 strengthens management capability. The Board skills matrix included in the Annual Report identifies sustainability and climate as director competencies, confirming oversight capability.

Strategy and Impact: The Transition Plan outlines Freightways’ climate focus areas and has been integrated into the Growth Strategy. This represents a significant improvement in disclosure, demonstrating how climate considerations influence operational and investment priorities. However, the company has not yet translated this strategic direction into defined emissions reduction targets, which limits visibility on how the plan will deliver measurable outcomes. Freightways notes this as a priority for the next reporting period.

Risk and Opportunity: Freightways identifies seven material climate-related risks and three opportunities, analysed across short, medium and long-term time horizons. Scenario analysis, supported by external consultants, has been undertaken, and the results have been integrated into the Group Risk Register and subsidiary risk frameworks. This indicates that climate is now embedded in the company’s broader risk management processes.

Metrics and Targets: The Climate Statement provides full disclosure of Scope 1 and Scope 2 emissions, as well as selected Scope 3 categories. Year-on-year comparisons are included for Scopes 1 and 2, and emissions intensity measures are also reported. However, Freightways has not yet established quantitative reduction targets or milestones, meaning there is no benchmark against which to assess progress. While CEO incentives include a climate-related weighting, this is not yet supported by broader company-wide climate targets, limiting the scope of accountability.

Assurance: Freightways obtained limited assurance from PwC over its FY2025 GHG emissions disclosures. The scope covered emissions reporting only, not the broader climate narrative. This aligns with the climate standard expectations at this stage, though, as NZSA, we encourage broader assurance coverage as reporting matures.

Ethical and Social

NZSA assessment against its key policy criteria are summarised below.

Whistleblowing:  Good disclosure.

Political Donations:  The Annual Report includes a clear statement that the company does not make political donations.

Financial & Performance

Freightway’s share price rose from $9.05 to $13.49 (as of 30^th September 2025) over the last 12 months – a 49% rise. This compares favourably with the NZX 50 which rose 6% in the same period. The capitalisation of FRE is $2.4b placing it 23^rd out of 115 companies on the NZX by size and makes it a large company.

¹ per share figures based off actual shares at balance date (not weighted average)

FY 25 was a good year and most metrics we follow improved; most notably, NPAT was up and beyond levels seen in 2023.

Revenues rose 7% to $1,290m, and although costs were up 6% to $1,041m, EBITDA was up 9% to $248.6m. Depreciation was up but finance costs were down, and this contributed to an improved NPAT of $80.1m giving EPS of $0.447 and places the company on a P/E ratio of 30.

The company is in a sound financial position and has low debt levels with long term debt at $237m. FRW also have non-current lease liabilities of $315m. These lease liabilities and associated “right of used assets” combined with $651m of intangible assets place the company on an NTA of -$0.85. These intangible assets are mainly comprised of Goodwill, Brand names and Software.

The operating cashflow, often a good yardstick of operational performance, was up 11% to $174m.

The company increased their fully imputed divided by 8% to $0.40.

Whilst the company has provided an outlook statement on page 31 of an investor presentation, most of the information is non-quantitative and general in nature.

The top 20 shareholders hold a combined 74.51% making this company widely held.

Resolutions

David Gibson was appointed to the Board in April 2022. He is a professional director with over 20 years investment banking experience, including as Co-Head of Investment Banking in New Zealand for Deutsche Bank and Deutsche Craigs. During his finance career David has advised on many of New Zealand’s largest capital market transactions. David is also Deputy Chair of Goodman (NZ) Limited and a director of Contact Energy Limited.

We will vote undirected proxies IN FAVOUR of this resolution.

Grant Devonport was appointed to the Board in November 2024 and is therefore required to offer himself for election. He was appointed a NonExecutive Director of Auckland International Airport in October 2024 after finishing his executive career as Chief Financial Officer of Australian Pacific Airports Corporation (APAC), owner of both Melbourne and Launceston Airports. Previously Grant worked at Toll Holdings from 2006- 2015 where he was CFO of both NZ (2006- 2008) and Group CFO (2011- 2015) up to the time of the sale of the business to Japan Post in 2015. Grant’s portfolio with Toll included finance, Treasury, investor relations, procurement, property, safety, and technology.

We will vote undirected proxies IN FAVOUR of this resolution.

The current Fee Pool was approved by shareholders at the 2023 ASM. The increase is intended to give the Board the ability to attract more Australian Directors as and when required by the expansion of the business in Australia and to ensure fees are aligned with the market. The Board has commissioned EY to prepare an independent Report and a copy of this is included with the Notice of Meeting. The Report includes comparator company data.

NZSA notes the proposed Chair and NZ Directors fees are both 5% above the median of the comparator group. We also note the proposed Committee Work Pool (‘headroom’) for additional work has increased from $42,145 to $188,786.

NZSA understands the rationale offered by Freightways in considering Australian-based directors for future appointments. We are also relatively comfortable with the level of headroom in the fee pool, at less than 20% of the total pool. Our own analysis suggests that the proposal falls at the top end of our expected range, perhaps limiting expectation of an increase in the pool in the next 2-yearly review.

We will vote undirected proxies IN FAVOUR of this resolution.

This is an administrative resolution.

                            We will vote undirected proxies IN FAVOUR of this resolution.

Proxies

You can vote online or appoint a proxy at https://www.investorvote.com.au/

Instructions are on the Proxy/voting paper sent to you.

Voting and proxy appointments close 10.00am Tuesday 28 October 2025.

Please note you can appoint the Association as your proxy. We will have a representative attending the meeting.

The Team at NZSA