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Moving forward through challenging times 07/04/2009 02:14pm

Financial markets became increasingly volatile in 2008 and earlier this year due to problems originating from the U.S. subprime loan crisis. As the global financial crisis deepened, we saw a downturn in the real economy, which translated to reduced freight volumes and volatile fuel prices. This created a difficult and uncertain operating environment, particularly when combined here in Australia with the effect of drought and bushfires.

On the positive side, the foundations that have been laid in the past have already been reinforced; we have won a number of key growth contracts this year, and we have invested in our core base platform to support the future growth model. Other key outcomes include:

• Reducing our overall debt by 15% (through the divestment of our Regional Logging Operation (completed on 1st April 2009) and a number of other non-core assets within the group).
• Variable cost containment, in line with our revenue movements.
• Reviewing our organisation structures. This may include some tough decisions, however these decisions will be for the greater good of the company.
• Revenue growth - significant new business development opportunities are presenting themselves based on our ability to provide customers with stability and compliance.
• Fast tracking business improvement, with consolidation and efficiency opportunities where identified.

I would like to explain where Wettenhalls stands at this time from my perspective as CEO.

Above all, we are not at all concerned by the current business climate. We have the confidence to continue to make steady progress. Just how do we plan to accomplish this? We will focus on three policies that have always been amongst my highest priorities at Wettenhalls:

• Managing operations based on profitable cash flows,
• Maintaining a lean, effective organisation that keeps moving forward, and;
• Exceeding customer expectations

I strongly believe that prioritising profitable cash flows is the essence of any business. Cash should be reinvested to drive new growth, as management monitors divisional and site productivity. Companies that can skilfully execute these basic tasks will be able to conduct their business activities in a stable manner for many years.

In 2008 and so far in 2009, we have witnessed many events that no one could have foreseen; however Wettenhalls still has the resources to conduct sound business operations on its own. We will strive to assemble an operating framework that is centred on being a successful business.

Of course, I am not satisfied with the status quo; Wettenhalls must tackle many issues in order to continue moving forward. In particular, we need to make profitable cash flows an even more important element of our management. This will require a comprehensive IT system transformation, providing more powerful, weekly management information systems. Establishing a highly transparent framework with regard to our business activities, operating results and financial condition, will be the first step in this direction. At the same time, we must foster a corporate culture that places high emphasis on the new compliance regulations.

Our ability to create this framework and use it effectively is a major reason that we remain a sound, self-reliant company.

How can you assist?

• Ensure that we maintain the highest levels of customer satisfaction. And provide services that are on time, in full and intact.
• Prevent operational waste - Ensure that we all focus on doing the important tasks really well, every day. (Handle and check freight accurately, maximise loading utilisation and double check to ensure that we are billing accurately and completely. And follow source document procedures and pallet management).

Only you, the individual who forms an important part of the overall Wettenhalls team truly knows the way in which you have contributed each and every day. Every contribution that strengthens our position is an important one; with our combined team approach we are very confident that we have the necessary foundations in place to successfully navigate our company through these difficult times, placing it in a position where the Wettenhalls Group will emerge an even stronger industry leader than it is today.

Thank you in advance for your continued input and commitment.

Let's all Keep Moving our business Forward during the good and difficult times.

Matthew Blizzard
CEO@wettenhalls.com.au