More details in store as divisions fall from six to five and two divisional directors leave later in the year
Toll Group will undergo another restructure as it advances its One Toll program.
The reduction of divisions from six to five and a reshuffle of reporting lines are aimed at better aligning contract logistics and network-based businesses, the transport and logistics giant states.
Toll Group Managing Director Brian Kruger expects $10-$12 million in annual savings from next financial year from the moves, with more details to surface in August.
Under the changes, the Specialised & Domestic Freight division goes.
Domestic Forwarding gains Express, NQX and Linehaul & Fleet Services.
Liquids and Transitions move to Global Resources due to the contract nature of their activities.
The specialised contract-driven parts of Intermodal will go to Global Logistics and its Queensland freight forwarding operations will merge into NQX.
Global Express and Global Forwarding remain unchanged as adjustments are already underway.
“This is a logical outcome given the progress we have made in our One Toll program and from our ongoing focus on returns,” Kruger says.
“We need to ensure that we are best placed to build on the key competitive advantages in our domestic network businesses, while also ensuring we are as aligned as possible with our customer needs in our contract logistics businesses.
“While cost reductions are not the key driver of these changes, we do expect to see meaningful benefits from this restructure together with other cost saving programs within Toll.
“We have strong businesses, particularly in Australia, but it is critical that in the current challenging market we reduce complexity and costs, improve our productivity and build on our strengths.
“This restructure will help mitigate near-term ongoing margin pressures as well as ensuring that we maximise the leverage that our company has to any improvements in the external environment.”
Domestic Forwarding Divisional Director Paul Ebsworth will leave the company to be replaced by Specialised & Domestic Freight Divisional Director Mal Grimmond.
Toll will also lose Global Logistics Divisional Director Wayne Hunt, with present Customised Solutions Divisional General Manager Chris Pearce stepping into that role.
Both departures are to occur later in the calendar year.
The company expects gross annual earnings to be similar to last year’s.
“In February we said that we expected our underlying earnings before interest, tax and amortisation (EBITA) for the2014 financial year to be broadly in line with last year and EBIT to be ahead of last year. This remains our expectation,” Kruger says.
EBIT was $425.9 million last year and $410.8 million the year before.
Earnings before interest, tax, depreciation and amortisation last year was $702.5 million and $681.3 million the year before.