Arcbest Corporation · NASDAQ:ARCB
Arcbest — Q2 2024 Earnings Presentation
33 slides from Arcbest's earnings presentation, August 2024
Slide 1: Investor Presentation 2Q'24
Investor Presentation 2Q’24
Slide 2: Forward Looking Statements
Forward Looking Statements Certain statements and information in this presentation may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including, among others, statements regarding (i) our expectations about our intrinsic value or o
Slide 3: Profile of an Industry Leader
PROFILE OF AN INDUSTRY LEADER 100+ #1 >98% ~240 ~29K TOP 15 105K+ Years of Safety award Coverage of Asset-Based Owned U.S. Approved transportation winner in the United States North American revenue Truckload contract and logistics industry service centers equipment Broker carriers experience 3
Slide 4: Broad Suite of Logistics Solutions and Services
Premium Less-than- Managed Broad Truckload Logistics Truckload Transportation Suite of Logistics Solutions Expedite & Time Critical International Air & Ocean Supply Chain Optimization Product Launch and Services Final Retail Trade Show Warehousing Mile Logistics Shipping 4
Slide 5: An Integrated Logistics Company
A N I N T E G R AT E D L O G I S T I C S C O M PA N Y Ongoing investment in technology and of revenue from equipment 37% logistics in 2023 versus 7% in 2009 Realignment and enhanced market approach under the ArcBest Five key logistics brand in 2017 5 acquisitions since 2012 Opportunistic addition of
Slide 6: Strategy in Action
Strategy in Action Our strategy is delivering solid results Revenues ($B) Operating Income ($M) Earnings Per Share (Unaudited)(1) (Non-GAAP, Unaudited)(1)(2) (Non-GAAP, Unaudited)(1)(2) +48% +71% +102% $13.52 $5.0 $468 $4.4 $4.3 $314 $8.40 $8.17 $3.8 $7.88 $258 $263 $2.9 $2.8 $2.8 $154 $4.05 $112 $1
Slide 7: Strategy in Action: Asset-Based Operating Ratio Improvement
Strategy in Action 97.9% 96.9% 94.5% 94.2% Improvement 93.3% in Asset-Based 88.8% 90.4% 89.5% Operating 86.4% Ratio (1) 2016 2017 2018 2019 2020 2021 2022 2023 2Q'24 TTM (Non-GAAP) FREIGHT RECESSION COVID-19 IMPACTS FREIGHT RECESSION (1) Operating Ratio adjusted for certain unusual items. See Reconc
Slide 8: A Values-Driven Culture
At the Center of our Company: A VALUES-DRIVEN CULTURE Creativity Integrity Collaboration We create We do the We work solutions right thing together Growth Excellence Wellness We grow our We exceed We embrace people and our expectations total health business 8
Slide 9: The Only 10x Winner
EXCELLENCE IN ACTION The Only 10x Winner ATA Excellence in Security 9
Slide 10: Leveraging a Differentiated Business Model
L E V E R A G I N G A D I F F E R E N T I AT E D B U S I N E S S M O D E L 10
Slide 11: Positioned in Large Markets
POSITIONED IN LARGE MARKETS Less-than- Expedite Domestic Transportation Warehousing Truckload Shipping Management & Distribution $55B $5B $124B $68B Premium International Moving Final Logistics Shipping Services Mile $20B $74B $24B $13B ArcBest Opportunity: ~$383B 11 Source: Armstrong & Associates,
Slide 12: Deepening Customer Relationships
Our Deepening Focus: Customer Relationships T ARG ET LARG E AT T R ACT IVE M ARKET S DEEPEN CUSTOMER ✓ Higher customer retention rates RELATIONSHIPS Profitability Recommend ✓ Higher profitability DEVELO P INNO V AT I VE SO LUT IO NS Advise & Cross-Sell ✓ Greater share of customer business W INNING C
Slide 13: ArcBest's Customer-Led Strategy Yields Results
A R C B E S T ’ S C U S T O M E R - L E D S T R AT E G Y Y I E L D S R E S U LT S >3x Revenue & Profit Revenue & Profit per account >70% 5% is over 3X higher in cross-sold accounts Asset-Light + Higher Customer Retention Asset-Based 3x 3x Over 70% of our Retention rates are 5 customers who use perce
Slide 14: Investments in Innovation
Investments in Innovation CUSTOMER CAPABILITIES CAPACITY EXPERIENCE T ARG ET LARG E AT T R ACT IVE M ARKET S DEEPEN CUST O M ER RELAT IO NS HI PS • Customer engagement • Serving shippers and • Digital connectivity to focus: capacity providers in capacity sources DEVELOP INNOVATIVE - Voice of the cus
Slide 15: Winning Customer Proposition
Winning Customer Proposition T ARG ET LARG E AT T R ACT IVE M ARKET S Solves my logistics and Is a trusted provider Makes it easy transportation challenges and partner to do business DEEPEN CUST O M ER RELAT IO NS HI PS Customer visibility Unmatched Digital DEVELO P INNO V AT I VE SO LUT IO NS and a
Slide 16: Integrated Logistics Provider
Integrated Logistics Provider T ARG ET LARG E FULL SUPPLY CHAIN SOLUTIONS AT T R ACT IVE M ARKET S International shipping from DEEPEN CUST O M ER 1 warehouse to port RELAT IO NS HI PS Managed transportation 2 options for vendor consolidation at port DEVELO P INNO V AT I VE 3 Multiple transportation
Slide 17: Balanced Investment Approach
BALANCED INVESTMENT APPROACH Strong business performance enables ArcBest to invest organically in the business and provide returns to shareholders while maintaining a solid balance sheet and investment-grade credit metrics Solid Financial Position Share Repurchases & Dividends • Net cash position of
Slide 18: Three-Point Strategy Continues to Deliver Shareholder Value
Three-Point Strategy Continues to Deliver Shareholder Value & Drive Business Growth 1 2 3 Accelerate Growth Increase Efficiency Drive Innovation Optimize ABF network Develop and implement Secure new customers disruptive and game changing ENHANCED Drive scale and productivity to innovations Expand wi
Slide 19: The ArcBest Advantage Drives Superior Results
The ArcBest Advantage … … Drives Superior Results Unmatched Market Visibility Shipment-level visibility to $25+ billion of annualized customer spend True integrated logistics allows for intelligent pricing and network and mode optimization partner in a growing $400B+ transportation Integrated & logi
Slide 20: Compelling Investment Opportunity
Compelling Competitive Moat Investment 100+ Years of Logistics Experience Opportunity Sustainability Leader Effective Capital Allocation Strategy Significant Growth and Efficiency Opportunities Attractive Valuation 20
Slide 21: Current Low Valuation Set to Improve as Strategy Advances
Current Low Valuation Price to Earnings (BASED ON FY2025 CONSENSUS ESTIMATES) Set to Asset-Based 24.7X Improve as Peer Avg Strategy Logistics Peer Avg 19.7X Execution Advances 9.9X • Asset-Based peers include Old Dominion, Saia and XPO • Logistics peers include C.H. Robinson, Hub Group, J.B. Hunt, L
Slide 22: Why ArcBest Will Continue to Outperform
IN SU MMA RY Why ArcBest Will Continue to Outperform Strong financial profile Winning customer proposition Develop innovative solutions Deepen customer rcBest relationships A U LTURE ED C - B AS L U ES Target large VA attractive markets RY INDUST 22
Slide 23: Additional Information
ADDITIONAL INFORMATION ArcBest
Slide 24: Net Capital Expenditures vs. Operating Cash
Net Capital Expenditures vs. Operating Cash 500 450 $471 400 350 $359 Millions 300 $324 $322 250 $274 $255 $245 200 $211 $206 150 $170 $144 $152 $146 $146 $152 $147 $143 $134 100 $112 $101 $104 $94 $86 $92 $77 $85 50 $69 $42 $26 $24 0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Slide 25: 2024 Net Capital Expenditures (estimated)
2024 Net Capital Expenditures (estimated) 400 • Total Net Capital Expenditures, including financed equipment: $325 million $325 - $375 to $375 million 350 Other • Includes revenue equipment purchases (majority for Asset-Based) of $155 300 $40 - $90 million • Includes real estate expenditures of $130
Slide 26: Asset-Based Billed Revenue Per Hundredweight
Asset-Based Billed Revenue Per Hundredweight (including FSC) $55.00 $50.00 August 2017 implementation $45.00 of space-based pricing $40.00 $35.00 $30.00 $25.00 Decrease reflects lower fuel surcharge and freight mix changes related to the addition of transactional shipments $20.00 Revenue per Hundred
Slide 27: Reconciliations of GAAP to Non-GAAP Financial Measures
A D D I T I O N A L I N F O R M AT I O N Reconciliations of GAAP to Non-GAAP Financial Measures (Unaudited) Note: ArcBest Corporation reports its financial results in accordance with generally accepted accounting principles (“GAAP”). However, management believes that certain non-GAAP performance mea
Slide 28: ArcBest Consolidated
ArcBest Consolidated (continuing operations)(1) (Unaudited) RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES* 2018 2019 2020 2021 2022 2023 2Q’24 TTM ArcBest Corporation – Consolidated ($ millions) Operating Income Amounts on a GAAP basis $ 103.6 $57.9 $ 93.7 $ 277.0 $ 394.5 $ 172.6 $ 180.6 Re
Slide 29: ArcBest Consolidated
ArcBest Consolidated (continuing operations)(1) (Unaudited) RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES* 2018 2019 2020 2021 2022 2023 2Q’24 TTM ArcBest Corporation – Consolidated ($ millions) Diluted Earnings Per Share Amounts on a GAAP basis $ 2.35 $ 1.33 $ 2.55 $ 7.86 $ 11.56 $ 5.77 $
Slide 30: Notes to Non-GAAP Financial Tables
ArcBest Consolidated (continuing operations)(1) Notes to Non-GAAP Financial Tables The following footnotes apply to the non-GAAP financial tables presented in this presentation. 1) Historical results of FleetNet have been excluded from results for all periods presented, and reclassifications have be
Slide 31: Asset-Based
Asset-Based (Unaudited) RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES 2016 2017 2018 2019 2020 2021 2022 2023 2Q’24 TTM Asset-Based ($ millions, except percentages) Operating Income Amounts on a GAAP basis (1) $36.9 98.1% $57.9 97.1% $103.9 95.2% $102.1 95.2% $98.9 95.3% $260.7 89.9% $381.1
Slide 32: Reconciliations of GAAP to Non-GAAP Financial Measures
Reconciliations of RETURN ON CAPITAL EMPLOYED (ROCE)(1) Twelve Months Ended December 31, 2023 GAAP to Non-GAAP ($ millions) Financial Measures Net Income (Amounts on a GAAP basis from continuing operations) $ 142.2 (Unaudited) Non-GAAP Adjustments Innovative technology costs, after-tax (includes rel
Slide 33: Investor Presentation
Investor Presentation