XPO, Inc. · NYSE:XPO
XPO — XPO Logistics — Investor Presentation (February 2017)
34 slides from XPO's investor presentation, Feb 21, 2017
Slide 1: XPO Investor Presentation and Transcript February 2017
XPO Investor Presentation and Transcript February 2017 Exhibit 99.1
Slide 2: Disclaimers: Non-GAAP Financial Measures
Disclaimers Non-GAAP Financial Measures This document contains certain non-GAAP financial measures as defined under the rules of the Securities and Exchange Commission ("SEC"), including adjusted net income (loss) attributable to common shareholders and adjusted earnings per share (“adjusted EPS”) f
Slide 3: XPO: High Growth and High Returns
XPO: High Growth and High Returns A $1 trillion addressable opportunity, with less than 1.5% market share Accelerating EBITDA and cash generation, while investing in growth Numerous company-specific margin improvement opportunities Cutting-edge technology that differentiates XPO across lines of busi
Slide 4: We Are a Top 10 Global Logistics Company
63% of Revenue Truckload Transport and Brokerage, Expedite Last Mile Intermodal and Drayage Less-Than-Truckload Global Forwarding LOGISTICS High-Value-Add Services TRANSPORTATION Freight Is Moved Using Optimal Mode 37% of Revenue Omni-Channel and E-Commerce Fulfillment Reverse Logistics Technology-E
Slide 5: Global Scale with Well-Diversified Business Mix
By Country of Operation By Customer Vertical Global Scale with Well-Diversified Business Mix Customers Over 50,000 Employees 87,000 Locations 1,425 Countries of Operation 34 Contract Logistics Facilities 157.5 million sq. feet (14.6 million sq. meters) Key Metrics Gross Revenue Profile Note: Gross r
Slide 6: Comprehensive Network for Customers
Comprehensive Network for Customers Meticulously built to add value to customers and generate high returns for shareholders: Talent: Top operators with highly engaged employees Technology: Best-in-class, proprietary applications integrated on cloud-based platform Ground transportation assets: 16,000
Slide 7: XPO Leads the Industry in Rapid Technology Development
| Investor Presentation February 2017 XPO Leads the Industry in Rapid Technology Development Highly scalable and integrated system On-cloud technology leads to more agility and ease of enhancements Global IT team of approximately 1,600 professionals Differentiated competitive advantages: Proprietary
Slide 8: Highly Skilled Management Team
Highly Skilled Management Team | Investor Presentation February 2017 Partial list, in alphabetical order Bradley Jacobs Chief Executive Officer United Rentals, United Waste Lou Amo President–Expedite Electrolux, Odyssey Logistics Tony Brooks President–Less-Than-Truckload Sysco, Dean Foods, Frito-Lay
Slide 9: Highly Skilled Management Team (Cont'd)
Highly Skilled Management Team (Cont’d) | Investor Presentation February 2017 Charles Hitt President–Last Mile 3PD, Affinity Logistics, GeoLogistics Erin Kurtz Senior Vice President, Communications Thomson Reuters, AOL Scott Malat Chief Strategy Officer Goldman Sachs, UBS, JPMorgan Chase John Mitche
Slide 10: Blue Chip Customers, Including 63% of the Fortune 100
| Investor Presentation February 2017 Blue Chip Customers, Including 63% of the Fortune 100 Partial list. Any trademarks or logos used in this presentation are the property of their respective owners
Slide 11: Serving Every Major Vertical
| Investor Presentation February 2017 Serving Every Major Vertical Partial list. Any trademarks or logos used in this presentation are the property of their respective owners
Slide 12: <1.5% Current Share of $1 Trillion Addressable Opportunity
< 1.5% Current Share of $1 Trillion Addressable Opportunity | Investor Presentation February 2017 Investment in Sales Growth Doubled strategic account executives and added 50+ local account executives Rolled out common CRM platform to increase visibility across organization Implemented growth-based
Slide 13: Leading Positions in Fast-Growing Industry Sectors
#2 largest global provider and e-fulfillment leader in Europe Non-commoditized service offering with multiple specializations Contract Logistics 37% Leading Positions in Fast-Growing Industry Sectors #2 largest LTL provider in North America: 99% of U.S. zip codes An industry leader in on-time perfor
Slide 14: Well-Defined Bridge to 2018 Target of $1.575 Billion EBITDA
Well-Defined Bridge to 2018 Target of $1.575 Billion EBITDA | Investor Presentation February 2017 Target: 10% adjusted EBITDA margin by 2018 Equates to 200 basis points of margin improvement compared with 2016; excludes divested truckload unit for the full year Includes approximately $120 million fr
Slide 15: XPOLogistics Key Lines of Business
XPOLogistics Key Lines of Business
Slide 16: Contract Logistics: Long-Term Recurring Revenue
Contract Logistics Long-Term Recurring Revenue | Investor Presentation February 2017 Asset-light business characterized by long-term contractual relationships, low cyclicality and a high-value-add component that minimizes commoditization Deep expertise in high-growth sectors that trend toward outsou
Slide 17: Truck Brokerage: High Growth and High Return
Truck Brokerage High Growth and High Return | Investor Presentation February 2017 Non-asset business that places shippers’ freight with qualified carriers through brokers that match capacity with shipper demand High free cash flow conversion and minimal capex Fragmented market with opportunity to ex
Slide 18: Last Mile: Demand Propelled by E-commerce
Last Mile Demand Propelled by E-commerce | Investor Presentation February 2017 Asset-light business that arranges the final stage of heavy goods delivery from distribution centers or retail stores to end consumers’ home or business Customers include nearly all of the top 30 big-box retailers and e-t
Slide 19: North American Less-Than-Truckload: Major Success Story
North American Less-Than-Truckload Major Success Story | Investor Presentation February 2017 Asset-based business utilizing employee drivers, a fleet of tractors and trailers for line-haul, pick-up and delivery of pallets, and a network of terminals Second largest LTL provider Grew adjusted operatin
Slide 20: Intermodal and Drayage
Intermodal and Drayage Long-term Sales Potential for Truck-to-Rail Conversion | Investor Presentation February 2017 Asset-light business that arranges the long-haul portion of containerized freight, including rail brokerage, local drayage and on-site operational services 3rd largest intermodal provi
Slide 21: European Transport: Largest Owned Fleet in Europe
European Transport Largest Owned Fleet in Europe | Investor Presentation February 2017 Leading European transport platform providing less-than-truckload, truckload, truck brokerage, and new last mile service Road transport across all of Europe is a $455 billion sector, of which XPO has less than 1%
Slide 22: Technology Across Lines of Business
Last Mile Patented technology enables real-time visibility and management of customer satisfaction Online order creation and management Customer satisfaction-focused design Truck Brokerage / Expedite Freight Optimizer offers powerful tools to source optimal capacity for each load Largest web-based T
Slide 23: XPOLogistics Financial Performance
XPOLogistics Financial Performance
Slide 24: Strong Financial Position
Accelerating free cash flow due to EBITDA growth; lower interest expense; and lower transaction, integration and rebranding costs $211 million of free cash in 2016; targeting $350+ million in 2017 Flexible net capex profile of approximately 3% of revenue, with the ability to decrease growth capex in
Slide 25: Cash Flow Profile
% Cash Flow Profile | Investor Presentation February 2017 Flexible asset / non-asset model gives XPO the ability to meet customers’ needs while enhancing returns Low Net Capex as a % of Revenue vs. Competitor Groups Note: Brokers include CH Robinson, Echo Global Logistics and Expeditors Internationa
Slide 26: Full Year 2016 Highlights
Full Year 2016 Highlights | Investor Presentation February 2017 $14.6 billion of gross revenue $84.5 million of net income, $121.5 million of adjusted net income $1.25 billion of adjusted EBITDA $625.4 million of cash flow from operations $210.9 million of free cash flow XPO named Fortune 500’s fast
Slide 27: Financial Outlook
Financial Outlook | Investor Presentation February 2017 Full year targets: 2017: adjusted EBITDA of at least $1.350 billion 2018: adjusted EBITDA of at least $1.575 billion 2017–2018: cumulative free cash flow target of approximately $900 million Includes at least $350 million of free cash flow gene
Slide 28: Supplemental Materials
| Investor Presentation February 2017 Supplemental Materials
Slide 29: XPO Is a Leader in Sustainability
XPO Is a Leader in Sustainability | Investor Presentation February 2017 XPO owns the largest natural gas truck fleet in Europe Will lower the carbon footprint of trucking in Paris by using natural gas trucks for the road transport portion of France's first intermodal urban rail shuttle (2017) Launch
Slide 30: Business Glossary
Business Glossary | Investor Presentation February 2017 Contract Logistics: An asset-light, technology-enabled business characterized by long-term contractual relationships with high renewal rates, low cyclicality and a high-value-add component that minimizes commoditization. Contracts are typically
Slide 31: Business Glossary (Cont'd)
Business Glossary (Cont’d) Intermodal: An asset-light business that facilitates the movement of long-haul, containerized freight by rail, often with a drayage (trucking) component at either end. Intermodal is a variable cost business, with revenue generated by a mix of contractual and spot market tr
Slide 32: Financial Reconciliations
Financial Reconciliations The following table reconciles XPO’s net income (loss) attributable to common shareholders for the periods ended December 31, 2016 and 2015 to adjusted EBITDA for the same periods. Refer to the “Non-GAAP Financial Measures” section on page 2 of this document. Adjusted EBITD
Slide 33: Financial Reconciliations (Cont'd)
Financial Reconciliations (Cont’d) Refer to the “Non-GAAP Financial Measures” section on page 2 of this document. Free cash flow was prepared assuming 100% ownership of XPO Logistics Europe. The following table reconciles XPO’s cash flows provided by operating activities for the periods ended Decemb
Slide 34: Financial Reconciliations (Cont'd)
Financial Reconciliations (Cont’d) Refer to the “Non-GAAP Financial Measures” section on page 2 of this document. Free cash flow was prepared assuming 100% ownership of XPO Logistics Europe. The following table reconciles XPO’s revenue attributable to its North American less-than-truckload business
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