XPO, Inc. · NYSE:XPO
XPO — XPO Logistics — Investor Presentation (May 2017)
36 slides from XPO's investor presentation, May 3, 2017
Slide 1: XPO Investor Presentation May 2017
XPO Investor Presentation May 2017 Exhibit 99.1
Slide 2: Disclaimers
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's Global Transportation and Logistics Platform
XPO’s Global Transportation and Logistics Platform | Investor Presentation May 2017 #2 largest contract logistics provider worldwide #2 freight brokerage firm worldwide #1 last mile logistics provider for heavy goods in North America #2 largest less-than-truckload provider in North America, covering
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 89,000 Locations 1,431 Countries of Operation 34 Contract Logistics Facilities 160 million sq. feet (14.9 million sq. meters) Key Metrics Gross Revenue Profile Note: Gross rev
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 May 2017 XPO Leads the Industry in Rapid Technology Development Highly scalable and integrated system On-cloud platform leads to greater speed of development and deployment Biweekly releases of new capabilities with strong feedback loops Global IT team of approximately 1,600
Slide 8: Technology Across Lines of Business
Last Mile Patented technology enables real-time delivery performance management Online order creation and management Facilitates complex in-home installations European Transport U.S. IT best practices application lowers costs and offers enhanced data analytics IT-enabled improvements to pricing, wor
Slide 9: Highly Skilled Management Team
Highly Skilled Management Team | Investor Presentation May 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, Roa
Slide 10: Highly Skilled Management Team (Cont'd)
Highly Skilled Management Team (Cont’d) | Investor Presentation May 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 Mitchell Ch
Slide 11: Less Than 1.5% Current Share of $1 Trillion Addressable Opportunity
< 1.5% Current Share of $1 Trillion Addressable Opportunity | Investor Presentation May 2017 Investment in Sales Growth More than tripled strategic account managers, and added 50+ local account executives Rolled out common CRM platform to increase visibility across organization Implemented growth-ba
Slide 12: 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 13: Well-Defined Bridge to 2018 Target of $1.575 Billion EBITDA
Well-Defined Bridge to 2018 Target of $1.575 Billion EBITDA | Investor Presentation May 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 $175 million of savi
Slide 14: Key Factors Driving Growth and Returns
Key Factors Driving Growth and Returns A well-integrated service offering with significant economies of scale Increasing sales momentum within a $1 trillion addressable opportunity, of which we hold less than 1.5% market share Accelerating EBITDA and cash generation, while we continue to invest in g
Slide 15: Key Lines of Business
XPOLogistics Key Lines of Business
Slide 16: Contract Logistics
Contract Logistics Long-Term Recurring Revenue | Investor Presentation May 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 outsourcing
Slide 17: Truck Brokerage
Truck Brokerage High Growth and High Return | Investor Presentation May 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 expand
Slide 18: Last Mile
Last Mile Demand Propelled by E-Commerce | Investor Presentation May 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-tailer
Slide 19: North American Less-Than-Truckload
North American Less-Than-Truckload Major Success Story | Investor Presentation May 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 operating income by 49
Slide 20: Intermodal and Drayage
Intermodal and Drayage Long-term Sales Potential for Truck-to-Rail Conversion | Investor Presentation May 2017 Asset-light business that arranges the long-haul portion of containerized freight, including rail brokerage, local drayage and on-site operational services Third largest intermodal provider
Slide 21: European Transport
European Transport Largest Owned Fleet in Europe | Investor Presentation May 2017 Leading European transport platform for dedicated and non-dedicated truckload, less-than-truckload, truck brokerage, and new last mile service LTL, truck brokerage and dedicated transport combined account for about thr
Slide 22: Global Forwarding
Global Forwarding Integrated Global Network | Investor Presentation May 2017 Growing non-asset logistics solution for domestic, cross-border and international shipments, including customs brokerage Freight forwarding is a $150 billion industry, of which XPO has less than a 1% share 157,000 TEUs and
Slide 23: 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 | Investor Presentation May 2017 Strong Financial Position Note: Free cash flow is operating cash flow
Slide 25: Cash Flow Profile
Cash Flow Profile | Investor Presentation May 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 International; Pa
Slide 26: First Quarter 2017 Highlights
First Quarter 2017 Highlights | Investor Presentation May 2017 $3.54 billion of revenue $19.5 million of net income; $0.16 per diluted share $290 million of adjusted EBITDA $37.9 million of adjusted net income $15 million of cash flow from operations Free cash usage of $86.9 million Solidly beat our
Slide 27: Financial Outlook
Financial Outlook | Investor Presentation May 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 generated
Slide 28: Supplemental Materials
XPOLogistics Supplemental Materials
Slide 29: A Strong and Global Commitment to Sustainability
A Strong and Global Commitment to Sustainability | Investor Presentation May 2017 Owns one of the most modern and environmental-friendly fleets in Europe 97% compliant with Euro V, EEV and Euro VI standards, with average truck age of 2.5 years Owns the largest natural gas truck fleet in Europe Intro
Slide 30: XPO Is a Leader in Sustainability (continued)
XPO Is a Leader in Sustainability (continued) | Investor Presentation May 2017 Awarded the label “Objectif CO2” for outstanding environmental performance of transport operations in Europe by the French Ministry of the Environment and the French Environment and Energy Agency Large capex investment in
Slide 31: XPO Is a Leader in Sustainability (continued)
XPO Is a Leader in Sustainability (continued) | Investor Presentation May 2017 Packaging engineers ensure that the optimal carton size is used for each product slated for distribution Recycled packaging purchased when feasible Reusable kitting tools utilized for the installation of parts in customer
Slide 32: Business Glossary
Business Glossary | Investor Presentation May 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 stru
Slide 33: 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 34: Financial Reconciliations
Financial Reconciliations The following table reconciles XPO’s net income (loss) attributable to common shareholders for the periods ended March 31, 2017 and 2016 to adjusted EBITDA for the same periods. Refer to the “Non-GAAP Financial Measures” section on page 2 of this document. Adjusted EBITDA w
Slide 35: 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 March
Slide 36: 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