FedEx Corporation · NYSE:FDX
FedEx — Q3 FY2023 Earnings Presentation
21 slides from FedEx's earnings presentation, Mar 16, 2023
Slide 1: FedEx Corporation Fiscal Third Quarter 2023 Earnings
FedEx Corporation Fiscal Third Quarter 2023 Earnings | March 16, 2023
Slide 2: Forward-Looking Statements and Non-GAAP Financial Measures
Forward-Looking Statements and Non-GAAP Financial Measures Certain statements in this presentation may be considered forward-looking statements, such as statements regarding expected cost savings, future financial targets, business strategies, management’s views with respect to future events and fin
Slide 3: Mickey Foster, VP of Investor Relations
Mickey Foster VP of Investor Relations
Slide 4: Raj Subra, President & CEO
Raj Subra President & CEO
Slide 5: Key messages
Key messages Exceeded our earnings forecast in what remains a challenged demand environment Maintained outstanding service throughout Peak Gaining traction on cost initiatives Raising FY23 earnings outlook 5
Slide 6: Fiscal third quarter 2023 overview
Fiscal third quarter 2023 overview Demonstrating continued progress on transformation while navigating a dynamic operating environment Commentary: Q3 FY23 results • Volumes down by a low double-digit percentage YoY Revenue $22.2B (6)% YoY across all segments • Volume declines partially offset by hig
Slide 7: Accelerating progress on FY23 cost reduction plan
Accelerating progress on FY23 cost reduction plan • $1.2B of total enterprise YoY cost savings in Q3 FY23 • Express remains the greatest area of opportunity; cost base is constrained in the short term • In Q3 FY23, mitigated 45%* of total revenue declines on an adjusted basis, a significant improvem
Slide 8: DRIVE program building momentum
DRIVE program building momentum Transformation Office facilitated by Sriram Krishnasamy Domain Executive Sponsors FedEx Express Shared & Allocated Expenses Richard John Brie Richard Smith Karen Reddington Mike Lenz Smith Smith Carere & John Smith Air Network Europe Dock Procurement Commercial Networ
Slide 9: EVP & Chief Customer Officer
EVP & Chief Customer Officer 9
Slide 10: Transportation segment revenue performance
Transportation segment revenue performance Ground and Freight yield supported margin expansion; Express environment remains constrained -8% -2% -3% $11.3B $10.3B $8.8B $8.7B $2.3B $2.2B Q3 FY22 Q3 FY23 Q3 FY22 Q3 FY23 Q3 FY22 Q3 FY23 FedEx Ground FedEx Freight FedEx Express • Double-digit yield impr
Slide 11: Transportation segment yield performance
Transportation segment yield performance Yield pressured across segments but remained a partial offset to volume weakness YoY yield by fiscal quarter 30% 25% 20% 15% 10% 5% 0% -5% Q1 FY22 Q2 FY22 Q3 FY22 Q4 FY22 Q1 FY23 Q2 FY23 Q3 FY23 FedEx Express International Export FedEx Express U.S. Domestic F
Slide 12: Delivered successful Peak with outstanding service
Delivered successful Peak with outstanding service FedEx Ground • Achieved pre-pandemic service levels • Delivered with an average transit of 2 days in the U.S. • Maintained advantage of being faster to more locations than our nearest competitor’s ground service FedEx Express • Approaching pre-pande
Slide 13: FedEx Ship Manager gaining traction
FedEx Ship Manager® gaining traction Online tool now fully modernized to make shipping more efficient, highly personal, and easier to use for all customers Previous FedEx Ship Manager® 13
Slide 14: Commercial momentum and innovation driving improved customer experience
Commercial momentum and innovation driving improved customer experience Picture Proof of Delivery (PPOD) allowing Expanded estimated delivery time window customers and businesses to shop and ship with offering internationally to 13 countries confidence 14
Slide 15: EVP & Chief Financial Officer
EVP & Chief Financial Officer 15
Slide 16: Transportation segment operating income performance
Transportation segment operating income performance Another strong quarter at Ground and Freight, offset by weakness at Express +32% -81% +15% $844M $641M $651M $337M $386M $122M Q3 FY22 Q3 FY23 Q3 FY22 Q3 FY23 Q3 FY22 Q3 FY23 FedEx Ground FedEx Freight FedEx Express* • Improvement driven by 11% rev
Slide 17: Monthly volume trends: Sept 2022-Feb 2023
Monthly volume trends: Sept 2022-Feb 2023 Volume environment remained challenged Q2 average daily volume Q3 average daily volume FedEx Express U.S. Domestic Package YoY FedEx Express International Priority Package YoY * Sept Oct Nov Dec Jan Feb Sept Oct Nov Dec Jan Feb -2% -12% -11% -12% -12% -10% -
Slide 18: Lowering capital intensity with higher returns to stockholders
Lowering capital intensity with higher returns to stockholders Unwavering focus on efficient and responsible capital allocation $1.5 Share Repurchases 7.9% of 7.2% of 6.5% of $2.7* Dividend revenue revenue revenue FY23E capital ($ in billions) return $1.2 FY18-FY21 FY22 FY25 Target Lowering capital
Slide 19: Raising FY23 earnings outlook
Raising FY23 earnings outlook December 2022 March 2023 Adjusted EPS* $13.00-14.00 $14.60-15.20 Effective tax rate** 25-26% 25-26% Capital spend $5.9B $5.9B *Non-GAAP fi nancial measure; see appendix for more i nformation 19 **Pri or to ma rk-to-market retirement plans a ccounting a djustments, which
Slide 20: Q&A
Q&A 20
Slide 21: Celebrating 50 years of driving what's next
Celebrating 50 years of driving what’s next 21