Gxo Logistics, Inc. · NYSE:GXO
Gxo Logistics — Investor Day (January 2023)
89 slides from Gxo Logistics's investor day presentation, Jan 12, 2023
Slide 1: New York, January 12, 2023
NEW YORK JANUARY 12, 2023 ©2023 GXO Logistics, Inc.
Slide 2: Legal disclaimer
Legal disclaimer Non-GAAP Financial Measures As required by the rules of the Securities and Exchange Commission (“SEC”), we provide reconciliations of the non-GAAP financial measures contained in this presentation to the most directly comparable measure under GAAP, which are set forth in the financi
Slide 3: Our agenda today
Our agenda today Marv Malcolm Mark Bill Cunningham Wilson Manduca Fraine Chief Operating Officer – Chief Executive Officer Chief Investment Officer Chief Commercial Officer Americas & Asia Pacific GXO investment Market and GXO The GXO Difference GXO’s technology highlights revenue growth advantage E
Slide 4: Industry-leading combination of scale, technology and expertise
Our industry-leading combination of scale, technology and expertise enables supply chain excellence for customers all over the world. ©2023 GXO Logistics, Inc. 4
Slide 5: GXO at a glance
GXO at a glance 27 974 ~200M >1,200 ~130K Countries Warehouse Total warehouse Global Global team of operation locations space (sq. ft.) customers members $8B 8%1 $633M1 >30%1 >30%1 2021 2017-2021 Organic 2021 Pro forma 2021 FCF 2021 Operating return Revenue revenue CAGR adjusted EBITDA conversion on
Slide 6: Full-year 2022 and full-year 2023 outlook
Full-year 2022 and full-year 2023 outlook 2022 preliminary results 2023 preliminary outlook Revenue Organic revenue growth ~$9.0B 6-8%1 Adjusted EBITDA Adjusted EBITDA $720-730M1 $700-730M1 1. Refer to the ‘Non-GAAP Financial Measures’ section on slide 2 and Appendix for related information. 2. Refl
Slide 7: We solve complex supply chain problems for the world's largest companies
We solve complex supply chain problems for the world’s largest companies. Customer benefits ~10x Return on investment through lower costs, higher revenues and faster inventory turnover ~50% Reduction in variable warehousing costs ©2023 GXO Logistics, Inc. 7
Slide 8: We're focused on the center of global supply chains
We’re focused on the center of global supply chains. Shipper Transport Warehouse Transport End consumer Supply/demand-driven Contractual pricing Supply/demand-driven pricing model model pricing model ©2023 GXO Logistics, Inc. 8
Slide 9: We design and operate state-of-the-art warehouses
We design and operate state-of-the-art warehouses, Cobots Scanners and loading robots enabled with the Vision technology latest technologies. Automated storage and retrieval Automated systems guided vehicles Unmanned aerial vehicles Palletizers and automated vehicles Load Item picking robots Pack Pr
Slide 10: Our path to growth
Our path to growth 1 2 Capitalizing on a massive Leveraging The GXO difference and rapidly growing to gain share and deliver outsized market opportunity top- and bottom-line growth ©2023 GXO Logistics, Inc. 10
Slide 11: A massive and rapidly growing market opportunity
A massive and rapidly growing market opportunity 2021 2027 TAM TAM $456 billion1 +45% $660 billion1 Outsourced market Outsourced market $146 billion1 +58% $231 billion1 32% outsourced 35% outsourced GXO Revenue Anticipated GXO Revenue $8 billion +115% ~$17 billion GXO market share gain of outsourced
Slide 12: The GXO Difference
“The GXO Difference” 1 Our Industry-leading automated solutions that use scalable and agile technology to address customer needs at the Technology advantage right return. 2 Leading market positions throughout North America Our and Europe, with the ability to serve multinational Global scale customer
Slide 13: GXO tomorrow: 2027 guidance
GXO tomorrow: 2027 guidance1 at constant 2021 FX ~$17B1 8-12%2 ~$1.6B12 Revenue 6-year organic average Adjusted EBITDA annual revenue growth range 30%+2 30%+2 ~17%2 FCF conversion Operating ROIC Adjusted EBITDA CAGR 1. 2027 Revenue of ~$17B EBITDA of ~$1.6B is based on FX rates of 1.38 and 1.18, 202
Slide 14: Our agenda today
Our agenda today Marv Malcolm Mark Bill Cunningham Wilson Manduca Fraine Chief Operating Officer – Chief Executive Officer Chief Investment Officer Chief Commercial Officer Americas & Asia Pacific GXO investment Market and GXO The GXO Difference GXO’s technology highlights revenue growth advantage E
Slide 15: GXO has consistently outperformed the industry
GXO has consistently outperformed the industry Growth CAGR 2017-2021 8%1 6%2 4%2 3%2 Physical product revenue Warehousing market revenue Outsourced warehousing market GXO organic revenue growth revenue 1. Refer to the ‘Non-GAAP Financial Measures’ section on slide 2 and Appendix for related informat
Slide 16: Our path to 8-12% annual organic revenue growth by 2027
Our path to 8-12% annual organic revenue growth by 2027 Key drivers of GXO 2021-2027 organic revenue growth The GXO Outsourced warehousing market tailwinds1 Difference 8-12%2 2- 4% ~1% ~1% ~2% 2-4% Economic Outsourcing eCommerce Increased Scale, technology GXO demand supply chain and expertise organ
Slide 17: Secular tailwind #1: Outsourcing
Secular tailwind #1: Outsourcing1 Significant room for outsourcing to grow GXO core verticals Omnichannel retail & consumer 39% packaged goods Food & beverage 13% Industrial and manufacturing 39% Tech & consumer electronics 18% Other 56% 0 50 100 150 200 GXO Outsourced Yet to be outsourced Outsource
Slide 18: Structural tailwind #2: eCommerce
Structural tailwind #2: eCommerce1 eCommerce penetration Wholesale and retail: eCommerce: Reverse logistics: of retail spending1 30% Pallet in → Pallet in → Different parcels in → pallet out single parcel out uniform singles out 25% 20% 15% 10% ~1X ~3X ~6X 5% Revenue multiplier Revenue multiplier Re
Slide 19: Structural tailwind #3: Supply chain resilience
Structural tailwind #3: Supply chain resilience Higher levels of inventory to ensure Global trade rebalancing product availability and safeguard likely due to nearshoring supply chains and production lines and re-shoring ~$3.5T1 of global trade could move to Each 1% of trade that moves to Europe and
Slide 20: Our path to 8-12% annual organic revenue growth by 2027
Our path to 8-12% annual organic revenue growth by 2027 Key drivers of GXO 2021-2027 organic revenue growth The GXO Outsourced warehousing market tailwinds1 Difference 8-12%2 2- 4% ~1% ~1% ~2% 2-4% Economic Outsourcing eCommerce Increased Scale, technology GXO demand supply chain and expertise organ
Slide 21: Our agenda today
Our agenda today Marv Malcolm Mark Bill Cunningham Wilson Manduca Fraine Chief Operating Officer – Chief Executive Officer Chief Investment Officer Chief Commercial Officer Americas & Asia Pacific GXO investment Market and GXO The GXO Difference GXO’s technology highlights revenue growth advantage E
Slide 22: The GXO Difference: Why customers choose GXO
The GXO Difference: Why customers choose GXO We have a unique understanding of customer challenges and provide tailored solutions to address them. Our Our Our Technology advantage Global scale Trusted expertise >30% of revenue from tech- 27 countries of operation 15-year average tenure with enabled
Slide 23: The GXO Difference: Our technology advantage
The GXO Difference: Our technology advantage 50% GXO’s market share increases with automation 40% 30% 20% 10% 0% Industrial & manufacturing Food & beverage Omnichannel retail & CPG Tech & consumer electronics 1 % of revenue automated Market share 1. Based upon third-party research ©2023 GXO Logistic
Slide 24: The GXO Difference: Our global scale
The GXO Difference: Our global scale GXO is the only pure-play provider with global scale. 84%1 of revenue comes from % of revenues from contract logistics #1 in: • UK customers working with of top-5 market participants2 100% GXO on more than one site. • Netherlands 52%1 33% 19% 17% 14% of revenue c
Slide 25: The GXO Difference: Our trusted expertise
The GXO Difference: Our trusted expertise Executive-led Unmatched depth of Proven implementation engagement industry knowledge playbook ©2023 GXO Logistics, Inc. 25
Slide 26: The GXO Difference in action
The GXO Difference in action An American multinational client initially came to GXO looking for a DC Optimization project. After a successful initial project, our relationship with the client has expanded through many innovative new projects to optimize their supply chain network. Customer engagemen
Slide 27: The GXO Difference drives shareholder value
The GXO Difference drives shareholder value GXO enables customers to realize higher margins…1 …creating a flywheel effect. Improved revenue performance Higher customer Improved inventory efficiency Lower warehousing costs >10x retention drives higher GXO Customer revenues and Base margins ROI margin
Slide 28: Our agenda today
Our agenda today Marv Malcolm Mark Bill Cunningham Wilson Manduca Fraine Chief Operating Officer – Chief Executive Officer Chief Investment Officer Chief Commercial Officer Americas & Asia Pacific GXO investment Market and GXO The GXO Difference GXO’s technology highlights revenue growth advantage E
Slide 29: Our automation leadership drives new business wins
Our automation leadership drives new business wins. Our continuous investment in technology underpins our market share gains. GXO leads industry automation levels +120 GXO cumulative market share gains (bps)2 40% +100 34%1 35% 30% +80 25% 29%1 +60 20% 15% +40 10% ~8%2 5% +20 0% GXO Market +0 2018 20
Slide 30: We create enormous value for our customers
We create enormous value for our customers.1 ~50% ~10% ~60% Reduction in Improved order Reduction in variable costs accuracy inventory wastage Better customer outcomes = faster growth and higher margins. 1. Illustrative example based upon sample of GXO contracts. ©2023 GXO Logistics, Inc. 30
Slide 31: The three components of GXO's technological advantage
The three components of GXO’s technological advantage 1) Large-scale automation Expertise: Industry leader in automated sites Differentiation: Composite solutions based on multiple providers 2) Adaptive technology Expertise: Scalable network effects; greenfield and retro-fit opportunities Differenti
Slide 32: Automation: industry leader in large infrastructure automation
Automation: We’re an industry leader in large infrastructure automation By the numbers1 GXO’s advantages Project capex 1 Large infrastructure designed and built from day 2 Track record of standing up more 3 Ability to leverage scale, software expertise and $10M-$50M one, with majority of warehouse p
Slide 33: Adaptive Tech: modular technology solutions
Adaptive Tech: Our modular technology solutions optimize operations, reduce costs and improve safety By the numbers GXO’s advantages Project capex1 $400-$40K 1 Small, flexible technology that can be retroactively fitted and focused on a 2 Replicable across sites, driving continuous 3 GXO gains a >50
Slide 34: Software: customizable proprietary solutions and third-party integrations
Software: Customizable proprietary solutions and third- party integrations make it easy to manage customer data By the numbers1 GXO’s advantages 1 2 3 4 Project capex Scaled cloud Improved speed to Expertise across more Scalable across, infrastructure, market and ability to processes and geographies
Slide 35: ©2023 GXO Logistics, Inc.
©2023 GXO Logistics, Inc. 35
Slide 36: Warehouse transformation drives productivity improvements
Warehouse transformation drives productivity improvements Productivity benefits achievable by stage Inbound Packing & Outbound Storage Picking staging sortation staging 2-3x 2-3x 4x 2-4x 2x ©2023 GXO Logistics, Inc. 36
Slide 37: Our agenda today
Our agenda today Marv Malcolm Mark Bill Cunningham Wilson Manduca Fraine Chief Operating Officer – Chief Executive Officer Chief Investment Officer Chief Commercial Officer Americas & Asia Pacific GXO investment Market and GXO The GXO Difference GXO’s technology highlights revenue growth advantage E
Slide 38: GXO Europe overview
GXO Europe overview $221 billion 2021 TAM1 1. Based upon third-party research ©2023 GXO Logistics, Inc. 38 38
Slide 39: Our core verticals
Our core verticals $m GXO revenue drivers to 2027 18 000 16 000 14 000 12 000 10 000 8 000 6 000 4 000 2 000 0 2021 Omnichannel retail & CPG Food & beverage Industrial & manufacturing Tech & consumer electronics Other 2027 ©2023 GXO Logistics, Inc. 39
Slide 40: Vertical overview: Omnichannel retail & CPG
Vertical overview: Omnichannel retail & CPG By the numbers today Market opportunity ($B)1 6% CAGR 166 ~9%1 ~39%1 GXO 2021 market share % TAM outsourced 2021 119 7% CAGR 70 46 $3.9B 7% CAGR1 GXO 2021 revenue Outsourced revenue 2021-2027 2021 2027 Outsourced TAM 1. Based upon third-party research ©202
Slide 41: Market overview: Omnichannel retail & CPG
Market overview: Omnichannel retail & CPG Key drivers & opportunities Market challenges ▪ eCommerce penetration rising to 29.2% ~40%1 by 2027, vs. 19.7% in 20211 Inventory discounted ▪ eCommerce warehousing revenue by retailers multiplier: 3x activity vs. wholesale facilities ~30%1 ▪ Increased adopt
Slide 42: The GXO Difference: Omnichannel retail & CPG
The GXO Difference: Omnichannel retail & CPG Technology Scale Expertise Necessary breadth of product offering >40 years of experience and speed to market necessitate automation Leader in reverse logistics capabilities ~$4B of 2021 revenue Customer financial performance Flexible offering via GXO Dire
Slide 43: GXO in action: eCommerce apparel
Case Study GXO in action: eCommerce apparel ▪ Large global apparel customer GXO impact on apparel retailer: Situation ▪ Existing warehousing solution resulted in orders with long lead times, causing consumers reduction in to order from wholesale channels – which, in turn, reduced the customer’s marg
Slide 44: GXO in action: Reverse logistics
Case Study GXO in action: Reverse logistics GXO impact on returns: Situation ▪ The average eCommerce apparel company has approximately 1/3 of products returned. > 96% of returns resold, ▪ Processing costs can be prohibitive, avoiding landfills resulting in ~25% of returned products ending up in a la
Slide 45: Vertical overview: Food & beverage
Vertical overview: Food & beverage By the numbers today Market opportunity ($B)1 157 6% CAGR ~10%1 ~13%1 112 GXO 2021 market share % TAM outsourced 2021 9% CAGR 23 $1.3B 9% CAGR1 14 GXO 2021 revenue Outsourced revenue 2017-2021 2021 2027 Outsourced TAM 1. Based upon third-party research ©2023 GXO Lo
Slide 46: Market overview: Food & beverage
Market overview: Food & beverage Key drivers & opportunities Market challenges ▪ Focus on reducing food waste and inefficiency ~4%1 product wastage ▪ Continued customer focus on costs at average food & beverage company ▪ Rising outsourcing as complexity ~3%1 increases ▪ Historically labor-intensive
Slide 47: The GXO Difference: Food & beverage
The GXO Difference: Food & beverage Technology Scale Expertise 25 years of experience Homogenous product offering enables high degree of automation Leader in reverse logistics capabilities >$1B 2021 revenue Technology improves accuracy of Strong ESG credentials processes, reducing variable costs 153
Slide 48: GXO in action: Global food group
Case Study GXO in action: Global food group ▪ Customer facing rising costs due to an Situation inflationary environment GXO impact on global food group: ▪ Multiple small, entirely manual, warehouses increase in ▪ Order inaccuracy and stock shrinkage 150% productivity1 contributing to margin drag imp
Slide 49: Our agenda today
Our agenda today Marv Malcolm Mark Bill Cunningham Wilson Manduca Fraine Chief Operating Officer – Chief Executive Officer Chief Investment Officer Chief Commercial Officer Americas & Asia Pacific GXO investment Market and GXO The GXO Difference GXO’s technology highlights revenue growth advantage E
Slide 50: GXO Americas and Asia Pacific Overview
GXO Americas and Asia Pacific Overview $235 billion 2021 TAM1 1. Based upon third-party research for North America only ©2023 GXO Logistics, Inc. 50
Slide 51: Vertical overview: Industrial & manufacturing
Vertical overview: Industrial & manufacturing By the numbers today Market opportunity ($B)1 264 7% CAGR ~1%1 ~39%1 GXO 2021 market2 share % TAM outsourced 2021 174 8% CAGR 108 $1.0B 8% CAGR1 68 GXO 2021 revenue Outsourced revenue 2017-2021 2021 2027 Outsourced TAM 1. Based upon third-party research
Slide 52: Market overview: Industrial & manufacturing
Market overview: Industrial & manufacturing Key drivers & opportunities Market challenges ▪ Stringent regulatory requirements 3-24 months1 manufacturing lead times create ▪ Inflationary pressures duration mismatch between fast- moving end-market demand and ▪ System complexity slower-moving supply ch
Slide 53: The GXO Difference: Industrial & manufacturing
The GXO Difference: Industrial & manufacturing Technology Scale Expertise Improves process accuracy 15 years of experience Drives real estate efficiency ~$1B of 2021 revenue Software capabilities help customers through denser storage and faster plan and procure more efficiently inventory turnover 16
Slide 54: GXO in action: Aerospace manufacturer
Case Study GXO in action: Aerospace manufacturer Situation ▪ A major aerospace customer asked GXO to help GXO impact on customer: reduce their overall footprint, increase efficiency and improve overall quality while maintaining just- improvement in-time delivery and inventory accuracy. 3x in picking
Slide 55: Vertical overview: Tech & consumer electronics
Vertical overview: Tech & consumer electronics By the numbers today Market opportunity ($B)1 7% CAGR 40 ~22%1 ~18%1 GXO 2021 market share % TAM outsourced 2021 27 11% CAGR $1.1B 11% CAGR1 9 GXO 2021 revenue Outsourced revenue 2017-2021 5 2021 2027 Outsourced TAM 1. Based upon third-party research ©2
Slide 56: Market overview: Tech & consumer electronics
Market overview: Tech & consumer electronics Key drivers & opportunities Market challenges ▪ Unattractive retail economics of dealing with electronic ~$25B1 returns of capital tied up in ~300M returned cellphones annually ▪ Rising outsourcing as in Europe and North America complexity increases ▪ Nea
Slide 57: The GXO Difference: Tech & consumer electronics
The GXO Difference: Tech & consumer electronics Technology Scale Expertise Highly automated solutions allow 19 years of experience more efficient processing, reducing >$1B of 2021 revenue costs and raising sales prices and Reverse logistics capabilities margins – optimizing the economics 99 sites ar
Slide 58: GXO in action: Tech & consumer electronics
Case Study GXO in action: Tech & consumer electronics ▪ Long-term GXO customer was seeing a high return Situation rate on consumer electronics products. GXO impact on customer: ▪ Cost of processing the items was high, and the failure to manage returns was generating e-waste ▪ and emissions. Attracti
Slide 59: Our agenda today
Our agenda today Marv Malcolm Mark Bill Cunningham Wilson Manduca Fraine Chief Operating Officer – Chief Executive Officer Chief Investment Officer Chief Commercial Officer Americas & Asia Pacific GXO investment Market and GXO The GXO Difference GXO’s technology highlights revenue growth advantage E
Slide 60: Environmental Social Governance
Environmental 30% 80% 100% 80% 50% GHG emissions Global landfill Carbon neutral Global operations using Renewable energy (Scopes 1&2) reduction diversion rate by 2025 (Scopes 1&2) by 2040 LED lighting by 2025 globally by 2030 by 2030 vs. 2019 baseline Being an employer of choice and creating a safe
Slide 61: ESG guides our business
ESG guides our business Investors Employees Customers Industry-leading safety record Grow at GXO participation driving ~10% increase in retention 7 inclusion-based Business Resource Groups launched in 2022 Continued expansion of ESG Ambassador program The majority of our employees are highly satisfi
Slide 62: The GXO Difference: ESG creates more value for customers
The GXO Difference: ESG creates more value for customers 1 One site powered by 2 Reduction of 3 We’re operating 4 5 We’re driving a 58% We’ve reduced the solar also provides packaging at one multiple zero-waste reduction of net volume of plastic pallet over 7,600 MWh of fashion retailer site sites,
Slide 63: Enabling the circular economy
Enabling the circular economy Our impact: $30K and 440+ tons CO2e 47.7 tons costs saved and emissions avoided polyethylene waste captured when helping a customer convert for recycling on behalf of an expired medical gowns into grocery Italian luxury fashion brand bag totes in 2022 ~30.4 tons >550K m
Slide 64: Our agenda today
Our agenda today Marv Malcolm Mark Bill Cunningham Wilson Manduca Fraine Chief Operating Officer – Chief Executive Officer Chief Investment Officer Chief Commercial Officer Americas & Asia Pacific GXO investment Market and GXO The GXO Difference GXO’s technology highlights revenue growth advantage E
Slide 65: Key drivers of GXO's organic value creation
Key drivers of GXO’s organic value creation 1 High-quality growth through contracts that are resilient and cash-generative, and provide high returns 2021 results 2027 outlook $8B 8-12% ~$17B Revenue 6-year organic average Revenue annual revenue growth range1 2 Driving productivity, at the site level
Slide 66: High-quality growth: Diversified, contracted, blue chip
High-quality growth: Diversified, contracted, blue chip Resilient, Pricing driven by Diversified Blue-chip, duration-matched contractual verticals, customers investment-grade contractual relationships, not and geographies customer base relationships supply /demand Vast majority of ~5-year ~5-year No
Slide 67: Resilient contracts generate predictable cashflows and returns
Resilient contracts generate predictable cashflows and returns ~45% of revenue1 ~55% of revenue1 Open-book contracts: Hybrid closed-book contracts: ▪ Cost-plus structure where all costs are passed ▪ Partly cost-plus and partly fixed price through to customers with a mark-up Two ▪ Revenues matched to
Slide 68: Example: Open-book contract
Example: Open-book contract1 Benefits ▪ Open-book margins are Revenue Costs EBITDA resilient to drops in activity, with all costs passed through to the Variable Variable Margin on customer with a mark-up. revenue costs variable costs 0 ▪ Margins stay broadly fixed; profitability is protected, Fixed
Slide 69: Example: Hybrid closed-book contract
Example: Hybrid closed-book contract1 Revenue Costs EBITDA Benefits Variable Variable ▪ Fixed and variable revenue costs revenue closely matched to fixed and variable costs to protect margins from volume moves. Margin on variable costs ▪ Inflation escalators are Fixed included to pass through + Fixe
Slide 70: Project-based >30% operating return on invested capital
Project-based >30% operating return on invested capital1 Open-book Hybrid closed-book Revenue ~100 Revenue ~100 ILLUSTRATIVE Fixed and Fixed and - variable costs - variable costs Benefits ▪ Hybrid-closed book EBITDA ~7 EBITDA ~10 contracts have higher - Depreciation - Depreciation ~4 EBITDA margins
Slide 71: 2027 Adjusted EBITDA outlook: Growth and efficiency
2027 Adjusted EBITDA outlook: Growth and efficiency 1 800 ~$730M ~$140M ~$30M ~$60M2 ~$45M2 ~$1.6B 1 600 8% 1 400 Pro forma adjusted 1 200 EBITDA margin1 1 000 ~9% adjusted EBITDA margin1 800 ~$1.5B at $1.22 GBPUSD $633M and $1.06 EURUSD 600 400 200 0 2021 Core growth Automation and value- Adaptive
Slide 72: Adjusted EBITDA growing faster than revenue
Adjusted EBITDA growing faster than revenue1 Automation & Adaptive Central Clipper cost reverse logistics technology efficiencies synergies Higher incremental margins ~$30M EBITDA uplift from $60M uplift via optimization of: Combine UK support on revenue growth (>9%) retro-fit opportunities for func
Slide 73: 2027 Adjusted EBITDA margin outlook: Automation and mix
2027 Adjusted EBITDA margin outlook: Automation and mix GXO % of automated revenue GXO to drive margins on revenue Majority of new contracts growth by focusing on differentiated to be automated: ~40% and higher-value-add segments such as: Dilutive effect on automation ▪ Automation penetration from C
Slide 74: 2027 Adjusted EBITDA margin outlook: Central efficiencies
2027 Adjusted EBITDA margin outlook: Central efficiencies Economies of scale available for a larger pure-play contract logistics player: 1) Centralized approach to IT software, hardware 3) Streamlining processes in administrative and data center procurement functions such as payments and accounting
Slide 75: 2027 Adjusted EBITDA margin outlook: Clipper synergies
2027 Adjusted EBITDA margin outlook: Clipper synergies Source of cost synergies 1) Combining the UK support functions of Clipper and GXO and removing costs such as Clipper public company costs 2) Leveraging the support functions and infrastructure across the combined GXO and Clipper Continental Euro
Slide 76: Adjusted EBITDA to Free cash flow
Adjusted EBITDA → Free cash flow ~60% 100 FCF conversion 75 (ex-growth investments) 50 ~30% FCF conversion 25 0 EBITDA Interest Tax and other Maintenance capex FCF before growth Growth capex Working capital FCF investment >$2B1 ~30%1 2021-2027 cumulative free cash flow FCF conversion by 2027 1. Refe
Slide 77: Balance sheet financial flexibility
Balance sheet financial flexibility: >$2B of balance sheet capacity by 2027 2500 Q3 2022: >$2B 2.0x 2.1x net debt/ Cash generation drives deployable balance Adjusted EBITDA1 balance sheet optionality sheet capacity by 2027 2000 1.5x 1500 2027 1.0x outlook: net cash balance sheet position 1000 0.5x 2
Slide 78: Capital allocation
Capital allocation 1 Accelerate organic growth 2 Invest in high-return retrofit adaptive technology and productivity 3 Opportunistically pursue accretive bolt-on M&A, and return excess free cash flow to shareholders ©2023 GXO Logistics, Inc. 78 78
Slide 79: GXO: Growth, predictability and cash returns
GXO: Growth, predictability and cash returns ©2023 GXO Logistics, Inc. 79
Slide 80: A clear path to extraordinary growth
A clear path to extraordinary growth 1 2 Capitalizing on a massive Leveraging The GXO difference and rapidly growing to gain share and deliver outsized market opportunity top- and bottom-line growth ~$17B1 8-12%2 ~$1.6B12 Revenue 6-year organic average Adjusted EBITDA annual revenue growth range 30%
Slide 81: Appendix
Appendix ©2023 GXO Logistics, Inc. 81
Slide 82: Reconciliation of GAAP Revenue to Organic Revenue
GXO Logistics, Inc. Reconciliation of GAAP Revenue to Organic Revenue (Unaudited) (In millions) Revenue Year Ended December 31, 2021 $ 7,940 Less: Revenue from acquired business (605) Less: Foreign exchange impact (200) Organic revenue(1) at 2017 Foreign exchange rates $ 7,135 Revenue Year Ended Dec
Slide 83: Reconciliation of Net Income to Adjusted EBITDA
GXO Logistics, Inc. Reconciliation of Net Income to Adjusted EBITDA (Unaudited) Year Ended December 31, 2022 2021 (In millions) Midpoint(1) As Reported Pro forma(2) Net income attributable to GXO $ 194$ 153 $ 162 Net income attributable to noncontrolling interest 3 8 8 Net income $ 197$ 161 $ 170 In
Slide 84: Reconciliation of Cash Flows from Operating Activities to Free Cash Flow
GXO Logistics, Inc. Reconciliation of Cash Flows from Operating Activities to Free Cash Flow (Unaudited) Year Ended (In millions) December 31, 2021 Net cash provided by operating activities $ 455 Less: Payment for purchases of property and equipment (250) Plus: Proceeds from sale of property and equ
Slide 85: Return on Invested Capital
GXO Logistics, Inc. Return on Invested Capital (Unaudited) Year Ended (In millions) December 31, 2021 Adjusted EBITA(1)(2) $ 374 Less: Cash paid for income taxes (75) Adjusted EBITA(1)(2), net of income taxes paid $ 299 (1) Pro forma as prepared under combined financial statements for all periods be
Slide 86: Operating Return on Invested Capital
GXO Logistics, Inc. Operating Return on Invested Capital (Unaudited) Year Ended (In millions) December 31, 2021 Adjusted EBITA(1)(2) $ 374 Less: Cash paid for income taxes (75) Adjusted EBITA(1)(2), net of income taxes paid $ 299 (1) Pro forma as prepared under combined financial statements for all
Slide 87: Reconciliation of Pro forma Net Income to Pro forma Adjusted EBITA
GXO Logistics, Inc. Reconciliation of Pro forma Net Income to Trailing Twelve Months Pro forma Adjusted EBITA (Unaudited) Year Ended December 31, 2021 (In millions) Pro forma(1) Net income attributable to GXO $ 162 Net income attributable to noncontrolling interest 8 Net income $ 170 Interest expens
Slide 88: Liquidity Reconciliation
GXO Logistics, Inc. Liquidity Reconciliation (Unaudited) Reconciliation of Net Debt: (In millions) September 30, 2022 Shor-term debt $ 94 Long-term debt 1,789 Total Debt $ 1,883 Less: Cash and cash equivalents (434) Net debt $ 1,449 Reconciliation of Net Leverage: (In millions) September 30, 2022 Ne
Slide 89: Reconciliation of Net Income to Trailing Twelve Months Adjusted EBITDA
GXO Logistics, Inc. Reconciliation of Net Income to Trailing Twelve Months Adjusted EBITDA (Unaudited) Trailing Twelve Year Ended Months Ended Nine Months Ended September 30, December 31, September 30, (In millions) 2022 2021 2021 2022 Net income attributable to GXO $ 151 $ 97 $ 153 $ 207 Net income