Xpo, Inc. · NYSE:XPO
Xpo — Q4 2024 Earnings Presentation
24 slides from Xpo's earnings presentation, Feb 6, 2025
Slide 1: Investor Overview Q4 2024
Investor Overview Q4 2024 February 2025
Slide 2: Forward-looking statements
2 Forward - looking statements This document includes forward - looking statements within the meaning of Section 27 A of the Securities Act of 1933 , as amended, and Section 21 E of the Securities Exchange Act of 1934 , as amended, including statements relating to our full year 2025 expectations of
Slide 3: Fourth quarter 2024 highlights
Fourth quarter 2024 highlights $148 million of operating income, up 24% YoY $303 million of adjusted EBITDA, up 15% YoY $0.89 of adjusted diluted EPS 1 , up 16% YoY LTL adjusted operating ratio of 86.2%, improved by 30 bps YoY LTL adjusted EBITDA of $280 million, up 20% YoY LTL purchased transportat
Slide 4: Fourth quarter 2024 performance
4 Fourth quarter 2024 performance $1.92 billion REVENUE $148 million OPERATING INCOME $76 million NET INCOME $0.63 DILUTED EARNINGS PER SHARE $107 million ADJUSTED NET INCOME $ 0.89 ADJUSTED DILUTED EPS $ 303 million ADJUSTED EBITDA $189 million CASH FLOW FROM OPERATING ACTIVITIES NORTH AMERICAN LTL
Slide 5: Our LTL strategy is driving significant margin and earnings expansion
Our LTL strategy is driving significant margin and earnings expansion 5 Provide best - in - class service 2 3 4 Invest in network for the long - term Accelerate yield growth Drive cost efficiencies Targets for LTL Growth, Profitability and Efficiency, 2021 - 2027 1 Revenue CAGR of 6% to 8% Adjusted
Slide 6: Strong position in North American LTL
Strong position in North American LTL 6 6
Slide 7: A leading carrier in a compelling industry
A leading carrier in a compelling industry • $52 billion bedrock industry for the US economy, with nearly 75% share held by top 10 LTL players • Diverse demand across verticals, with secular growth drivers • Attractive pricing environment for over a decade, with positive YoY industry pricing each ye
Slide 8: A major player in the supply-chain ecosystem
A major player in the supply - chain ecosystem Note: Company data for North American LTL segment only as of December 31, 2024, unless otherwise noted as 2024 (full year) 3 rd largest LTL carrier by 2023 revenue 14.6% of 2024 revenue allocated to gross capex 13 million 2024 s hipments 36,000 customer
Slide 9: Expansive network covering 99% of US zip codes
9 Expansive network covering 99% of US zip codes • 303 service centers 2 • Cross - border and offshore capabilities • Strategic investments in high - demand markets 1 Acquisition of strategic service center sites in December 2023 is driving landmark network expansion; on track for all sites to be op
Slide 10: Strategic mix of blue-chip and local customers
Strategic mix of blue - chip and local customers 10 Note: Company data for North American LTL segment only as of December 31, 2024; selected customers Long - standing relationships – average tenure of top 10 customers is 17 years
Slide 11: LTL growth plan and levers
LTL growth plan and levers 11
Slide 12: Executing on four key levers
Provide best - in - class service Accelerate yield growth Drive cost efficiencies • Aligning price earned with increasing service excellence • Expanding accessorial revenue from value - add services • Growing share of higher - yielding local channel with scaled - up local salesforce • Insourcing lin
Slide 13: Delivering meaningful service improvements
1.1% 1.2% 1.1% 0.9% 0.9% 1.0% 1.0% 1.2% 1.1% 0.9% 0.9% 0.6% 0.7% 0.7% 0.4% 0.3% 0.3% 0.2% 0.2% 0.2% Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 Q4 2024 1 Based on claims payment data 2 Based o
Slide 14: Investing in capacity that supports growth and high returns
$145 $197 $145 $197 $424 $581 $715 3.8% 5.2% 4.1% 4.8% 9.1% 12.4% 14.6% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0% $- $200 $400 $600 $800 $1,000 2018 2019 2020 2021 2022 2023 2024 Gross capex as a % of revenue Gross capex ($ millions) Investing in capacity that supports growth and high returns
Slide 15: Earning price by delivering value through service excellence
$18.34 $18.45 $18.90 $18.82 $19.11 $19.29 $20.02 $20.90 $20.76 $21.34 $21.43 $21.19 $21.06 $21.63 $22.81 $23.37 $23.13 $23.56 $24.34 $24.84 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 Q4 2024
Slide 16: Insourcing linehaul is a key cost and service opportunity
25.5% 25.3% 25.7% 24.4% 23.8% 23.9% 23.6% 22.7% 24.5% 24.7% 23.5% 22.5% 21.8% 20.7% 21.5% 19.6% 18.1% 15.9% 13.6% 10.7% Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 Q4 2024 Insourcing linehaul
Slide 17: 11% to 13% adjusted EBITDA CAGR in North American LTL
17 11% to 13% adjusted EBITDA CAGR in North American LTL 2021 - 2027 Combination of volume gains + pricing over inflation 6% to 7% 3% to 4% 2% Operating costs optimized through technology Linehaul insourced from third parties Expected components and contributions 11% to 13% Generated 29% YoY increas
Slide 18: Appendix
Appendix 18
Slide 19: European Transportation segment
European Transportation segment • In France: the #1 full truckload (FTL) broker and the #1 pallet network (LTL) provider • In Iberia (Spain and Portugal): the #1 FTL broker and the #1 LTL provider • In the UK: a top - tier dedicated truckload provider, and the largest single - owner LTL network • Se
Slide 20: 2025 planning assumptions
20 For the full year 2025, the company expects: • Total company gross capex of $600 million to $700 million • Interest expense of $220 million to $230 million • Pension income of approximately $6 million • Adjusted effective tax rate of 24% to 25% • Diluted share count of 120 million 2025 planning a
Slide 21: Financial reconciliations
Financial reconciliations The following table reconciles XPO’s net income from continuing operations for the periods ended December 31, 2024 and 2023 t o adjusted EBITDA for the same periods. 21 Reconciliation of net income to adjusted EBITDA Amounts may not add due to rounding 1 Relates to Californ
Slide 22: Financial reconciliations (cont.)
Financial reconciliations (cont.) The following table reconciles XPO’s net income from continuing operations for the periods ended December 31, 2024 and 2023 t o adjusted net income from continuing operations for the same periods. 22 Amounts may not add due to rounding 1 Includes gains from sales of
Slide 23: Financial reconciliations (cont.)
Financial reconciliations (cont.) The following table reconciles XPO’s operating income attributable to its North American less - than - truckload ("LTL") segment for the periods ended December 31, 2024 and 2023 to adjusted operating income, adjusted operating ratio and adjusted EBITDA. 23 Reconcili
Slide 24: Non-GAAP financial measures
dNon - 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 document to the most directly comparable measure under GAAP, which are set forth in the financial tables attach