Xpo, Inc. · NYSE:XPO
Xpo — XPO Logistics — Investor Presentation (September 2021)
41 slides from Xpo's investor presentation, Sep 9, 2021
Slide 1: Investor Presentation September 2021
SEPTEMBER 2021 Investor Presen t a t ion Exhibit 99.2
Slide 2: Disclaimers
INVESTOR PRESENTATION SEPTEMBER 2021 Disclaimers 2 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 GA
Slide 3: Disclaimers (cont.)
INVESTOR PRESENTATION SEPTEMBER 2021 Disclaimers (cont.) 3 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 o
Slide 4: Table of contents
INVESTOR PRESENTATION SEPTEMBER 2021 Table of contents 4 INVESTMENT HIGHLIGHTS 5 LESS - THAN - TRUCKLOAD (LTL) 13 TRUCK BROKERAGE 20 SUPPLEMENTAL MATERIALS 28
Slide 5: Why invest in XPO today?
INVESTOR PRESENTATION SEPTEMBER 2021 Why invest in XPO today? 1 High - ROI businesses poised to benefit from secular tailwinds 2 Massive capacity in highly attractive less - than - truckload and truck brokerage sectors 3 Leading technology platform, with soaring industry adoption rates 4 Multiple in
Slide 6: XPO at a glance
INVESTOR PRESENTATION SEPTEMBER 2021 TTM revenue $11.8 billion Locations 744 Employees ~40,000 Customers ~50,000 LTL industry, North America 2 ~$42 billion Truck brokerage industry, North America 3 ~$64 billion 1 Global data for revenue, locations, customers and employees as of June 30, 2021; exclud
Slide 7: Continuing to execute strategy to drive outsized returns
INVESTOR PRESENTATION SEPTEMBER 2021 Continuing to execute strategy to drive outsized returns ▪ XPO was the 7th best - performing stock of the last decade on the Fortune 500, based on Bloomberg market data ▪ Spent more than $3 billion on technology over the past 10 years, including truck brokerage d
Slide 8: XPO has a long runway for revenue and margin expansion
INVESTOR PRESENTATION SEPTEMBER 2021 XPO has a long runway for revenue and margin expansion REVENUE GROWTH DRIVERS ▪ Industrial recovery: XPO is benefiting from the ongoing increase in industrial demand, as supply chains continue to recover from COVID - 19 ▪ E - commerce: As customers increasingly e
Slide 9: Q2 2021 commentary and results
INVESTOR PRESENTATION SEPTEMBER 2021 Commentary ▪ Achieved record revenue and adjusted EBITDA ▪ Revenue was the highest of any quarter in XPO’s history at $3.19 billion, increasing by 50% from prior year Q2 ▪ Operating income increased to $175 million from prior year Q2 loss of $98 million 4 ▪ Adjus
Slide 10: XPO 2021 guidance
INVESTOR PRESENTATION SEPTEMBER 2021 1 Spin - off completed August 2, 2021 2 Pro forma for debt paid down in Q3 2021 Refer to the “Non - GAAP Financial Measures” section on page 2 XPO 2021 guidance ADJUSTED EBITDA $1.195 billion to $1.235 billion, including adjusted EBITDA of $574 million to $614 mi
Slide 11: Pro forma balance sheet and liquidity as of June 30, 2021
INVESTOR PRESENTATION SEPTEMBER 2021 Pro forma balance sheet and liquidity as of June 30, 2021 1 Commentary ▪ In July, GXO issued $800 million of five - year and 10 - year notes; $794 million of net proceeds were used for a cash distribution to XPO in conjunction with the spin - off ▪ In July, XPO r
Slide 12: Strong ESG culture, with chief diversity officer leading DE&I
INVESTOR PRESENTATION SEPTEMBER 2021 Strong ESG culture, with chief diversity officer leading DE&I W o rk fo rc e and Talent Employee and Community Safety Diversity, Equity and Inclusion Info rma tion Security Environmental and Sustainability Governance ESG S c o r eca rd T a r g e t Ar ea s ESG tar
Slide 13: Less-than-truckload (LTL)
L e s s - th a n - t r u ckl o a d ( L TL)
Slide 14: XPO is a top three provider of LTL transportation in North America
INVESTOR PRESENTATION SEPTEMBER 2021 Note: LTL is the transportation of a quantity of freight that is larger than a parcel but too small to require an entire truc k, often shipped on pallets. Freight for different customers is consolidated in the same trailer. XPO is a top three provider of LTL tran
Slide 15: Key LTL operating and financial metrics
INVESTOR PRESENTATION SEPTEMBER 2021 TTM r evenue $3.9 billion TTM adjusted operating ratio 83.0% 2 Key LTL operating and financial metrics 1 Source: Third - party research 2 Excluding gains from sales of real estate Refer to the “Non - GAAP Financial Measures” section on page 2 and Supplemental Mat
Slide 16: Scaled LTL network represents multiple decades of investment
INVESTOR PRESENTATION SEPTEMBER 2021 Scaled LTL network represents multiple decades of investment Note: As of August 30, 2021 291 terminals ensure LTL coverage in every major area, including ~99% of all US zip codes and key coverage in Canada 16
Slide 17: Over 1,000 bps improvement in LTL adjusted operating margin since 2015
INVESTOR PRESENTATION SEPTEMBER 2021 Over 1,000 bps improvement in LTL adjusted operating margin since 2015 7% 1 7 % 2 0 15 TTM J une 30, 2021 1 Excluding gains from sales of real estate Refer to the “Non - GAAP Financial Measures” section on page 2 and Supplemental Materials for related information
Slide 18: North America LTL pricing fundamentals are favorable
INVESTOR PRESENTATION SEPTEMBER 2021 North America LTL pricing fundamentals are favorable for long - term expansion $ 16 . 48 $ 17 . 20 $ 17 . 32 $ 19 . 03 $ 18.63 $ 18.27 $ 17.70 2015 2016 2017 2018 2019 2020 TTM June 30, 2021 1 Excludes the impact of fuel surcharges XPO LTL GROSS REVENUE PER HUNDR
Slide 19: XPO Smart intelligent productivity tools optimize LTL variable labor spend
INVESTOR PRESENTATION SEPTEMBER 2021 XPO Smart Πintelligent productivity tools optimize LTL variable labor spend XPO expects to realize major productivity enhancements as software is fully utilized in LTL network Proprietary technology uses machine learning to become continually smarter at site - s
Slide 20: Truck brokerage
T ru c k b r o kera g e
Slide 21: XPO is the second largest truck broker worldwide
INVESTOR PRESENTATION SEPTEMBER 2021 Note: Truck brokerage is a non - asset business that facilitates the movement of full truckloads of freight, typically from a sing le shipper. A broker purchases truck capacity from independent carriers. XPO is the second largest truck broker worldwide ▪ Massive
Slide 22: Key truck brokerage operating and financial metrics
INVESTOR PRESENTATION SEPTEMBER 2021 T TM revenue June 30, 2021 $2.2 billion Key truck brokerage operating and financial metrics 1 Source: Third - party research XPO BROKERAGE FINANCIAL METRIC Industry size, North America $64 billion 1 XPO’s industry share ~3% Average tenure of XPO’s top 10 customer
Slide 23: Brokers have been steadily capturing truckload share for decades
INVESTOR PRESENTATION SEPTEMBER 2021 6% 7% 7% 7% 21% 20% 19% 17% 16% 14% 14% 13% 12% 12% 11% 11% 10% 10% 10% 9% 8% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Source: Third - party research Brokers have been steadily capturing truckload sh
Slide 24: XPO's brokerage revenue CAGR has outperformed industry by more than 3x
INVESTOR PRESENTATION SEPTEMBER 2021 XPO’s brokerage revenue CAGR has outperformed industry by more than 3x 1 Third - party research: North American truck brokerage industry size; reflects brokered component of ~$360 billion total addressable truckload opportunity $39 billion $64 billion 2013 2020 $
Slide 25: XPO Connect is our cutting-edge digital freight platform
INVESTOR PRESENTATION SEPTEMBER 2021 XPO Connect Œ is our cutting - edge digital freight platform ▪ Improves transportation procurement by providing deep visibility into available capacity and market conditions ▪ Captures high - margin opportunities with proprietary pricing technology ▪ Optimizes sh
Slide 26: Digital adoption on XPO Connect
INVESTOR PRESENTATION SEPTEMBER 2021 Total Drive XPO app downloads Total registered carrier users Total registered customer users CARRIERS WANT DIGITAL ACCESS TO LOADS THAT XPO CONNECT ΠOFFERS Total digital brokerage orders Note: All data is cumulative as of June 30, 2021 MORE THAN 6X INCREASE IN C
Slide 27: Drive XPO app downloads over 500,000
INVESTOR PRESENTATION SEPTEMBER 2021 FREIGHT M ANA G E M E N T CARRIER SCORE AND REWARDS CAPACITY POSTING LOAD BOOKING Drivers have downloaded the Drive XPO Œ app over 500,000 times More than 3x the cumulative downloads of a year ago ▪ Proprietary mobile app gives truck drivers access to the XPO Con
Slide 28: Supplemental materials
Supplemen t al materials
Slide 29: Highly skilled management team
INVESTOR PRESENTATION NOVEMBER 2020 Highly skilled management team Brad Jacobs Chief Executive Officer United Rentals, United Waste Lou Amo President, Truck Brokerage – North America Electrolux, Union Pacific, Odyssey Logistics Josephine Berisha Chief Human Resources Officer Morgan Stanley Tony Broo
Slide 30: Highly diversified revenue across attractive verticals
INVESTOR PRESENTATION SEPTEMBER 2021 Industrial and Manufacturing 38% Retail and E - commerce 22% Consumer Goods 7% Food and Beverage 8% Logistics and Transportation 8% Other 17% TTM June 30, 2021 Pro forma for spin - off of logistics segment XPO REVENUE DIVERSIFICATION BY VERTICALS Highly diversifi
Slide 31: Last mile logistics for heavy goods
INVESTOR PRESENTATION SEPTEMBER 2021 142 146 170 200 232 263 302 346 397 459 520 598 840 914 1,006 1,105 1,210 2008A 2009A 2010A 2011A 2012A 2013A 2014A 2015A 2016A 2017A 2018A 2019A 2020A 2021E 2022E 2023E 2024E #1 last mile logistics provider for heavy goods TTM revenue $1 billion Hub locations 85
Slide 32: XPO holds leading transportation positions in key European geographies
INVESTOR PRESENTATION SEPTEMBER 2021 XPO holds leading transportation positions in key European geographies TRUCK BROKERAGE #1 LTL provider in France and Iberia #1 single - owner LTL network in the UK ▪ Approximately 100 LTL locations serving countries across Europe ▪ Optimal LTL operating model uti
Slide 33: XPO is widely recognized for performance and culture
INVESTOR PRESENTATION SEPTEMBER 2021 XPO is widely recognized for performance and culture ▪ Named one of the World’s Most Admired Companies by Fortune, 2018, 2019, 2020, 2021 ▪ Ranked #1 in the Fortune 500 category of Transportation and Logistics, 2017, 2018, 2019, 2020, 2021 ▪ Named one of Spain’s
Slide 34: Selected highlights of XPO's people-first culture
INVESTOR PRESENTATION SEPTEMBER 2021 Select ed highlights of XPO’s people - first culture ▪ Road to Zero program helped decrease the percentages of distracted driving, lost work days and crashes by double - digits in 2020 ▪ Appointed a Chief Diversity Officer and launched a Diversity and Inclusion C
Slide 35: XPO is strongly committed to sustainability
INVESTOR PRESENTATION SEPTEMBER 2021 XPO is strongly committed to sustainability ▪ CarbonNET, XPO’s proprietary, cloud - based calculator, helps document emission sources, activity data and CO 2 calculations ▪ Named a Top 75 Green Supply Chain Partner by Inbound Logistics for 2016, 2017, 2018, 2019,
Slide 36: Business glossary
INVESTOR PRESENTATION SEPTEMBER 2021 Business glossary XPO SERVICES ▪ Less - than - truckload (LTL): LTL is the transportation of a quantity of freight that is larger than a parcel but too small to require an entire truck, and is often shipped on a pallet. LTL shipments are priced according to the w
Slide 37: Financial reconciliations
INVESTOR PRESENTATION SEPTEMBER 2021 Financial reconciliations The following table reconciles XPO’s pro forma net income (loss) attributable to common shareholders for the periods ended June 30, 2021 and 2020 to pro forma adjusted EBITDA for the same periods. Note: NM = not meaningful 1 Relates to S
Slide 38: Financial reconciliations (cont.)
INVESTOR PRESENTATION SEPTEMBER 2021 Financial reconciliations (cont.) 1 Q2 2020 was recast to exclude the amortization of acquisition - related intangible assets 2 Calculated by applying the overall estimated effective tax rate to the pre - tax amount, unless the nature of the item and/or tax juris
Slide 39: Financial reconciliations (cont.)
INVESTOR PRESENTATION SEPTEMBER 2021 1 Operating income (loss) has been derived from XPO's historical financial statements for the periods presented Refer to the “Non - GAAP Financial Measures” section on page 2 of this document The following table reconciles XPO’s pro forma operating income (loss)
Slide 40: Financial reconciliations (cont.)
INVESTOR PRESENTATION SEPTEMBER 2021 Financial reconciliations (cont.) The following table reconciles XPO’s operating income attributable to the company’s North American less - than - truckload business for the trailing twelve months ended June 30, 2021, the quarters ended June 30, 2021 and 2020, th
Slide 41: Financial reconciliations (cont.)
INVESTOR PRESENTATION SEPTEMBER 2021 1 Relates to the conversion of 69,445 shares of the company's Series A Preferred Stock 2 Relates to Series A Preferred Stock and comprises actual preferred stock dividends and non - cash allocation of undistributed earnings 3 Calculated by applying the overall es
XPO Logistics — Investor Presentation (September 2021) on 6ix