FedEx Corporation · NYSE:FDX
FedEx — Non-Deal Roadshow (December 2020)
33 slides from FedEx's roadshow presentation, Dec 17, 2020
Slide 1: FedEx Corporation Investor Relations
FedEx Corporation Investor Relations December 17, 2020
Slide 2: Forward-Looking Statements
Forward-Looking Statements Certain statements in this presentation may be considered forward-looking statements, such as statements relating to management’s views with respect to future events and financial performance and underlying assumptions. Forward-looking statements include those preceded by,
Slide 3: Unmatched Global Network
Unmatched Global Network Links More Than 99% of World’s GDP • Over 220 countries and territories, every address in the U.S. • 680 aircraft and more than 200,000 motorized vehicles • More than 5,000 operating facilities; more than 650 airports served worldwide • Sorts and processes over 18M shipments
Slide 4: Broad Portfolio of Services
Broad Portfolio of Services FY20 Revenues: $69.2 billion Team Members: Nearly 600,000 Countries and Territories Served: More than 220 $35.5 Billion 51% Express $22.7 Billion 33% Ground $7.1 Billion 10% Freight $3.8 Billion* 6% Other & eliminations* FedEx Express, FedEx Ground, and FedEx Freight show
Slide 5: Strategic Operating Principles
Strategic Operating Principles “Ultimately, this creates greater value for our customers and shareholders alike.” - Frederick W. Smith, FedEx Corporation – Chairman & CEO Compete Collectively • FedEx brand unites distinct operating companies • Significant majority of U.S. revenue derived from custom
Slide 6: Bundle of Solutions
Bundle of Solutions % of U.S. Revenue • Our portfolio of solutions creates a strong value proposition FedEx Express (FXE) 1.3% • 97.1% of U.S. revenue comes from customers of two or more operating FXE+FXG FXE+FXF companies 16.3% All 0.2% Opcos • We manage service offerings as 80.4% a portfolio for t
Slide 7: FedEx Long-Term Financial Goals
FedEx Long-Term Financial Goals • Increase EPS 10%–15% per year • Grow profitable revenue • Achieve 10%+ operating margin • Improve cash flows • Increase ROIC • Increase returns to shareowners
Slide 8: Positioning for Long-Term Growth
Positioning for Long-Term Growth • E-commerce, including B2B e-commerce, is increasing demand for our services • FedEx Express integrating TNT and continuing to transform and optimize the FedEx Express international business while modernizing its aircraft fleet and major sort facilities • FedEx Grou
Slide 9: FedEx Business Trends
FedEx Business Trends Meeting E-Commerce Demands • Year-round, seven-day-per-week U.S. residential delivery by FedEx Ground began Jan. 2020 • Significantly later pick up times offered with FedEx Extra Hours Service • Expanding our retail convenience network with Walgreens, Dollar General, and our ow
Slide 10: COVID-19
COVID-19 • The safety and well-being of FedEx team members and customers remains our first priority. • Incurred approximately $150 million in COVID-19-related costs during FY21 to provide team members with personal protective equipment and medical/safety supplies, as well as additional security and
Slide 11: 92% of people in the U.S. are within 5 miles of a FedEx hold location
92% of people in the U.S. are within 5 miles of a FedEx hold location Customers want to drop off or pick up at places convenient to their everyday lives — the FedEx retail convenience network offers 60,000 U.S. locations. Now U.S. consumers can pick up their packages at more than 20,000 convenient,
Slide 12: Pricing Strategy: Grow Yields
Pricing Strategy: Grow Yields • Focused on long-term profitable growth • FedEx Express and FedEx Ground increasing shipping rates an average of 4.9% in January 2021 • FedEx Freight increasing rates an average of 4.9%-5.9% in January 2021 • Implementing temporary peak surcharges due to a surge in res
Slide 13: FedEx Express: Long-Term Opportunity
FedEx Express: Long-Term Opportunity • Integration of TNT will provide growth opportunities and reduce operational costs • Improving hub automation • Modernizing air fleet for greater reliability and fuel efficiency • Continuing yield management • International revenue growth
Slide 14: Aligning Synergies with TNT Integration
Aligning Synergies with Integration focused on more complex, higher value markets Integrated Improved Efficiency of Grow Revenue With Optimized Pickup and Global Express Staff Functions and Best-In-Class Service Delivery Operations Network Processes (SG&A) Portfolio
Slide 15: Milestones for Integration
Milestones for Integration End of FY20 FY21 FY22 • European Ground • Integrating linehaul • • Final International air phase of air Interoperability- and pickup-and- network network integration Flow volume delivery operations interoperability between networks supported by • Will begin offering techno
Slide 16: FedEx Ground: Building A Better Business
FedEx Ground: Building A Better Business • Superior service, innovation and speed advantage • Three distinct services: FedEx Ground®, FedEx Home Delivery®, FedEx SmartPost® • Flexible business model • Now operating seven days per week year- round in the U.S., with residential delivery on Sundays to
Slide 17: Strong Portfolio of Residential Package Services
Strong Portfolio of Residential Package Services FedEx Express FedEx Ground FedEx Ground • 1–2 days transit time Home Delivery: SmartPost: • Time-definite • 1–5 days transit time • 2–8 days transit time • MBG* • Day-definite • No MBG • Declared value up • MBG* • No declared value to $50K • Declared
Slide 18: FedEx Ground Revenue Market Share Has Grown to more than 30%
FedEx Ground Revenue Market Share Has Grown to more than 30% $70 50% $60 Revenue ($ Billions) 40% $50 Market Share 30% $40 $30 20% $20 10% $10 $0 0% CY98 CY99 CY00 CY01 CY02 CY03 CY04 CY05 CY06 CY07 CY08 CY09 CY10 CY11 CY12 CY13 CY14 CY15 CY16 CY17 CY18 CY19 FedEx Ground/FedEx SmartPost Revenue FedE
Slide 19: FedEx Ground Annual Revenue of $21B with a CAGR of 12%
FedEx Ground Annual Revenue of $21B with a CAGR of 12% Since 2001 $24 Revenue ($ Billions) $20 $16 $12 $8 $4 $0 CY01 CY02 CY03 CY04 CY05 CY06 CY07 CY08 CY09 CY10 CY11 CY12 CY13 CY14 CY15 CY16 CY17 CY18 CY19 FedEx Ground/FedEx SmartPost Revenue Source: FedEx analysis, $22.7 billion revenue for FY20.
Slide 20: FedEx Freight: Competitive Advantages
FedEx Freight: Competitive Advantages • The only nationwide LTL that offers Priority and Economy service from one network • Priority: Fastest published times of any nationwide LTL* • Focused on improving margins with a better balance of volume, pricing and capacity • Expanding FedEx Freight Direct s
Slide 21: LTL Industry Revenue Market Share
LTL Industry Revenue Market Share 30% FedEx YRCW XPO UPS Freight ODFL ABFS Saia 25% 20% 15% 10% 5% 0% CY04 CY05 CY06 CY07 CY08 CY09 CY10 CY11 CY12 CY13 CY14 CY15 CY16 CY17 CY18 CY19 Source: FedEx Analysis
Slide 22: Corporate Social Responsibility
Corporate Social Responsibility Environmental Impact • 40% reduction in CO2 emissions intensity on a revenue basis from FY09-FY19 • Reduced aircraft emissions intensity by 24% through FY19 from a 2005 baseline • Increased FedEx Express vehicle fuel efficiency by 41% through FY19 from a 2005 baseline
Slide 23: Corporate Social Responsibility- Awards & Recognition
Corporate Social Responsibility- Awards & Recognition • World’s Most Admired Companies 2020 - FORTUNE • This is the 20th consecutive year that FedEx has ranked among the top 20 in the FORTUNE Most Admired Companies List. • World’s Best Employers for Diversity 2020 - FORBES • America’s Most Responsib
Slide 24: Corporate Operating Margin
Corporate Operating Margin 12.0% 10.0% 8.2% 8.0% 7.6% 7.8% 7.5% 6.5% 6.4% 6.0% 4.5% 4.0% 3.5% 2.0% 0.0% FY17 FY18 FY19 FY20 GAAP Adjusted Non-GAAP reconciliations are included herein.
Slide 25: Earnings Per Share
Earnings Per Share $18.00 $16.79 $16.00 $15.31 $15.52 $14.00 $12.09 $12.00 $11.07 $10.00 $9.50 $8.00 $6.00 $4.90 $4.00 $2.03 $2.00 $0.00 FY17 FY18 FY19 FY20 GAAP Adjusted Non-GAAP reconciliations are included herein.
Slide 26: Capital Expenditures
Capital Expenditures (% of Revenues) 12.0% 10.0% 9.6% 9.2% 8.5% 8.7% 8.5% 7.9% 8.0% 6.0% 4.0% 2.0% 0.0% FY15 FY16 FY17 FY18 FY19 FY20
Slide 27: Dividends Per Share
Dividends Increased at a 5-Year CAGR of 26% $2.50 Dividends Per Share $2.00 $1.50 $1.00 $0.50 $0.00 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 From FY15 through FY20, FedEx returned over $9.8 billion to shareowners through repurchases and dividends, includin
Slide 28: Explanatory Note on Non-GAAP Financial Measures
Explanatory Note on Non-GAAP Financial Measures The company reports its financial results in accordance with accounting principles generally accepted in the United States (“GAAP”). We have supplemented the reporting of our financial information determined in accordance with GAAP with certain non-GAA
Slide 29: FY20 Reconciliation for FedEx Corp.
FY20 Reconciliation for FedEx Corp. Dollars in millions, except EPS Op Op Income Net Diluted Income Margin Taxes1 Income2 EPS GAAP Measure $2,417 3.5% $383 $1,286 $4.90 Mark-to-Market Retirement Plan — — 211 583 2.22 Accounting Adjustment3 Goodwill And Other Asset Impairment 435 0.6% 19 416 1.58 Cha
Slide 30: FY19 Reconciliation for FedEx Corp.
FY19 Reconciliation for FedEx Corp. Dollars in millions, except EPS Op Op Income Net Diluted Income Margin6 Taxes1 Income2 EPS GAAP Measure $4,466 6.4% $115 $540 $2.03 Mark-to-Market Retirement Plan --- --- 902 2,981 11.22 Accounting Adjustment3 TNT Express Integration Expenses5 388 0.6% 74 314 1.18
Slide 31: FY18 Reconciliation for FedEx Corp.
FY18 Reconciliation for FedEx Corp. Dollars in millions, except EPS Op Op Income Net Diluted Income Margin Taxes1,6 Income2,6 EPS GAAP Measure $4,272 6.5% ($219) $4,572 $16.79 FedEx Supply Chain Goodwill and 380 0.6% 1 379 1.39 Other Asset Impairments4 TNT Express Integration Expenses5 477 0.7% 105
Slide 32: FY17 Reconciliation for FedEx Corp.
FY17 Reconciliation for FedEx Corp. Dollars in millions, except EPS Op Op Income Net Diluted Income Margin Taxes1 Income2 EPS6 GAAP Measure $4,566 7.6% $1,582 $2,997 $11.07 Mark-to-Market Retirement Plan --- --- (18) (6) (0.02) Accounting Adjustment3 TNT Express Integration Expenses5 327 0.5% 82 245
Slide 33: Footnotes for Non-GAAP Reconciliation Slides
Footnotes for Non-GAAP Reconciliation Slides 1 – Income taxes are based on the company’s approximate statutory tax rates applicable to each transaction and give consideration to the effects of the TCJA on the applicable rates. 2 – Effect of “Total other (expense) income” on net income amount not sho