Ryder System, Inc. · NYSE:R

Ryder System — Q4 2020 Earnings Presentation

48 slides from Ryder System's earnings presentation, Feb 11, 2021

  1. Slide 1: Fourth Quarter 2020 Earnings & 2021 Outlook Conference Call

    Proprietary and Confidential Fourth Quarter 2020 Earnings & 2021 Outlook Conference Call February 11, 2021

  2. Slide 2: Safe Harbor and Non-GAAP Financial Measures

    © 2021 Ryder System, Inc. All Rights Reserved 2 Safe Harbor and Non-GAAP Financial Measures Note Regarding Forward-Looking Statements: Certain statements and information included in this presentation are “forward-looking statements” under the Federal Private Securities Litigation Reform Act of 1995,

  3. Slide 3: Contents

    © 2021 Ryder System, Inc. All Rights Reserved 3 Contents 4Q20 Earnings & 2021 Outlook Note Regarding Forward Looking Statements Slide 2 2020 Overview and 4Q20 Results Slides 4 - 9 Targets and Outlook Slides 10 - 16 Progress on Actions to Reach ROE Target Slides 17 - 19 Appendix & Non-GAAP Financial

  4. Slide 4: 2020 Overview

    @ 2021 Ryder System, Inc. All Rights Reserved 4 2020 Overview Cash Flow / Leverage / Liquidity Operating Performance / COVID Effects Macro Environment Strategic Focus • Negative impact from prior residual value estimate changes and COVID, partially offset by higher lease results and lower maintenanc

  5. Slide 5: Results Overview

    @ 2021 Ryder System, Inc. All Rights Reserved 5 Results Overview Note: See Appendix for reconciliations of non-GAAP financial measures including Operating Revenue, Comparable EPS, Adjusted ROE and Free Cash Flow $1.84B $1.84B 4Q19 4Q20 4Q Operating Revenue Higher SCS offset by lower FMS/DTS $(1.1)B

  6. Slide 6: 4th Quarter Results Overview – FMS

    @ 2021 Ryder System, Inc. All Rights Reserved 6 4th Quarter Results Overview – FMS Declined 3% primarily due to: • 7% lower rental revenue, • partially offset by higher lease revenue Earnings improvement of $141 million reflects: • $62 million YOY earnings benefit from declining depreciation expense

  7. Slide 7: Global Used Vehicle Sales Update – FMS

    © 2021 Ryder System, Inc. All Rights Reserved 7 Global Used Vehicle Sales Update – FMS 15% 22% 13% 16% Tractors Trucks Tractors Trucks % Change in Proceeds* vs. 4Q19 • Higher proceeds primarily reflect improved market pricing and, to a lesser extent, higher retail mix • U.S. only: Since 2Q20, our tr

  8. Slide 8: 4th Quarter Results Overview – SCS

    @ 2021 Ryder System, Inc. All Rights Reserved 8 4th Quarter Results Overview – SCS 8% increase reflects: • new business, higher pricing and increased volumes • growth in consumer packaged goods, retail and automotive 5% increase reflects: • higher pricing and new business • partially offset by favor

  9. Slide 9: 4th Quarter Results Overview – DTS

    @ 2021 Ryder System, Inc. All Rights Reserved 9 4th Quarter Results Overview – DTS Operating Revenue Earnings Before Tax (EBT) $241M $231M 4Q19 4Q20 $18M $15M 4Q19 4Q20 7.5% 6.6%EBT as % of Operating Revenue 4% decline due to lower contractual sales in late 2019 and early 2020 16% decline due to fav

  10. Slide 10: Our primary financial target relates to Return on Equity

    © 2021 Ryder System, Inc. All Rights Reserved 10 Our primary financial target relates to Return on Equity Adjusted Return on Equity Interim target 11% Long-term target over the cycle 15% Component drivers to achieve ROE target include: Operating Revenue Growth Fleet Management Mid Single Digit Suppl

  11. Slide 11: 2021 Outlook

    © 2021 Ryder System, Inc. All Rights Reserved 11 2021 Outlook* General • Moderate economic growth environment • Mid-single digit YOY operating revenue growth; ◦ SCS and DTS in high-single digit target range ◦ FMS below mid-single digit target range • Expect FY21 tax rate to be in normalized range of

  12. Slide 12: Disciplined Capital Allocation

    @ 2021 Ryder System, Inc. All Rights Reserved 12 Disciplined Capital Allocation Revised capital allocation strategy in late 2019 to achieve ROE target and generate positive free cash flow over the cycle

  13. Slide 13: Capital Expenditures

    © 2021 Ryder System, Inc. All Rights Reserved 13 Capital Expenditures Lease Rental Normalized Replacement CapEx (1) ~ $450M $2.9B $0.9B $1.5B FY 19 FY 20 FY 21F $557M $85M $550M FY 19 FY 20 FY 21F Normalized Replacement CapEx (1) ~ $1.3-1.4B Lease fleet expected to modestly decline Rental fleet expe

  14. Slide 14: Free Cash Flow, Adjusted ROE & Comparable EBITDA

    @ 2021 Ryder System, Inc. All Rights Reserved 14 Free Cash Flow, Adjusted ROE & Comparable EBITDA $0.2B $-0.9B $-1.1B $1.6B $0.55B FY 17 FY 18 FY 19 FY 20 FY 21F Free Cash Flow * Midpoint of $400 - $700 million forecast range * • Declining depreciation impact from 2019 and 2020 residual value estima

  15. Slide 15: Strategic Initiative Highlights

    © 2021 Ryder System, Inc. All Rights Reserved 15 Strategic Initiative Highlights SCS / DTS SCS SCS FMS FMSSCS / DTS

  16. Slide 16: EPS – Continuing Operations

    © 2021 Ryder System, Inc. All Rights Reserved 16 EPS – Continuing Operations ($ Earnings Per Share) Full Year EPS 2021 Forecast 2020 GAAP $4.18 - $4.68 $(2.15) Comparable $4.15 - $4.65 $(0.27) First Quarter EPS 2021 Forecast 2020 GAAP $0.30 - $0.40 $(2.09) Comparable $0.50 - $0.60 $(1.38) Note: See

  17. Slide 17: Key Drivers to Reach Long-Term Adjusted ROE Target

    © 2021 Ryder System, Inc. All Rights Reserved 17 Key Drivers to Reach Long-Term Adjusted ROE Target 1 2020 ROE (1.3)% Declining Impact from 2019 & 2020 Depreciation Changes Rental Recovery Maintenance / Cost Initiatives SCS/DTS Growth Adjusted ROE expected to approach interim target of 11% in FY21 d

  18. Slide 18: Progress on Actions to Reach Adjusted ROE Target

    © 2021 Ryder System, Inc. All Rights Reserved 18 Progress on Actions to Reach Adjusted ROE Target Impact of Depreciation Changes / Cyclical Upturn in Used Vehicle Sales • Improving used vehicle market conditions • Expanding retail sales capacity - increase locations and online sales capabilities • D

  19. Slide 19: Progress on Actions to Reach Adjusted ROE Target

    © 2021 Ryder System, Inc. All Rights Reserved 19 Progress on Actions to Reach Adjusted ROE Target Maintenance Cost Initiative & Other Cost Actions • Achieved $30M annual savings target from $100M multi-year maintenance cost savings initiative in 2020; $50M+ savings achieved program to date ◦ Expect

  20. Slide 20: Q&A

    © 2021 Ryder System, Inc. All Rights Reserved 20 Q&A

  21. Slide 21: Appendix

    © 2021 Ryder System, Inc. All Rights Reserved 21 Appendix Segment Comparable EBITDA ChoiceLease Fleet Count - Active Fleet Key Financial Statistics Business Segment Detail Central Support Services Balance Sheet Segment Balance Sheet Asset Management Non-GAAP Financial Measures & Reconciliations

  22. Slide 22: Fourth Quarter Comparable Segment EBITDA

    © 2021 Ryder System, Inc. All Rights Reserved 22 Fourth Quarter Comparable Segment EBITDA 4Q20 FMS SCS DTS CSS/ELIMS Net segment earnings $ 53 $ 24 $ 13 $ (64) Income taxes 7 10 2 (22) Non-operating pension costs (2) — — — 2 Other items impacting comparability (2) — — — 23 EBT 60 34 15 (61) Interest

  23. Slide 23: Full Year Comparable Segment EBITDA

    © 2021 Ryder System, Inc. All Rights Reserved 23 Full Year Comparable Segment EBITDA 2020 YTD FMS SCS DTS CSS/ELIMS Net segment earnings $ (113) $ 118 $ 60 $ (178) Income taxes (29) 42 13 (44) Non-operating pension costs (2) — — — 11 Other items impacting comparability (2) — — — 90 EBT (142) 160 74

  24. Slide 24: ChoiceLease Fleet Count - Active Fleet

    © 2021 Ryder System, Inc. All Rights Reserved 24 ChoiceLease Fleet Count - Active Fleet Change ChoiceLease 2020 2019 2020 / 2019 Average Active Vehicles (1) 145,500 144,300 1% Revenue per Average Active Vehicle (2) $ 21,700 $ 21,300 2% End of Period Active Vehicles 142,300 147,400 (3)% (1) Active Ch

  25. Slide 25: Business Segments

    © 2021 Ryder System, Inc. All Rights Reserved 25 Business Segments NM - Not meaningful Note: Amounts may not be additive due to rounding. (1) Our primary measure of segment financial performance excludes unallocated CSS, non-operating pension costs and other items impacting comparability. ($ Million

  26. Slide 26: Business Segments

    © 2021 Ryder System, Inc. All Rights Reserved 26 Business Segments Memo: Operating Revenue 2020 2019 % B/(W) 2020 2019 % B/(W) Total Revenue: Fleet Management Solutions $ 5,170.5 $ 5,571.4 (7) % $ 4,577.6 $ 4,719.8 (3) % Supply Chain Solutions 2,544.4 2,551.3 — % 1,870.4 1,880.0 (1) % Dedicated Tran

  27. Slide 27: Fleet Management Solutions (FMS) Fourth Quarter

    © 2021 Ryder System, Inc. All Rights Reserved 27 Fleet Management Solutions (FMS) Fourth Quarter ($ Millions) Revenue 2020 2019 % B/(W) ChoiceLease $ 813.4 $ 809.0 1 % SelectCare 123.9 135.8 (9) % Commercial Rental 239.2 256.1 (7) % Other 16.6 23.6 (30) % FMS Operating Revenue 1,193.2 1,224.5 (3) %

  28. Slide 28: Fleet Management Solutions (FMS) Full Year

    © 2021 Ryder System, Inc. All Rights Reserved 28 Fleet Management Solutions (FMS) Revenue 2020 2019 % B/(W) ChoiceLease $ 3,159.9 $ 3,077.1 3 % SelectCare 514.3 541.4 (5) % Commercial Rental 834.2 1,009.1 (17) % Other 69.1 92.3 (25) % FMS Operating Revenue 4,577.6 4,719.8 (3) % Fuel Services Revenue

  29. Slide 29: Supply Chain Solutions (SCS) Fourth Quarter

    © 2021 Ryder System, Inc. All Rights Reserved 29 Supply Chain Solutions (SCS) ($ Millions) Fourth Quarter Revenue 2020 2019 % B/(W) Automotive $ 175.5 $ 164.4 7 % Technology & Healthcare 55.1 59.3 (7) % CPG & Retail 223.6 192.4 16 % Industrial & Other 51.6 50.3 3 % SCS Operating Revenue 505.7 466.4

  30. Slide 30: Supply Chain Solutions (SCS) Full Year

    © 2021 Ryder System, Inc. All Rights Reserved 30 Supply Chain Solutions (SCS) ($ Millions) Revenue 2020 2019 % B/(W) Automotive $ 638.3 $ 693.2 (8) % Technology & Healthcare 223.0 268.3 (17) % CPG & Retail 814.1 736.1 11 % Industrial & Other 195.1 182.4 7 % SCS Operating Revenue 1,870.4 1,880.0 (1)

  31. Slide 31: Dedicated Transportation Solutions (DTS) Fourth Quarter

    © 2021 Ryder System, Inc. All Rights Reserved 31 Dedicated Transportation Solutions (DTS) ($ Millions) Fourth Quarter Revenue 2020 2019 % B/(W) DTS Operating Revenue $ 231.0 $ 241.3 (4) % Subcontracted Transportation 43.4 69.5 (38) % Fuel 26.5 35.6 (26) % DTS Total Revenue $ 300.9 $ 346.4 (13) % Ear

  32. Slide 32: Dedicated Transportation Solutions (DTS) Full Year

    © 2021 Ryder System, Inc. All Rights Reserved 32 Dedicated Transportation Solutions (DTS) ($ Millions) Revenue 2020 2019 % B/(W) DTS Operating Revenue $ 929.2 $ 972.7 (4) % Subcontracted Transportation 191.9 299.5 (36) % Fuel 108.2 145.3 (26) % DTS Total Revenue $ 1,229.4 $ 1,417.5 (13) % Earnings B

  33. Slide 33: Central Support Services (CSS)

    © 2021 Ryder System, Inc. All Rights Reserved 33 Central Support Services (CSS) Fourth Quarter ($ Millions) 2020 2019 % B/(W) Allocated CSS Costs $ 68.1 $ 62.5 (9) % Unallocated CSS Costs 49.3 14.7 NM Total CSS Costs $ 117.4 $ 77.1 (52) % 2020 2019 % B/(W) Allocated CSS Costs $ 247.3 $ 242.4 (2) % U

  34. Slide 34: Balance Sheet

    © 2021 Ryder System, Inc. All Rights Reserved 34 Balance Sheet ($ Millions) December 31, 2020 December 31, 2019 Cash and Cash Equivalents $ 151 $ 74 Other Current Assets 1,444 1,488 Revenue Earning Equipment, Net 8,777 10,428 Operating Property and Equipment, Net 927 918 Other Assets 1,632 1,568 Tot

  35. Slide 35: Selected Segment Balance Sheet Items

    © 2021 Ryder System, Inc. All Rights Reserved 35 Selected Segment Balance Sheet Items ($ Millions) General: These results reflect management's reporting of selected segment balance sheet accounts. These amounts would differ if presented as standalone entities. (1) FMS amounts include CSS assets and

  36. Slide 36: © 2021 Ryder System, Inc. All Rights Reserved 36

    © 2021 Ryder System, Inc. All Rights Reserved 36

  37. Slide 37: Non-GAAP Financial Measures

    © 2021 Ryder System, Inc. All Rights Reserved 37 Non-GAAP Financial Measures This presentation includes “non-GAAP financial measures” as defined by SEC rules. As required by SEC rules, we provide a reconciliation of each non-GAAP financial measure to the most comparable GAAP measure. Non-GAAP financ

  38. Slide 38: Reconciliation of Total to Operating Revenue

    © 2021 Ryder System, Inc. All Rights Reserved 38 Reconciliation of Total to Operating Revenue Full Year 2020 2019 Total Revenue $ 2,213 $ 2,277 Fuel and Subcontracted Transportation (371) (428) ChoiceLease Liability Insurance Revenue (1) (2) (10) Operating Revenue $ 1,839 $ 1,839 2020 2019 Total Rev

  39. Slide 39: Earnings (Loss) and EPS from Continuing Operations Reconciliation

    © 2021 Ryder System, Inc. All Rights Reserved 39 Earnings (Loss) and EPS from Continuing Operations Reconciliation ($ Millions, except Per Share Data) 4Q20 4Q20 4Q19 4Q19 Earnings EPS Earnings EPS Continuing operations (GAAP) $ 25.8 $ 0.48 $ (53.1) $ (1.02) Non-operating pension costs 0.6 0.01 30.6

  40. Slide 40: Earnings (Loss) Before Income Tax and Tax Rate Reconciliation

    © 2021 Ryder System, Inc. All Rights Reserved 40 Earnings (Loss) Before Income Tax and Tax Rate from Continuing Operations Reconciliation ($ Millions) 4Q20 YTD20 EBT Tax Tax Provision (Benefit) EBT Tax Tax Provision (Benefit) Continuing operations (GAAP) $ 23.3 $ (2.5) (10.6) % $ (130.4) $ (18.4) (1

  41. Slide 41: Comparable EPS Forecast Reconciliation

    © 2021 Ryder System, Inc. All Rights Reserved 41 Comparable EPS Forecast Reconciliation First Quarter 2021 Full Year 2021 EPS from continuing operations (GAAP) $0.30 - $0.40 $4.18 - $4.68 Non-operating pension costs (0.03) (0.13) Tax adjustments 0.01 0.04 ERP implementation 0.11 0.16 Restructuring a

  42. Slide 42: Adjusted Return on Equity Reconciliation

    © 2021 Ryder System, Inc. All Rights Reserved 42 Adjusted Return on Equity Reconciliation ($ Millions) 2019 2020 2021 Forecast Net earnings (2) $ (24) $ (122) $ 240 Other items impacting comparability (7) 38 90 10 Income taxes (3) (19) (18) 85 Adjusted earnings before income taxes (5) (50) 335 Adjus

  43. Slide 43: Adjusted Return on Capital Reconciliation

    © 2021 Ryder System, Inc. All Rights Reserved 43 Adjusted Return on Capital Reconciliation ($ Millions) (1) Non-GAAP elements of this calculation have been reconciled to the corresponding GAAP measures. A numerical reconciliation of net earnings to adjusted net earnings and average total debt and av

  44. Slide 44: Comparable EBITDA Reconciliation

    © 2021 Ryder System, Inc. All Rights Reserved 44 Comparable EBITDA Reconciliation ($ Millions) 2012 2013 2014 Net earnings (loss) $ 209.8 $ 237.9 $ 218.3 Loss (earnings) from discontinued operations, net of tax (9.1) 5.4 1.9 Provision for income taxes 102.1 125.7 118.1 Earnings (loss) before income

  45. Slide 45: Comparable EBITDA Reconciliation

    © 2021 Ryder System, Inc. All Rights Reserved 45 Comparable EBITDA Reconciliation ($ Millions) 2015 2016 2017 2018 Net earnings (loss) $ 304.8 $ 263.1 $ 719.6 $ 284.6 Loss (earnings) from discontinued operations, net of tax 1.2 2.2 0.5 2.3 Provision (benefit) for income taxes 163.2 142.0 (423.7) 102

  46. Slide 46: Comparable EBITDA Reconciliation

    © 2021 Ryder System, Inc. All Rights Reserved 46 Comparable EBITDA Reconciliation ($ Millions) Three months ended December 31, Twelve month ended December 31, 2020 2019 2020 2019 Net earnings (loss) $ 25.6 $ (53.5) $ (122.3) $ (24.4) Loss (earnings) from discontinued operations, net of tax 0.1 0.4 1

  47. Slide 47: Cash Flow Reconciliation

    © 2021 Ryder System, Inc. All Rights Reserved 47 Cash Flow Reconciliation ($ Millions) 2017 2018 2019 2020 2021 Forecast Cash Provided by Operating Activities from Continuing Operations $ 1,628 $ 1,718 $ 2,141 $ 2,181 $ 2,200 Proceeds from Sales (Primarily Revenue Earning Equipment)(1) 429 396 518 5

  48. Slide 48: © 2021 Ryder System, Inc. All Rights Reserved 48

    © 2021 Ryder System, Inc. All Rights Reserved 48

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