Slide 1: FedEx Corporation Fiscal Third Quarter 2023 Earnings
FedEx Corporation Fiscal Third Quarter 2023 Earnings | March 16, 2023 Forward-Looking Statements and Non-GAAP Financial Measures Certain statements in this presentation may be considered forward-looking statements, such as statements regarding expected cost savings, future financial targets, busines
Slide 2: Presenters: VP of Investor Relations, President & CEO
VP of Investor Relations 3 President & CEO 4
Slide 3: Key messages and fiscal third quarter 2023 overview
Key messages Exceeded our earnings forecast in what remains a challenged demand environment Maintained outstanding service throughout Peak Gaining traction on cost initiatives Raising FY23 earnings outlook 5 Fiscal third quarter 2023 overview Demonstrating continued progress on transformation while
Slide 4: Accelerating progress on FY23 cost reduction plan
Accelerating progress on FY23 cost reduction plan • $1.2B of total enterprise YoY cost savings in Q3 FY23 • Express remains the greatest area of opportunity; cost base is constrained in the short term • In Q3 FY23, mitigated 45%* of total revenue declines on an adjusted basis, a significant improvem
Slide 5: Transportation segment revenue performance
EVP & Chief Customer Officer 9 Transportation segment revenue performance Ground and Freight yield supported margin expansion; Express environment remains constrained -8% -2% -3% $11.3B $10.3B $8.8B $8.7B $2.3B $2.2B Q3 FY22 Q3 FY23 Q3 FY22 Q3 FY23 Q3 FY22 Q3 FY23 FedEx Ground FedEx Freight FedEx Ex
Slide 6: Transportation segment yield performance
Transportation segment yield performance Yield pressured across segments but remained a partial offset to volume weakness YoY yield by fiscal quarter 30% 25% 20% 15% 10% 5% 0% -5% Q1 FY22 Q2 FY22 Q3 FY22 Q4 FY22 Q1 FY23 Q2 FY23 Q3 FY23 FedEx Express International Export FedEx Express U.S. Domestic F
Slide 7: FedEx Ship Manager gaining traction
FedEx Ship Manager® gaining traction Online tool now fully modernized to make shipping more efficient, highly personal, and easier to use for all customers Previous FedEx Ship Manager® 13 Commercial momentum and innovation driving improved customer experience Picture Proof of Delivery (PPOD) allowin
Slide 8: Transportation segment operating income performance
EVP & Chief Financial Officer 15 Transportation segment operating income performance Another strong quarter at Ground and Freight, offset by weakness at Express +32% -81% +15% $844M $641M $651M $337M $386M $122M Q3 FY22 Q3 FY23 Q3 FY22 Q3 FY23 Q3 FY22 Q3 FY23 FedEx Ground FedEx Freight FedEx Express
Slide 9: Monthly volume trends; lowering capital intensity
Monthly volume trends: Sept 2022-Feb 2023 Volume environment remained challenged Q2 average daily volume Q3 average daily volume FedEx Express U.S. Domestic Package YoY FedEx Express International Priority Package YoY* Sept Oct Nov Dec Jan Feb Sept Oct Nov Dec Jan Feb -2% -12% -11% -10% -14% -12% -1
Slide 10: Raising FY23 earnings outlook
Raising FY23 earnings outlook December 2022 March 2023 Adjusted EPS* $13.00-14.00 $14.60-15.20 Effective tax rate** 25-26% 25-26% Capital spend $5.9B $5.9B *Non-GAAP financial measure; see appendix for more information 19 **Prior to mark-to-market retirement plans accounting adjustments, which are i
Slide 11: Appendix: Q3 FY23 reconciliation for FedEx Corporation
Appendix 21 Q3 FY23 reconciliation for FedEx Corporation Diluted Operating Operating Income Net Dollars in millions, except EPS Earnings Income Margin1 Taxes2 Income3 Per Share1 GAAP measure $1,042 4.7% $251 $771 $3.05 Business optimization costs4 120 0.5% 28 92 0.36 Business realignment costs5 3 –
Slide 12: Q3 FY23 Express and Q3 FY22 reconciliations
Q3 FY23 reconciliation for FedEx Express segment Operating Operating Dollars in millions Income Margin GAAP measure $119 1.2% Business realignment costs 3 – Non-GAAP measure $122 1.2% 23 Q3 FY22 reconciliation for FedEx Corporation Diluted Operating Operating Income Net Dollars in millions, except E
Slide 13: Q3 FY22 Express reconciliation; FY23 EPS forecast
Q3 FY22 reconciliation for FedEx Express segment Operating Operating Dollars in millions Income Margin1 GAAP measure $520 4.6% Business realignment costs 107 0.9% TNT Express integration expenses 24 0.2% Non-GAAP measure $651 5.8% 1 See “Footnotes for Non-GAAP Reconciliation Slides” below for detail
Slide 14: Footnotes for non-GAAP reconciliation slides
Footnotes for non-GAAP reconciliation slides 1. Does not sum to total due to rounding 2. Income taxes are based on the company’s approximate statutory tax rates applicable to each transaction 3. Effect of “total other (expense) income” on net income amount not shown 4. These expenses were recognized