Xpo, Inc. · NYSE:XPO
Xpo — XPO Logistics — Investor Presentation (May 2014)
24 slides from Xpo's investor presentation, May 1, 2014
Slide 1: Management Presentation
Exhibit 99.2 Management Presentation May 1, 2014
Slide 2: Forward-Looking Statements Disclaimer
Forward-Looking Statements Disclaimer This document includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including the company’s full year 2014 and full year 2017 financial
Slide 3: One of the Largest 3PLs in North America
One of the Largest 3PLs in North America We facilitate over 25,000 deliveries per day #4 freight brokerage firm and Top 50 logistics company #3 provider of intermodal services #1 provider of cross-border Mexico intermodal #1 manager of expedited shipments #1 provider of last-mile logistics for heavy
Slide 4: Clearly Defined Strategy for Value Creation
Clearly Defined Strategy for Value Creation Acquire companies that bring value and are highly scalable Significantly scale up and optimize existing operations Open cold-starts where sales recruitment can drive revenue We continue to be on track or ahead of plan with all three legs of our growth stra
Slide 5: Precise Execution of Growth Plan
Precise Execution of Growth Plan Completed 11 strategic acquisitions and established 24 cold-starts in two years Created leading-edge recruiting and training programs Introduced scalable IT platform Added national operations centers for shared services, carrier procurement and last-mile operations S
Slide 6: Massive Commitment to Shipper Satisfaction
Massive Commitment to Shipper Satisfaction Integrated network across North America with global reach 123 locations in the U.S., Canada, Mexico, Asia and Europe Approximately 3,000 employees Over 14,000 customers – Primarily in the manufacturing, industrial, retail, food and beverage, commercial, lif
Slide 7: Significant Growth Embedded in XPO's Model
Significant Growth Embedded in XPO’s Model Strategic accounts: market to large shippers Cold-starts: expand footprint in markets with best access to sales talent Scale and productivity: recruit sales reps and provide state- of-the-art training and IT Supply chain offering: build leadership positions
Slide 8: Leading Positions in High-Growth Sectors
Leading Positions in High-Growth Sectors Market Projected Size Growth Sector ($ billions) (x GDP) Growth Drivers Truck brokerage $50 2-3 times Outsourcing and technology Long-haul rail efficiencies and Intermodal $15 3-5 times near-sourcing of manufacturing in Mexico Heavy goods, $13 5-6 times Outso
Slide 9: Comprehensive North American Network
Comprehensive North American Network 123 locations Approximately 3,000 employees Over 26,000 active, vetted carriers Access to 60,000 miles of network rail routes Source: Company data 9
Slide 10: Acquired Pacer in March 2014
Acquired Pacer in March 2014 Provides instant scale in the $15 billion intermodal sector, the fastest-growing freight mode in North America – Third largest provider of intermodal services – Largest provider of cross-border Mexico intermodal Enhances XPO’s value proposition as a large, single-source
Slide 11: Acquired 3PD in August 2013
Acquired 3PD in August 2013 Largest provider of heavy goods, last-mile logistics in North America High value, high margin business, growing rapidly due to e-commerce and outsourcing Strengthens XPO’s position with shippers as a large, single-source provider Industry-leading customer experience IT ca
Slide 12: Acquired NLM in December 2013
Acquired NLM in December 2013 XPO NLM is the largest manager of expedited shipments in North America #1 provider of web-based transportation management for expedited Managing over $1 billion of annual gross transportation spend – Online auction system proprietary to XPO – Carriers bid on loads that
Slide 13: Focused Sales and Marketing Effort
Focused Sales and Marketing Effort Differentiate XPO by providing a passionate commitment to customer satisfaction across a range of services Single point of contact for each customer – Strategic accounts team marketing to largest 2,000 shippers – National accounts team focused on next largest 5,000
Slide 14: Increasing Productivity through Technology
Increasing Productivity through Technology One common IT platform for freight brokerage in all cold-starts and acquired companies Proprietary freight optimizer tools for pricing and load-covering put in place in 2012 Highly scalable load execution and tendering via automated load-to-carrier matching
Slide 15: Growth through Cold-starts
Growth through Cold-starts 24 cold-starts – 11 in freight brokerage, including Kansas City opened in March; 12 in freight forwarding; one in expedited Brokerage cold-starts on an annual revenue run rate of more than $190 million – Nearly triple the run rate 12 months ago Low capital investment can d
Slide 16: CEO Bradley S. Jacobs
CEO Bradley S. Jacobs Founded and led four highly successful companies, including world-class public corporations Amerex Oil Associates: Built one of world’s largest oil brokerage firms Hamilton Resources: Grew global oil trading company to ~$1 billion United Waste: Created 5th largest solid waste b
Slide 17: Highly Skilled Management Team
Highly Skilled Management Team Partial list Sean Fernandez NCR, Avery Dennison, Arrow Electronics Chief Operating Officer John Hardig Stifel Nicolaus, Alex. Brown Chief Financial Officer Scott Malat Goldman Sachs, UBS, JPMorgan Chase Chief Strategy Officer Troy Cooper United Rentals, United Waste Se
Slide 18: Deep Bench of Industry Experience
Deep Bench of Industry Experience Partial list Chris Healy Boyd Brothers, Caliber Logistics, Roberts Express President, Expedited Transportation Will O’Shea Ryder Integrated Logistics, Cardinal Logistics Chief Sales and Marketing Officer, 3PD division Gregory Ritter Knight Brokerage, C.H. Robinson S
Slide 19: Revenue and Margin Growth
Revenue and Margin Growth Revenue trajectory Revenue ($ millions) – 2011 revenue of $177 million $282 – Currently at approximately $2 +148% billion annual revenue run rate 1Q growth company-wide, 2014 vs. 2013 $114 – Organic growth up 51% – Gross revenue up 148% – Net revenue up 259% Q1 2013 Q1 2014
Slide 20: Key Financial Statistics
Key Financial Statistics Revenue ($ millions) 1Q revenue growth by business unit, 2014 vs. 2013 Freight Brokerage Expedited Transportation Freight Forwarding +196% $232 +42% $34 +20% $20 $24 $16 $78 Q1 '13 Q1 '14 Q1 '13 Q1 '14 Q1 '13 Q1 '14 Organic growth 34% margin, 48% increase in up 75% up from 1
Slide 21: First 27 Months of Growth Strategy
First 27 Months of Growth Strategy Revenue ($ millions) $282 $257 $194 $137 $109 $114 $71 $45 $55 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2012 2013 2014 Source: Company data 21
Slide 22: Financial Targets
Financial Targets Full year 2014 Annual revenue run rate of at least $2.75 billion by December 31 Annual EBITDA run rate of at least $100 million by December 31 At least $400 million of acquired historical annual revenue, excluding the Pacer acquisition Full year 2017 Revenue of $7.5 billion EBITDA
Slide 23: Incentivized XPO Management
Incentivized XPO Management Equity ownership aligns management team with shareholders Management and directors own approx. 29% of the company(1) Common Stock Equivalent Capitalization as of 4/30/14 Common Shares 52.5 million Preferred Shares 10.5 million Warrants (Strike Price $7 per share) 10.6 mil
Slide 24: Clear Path for Significant Value Creation
Clear Path for Significant Value Creation Significant growth embedded in XPO’s business model Leading positions in fastest-growing areas of transportation Compelling multi-modal value proposition for shippers of all sizes Passionate culture of on-time performance and productivity Top management tale