Xpo, Inc. · NYSE:XPO
Xpo — XPO Logistics — Investor Presentation (November 2012)
23 slides from Xpo's investor presentation, Nov 23, 2012
Slide 1: Management Presentation November 2012
Management Presentation November 2012 Exhibit 99.2
Slide 2: Disclaimer
Disclaimer This presentation contains, and XPO Logistics, Inc. (the “Company”) may from time to time make, written or oral “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. All
Slide 3: The XPO Growth Strategy
The XPO Growth Strategy Build a multi-billion dollar, non-asset based, third party logistics business Primary focus on truck brokerage Execute selective acquisitions and cold-starts Scale up operations company-wide Apply best practices with highly skilled management team Disciplined focus on creatin
Slide 4: CEO Bradley S. Jacobs
CEO Bradley S. Jacobs Founded and led four highly successful companies 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 fifth largest solid waste business in North America United Rentals:
Slide 5: A Large Market Opportunity
A Large Market Opportunity Sources: American Trucking Association, Armstrong & Associates, EVE Partners LLC Worldwide logistics: >$3 trillion U.S. logistics: >$1 trillion U.S. trucking: ~$350 billion U.S. truck brokerage ~$50 billion
Slide 6: Truck Brokerage Growing at 2x to 3x GDP
Truck Brokerage Growing at 2x to 3x GDP Long-term outsourcing trend Brokers add efficiency to both shippers and carriers – Shippers gain access to thousands of carriers – Carriers gain access to millions of loads 85% of shipments are not presently handled by brokers $300 billion untapped opportunity
Slide 7: Brokerage Is a Highly Fragmented Market
Brokerage Is a Highly Fragmented Market More than 10,000 licensed brokers in the U.S. Only about 25 brokers with more than $200 million in revenue Large potential acquisition universe Lack of working capital can motivate sellers Sources: Armstrong & Associates
Slide 8: Acquisition and Optimization Strategy
Acquisition and Optimization Strategy Capitalize on attractive acquisition universe – Focus primarily on truck brokers Rapidly scale acquired companies – Provide access to centralized carrier capacity in Charlotte – Move onto technology platform – Aggressively expand sales force Benefit from added c
Slide 9: Acquired Turbo Logistics
Acquired Turbo Logistics 28-year-old business, acquired in October 2012 Operations in Gainesville (Georgia), Reno, Chicago and Dallas $124 million in annual brokerage revenue Highly scalable – Talented management team – Well-positioned geographically for hiring salespeople – Strong customer and carr
Slide 10: Acquired Kelron Logistics
Acquired Kelron Logistics 20-year-old business, acquired in August 2012 Highly scalable operations in Toronto, Montreal, Vancouver and Cleveland $100 million in annual brokerage revenue Strong base of over 1,000 customers Significant synergies with XPO
Slide 11: Acquired Continental Freight Services
Acquired Continental Freight Services 32-year-old business, acquired in May 2012 Operations in South Carolina, North Carolina, Texas and Florida $22 million in annual brokerage revenue Highly scalable; plan to triple in size Completed integration in 90 days
Slide 12: Cold-starts Are High Return Opportunities
Cold-starts Are High Return Opportunities Truck brokerage cold-start plan ahead of schedule – Q4 2011: Phoenix – Q2 2012: Ann Arbor and Dallas – Q3 2012: Chicago, Jacksonville, Montgomery and Tri-State (Morris County, NJ) – Q4 2012: Charlotte Led by industry veterans with strong track records Open a
Slide 13: National Operations Center in Charlotte
National Operations Center in Charlotte Provides carrier procurement and shared services Expand carrier procurement team to 100 people by December Cover freight more efficiently Enable sales offices to focus on new business
Slide 14: Scalable Technology Platform
Scalable Technology Platform Differentiate XPO through superior technology Purchase transportation more efficiently as data pool grows Rolled out first phase of platform in March 2012 Added pricing tools in July 2012 Currently beta testing enhanced pricing and truck-finding tools Source: Company dat
Slide 15: Highly Skilled Management Team
Highly Skilled Management Team Partial list below NCR, Avery Dennison, Arrow Electronics AutoNation, Skadden Arps Oakleaf Waste Management Echo Global Logistics Union Pacific, Odyssey Logistics United Rentals, United Waste Compass Group Goldman Sachs, UBS, JPMorgan Chase C.H. Robinson, Knight Broker
Slide 16: Optimize Existing Operations
Optimize Existing Operations Freight Forwarding Non-asset based premium freight brokerage services Truck Brokerage Expedited Transportation Non-asset based expedited service provider through Express-1, Inc. Non-asset based ground, air and ocean freight forwarding service through Concert Group Logist
Slide 17: Expedited Transportation
Expedited Transportation Top 5 provider of domestic expedite Grow business in attractive sectors – Cross-border Mexico – Temperature-controlled – Defense Opened new hub in Birmingham in August 2012 – Positioned for shift in manufacturing to the southeast Synergies with Turbo Division Source: Company
Slide 18: Freight Forwarding
Freight Forwarding Currently a $65 million player in a $150 billion market Significant opportunity to grow market share Added locations in Los Angeles, Houston, Kansas City, Charlotte, Atlanta and Newark in 2012 – Currently 28 locations Plan to build footprint to 35 locations over two years Source:
Slide 19: Financial Overview
Financial Overview
Slide 20: Key Financial Statistics
Key Financial Statistics 2011 revenue: $177 million Approaching a $500 million annual revenue run rate Approximately $265 million cash as of October 31, 2012 Marketing new accounts receivable facility
Slide 21: Incentivized Management
Incentivized Management Equity ownership aligns management team with shareholders Management and directors own 54% of the company (1) Common Stock Equivalent Capitalization (as of 9/30/12) Common Shares 17.9 million Preferred Shares 10.7 million Warrants (Strike Price $7 per share) 10.7 million (5.5
Slide 22: Conclusion
Conclusion
Slide 23: Summary of Opportunities
Summary of Opportunities Large, growing, fragmented industry Significant potential for value creation through cold-starts Strong pipeline of acquisition targets Resources to scale up acquired and existing operations Highly experienced management team aligned with shareholder interests
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