Tfi International Inc. · TSX:TFII
Tfi International — Q1 2024 Earnings Presentation
50 slides from Tfi International's earnings presentation, Apr 25, 2024
Slide 1: First Quarter Ended March 31, 2024
First Quarter Ended March 31, 2024
Slide 2: Forward-Looking Statements
Forward-Looking Statements In the interest of providing shareholders and potential investors with information regarding TFI International, including management’s assessment of future plans and operations, certain statements in this presentation are forward-looking statements subject to risks, uncert
Slide 3: TFI International: Who We Are
TFI International: Who We Are Diversified: Full service: Package & Courier, Transport and Less-Than-Truckload, logistics Truckload and Logistics North Number of Extensive American Operating Network: Leader: Companies: 620 facilities, Operations across 18,462 trucks1, U.S. and Canada 90+ 33,771 trail
Slide 4: Our Customer Value Proposition
Our Customer Value Proposition ◼ We create transportation and supply chain advantages to… …mitigate risk for customers …improve their efficiency and delivery timing …reduce their delivery costs …drive satisfaction for the end consumer 4
Slide 5: Why Invest in TFI International?
Why Invest in TFI International? Superior record Market leader in of growth and key transportation shareholder value and logistics creation segments Track record of M&A execution Diversification by with well-defined industry sectors acquisition and geography pipeline Robust Return on Invested Capita
Slide 6: Investment Highlights
Investment Highlights ◼ 11.5% Operating Margin2 Best-in-class operating margins, ◼ 5.3% FCF Yield1,3 FCF yield and FCF conversion ◼ 82.5% FCF Conversion1,4 Proven track record of growth ◼ Completed 87 acquisitions since 2015, through disciplined of which 4 were major acquisitions6 acquisition strate
Slide 7: Low Capex Facilitates Asset-Light Model
Low Capex Facilitates Asset-Light Model TTM Net Capex (% of Total Revenue) 15.2% 10.1% 6.6% 3.5% 1.4% 2 3 4 Truckload Peer Average 1 Package & Courier Peer Average Less-than-Truckload Peer Average Logistics Peer Average Note: TFI Net Capex excludes purchases and sales of property. 1 Truckload: Heart
Slide 8: Market Leadership in Key Segments: TTM FCF Conversion
Market Leadership in Key Transportation and Logistics Segments: TTM FCF Conversion Package & Courier Less-Than-Truckload 85.0% 70.9% 48.7% 51.9% 1 2 Peer Average Peer Average Truckload Logistics 89.7% 98.1% 75.9% -5.2% 4 Peer Average 3 Peer Average Note: FCF Conversion (%) calculated as (Adjusted EB
Slide 9: Our Strategy of Growth Through Acquisitions
Our Strategy of Growth Through Acquisitions ◼ Proven track record of executing on M&A strategy across highly fragmented markets – Completed 87 acquisitions since 2015, of which 4 were major acquisitions1. – Strong focus on integration, operations and realization of synergies ◼ Our disciplined acquis
Slide 10: Overview of the TFI International Platform
Overview of the TFI International Platform Package & Courier Less-Than-Truckload Truckload Logistics (7% of YTD Q1-2024 (43% of YTD Q1-2024 (25% of YTD Q1-2024 (25% of YTD Q1-2024 Revenue) Revenue) Revenue) Revenue) US Specialized Canadian Conventional (34% of YTD (20% of YTD (9% of YTD Q1- (5% of Y
Slide 11: Services by Geography
Services by Geography ◼ TFI has built a robust and well-diversified revenue base By Geography (YTD Q1-2024) — No client accounts for > 5% of consolidated revenue Package & Less-Than- Truckload Logistics Courier Truckload By Top Customers' Industry1 (YTD Q4-2023) 3% 1% 1% 6% Canada ✔ ✔ ✔ ✔ 3% 4% 24%
Slide 12: Package & Courier Segment
Package & Courier Segment Geographic Footprint Segment Overview ◼ Next-day in Canada and globally through partnership with DHL ◼ Cutting edge technology ◼ Specialized supply chain services ◼ 7% of YTD Q1-2024 Revenue Package & Courier Operating Companies Canpar Express Loomis Express ICS Courier TFo
Slide 13: Less-Than-Truckload Segment
Less-Than-Truckload Segment Geographic Footprint Segment Overview ◼ Over-the-road and asset-light intermodal LTL services ◼ Significant scale in both Canada and US, now with Tforce Freight ◼ Solid track record for safety and on-time delivery ◼ Focus on customer facing technology ◼ 43% of YTD Q1-2024
Slide 14: Truckload Segment
Truckload Segment Geographic Footprint Segment Overview ◼ Dry van full truckload ◼ Flatbed, tanks, dumps, oversized and other specialized services ◼ Modern fleet ◼ We own the majority of our assets and have long established partner carrier relationships ◼ 25% of YTD Q1-2024 Revenue Truckload Operati
Slide 15: Logistics Segment
Logistics Segment Geographic Footprint Segment Overview ◼ Same day parcel delivery nationwide in the United States and Canada ◼ Truck brokerage and other logistics services ◼ 25% of YTD Q1-2024 Revenue Logistics Operating Companies AC Logistics Canada Craler SAF Logistics TForce Premier Distribution
Slide 16: Return on Invested Capital by Operating Segment
Return on Invested Capital¹ by Operating Segment 2023-Q1 2023-Q2 2023-Q3 2023-Q4 2024-Q1 Package & Courier 31.5% 28.8% 27.6% 28.1% 25.7% Canadian Less-Than-Truckload 23.2% 21.1% 19.6% 20.1% 19.1% US Less-Than-Truckload 17.4% 16.0% 15.2% 15.1% 15.2% Canadian Truckload 21.3% 17.0% 13.8% 12.6% 10.4% Sp
Slide 17: Our Decentralized Structure: Uniquely Delivering Value for Shareholders
Our Decentralized Structure: Uniquely Delivering Value for Shareholders ◼ Our four segments are constituted of wholly-owned subsidiaries operating under their own brands ◼ Our differentiated approach to operating our businesses enables us to create shareholder value by… …reaping the benefits of both
Slide 18: Superior Track Record of Growth
Superior Track Record of Growth Revenue Before Fuel Surcharge (US$ in millions) Adjusted EBITDA1,2 (US$ in millions) 8,000 1,600 6,417 1,400 7,000 1,188 6,000 1,200 5,000 1,000 4,000 800 3,000 600 2,000 400 1,000 200 0 0 2002 2023 2002 2023 Diluted Adjusted EPS from Continuing Operations (US$)1,2,3
Slide 19: Total Shareholder Return
Total Shareholder Return Over Various Periods “TFII maintained the longest winning streak in our coverage as it's now outperformed the S&P 500 for 6 straight years.” – Scott Group, analyst at Wolfe Research, January 2, 2024 Peer Package & Less-Than- Average Courier1 Truckload2 Truckload3 Logistics4
Slide 20: Resilience Through the Cycle
Resilience Through the Cycle ◼ TFI’s operating income, adjusted EPS – Diluted and Free Cash Flow continued growing despite the global pandemic of COVID-19. (US$ in millions) 2018 2019* 2020 2021 2022 Total Revenue 3,954.8 3,903.5 3,781.1 7,220.4 8,812.5 Operating Income 332.0 382.9 416.6 979.2 1146.
Slide 21: E-Commerce Provides Additional Growth
E-Commerce Provides Additional Growth ◼ E-Commerce is a powerful secular force, driving new shipping demands including greater emphasis on last-mile logistics E-Commerce Revenue Evolution of B2B/B2C Split (US$ in millions) 509 10.5% 41% 43% 41% 42% 45% 53% 51% CAGR 58% 67% 165 59% 57% 59% 58% 55% 47
Slide 22: Evolution of E-Commerce Fulfillment
Evolution of E-Commerce Fulfillment ◼ The evolution of E-Commerce fulfillment has created numerous opportunities for TFI companies – both next-day (Canada) and same-day (Canada & U.S.) Next-Day Services Same-Day Services Shipper - Warehouse Shipper - Warehouse Pickup Sorting Facility Region A Lineha
Slide 23: TFI International Serves a Vast E-Commerce Network
TFI International Serves a Vast E-Commerce Network TTM Q1 2024 E-Commerce Revenue by Segment (US$ in millions) 44.9 United States Canada 215.1 127.7 12.3 89.3 ◼ TFI services E-Commerce from nearly 19.9 Logistics TL P&C LTL 80 North American cities ◼ Further opportunities for the Logistics ◼ Total Ca
Slide 24: Robust Balance Sheet With Strategic Flexibility
Robust Balance Sheet With Strategic Flexibility As at March Covenants Requirements 31, 2024 Funded debt-to-EBITDA ratio [ratio of total debt, net of cash, plus letters of credit and some other long- term liabilities to earnings before interest, income tax, depreciation and amortization (“EBITDA”), <
Slide 25: Track Record of M&A Execution and Integration
Track Record of M&A Execution and Integration ◼ Acquired 87 companies across our highly fragmented markets since 2015, of which 4 were major acquisitions1. Number of Acquisitions per Year TForce Worldwide TForce MCT Freight Grammer Dry Bulk Laser JHT Coastal Transport South Shore SGT STG CFI Cavalie
Slide 26: Our Approach To Creating Shareholder Value
Our Approach To Creating Shareholder Value Growth & ROIC ◼ We deliver earnings Market growth and strong ROIC, both organically and Leadership through our proven acquisition strategy ◼ We continually solidify Our our position as a leader in the North American People transportation and logistics indus
Slide 27: Appendix
TF International Appendix
Slide 28: Additional Operational Data (Slide 1 of 5)
Additional Operational Data (Slide 1 of 5) Operational Data – P&C 2022-Q2 2022-Q3 2022-Q4 2023-Q1 2023-Q2 2023-Q3 2023-Q4 2024-Q1 Revenue before fuel surcharge (in thousands 125,082 120,236 129,074 112,560 115,588 111,749 122,033 103,180 of dollars) Revenue per pound (including fuel) $0.51 $0.48 $0.
Slide 29: Additional Operational Data (Slide 2 of 5)
Additional Operational Data (Slide 2 of 5) Operational Data – LTL 2022-Q2 2022-Q3 2022-Q4 2023-Q1 2023-Q2 2023-Q3 2023-Q4 2024-Q1 U.S. based LTL Revenue (in thousands of dollars) 585,539 544,318 475,389 460,343 467,903 503,275 481,102 484,314 GFP Revenue (in thousands of dollars) 139,750 142,957 126
Slide 30: Additional Operational Data (Slide 3 of 5)
Additional Operational Data (Slide 3 of 5) Operational Data – LTL 2022-Q2 2022-Q3 2022-Q4 2023-Q1 2023-Q2 2023-Q3 2023-Q4 2024-Q1 Canadian based LTL Revenue (in thousands of dollars) 148,685 133,654 123,176 124,812 127,936 140,794 138,241 134,918 FSC revenue (in thousands of dollars) 48,727 42,254 4
Slide 31: Additional Operational Data (Slide 4 of 5)
Additional Operational Data (Slide 4 of 5) Operational Data – TL 2022-Q2 2022-Q3 2022-Q4 2023-Q1 2023-Q2 2023-Q3 2023-Q4 2024-Q1 Specialized TL Revenue (in thousands of U.S. dollars) 288,954 297,267 274,537 279,415 291,768 284,322 283,383 278,468 Brokerage revenue (in thousands of U.S. 64,192 58,165
Slide 32: Additional Operational Data (Slide 5 of 5)
Additional Operational Data (Slide 5 of 5) Operational Data – TL 2022-Q2 2022-Q3 2022-Q4 2023-Q1 2023-Q2 2023-Q3 2023-Q4 2024-Q1 Canadian based Conventional TL Revenue (in thousands of U.S. dollars) 57,181 53,210 54,810 53,829 54,520 54,300 53,838 51,596 Brokerage revenue (in thousands of U.S. 30,89
Slide 33: Reconciliations
TF International Reconciliations 33
Slide 34: Five-Year Reconciliation of Adjusted EBITDA
Five-Year Reconciliation of Adjusted EBITDA1 (US$ in millions) TTM Q1 2023 2022 2021 2020 (from Continuing Operations) 2024 Net Income 485.8 504.9 823.2 754.4 275.7 Net Finance Costs 91.1 80.9 80.4 73.0 53.9 Income Tax Expense (Recovery) 165.9 171.9 242.4 151.8 87.0 Depreciation of Property and Equi
Slide 35: Five-Year Reconciliation of Adjusted Net Income and Adjusted EPS
Five-Year Reconciliation of Adjusted Net Income1 and Adjusted EPS – Diluted1 TTM Q1 (US$ in millions, except per share data) 2023 2022 2021 2020 2024 Net Income 485.8 504.9 823.2 754.4 275.7 Amortization of Intangible Assets Related to Business Acquisitions 59.5 56.2 52.0 50.5 47.6 Net Change in Fai
Slide 36: Adjusted Operating Ratio Reconciliation
Adjusted Operating Ratio1 Reconciliation (US$ in thousands) 2022-Q2 2022-Q3 2022-Q4 2023-Q1 2023-Q2 2023-Q3 2023-Q4 2024-Q1 US Based Less-Than-Truckload Total revenue 904,942 849,450 743,616 690,287 649,043 696,734 674,745 655,153 Total operating expenses 764,197 785,265 685,797 662,954 602,026 628,
Slide 37: Adjusted Operating Ratio Reconciliation
Adjusted Operating Ratio1 Reconciliation (US$ in thousands) 2022-Q2 2022-Q3 2022-Q4 2023-Q1 2023-Q2 2023-Q3 2023-Q4 2024-Q1 Canadian Based Less-Than-Truckload Total revenue 197,412 175,908 164,227 163,035 159,991 178,375 177,629 170,326 Total operating expenses 150,873 139,580 133,806 132,428 126,33
Slide 38: Adjusted Operating Ratio Reconciliation
Adjusted Operating Ratio1 Reconciliation (US$ in thousands) 2022-Q2 2022-Q3 2022-Q4 2023-Q1 2023-Q2 2023-Q3 2023-Q4 2024-Q1 Truckload Total revenue 703,234 635,370 502,784 500,095 479,779 476,568 479,596 469,595 Total operating expenses 575,864 538,742 430,942 429,599 413,596 426,511 428,939 428,131
Slide 39: Adjusted Operating Ratio Reconciliation
Adjusted Operating Ratio1 Reconciliation (US$ in thousands) 2022-Q2 2022-Q3 2022-Q4 2023-Q1 2023-Q2 2023-Q3 2023-Q4 2024-Q1 Truckload - Revenue before fuel surcharge U.S. based Conventional TL 118,361 78,289 - - - - - - Canadian based Conventional TL 88,072 79,073 79,101 77,601 77,389 79,034 77,815
Slide 40: Adjusted Operating Ratio Reconciliation
Adjusted Operating Ratio1 Reconciliation (US$ in thousands) 2022-Q2 2022-Q3 2022-Q4 2023-Q1 2023-Q2 2023-Q3 2023-Q4 2024-Q1 Canadian based Conventional TL Operating expenses** 82,851 75,866 65,945 78,698 77,613 83,452 84,518 85,721 Gain on sale of land and buildings and - - 15,485 - - - - - assets h
Slide 41: Adjusted Operating Ratio Reconciliation
Adjusted Operating Ratio1 Reconciliation (US$ in thousands) 2022-Q2 2022-Q3 2022-Q4 2023-Q1 2023-Q2 2023-Q3 2023-Q4 2024-Q1 Specialized TL Operating expenses** 365,675 371,313 366,402 352,901 338,416 346,294 347,245 344,551 Gain on sale of land and buildings and 1 1 474 3,398 28 546 (7) (34) assets
Slide 42: Return on Invested Capital TTM Reconciliation
Return on Invested Capital1 TTM Reconciliation (US$ in thousands) 2023-Q1 2023-Q2 2023-Q3 2023-Q4 2024-Q1 Package and Courier Operating income 135,544 125,848 117,212 114,360 105,192 (Gain) Loss on sale of land and buildings and assets held for sale - - - 7 7 Amortization of intangible assets 639 63
Slide 43: Return on Invested Capital TTM Reconciliation
Return on Invested Capital1 TTM Reconciliation (US$ in thousands) 2023-Q1 2023-Q2 2023-Q3 2023-Q4 2024-Q1 Less-Than-Truckload – Canadian based LTL Operating income 143,895 131,014 126,796 124,198 119,344 (Gain) loss on sale of land and buildings and assets held for sale (661) (40) (9) 3 3 Amortizati
Slide 44: Return on Invested Capital TTM Reconciliation
Return on Invested Capital1 TTM Reconciliation (US$ in thousands) 2023-Q1 2023-Q2 2023-Q3 2023-Q4 2024-Q1 Less-Than-Truckload – US based LTL2 Operating income 290,082 196,353 200,426 186,231 200,019 (Gain) loss on sale of land and buildings 8 36 36 36 36 Gain on sale of assets held for sale (57,928)
Slide 45: Return on Invested Capital TTM Reconciliation
Return on Invested Capital1 TTM Reconciliation (US$ in thousands) 2023-Q1 2023-Q2 2023-Q3 2023-Q4 2024-Q1 Truckload - Canadian based Conventional TL Operating income 87,880 76,584 66,882 45,004 37,331 Gain on sale of land and buildings and assets held for sale (15,485) (15,485) (15,485) - - Amortiza
Slide 46: Return on Invested Capital TTM Reconciliation
Return on Invested Capital1 TTM Reconciliation (US$ in thousands) 2023-Q1 2023-Q2 2023-Q3 2023-Q4 2024-Q1 Truckload - Specialized TL Operating income 249,735 222,836 191,696 192,389 171,030 Gain on sale of land and buildings and assets held for sale (10,074) (3,888) (4,435) (3,951) 3 Amortization of
Slide 47: Return on Invested Capital TTM Reconciliation
Return on Invested Capital1 TTM Reconciliation (US$ in thousands) 2023-Q1 2023-Q2 2023-Q3 2023-Q4 2024-Q1 Logistics Operating income 137,274 127,799 139,662 160,112 168,584 (Gain) Loss on sale of land and buildings and assets held for sale - - - (226) (262) Amortization of intangible assets 22,162 2
Slide 48: Reconciliation of FCF Conversion TTM 2024-Q1
Reconciliation of FCF Conversion1 TTM 2024-Q1 Package & Less-Than- (US$ in thousands) Truckload Logistics Courier Truckload Adjusted EBITDA1 reconciliation TTM 2024-Q1 Operating income 105,192 319,364 208,361 168,584 Depreciation and amortization 25,056 180,018 195,857 53,398 (Gain) loss on sale of
Slide 49: Reconciliation of Free Cash Flow Measures
Reconciliation of Free Cash Flow1 Measures (US$ in millions) TTM 2024-Q1 Reconciliation of free cash flow1 Net cash from operating activities 982.4 Additions to property and equipment (362.9) Proceeds from sale of property and equipment and AHFS 97.8 Free Cash Flow 717.4 (US$ in millions) TTM 2024-Q
Slide 50: TFI International
TF International