Gxo Logistics, Inc. · NYSE:GXO
Gxo Logistics — Q3 2022 Earnings Presentation
28 slides from Gxo Logistics's earnings presentation, Nov 8, 2022
Slide 1: Third Quarter 2022 Results
Third Quarter 2022 Results November 8, 2022 ©2022 GXO Logistics, Inc. | Confidential and Proprietary 1
Slide 2: Disclaimer
Disclaimer Non-GAAP Financial Measures As required by the rules of the Securities and Exchange Commission (“SEC”), we provide reconciliations of the non-GAAP financial measures contained in this presentation to the most directly comparable measure under GAAP, which are set forth in the financial tab
Slide 3: Presenters
Presenters Malcolm Wilson Baris Oran Mark Manduca Bill Fraine Chief Executive Officer Chief Financial Officer Chief Investment Officer Chief Commercial Officer ©2022 GXO Logistics, Inc. 3
Slide 4: 3Q 2022: Highlights
3Q 2022: Highlights • New business wins expected to generate Revenue $2.3 billion $158 million of annualized revenue. • Over $1.0 billion of new FY 2022 revenue won through 3Q(3), equivalent to 13% YoY Organic revenue growth(1) 16% revenue growth. • Adjusted EBITDA of $192 million compared to $162 m
Slide 5: 3Q 2022: Revenue growth
3Q 2022: Revenue growth (In millions USD) $3,000 ~11% (~11%) ~16% $2,500 ~16% Net M&A FX Revenue Organic(1) growth $2,000 $1,500 $1,000 $500 $0 3Q 2021 Revenue Organic growth Net M&A FX 3Q 2022 Revenue ©2022 GXO Logistics, Inc. (1)Refer to the ‘Non-GAAP Financial Measures’ section on slide 2 and App
Slide 6: 3Q 2022: Solid profit growth
3Q 2022: Solid profit growth (In millions USD) Adjusted EBITDA(3) Net Income(1) $195 $80 $192 $72 $190 $70 $63 $185 $60 $180 $50 $175 $42(2) $40 $170 $165 $30 $162 $160 $20 $30 $155 $10 $150 $0 $145 3Q 2021 3Q 2022 3Q 2021 3Q 2022 (1)Net Income attributable to GXO (2)Third quarter 2021 net income at
Slide 7: Recent wins and expansions
Recent wins and expansions ©2022 GXO Logistics, Inc. 7 7
Slide 8: New contract wins underpin 2022 and 2023 revenue growth
New contract wins underpin 2022 and 2023 revenue growth Expected 2022 revenue Expected 2023 revenue from contract wins $1,059(1) from contract wins $497(2) million $600 million $1,200 $500 $1,000 $400 $800 $600 $300 $400 $200 $200 $100 $0 $0 Prior Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2
Slide 9: Year-to-date contract wins by source
Year-to-date contract wins by source 25% 25% Won from New competitors outsourcing 50% New activity ©2022 GXO Logistics, Inc. Excludes revenue year-to-date from the Clipper acquisition. 9 9
Slide 10: All verticals delivered organic revenue growth in 3Q 2022
All verticals delivered organic revenue growth in 3Q 2022 8% Omnichannel retail 10% Food and beverage 40% GXO revenue Technology and consumer electronics 12% by vertical 3Q 2022(1) Industrial and manufacturing Consumer packaged goods 15% Other 15% ©2022 GXO Logistics, Inc. (1)Includes Clipper revenu
Slide 11: Resilient business model with flexible cost structure
Resilient business model with flexible cost structure High revenue visibility Inflation pass-through Stable earnings structure Countercyclical FCF • ~$2.0 billion sales pipeline(1) • ~45% of revenue from ‘open • High exposure to predictable • Approximately two thirds book’ (cost-plus) contracts(3) c
Slide 12: Clipper acquisition
Clipper acquisition % of GXO 2021 revenue 14% Adding scale and expertise across geographies and verticals • Cross-selling opportunities into new customers, geographies, verticals and services. • Cost efficiencies leveraging economies of scale and overlap. £36 million cost synergies representing ~4%
Slide 13: Accelerating automation and adaptive technology leadership
Accelerating automation and adaptive technology leadership ~30% of 3Q 2022 revenue 2 is from automated sites. Total technology and Goods-to-person systems Cobots Vision tech automated systems +54% +29% +330% +43% 3Q 2021 3Q 2022 3Q 2021 3Q 2022 3Q 2021 3Q 2022 3Q 2021 3Q 2022 Clipper acquisition off
Slide 14: 3Q Balance sheet, free cash flow and FX
3Q Balance sheet, free cash flow and FX Balance sheet Free cash flow Total debt(1) Interest: Cash flow from operations $1,883 million Mostly fixed-rate borrowing $116 million 3Q 2021: $105 million Net debt(2) Free cash flow(2) Investment grade rated $1,449 million $47 million 3Q 2021: $50 million Ex
Slide 15: FY 2022 guidance reiterated
FY 2022 guidance(1) reiterated CURRENT Organic revenue growth(2) 12% – 16% Adjusted EBITDA(2) $715 – $750 million Adjusted EBITDA(2) to FCF conversion ~30% Adjusted diluted EPS(2) $2.70 – $2.90 Adjusted EBITDAR(3) $1.60 – $1.65 billion (1)Our guidance reflects the acquisition of Clipper Logistics; c
Slide 16: GXO on track to reach ESG targets
GXO on track to reach ESG targets LEDs +15 million square feet added year-to-date in addition to 44 million GXO’s environmental targets square feet deployed at end FY 2021 Solar Panel roll-out continued through 3Q 2022 with >5m square feet 2021: LED penetration at 47% 2021: GXO GHG intensity ~70% re
Slide 17: Appendix
Appendix 17
Slide 18: Reconciliation of Net Income to Adjusted EBITDA and Adjusted EBITDA Margin
GXO Logistics, Inc. Reconciliation of Net Income to Adjusted EBITDA and Adjusted EBITDA Margin (Unaudited) Three Months Ended September 30, Nine Months Ended September 30, (In millions) 2022 2021 2022 2021 (Pro forma)(1) Net income attributable to GXO $ 63 $ 72 $ 151 $ 97 $ 106 Net income attributab
Slide 19: Reconciliation of Net Income to Adjusted EBITA and Adjusted EBITA Margin
GXO Logistics, Inc. Reconciliation of Net Income to Adjusted EBITA and Adjusted EBITA Margin (Unaudited) Three Months Ended September 30, Nine Months Ended September 30, (In millions) 2022 2021 2022 2021 (Pro forma)(1) (Pro forma)(1) Net income attributable to GXO $ 63 $ 72 $ 72 $ 151 $ 97 $ 106 Net
Slide 20: Reconciliation of Net Income to Adjusted Net Income and Adjusted Net Income Per Share
GXO Logistics, Inc. Reconciliation of Net Income to Adjusted Net Income and Adjusted Net Income Per Share (Unaudited) Three Months Ended September 30, Nine Months Ended September 30, (Dollars in millions, shares in thousands, except per share amounts) 2022 2021 2022 2021 Net income attributable to G
Slide 21: Other Reconciliations
GXO Logistics, Inc. Other Reconciliations (Unaudited) Reconciliation of Cash Flows from Operating Activities to Free Cash Flow: Three Months Ended September 30, Nine Months Ended September 30, (In millions) 2022 2021 2022 2021 Net cash provided by operating activities $ 116 $ 105 $ 316 $ 251 Payment
Slide 22: Liquidity Reconciliations
GXO Logistics, Inc. Liquidity Reconciliations (Unaudited) Reconciliation of Net Debt: (In millions) September 30, 2022 Shor-term debt $ 94 Long-term debt 1,789 Total Debt $ 1,883 Less: Cash and cash equivalents 434 Net debt $ 1,449 Reconciliation of Net Leverage: (In millions) September 30, 2022 Net
Slide 23: Reconciliation of Net Income to Trailing Twelve Months Adjusted EBITDA
GXO Logistics, Inc. Reconciliation of Net Income to Trailing Twelve Months Adjusted EBITDA (Unaudited) Trailing Twelve Year Ended Months Ended Nine Months Ended September 30, December 31, September 30, (In millions) 2022 2021 2021 2022 Net income attributable to GXO $ 151 $ 97 $ 153 $ 207 Net income
Slide 24: Liquidity Reconciliations
GXO Logistics, Inc. Liquidity Reconciliations (Unaudited) Reconciliation of Net Debt: (In millions) June 30, 2022 Shor-term debt $ 84 Long-term debt 1,801 Total Debt $ 1,885 Less: Cash and cash equivalents 384 Net debt $ 1,501 Reconciliation of Net Leverage: (In millions) June 30, 2022 Net debt $ 1,
Slide 25: Reconciliation of Net Income to Trailing Twelve Months Adjusted EBITDA
GXO Logistics, Inc. Reconciliation of Net Income to Trailing Twelve Months Adjusted EBITDA (Unaudited) Trailing Twelve Year Ended Months Ended Six Months Ended June 30, December 31, June 30, (In millions) 2022 2021 2021 2022 Net income attributable to GXO $ 88 $ 25 $ 153 $ 216 Net income attributabl
Slide 26: Return on Invested Capital
GXO Logistics, Inc. Return on Invested Capital (Unaudited) Trailing Twelve Year Ended Months Ended Nine months ended September 30, December 31, September 30, (In millions) 2022 2021 2021 2022 (Pro forma)(1) Adjusted EBITA(1)(2) $ 329 $ 266 $ 374 $ 437 Cash paid for income taxes (74) (38) (75) (111)
Slide 27: Reconciliation of Net Income to Trailing Twelve Months Pro forma Adjusted EBITA
GXO Logistics, Inc. Reconciliation of Net Income to Trailing Twelve Months Pro forma Adjusted EBITA (Unaudited) Trailing Twelve Year Ended Months Ended Nine Months Ended September 30, December 31, September 30, (In millions) 2022 2021 2021 2022 (Pro forma) (1) Net income attributable to GXO $ 151 $
Slide 28: ©2022 GXO Logistics, Inc. | Confidential and Proprietary
©2022 GXO Logistics, Inc. | Confidential and Proprietary 28