Slide 1: Investor Overview Q3 2024
Investor Overview Q3 2024 October 2024
Slide 2: Forward-looking statements
2 Forward - looking statements This document includes forward - looking statements within the meaning of Section 27 A of the Securities Act of 1933 , as amended, and Section 21 E of the Securities Exchange Act of 1934 , as amended, including statements relating to our full year 2024 expectations of
Slide 3: Third quarter 2024 highlights
Third quarter 2024 highlights $2.05 billion of revenue, up 4% YoY $176 million of operating income, up 14% YoY $333 million of adjusted EBITDA, up 20% YoY $1.02 of adjusted diluted EPS 1 , up 16% YoY LTL adjusted operating income of $198 million, up 17% YoY LTL adjusted operating ratio of 84.2%, imp
Slide 4: Third quarter 2024 performance
4 Third quarter 2024 performance $2.05 billion REVENUE $176 million OPERATING INCOME $95 million NET INCOME $0.79 DILUTED EARNINGS PER SHARE $122 million ADJUSTED NET INCOME $ 1.02 ADJUSTED DILUTED EPS $ 333 million ADJUSTED EBITDA $264 million CASH FLOW FROM OPERATING ACTIVITIES NORTH AMERICAN LTL
Slide 5: Our LTL strategy is driving significant margin and earnings expansion
Our LTL strategy is driving significant margin and earnings expansion 5 Provide best - in - class service 2 3 4 Invest in network for the long - term Accelerate yield growth Drive cost efficiencies Targets for LTL Growth, Profitability and Efficiency, 2021 - 2027 1 Revenue CAGR of 6% to 8% Adjusted
Slide 6: Strong position in North American LTL
Strong position in North American LTL 6 6
Slide 7: A leading carrier in a compelling industry
A leading carrier in a compelling industry • $52 billion bedrock industry for the US economy, with nearly 75% share held by top 10 LTL players • Diverse demand across verticals, with secular growth drivers • Attractive pricing environment for over a decade, with positive YoY industry pricing each ye
Slide 8: A major player in the supply-chain ecosystem
A major player in the supply - chain ecosystem 1 Operational service centers as of September 30, 2024 Note: Company data for North American LTL segment only as of September 30, 2024, unless otherwise noted as 2023 (full year) 3 rd largest LTL carrier by 2023 revenue 12.4% of 2023 revenue allocated t
Slide 9: Expansive network covering 99% of US zip codes
9 Expansive network covering 99% of US zip codes • 304 service centers 2 • Cross - border and offshore capabilities • Strategic investments in high - demand markets 1 Indicates expanded footprint with integration underway of service centers acquired in December 2023; on track for all sites to be ope
Slide 10: Strategic mix of blue-chip and local customers
Strategic mix of blue - chip and local customers 10 Note: Company data for North American LTL segment only as of September 30, 2024; selected customers Long - standing relationships – average tenure of top 10 customers is 16 years
Slide 11: LTL growth plan and levers
LTL growth plan and levers 11
Slide 12: Executing on four key levers
Provide best - in - class service Accelerate yield growth Drive cost efficiencies • Aligning price earned with increasing service excellence • Expanding accessorial revenue from value - add services • Growing share of higher - yielding local channel with scaled - up local salesforce • Insourcing lin
Slide 13: Service initiatives have driven over 75% improvement in damages
1 Based on claims payment data 2 Based on damage frequency data 13 Service initiatives have driven over 75% improvement in damages since the beginning of LTL 2.0 2 LTL 2.0 Delivering meaningful service improvements Damage claims declining as a % of LTL revenue 1 1.1% 1.2% 1.1% 0.9% 0.9% 1.0% 1.0% 1.
Slide 14: Investing in capacity that supports growth and high returns
Investing in capacity that supports growth and high returns 14 Tractor age in years As of December 31 5.3 5.1 5.4 5.9 5.9 Note: Gross capex and revenue for North American LTL only 1 Excludes the company’s December 2023 acquisition of 28 service centers 5.0 LTL 2.0 $145 $197 $145 $197 $424 $581 3.8%
Slide 15: Earning price by delivering value through service excellence
Earning price by delivering value through service excellence 15 Note: Gross revenue per hundredweight excludes the adjustment required for financial statement purposes in accordance with th e c ompany's revenue recognition policy Yield, excluding fuel, improved 6.7% year - over - year in Q3’24 Gross
Slide 16: Insourcing linehaul is a key cost and service opportunity
Insourcing linehaul is a key cost and service opportunity 16 Reduced linehaul miles outsourced to third - party carriers by nearly 800 bps year - over - year in Q3’24 LTL 2.0 Linehaul miles outsourced to third - party carriers, as a % of total linehaul miles 25.5% 25.3% 25.7% 24.4% 23.8% 23.9% 23.6%
Slide 17: 11% to 13% adjusted EBITDA CAGR in North American LTL
17 11% to 13% adjusted EBITDA CAGR in North American LTL 2021 - 2027 Combination of volume gains + pricing over inflation 6% to 7% 3% to 4% 2% Operating costs optimized through technology Linehaul insourced from third parties Expected components and contributions 11% to 13%
Slide 18: Appendix
Appendix 18
Slide 19: European Transportation segment
European Transportation segment • In France: the #1 full truckload (FTL) broker and the #1 pallet network (LTL) provider • In Iberia (Spain and Portugal): the #1 FTL broker and the #1 LTL provider • In the UK: a top - tier dedicated truckload provider, and the largest single - owner LTL network • Se
Slide 20: 2024 planning assumptions
20 For the full year 2024, the company expects: • Gross capex of $700 million to $800 million • Interest expense of $225 million to $230 million • Pension income of approximately $25 million • Adjusted effective tax rate of 24.0% to 25.0% • Diluted share count of 120 million 2024 planning assumption
Slide 21: Financial reconciliations
Financial reconciliations The following table reconciles XPO’s net income from continuing operations for the periods ended September 30, 2024 and 2023 to adjusted EBITDA for the same periods. 21 Reconciliation of net income to adjusted EBITDA Amounts may not foot due to rounding Refer to “Non - GAAP
Slide 22: Financial reconciliations (cont.)
Financial reconciliations (cont.) The following table reconciles XPO’s net income from continuing operations for the periods ended September 30, 2024 and 2023 to adjusted net income from continuing operations for the same periods. 22 Amounts may not add due to rounding 1 The income tax rate applied
Slide 23: North American LTL segment financial table
In millions (Unaudited) Change % Change % Revenue (excluding fuel surcharge revenue) $ 1,055 $ 1,005 5.0% $ 3,130 $ 2,848 9.9% Fuel surcharge revenue 195 223 -12.6% 613 636 -3.6% Revenue 1,251 1,228 1.9% 3,743 3,484 7.4% Salaries, wages and employee benefits 642 616 4.2% 1,894 1,744 8.6% Purchased t
Slide 24: Non-GAAP financial measures
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 document to the most directly comparable measure under GAAP, which are set forth in the financial tables attache