Xpo, Inc. · NYSE:XPO
Xpo — XPO Logistics — Investor Presentation (February 2014)
28 slides from Xpo's investor presentation, Feb 24, 2014
Slide 1: Management Presentation February 2014
Exhibit 99.1 Management February 2014Presentation
Slide 2: Additional Information and Forward-Looking Statements
Additional Disclaimer In “SEC”) “Merger”). WITH AND also Greenwich investor Participants XPO, Information (1) on and to 1933, Forward This XPO’s be “forecast,” well These any those expected conditions growth information ability no businesses subsequent sell registration connection identified Schedul
Slide 3: XPO company rankings and position
Onelargest We 4th Growing Will 3Sources facilitate of be the #3 for presence freight provider Largest rankings: over 20,000 brokerage in 3PLs ofmanaged Transport intermodal indeliveries North firm transportation Topics, and America services per Top day Journal 50 andand logistics largest ofLTL Comme
Slide 4: Clearly Defined Strategy for Value Creation
Clearly Acquire 4We are on Defined companies track or Strategy ahead that bring of forplan Value value with Creation and allare three highly legs scalable of our growth Significantly strategyscale up and optimize existing operations Open cold-starts where sales recruitment can drive revenue
Slide 5: Disciplined Execution of Growth Plan
Precisenational Completed Created Introduced Added Stratified 5Disciplined Execution leading customers, scalable 10 focus strategic operations edge on ofITGrowth assigned operational recruiting platform acquisitions centers Plan a and single excellence for training and shared point established of pr
Slide 6: Massive Network Built Over Two Years
Massive Built 9,500 Over 6Approximately 2,200 24,000 integrated customers Commitment employees active, 400 network in the additional vetted to at manufacturing, across Shipper 94carriers locations trucks North Satisfaction under America in industrial, theexclusive U.S. in and retail, twocontract Can
Slide 7: Planned Pacer Acquisition: Compelling Reasons
Planned Compelling Intermodal Pacer The 7Sources: combination (NASDAQ: is the Acquisition Transport islargest reasons one will of PACR) provider Topics for the ofcreate Pacer the fastest-growing is and transaction of company-wide the International Pacer intermodal thirdInternational largest areas se
Slide 8: Strong Pacer Intermodal Business
StrongPacer With Pacer Trailing Approximately 8Source: manages Entry Pacer 12 acquisition, months into International approximately 950Intermodal revenue employees XPOcompany ofwill 10% approximately at 30 gain oflocations data all instant domestic $1.0 scale serving billion intermodal andover expert
Slide 9: Intermodal: Major Market Opportunity
Major $15 One –Enables 9Sources: Rail Intermodal billion ofcan Intermodal the shippers SJbe fastest-growing intermodal Consulting can moreto lower Market fuel-efficient lower sector Group, shipper’s Opportunity transportation areas inInc., North of than cost transportation FTR truckload by America c
Slide 10: High-Growth Cross-Border Mexico Business
High-Growth –Mexico Large Pacer Sources: 10Competitively Faster Can has potential beoffers speed-to-market AlixPartners more industry-leading Cross-Border acost universe highly priced effective and attractive labor for than Pacer cross-border Mexico conversion than force overseas International manuf
Slide 11: Immediate Synergies from Combination
Immediate –Combination Will Source: 11XPO Pacer’s Combined enhance will XPO intermodal Synergies market sales will XPO’s Logistics create force intermodal value customers ofcompany will Service company-wide proposition usetowill Offerings strongest data ourhave 9,500 ascross-selling aaccess single l
Slide 12: Pacer Transaction Terms and Financing
Pacer Terms $3.00 Enterprise 11.5 and Financing with Closing 12 8.9 times proceeds Transaction in Purchase times Expected stock XPO value Pacer’s 2014 of subject intends price of recent April Highlights 2013 approximately consensus of tocommon 2014 to consensus $9.00 a fund price EBITDA per cash col
Slide 13: Largest Last-Mile Provider of Heavy Goods
Largest High Strengthens Industry-leading –Acquired 13Highly value, provider scalable 3PD Optima high XPO’s in customer of margin August Service supplier position heavybusiness 2013 Solutions goods, to experience with 3PD,shippers last-mile serves leader in IT November acan in as rapidly logistics l
Slide 14: Acquired Largest Expedited Manager in North America
Acquired Largest –Manages Adds Capitalizes Makes 14Proprietary transportation XPO web-based approximately NLM on the online trend in largest December expeditor management toward auction manager $500just-in-time system in 2013 million North of capabilities expedited allows of America inventories annu
Slide 15: Significant Growth Model
Significant Strategic Cold-starts: Scale Service M&A 15 and program: offering: accounts: productivity: Growth expand focus build market Embedded footprint onleadership recruit the totop in large sales inmarkets 100 XPO’s positions shippers reps pipeline with Model andinprovide best prospects the fas
Slide 16: Leading Positions in High-Growth Sectors
Leading Market Size Sector Truck Long-haul Intermodal manufacturing Heavy Sources: last-mile Bureau 16 Growth brokerage ($ goods, Projected of Positions Armstrong billions) Economic rail $15$13 efficiencies in3-5 $50 Mexico in (x 5-6 times &Analysis, High-Growth GDP) 2-3 times Associates, times near
Slide 17: Focused Sales Effort Differentiates XPO
Focused Differentiate –Single Capture Source: 17Strategic National Branch point SJ more Sales network accounts Consulting accounts of XPO of and contact the expands by Marketing team $32 team providing Group, forbillion focused marketing each ourEffort Inc. reach customer less-than-truckload a compl
Slide 18: Proprietary Technology Increases Productivity
(1) Increasing One Proprietary Highly IT 18 budget common scalable $21 of Productivity freight $36 million platform load million optimizer of execution for operating through for freight 2014 tools and Technology expense brokerage (1) for tendering pricing androlled via and $15automated load-covering
Slide 19: Cold-starts Growth in Brokerage
Growth –Hire 1910 in Brokerage strong freight through industry cold-starts brokerage, Cold-starts veterans on12 a combined in asfreight branchforwarding, annual presidents revenue Position onerun in expedited rate in prime of approximately recruitment areas $150 Rapidly million scale up by adding sa
Slide 20: CEO Bradley Jacobs
CEO Bradley Founded Amerex United 20 Waste Rentals: Oil andAssociates: led stock S.Built Jacobs four outperformed world’s highly Builtsuccessful one largest S&P of world’s equipment 500 companies, by largest 5.6x rental including from oilcompany brokerage 1992world-class to 1997 firmsUnited Hamilton
Slide 21: Highly Skilled Management Team
Highly Sean John Scott Troy Gordon General Mario Dave Karl Chief Bud President, Tom Senior Lou Vice The 21 full Amo Workmon Meyer Connolly President, Hardig Cooper Fernandez Malat Rowe Technology Operating Financial Strategy Information Executive Harik Vice Skilled Devens Counsel management Electrol
Slide 22: Deep Operational Bench
Deep Chris President, Will Chief Gregory Senior Jake Sr. Jenna Marie Kip Regional Drew Doug Branch Evan Director Andrew Sales 22 Operational Douglass O’Shea Schnell Laskaris Bench and Healy Wilkerson Sales George Sargent Fields Vice President, Armstrong of Ritter Vice Sales Operations Expedited Trai
Slide 23: First Quarter Revenue Growth Trajectory
FirstQ2 Revenue 28% $109 $137 $194 $45 $71 Q1 2012 Source: 23 $55 quarter-over-quarter 24 $114 2013 Q3 Company Months ($Q4 millions) Q1ofQ2 data NewQ3Growth Q4 CACR Strategy $257
Slide 24: Transformational Impact of Pacer Acquisition
Transformational 94 Over vetted a20,000+ With 124 Access Locations Pacer 3PD XPO Interstate Source 24day locations locations Pacer 24,000 Now 22,000 carriers for todeliveries highways 60,000 of proactive, network freight forma miles Impact movements with rail of routes acquisition Pacer a day of Pac
Slide 25: Key Financial Statistics
Key Financial Revenue 2011 Currently Expect Growth Freight Source: 25 revenue to brokerage: Company by Trajectory be atBusiness more atof Statistics approximately $177 than data revenue Unit, million $1 billion 4Q up 2013 $2 202%, annual billion vs.gross 2012 run revenue margin rate with run uprate
Slide 26: Financial Targets
Financial Annual At Full Revenue EBITDA 26 least yearEBITDA revenue $400 of 2014 2017 of Targets approximately approximately million run runrate rate of acquired ofof$7.5 $425 atatleast least billion million historical $2.75 $100 billion million annual by by revenue, December December excluding 31 3
Slide 27: Incentivized Management Equity Ownership
(1) Incentivized Equity Management Common Preferred Warrants Convertible Stock Fully Diluted Options ownership Based (Strike Shares Stock (2)2/21/14) (3) (4) of (5) 27 Assumes As Dilutive of Senior XPO and Shares and Excludeson FebruaryEquivalent effectPrice 10.5 48.7 directors aligns SEC Management
Slide 28: Clear Path to Significant Value Creation
Clear aPath Assembled Built Established Scaled Focused We’re 28 making up $177 ontofor top making leading over million Significant the management 20,000 best positions XPO company usedeliveries an Value ofirreplaceable talent ininto our some Creation resources with the a day of 4th athe for skill su
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