Xpo, Inc. · NYSE:XPO
Xpo — XPO Logistics — Merger or Acquisition (May 2015)
38 slides from Xpo's merger presentation, May 11, 2015
Slide 1: XPO Investor Presentation May 2015
XPO Investor Presentation May 2015 XPO to Acquire Norbert Dentressangle Announced April 28, 2015 XPO to Acquire Bridge Terminal Transport Announced May 4, 2015
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation includes 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, including 2015 performance targets, the expected closing dates for the acq
Slide 3: Contents
Contents Growth strategy and execution First quarter 2015 financial results Planned acquisition of Norbert Dentressangle Planned acquisition of Bridge Terminal Transport Summary 3 | XPO Investor Presentation May 4, 2015
Slide 4: One of the Largest 3PLs in North America Today
One of the Largest 3PLs in North America Today Leader in end-to-end supply chain solutions #1 provider of last mile logistics for heavy goods #1 manager of expedited shipments #2 freight brokerage firm and 12th largest logistics company #3 provider of intermodal services, and leader in cross-border
Slide 5: Strong Value Proposition Drives Growth
Strong Value Proposition Drives Growth Complete service portfolio – Freight brokerage, intermodal, last mile, expedite, highly-engineered contract logistics and global forwarding Positioned as a single-source provider with the scale and resources to optimize the supply chains of blue chip customers
Slide 6: Precise Execution of Growth Plan
Precise Execution of Growth Plan Began executing a new growth strategy under new management, following a significant investment in the company in September of 2011 Completed 14 strategic acquisitions and established 23 cold-starts in three years Created leading-edge recruiting and training programs
Slide 7: Major Resources Dedicated to Customer Satisfaction
Major Resources Dedicated to Customer Satisfaction 201 locations in the U.S., Canada, Mexico, Asia and Europe More than 10,000 employees Approximately 4,900 owner operator trucks under contract for drayage, expedited and last mile subsidiaries – Will expand to 6,200 owner operator trucks after acqui
Slide 8: Significant Growth Embedded in XPO's Model
Significant Growth Embedded in XPO’s Model Strategic accounts: market multiple services to large shippers Multi-modal: become the logistics partner of choice by offering the most compelling range of transportation solutions Scale and productivity: recruit sales reps and provide state-of-the-art trai
Slide 9: Secular Trends Driving Industry Growth
Secular Trends Driving Industry Growth Growth in e-commerce retailing Outsourcing of logistics services and capacity Conversion from over-the-road to intermodal rail Near-shoring of manufacturing in Mexico Just-in-time lean production Driver shortage Automation in transportation and logistics We hav
Slide 10: Leading Positions in High Growth Sectors
Leading Positions in High Growth Sectors Market Projected Size Growth Sector ($ billions) (x GDP) Growth Drivers Outsourcing, driver shortage and Truck brokerage $50 2-3 times technology Outsourcing, e-commerce, just-in-Contract logistics $37 2-3 times time production and technology Long-haul rail e
Slide 11: Focused Sales and Marketing Effort
Focused Sales and Marketing Effort Differentiate XPO by providing a passionate commitment to customer satisfaction across a range of services Strategic accounts team markets to largest 2,000 companies, where XPO can provide services throughout the supply chain in both transportation and logistics Na
Slide 12: High Productivity through Technology
High Productivity through Technology One common IT platform for freight brokerage in all cold-starts and acquired companies Proprietary Freight Optimizer tools for pricing and load-covering – Highly scalable load execution and tendering via automated load-to-carrier matching – Algorithms that retrie
Slide 13: Cold-starts Contribute to Organic Growth
Cold-starts Contribute to Organic Growth 23 cold-starts to date: 12 freight brokerage, 10 global forwarding; one expedite Low capital investment can deliver outsized returns Hire strong industry veterans as branch presidents Position in prime recruitment areas and scale up Freight brokerage cold-sta
Slide 14: CEO Bradley S. Jacobs
CEO Bradley S. Jacobs Prior to XPO, founded and led four highly successful companies, including two world-class publicly-traded corporations United Rentals: Built world’s largest equipment rental company United Waste: Created 5th largest solid waste business in North America Hamilton Resources: Grew
Slide 15: Highly Skilled Management Team
Highly Skilled Management Team Troy Cooper United Rentals, United Waste Chief Operating Officer John Hardig Stifel Nicolaus, Alex. Brown Chief Financial Officer Scott Malat Goldman Sachs, UBS, JPMorgan Chase Chief Strategy trategy Officer Gordon Devens AutoNation, Skadden Arps General Counsel Louis
Slide 16: Highly Skilled Management Team
Highly Skilled Management Team Dave Rowe Echo Global Logistics Chief Technology Officer Bud Workmon 3PD, Cardinal Logistics President, Last Mile Will O’Shea 3PD, Ryder, Cardinal Logistics Chief Sales and Marketing Officer, Last Mile Dominick Muzi Priority Solutions, AIT Worldwide President, Global F
Slide 17: First Quarter 2015 Financial Results
First Quarter 2015 Financial Results
Slide 18: First Quarter 2015 Results
First Quarter 2015 Results Revenue ($ millions) Adjusted EBITDA ($ millions) (1) $703 +149% YOY $29.2 $282 $0.6 Q1 ‘14 Q1 ‘15 Q1 ‘14 Q1 ‘15 (1) For a reconciliation of adjusted EBITDA to GAAP net loss, see Appendix 18 | XPO Investor Presentation May 4, 2015
Slide 19: First Months of Growth Strategy
First 39 Months of Growth Strategy Revenue ($ millions) $831 $703 $662 $581 $295 $245 $194 $137 $109 $114 $55 $71 $45 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2012 2013 2014 2015 19 | XPO Investor Presentation May 4, 2015
Slide 20: 2015 Year-End Run Rate Targets
2015 Year-End Run Rate Targets Financial targets raised in light of M&A announcements An annual revenue run rate of at least $9.5 billion by December 31, 2015 An annual EBITDA run rate of at least $625 million by December 31, 2015 Expects to exceed 2017 targets two years ahead of plan 20 | XPO Inves
Slide 21: Incentivized XPO Management
Incentivized XPO Management Equity ownership aligns management team with shareholders Management and directors own approx. 21% of the company Common Stock Equivalent Capitalization as of 3/31/15 Common Shares 79.7 million(1) Preferred Shares 10.5 million Warrants (Strike Price $7 per share) 10.5 mil
Slide 22: Planned Acquisition of Norbert Dentressangle
Planned Acquisition of Norbert Dentressangle
Slide 23: XPO Will Attain Global Platform for Growth
XPO Will Attain Global Platform for Growth Top ten worldwide logistics company 863 locations in 27 countries and more than 52,000 employees Europe’s largest ground transportation network, including more than €250 million of dedicated carriage – Mix of 7,700 owned trucks, 3,200 trucks contracted thro
Slide 24: Strategic Rationale
Strategic Rationale ND’s capabilities closely mirror XPO’s North American offering – XPO will gain global scale in three of its core services: contract logistics, freight brokerage and global freight forwarding Companies share an asset-light model with low capital intensity: net capex of approximate
Slide 25: Transaction Overview
Transaction Overview Enterprise Value: Approximately €3.24 billion ($3.53 billion) Purchase Price Transaction Multiple: 9.1x consensus 2015E EBITDA of €357 million ND’s founder and his family have irrevocably agreed to sell his 67% ownership of the company to XPO at €217.50 per share all cash, exclu
Slide 26: Europe's Strongest Full-Service 3PL Platform
Europe’s Strongest Full-Service 3PL Platform 2014 pro-forma revenue of approximately €5.1 billion ($5.5 billion) Logistics Transportation Global Forwarding 2014 PF Revenue 2014 PF Revenue 2014 PF Revenue €2.6 billion €2.3 billion €0.2 billion Employees: 27,800 Employees: 13,900 Employees: 650 Sites:
Slide 27: European Leader in E-Commerce
European Leader in E-Commerce Leading outsourced e-fulfillment provider in Europe €242 million revenue in e-commerce logistics in 2014 – 31% organic growth compared to 2013 – Business focused in the UK, Spain and France Strong growth potential with approximately 5% market share in estimated €5 billi
Slide 28: Preeminent European Transportation Network
Preeminent European Transportation Network 36-year history as global partner to blue chip customers Combines non-asset, asset-light and asset-based operations Rapid growth in freight brokerage, asset-light palletized service and dedicated carriage Unique service capabilities from lane density coveri
Slide 29: Loyal Customer Base Across Attractive Verticals
Loyal Customer Base Across Attractive Verticals Highlights Top 10 Customers Diversified portfolio of blue chip customers Largest client under 4% of revenue 97% customer renewal rate in logistics Customer verticals include retail, food & beverage, manufacturing, chemicals, agriculture, e-commerce and
Slide 30: Synergies to Drive Growth
Synergies to Drive Growth Substantial opportunities to cross-sell services and cross-fertilize best practices between North American and European platforms XPO expects to invest in growing the European business through – Expansion of e-fulfillment services to build on leadership position – Deploymen
Slide 31: Intense Focus on Operational Execution
Intense Focus on Operational Execution Current ND CEO Hervé Montjotin will become CEO of XPO Europe and President of XPO Logistics worldwide Substantially all of the ND executive team will join XPO ND’s headquarters in Lyon, France will become XPO’s European headquarters Global career advancement an
Slide 32: Global Logistics Company Under Single XPO Brand
Global Logistics Company Under Single XPO Brand Pro-Forma XPO ND XPO Combined Countries 7 24 27 Locations 201 662 863 Employees 10,000 42,350 52,350 Customers 15,000 20,000 > 30,000 Logistics Facilities (sf) 13 million 116 million 129 million Major leap forward, but XPO still in early innings of lon
Slide 33: Planned Acquisition of Bridge Terminal Transport
Planned Acquisition of Bridge Terminal Transport
Slide 34: Bridge Terminal Transport Services Company Profile
Bridge Terminal Transport Services Company Profile BTT is one of the largest asset-light drayage providers in the United States Network of 1,300 independent owner operators and 28 terminals, primarily on the East Coast – Approximately 250 employees 33-year-old company with loyal blue chip customer r
Slide 35: Strategic Rationale and Synergies
Strategic Rationale and Synergies Acquisition will increase XPO’s total capacity under contract to its drayage, last mile and expedite businesses to more than 6,200 independent owner operators – Can take on more freight in tight markets, when drayage capacity is scarce – More cost effective and more
Slide 36: Details of the BTT Transaction
Details of the BTT Transaction Purchase price is $100 million, excluding any working capital adjustments, with no assumption of debt Represents a consideration of 8.1 times EBITDA of $12.4 million Expected to be immediately accretive to earnings before the benefits of cross-selling and other synergi
Slide 37: Clear Path for Significant Value Creation
Clear Path for Significant Value Creation XPO’s growth plan is still in early innings Significant future growth embedded in XPO’s business model Leading positions in fastest-growing areas of transportation and logistics Compelling value proposition as a multi-modal, single-source provider Passionate
Slide 38: Appendix: Reconciliation of Non-GAAP Measures
Appendix The following table reconciles XPO’s net loss available to common stockholders for the three months ended March 31, 2015, to adjusted EBITDA for the same periods Reconciliation of Non-GAAP Measures XPO Logistics, Inc. Consolidated Reconciliation of EBITDA to Net Loss (In millions) Three Mon