Slide 1: FedEx Corporation Fiscal Second Quarter 2024 Earnings
FedEx Corporation Fiscal Second Quarter 2024 Earnings | December 19, 2023 Investor Relations 2
Slide 2: Forward-Looking Statements and Non-GAAP Financial Measures
Forward-Looking Statements and Non-GAAP Financial Measures Certain statements in this presentation may be considered forward-looking statements, such as statements regarding expected cost savings, the planned consolidation of operating companies, future financial targets, business strategies, manage
Slide 3: Key messages and results overview
Key messages • Delivering another strong Peak season while sustaining superior service levels • DRIVE enabling improved profitability with two consecutive quarters of operating income growth and margin expansion against declining revenues • Reaffirming FY24 adjusted EPS* outlook *Non-GAAP financial
Slide 4: DRIVE is enabling improved profitability
DRIVE is enabling improved profitability Highly confident in our goal to deliver $1.8B in cost reduction benefits from DRIVE DRIVE supporting operating income growth against declining revenues (Absolute $ change) DRIVE impact Q2 FY24 Q2 cost savings: Q1 FY24 Q4 FY23 Q3 FY23 • ~$200M in Surface Netwo
Slide 5: Building the world's most flexible, efficient, and intelligent network
Building the world’s most flexible, efficient, and intelligent network 9 EVP & Chief Customer Officer 10
Slide 6: Transportation segment revenue performance
Transportation segment revenue performance Gaining parcel share in the U.S. and internationally -6% +3% $8.6B -4% $10.9B $10.3B $8.4B $2.5B $2.4B Q2 FY23 Q2 FY24 Q2 FY23 Q2 FY24 Q2 FY23 Q2 FY24 FedEx Ground FedEx Freight FedEx Express • Revenue increase driven by higher • Lower shipments offset an •
Slide 7: Monthly volume trends: June 2023-Nov. 2023
Monthly volume trends: June 2023-Nov. 2023 Sequential improvement with continued growth in Ground and International Export Q1 average daily volume Q2 average daily volume FedEx Express U.S. Domestic Package YoY FedEx Express International Export YoY Jun Jul Aug Sep Oct Nov Jun Jul Aug Sep Oct Nov 3%
Slide 8: Digital DNA
Digital DNA Launching new Tracking Application Programming Interface (API) in early 2024 • API to offer e-commerce shippers and platforms best-in-class visibility for their customers including Picture Proof of Delivery • A significant enhancement for our retail customers as well as third-party e-com
Slide 9: Transportation segment operating income performance
Transportation segment operating income performance +57% +11% $936M -49% $598M $440M $487M $352M $178M Q2 FY23 Q2 FY24* Q2 FY23 Q2 FY24 Q2 FY23* Q2 FY24* FedEx Ground FedEx Freight FedEx Express • Increase driven by yield • Increase driven by yield • Decline due to lower revenue improvement, cost re
Slide 10: Operating income bridge and capital allocation priorities
Illustrative operating income bridge based on FY24 adjusted EPS* outlook $1.8B $6.3B $0.5B ($0.8B) $5.4B ($0.6B) FY23 adjusted Revenue, net International Variable comp DRIVE FY24E operating of cost export yield adjusted income* increases pressure operating income* *Non-GAAP financial measure; see ap
Slide 11: Q&A
Q&A Q&A 21 Appendix 22
Slide 12: Q2 FY24 reconciliation for FedEx Corporation
Q2 FY24 reconciliation for FedEx Corporation Diluted Operating Operating Income Net Dollars in millions, except EPS Earnings Income Margin1 Taxes2 Income3 Per Share GAAP measure $1,276 5.8% $302 $900 $3.55 Business optimization costs4 145 0.7% 35 110 0.44 Non-GAAP measure $1,421 6.4% $337 $1,010 $3.
Slide 13: Q2 FY24 Ground and Q2 FY23 reconciliations
Q2 FY24 reconciliation for FedEx Ground segment Operating Operating Dollars in millions Income Margin GAAP measure $900 10.4% Business optimization costs 36 0.4% Non-GAAP measure $936 10.8% 25 Q2 FY23 reconciliation for FedEx Corporation Diluted Operating Operating Income Net Dollars in millions, ex
Slide 14: Q2 FY23 Express reconciliation and FY24 EPS forecast
Q2 FY23 reconciliation for FedEx Express segment Operating Operating Dollars in millions Income Margin GAAP measure $341 3.1% Business optimization costs 11 0.1% Non-GAAP measure $352 3.2% 27 FY24 earnings per share forecast Dollars in millions, except EPS Adjustments Diluted Earnings Per Share Earn
Slide 15: FY23 operating income reconciliation and FY24 outlook
FY23 operating income reconciliation for FedEx Corporation Dollars in millions Operating Income GAAP measure $4,912 MTM retirement plans - accounting adjustment Business optimization costs 273 Goodwill and other asset 117 impairment charges Business realignment costs 36 FedEx Ground legal matter 35
Slide 16: Footnotes for non-GAAP reconciliation slides
Footnotes for non-GAAP reconciliation slides 1. Does not sum to total due to rounding. 2. Income taxes are based on the company’s approximate statutory tax rates applicable to each transaction. 3. Effect of “total other (expense) income” on net income amount not shown. 4. These expenses were recogni