C.h. Robinson Worldwide, Inc. · NASDAQ:CHRW
C.h. Robinson Worldwide — Q3 2018 Earnings Presentation
26 slides from C.h. Robinson Worldwide's earnings presentation, Oct 31, 2018
Slide 1: Earnings Conference Call – Third Quarter 2018
Earnings Conference Call – Third Quarter 2018 October 31, 2018 John Wiehoff, Chairman & CEO Andrew Clarke, CFO Robert Biesterfeld, COO & President of NAST Robert Houghton, VP of Investor Relations 1
Slide 2: Safe Harbor Statement
Safe Harbor Statement Except for the historical information contained herein, the matters set forth in this presentation and the accompanying earnings release are forward-looking statements that represent our expectations, beliefs, intentions or strategies concerning future events. These forward-loo
Slide 3: Q3 2018 – Key Themes
Q3 2018 – Key Themes ▪ Strong financial performance including net revenue and operating margin expansion ▪ Double-digit increase in truckload cost and price ▪ Third quarter financial performance demonstrates the strength of our business model 3 3
Slide 4: Results Q3 2018
Results Q3 2018 in thousands, except per share amounts and headcount Three Months Ended September 30 Nine Months Ended September 30 2018 2017 % Change 2018 2017 % Change Total Revenues $4,291,900 $3,784,451 13.4% $12,493,264 $10,909,594 14.5% Total Net Revenues $694,044 $593,846 16.9% $1,991,452 $1,
Slide 5: Other Income Statement Items
Q3 2018 Other Income Statement Items ▪ Q3 effective tax rate of 26.5% vs. 35.2% last year ▪ Interest expense increase due to higher debt levels and an increase in variable interest rates ▪ $7 million favorable impact from currency revaluation ▪ Weighted average diluted shares outstanding down 0.6 pe
Slide 6: 2018 Cash Flow
2018 Cash Flow Q3 Cash Flow from Operations YTD Cash Flow from Operations + 222.5% + 142.2% $528.9M $220.4M $218.3M $68.3M ▪ $152.1 million increase in cash flow ▪ $310.6 million increase in cash flow driven by improved working capital driven by improved working capital performance and higher net in
Slide 7: 2018 Capital Distribution
2018 Capital Distribution Q3 Capital Distribution YTD Capital Distribution + 18.7% + 23.5% $421.7M $150.8M $341.5M $127.1M Cash Dividends Share Repurchases ▪ $150.8 million of net income returned ▪ $421.7 million of net income to shareholders returned to shareholders ▪ $64.6 million in cash dividend
Slide 8: Balance Sheet
Q3 2018 Balance Sheet in thousands September 30, December 31, 2018 2017 % Change Accounts Receivable, Net $2,251,944 $2,113,930 Contract Assets(1) $201,411 — Accounts Payable and O/S Checks $1,152,633 $1,096,664 Accrued Transportation Expense(1) $156,810 — Net Operating Working Capital(2) $1,143,912
Slide 9: Fourth Quarter 2018 Trends – October
Fourth Quarter 2018 Trends – October ▪ October to date total company net revenue per day has increased approximately 9 percent when compared to October 2017 ▪ Truckload volume per day has declined approximately 2 percent on a year-over-year basis in October ▪ Fourth quarter 2017 items of note ▪ 12.5
Slide 10: Transportation Net Revenue Margin
North America Truckload Cost and Price Change(1) TRANSPORTATION NET REVENUE MARGIN YoY Price Change YoY Cost Change Transportation Net Revenue Margin North America ▪ North America Truckload cost and price change chart Truckload Q3 represents truckload shipments from all North America Volume (1.5%) s
Slide 11: North America Truckload Cost and Price Per Mile
North America Truckload Cost and Price Per Mile(1) Price per Mile Cost per Mile ▪ North America Truckload cost and price per mile chart represents truckload shipments from all North America segments ▪ 2018 third quarter cost and price per mile remain above year-ago levels ▪ Continued price movements
Slide 12: NAST Results by Service Line
Q3 2018 NAST Results by Service Line Truckload, Less Than Truckload and Intermodal in thousands Three Months Ended September 30 Net Revenues 2018 2017 % Change ▪ Double-digit price Truckload $334,665 $266,632 25.5% increases in truckload, LTL LTL $116,789 $97,634 19.6% and intermodal Intermodal $7,8
Slide 13: NAST Operating Income
Q3 2018 NAST Operating Income Q3 Operating Income Q3 Operating Margin % + 34.9% + 380 bps $204.2M 43.9% $151.4M 40.1% ▪ Increased net revenues ▪ Progress against productivity initiatives ▪ Headcount approximately flat ‹#› 13
Slide 14: Global Forwarding Results by Service Line
Q3 2018 Global Forwarding Results by Service Line Ocean, Air and Customs in thousands Three Months Ended September 30 ▪ Volume increases in all Net Revenues 2018 2017 % Change service lines Ocean $74,700 $81,110 (7.9%) Air $28,228 $23,992 17.7% ▪ Ocean net revenues Customs $23,305 $17,419 33.8% nega
Slide 15: Global Forwarding Operating Income
Q3 2018 Global Forwarding Operating Income Q3 Operating Income Q3 Operating Margin % (23.4%) (620 bps) $31.1M 24.0% $23.8M 17.8% ▪ Investments in headcount and increased variable compensation ▪ 8.9 percent increase in average headcount ▪ Milgram headcount added 5 percentage points ‹#› 15
Slide 16: Robinson Fresh Results
Q3 2018 Robinson Fresh Results Transportation and Sourcing in thousands Three Months Ended September 30 Sourcing 2018 2017 % Change ▪ Sourcing case volume declined 9.5 percent Total Revenues(1) $263,508 $350,750 (24.9%) Net Revenues $25,172 $29,761 (15.4%) Net Revenue Margin % 9.6% 8.5% 110 bps ▪ Re
Slide 17: Robinson Fresh Operating Income
Q3 2018 Robinson Fresh Operating Income Q3 Operating Income Q3 Operating Margin % + 84.8% + 1,410 bps $21.4M 35.5% $11.6M 21.4% ▪ Increased transportation net revenues ▪ Operating expense reduction initiatives continue ▪ 8.8 percent reduction in operating expenses ▪ 5.8 percent reduction in average
Slide 18: All Other and Corporate Results
Q3 2018 All Other and Corporate Results Managed Services and Other Surface Transportation in thousands Three Months Ended September 30 Net Revenues 2018 2017 % Change Managed Services $20,080 $18,487 8.6% Other Surface Transportation $14,001 $13,861 1.0% Total $34,081 $32,348 5.4% Managed Services ▪
Slide 19: Final Comments
Final Comments ▪ Cost and price remain above year-ago levels ▪ Continued business model strength ▪ Escalating tariff activity ▪ Investing to deliver increased value to customers, carriers, employees and shareholders ‹#› 19
Slide 20: Appendix
Appendix 20
Slide 21: Transportation Results
Q3 2018 Transportation Results(1) in thousands Three Months Ended September 30 Nine Months Ended September 30 Transportation 2018 2017 % Change 2018 2017 % Change Total Revenues $4,028,392 $3,433,701 17.3% $11,619,171 $9,855,739 17.9% Total Net Revenues $668,872 $564,085 18.6% $1,904,853 $1,640,883
Slide 22: NAST Results
Q3 2018 NAST Results in thousands, except headcount Three Months Ended September 30 Nine Months Ended September 30 2018 2017 % Change 2018 2017 % Change Total Revenues(1) $2,931,461 $2,469,420 18.7% $8,473,376 $7,110,223 19.2% Total Net Revenues $465,522 $377,403 23.3% $1,317,104 $1,109,749 18.7% Ne
Slide 23: Global Forwarding Results
Q3 2018 Global Forwarding Results in thousands, except headcount Three Months Ended September 30 Nine Months Ended September 30 2018 2017 % Change 2018 2017 % Change Total Revenues(1) $639,268 $552,134 15.8% $1,810,619 $1,549,742 16.8% Total Net Revenues $134,101 $129,842 3.3% $401,169 $357,411 12.2
Slide 24: Robinson Fresh Results
Q3 2018 Robinson Fresh Results in thousands, except headcount Three Months Ended September 30 Nine Months Ended September 30 2018 2017 % Change 2018 2017 % Change Total Revenues(1) $565,590 $613,646 (7.8%) $1,737,083 $1,821,094 (4.6%) Total Net Revenues $60,340 $54,253 11.2% $169,747 $171,936 (1.3%)
Slide 25: All Other and Corporate Results
Q3 2018 All Other and Corporate Results in thousands, except headcount Three Months Ended September 30 Nine Months Ended September 30 2018 2017 % Change 2018 2017 % Change Total Revenues(1) $155,581 $149,251 4.2% $472,186 $428,535 10.2% Total Net Revenues $34,081 $32,348 5.4% $103,432 $97,105 6.5% I
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