United Parcel Service, Inc. · NYSE:UPS
United Parcel Service — Q3 2023 Earnings Presentation
28 slides from United Parcel Service's earnings presentation, Oct 26, 2023
Slide 1: 3Q23 Earnings Call
3Q23 Earnings Call October 26, 2023 © 2023 United Parcel Service of America, Inc. UPS, the UPS brandmark, and the color dark brown tone are trademarks of United Parcel Service of America, Inc. All rights reserved. 1
Slide 2: PJ Guido, Investor Relations Officer
PJ Guido Investor Relations Officer 2
Slide 3: UPS Speakers
UPS Speakers Carol B. Tomé Chief Executive Officer Brian Newman Chief Financial Officer 3 © 2023 United Parcel Service of America, Inc. UPS, the UPS brandmark, and the color dark brown tone are trademarks of United Parcel Service of America, Inc. All rights reserved.
Slide 4: Forward-Looking Statements and Non-GAAP Reconciliations
Forward-Looking Statements and Non-GAAP Reconciliations Forward-Looking Statements This presentation and our filings with the Securities and Exchange Commission contain and realize the anticipated benefits from acquisitions, dispositions, joint ventures or strategic in the future may contain “forwar
Slide 5: Diluted EPS 3Q23 vs 3Q22
Diluted EPS 3Q23 3Q22 $3.50 $3.50 $2.96 $2.99* $3.00 $3.00 $0.03 $2.50 $2.50 $2.00 $2.00 $0.05 $0.12 $0.09 $1.57* $1.50 $1.31 $1.50 $1.00 $1.00 $0.50 $0.50 $0.00 3Q23 EPS One-Time Non-Cash Transformation 3Q23 Adj. EPS* $0.00 Compensation Goodwill & Other 3Q22 EPS Transformation & Other 3Q22 Adj. EPS
Slide 6: Carol B. Tomé, Chief Executive Officer
Carol B. Tomé Chief Executive Officer 6
Slide 7: Thank You UPSers!
Thank You UPSers! e c o a. L¢ a) a = iS —)
Slide 8: 3Q23 Consolidated Results
3Q23 Consolidated Results In $ Millions 3Q23 3Q22 Change Y/Y (except per share) Total Revenue $21,061 $24,161 -12.8% Adj. Operating Profit* $1,615 $3,149 -48.7% Adj. Operating Margin* 7.7% 13.0% -530 bps Adj. Diluted EPS* $1.57 $2.99 -47.5% “With the third quarter behind us, we are laser focused on
Slide 9: Customer First, People Led, Innovation Driven
Customer First, People Led, Innovation Driven • Expanding global time-critical healthcare logistics with pending acquisition of MNX Global Logistics • Opened seven dedicated healthcare facilities in 2023; on track to generate $10B in healthcare revenue this year Customer • Expanding returns portfoli
Slide 10: Ready to Deliver Another Successful Peak
Ready to Deliver Another Successful Peak • Industry-leading service for the last five peak seasons • Leverage Network Planning Tools to adjust integrated network and operate efficiently • Flexibility to use experienced part-time employees as seasonal support drivers • Hiring over 100,000 seasonal em
Slide 11: Brian Newman, Chief Financial Officer
Brian Newman Chief Financial Officer 11
Slide 12: 3Q23 Consolidated Results
3Q23 Consolidated Results In $ Millions 3Q23 3Q22 Change Y/Y (except per share) Total Revenue $21,061 $24,161 -12.8% Adj. Operating Profit* $1,615 $3,149 -48.7% Adj. Operating Margin* 7.7% 13.0% -530 bps Adj. Diluted EPS* $1.57 $2.99 -47.5% “Through the end of the quarter we adjusted our integrated
Slide 13: U.S. Domestic: 3Q Average Daily Volume Declined 11.5%
U.S. Domestic 3Q Average Daily Volume Declined 11.5% Continuing to see week-over-week volume levels improve, despite a challenging retail backdrop ADV Change (Y/Y) Monthly ADV Growth (Y/Y) 4.0% -11.5% vs. Last Year -1.0% -6.0% -253 -263 19,539 -1,737 -11.0% -13.1% -19.6% -16.0% In Thousands Jan Feb
Slide 14: U.S. Domestic: 3Q Revenue of $13.7B, Down 11.1%
U.S. Domestic 3Q Revenue of $13.7B, Down 11.1% YOY Increased revenue per piece 2.0% Revenue Change (Y/Y) Revenue Per Piece $12.80 -11.1% vs. Last Year $15.4B -$2B $11.30 1Q 2Q 3Q 4Q In Billions 2022 2023 • 3Q revenue per piece (RPP) growth of 2.0% +$271M o Combination of strong base rates and improv
Slide 15: U.S. Domestic: Delivered $665M in Adjusted Operating Profit
U.S. Domestic Delivered $665M in Adjusted Operating Profit* in 3Q Leveraged Total Service Plan and Network Planning Tools to reduce total hours 11.4% U.S. Domestic Results • Adjusted operating expense* was down 5.1% o Compensation and benefits decreased the total Change expense growth rate ~50 basis
Slide 16: International: 3Q Average Daily Volume Down 6.6%
International 3Q International Average Daily Volume Down 6.6% Domestic ADV down 9.1%; Export ADV down 4.1% Total Asia Monthly ADV (Y/Y) Total Europe Monthly ADV (Y/Y) 20% 0% 10% -2% 0% -4% -10% -6% -8% -20% -10% -30% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec -12% 2023 2022 Jan Feb Mar Apr May
Slide 17: International: Generated Adjusted Operating Profit of $675M
International Generated Adjusted Operating Profit* of $675M Adjusted integrated network to match demand while delivering excellent service International Results • Revenue of $4.3B, down 11.1% Y/Y Change • Revenue per piece declined 1.4% Y/Y driven by 3Q23 3Q22 Y/Y lower fuel surcharge revenue Total
Slide 18: Supply Chain Solutions: Navigated Weak Global Macro Environment
Supply Chain Solutions Navigated Weak Global Macro Environment While Reducing Cost Supply Chain Solutions Results • Revenue of $3.1B, down $854M Y/Y o Soft global demand drove down international air freight volume Change 3Q23 3Q22 o Ocean freight grew volume, driven by the Y/Y retail sector o Truckl
Slide 19: 3Q23 YTD Cash Flow and Dividends
3Q23 YTD Cash Flow and Dividends 3Q23 YTD Cash From Operations 3Q23 YTD Free Cash Flow* $7.8B $4.9B -$2.9B Y/Y YTD CapEx spend of $3.1B 3Q23 YTD Dividends Paid 3Q23 YTD Share Buy Backs $4.0B $2.25B $4.86 per share YTD Average price per share of ~$176 © 2023 United Parcel Service of America, Inc. UPS
Slide 20: 2023 Full-year Consolidated Outlook
2023 Full-year Consolidated Outlook Lowered full-year guidance and provided a range to reflect the uncertainty in the market Key Assumptions: • Demand softness with many Consolidated Financial Targets: customers who did not divert • Revenue of between $91.3B - $92.3B • U.S.: Industry expert estimate
Slide 21: Questions & Answers
Questions & Answers © 2023 United Parcel Service of America, Inc. UPS, the UPS brandmark, and the color dark brown tone are trademarks of United Parcel Service of America, Inc. All rights reserved. 21
Slide 22: Appendix
Appendix © 2023 United Parcel Service of America, Inc. UPS, the UPS brandmark, and the color dark brown tone are trademarks of United Parcel Service of America, Inc. All rights reserved. 22
Slide 23: Reconciliation of GAAP and Non-GAAP Financial Measures
Reconciliation of GAAP and Non-GAAP Financial Measures Non-GAAP Financial Measures; Reconciliations Transformation Charges, and Goodwill, Asset Impairment and Divestiture Charges From time to time we supplement the reporting of our financial information determined under generally accepted We supplem
Slide 24: Reconciliations
Reconciliations © 2023 United Parcel Service of America, Inc. UPS, the UPS brandmark, and the color dark brown tone are trademarks of United Parcel Service of America, Inc. All rights reserved. 24
Slide 25: Reconciliations
Reconciliations © 2023 United Parcel Service of America, Inc. UPS, the UPS brandmark, and the color dark brown tone are trademarks of United Parcel Service of America, Inc. All rights reserved. 25
Slide 26: Reconciliations
Reconciliations © 2023 United Parcel Service of America, Inc. UPS, the UPS brandmark, and the color dark brown tone are trademarks of United Parcel Service of America, Inc. All rights reserved. 26
Slide 27: Reconciliations
Reconciliations © 2023 United Parcel Service of America, Inc. UPS, the UPS brandmark, and the color dark brown tone are trademarks of United Parcel Service of America, Inc. All rights reserved. 27
Slide 28: Reconciliations
Reconciliations © 2023 United Parcel Service of America, Inc. UPS, the UPS brandmark, and the color dark brown tone are trademarks of United Parcel Service of America, Inc. All rights reserved. 28
United Parcel Service — Q3 2023 Earnings Presentation on 6ix