United Parcel Service, Inc. · NYSE:UPS
United Parcel Service — Q4 2023 Earnings Presentation
33 slides from United Parcel Service's earnings presentation, Jan 30, 2024
Slide 1: 4Q23 Earnings Call
4Q23 Earnings Call January 30, 2024 © 2024 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 2: PJ Guido, Investor Relations Officer
PJ GUIDO Investor Relations Officer © 2024 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. 2
Slide 3: UPS Speakers
UPS Speakers CAROL B. TOMÉ Chief Executive Officer BRIAN NEWMAN Chief Financial Officer © 2024 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. 3
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 4Q23 vs 4Q22
Diluted EPS 4Q23 4Q22 $4.50 $4.50 $4.00 $3.96 ($0.90) $4.00 $0.05 $3.62* $3.50 $0.44 $0.07 $3.50 $3.00 $3.00 $0.18 $2.47* $2.50 $0.10 $2.50 $0.32 $2.00 $1.87 $2.00 $1.50 $1.50 $1.00 $1.00 $0.50 $0.50 $0.00 $0.00 4Q23 EPS Pension Asset Transformation 4Q23 4Q22 EPS Pension Incentive Aircraft Residual
Slide 6: Carol B. Tomé
CAROL B. TOMÉ Chief Executive Officer © 2024 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. 6
Slide 7: Thank You
Six years in a row of industry–leading service Thank You
Slide 8: 4Q23 and Full-Year 2023 Consolidated Results
4Q23 Consolidated Results In $ Millions 4Q23 4Q22 Change Y/Y (except per share) Revenue $24,917 $27,033 -7.8% Adj. Operating Profit* $2,787 $3,882 -27.1% Adj. Operating Margin* 11.2% 14.1% -290 bps Adj. Diluted EPS* $2.47 $3.62 -31.8% Full-Year 2023 Consolidated Results In $ Millions 2023 2022 Chang
Slide 9: Customer First, People Led, Innovation Driven
Customer First, People Led, Innovation Driven • Healthcare portfolio achieved our target of $10B in revenue in 2023 • Over 17M sq ft of healthcare–compliant distribution space globally; acquisitions of Bomi Group and MNX Global Logistics enhance our cold chain capabilities • Building a new air hub a
Slide 10: 2024 Outlook
2024 Outlook • Projected U.S. small package market growth of <1% • For International and Supply Chain Solutions, some improvement in market growth is expected later in the year • Low-end of guidance range anchored to market growth and high-end assumes market share gains • Expect revenue within a ran
Slide 11: UPS Board of Directors Approves Dividend Increase
UPS Board of Directors Approves Dividend Increase Quarterly dividend of $1.63 per share $7.00 $6.48 $6.52 $6.08 $6.00 15th Consecutive Year of Increased Dividend $5.00 $4.04 $4.08 $3.84 $4.00 $3.64 $3.32 $3.12 $2.92 $2.68 $3.00 $2.48 $2.28 $2.08 $1.88 $2.00 $1.00 $0.00 2010 2011 2012 2013 2014 2015
Slide 12: Brian Newman
BRIAN NEWMAN Chief Financial Officer © 2024 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. 12
Slide 13: 4Q23 Consolidated Results
4Q23 Consolidated Results In $ Millions 4Q23 4Q22 Change Y/Y (except per share) Revenue $24,917 $27,033 -7.8% Adj. Operating Profit* $2,787 $3,882 -27.1% Adj. Operating Margin* 11.2% 14.1% -290 bps Adj. Diluted EPS* $2.47 $3.62 -31.8% “All three of our segments demonstrated agility and on a combined
Slide 14: U.S. Domestic: 4Q Average Daily Volume Declined 7.4%
U.S. Domestic 4Q Average Daily Volume Declined 7.4% Record sequential volume surge from 3Q23 to 4Q23 ADV Change (Y/Y) Monthly ADV Growth (Y/Y) 4.0% -7.4% vs. Last Year -1.0% -6.0% -252 24,238 -372 -11.5% -18.9% -1,165 -11.0% -5.8% 22,449 -16.0% In Thousands Jan Feb Mar Apr May Jun Jul Aug Sept Oct N
Slide 15: U.S. Domestic: 4Q Revenue of $16.9B, Down 7.3% Y/Y
U.S. Domestic 4Q Revenue of $16.9B, Down 7.3% Y/Y Revenue per piece was slightly positive Y/Y Revenue Change (Y/Y) Revenue Per Piece $13.00 -7.3% vs. Last Year $18.3B -$1.3B +$10M $11.00 1Q 2Q 3Q 4Q $16.9B 2022 2023 In Billions • 4Q revenue per piece (RPP) was slightly positive, driven by: o Combina
Slide 16: U.S. Domestic: Delivered $1.6B in Adjusted Operating Profit
U.S. Domestic Delivered $1.6B in Adjusted Operating Profit* in 4Q Reduced adj. operating expense* by $578M, our largest fourth-quarter dollar cost reduction ever U.S. Domestic Results • Adjusted operating expense* was down 3.6% despite a 12.1% increase in union wage rates o Leveraged Network Plannin
Slide 17: International: 4Q Average Daily Volume Down 8.3%
International 4Q International Average Daily Volume Down 8.3% Domestic ADV down 10.8%; Export ADV down 5.9% 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 18: International: Generated 4Q Adjusted Operating Profit of $899M
International Generated 4Q Adjusted Operating Profit* of $899M Focused on revenue quality and managed network to match capacity with demand International Results • Revenue of $4.6B, down 6.9% Y/Y Change 4Q23 4Q22 • Revenue per piece increased 3.1% Y/Y driven by Y/Y strong base pricing and changes in
Slide 19: 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 $3.4B, down $435M Y/Y o International air freight volumes were down, Change 4Q23 4Q22 and market rates continued to be pressured Y/Y o Ocean freight volume grew volume; exce
Slide 20: 2023 CapEx, Cash Flow, Shareholder Returns and Adjusted Debt to EBITDA
2023 CapEx, Cash Flow, Shareholder Returns and Adjusted Debt to Adjusted EBITDA* CapEx of $5.2B Free Cash Flow* of $5.3B $10.24B $0.17B $5.25B $2.2B -$5.16B $585M $1.5B $877M Buildings & Aircraft Vehicles IT Facilities Cash Flows CapEx Other Investing Free Cash Flow* from Operations Activities Total
Slide 21: Full-year 2023 Segment Highlights
Full-year 2023 Segment Highlights Full-year 2023 U.S. Domestic International SCS Adjusted Operating Profit * $5.4B $3.3B $1.2B Adjusted Operating Margin * 9.0% 18.4% 9.0% * Non-GAAP financial measure. See Appendix for reconciliation to GAAP financial measure. © 2024 United Parcel Service of America,
Slide 22: 2024 Full-year Consolidated Outlook
2024 Full-year Consolidated Outlook High end of range based on gaining share; low end of range based on growth at market rates Full-year 2024 Outlook Key Assumptions: • Consolidated: • S&P Global forecasts o Revenue within a range of approximately $92.0B - $94.5B improvement in global macro o Adjust
Slide 23: Questions & Answers
Questions & Answers © 2024 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. 23
Slide 24: Appendix
Appendix © 2024 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 25: 2023 Mark-to-Market Impact to Shareowners' Equity
2023 Mark-to-Market Impact to Shareowners’ Equity (in millions) Unrecognized Gain Within Shareowners’ Equity as of 12/31/2022 $(396) Net loss due to changes in demographic data and assumptions 94 Including turnover, salaries, medical claims costs, other Loss due to discount rate change 2,324 Discoun
Slide 26: 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 27: Reconciliations
Reconciliations © 2024 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 © 2024 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
Slide 29: Reconciliations
Reconciliations © 2024 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. 29
Slide 30: Reconciliations
Reconciliations © 2024 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. 30
Slide 31: Reconciliations
Reconciliations © 2024 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. 31
Slide 32: Reconciliations
Reconciliations © 2024 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. 32
Slide 33: Reconciliations
Reconciliations © 2024 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. 33
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