Xpo, Inc. · NYSE:XPO
Xpo — XPO Logistics — Investor Presentation (February 2013)
24 slides from Xpo's investor presentation, Feb 13, 2013
Slide 1: Management Presentation
Exhibit 99.2 Management Presentation February 2013
Slide 2: Disclaimer
Disclaimer This presentation contains, and XPO Logistics, Inc. (the "Company") may from time to time make, written or oral "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 1
Slide 3: A Large Market Opportunity
A Large Market Opportunity Sources: American Trucking Association, Armstrong & Associates, EVE Partners LLC Worldwide logistics: >$3 trillion U.S. logistics: >$1 trillion U.S. trucking: ~$350 billion U.S. truck brokerage ~$50 billion
Slide 4: Long-term outsourcing trend
Long-term outsourcing trend Brokers add efficiency to both shippers and carriers Shippers gain access to thousands of carriers Carriers gain access to millions of loads 85% of shipments are not presently handled by brokers $300 billion untapped opportunity Truck Brokerage Growing at 2x to 3x GDP Sou
Slide 5: Brokerage Is a Highly Fragmented Market
More than 10,000 licensed brokers in the U.S. Only about 25 brokers with more than $200 million in revenue Large potential acquisition universe Lack of working capital can motivate sellers Brokerage Is a Highly Fragmented Market Sources: Armstrong & Associates
Slide 6: The XPO Growth Strategy
The XPO Growth Strategy On track or ahead of plan with all parts of the strategy Build a multi-billion dollar, non-asset, 3PL business in truck brokerage, expedited and freight forwarding Significantly scale up and optimize operations Acquire attractive companies that are highly scalable Open cold-s
Slide 7: Major Accomplishments in Months
Major Accomplishments in 14 Months Grew footprint to 59 sales offices Opened 17 cold-starts, eight of them in truck brokerage Completed five strategic acquisitions Increased headcount from 208 to over 900 Built up national operations center to 202 employees, including 124 in carrier procurement
Slide 8: Major Accomplishments in Months
Major Accomplishments in 14 Months Foundation in place for a much larger company Implemented leading edge training programs Introduced scalable IT platform and two major upgrades Established national accounts program Raised $289 million in common stock and convertible debt Dynamic team culture, hung
Slide 9: Strategy Part One: Scale and Optimization
Rapidly expand sales force with aggressive recruiting and on-boarding, including off-site training Identify branches capable of mega-growth: Charlotte, led by Drew Wilkerson Chicago, led by Abtin Hamidi Gainesville, led by David Coker and Jeff Battle Drive operational efficiency through shared servi
Slide 10: Customers Will Drive Growth
Customers Will Drive Growth $50 billion addressable market and growing Acquisitions accelerate customer diversification Retail, commercial, manufacturing, industrial, life sciences, government-related Tier one customer relationships in place Cold-starts build primarily with small to mid-size account
Slide 11: Differentiate XPO through superior technology
Differentiate XPO through superior technology Purchase transportation more efficiently as data pool grows Introduced pricing tools in Q3 2012 Added truck-finding and advanced pricing tools in Q4 2012 with introduction of proprietary freight optimizer software Planned for 2013: LTL, new carrier algor
Slide 12: Strategy Part Two: Acquisitions
Capitalize on attractive acquisition universe Primarily truck brokerage and expedite Aggressive sales force expansion Connect to entire organization via XPO technology Draw on shared carrier capacity Cross-sell services company-wide Gain carriers, customers, lane and pricing histories with each acqu
Slide 13: Acquired East Coast Air Charter
Non-asset logistics provider of expedited air charter brokerage, North Carolina 16-year-old business, acquired in February 2013 2012 revenue of $43 million Proprietary technology in place Long-time partner to our expedite division Responds to expedite customer demand for air charter Now selling air
Slide 14: Expedited Division Strengths
Top 5 provider of domestic expedite services Hub in Birmingham positioned for southeast manufacturers Under contract with fleet owners for more than 400 trucks Critically important service to customers, earns loyalty and repeat business Expedite-friendly sectors have high potential: cross-border Mex
Slide 15: Acquired Turbo Logistics
28-year-old business, acquired in October 2012 Operated in Gainesville (Georgia), Reno, Chicago and Dallas $124 million in annual brokerage revenue Specializes in tier one customers Completed integration in 90 days, moved to XPO IT platform Growing quickly, led by industry veterans Acquired Turbo Lo
Slide 16: Acquired Kelron Logistics
20-year-old business, acquired in August 2012 Highly scalable operations in Toronto, Montreal, Vancouver and Cleveland $100 million in annual brokerage revenue Strong base of over 1,000 customers, mostly tier one Extensive carrier and lane histories made available to all brokerage branches Similar s
Slide 17: Strategy Part Three: Cold-starts
Opened 17 cold-starts to date Eight in truck brokerage, three more than planned Eight in freight forwarding One in expedite Open branches with strong leaders from the industry Position in prime recruitment areas Scale up rapidly by adding salespeople Strategy Part Three: Cold-starts
Slide 18: CEO Bradley S. Jacobs
Founded and led four highly successful companies Amerex Oil Associates: Built one of world’s largest oil brokerage firms Hamilton Resources: Grew global oil trading company to ~$1 billion United Waste: Created fifth largest solid waste business in North America United Rentals: Built world’s largest
Slide 19: Highly Skilled Management Team
Highly Skilled Management Team Partial list below Sean Fernandez Chief Operating Officer Gordon Devens General Counsel Mario Harik Chief Information Officer David Rowe Chief Technology Officer Lou Amo VP, Carrier Procurement Troy Cooper SVP, Operations John Tuomala VP, Talent Management Scott Malat
Slide 20: Financial Overview
Financial Overview
Slide 21: Key Financial Statistics
2011 revenue of $177 million Currently on a $500 million annual revenue run rate Q3 2012 total revenue: $71 million* – up 49.8% YOY Freight brokerage: $32.2 million – up 290% Expedited transportation: $23.8 million – up 1.4% Freight forwarding: $17.3 million – up 2.3% Approximate
Slide 22: Equity ownership aligns management team with shareholders
Equity ownership aligns management team with shareholders Management and directors own 54% of the company (1) Incentivized Management Common Stock Equivalent Capitalization (as of 12/31/12) Common Stock Equivalent Capitalization (as of 12/31/12) Common Shares 17.7 million Preferred Shares 10.5 milli
Slide 23: Conclusion
Conclusion
Slide 24: Strong Fundamentals for Value Creation
Large, growing, fragmented industry Intend to acquire at least $250 million revenues in 2013 Significant growth potential through cold-starts Well-defined process to scale up operations Highly skilled management team High employee morale due to growth initiatives and culture 99% of market available
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