Xpo, Inc. · NYSE:XPO
Xpo — XPO Logistics — Investor Presentation (November 2020)
86 slides from Xpo's investor presentation, Nov 5, 2020
Slide 1: Investor Presentation November 2020
INVESTOR PRESENTATION NOVEMBER 2020 v NOVEMBER 2020 Investor Presentation Exhibit 99.2
Slide 2: Disclaimers
INVESTOR PRESENTATION NOVEMBER 2020 Disclaimers 2 NON - GAAP FINANCIAL MEASURES As required by the rules of the Securities and Exchange Commission ("SEC"), we provide reconciliations of the non - GAAP financial measures contained in this presentation to the most directly comparable measure under GAA
Slide 3: Table of contents
INVESTOR PRESENTATION NOVEMBER 2020 Table of contents 3 ▪ Investor highlights ▪ Company overview ▪ Financial highlights and key metrics ▪ Business overview – North American contract logistics – European contract logistics – North American less - than - truckload – North American transportation – Eur
Slide 4: Investor highlights: Key factors driving growth and returns
INVESTOR PRESENTATION NOVEMBER 2020 Investor highlights: Key factors driving growth and returns 4 Leading positions in fast - growing sectors ▪ Top three industry positions across all major service lines in transportation and logistics ▪ Outsized exposure to sectors with secular growth drivers, incl
Slide 5: Key metrics
INVESTOR PRESENTATION NOVEMBER 2020 Asset - Based 31% Asset - Light 69% Key metrics 5 US 59% France 12% UK 12% Spain 5% Other 12% REVENUE BY MIX 1 REVENUE BY GEOGRAPHY 1 2019 revenue: $16.6 billion CUSTOMERS Over 50,000 EMPLOYEES ~97,000 LOCATIONS 1,499 COUNTRIES OF OPERATION 30 1 Geographic and mix
Slide 6: Comprehensive service offerings, each with a large opportunity for share gain
INVESTOR PRESENTATION NOVEMBER 2020 Comprehensive service offerings, each with a large opportunity for share gain 6 1 C ompany revenue data, excluding intersegment elimination, as of FY 2019 2 Includes only North American and European markets. Sources include Armstrong and Associates, Norbridge , In
Slide 7: Global provider of massive capacity for customers
INVESTOR PRESENTATION NOVEMBER 2020 Global provider of massive capacity for customers 7 GROUND TRANSPORTATION ASSETS NON - ASSET TRANSPORTATION NETWORK FACILITY ASSETS 10,000 trucks contracted via independent owner - operators 1,000,000+ brokered trucks 553 cross - docks 766 contract logistics facil
Slide 8: Superior e-commerce platform for fulfillment, reverse logistics and last mile
INVESTOR PRESENTATION NOVEMBER 2020 Superior e - commerce platform for fulfillment, reverse logistics and last mile 8 Agile, technology - enabled logistics with visibility, speed and accuracy ▪ Integrated warehouse management, carrier management and reverse logistics ▪ Largest outsourced e - fulfill
Slide 9: Technology blueprint focuses on innovation in four areas
INVESTOR PRESENTATION NOVEMBER 2020 Technology blueprint focuses on innovation in four areas 9 Singular technology platform propels efficiencies for customers and company Digital freight marketplace ▪ Automated capacity management ▪ Customer self - service, multimodal flexibility Automation and inte
Slide 10: Key applications of XPO's proprietary technology by service offering
INVESTOR PRESENTATION NOVEMBER 2020 Key applications of XPO’s proprietary technology by service offering 10 ▪ Proprietary technology suite manages all distribution processes and warehouse operations ▪ Provides in - house control of robotics and other automation ▪ Integrates last mile with contract l
Slide 11: Advanced automation differentiates XPO as a supply chain partner
INVESTOR PRESENTATION NOVEMBER 2020 ▪ First - mover advantage with advanced automation strongly differentiates XPO as a superior supply chain partner for customers ▪ Superior visibility and control of advanced automation on proprietary platform ▪ Can perform several steps of a process by tying in mu
Slide 12: XPO Connect is at the forefront of transportation automation
INVESTOR PRESENTATION NOVEMBER 2020 XPO Connect™ is at the forefront of transportation automation 12 Expands revenue and margins ▪ Automates load - tendering, pricing, bidding, buying and tracking ▪ Unlocks cross - selling opportunities across modes ▪ Penetrates tier - two and tier - three customer
Slide 13: Proprietary technology informs decision-making in real time
INVESTOR PRESENTATION NOVEMBER 2020 13 Proprietary technology informs decision - making in real time Forecasting Analytics Model Training Machine Learning TIME AND ATTENDANCE CLOUD APPLICATIONS IOT DATA MOBILE DEVICES AND HANDHELDS TRANSACTIONAL DATA LARGE - FORMAT DISPLAYS
Slide 14: Large productivity upside as XPO Smart is fully utilized
INVESTOR PRESENTATION NOVEMBER 2020 14 Large productivity upside as XPO Smart ™ is fully utilized going forward Implemented in 80% of warehouses in North America, 100% of US LTL network, with European roll - out underway CAPABILITIES ▪ Labor management and planning ▪ Attendance tracking ▪ Production
Slide 15: Potential profit growth opportunity of ~$700 million to $1 billion
INVESTOR PRESENTATION NOVEMBER 2020 Potential profit growth opportunity of ~$700 million to $1 billion 15 Pricing benefits 20% New business initiatives 20% Cost initiatives 60% Revenue initiatives POOL OF COST OPPORTUNITIES ▪ XPO Smart ™ workforce productivity – Optimize ~$5 billion of variable labo
Slide 16: Financial highlights and key metrics
INVESTOR PRESENTATION NOVEMBER 2020 Financial highlights and key metrics
Slide 17: Industry-leading growth in revenue and adjusted EBITDA
INVESTOR PRESENTATION NOVEMBER 2020 Industry - leading growth in revenue and adjusted EBITDA 17 7,533 14,188 15,381 17,279 16,648 0 4,000 8,000 12,000 16,000 20,000 2015 2016 2017 2018 2019 474 1,168 1,367 1,562 1,668 0 250 500 750 1,000 1,250 1,500 1,750 2,000 2015 2016 2017 2018 2019 $ in millions
Slide 18: Strong free cash flow generation
INVESTOR PRESENTATION NOVEMBER 2020 Strong free cash flow generation 18 $ in millions (98) 207 399 694 628 -125 0 125 250 375 500 625 750 2015 2016 2017 2018 2019 - 125 XPO FREE CASH FLOW Note: 2016 and 2017 data have been recast to reflect the impact of Accounting Standards Update 2016 - 18 Refer t
Slide 19: Balance sheet and liquidity as of September 30, 2020
INVESTOR PRESENTATION NOVEMBER 2020 Balance sheet and liquidity as of September 30, 2020 19 NET DEBT 1 $4.7 billion CASH AND CASH EQUIVALENTS $2.0 billion NET LEVERAGE 3.4x TOTAL LIQUIDITY $3.1 billion Q3 2020 activities ▪ Repaid $400 million of ABL borrowings ▪ No significant debt maturities until
Slide 20: Third quarter 2020 results and 2020 guidance
INVESTOR PRESENTATION NOVEMBER 2020 Third quarter 2020 results and 2020 guidance 20 REVENUE $4.22 billion NET INCOME 1 $84 million DILUTED EARNINGS PER SHARE $0.83 ADJUSTED NET INCOME 1 $86 million ADJUSTED DILUTED EARNINGS PER SHARE ADJUSTED EBITDA $439 million CASH FLOW FROM OPERATIONS $298 millio
Slide 21: Full year 2019 results
INVESTOR PRESENTATION NOVEMBER 2020 Full year 2019 results 21 REVENUE $16.65 billion NET INCOME 1 $379 million DILUTED EPS $3.57 ADJUSTED NET INCOME 1 $428 million ADJUSTED DILUTED EPS ADJUSTED EBITDA $1.67 billion CASH FLOW FROM OPERATIONS $791 million FREE CASH FLOW $628 million $4.03 1 Net income
Slide 22: Share repurchase program
INVESTOR PRESENTATION NOVEMBER 2020 Share repurchase program 22 Year - to - date through September 30, 2020, the company repurchased: XPO has approximately $503 million remaining on the current $2.5 billion share repurchase authorization. The company is not obligated to repurchase any specific numbe
Slide 23: Operating flexibility across all economic environments
INVESTOR PRESENTATION NOVEMBER 2020 Operating flexibility across all economic environments 23 ▪ Blended model of owned, contracted and brokered capacity for truck transportation – Non - asset portion is predominantly variable - cost – Includes brokerage operations and contracted capacity with indepe
Slide 24: Business overview: North American contract logistics
INVESTOR PRESENTATION NOVEMBER 2020 Business overview: North American contract logistics Americas and Asia
Slide 25: #2 logistics provider in North America, with operations in Asia and Latin America
INVESTOR PRESENTATION NOVEMBER 2020 #2 logistics provider in North America, with operations in Asia and Latin America 25 Strongly positioned with blue - chip customers who need complex solutions ▪ Expansive footprint and scale are competitive advantages ▪ Employer of choice with best - in - class ab
Slide 26: Preeminent reputation for innovation, expertise and quality of performance
INVESTOR PRESENTATION NOVEMBER 2020 Preeminent reputation for innovation, expertise and quality of performance Industry size ~$50 billion 2019 revenue $2.5 billion Countries 14 Locations 383 (North America, 317) Warehouse space ~ 104 million sq. ft. (North America, Asia) Employees ~21,000 Average co
Slide 27: XPO's footprint and scale are key competitive advantages
INVESTOR PRESENTATION NOVEMBER 2020 27 XPO’s footprint and scale are key competitive advantages North America 96 million sq.ft . of warehouse space 1 Chile Asia 8 million sq.ft . of warehouse space 1 COUNTRIES OF OPERATION WAREHOUSE SQ. FT. (millions) United States 94 Canada 1 Mexico 1 Chile <1 Peru
Slide 28: Sophisticated capabilities, deeply integrated with customer supply chains
INVESTOR PRESENTATION NOVEMBER 2020 28 Sophisticated capabilities, deeply integrated with customer supply chains 28 ADVANCED AUTOMATION AND ROBOTICS INBOUND LOGISTICS AND MANUFACTURING SUPPORT REVERSE LOGISTICS AND AFTERMARKET SUPPORT WAREHOUSING ▪ Tech - enabled fulfillment continuously improved by
Slide 29: Decades of logistics expertise in diverse verticals in North America
INVESTOR PRESENTATION NOVEMBER 2020 XPO has decades of logistics expertise in diverse verticals in North America 29 END MARKETS % 2019 REVENUE 1 EXPERTISE CONSUMER TECHNOLOGY ▪ Direct - to - consumer and retail fulfillment of consumer electronics and other devices ▪ Returns management, OEM - certifi
Slide 30: E-commerce growth continues to drive supply chain complexity
INVESTOR PRESENTATION NOVEMBER 2020 $81 $94 $143 2017 2018 2023E US E - COMMERCE LOGISTICS MARKET INCREASING DEMAND FOR AUTOMATION TO MANAGE GROWTH E - commerce growth continues to drive supply chain complexity 30 CONSUMERS EXPECT FASTER DELIVERIES AND SHOP GLOBALLY $ in billions 2.0% 1.6% 2.1% 2.6%
Slide 31: Special software layer enables customization
INVESTOR PRESENTATION NOVEMBER 2020 31 Special software layer enables customization Warehouse managemen t Manages all distribution processes within the warehouse walls WMx Order managemen t Centralizes customer order data, enables real - time visibility OMx Connection management Integrates customer
Slide 32: XPO Direct shared distribution is a game-changer for customers
INVESTOR PRESENTATION NOVEMBER 2020 XPO Direct ™ shared distribution is a game - changer for customers 32 Scale and proximity Speeds up store replenishment and home delivery; reaches 99% of population with one - day and two - day ground delivery; one tracking number end - to - end Better customer ex
Slide 33: Business overview: European contract logistics
INVESTOR PRESENTATION NOVEMBER 2020 Business overview: European contract logistics
Slide 34: Leading provider of technology-enabled, customized logistics in Europe
INVESTOR PRESENTATION NOVEMBER 2020 Leading provider of technology - enabled, customized logistics in Europe 34 #2 contract logistics provider in Europe, with the largest outsourced e - fulfillment platform ▪ Rigorous reverse logistics management is highly valued by retailers and e - tailers ▪ Stron
Slide 35: Best-in-class vertical expertise, advanced technology and scale
INVESTOR PRESENTATION NOVEMBER 2020 Best - in - class vertical expertise, advanced technology and scale 35 Industry size ~ $80 billion 2019 revenue $3.6 billion Countries 15 Locations 383 Warehouse space ~ 96 million sq. ft. (9 million sq. m.) Employees ~37,000 Average contract length ~5 years ▪ Pro
Slide 36: Logistics network footprint and scale are major competitive advantages
INVESTOR PRESENTATION NOVEMBER 2020 36 XPO’s logistics network footprint and scale are major competitive advantages Europe 96 million sq. ft. (9 million sq. m.) of facility space Belgium Ireland Romania Czech Republic Italy Russia Finland Netherlands Spain France Poland Switzerland Germany Portugal
Slide 37: Contract logistics and value-added services
INVESTOR PRESENTATION NOVEMBER 2020 CONTRACT LOGISTICS AND VALUE - ADDED SERVICES ▪ Inbound quality assessment and inventory inspections ▪ Tech - enabled fulfillment continuously improved by AI and machine learning ▪ Order pick, pack and customization, custom services, and pre - retailing ▪ In - dem
Slide 38: Diversified geographical exposure with tailored business strategies
INVESTOR PRESENTATION NOVEMBER 2020 Diversified geographical exposure with tailored business strategies 38 END MARKETS % 2019 REVENUE 1 POSITIONING UK AND IRELAND ▪ #1 in e - commerce fulfillment ▪ ~262 million units picked and packed per year ▪ Capabilities for ”big and bulky” products 50 - 150 lbs
Slide 39: Serving sectors that are high growth, high margin or macro-resilient
INVESTOR PRESENTATION NOVEMBER 2020 Serving sectors that are typically high growth, high margin or macro - resilient 39 END MARKETS % 2019 REVENUE 1 DESCRIPTION E - COMMERCE AND RETAIL ▪ Seamless integration of large footprint: warehouses, transportation capacity, labor and advanced automation ▪ Adv
Slide 40: Leading e-commerce and omnichannel service capabilities
INVESTOR PRESENTATION NOVEMBER 2020 SCALE AND FLEXIBILITY ▪ Largest provider of outsourced e - fulfillment services in Europe ▪ Superior ability to ramp up and manage large workforces for peak seasonality ▪ Sophisticated inventory management system optimizes lead times for customers ▪ Multichannel d
Slide 41: Business overview: North American less-than-truckload
INVESTOR PRESENTATION NOVEMBER 2020 Business overview: North American less - than - truckload
Slide 42: LTL has a well-defined opportunity to grow EBITDA to at least $1 billion in 2022
INVESTOR PRESENTATION NOVEMBER 2020 LTL has a well - defined opportunity to grow EBITDA to at least $1 billion in 2022 42 Favorable long - term industry fundamentals ▪ Rational pricing dynamics ▪ Rapid growth of e - commerce driving retail shipments to LTL carriers One of the few US providers with n
Slide 43: Top three provider of LTL in North America
INVESTOR PRESENTATION NOVEMBER 2020 Top three provider of less - than - truckload (LTL) in North America 43 Industry size ~$43 billion 2019 revenue $3.8 billion Employees ~20,000 Cross - dock facilities 290 Number of tractors / trailers ~7,800 / 25,000 Average length of haul 837.2 miles Average trac
Slide 44: LTL customers of all sizes value XPO's scale and capacity
INVESTOR PRESENTATION NOVEMBER 2020 LTL customers of all sizes value XPO’s scale and capacity 44 XPO’s network of LTL terminals in US and Canada
Slide 45: Capacity, density and scale
INVESTOR PRESENTATION NOVEMBER 2020 CAPACITY, DENSITY AND SCALE ▪ One of the largest, most modern and safety - equipped fleets in industry ▪ 7,800 tractors and 25,000 trailers 1 ▪ ~ 12,000 professional drivers, operating out of 290 terminals 1 ▪ All types of commodities accepted ▪ Over 75,000 next -
Slide 46: Technology prioritizes three areas of LTL network optimization
INVESTOR PRESENTATION NOVEMBER 2020 Technology prioritizes three areas of LTL network optimization 46 DYNAMIC ROUTE OPTIMIZATION INTELLIGENT LOAD - BUILDING PRICING OPTIMIZATION Technology becomes continually smarter at automating operations for best results ▪ Intelligent routing and real - time vis
Slide 47: XPO Smart right-sizes shift scheduling and LTL labor mix
INVESTOR PRESENTATION NOVEMBER 2020 XPO Smart ™ right - sizes shift scheduling and all components of LTL labor mix 47 ▪ The introduction of real - time visibility is driving more motor moves per hour on LTL cross - docks, with high employee engagement ▪ Analytics provide deep visibility into cross -
Slide 48: Business overview: North American transportation
INVESTOR PRESENTATION NOVEMBER 2020 Business overview: North American transportation Truck brokerage / expedite Intermodal / drayage Last mile Managed transportation
Slide 49: Combination of scale, technology and service range is unique in North America
INVESTOR PRESENTATION NOVEMBER 2020 Combination of scale, technology and service range is unique in North America 49 Multimodal solutions with critical mass and leadership positions in fast - growing sectors ▪ Leading positions and real - time visibility across singular range of modes ▪ Customers ga
Slide 50: Brokerage is a vast opportunity to sell XPO's network capacity
INVESTOR PRESENTATION NOVEMBER 2020 Brokerage is a vast opportunity to sell XPO’s network capacity 50 Industry size 2 ~$375 billion 2019 revenue 3 $1.66 billion Locations 23 Employees ~900 Carrier relationships 38,000 Accessible trucks Over 1,000,000 ▪ Full truckload, domestic and cross - border ▪ R
Slide 51: Demand driven by expansion of transportation outsourcing
INVESTOR PRESENTATION NOVEMBER 2020 Demand for XPO solutions driven by expansion of transportation outsourcing 51 6% 7% 7% 7% 8% 9% 10% 10% 10% 11% 11% 12% 12% 13% 14% 14% 16% 17% 19% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 US TRUCK BROKERAGE IN
Slide 52: Scale and optionality; XPO Connect platform
INVESTOR PRESENTATION NOVEMBER 2020 SCALE AND OPTIONALITY ▪ Services include full truckload, expedite ground, expedite air charter, heavy haul, cross - border shipments, specialized services, global forwarding and managed transportation XPO CONNECT™ PLATFORM ▪ Proprietary cloud - based platform give
Slide 53: Drives efficiency, volume and margin through cutting-edge connectivity
INVESTOR PRESENTATION NOVEMBER 2020 Drives efficiency, volume and margin through cutting - edge connectivity 53 CUSTOMERS CARRIERS DRIVE XPO™ APP CARRIER INTERFACE CARRIER MOBILE INTERFACE REAL - TIME TRACKING ENGINE CUSTOMER INTERFACE CUSTOMER MOBILE INTERFACE ROUTE OPTIMIZATION FREIGHT OPTIMIZATIO
Slide 54: Fully mobilizes the procurement process
INVESTOR PRESENTATION NOVEMBER 2020 54 FULLY MOBILIZES THE PROCUREMENT PROCESS Preview XPO’s freight opportunities using the guest access feature and sign up to start booking Search for available loads, place bids and immediately purchase loads to keep moving Request loads for a specific lane and da
Slide 55: Third largest intermodal provider in North America
INVESTOR PRESENTATION NOVEMBER 2020 Third largest intermodal provider in North America 55 Industry size ~$43 billion 2019 revenue $948 million Locations 37 terminals Employees ~ 400 53 - ft. containers / chassis ~10,000 / ~5,000 Drayage trucks under contract Over 25,000 ▪ 30 - year relationships wit
Slide 56: Unique competitive advantages differentiate XPO's intermodal offering
INVESTOR PRESENTATION NOVEMBER 2020 Unique competitive advantages differentiate XPO’s intermodal offering 56 ▪ Proprietary intermodal system tracks door - to - door movements of long - haul freight with GPS on containers ▪ Communicates constantly with railroads to proactively identify any delays ▪ M
Slide 57: Largest provider of last mile logistics for heavy goods in North America
INVESTOR PRESENTATION NOVEMBER 2020 Largest provider of last mile logistics for heavy goods in North America 57 Industry size ~$13 billion 2019 revenue $873 million Hub locations 85 Employees ~1,800 Carriers / trucks ~1,500 / ~3,700 Annual deliveries Over 10 million ▪ Fully integrated, national plat
Slide 58: Growth in US e-commerce orders for large goods benefits last mile
INVESTOR PRESENTATION NOVEMBER 2020 Growth in US e - commerce orders for large goods benefits XPO’s last mile service 58 US E - COMMERCE SALES FORECASTED TO CONTINUE TO INCREASE $ in billions 135 138 161 190 220 250 287 328 377 435 493 567 707 818 957 1,104 1,249 2008A 2009A 2010A 2011A 2012A 2013A
Slide 59: Unmatched combination of last mile scale, technology and experience
INVESTOR PRESENTATION NOVEMBER 2020 Unmatched combination of last mile scale, technology and experience 59 ▪ Long - term relationships with best - in - class contract carriers ▪ Post - delivery feedback loops resolve issues quickly and protect brand loyalty ▪ Industry - best consumer satisfaction le
Slide 60: Top five global provider of managed transportation
INVESTOR PRESENTATION NOVEMBER 2020 Top five global provider of managed transportation 60 ▪ Integrated with XPO Connect™, industry - leading multimodal technology platform ▪ Rigorous tracking and visibility; worry - free set - up; disaster recovery capabilities ▪ Technology tools collect big data an
Slide 61: Business overview: European transportation
INVESTOR PRESENTATION NOVEMBER 2020 Business overview: European transportation Truck brokerage Dedicated truckload Less - than - truckload Managed transportation Last mile
Slide 62: Leading positions in fast-growing sectors
INVESTOR PRESENTATION NOVEMBER 2020 Leading positions in fast - growing sectors 62 Expansive platform with strong positions across Europe ▪ Largest transportation company across UK, France, Spain, Portugal and Morocco ▪ Mix of asset - based and non - asset over - the - road capacity optimized for ea
Slide 63: Leading provider of truck brokerage and LTL transportation in Europe
INVESTOR PRESENTATION NOVEMBER 2020 Leading provider of truck brokerage and LTL transportation in Europe 63 ▪ Leading provider of truck brokerage in Europe ▪ Leading less - than - truckload (LTL) provider in the UK, France, Spain and Portugal ▪ Dedicated truckload offering is a key differentiator in
Slide 64: Tailored growth strategies for XPO's largest markets
INVESTOR PRESENTATION NOVEMBER 2020 TAILORED GROWTH STRATEGIES FOR XPO’S LARGEST MARKETS BY % OF REVENUE 1 XPO’s transportation network covers over 90% of Europe’s GDP 64 FRANCE UNITED KINGDOM AND IRELAND SPAIN AND PORTUGAL 26% 17% 46% ▪ Blended model of XPO - owned trucks and contracted independent
Slide 65: Strong positioning in highly fragmented transportation marketplaces
INVESTOR PRESENTATION NOVEMBER 2020 FRANCE ▪ #1 in less - than - truckload ▪ Top three provider of truck brokerage ▪ #1 provider of dedicated dry van truckload ▪ Only LTL provider fully authorized to handle hazardous goods ▪ Differentiated intermodal offerings, such as road transportation + river ba
Slide 66: LTL locations serving countries across Europe
INVESTOR PRESENTATION NOVEMBER 2020 Over 100 LTL locations serving countries across Europe 66 International Hub XPO International Hub Partner Platform XPO Platform Partner ▪ Transportation capabilities from a single pallet to full truckload ▪ ~60,000 pallets delivered daily over domestic networks ▪
Slide 67: Numerous levers to grow revenue and expand margin in Europe
INVESTOR PRESENTATION NOVEMBER 2020 Numerous levers to grow revenue and expand margin in Europe EXPAND EXISTING PLATFORM COLLABORATE ACROSS NETWORK CONTINUE TO BUILD TECH ADVANTAGE EXECUTE PRICING INITIATIVES ▪ Take advantage of fragmented industry to drive outsized growth ▪ Increase scale in last m
Slide 68: Supplemental materials
INVESTOR PRESENTATION NOVEMBER 2020 Supplemental materials
Slide 69: Investor highlights: Key factors driving growth and returns
INVESTOR PRESENTATION NOVEMBER 2020 Investor highlights: Key factors driving growth and returns 69 Leading positions in fast - growing sectors ▪ Top three industry positions across all major service lines in transportation and logistics ▪ Outsized exposure to sectors with secular growth drivers, inc
Slide 70: XPO is widely recognized for performance and culture
INVESTOR PRESENTATION NOVEMBER 2020 XPO is widely recognized for performance and culture 70 ▪ Named one of the World’s Most Admired Companies by Fortune, 2018, 2019, 2020 ▪ Ranked #1 in the Fortune 500 category of Transportation and Logistics, 2017, 2018, 2019, 2020 ▪ Named one of Spain’s Best Compa
Slide 71: Highlights of XPO's people-first culture
INVESTOR PRESENTATION NOVEMBER 2020 Some highlights of XPO’s people - first culture 71 ▪ XPO’s US warehouse safety record for OSHA reportable incidents is more than four times better than industry average ▪ Appointed a Chief Diversity Officer and launched a Diversity and Inclusion Council of employe
Slide 72: COVID-19 pandemic response
INVESTOR PRESENTATION NOVEMBER 2020 72 COVID - 19 pandemic response XPO is continuing to use a combination of rigorous protective measures, technology and virtual communications to keep its employees safe. These are some of the many actions the company has taken as part of its COVID - 19 response: ▪
Slide 73: Strongly committed to sustainability in transportation and logistics
INVESTOR PRESENTATION NOVEMBER 2020 Strongly committed to sustainability in transportation and logistics 73 ▪ Awarded silver CSR rating in Europe by EcoVadis , with overall score placing XPO in the top 10% of Freight Transport by Road category, 2019, 2020 ▪ Awarded Trophées EVE 2020 for implementing
Slide 74: Strongly committed to sustainability (cont.)
INVESTOR PRESENTATION NOVEMBER 2020 Strongly committed to sustainability in transportation and logistics (cont.) 74 ▪ XPO’s Warehouse of the Future for Nestlé in the UK is an environmentally advanced facility, with ammonia refrigeration, LED lighting, air - source heat pumps and a rainwater harvesti
Slide 75: Highly skilled management team
INVESTOR PRESENTATION NOVEMBER 2020 Highly skilled management team 75 Brad Jacobs Chief Executive Officer United Rentals, United Waste Josephine Berisha Chief Human Resources Officer Morgan Stanley Tony Brooks President, Less - Than - Truckload – North America Sysco, PepsiCo, Roadway Erik Caldwell P
Slide 76: Highly skilled management team (cont.)
INVESTOR PRESENTATION NOVEMBER 2020 Highly skilled management team (cont.) 76 LaQuenta Jacobs Chief Diversity Officer Delta Air Lines, Home Depot, Turner Broadcasting Katrina Liddell President, Global Forwarding and Expedite Johnson Controls International Eduardo Pelleissone Chief Transformation Off
Slide 77: Business glossary
INVESTOR PRESENTATION NOVEMBER 2020 Business glossary 77 ▪ Contract Logistics: An asset - light, technology - enabled business characterized by long - term contractual relationships with high renewal rates, low cyclicality and a high - value - add component that minimizes commoditization. Contracts
Slide 78: Business glossary (cont.)
INVESTOR PRESENTATION NOVEMBER 2020 Business glossary (cont.) 78 ▪ Intermodal: An asset - light business that facilitates the movement of long - haul, containerized freight by rail, often with a drayage (trucking) component at either end. Intermodal is a variable cost business, with revenue generate
Slide 79: Business glossary (cont.)
INVESTOR PRESENTATION NOVEMBER 2020 Business glossary (cont.) 79 ▪ XPO Connect™: XPO’s fully automated, self - learning digital freight marketplace connects shippers and carriers directly, as well as through company operations. XPO Connect™ gives customers comprehensive visibility across multiple tr
Slide 80: Financial reconciliations
INVESTOR PRESENTATION NOVEMBER 2020 Financial reconciliations 80 The following table reconciles XPO’s net income (loss) attributable to common shareholders for the periods ended September 30, 2020 and 2019 to EBITDA and adjusted EBITDA for the same periods. NM - Not meaningful (1) The sum of quarter
Slide 81: Financial reconciliations (cont.)
INVESTOR PRESENTATION NOVEMBER 2020 Financial reconciliations (cont.) 81 (1) The income tax rate applied to reconciling items is based on the GAAP annual effective tax rate, excluding discrete items and co ntribution - and margin - based taxes. Note: Refer to the “Non - GAAP Financial Measures” sect
Slide 82: Financial reconciliations (cont.)
INVESTOR PRESENTATION NOVEMBER 2020 Financial reconciliations (cont.) 82 Note: Refer to the “Non - GAAP Financial Measures” section on page 2 of this document The following table reconciles XPO’s net income attributable to common shareholders for the year ended December 31, 2019 to adjusted net inco
Slide 83: Financial reconciliations (cont.)
INVESTOR PRESENTATION NOVEMBER 2020 Financial reconciliations (cont.) 83 Note: 2016 and 2017 data have been recast to reflect the impact of Accounting Standards Update 2016 - 18 Refer to the “Non - GAAP Financial Measures” section on page 2 of this document The following table reconciles XPO’s net c
Slide 84: Financial reconciliations (cont.)
INVESTOR PRESENTATION NOVEMBER 2020 Financial reconciliations (cont.) 84 The following table reconciles XPO’s revenue attributable to its North American last mile business for the periods ended September 30, 2020 and 2019 to net revenue for the same period. (1) For purposes of the net revenue table,
Slide 85: Financial reconciliations (cont.)
INVESTOR PRESENTATION NOVEMBER 2020 Financial reconciliations (cont.) 85 The following table reconciles XPO’s revenue attributable to its North American less - than - truckload business for the years ended December 31, 2019, 2018, 2017, 2016 and 2015 to adjusted operating income, adjusted operating
Slide 86: Financial reconciliations (cont.)
INVESTOR PRESENTATION NOVEMBER 2020 Financial reconciliations (cont.) 86 Note: Adjusted EBITDA was prepared assuming 100% ownership of XPO Logistics Europe Refer to the “Non - GAAP Financial Measures” section on page 2 of this document The following table reconciles XPO’s net income (loss) attributa
XPO Logistics — Investor Presentation (November 2020) on 6ix