United Parcel Service, Inc. · NYSE:UPS
United Parcel Service — Q3 2024 Earnings Presentation
30 slides from United Parcel Service's earnings presentation, Oct 24, 2024
Slide 1: 3Q24 Earnings Call
3Q24 Earnings Call October 24, 2024 © 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 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 DYKES 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 including terrorist attacks, epidemics or pandemics; exposure to changing contain and in the future may contain “forward-looking statements
Slide 5: Diluted EPS 3Q24 vs 3Q23
Diluted EPS 3Q24 3Q23 $2.00 $1.80 $0.18 $1.76* $2.00 $0.14 $0.09 $1.57* $1.50 $0.12 $1.50 $0.05 $1.31 $1.00 $1.00 $0.50 $0.50 $0.00 $0.00 3Q24 EPS Gain on Disposition Transformation 3Q24 3Q23 EPS One-Time Goodwill and Transformation 3Q23 Non-GAAP of Coyote Strategy Costs** Non-GAAP Adj. Compensation
Slide 6: Carol B. Tomé, Chief Executive Officer
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, UPSers
Thank You, UPSers ; ah y >>; 2 i Sago “| 4) Mu le a |
Slide 8: 3Q24 Consolidated Results
3Q24 Consolidated Results In $ Millions 3Q24 3Q23 Change Y/Y (except per share) Revenue $22,245 $21,061 5.6% Non-GAAP Adj. Operating Profit* $1,983 $1,615 22.8% Non-GAAP Adj. Operating Margin* 8.9% 7.7% 120 bps Non-GAAP Adj. Diluted EPS* $1.76 $1.57 12.1% “On our last earnings call, we said that the
Slide 9: We Will Become the #1 Healthcare Logistics Provider in the World
We Will Become the #1 Healthcare Logistics Provider in the World Building a global network of dedicated healthcare Acquiring Frigo-Trans to build facilities to serve the needs of complex healthcare a more integrated Pan- European cold chain network + Pan-European cold chain transportation solution +
Slide 10: Customer First, People Led, Innovation Driven
Customer First, People Led, Innovation Driven • Expanded residential Saturday delivery to the eight largest markets in Europe • Sped up deliveries to over 35 countries across Asia, Customer Africa and the Middle East First Net Promoter • Added over 200 flights connecting Asia to Europe and Score the
Slide 11: Ready to Deliver Another Successful Peak
Ready to Deliver Another Successful Peak • Industry-leading service for the last six peak seasons • Leveraging Network Planning Tools and other proven technologies to control how volume comes in, flow more volume to our automated facilities and adjust the network to operate as efficiently as possibl
Slide 12: Updated Full-Year 2024 Outlook
Updated Full-Year 2024 Outlook Full-year 2024 outlook reflects our 3Q24 results and increased emphasis on revenue quality, our latest peak volume expectations, and the impact of the completed Coyote disposition Consolidated outlook • Expect revenue of approximately $91.1B • Lifting non-GAAP Adj. ope
Slide 13: Brian Dykes, Chief Financial Officer
BRIAN DYKES 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. 13
Slide 14: 3Q24 Consolidated Results
3Q24 Consolidated Results In $ Millions 3Q24 3Q23 Change Y/Y (except per share) Revenue $22,245 $21,061 5.6% Non-GAAP Adj. Operating Profit* $1,983 $1,615 22.8% Non-GAAP Adj. Operating Margin* 8.9% 7.7% 120 bps Non-GAAP Adj. Diluted EPS* $1.76 $1.57 12.1% “All three of our business segments delivere
Slide 15: U.S. Domestic: 3Q Average Daily Volume Increased 6.5% Y/Y
U.S. Domestic 3Q Average Daily Volume Increased 6.5% Y/Y Highest ADV growth rate in three years ADV Change (Y/Y) Monthly ADV Growth (Y/Y) 8.0% +6.5% Y/Y 4.0% 0.0% +1,294 +8.9% -4.0% 18,407 -8.0% -83 -90 -12.0% -4.9% -8.3% -16.0% ADV in Thousands 17,286 Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov De
Slide 16: U.S. Domestic: 3Q Revenue of $14.5B, Up 5.8% Y/Y
U.S. Domestic 3Q Revenue of $14.5B, Up 5.8% Y/Y Revenue per piece Y/Y growth rate up 40 basis points compared to 2Q Revenue Change (Y/Y) • Total 3Q revenue per piece (RPP) declined 2.2% +5.8% Y/Y o Base rates increased RPP growth rate ~170 $15.0 +$1.1B basis points -$0.3B $14.5B o Combination of pro
Slide 17: U.S. Domestic: Delivered $974M in Non-GAAP Adj. Operating Profit
U.S. Domestic Delivered $974M in Non-GAAP Adj. Operating Profit* in 3Q Excellent cost management resulted in 4.1% Y/Y decrease in cost per piece U.S. Domestic Results • Total Non-GAAP Adj. operating expense* up 3.7% o Through Network of the Future, completed 45 3Q24 3Q23 Change operational closures,
Slide 18: International: 3Q Average Daily Volume Down 0.6% Y/Y
International 3Q International Average Daily Volume Down 0.6% Y/Y Thirteen of our top 20 export countries demonstrated Y/Y average daily volume growth Total Asia* Monthly ADV (Y/Y) Total Europe** Monthly ADV (Y/Y) 30% 4% 20% 0% 10% 0% -4% -10% -8% -20% -30% -12% Jan Feb Mar Apr May Jun Jul Aug Sep O
Slide 19: International: Generated 3Q Non-GAAP Adj. Operating Profit of $792M
International Generated 3Q Non-GAAP Adj. Operating Profit* of $792M All regions grew revenue Y/Y International Results • Revenue per piece increased 2.5% Y/Y driven by Change 3Q24 3Q23 strong base pricing and the positive impact of Y/Y region and product mix Revenue $4.4B $4.3B 3.4% • Total non-GAAP
Slide 20: Supply Chain Solutions: Revenue of $3.4B, Up 8.0% Y/Y
Supply Chain Solutions Revenue of $3.4B, Up 8.0% Y/Y Remained agile and leaned into areas of growth in the face of a dynamic market Supply Chain Solutions Results • Air and Ocean Forwarding revenue was up 15.1%, driven by market demand out of Asia Change 3Q24 3Q23 Y/Y • Logistics delivered revenue g
Slide 21: 3Q24 YTD Cash Flow and Capital Allocation
3Q24 YTD Cash Flow and Capital Allocation Cash From Free Cash Dividends Share Operations Flow* Paid Repurchases $6.8B $4.0B $4.0B $500M Includes $1.4B $1.63 per share annual pension contribution © 2024 United Parcel Service of America, Inc. UPS, the UPS brandmark, and the color dark brown tone are t
Slide 22: Updated 2024 Full-year Outlook
Updated 2024 Full-year Outlook Lifting consolidated non-GAAP adj. operating margin expectation to ~9.6% Considerations Outlook • Our third-quarter • Full-year 2024 Consolidated: • Revenue of ~$91.1B results and focus • Non-GAAP Adj. operating margin* ~9.6% on revenue quality • Capital expenditures o
Slide 23: 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. 23
Slide 24: 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. 24
Slide 25: Reconciliation of GAAP and Non-GAAP Financial Measures
Reconciliation of GAAP and Non-GAAP Financial Measures Reconciliation of GAAP and Non-GAAP Adjusted Financial Measures Goodwill and Asset Impairments We supplement the reporting of our financial information determined under generally accepted accounting principles ("GAAP") with certain non-GAAP adju
Slide 26: Reconciliations
Reconciliations United Parcel Service, Inc. Reconciliation of GAAP and Non-GAAP Adjusted Measures (unaudited) Three Months Ended September 30 2024 2023 2024 2023 Operating Profit (GAAP) $ 1,985 $ 1,343 Operating Margin (GAAP) 8.9 % 6.4 % Transformation Strategy Costs: Transformation Strategy Costs:
Slide 27: Reconciliations
Reconciliations United Parcel Service, Inc. Reconciliation of GAAP and Non-GAAP Adjusted Measures (unaudited) Three Months Ended September 30 2024 2023 2024 2023 Income Tax Expense (GAAP) $ 371 $ 141 Diluted Earnings Per S hare (GAAP) $ 1.80 $ 1.31 Transformation Strategy Costs: Transformation Strat
Slide 28: Reconciliations by Segment
Reconciliations United Parcel Service, Inc. Reconciliation of GAAP and Non-GAAP Adjusted Measures by Segment (unaudited) Three Months Ended September 30 2024 2023 2024 2023 2024 2023 U.S . Domestic Package Operating Expenses % Change Operating Profit % Change Operating Margin GAAP $ 13,552 $ 13,089
Slide 29: Reconciliations: U.S. Domestic Cost Per Piece
Reconciliations United Parcel Service, Inc. Reconciliation of GAAP and Non-GAAP Adjusted Measures - U.S. Domestic Cost Per Piece (unaudited) Three Months Ended September 30 2024 2023 % Change Operating Days 64 63 Average Daily U.S. Domestic Package Volume 18,407 17,286 U.S . Domestic Cost Per Piece
Slide 30: Reconciliation of Free Cash Flow
Reconciliations United Parcel Service, Inc. Reconciliation of Free Cash Flow (Non-GAAP measure) (unaudited) (amounts in millions): Nine Months Ended September 30, 2024 2023 Cash flows from operating activities $ 6,807 $ 7,827 Capital expenditures (2,811) (3,109) Proceeds from disposals of property,
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