Xpo, Inc. · NYSE:XPO
Xpo — XPO Logistics — Investor Presentation (November 2013)
23 slides from Xpo's investor presentation, Nov 15, 2013
Slide 1: Management Presentation
Exhibit 99.1 Management Presentation November 2013
Slide 2: Disclaimer
Disclaimer This presentation includes 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 1934, as amended, including, without limitation, our outlook with respect to annual revenue and fourth quart
Slide 3: Clearly Defined Strategy for Value Creation
Clearly Defined Strategy for Value Creation Significantly scale up and optimize existing operations Acquire companies that bring value and are highly scalable Open cold-starts where sales recruitment can drive revenue We’re on track or ahead of plan with every leg of our strategy to achieve $5 billi
Slide 4: Precise Execution of Growth Plan
Precise Execution of Growth Plan Completed nine strategic acquisitions and opened 20 cold-starts in two years Created leading edge recruiting and training programs Introduced scalable IT platform Established national operations centers in Atlanta, Charlotte and Chicago Raised $543 million in common
Slide 5: One of the Fastest Growing 3PLs
One of the Fastest Growing 3PLs Broad and expanding service offering in North America 4th largest truck brokerage firm – Up from 17th largest in 2012, unranked in 2011 Top 5 ground expediter, with integrated air charter capabilities #1 heavy goods, white glove provider of last-mile logistics Interna
Slide 6: Strong Industry Fundamentals
Strong Industry Fundamentals U.S. logistics is more than $1 trillion annual spend Over-the-road trucking is $350 billion Penetration rate estimated at 15% (approximately $50 billion) – 85% of shipments are not presently handled by brokers Brokers add efficiency to both shippers and carriers – Shippe
Slide 7: Massive Commitment to Shipper Satisfaction
Massive Commitment to Shipper Satisfaction Built integrated network across North America in two years Over 2,100 employees at 90 locations in the U.S. and Canada 9,500 customers in the manufacturing, industrial, retail, food and beverage, commercial, life sciences and government sectors Over 23,000
Slide 8: We Excel at Managing Scale and Change
We Excel at Managing Scale and Change We currently facilitate over 18,500 deliveries a day with an intense focus on on-time pickup and delivery, and safety We serve some of the most demanding shipper needs in North America, including expedite and white glove last-mile We’ve grown by almost $1 billio
Slide 9: Strategy Part 1: Scale and Optimization
Strategy Part 1: Scale and Optimization Rapidly grow sales force with aggressive recruiting and training Expand branches capable of mega-growth – Charlotte, North Carolina – Chicago, Illinois – Gainesville, Georgia – Salt Lake City, Utah Drive operational efficiency through shared services 9
Slide 10: Accelerate Sales and Marketing
Accelerate Sales and Marketing Differentiate XPO by providing world-class customer service Single point of contact for each customer – Strategic accounts team marketing to largest 1,200 shippers – National accounts team focused on next largest 5,000 companies – Branch network expands our reach to hu
Slide 11: Scalable Technology Platform
Scalable Technology Platform One common platform for freight brokerage rolled out in all acquired companies Purchase transportation more efficiently as data pool grows Proprietary freight optimizer tools for pricing and load-covering put in place in 2012 Enhancements delivered to date include carrie
Slide 12: Increasing Productivity through Technology
Increasing Productivity through Technology Highly scalable load execution and tendering via automated load-to-carrier matching Dynamic load optimization on a transactional basis between full truckload, less-than-truckload, partials and intermodal Ability to automatically cover, execute and tender lo
Slide 13: Enhanced TMS Services
Enhanced TMS Services Our operating system can customize customer-specific tariffs and routing guides We can integrate an ERP system, warehouse management system or supply chain management system with XPO via electronic data interchange or web services Large customers can leverage our technology, bu
Slide 14: Strategy Part 2: Acquisitions
Strategy Part 2: Acquisitions Acquire attractive, highly scalable companies Gain capabilities, customers, carriers, lane and pricing histories with each acquisition Continue to grow carrier network, currently at over 23,000 Nine acquisitions to date have added capabilities in LTL, last-mile, refrige
Slide 15: Acquisition of Optima Service Solutions
Acquisition of Optima Service Solutions Acquired November 13, 2013 TTM revenue of $35.7 million, as of October 31, 2013 Leading U.S. provider of last-mile logistics services for large appliances and electronics Highly scalable supplier to XPO’s 3PD business Benefits from strong trend toward outsourc
Slide 16: Strategy Part 3: Cold-starts
Strategy Part 3: Cold-starts Hire strong industry veterans as branch presidents Position in prime recruitment areas Rapidly scale up by adding salespeople Low capital investment can deliver outsized returns Opened 20 cold-starts to date – 9 in freight brokerage, 10 in freight forwarding, one in expe
Slide 17: CEO Bradley S. Jacobs
CEO Bradley S. Jacobs Founded and led four highly successful companies, including world-class public corporations 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 5th largest solid waste b
Slide 18: Highly Skilled Management Team
Highly Skilled Management Team Partial list Sean Fernandez NCR, Avery Dennison, Arrow Electronics Chief Operating Officer John Hardig Stifel Nicolaus, Alex. Brown Chief Financial Officer Scott Malat Goldman Sachs, UBS, JPMorgan Chase Chief Strategy Officer Gordon Devens AutoNation, Skadden Arps Gene
Slide 19: Deep Bench of Industry Experience
Deep Bench of Industry Experience Selected examples Jake Schnell C.H. Robinson Sr. Operational Process and Integration Manager Jenna Sargent OHL, Schneider National Regional Sales and Operation Manager Evan Laskaris AFN, CEVA Logistics Director of Operations Kip Douglass Crowley Maritime, Coyote Log
Slide 20: Key Financial Statistics
Key Financial Statistics 2011 revenue of $177 million Currently at approximately $950 million annual revenue run rate 42% YOY organic revenue growth company-wide in Q3 – Freight brokerage organic growth – up 146.1% Q3 2013 total revenue: $194.0 million (1) – up 173.3% YOY – Freight brokerage: $152.6
Slide 21: Financial Goalposts
Financial Goalposts 2013 outlook – EBITDA-positive in Q4 – $1 billion annual revenue run rate by December 31 2017 targets – $300 million of EBITDA – $5 billion of revenue (1) (1) Includes $1.5 to $2.0 billion of acquired revenue Source: Company data 21
Slide 22: Incentivized XPO Management
Incentivized XPO Management Equity ownership aligns management team with shareholders Management and directors own approx. 41% of the company (1) Common Stock Equivalent Capitalization as of 9/30/13 Common Shares 29.9 million Preferred Shares 10.6 million Warrants (Strike Price $7 per share) 10.7 mi
Slide 23: Clear Path for Significant Value Creation
Clear Path for Significant Value Creation Large, growing, fragmented logistics industry Well-defined process to scale up operations Robust acquisition pipeline Strong organic growth, including cold-starts Highly skilled management team incentivized to create shareholder value Passionate, world-class
XPO Logistics — Investor Presentation (November 2013) on 6ix