Schneider National, Inc. · NYSE:SNDR
Schneider National — Q4 2023 Earnings Presentation
29 slides from Schneider National's earnings presentation, Feb 1, 2024
Slide 1: Fourth Quarter 2023 Investor Presentation
FOURTH QUARTER 2023 Investor Presentation INNOVATIVE – RESILIENT – DRIVEN
Slide 2: Presentation highlights
Presentation highlights • BUSINESS OVERVIEW • STRATEGY • CAPITAL ALLOCATION • TECHNOLOGY AND INNOVATION • PEOPLE AND VALUES • SECULAR TRENDS • INVEST WITH SNDR • CURRENT RESULTS AND OUTLOOK • APPENDIX 2
Slide 3: Schneider: By the numbers
BUSINESS OVERVIEW Schneider: By the numbers * * 3
Slide 4: Experienced leadership, focused on growth and delivering shareholder value
BUSINESS OVERVIEW Experienced leadership, focused on growth and delivering shareholder value Mark Rourke Darrell Campbell Jim Filter • Chief Executive Officer and President since • Executive Vice President, Chief Financial • Executive Vice President, Group 2019, previously serving as Executive Vice
Slide 5: Driven by our uncompromising values to deliver the goods
BUSINESS OVERVIEW Driven by our uncompromising values to deliver the goods that enhance the lives of people everywhere. Truckload Segment Over the road freight transportation via dry van, bulk, temperature-controlled and flat- bed trailers across either network (irregular route) or dedicated (struct
Slide 6: Truckload consists primarily of Dedicated contract configurations
BUSINESS OVERVIEW Truckload consists primarily of Dedicated contract configurations, complemented by a trailer-centric Network operation. Dedicated • Contracted and consistent capacity through freight cycles • Multi-year contracts with 90%+ renewal rates • Driver-preferred alignment • Organic and ac
Slide 7: Intermodal's goal is to double in size by 2030
BUSINESS OVERVIEW Intermodal’s goal is to double in size by 2030, leveraging our differentiated company-owned container, chassis and dray model. • Nearly 27,000 company-owned containers and 23,000 company-owned chassis • Approximately 1,500 company dray tractors, executing the majority of dray movem
Slide 8: Logistics continues to grow share through brokerage solutions including Power Only
BUSINESS OVERVIEW Logistics continues to grow share by connecting shippers and carriers of all sizes through our advanced brokerage solutions, including Power Only. • 50,000+ qualified carriers in our network • Enabled by proprietary Schneider FreightPower® technology which digitally aggregates frei
Slide 9: Strong financial position built on diligent capital allocation
BUSINESS OVERVIEW Our strong financial position is built on diligent capital allocation, the relentless pursuit of profitable growth and delivering shareholder value. Operating revenues Income Free cash flow Adjusted diluted earnings per share from operations $1.37 $5,499 $296 $109 $0.94 $4,384 $106
Slide 10: Comprehensive North American footprint with industry-leading safety
BUSINESS OVERVIEW Comprehensive North American footprint with industry-leading safety, culture and performance. 10
Slide 11: Our strategy is to deliver a superior portfolio of services
STRATEGY Our strategy is to deliver a superior portfolio of services that enables our business to prosper and achieve sustainable growth in revenue and earnings performance and shareholder value. Strategic approach ► Deploy capital to targeted service offerings in support of our goal Always to enhan
Slide 12: Strategic growth areas are Intermodal, Logistics and Dedicated
STRATEGY Schneider’s strategic growth areas are Intermodal, Logistics and Dedicated. We have purposefully reshaped the portfolio since our April 2017 IPO to enable resiliency through cycles. Increased earnings contribution Increased Dedicated mix from Intermodal and Logistics within Truckload fleet
Slide 13: Use-of-cash strategy balances growth, shareholder returns and resilience
CAPITAL ALLOCATION Schneider’s use-of-cash strategy creates a balance between growth, shareholder returns and resilient financial performance. Maintain strong Fund operating and Fund acquisitive Committed to balance sheet growth needs growth needs shareholder value • Maintain investment • Maintain o
Slide 14: Disciplined capital deployment and long-term shareholder value
CAPITAL ALLOCATION Committed to disciplined capital deployment and delivering long-term shareholder value Share repurchase program Quarterly dividends 2023 activity As of Dec 31, 2023 *Does not include the $2.00 special dividend paid in Nov 2020 • Announced our inaugural $150.0 million, three-year s
Slide 15: Technology to advance and simplify core business processes
TECHNOLOGY AND INNOVATION Our technology aims to advance and simplify core business processes, eliminate complexity in decision making and elevate information flow with key stakeholders. • Our proprietary Schneider FreightPower® platform and marketplace drive growth into the enterprise by creating s
Slide 16: Living out our core values in support of our vision
PEOPLE AND VALUES How we do it is as important: Living out our core values in support of our vision. SAFETY FIRST RESPECT INTEGRITY IN EXCELLENCE AND ALWAYS FOR ALL EVERY ACTION IN W HAT W E DO Schneider trucks are spec’d Schneider has provided nearly $11 Schneider named one of TIME Schneider become
Slide 17: Our commitment to sustainability
PEOPLE AND VALUES Our commitment to sustainability allows us to authentically address a changing landscape to build a fleet and workforce for the future. Sustainability goals: Reduce CO2 Double Schneider’s Intermodal emissions by 7.5% size by 2030, thus reducing carbon per mile by 2025. emissions by
Slide 18: Secular trends that drive our strategy and future growth
SECULAR TRENDS Secular trends that drive our strategy and our future growth. Truckload Intermodal Logistics Customers value committed contract Increased focus on sustainability goals for Capacity conditions are expected to remain freight in order to build reliability and all stakeholders. pressured
Slide 19: Positioned for value creation and growth in transportation
INVEST W ITH SNDR Positioned for value creation and Premier multimodal growth at the forefront of the transportation platform transportation industry. • Most diverse logistics and Technology leader and innovator transportation platform in North America. • Portfolio of services enables growth Strong
Slide 20: Current results and outlook
CURRENT RESULTS AND OUTLOOK Our focus remains on positioning the business for the impending freight recovery, executing on our strategic growth objectives and continuing to deliver shareholder value. We recognized stabilization in network operating conditions 4Q22 4Q23 FY22 FY23 through the end of t
Slide 21: 4Q23 Enterprise Results
CURRENT RESULTS AND OUTLOOK 4Q23 Enterprise Results Operating revenues Revenues excluding fuel surcharge • Our fourth quarter results reflect the persistent challenges of the current freight environment, as well as costs primarily related to the adverse development of two recent accident claims. Adj
Slide 22: 4Q23 Truckload Results
CURRENT RESULTS AND OUTLOOK 4Q23 Truckload Results Revenues excluding Income from fuel surcharge operations • Revenues increased primarily due to the impact of dedicated organic and acquisitive growth, partially offset by lower pricing in network YoY. • Truckload network volumes improved and price s
Slide 23: 4Q23 Intermodal Results
CURRENT RESULTS AND OUTLOOK 4Q23 Intermodal Results Revenues excluding Income from fuel surcharge operations • Revenues decreased YoY primarily due to 17% lower revenue per order. • Volumes decreased 1% YoY though increased sequentially throughout the quarter. • Earnings were lower YoY due to lower
Slide 24: 4Q23 Logistics Results
CURRENT RESULTS AND OUTLOOK 4Q23 Logistics Results Revenues excluding Income from fuel surcharge operations • Revenues were lower primarily due to decreased revenue per order and lower brokerage volume YoY. • Earnings declined largely due to lower net revenue per order. • Logistics continues to driv
Slide 25: 2024 guidance and outlook
CURRENT RESULTS AND OUTLOOK We believe the signs of stabilization seen in the fourth quarter may be indicative of a broader freight market rebalancing ahead of us in 2024. We are intently focused on our targeted actions to restore margins, deliver on our commercial and $1.15 - $1.30 operational obje
Slide 26: Disclaimer and Forward-Looking Statements
Special Note Regarding Forward-Looking Statements This presentation contains and, any commentary or discussion by management of the content of this presentation may include “forward-looking statements,” as defined in the Private Securities Litigation Reform Act of 1995 (the “Act”), which Disclaimer
Slide 27: Appendix
Appendix
Slide 28: Non-GAAP Reconciliations: Revenues, Adjusted Income from Operations, Net Income
APPENDIX Non-GAAP Reconciliation—Revenues Excluding Fuel Surcharge1 Non-GAAP Reconciliation—Adjusted Income from Operations1 ($M) FY2017 FY2022 FY2023 4Q22 4Q23 ($M) FY2017 FY2022 FY2023 4Q22 4Q23 Income from operations $280 $600 $296 $143 $31 Operating revenues $4,384 $6,604 $5,499 $1,562 $1,372 Li
Slide 29: Non-GAAP Reconciliations: Adjusted EBITDA and Free Cash Flow
APPENDIX Non-GAAP Reconciliation—Adjusted EBITDA1 Non-GAAP Reconciliation—Free Cash Flow1 ($M) FY2017 FY2022 FY2023 4Q22 4Q23 ($M) FY2017 FY2022 FY2023 4Q22 4Q23 Net income $390 $458 $239 $110 $27 Net cash provided by $461 $856 $680 $278 $194 operating activities Provision for (benefit from) (127) 1