United Parcel Service, Inc. · NYSE:UPS
United Parcel Service — Q2 2022 Earnings Presentation
28 slides from United Parcel Service's earnings presentation, Jul 26, 2022
Slide 1: 2Q22 Earnings Call
2Q22 Earnings Call July 26, 2022 © 2022 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. 1
Slide 2: Ken Cook, Investor Relations Officer
Ken Cook Investor Relations Officer 2
Slide 3: Speakers
UPS Speakers Carol B. Tomé Chief Executive Officer Brian Newman Chief Financial Officer © 2021 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 contain and work stoppages or slowdowns by our employees; results of negotiations and ratifications of in the future may contain “forward-l
Slide 5: Diluted EPS
Diluted EPS 2Q22 2Q21 $3.50 $3.25 $0.04 $3.29* $3.50 $3.05 $0.01 $3.06* $3.00 $3.00 $2.50 $2.50 $2.00 $2.00 $1.50 $1.50 $1.00 $1.00 $0.50 $0.50 $0.00 $0.00 2Q22 EPS Transformation & Other 2Q22 Adj. EPS* 2Q21 EPS Transformation & Other 2Q21 Adj. EPS* * Non-GAAP financial measure. See Appendix for rec
Slide 6: Carol B. Tomé, Chief Executive Officer
Carol B. Tomé Chief Executive Officer 6
Slide 7: Our World, By Delivering
OUR WORLD BY DELIVERING
Slide 8: Consolidated Results
Consolidated Results GAAP Adjusted In $ Millions In $ Millions 2Q22 2Q21 Change 2Q22 2Q21 Change (except per share) (except per share) Total Revenue $24,766 $23,424 5.7% Total Revenue $24,766 $23,424 5.7% Operating Profit $3,535 $3,258 8.5% Operating Profit* $3,576 $3,273 9.3% Operating Margin 14.3%
Slide 9: Customer First, People Led, Innovation Driven
Customer First, People Led, Innovation Driven • Acquisition of Delivery Solutions expands our digital commerce portfolio • Continue to win with SMBs as DAP revenue exceeded $1B in 1H22 • Expanding healthcare capabilities with UPS Premier now in 33 countries Customer First Net Promoter Score • New Ch
Slide 10: Reaffirming 2022 Financial Targets
Reaffirming 2022 Financial Targets • Consolidated revenue ~$102B • Consolidated adjusted operating margin* ~13.7% • Adjusted return on invested capital* above 30% • Raising targeted share repurchases to $3B * Non-GAAP financial measure. See Appendix for reconciliation to GAAP financial measure. © 20
Slide 11: Brian Newman, Chief Financial Officer
Brian Newman Chief Financial Officer 11
Slide 12: Consolidated Results
Consolidated Results GAAP Adjusted In $ Millions In $ Millions 2Q22 2Q21 Change 2Q22 2Q21 Change (except per share) (except per share) Total Revenue $24,766 $23,424 5.7% Total Revenue $24,766 $23,424 5.7% Operating Profit $3,535 $3,258 8.5% Operating Profit* $3,576 $3,273 9.3% Operating Margin 14.3%
Slide 13: U.S. Domestic: 2Q Average Daily Volume Declined 4.0%
U.S. Domestic 2Q Average Daily Volume Declined 4.0% More than half of the decline was from actions we took to optimize volume in our network Monthly B2C ADV (Y/Y) 2Q22 ADV Change (Y/Y) • B2C declined 8.2% 60% • Split was 57% B2C -4.0% vs. Last Year 30% 20,508 -161 -180 20,000 0% -482 19,685 -30% In
Slide 14: U.S. Domestic: 2Q Revenue Increased 7.3% to $15.5B
U.S. Domestic 2Q Revenue Increased 7.3% to $15.5B Driven by 11.9% increase in revenue per piece; RPP up double-digits for all products Revenue Change (Y/Y) Revenue Per Piece $12.50 +7.3% vs. Last Year $11.50 $16.0 $15.0 $10.50 +$1.6B 2Q21 3Q21 4Q21 1Q22 2Q22 $15.5B In Billions -$578M $14.0 $14.4B •
Slide 15: U.S. Domestic: 2Q Operating Profit and Margin Increased
U.S. Domestic 2Q Operating Profit and Margin Increased YoY Driven by revenue-quality and productivity initiatives Operating Profit (In Millions) • Adjusted operating expense* grew 6.9% $262 $1,829 GAAP primarily driven by two factors: $1,567 o Fuel drove 370 basis points of the increase; wages and b
Slide 16: International: 2Q Total Average Daily Volume Down 9.2%
International 2Q Total Average Daily Volume Down 9.2% Domestic ADV Down 13.4%; Export ADV down 4.4% Asia Monthly ADV (Y/Y) Europe Monthly ADV (Y/Y) 35% 70% 25% 40% 15% 10% 5% -5% -20% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec -15% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2022 2021 2022
Slide 17: International: Operating Profit of $1.2B in a Challenging Market
International Increased Operating Profit to $1.2B in a Challenging Global Market Adjusted the network to match volume levels Operating Profit (In Millions) +$9 • Revenue per piece increased 14.8% GAAP $1,184 $1,193 o 790 basis points of the increase driven by base pricing, product mix and revenue qu
Slide 18: Supply Chain Solutions: Strong Results in a Dynamic Environment
Supply Chain Solutions Delivered Strong Results in a Dynamic Environment Operating Profit (In Millions) +$6 • Revenue increased to $4.2B, despite the $297M $513 impact from the divestiture of UPS Freight $507 GAAP • Forwarding generated strong revenue and 2Q21 Operating Profit Performance 2Q22 Opera
Slide 19: Cash Flow and Dividends
Cash Flow and Dividends 2Q22 YTD Cash From Operations of $8.3B 2Q22 YTD Free Cash Flow* of $6.9B $16.0 $12.0 $14.0 $10.0 $12.0 $10.0 $8.0 In Billions In Billions $8.0 $6.0 $6.0 $4.0 $4.0 $2.0 $2.0 $0.0 $0.0 1Q YTD 2Q YTD 3Q YTD 4Q YTD 1Q YTD 2Q YTD 3Q YTD 4Q YTD CFO 2021 CFO 2022 FCF* 2021 FCF* 2022
Slide 20: Reaffirming Full-Year 2022 Financial Targets
Reaffirming Full-Year 2022 Financial Targets Raising share repurchase target to $3B Full-year 2022 Outlook • Consolidated: o Revenue about $102B Expect macro environment to remain o Adjusted operating margin* approximately 13.7% dynamic with global GDP growing 2.9% o Adjusted return on invested ca
Slide 21: Questions & Answers
Questions & Answers © 2022 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. 21
Slide 22: Appendix
Appendix 22 © 2022 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 23: Reconciliation of GAAP and Non-GAAP Financial Measures
Reconciliation of GAAP and Non-GAAP Financial Measures Non-GAAP Financial Measures; Reconciliations Pension and Postretirement Adjustments From time to time we supplement the reporting of our financial information determined under generally We recognize changes in the fair value of plan assets and n
Slide 24: Reconciliations
Reconciliations © 2022 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 25: Reconciliations
Reconciliations © 2022 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 26: Reconciliations
Reconciliations © 2022 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 27: Reconciliations
Reconciliations © 2022 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 28: Reconciliations
Reconciliations © 2022 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.
United Parcel Service — Q2 2022 Earnings Presentation on 6ix