Xpo, Inc. · NYSE:XPO
Xpo — XPO Logistics — Investor Presentation (July 2015)
38 slides from Xpo's investor presentation, Jul 7, 2015
Slide 1: XPO Investor Presentation and Transcript
Exhibit 99.1 XPO Investor Presentation and Transcript July 2015
Slide 2: Disclaimers
Disclaimers Forward-Looking Statements 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 XPO Logistics, Inc.’s 2015 year-end run-rate perform
Slide 3: A Global Top Ten Transportation and Logistics Provider
A Global Top Ten Transportation and Logistics Provider Many robust avenues for growth One of the world’s largest contract logistics companies #1 last mile logistics provider for heavy goods in North America #1 manager of expedited shipments in North America #2 global freight brokerage firm by net re
Slide 4: Highly Efficient and Customer Focused Organization
Highly Efficient and Customer Focused Organization 863 locations globally across 27 countries 52,350 employees serving over 30,000 customers Access to network of over 700,000 trucks in North America and Europe 129 million square feet of logistics facilities Over 42,000 deliveries a day facilitated b
Slide 5: XPO Is Built to Serve Customers' Growing Needs
XPO Is Built to Serve Customers’ Growing Needs Market Size Projected Growth Sector ($ billions) (x GDP) Contract Logistics $120 2 to 3 times (North America and Europe) Last Mile (North America) $13 5 to 6 times Truck Brokerage (North America) $50 2 to 3 times Road Transport (Europe) $85 ~ 2 times Ex
Slide 6: Contract Logistics: Long-term, Sticky Relationships
Contract Logistics: Long-term, Sticky Relationships Significant barriers to entry Largely non-commoditized High value-add component – In Europe: Full range of retail logistics, and specialized services for cold chain, chemicals and e-commerce – In North America: Deep relationships in technology, wir
Slide 7: Major Player in E-Commerce
Major Player in E-Commerce Leading e-commerce capabilities in high-growth e-fulfillment, reverse logistics and last mile – Worldwide e-commerce is projected to grow at a rate of 13% to 21% through at least 2018 North American market leader in last mile for heavy goods, with approximately 5% market s
Slide 8: Blue Chip Customers
Blue Chip Customers Any trademarks or logos used in this presentation are the property of their respective owners 8 | XPO Company Overview and Capabilities
Slide 9: Blue Chip Customers
Blue Chip Customers Any trademarks or logos used in this presentation are the property of their respective owners 9 | XPO Company Overview and Capabilities
Slide 10: High Productivity through Technology
High Productivity through Technology IT team of about 1,000 professionals Over 200 IT projects launching in 2015 Proprietary technology delivers world-class service – Sophisticated contract logistics solutions for complex supply chain requirements – Rigorous inventory management technology – Freight
Slide 11: Disciplined Selection Process from M&A Pipeline
Disciplined Selection Process from M&A Pipeline Acquisition prospects must meet strategic criteria Provide services our customers highly value Highly scalable Technology-oriented, with a willingness to embrace additional technology Well-run operations that can be tightly integrated into XPO’s networ
Slide 12: Rock Solid Financial Position
Rock Solid Financial Position $1.7 billion in cash, in addition to an undrawn $415 million asset-backed loan Positive and accelerating free cash flow Low maintenance capex, with total net capex of about 2% of revenue Global access to the highest caliber institutional investors Raised total of $2 bil
Slide 13: First Three Years of XPO's Growth Strategy
First Three Years of XPO’s Growth Strategy TTM Revenue ($ millions) $9,205 $2,777 $2,357 $1,783 $1,315 $871 $279 $348 $431 $554 $702 $180 $191 $214 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 PF, March 2012 2013 2014 2015 2015 13 | XPO Investor Presentation July 2015
Slide 14: CEO Bradley S. Jacobs
CEO Bradley S. Jacobs Prior to XPO, founded and led four highly successful companies, including two world-class publicly-traded corporations United Rentals: Built world’s largest equipment rental company United Waste: Created 5th largest solid waste business in North America Hamilton Resources: Grew
Slide 15: Highly Skilled Management Team
Highly Skilled Management Team Ashfaque Chowdhury New Breed CIO, Contract Logistics, Americas Troy Cooper United Rentals, United Waste Chief Operating Officer Louis DeJoy New Breed CEO, Contract Logistics, Americas Gordon Devens AutoNation, Skadden Arps General Counsel Bill Fraine New Breed, FedEx C
Slide 16: Highly Skilled Management Team (Cont'd)
Highly Skilled Management Team (Cont’d) Scott Malat Goldman Sachs, UBS, JPMorgan Chase Chief Strategy Officer Karl Meyer 3PD, Home Depot Chief Executive Officer, Last Mile Hervé Montjotin Norbert Dentressangle Chief Executive Officer, Europe Dominick Muzi Priority Solutions, AIT Worldwide President,
Slide 17: First Quarter 2015 Financial Results
First Quarter 2015 Financial Results
Slide 18: Combined and Pro Forma Historical Financials
Combined and Pro Forma Historical Financials Pro Forma Revenue (1) Pro Forma Adjusted EBITDA (1)(2) ($ millions) ($ millions) $585 $9,205 $3,130 $177 2014 LTM 3/31/15 2014 LTM 3/31/15 (1) LTM figures are pro forma for acquisition of ND, 2014 figures are pro forma for all previously completed acquisi
Slide 19: Incentivized XPO Management Owns ~16% of Company
Incentivized XPO Management Owns ~16% of Company Common Stock Equivalent (as of 5/29/2015) Common Shares 107.7 million (1) Preferred Shares 10.5 million Warrants 10.5 million (9.0 million dilutive) (2) Convertible Senior Notes 4.4 million shares (3) Stock Options and RSUs 3.5 million shares dilutive
Slide 20: 2015 Year-End Run Rate Targets
2015 Year-End Run Rate Targets Financial targets raised in light of M&A announcements An annual revenue run rate of at least $9.5 billion by December 31, 2015 An annual EBITDA run rate of at least $625 million by December 31, 2015 XPO intends to update its long-term financial targets with the announ
Slide 21: XPO's Growth Plan Is Still in Early Innings
XPO’s Growth Plan Is Still in Early Innings Leading positions in fastest-growing areas of transportation and logistics Compelling value proposition as a multi-modal, single-source provider of end-to-end supply change solutions Significant potential to grow European platform High-growth positions in
Slide 22: Acquired Norbert Dentressangle (ND)
Acquired Norbert Dentressangle (ND) June 8, 2015
Slide 23: Expansive Platform for Growth
Expansive Platform for Growth June 8 acquisition of Norbert Dentressangle added approximately €5.1 billion ($5.5 billion) of annual revenue as categorized below (1) Contract Logistics Transportation Global Forwarding 2014 Revenue 2014 Revenue 2014 Revenue €2.6 billion €2.3 billion €0.2 billion 27,80
Slide 24: Strategic Rationale for Acquisition
Strategic Rationale for Acquisition ND’s capabilities closely mirrored XPO’s North American offering – XPO gained global scale in three of its core services: contract logistics, freight brokerage and global freight forwarding Companies shared an asset-light model with low capital intensity: total ne
Slide 25: Significant Synergy Potential
Significant Synergy Potential Massive cross selling potential to serve global clients as a single-source provider Complementary contract logistics services in the U.S. Opportunity to grow European freight brokerage business Combined global forwarding volume allows XPO to buy transportation more effe
Slide 26: XPO Gained Leadership in European E-Fulfillment
XPO Gained Leadership in European E-Fulfillment Favorable historical performance and future growth opportunities €242 million revenue in e-commerce logistics in 2014 – 31% organic growth compared to 2013 – Business focused in the UK, Spain and France Strong growth potential with approximately 5% mar
Slide 27: Preeminent European Transportation Network
Preeminent European Transportation Network 36-year history as global partner to blue chip customers Combines non-asset, asset-light and asset-based operations Rapid growth in freight brokerage, asset-light palletized service and dedicated carriage Unique service capabilities from lane density coveri
Slide 28: Combination is a Growth Accelerator
Combination is a Growth Accelerator Deploy cutting-edge technology to turbocharge growth in freight brokerage – Pricing and truck matching algorithms to accelerate growth and margins – Combined annual technology spend is among the highest in the industry Combine leading businesses in fast growth e-c
Slide 29: Loyal European Customer Base in Attractive Verticals
Loyal European Customer Base in Attractive Verticals Highlights Top Customers Diversified portfolio of blue chip customers Largest client under 4% of revenue 97% customer renewal rate in logistics Customer verticals include retail, food and beverage, manufacturing, chemicals, agriculture, e-commerce
Slide 30: Transaction Overview
Transaction Overview Enterprise Value: Approximately €3.24 billion ($3.53 billion) Purchase Price Transaction Multiple: Approximately 9 times consensus 2015E EBITDA On June 8, 2015, ND’s founder and family sold their 67% ownership of the company to XPO at €217.50 per share all cash On June 25, 2015,
Slide 31: Acquired Bridge Terminal Transport (BTT)
Acquired Bridge Terminal Transport (BTT) June 1, 2015
Slide 32: Acquired Bridge Terminal Transport (BTT)
Acquired Bridge Terminal Transport (BTT) One of the largest asset-light drayage providers in the United States – Approximately 1,800 customers, including many longstanding, blue chip customer relationships Revenue of $232 million and EBITDA of $12.4 million for the trailing 12 months ended March 31,
Slide 33: Strategic Rationale and Synergies
Strategic Rationale and Synergies XPO gained 1,300 independent owner operators and 28 terminals – Increased XPO’s total capacity under contract to its drayage, last mile and expedite businesses to more than 6,200 independent owner operators – Strengthened XPO’s drayage footprint on the East Coast XP
Slide 34: Supplemental Materials
Supplemental Materials
Slide 35: XPO Business Glossary
XPO Business Glossary Integrated services Contract Logistics: An asset-light, technology-enabled business characterized by long-term contractual relationships with high renewal rates, low cyclicality, significant barriers to entry and a high-value-add component that minimizes commoditization. Contra
Slide 36: XPO Business Glossary
XPO Business Glossary Integrated services, continued Global Forwarding: A non-asset business that facilitates freight shipments by ground, air and ocean. Shipments may have origins and destinations within North America, to or from North America, or between foreign locations. Services are provided th
Slide 37: PF LTM Adjusted EBITDA Reconciliation
PF LTM Adjusted EBITDA Reconciliation 37 | XPO Investor Presentation July 2015
Slide 38: Historical PF Adjusted EBITDA Reconciliation
Historical PF Adjusted EBITDA Reconciliation Note: Excludes acquisition of ND 38 | XPO Investor Presentation July 2015