Werner Enterprises, Inc. · NASDAQ:WERN
Werner Enterprises — Investor Presentation (December 2021)
35 slides from Werner Enterprises's investor presentation, Dec 20, 2021
Slide 1: Investor Presentation December 2021
INVESTOR PRESENTATION December 2021
Slide 2: Safe Harbor and Non-GAAP Financial Measures
2 S A F E H A R B O R A N D N O N - G A A P F I N A N C I A L M E A S U R E S FORWARD-LOOKING STATEMENTS This presentation may contain 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 am
Slide 3: Key Werner Messages
3 Driven by a culture of superior service and safety excellence, with a new and innovative truck and trailer fleet, leading IT infrastructure and a strategic network of terminals and driver training schools Diversified operating portfolio with a strong customer base winning in their industry vertica
Slide 4: Our Core Values Support Our Business Philosophy
4 OUR CORE VALUES SUPPORT OUR BUSINESS PHILOSOPHY Provide creative capacity solutions and superior on-time customer service for our customers Operate premium modern trucks and trailers that are equipped with the latest safety technology, which inherently have fewer mechanical and maintenance issues
Slide 5: Business Overview
BUSINESS OVERVIEW
Slide 6: Werner Snapshot
6 36% 49% 66% 79% Top 5 Top 10 Top 25 Top 50 Segment Vertical (Top 50 Customers) Customer Rank WERNER SNAPSHOT (NASDAQ: WERN) P R E M I U M T R U C K L OA D T R A N S P O R TAT I O N & L O G I S T I C S S E R V I C E S P R OV I D E R Omaha, NE Headquarters $3.1B Market Cap1 1.0% Dividend Yield1 WE K
Slide 7: Highly Attractive Lines of Business in Two Segments
7 5,120 trucks1 150+ dedicated fleets 3,100 trucks1 14 terminals 36 drop-yards 5 strategic regional centers in North America HIGHLY ATTRACTIVE LINES OF BUSINESS IN TWO SEGMENTS • Consistent and reliable revenue stream, through economic upturns and downturns • Deep, tenured customer relationships, wi
Slide 8: Our Footprint
8 Tremendous scale – among the top 5 U.S. public truckload carriers* as measured by truck count Recent ECM Transport Group (ECM) truckload acquisition July 2021 – expands footprint in the strategic Mid-Atlantic, Ohio and Northeast regions by 500 trucks, 2,000 trailers and over 500 professional drive
Slide 9: Truck Transportation Employment and Supply
9 -100 -80 -60 -40 -20 0 20 40 1200 1250 1300 1350 1400 1450 1500 1550 1600 2 0 1 0 2 0 1 1 2 0 1 2 2 0 1 3 2 0 1 4 2 0 1 5 2 0 1 6 2 0 1 7 2 0 1 8 2 0 1 9 2 0 2 0 2 0 2 1 M /M J o b s C h a n g e ( 0 0 0 s ) E m p lo ym e n t (0 0 0 s ) Truck Transportation Employment January 2010 - November 2021 (
Slide 10: Tailwinds Supporting Near-Term Growth
10 TAILWINDS SUPPORTING NEAR -TERM GROWTH Customer Alignment Lower Cost BaseHigher Velocity Supply Chain Greater Demand for E-Commerce Has Increased Supply Chain Velocity • E-Commerce driving demand; need for forward-deployed inventory nearer to the customer; the retail competitive landscape is shri
Slide 11: Competitive Advantages Across All Business Cycles
11 Breadth Diversified truckload transportation portfolio (Dedicated TL, One-Way TL, Logistics) Scale Top 5 Truckload carrier*, Top 4 Dedicated carrier* and growing Logistics provider North America Footprint Comprehensive North American footprint including industry leading cross-border coverage via
Slide 12: Balanced Werner Portfolio Performs Well Through the Cycles
12 BALANCED WERNER PORTFOLIO PERFORMS WELL THROUGH THE CYCLES 87% 86% 65% 73% A B C 0% (15%) (20%) 1% A B C 2017 / 2018 Up Cycle 2018 / 2019 Down Cycle • Demonstrated resilience through the down cycle as industry freight volumes1 decreased ~4% YoY • Longer-term dedicated contracts provide a stable b
Slide 13: Strategy
STRATEGY
Slide 14: TS + S Are Core Components of Our Strategy
14 5 TS + S ARE CORE COMPONENTS OF OUR STRATEGY KEY FOCUS AREAS RELEVANT 3Q21 UPDATES 1. Trucks ▪ Maintain the age of our industry-leading modern truck fleet, which includes state- of-the-art safety technology ▪ Fleet age increased slightly, due to OEM new equipment delivery delays 2. Trailers ▪ Rem
Slide 15: Werner's Best-in-Class, Modern Fleet
15 Werner Fleet Sales Strategy Maximizes Resale Value TRUCKS AND TRAILERS WERNER’S BEST-IN-CLASS, MODERN FLEET LOWERS OPERATING AND MAINTENANCE COSTS AND IMPROVES ON-TIME SERVICE Modern truck fleet, with GPS tracking, from top-quality OEMs with an average age of 2.1 years2 (vs. industry average of 5
Slide 16: Talent Powered by Our Core Values
16 TALENT Powered by Our Core Values SAFETY & SERVICE INCLUSION COMMUNITY INNOVATION LEADERSHIP INTEGRITY O U R D R I V E R S T R AT E G Y I S W O R K I N G I N A N E X T R E M E LY C O M P E T I T I V E L A B O R M A R K E T W e r n e r P r o g r a m s A r e A t t r a c t i n g a n d R e t a i n i
Slide 17: Terminals
17 TERMINALS Omaha, NE Brownstown, MI Lehigh Valley, PA Joliet, IL El Paso, TX Laredo, TX Lake City, FL Fontana, CA Dallas, TX HQ West Memphis, AR Lithia Springs, GA Springfield, OH Phoenix, AZ Henderson, CO Werner Terminals ECM Terminals Northwood, OH Fremont, OH York, PA Cheswick, PA Hunker, PA Me
Slide 18: Technology
18 Drivers • Cutting-Edge Telematics • DriveWerner App • Breakdown Management • Safety Event Management Shippers • Final Mile • Shipment Tracking Third-Party Carriers • Optimize freight management • Streamline work processes • Manage preferences Infrastructure TECHNOLOGY Innovative Technology Proces
Slide 19: Quest for Quality Awards
19 Werner had the 2nd highest overall weighted score in the dry freight category in 2021 38th annual awards, August 2021 Dry freight public company truckload award winners Quest for Quality 2021 2020 2019 2018 2017 X X X X X Quest for Quality is widely regarded as the most important measure of custo
Slide 20: Commitment to Sustainability
COMMITMENT TO SUSTAINABILITY
Slide 21: ESG Program Milestones
21 Formally launched ESG program, adding Sustainability as a strategic pillar Q4 2020 Created two new roles and hired diverse leaders • AVP of Sustainability • AVP of Diversity, Inclusion, and Learning Created 3 initial Associate Resource Groups (ARGs) Q1 2021 Q2 2021 5Ts + S Strategy Trucks Trailer
Slide 22: Environmental, Social and Governance Goals
22 Environmental Build on Strong Foundation as an Industry Leader, Focused on Reducing Our Environmental Impact through Young and Innovative Fleet Social Foster and Empower an Inclusive Culture that Upholds Our Core Values and Provides Equal Opportunities for All; Uphold Relentless Focus on Safety G
Slide 23: Financial Overview
FINANCIAL OVERVIEW
Slide 24: Revenue and Adjusted Operating Income
24 $2,117 $2,458 $2,464 $2,372 $2,589 2017 2018 2019 2020 Q3 2021 LTM $0.0 $10 .0 $20 .0 $30 .0 $40 .0 $50 .0 $60 .0 $70 .0 $80 .0 $90 .0 $100.0 $110.0 $120.0 $130.0 $140.0 $150.0 $160.0 $170.0 $180.0 $190.0 $200.0 $210.0 $220.0 $230.0 $240.0 $250.0 $260.0 $270.0 $280.0 $290.0 $300.0 $310.0 $320.0 $
Slide 25: Strong FCF Generation; Expected to Continue
25 $283 $418 $427 $446 $353 $199 $349 $284 $266 $242 $84 $69 $143 $180 $111 2017 2018 2019 2020 Q3 2021 LTM CF Net CapEx FCF Commentary • FCF generation of $111M as of Q3 2021 LTM1 • 2021 Net CapEx expected to be in the range of $250M to $275M; over the long-term, targeting Net CapEx at 11-13% of an
Slide 26: Raising Long-Term Goal Range for TTS Adjusted Operating Margin
26 39% 43% 47% 47% 47% 49% 50% 50% 51% 52% 56% 58% 60% 63% 6.6% 6.7% 9.4% 11.9% 11.6% 9.2% 11.3% 13.3% 7.8% 9.7% 13.2% 12.3% 14.0% 15.9% 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Q3 2021 LTM 5Ts strategy begins 4 TTS Adj. Operating Margin New range 1, 2,: 12% to 17% Prior rang
Slide 27: Net Debt to LTM EBITDA and Capital Allocation
27 0.2x 0.6x 0.3x 0.2x 0.2x 0.5x 12/31/1812/31/1912/31/20 3/31/21 6/30/21 9/30/21 Net Debt to LTM EBITDA Continual and Consistent Investment in the 5 Ts + S ▪ Reinvestments in new, feature-rich trucks and trailers, including the latest safety technology, that extend sustainable competitive advantage
Slide 28: 2021 Guidance
28 Prior (as of 7/29/21) Actual (as of 9/30/21) New (as of 10/28/21) Commentary 2021 Guidance TTS truck growth from BoY to EoY 1% to 4% (annual) 5% (YTD21) 3% to 5% (annual) Flat to slightly lower fleet expected in 4Q21 Gains on sales of equipment $9M to $13M (3Q21) $15.3M (3Q21) $10M to $12M (4Q21)
Slide 29: Invest With Us
INVEST WITH US Executing in strong freight market; expected to continue well into 2022 • Achieved record 3Q21 Adjusted operating income and Adjusted EPS, our fifth consecutive record-setting quarter • Positioned to deliver cash flow stability through the cycle Focused on operational excellence and o
Slide 30: Appendix
APPENDIX
Slide 31: GAAP to Non-GAAP Reconciliation
GAAP to NON-GAAP RECONCILIATION 31
Slide 32: GAAP to Non-GAAP Reconciliation
GAAP to NON-GAAP RECONCILIATION 32
Slide 33: GAAP to Non-GAAP Reconciliation
GAAP to NON-GAAP RECONCILIATION 33
Slide 34: GAAP to Non-GAAP Reconciliation
GAAP to NON-GAAP RECONCILIATION 34
Slide 35: For More Information, Visit werner.com
F O R M O R E I N F O R M A T I O N , V I S I T W E R N E R . C O M
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