Slide 1: FedEx Corporation Fiscal First Quarter 2024 Earnings
FedEx Corporation Fiscal First Quarter 2024 Earnings | September 20, 2023 Forward-Looking Statements and Non-GAAP Financial Measures Certain statements in this presentation may be considered forward-looking statements, such as statements regarding expected cost savings, the planned consolidation of
Slide 2: Presenters: VP of Investor Relations, President & CEO
VP of Investor Relations 3 President & CEO 4
Slide 3: Key messages and results overview
Key messages • Entered the fiscal year with strength, delivering results ahead of expectations • Making substantial progress on DRIVE, eliminating costs to deliver structural efficiencies • Delivering innovative and data-driven solutions as we prepare for Peak season • Increasing midpoint of adjuste
Slide 4: DRIVE enabling cost savings across FedEx
DRIVE enabling cost savings across FedEx G&A savings start to ramp in second half of FY24 On track to deliver targeted $1.8 billion savings in FY24 FedEx Ground FedEx Freight FedEx Express • Lower third-party • Effectively managing • Structural flight transportation rates cost base takedowns • Optim
Slide 5: Transportation segment revenue performance
EVP & Chief Customer Officer 9 Transportation segment revenue performance Remained consistent in our focus on revenue quality and being a valued partner to our customers -9% +3% $11.1B $10.1B -16% $8.2B $8.4B $2.7B $2.3B Q1 FY23 Q1 FY24 Q1 FY23 Q1 FY24 Q1 FY23 Q1 FY24 FedEx Ground FedEx Express FedE
Slide 6: Monthly volume trends and segment yield performance
Monthly volume trends: March 2023-Aug 2023 Volume trends improving sequentially Q4 average daily volume Q1 average daily volume FedEx Express U.S. Domestic Package YoY FedEx Express International Export YoY Mar Apr May June July Aug Mar Apr May June July Aug 1% 6% 4% -4% -4% -10% -8% -9% -8% -3% -13
Slide 7: Serving our customers
Serving our customers • U.S. service strong as volume picked up towards quarter-end • Europe service KPIs improved, enabling share gains • Rolled out Estimated Delivery Time Window (EDTW) to 48 countries • Simplifying how we do business, particularly with small and medium customers • Expanded My Fed
Slide 8: Financial priorities and segment operating income performance
Financial priorities Margin expansion Consistent execution on transformation Deploy capital to highest return opportunities, including returns to shareholders Open and transparent communication 15 Transportation segment operating income performance +61% -26% $1,120M $694M +14% $651M $481M $188M $215
Slide 9: Updating FY24 outlook
Updating FY24 outlook June 2023 Sept 2023 Commentary: • Expect business conditions to Flat to low-single- Approximately Revenue remain uncertain in FY24 digit % growth flat • No anticipation of demand recovery Adjusted EPS* $16.50-18.50 $17.00-18.50 • Continue to expect $1.8 billion in DRIVE cost sa
Slide 10: Reaffirming capital allocation priorities
Reaffirming capital allocation priorities Unwavering focus on efficient and responsible capital allocation $2.0 Share repurchases 7.6% of revenue 6.8% of revenue <6.5% of revenue $3.3* FY24E capital Dividend ($ in billions) return $1.3 FY19-FY22 FY23 FY25 Target Lowering capital spend through FY25 E
Slide 11: Q1 FY24 reconciliation for FedEx Corporation
Appendix 21 Q1 FY24 reconciliation for FedEx Corporation Diluted Operating Operating Income Net Dollars in millions, except EPS Earnings Income Margin Taxes1 Income2 Per Share GAAP measure $1,485 6.8% $345 $1,078 $4.23 Business optimization costs3 105 0.5% 24 81 0.32 Non-GAAP measure $1,590 7.3% $36
Slide 12: Q1 FY24 reconciliation for Express and Ground segments
Q1 FY24 reconciliation for FedEx Express segment Operating Operating Dollars in millions Income Margin GAAP measure $205 2.0% Business optimization costs 10 0.1% Non-GAAP measure $215 2.1% 23 Q1 FY24 reconciliation for FedEx Ground segment Operating Operating Dollars in millions Income Margin GAAP m
Slide 13: Q1 FY23 reconciliation for FedEx Corporation and Express
Q1 FY23 reconciliation for FedEx Corporation Diluted Operating Operating Income Net Dollars in millions, except EPS Earnings Income Margin Taxes1 Income2 Per Share GAAP measure $1,191 5.1% $279 $875 $3.33 Business optimization costs4 24 0.1% 6 19 0.07 Business realignment costs5 14 0.1% 3 11 0.04 No
Slide 14: FY24 EPS forecast and FY23 operating income reconciliation
FY24 earnings per share forecast Dollars in millions, except EPS Adjustments Diluted Earnings Per Share Earnings per diluted share before MTM retirement plans accounting adjustments (non- $15.10 to $16.60 GAAP)6 Business optimization costs 620 Income tax effect1 (145) Net of tax effect $475 1.90 Ear
Slide 15: FY24 outlook midpoint operating income forecast and footnotes
FY24 outlook midpoint operating income forecast Dollars in millions Operating income (GAAP measure) $5,680 Business optimization costs 620 Adjusted operating income (non-GAAP) $6,300 29 Footnotes for non-GAAP reconciliation slides 1. Income taxes are based on the company’s approximate statutory tax