Schneider National, Inc. · NYSE:SNDR
Schneider National — Q4 2022 Earnings Presentation
30 slides from Schneider National's earnings presentation, Feb 2, 2023
Slide 1: Fourth Quarter 2022 Investor Presentation
FOURTH QUARTER 2022 Investor Presentation INNOVATIVE – RESILIENT - DRIVEN
Slide 2: Agenda
► Business overview Agenda ► Strategy ► Capital allocation ► Technology and innovation ► People and values ► Secular trends ► Invest with SNDR ► Current results and outlook ► Appendix 2
Slide 3: Business overview: Driven by our uncompromising values
BUSINESS OVERVIEW Driven by our uncompromising values to deliver the goods that enhance the lives of people everywhere. Experienced Leadership, Focused on At a glance: Growth and Delivering Shareholder Value Mark Rourke • Chief Executive Officer and President since 2019, previously serving as Execut
Slide 4: Premier multimodal provider of transportation and logistics solutions
BUSINESS OVERVIEW Premier multimodal provider of transportation and logistics solutions. Truckload Segment Over the road freight transportation via dry van, bulk, temperature-controlled and flat- bed trailers across either network (irregular route) or dedicated (structured route) contracts. Includes
Slide 5: Truckload: Dedicated and Network operations
BUSINESS OVERVIEW Truckload consists primarily of Dedicated contract configurations, complemented by a trailer- centric one-way Network operation. Dedicated • Contracted and consistent capacity through cycles • Multi-year contracts with 90%+ renewal rates • Driver-preferred alignment • Organic and a
Slide 6: Intermodal goal to double in size by 2030
BUSINESS OVERVIEW Intermodal’s goal is to double in size by 2030 by leveraging our differentiated company- owned container, chassis and dray model. • 28,000+ company-owned containers and nearly 21,000 company-owned chassis • Approximately 1,600 company dray tractors, executing the majority of dray m
Slide 7: Logistics growing share through brokerage and 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. • 64,000+ qualified carriers in our network • Enabled by proprietary Schneider FreightPower® technology which digitally aggregates frei
Slide 8: Positioned for value creation and growth
BUSINESS OVERVIEW Positioned for value creation and growth at the forefront of the transportation industry. Premier multimodal transportation platform Technology leader and innovator Strong cash flow and disciplined capital deployment Diversity of customers and end markets 8
Slide 9: Multimodal platform has delivered profitable growth
BUSINESS OVERVIEW Multimodal platform has delivered profitable growth and increasing returns to shareholders. Growth focus on Intermodal, Logistics and Dedicated. Operating Revenues Income Free Cash Flow LTM Adjusted Diluted from Operations Earnings per Share $6,604 $395 $600 $4,384 $280 $109 2017 2
Slide 10: Diversity of customers and end-markets served
BUSINESS OVERVIEW Diversity of customers and end-markets served Growing Customer Base: Change in Customer Concentration supports resiliency through business cycles. Diverse End-Market Footprint: 2022 Revenues (xFSC) All other 33% Retail 21% Food and Online-only beverage 15% retail 4% Consumer Auto 4
Slide 11: Comprehensive North American footprint
BUSINESS OVERVIEW Comprehensive North American footprint with industry-leading safety, culture and performance. 11
Slide 12: Our strategy: 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 to Always enhan
Slide 13: Strategic growth areas: 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 31% contribution from 47% 47% Intermodal and Logistics Based on sum of Truckload, Intermod
Slide 14: Use-of-cash strategy balancing growth and returns
CAPITAL ALLOCATION Schneider’s use-of-cash strategy creates a balance between growth, shareholder returns and resilient financial performance in all market conditions. MAINTAIN STRONG FUND OPERATING FUND ACQUISITIVE COMMON STOCK BALANCE SHEET AND GROWTH NEEDS GROWTH NEEDS DIVIDENDS • Maintain invest
Slide 15: Tech investments as a catalyst for profitable growth
TECHNOLOGY AND INNOVATION Tech investments are a catalyst for profitable growth as an Enterprise through our focus on automation, intelligence and aggregation. • Driving growth through our Schneider FreightPower® marketplace by investing in seamless digital connections and transactions with shippers
Slide 16: Living out our core values
PEOPLE AND VALUES How we do it is as important: Living out our core values in support of our vision. SAFETY FIRST AND ALWAYS RESPECT FOR ALL INTEGRITY IN EVERY ACTION EXCELLENCE IN WHAT WE DO Schneider trucks are spec’d with the Schneider has provided $10 million Schneider earns PepsiCo Asset Dedica
Slide 17: Commitment to sustainability across business and leadership
PEOPLE AND VALUES Our commitment to sustainability across our business and leadership allows us to authentically address a changing landscape to build a fleet and a workforce for the future. 7.5% by 2025 Reduced CO2 We are committed to: emissions per mile 60% by 2035 Utilizing diverse modes of trans
Slide 18: Advising customers on fleet decarbonization
PEOPLE AND VALUES As experts in the shipping industry, we advise our customers on how our operations fit into their Fleet decarbonization is critical to PepsiCo’s overarching emissions reduction goals. goal to achieve net zero emissions by 2040. Collaboration is necessary to understand, measure and
Slide 19: Secular trends that drive our strategy
SECULAR TRENDS Secular trends that drive our strategy and our future growth. TRUCKLOAD INTERMODAL LOGISTICS Customers value committed contract Increased focus on ESG/sustainability Challenging capacity conditions are freight in order to build reliability and goals with customers, consumers and expec
Slide 20: Invest with SNDR
INVEST W ITH SNDR Positioned for value creation and Premier multimodal transportation platform growth at the forefront of the transportation industry. Technology leader • Most diverse logistics and transportation platform in North and innovator America. • Portfolio of services enables Strong cash fl
Slide 21: Earnings performance illustrates value of portfolio
CURRENT RESULTS AND OUTLOOK Our earnings performance illustrates the value and momentum of our portfolio of services. Our enterprise delivered record Metric 4Q22 4Q21 FY22 FY21 revenues of $6.6 billion and adjusted earnings of $617 million in 2022, Operating Revenues $1,562 $1,575 $6,604 $5,609 illu
Slide 22: 4Q22 Enterprise Results
CURRENT RESULTS AND OUTLOOK 4Q22 Enterprise Results Operating revenues Revenues excluding fuel surcharge • Second most profitable 4th quarter in our $1,575 $1,562 $1,445 $1,348 history. • Leveraged our portfolio amid decelerating market conditions and atypical seasonality in the 4th quarter. 4Q21 4Q
Slide 23: 4Q22 Truckload Results
CURRENT RESULTS AND OUTLOOK Revenues excluding Income from 4Q22 Truckload Results fuel surcharge operations • Grew revenues 4% despite lack of $524 $545 $88 holiday peak and premium freight $69 opportunities. • Earnings constrained by higher driver and equipment-related costs. 4Q21 4Q22 4Q21 4Q22 •
Slide 24: 4Q22 Intermodal Results
CURRENT RESULTS AND OUTLOOK 4Q22 Intermodal Results Revenues excluding fuel surcharge Income from operations • Successfully transitioned Western rail $318 $316 $55 $53 operations to the Union Pacific. • Improved revenue per order 7% with order volume contracting 6%. • Containers 11% higher YoY, +2,8
Slide 25: 4Q22 Logistics Results
CURRENT RESULTS AND OUTLOOK 4Q22 Logistics Results Revenues excluding fuel surcharge Income from operations • Lower spot price continued to impact $548 $37 revenues, while brokerage volumes $425 $24 contracted 5% due to moderating market conditions. • Third party support for port dray, 4Q21 4Q22 4Q2
Slide 26: Guidance reflects freight demand strengthening through the year
CURRENT RESULTS AND OUTLOOK Our guidance reflects our anticipation that freight demand will strengthen as the year progresses. We look forward to demonstrating the resilience of our diverse portfolio through evolving market $2.15 - $2.35 conditions, while advancing our Full year adjusted diluted ear
Slide 27: Disclaimer and Forward-Looking Statements
Special Note Regarding Forward-Looking Statements This presentation contains and, any commentary or discussion by management of the content of this presentation may include “forward-looking statements,” as defined in the Private Securities Litigation Reform Act of 1995 (the “Act”), which express man
Slide 28: Appendix
Appendix
Slide 29: Non-GAAP Reconciliation: Revenues, Income from Operations, Net Income
APPENDIX Non-GAAP Reconciliation—Revenues Excluding Fuel Surcharge1 Non-GAAP Reconciliation—Adjusted Income from Operations1 ($M) FY2017 FY2022 FY2021 4Q22 4Q21 ($M) FY2017 FY2022 FY2021 4Q22 4Q21 Operating revenues $4,384 $6,604 $5,609 $1,562 $1,575 Income from operations $280 $600 $534 $143 $178 L
Slide 30: Non-GAAP Reconciliation: Adjusted EBITDA and Free Cash Flow
APPENDIX Non-GAAP Reconciliation—Adjusted EBITDA1 Non-GAAP Reconciliation—Free Cash Flow1 ($M) FY2017 FY2022 FY2021 4Q22 4Q21 ($M) FY2017 FY2022 FY2021 4Q22 4Q21 Net income $390 $458 $405 $110 $134 Net cash provided by $461 $856 $566 $278 $170 operating activities Provision for (benefit from) (127)