Slide 1: Investor Overview Q3 2023
Investor Overview Q3 2023 October 2023
Slide 2: Forward-looking statements and Non-GAAP financial measures
Forward-looking statements This document 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 statements relating to our full year 2023 expectations of gross cape
Slide 3: Third quarter 2023 highlights
Third quarter 2023 highlights Delivering solid results $1.98 billion of revenue, up 2% YoY $278 million of adjusted EBITDA, up 6% YoY $0.88 adjusted diluted earnings per share1 LTL adjusted operating ratio of 86.2%, improving sequentially by 140 bps, outperforming seasonality by 370 bps LTL shipment
Slide 4: Third quarter 2023 performance
Third quarter 2023 performance REVENUE $1.98 billion BY SEGMENT OPERATING INCOME $154 million NORTH AMERICAN LTL NET INCOME 1 $86 million REVENUE $1.23 billion DILUTED EARNINGS PER SHARE 2 $0.72 ADJUSTED EBITDA $241 million $105 million ADJUSTED OPERATING RATIO 86.2% ADJUSTED NET INCOME 1 ADJUSTED D
Slide 5: Four pillars of LTL 2.0 plan will drive significant margin and earnings expansion
Four pillars of LTL 2.0 plan will drive significant margin and earnings expansion 1 Provide best-in- 2Invest in network 3 Accelerate yield 4 Drive cost class service for the long-term growth efficiencies Targets for LTL Growth, Profitability and Efficiency, 2021-2027 Revenue CAGR of 6% to 8% Adjuste
Slide 6: Strong position in North American LTL
Strong position in North American LTL 6
Slide 7: A leading carrier in a compelling industry
A leading carrier in a compelling industry 6% North American LTL industry revenue CAGR • $59 billion bedrock industry for the US economy; with 77% of share held by top 10 LTL players • Diverse demand across verticals, with secular growth drivers • Attractive pricing environment, with industry pricin
Slide 8: A major player in the supply-chain ecosystem
A major player in the supply-chain ecosystem $4.6 billion 8% 9% 34% annual revenue 2022 industry share 2022 revenue allocated return on invested capital to gross capex 30,000 620 million >12 million 18 billion customers served linehaul miles run shipments per year pounds of freight per year per year
Slide 9: Expansive network covering 99% of US zip codes
Expansive network covering 99% of US zip codes Service Centers Freight Assembly Centers • 294 service centers • Cross-border and offshore capabilities • Strategic investments in high-demand markets 9
Slide 10: Strategic mix of blue-chip and local customers
Strategic mix of blue-chip and local customers 30,000 customers as of September 30, 2023 2% revenue from largest customer, low concentration risk 16-year average tenure of top 10 customers Note: Company data for North American LTL segment as of December 31, 2022, unless otherwise noted; selected cus
Slide 11: LTL growth plan and levers
LTL growth plan and levers 11
Slide 12: Strong momentum in executing LTL 2.0 growth plan
Strong momentum in executing LTL 2.0 growth plan • Building a customer-centric service organization Provide best-in-class • Incentivizing employees to drive service quality service • Improved Q3’23 damage claims ratio to 0.4% from 1.2% at launch of LTL 2.0 • Expanding linehaul fleet with tractors an
Slide 13: 11% to 13% adjusted EBITDA CAGR in North American LTL 2021-2027
11% to 13% adjusted EBITDA CAGR in North American LTL 2021-2027 Expected components and contributions Combination of volume gains + pricing over inflation 6% to 7% Operating costs optimized through technology 3% to 4% Linehaul insourced from third parties 2% 11% to 13% 13
Slide 14: Damage claims ratio (as a % of LTL revenue)
Damage claims ratio (as a % of LTL revenue) 1.2% 1.2% 1.1% 1.1% 1.1% LTL 2.0 1.0% 1.0% 0.9% 0.9% 0.9% 0.9% 0.7% 0.7% 0.6% 0.4% Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 LTL 2.0 service initiatives drove company-best damage
Slide 15: Employee engagement and satisfaction at record levels
Employee engagement and satisfaction at record levels 54% of field 17% better employee 47% of drivers have 10+ 100+ graduates in field management trainees retention years tenure management program are diverse Highest employee satisfaction Experienced drivers are Strong leadership DE&I initiatives id
Slide 16: Disciplined investing in high-return projects
Disciplined investing in high-return projects $800 14.0% 12.9% $700 12.0% $600 Gross capex as a % of revenue 9.1% 10.0% Gross capex ($ millions) $500 $448 $424 8.0% $400 5.2% 6.0% $300 4.8% 3.8% 4.1% $197 $197 4.0% $200 $145 $145 $100 2.0% $- 0.0% 2018 2019 2020 2021 2022 YTD 2023 Tractor age in yea
Slide 17: In-house capabilities provide distinct competitive advantages
In-house capabilities provide distinct competitive advantages Trailer manufacturing facility in Arkansas • Expanded linehaul trailer fleet by 4,700 units or 10% in 2022 • Self-sufficient for critical component of fleet capacity, instead of relying on OEMs • Added second production line in January 20
Slide 18: Appendix
Appendix 18
Slide 19: European Transportation segment
European Transportation segment Unique pan-European transportation platform holds leading positions in key geographies • In France: the #1 full truckload (FTL) broker and the #1 pallet network (LTL) provider • In Iberia (Spain and Portugal): the #1 FTL broker and the #1 LTL provider • In the UK: a t
Slide 20: Full year 2023 planning assumptions
Full year 2023 planning assumptions The company provided the following updated expectations: • Gross capex of $675 million to $725 million • Interest expense of $170 million to $175 million • Pension income of $15 million to $20 million • Effective tax rate of 23% to 24% • Diluted share count of 118
Slide 21: Financial reconciliations
Financial reconciliations The following table reconciles XPO’s net income from continuing operations attributable to common shareholders for the periods ended September 30, 2023 and 2022 to adjusted EBITDA for the same periods. Reconciliation of net income from continuing operations to adjusted EBIT
Slide 22: Financial reconciliations (cont.)
Financial reconciliations (cont.) The following table reconciles XPO’s net income from continuing operations attributable to common shareholders for the periods ended September 30, 2023 and 2022 to adjusted net income from continuing operations attributable to common shareholders for the same period
Slide 23: Financial reconciliations (cont.)
Financial reconciliations (cont.) The following table reconciles XPO’s operating income attributable to its North American less-than-truckload segment to adjusted operating income, adjusted operating ratio and adjusted EBITDA for the respective periods shown in the table below. Reconciliation of Nor
Slide 24: Financial reconciliations (cont.)
$ in millions Financial reconciliations (cont.) (unaudited) Year Ended The following table calculates XPO's return on invested capital (ROIC) attributable to itsstatement Select income North items American less-than-truckloadDecember segment for 31, 2022 Adjusted EBITDA $ 1,012 the periods presented
Slide 25: Non-GAAP financial measures
Non-GAAP financial measures As required by the rules of the Securities and Exchange Commission (“SEC”), we provide reconciliations of the non-GAAP financial measures contained in this document to the most directly comparable measure under GAAP, which are set forth in the financial tables attached to