Werner Enterprises, Inc. · NASDAQ:WERN

Werner Enterprises — Q3 2020 Earnings Presentation

24 slides from Werner Enterprises's earnings presentation, Oct 28, 2020

  1. Slide 1: 3Q 2020 Earnings Presentation

    3Q 2020 EARNINGS PRESENTATION October 28, 2020

  2. Slide 2: Disclosure Statement

    DISCLOSURE STATEMENT 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 amended, and made pursuant to the safe harbor provisions of the Private Securities Lit

  3. Slide 3: Werner Overview, 3Q 2020 Highlights

    WERNER OVERVIEW, 3Q 2020 HIGHLIGHTS Derek Leathers President and Chief Executive Officer

  4. Slide 4: Werner Overview

    WERNER OVERVIEW Premium Truckload Transportation & Logistics Services Provider Omaha, NE $2.8B 4,715 2,995 12,714 0.9% Headquarters Market Cap1 Dedicated One-Way Associates2 Dividend Yield1 Fleet Size1 Fleet Size1 2019 Revenues by Segment 2019 Revenues by Vertical 2019 Revenues by Customer 3% Top 50

  5. Slide 5: 3Q 2020 Highlights

    3Q 2020 HIGHLIGHTS  Revenues decreased 5% to $590M  Sequentially, revenues increased 4% versus 2Q20 3Q20  GAAP EPS increased 19% to $0.67 Financial  Adjusted EPS increased 21% to $0.69 Highlights  Sequentially, adjusted EPS grew 12% from 2Q20  Adjusted operating income increased 19% to $64.3M

  6. Slide 6: Total Company and Segment Financial Results

    TOTAL COMPANY AND SEGMENT FINANCIAL RESULTS John Steele EVP, Treasurer and Chief Financial Officer

  7. Slide 7: 3Q 2020 Financial Performance

    3Q 2020 FINANCIAL PERFORMANCE Total Revenues ($M) Adjusted Operating Income ($M) Adjusted EPS and Operating Margin 20.0% $800 $64.3 $790 $780 $770 $760 $70.0 $750 $740 18.0% $730 $57.7 $0.69 $720 $618 $710 $700 $690 $590 $54.2 $680 $670 $569 $660 $0.62 $60.0 16.0% $650 $640 $630 $620 $0.57 $610 $600

  8. Slide 8: Truckload Transportation Services (TTS) 3Q Results

    TRUCKLOAD TRANSPORTATION SERVICES (TTS) 3Q RESULTS 3Q19 3Q20 ∆ YoY Revenues ($M) $480.4 $458.3 (5)% Adjusted Op. Income ($M) $49.7 $65.2 31% Adjusted Op. Margin 10.3% 14.2% 390 bps Adjusted OR, net FSC 88.3% 84.5% (380) bps Commentary  TTS RPTPW +5.0%  Revenues reduction primarily due to lower fue

  9. Slide 9: TTS 3Q Fleet Metrics

    TTS1 3Q FLEET METRICS Dedicated Truckload Trucking Revenues2 ($M) Average Trucks Revenues / Truck / Week2 $265 4,592 4,567 $4,115 $244 $3,888 $245 $232 $225 $205 $185 $165 $145 $125 3Q19 3Q20 3Q19 3Q20 3Q19 3Q20 One-Way Truckload Trucking Revenues2 ($M) Average Trucks Revenues / Truck / Week2 $4,366

  10. Slide 10: Werner Logistics 3Q Results

    WERNER LOGISTICS 3Q RESULTS 3Q19 3Q20 ∆ YoY Revenues ($M) $121.3 $117.4 (3)% Gross Margin 15.2% 10.8% (440) bps Operating Income ($M) $3.0 $(0.9) (128)% Operating Margin 2.5% (0.7)% (320) bps COMMENTARY  Truckload Logistics revenues (60% of total Logistics revenues) decreased by 15% in 3Q20, and In

  11. Slide 11: Strong FCF Generation; Expected to Continue

    STRONG FCF GENERATION; EXPECTED TO CONTINUE COMMENTARY ($M)  2020 Net CapEx expected to be in $430 $427 the range of $275M to $300M; over $418 the long-term, targeting Net CapEx at 11-13% of annual revenues $349 $346 $310  Investment focused on maintaining $283 $284 a new fleet, strengthening our

  12. Slide 12: Update on Business & Financial Outlook

    UPDATE ON BUSINESS & FINANCIAL OUTLOOK Derek Leathers President and Chief Executive Officer

  13. Slide 13: Introducing Sustainability as a Core Component of Our Strategy

    INTRODUCING SUSTAINABILITY AS A CORE COMPONENT OF OUR STRATEGY COMMITTED TO REMAINING AT THE FOREFRONT OF OUR INDUSTRY KEY FOCUS AREAS 2020 YTD RESULTS  Maintain our industry-leading modern  Delivered customer satisfaction with new truck fleet age, which includes state-of- and reliable fleet: 100%

  14. Slide 14: Introducing Our Formalized Approach to Sustainability

    INTRODUCING OUR FORMALIZED APPROACH TO SUSTAINABILITY Environmental Social Governance Industry leader in Strong Foundation of Robust Corporate Environmental, Health Community and Governance Grounded in and Safety Impact Stakeholder Engagement Ethics, Risk Management and Best Practice Building on our

  15. Slide 15: Announcing Our ESG Milestones

    ANNOUNCING OUR ESG MILESTONES Environmental Social Governance Carbon Emissions Associate Resource Groups Formal Diversity Leadership Position 55% Reduction by 2035 +3 by End of 2021 Established by End of 1Q21 Committed to Publishing Our Inaugural Corporate Social Responsibility Report in 2021 15

  16. Slide 16: Refreshing, Diversifying and Adding New Capabilities to Our Board

    REFRESHING, DIVERSIFYING AND ADDING NEW CAPABILITIES TO OUR BOARD Commentary  Experienced Board with 7 independent members  CL Werner to serve as Derek Leathers Kenneth Bird Diane Duren Michael Gallagher Chairman through May Vice Chairman President & CEO, Former EVP, CAO & Chairman Emeritus, 2021,

  17. Slide 17: Leveraging Our Core Strengths and Sustainable Competitive Advantages

    LEVERAGING OUR CORE STRENGTHS AND SUSTAINABLE COMPETITIVE ADVANTAGES Core Strengths Sustainable Competitive Advantages • Breadth: Diversified truckload transportation portfolio (Dedicated Deep, long-term customer relationships delivering superior, award- TL, One-Way TL, Logistics) winning on-time se

  18. Slide 18: 2020 Guidance Metrics and Assumptions

    2020 GUIDANCE METRICS AND ASSUMPTIONS PRIOR ANNUAL 3Q20 4Q20 2020 GUIDANCE GUIDANCE ACTUAL GUIDANCE (AS OF 7/29/20) (AS OF 9/30/20) (AS OF 10/28/20) COMMENTARY Currently expect 4Q20 TTS Truck Growth modest truck growth; expect from Y/E 2019 to (3)% to (1)% (4)% (3)% to (1)% to be at the bottom end o

  19. Slide 19: Werner's TTS Resilience in a Variety of Freight Economy Scenarios

    WERNER’S TTS RESILIENCE IN A VARIETY OF FREIGHT ECONOMY SCENARIOS NEW LONG TERM TTS OPERATING MARGIN %1 GOAL OF 13% Revenue2 -10% BASELINE 10% Scenarios TTS Operating 10% 13% 16% Margin %1 Adjusted 2019 YTD 2020 2018 Operating -300 bps +300 bps Margin1 12.3% 12.6% 13.2% Durability  Dedicated (61%)

  20. Slide 20: Q&A

    Q&A

  21. Slide 21: Invest With Us

    INVEST WITH US 1 Consistent execution of 5 T’s strategy has resulted in structural and durable improvements across Werner; adding Sustainability to our strategy 2 Balanced revenue portfolio with exposure to diverse end markets provides earnings and cash flow stability through the cycle 3 An industry

  22. Slide 22: Appendix

    APPENDIX

  23. Slide 23: GAAP to Non-GAAP Reconciliation

    GAAP TO NON-GAAP RECONCILIATION (UNAUDITED) (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) Three Months Ended Nine Months Ended September 30, September 30, 2020 2019 2020 2019 Operating revenues $ 590,214 $ 618,264 $ 1,751,876 $ 1,841,914 Operating expenses 528,111 564,907 1,605,889 1,682,096 Operating in

  24. Slide 24: For More Information, Visit werner.com

    FOR MORE INFORMATION, VISIT WERNER.COM

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