United Parcel Service, Inc. · NYSE:UPS
United Parcel Service — Q1 2024 Earnings Presentation
28 slides from United Parcel Service's earnings presentation, Apr 23, 2024
Slide 1: 1Q24 Earnings Call
1Q24 Earnings Call April 23, 2024 © 2023 United Parcel Service of America, Inc. UPS, the UPS brandmark, and the color dark brown tone are trademarks of United Parcel Service of America, Inc. All rights reserved. 1
Slide 2: PJ Guido, Investor Relations Officer
PJ GUIDO Investor Relations Officer © 2024 United Parcel Service of America, Inc. UPS, the UPS brandmark, and the color dark brown tone are trademarks of United Parcel Service of America, Inc. All rights reserved. 2
Slide 3: UPS Speakers
UPS Speakers CAROL B. TOMÉ Chief Executive Officer BRIAN NEWMAN Chief Financial Officer © 2024 United Parcel Service of America, Inc. UPS, the UPS brandmark, and the color dark brown tone are trademarks of United Parcel Service of America, Inc. All rights reserved. 3
Slide 4: Forward-Looking Statements and Non-GAAP Reconciliations
Forward-Looking Statements and Non-GAAP Reconciliations Forward-Looking Statements This presentation and our filings with the Securities and Exchange Commission including terrorist attacks, epidemics or pandemics; exposure to changing contain and in the future may contain “forward-looking statements
Slide 5: Diluted EPS 1Q24 vs 1Q23
Diluted EPS 1Q24 1Q23 $3.00 $3.00 $2.50 $2.50 $2.19 $0.01 $2.20 $2.00 $2.00 $1.50 $0.09 $1.43 $0.04 $1.50 $1.30 $1.00 $1.00 $0.50 $0.50 $0.00 $0.00 1Q24 EPS Asset Transformation 1Q24 1Q23 EPS Asset 1Q23 Impairment & Other Adj. EPS* Impairment Adj. EPS* © 2024 United Parcel Service of America, Inc. U
Slide 6: Carol B. Tomé, Chief Executive Officer
CAROL B. TOMÉ Chief Executive Officer © 2024 United Parcel Service of America, Inc. UPS, the UPS brandmark, and the color dark brown tone are trademarks of United Parcel Service of America, Inc. All rights reserved. 6
Slide 7: Thank You UPSers
Thank You UPSers For delivering industry-leading service
Slide 8: 1Q24 Consolidated Results
1Q24 Consolidated Results In $ Millions 1Q24 1Q23 Change Y/Y (except per share) Revenue $21,706 $22,925 -5.3% Adj. Operating Profit* $1,747 $2,552 -31.5% Adj. Operating Margin* 8.0% 11.1% -310 bps Adj. Diluted EPS* $1.43 $2.20 -35.0% “The first quarter turned out as we expected… U.S. average daily v
Slide 9: Customer First, People Led, Innovation Driven
Customer First, People Led, Innovation Driven • Expanding addressable market through On Demand Network made up of Happy Returns, The UPS Store and Roadie; launched RoadieXD for long-zone, big and bulky items • Enhanced DAP with Fastlane to optimize rates within days or hours to target attractive vol
Slide 10: 2024 Outlook
2024 Outlook Reaffirming 2024 financial goals, including: • Expect revenue within a range of approximately $92.0B to $94.5B • Expect adjusted operating margin* within a range of approximately 10.0% to 10.6% • Expect to exit the year with a U.S. adjusted operating margin* of 10% * Non-GAAP financial
Slide 11: Brian Newman, Chief Financial Officer
BRIAN NEWMAN Chief Financial Officer © 2024 United Parcel Service of America, Inc. UPS, the UPS brandmark, and the color dark brown tone are trademarks of United Parcel Service of America, Inc. All rights reserved. 11
Slide 12: 1Q24 Consolidated Results
1Q24 Consolidated Results In $ Millions 1Q24 1Q23 Change Y/Y (except per share) Revenue $21,706 $22,925 -5.3% Adj. Operating Profit* $1,747 $2,552 -31.5% Adj. Operating Margin* 8.0% 11.1% -310 bps Adj. Diluted EPS* $1.43 $2.20 -35.0% “All three of our segments demonstrated cost agility and on a comb
Slide 13: U.S. Domestic: 1Q Average Daily Volume Declined 3.2% Y/Y
U.S. Domestic 1Q Average Daily Volume Declined 3.2% Y/Y Focused on controlling what we could control to improve volume growth and drive productivity ADV Change (Y/Y) Monthly ADV Growth (Y/Y) 4.0% -3.2% Y/Y 0.0% -4.0% 18,672 -147 -8.0% -8.5% -92 -8.1% -358 -12.0% -2.3% 18,075 -16.0% In Thousands Jan
Slide 14: U.S. Domestic: 1Q Revenue of $14.2B, Down 5.0% Y/Y
U.S. Domestic 1Q Revenue of $14.2B, Down 5.0% Y/Y Revenue per piece was relatively flat Y/Y Revenue Change (Y/Y) Revenue Per Piece $13.00 -5.0% Y/Y $15.0 $11.00 $15.0B -$0.8B 1Q 2Q 3Q 4Q -$0.0B 2023 2024 $14.2B $14.0 1Q revenue per piece (RPP) was relatively flat, driven by: +$271M • Base rates incr
Slide 15: U.S. Domestic: Delivered $839M in Adjusted Operating Profit
U.S. Domestic Delivered $839M in Adjusted Operating Profit* in 1Q Leveraged technology and the agility of our integrated network to reduce expense U.S. Domestic Results • Adjusted operating expense* was down 0.8% despite a 13.0% increase in union wage rates o Leveraged Network Planning Tools and Tot
Slide 16: International: 1Q Average Daily Volume Down 5.8% Y/Y
International 1Q International Average Daily Volume Down 5.8% Y/Y Domestic ADV down 8.1%; Export ADV down 3.6% 20% Total Asia* Monthly ADV (Y/Y) Total Europe** Monthly ADV (Y/Y) 0% 10% -2% 0% -4% -6% -10% -8% -20% -10% -30% -12% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun
Slide 17: International: Generated 1Q Adjusted Operating Profit of $682M
International Generated 1Q Adjusted Operating Profit* of $682M Leveraged agility of our integrated network to match capacity with demand International Results • Revenue per piece increased 2.0% Y/Y driven by: Change 1Q24 1Q23 Y/Y o Strong base pricing drove a ~360 basis point increase in the RPP gro
Slide 18: Supply Chain Solutions: Drove Expense Out in Challenging Macro Environment
Supply Chain Solutions Drove Expense Out While Navigating Challenging Macro Environment Supply Chain Solutions Results • Market rates in international air freight continued to drive down topline revenue Change 1Q24 1Q23 Y/Y • In ocean freight, excess market capacity continued to pressure market rate
Slide 19: 1Q24 Cash Flow and Dividends
1Q24 Cash Flow and Dividends Cash From Free Cash Dividends Operations Flow* Paid $3.3B $2.3B $1.3B +$959M Y/Y +$510M Y/Y $1.63 per share © 2023 United Parcel Service of America, Inc. UPS, the UPS brandmark, and the color dark brown tone are trademarks of United Parcel Service of America, Inc. All ri
Slide 20: 2024 Full-year Consolidated Outlook
2024 Full-year Consolidated Outlook Reaffirming previously announced 2024 financial targets 2H24 Key Assumptions Full-year 2024 Consolidated Outlook • Return to positive volume • Revenue within a range of approximately $92.0B - $94.5B and revenue growth • Adjusted operating margin* within a range of
Slide 21: Leveraging the Flexibility of Our Integrated Network
Leveraging the Flexibility of Our Integrated Network USPS UPS USPS AIR CARGO GATEWAY TO GATEWAY INTEGRATED MOVEMENTS WORLDPORT TO GATEWAY (point-to-point) (hub and spoke) Flexibility to move volume We can bypass Worldport without compromising on We can leverage air to fly direct to / from service co
Slide 22: Reaffirming 3-year Consolidated Financial Targets
Reaffirming 3-year Consolidated Financial Targets • Revenue between $108B and $114B by 2026 • High end includes inorganic opportunities, primarily in healthcare and international • Adjusted operating margin* of more than 13% • Includes U.S. Domestic adjusted operating margin* of at least 12% * Non-G
Slide 23: Questions & Answers
Questions & Answers © 2024 United Parcel Service of America, Inc. UPS, the UPS brandmark, and the color dark brown tone are trademarks of United Parcel Service of America, Inc. All rights reserved. 23
Slide 24: Appendix
Appendix © 2024 United Parcel Service of America, Inc. UPS, the UPS brandmark, and the color dark brown tone are trademarks of United Parcel Service of America, Inc. All rights reserved.
Slide 25: Reconciliation of GAAP and Non-GAAP Financial Measures
Reconciliation of GAAP and Non-GAAP Financial Measures Non-GAAP Financial Measures; Reconciliations and losses resulting from plan curtailments and settlements, for our defined benefit pension and postretirement medical plans immediately as part of Investment income (expense) and other in the statem
Slide 26: Reconciliations
Reconciliations © 2024 United Parcel Service of America, Inc. UPS, the UPS brandmark, and the color dark brown tone are trademarks of United Parcel Service of America, Inc. All rights reserved. 26
Slide 27: Reconciliations
Reconciliations © 2024 United Parcel Service of America, Inc. UPS, the UPS brandmark, and the color dark brown tone are trademarks of United Parcel Service of America, Inc. All rights reserved. 27
Slide 28: Reconciliations
Reconciliations © 2024 United Parcel Service of America, Inc. UPS, the UPS brandmark, and the color dark brown tone are trademarks of United Parcel Service of America, Inc. All rights reserved. 28
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