United Parcel Service, Inc. · NYSE:UPS
United Parcel Service — Q1 2023 Earnings Presentation
28 slides from United Parcel Service's earnings presentation, Apr 25, 2023
Slide 1: 1Q23 Earnings Call
1Q23 Earnings Call April 25, 2023 © 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: Ken Cook, Investor Relations Officer
Ken Cook Investor Relations Officer 2
Slide 3: UPS Speakers
UPS Speakers Carol B. Tomé Chief Executive Officer Brian Newman Chief Financial Officer © 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. 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 contain and realize the anticipated benefits from acquisitions, dispositions, joint ventures or strategic in the future may contain “forwar
Slide 5: Diluted EPS
Diluted EPS 1Q23 1Q22 $4.00 $4.00 $3.50 $3.50 $3.03 ($0.03) $0.05 $3.05* $3.00 $3.00 $2.50 $2.19 $2.20* $2.50 $0.01 $2.00 $2.00 $1.50 $1.50 $1.00 $1.00 $0.50 $0.50 $0.00 $0.00 1Q23 EPS Transformation & Other 1Q23 Adj. EPS* 1Q22 EPS Pension Transformation & 1Q22 Adj. EPS* Adjustments Other © 2023 Uni
Slide 6: Carol B. Tomé, Chief Executive Officer
Carol B. Tomé Chief Executive Officer 6
Slide 7: Thank You
Continuing to Deliver What Matters Thank You
Slide 8: 1Q23 Consolidated Results
1Q23 Consolidated Results In $ Millions 1Q23 1Q22 Change (except per share) “Revenue was short of our base Total Revenue $22,925 $24,378 -6.0% plan, but due to our relentless Adj. Operating Profit* $2,552 $3,306 -22.8% focus on productivity, operating profit and operating margin were Adj. Operating
Slide 9: Customer First, People Led, Innovation Driven
Customer First, People Led, Innovation Driven • 16 countries producing DAP revenue; expect to generate ~$3B in 2023 • Improving the customer experience at The UPS Store; deploying 1,000 self-serve kiosks in 2023 and launched online claims portal • Opened ~1M sq ft of dedicated healthcare logistics s
Slide 10: 2023 Outlook
2023 Outlook • There has been a deceleration in U.S. retail sales growth and certain non-U.S. markets remain challenged • As a result, UPS expects full-year revenue and adjusted operating profit margin to be at the low end of the previously-guided range • Making the right long-term decisions, contin
Slide 11: Brian Newman, Chief Financial Officer
Brian Newman Chief Financial Officer 11
Slide 12: 1Q23 Consolidated Results
1Q23 Consolidated Results In $ Millions 1Q23 1Q22 Change “We managed with agility and (except per share) through the first quarter UPS Total Revenue $22,925 $24,378 -6.0% focused on controlling what we Adj. Operating Profit* $2,552 $3,306 -22.8% could control to deliver great service for our custome
Slide 13: U.S. Domestic: 1Q Average Daily Volume Declined 5.4%
U.S. Domestic 1Q Average Daily Volume Declined 5.4% Revenue quality nearly offset the decrease in volume Monthly B2C ADV (Y/Y) 1Q23 ADV Change (Y/Y) • B2C declined 5.5% 5% • Split was 57% B2C -5.4% vs. Last Year 21,000 -5% -208 -370 -491 19,741 19,000 -15% 18,672 Jan Feb Mar Apr May Jun Jul Aug Sep
Slide 14: U.S. Domestic: 1Q Revenue of $15.0B, Down 0.9% YOY
U.S. Domestic 1Q Revenue of $15.0B, Down 0.9% YOY Revenue per piece increased 4.8% Revenue Change (Y/Y) Revenue Per Piece LY TY $12.60 -0.9% vs. Last Year $15.0 $15.1B -$819M +$682M $15.0B $11.10 1Q 2Q 3Q 4Q In Billions $14.0 • 1Q revenue per piece growth of 4.8% o Combination of base rates and cust
Slide 15: U.S. Domestic: 1Q Adjusted Operating Margin of 9.9%
U.S. Domestic 1Q Adjusted Operating Margin* of 9.9% Managed network with agility in response to changing volume levels U.S. Domestic Results • Adjusted operating expense* increased 0.6% o Higher union wage and benefit rates increased expense >$300M, primarily from a 6.1% % Change 1Q23 1Q22 Y/Y incre
Slide 16: International: 1Q Total Average Daily Volume Down 6.2%
International 1Q Total Average Daily Volume Down 6.2% As Expected Domestic ADV down 9.5%; Export ADV down 2.8% Total Asia Monthly ADV (Y/Y) Total Europe Monthly ADV (Y/Y) 20% 12% 10% 6% 0% 0% -10% -20% -6% -30% -12% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep
Slide 17: International: Generated Adjusted Operating Profit of $806M
International Generated Adjusted Operating Profit* of $806M Remained agile and flexed our network in response to changing market conditions International Results • Generated revenue of $4.5B % Change 1Q23 1Q22 Y/Y • Adjusted operating profit* was $806M, a decline of $314M, including: Total Revenue $
Slide 18: Supply Chain Solutions: Growth in Logistics Revenue Offset Forwarding Declines
Supply Chain Solutions Growth in Logistics Revenue Partially Offset Declines in Forwarding • Revenue of $3.4B, a decline of $983M year Supply Chain Solutions Results over year % Change 1Q23 1Q22 o Softer global demand, especially out of Y/Y Asia, drove down Forwarding market Total Revenue $3.4B $4.4
Slide 19: 1Q23 Cash Flow and Dividends
1Q23 Cash Flow and Dividends 1Q23 Cash From Operations 1Q23 Free Cash Flow* $2.4B $1.8B -$2.1B Y/Y -$2.1B Y/Y Discretionary pension contribution increased $1.2B Y/Y due to CapEx spend was $609M in 1Q23 timing of the payments 1Q23 Dividends Paid 1Q23 Share Buy Backs $1.3B $751M $1.62 per share 14th c
Slide 20: 2023 Full-year Outlook
2023 Full-year Outlook Expect FY 2023 revenue and operating margin at the low end of previously-provided range Full-year 2023 Outlook - Challenging macro • Consolidated: environment o Revenue of around $97.0B o Adjusted operating margin* of around 12.8% - Changes in consumer o About 56% of adjusted
Slide 21: Questions & Answers
Questions & Answers © 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. 21
Slide 22: Appendix
Appendix © 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. 22
Slide 23: Reconciliation of GAAP and Non-GAAP Financial Measures
Reconciliation of GAAP and Non-GAAP Financial Measures Non-GAAP Financial Measures; Reconciliations business performance from the same perspective as management. We do not consider these costs when evaluating the operating performance of our business units, making decisions to allocate resources or
Slide 24: Reconciliations
Reconciliations © 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. 24
Slide 25: Reconciliations
Reconciliations © 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. 25
Slide 26: Reconciliations
Reconciliations © 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. 26
Slide 27: Reconciliations
Reconciliations © 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. 27
Slide 28: Reconciliations
Reconciliations © 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. 28
United Parcel Service — Q1 2023 Earnings Presentation on 6ix