Schneider National, Inc. · NYSE:SNDR
Schneider National — Q1 2023 Earnings Presentation
30 slides from Schneider National's earnings presentation, Apr 27, 2023
Slide 1: First Quarter 2023 Investor Presentation
FIRST QUARTER 2023 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: Experienced Leadership, Focused on Growth and Delivering Shareholder Value
BUSINESS OVERVIEW Driven by our uncompromising values to deliver the goods that enhance the lives of people everywhere. Experienced Leadership, Focused on Growth and Delivering Shareholder Value At a glance: 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 ac
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. • Approximately 28,000 company-owned containers and nearly 21,000 company-owned chassis • Approximately 1,500 company dray tractors, executing the majori
Slide 7: Logistics growing share through brokerage solutions including 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. LTM Adjusted Diluted Earnings per Share Operating Revenues Income Free Cash Flow from Operations $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 with industry-leading safety
BUSINESS OVERVIEW Comprehensive North American footprint with industry-leading safety, culture and performance. 11
Slide 12: Our strategy: a 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 Always to 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 balances growth, returns and resilience
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 in support of our vision
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 our business
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 emissions reduction goals
PEOPLE AND VALUES As experts in the shipping industry, we advise our customers on how our operations fit into their overarching emissions reduction goals. Fleet decarbonization is critical to PepsiCo’s goal to achieve net zero emissions by 2040. Collaboration is necessary to understand, measure and
Slide 19: Secular trends that drive our strategy and future growth
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 growth at the forefront of the transportation platform transportation industry. • Most diverse logistics and Technology leader and innovator transportation platform in North America. • Portfolio of services enables Strong cash fl
Slide 21: Second highest first quarter revenue and earnings in company history
CURRENT RESULTS AND OUTLOOK Second highest first quarter revenue and earnings in company history. We are leveraging our complementary portfolio of 1Q23 1Q22 services and strong balance Operating Revenues $1,429 $1,621 sheet to position ourselves for Revenues (xFSC) $1,250 $1,455 an inevitable recove
Slide 22: 1Q23 Enterprise Results
CURRENT RESULTS AND OUTLOOK 1Q23 Enterprise Results Operating revenues Revenues excluding fuel surcharge • Market conditions in the first quarter, consistent with recent quarters, were $1,621 $1,429 $1,455 $1,250 characterized by muted demand and a lack of seasonal surges, which pressured pricing, f
Slide 23: 1Q23 Truckload Results
CURRENT RESULTS AND OUTLOOK 1Q23 Truckload Results Revenues excluding Income from fuel surcharge operations* • Second highest first quarter earnings in company history $548 $537 $119 $63 • Dedicated new business growth contributed positively to revenue, earnings and margin in the quarter 1Q22 1Q23 1
Slide 24: 1Q23 Intermodal Results
CURRENT RESULTS AND OUTLOOK 1Q23 Intermodal Results Revenues excluding Income from fuel surcharge operations • Second highest revenue and earnings first quarter in company history $302 $266 $39 • Announced strategic partnership with $30 CPKC to provide flagship intermodal service between the U.S. an
Slide 25: 1Q23 Logistics Results
CURRENT RESULTS AND OUTLOOK 1Q23 Logistics Results Revenues excluding Income from fuel surcharge operations • Second highest revenue and earnings first quarter in company history $546 $42 $382 • Logistics volume aided by Power Only $19 freight contribution in a difficult demand environment 1Q22 1Q23
Slide 26: Full year guidance
CURRENT RESULTS AND OUTLOOK Our guidance reflects our belief that we are now in the trough of this freight cycle as customer inventories and industry capacity levels continue to rationalize. Our first quarter 2023 results were largely in line with expectations, though we now anticipate that the $2.0
Slide 27: Disclaimer and Forward-Looking Statements
Special Note Regarding Forward-Looking Statements This presentation contains and, any commentary or discussion by management of the content of this presentation may include “forward-looking statements,” as defined in the Private Securities Litigation Reform Act of 1995 (the “Act”), which Disclaimer
Slide 28: Appendix
Appendix
Slide 29: Non-GAAP Reconciliations: Revenues, Income from Operations, Net Income
APPENDIX Non-GAAP Reconciliation—Revenues Excluding Fuel Surcharge1 Non-GAAP Reconciliation—Adjusted Income from Operations1 ($M) FY2017 FY2022 1Q23 1Q22 ($M) FY2017 FY2022 1Q23 1Q22 Operating revenues $4,384 $6,604 $1,429 $1,621 Income from operations $280 $600 $115 $135 Litigation and audit assess
Slide 30: Non-GAAP Reconciliations: Adjusted EBITDA, Free Cash Flow, EPS
APPENDIX Non-GAAP Reconciliation—Adjusted EBITDA1 Non-GAAP Reconciliation—Free Cash Flow1 ($M) FY2017 FY2022 1Q23 1Q22 ($M) FY2017 FY2022 1Q23 1Q22 Net income $390 $458 $98 $92 Net cash provided by $461 $856 $183 $136 operating activities Provision for (benefit from) (127) 146 31 31 Purchases of tra