Xpo, Inc. · NYSE:XPO
Xpo — XPO Logistics — Investor Presentation (November 2016)
34 slides from Xpo's investor presentation, Nov 2, 2016
Slide 1: XPO Investor Presentation and Transcript November 2016
XPO Investor Presentation and Transcript November 2016 Exhibit 99.1
Slide 2: Disclaimers: Non-GAAP Financial Measures
Disclaimers Non-GAAP Financial Measures This document contains certain non-GAAP financial measures as defined under rules of the Securities and Exchange Commission ("SEC"), including adjusted net income (loss) attributable to common shareholders and adjusted earnings per share (“adjusted EPS”) for t
Slide 3: XPO Is at an Inflection Point for EBITDA and Cash Generation
XPO Is at an Inflection Point for EBITDA and Cash Generation Numerous company-specific margin improvement opportunities, regardless of the macro environment A $1 trillion addressable opportunity, with less than 1.5% market share Accelerating EBITDA and cash generation, while investing in growth Cutt
Slide 4: We Are a Top 10 Global Logistics Company
2017 Targets Revenue: Approximately $15 billion Adjusted EBITDA: At least $1.35 billion 63% of Revenue Truckload Transport and Brokerage, Expedite Last Mile Intermodal and Drayage Less-Than-Truckload Global Forwarding LOGISTICS High-Value-Add Services TRANSPORTATION Freight Is Moved Using Optimal Mo
Slide 5: Global Scale with Well-Diversified Business Mix
By Country of Operation By Customer Vertical Global Scale with Well-Diversified Business Mix Customers Over 50,000 Employees 86,000 Locations 1,425 Countries of Operation 34 Contract Logistics Facilities 151 million sq. feet (14 million sq. meters) | Investor Presentation November 2016 Key Metrics G
Slide 6: Extensive Customer Service Infrastructure and Capacity
Extensive Customer Service Infrastructure and Capacity Comprehensive network meticulously built to add value to customers and generate high returns for shareholders: Talent: Top operators with highly engaged employees Technology: Best-in-class, proprietary applications integrated on cloud-based plat
Slide 7: XPO Leads the Industry in Rapid Technology Development
| Investor Presentation November 2016 XPO Leads the Industry in Rapid Technology Development Highly scalable and integrated system On-cloud technology leads to more agility and ease of enhancements Global IT team of approximately 1,500 professionals Differentiated competitive advantages: Proprietary
Slide 8: Highly Skilled Management Team
Highly Skilled Management Team | Investor Presentation November 2016 Partial list, in alphabetical order Bradley Jacobs Chief Executive Officer United Rentals, United Waste Lori Blaney VP, Sales and Customer Solutions, Less-Than-Truckload Con-way Michael Borman Chief Commercial Officer IBM, SunGard
Slide 9: Highly Skilled Management Team (Cont'd)
Highly Skilled Management Team (Cont’d) | Investor Presentation November 2016 Partial list, in alphabetical order Mario Harik Chief Information Officer Oakleaf Waste Management Christophe Haviland Sales Director, Transport–Europe DHL, American Express, Staples Meghan Henson Chief Human Resources Off
Slide 10: Serving Blue Chip Customers in Every Major Vertical
| Investor Presentation November 2016 Serving Blue Chip Customers in Every Major Vertical Partial list. Any trademarks or logos used in this presentation are the property of their respective owners
Slide 11: Serving Blue Chip Customers in Every Major Vertical (Cont'd)
| Investor Presentation November 2016 Serving Blue Chip Customers in Every Major Vertical (Cont’d) Partial list. Any trademarks or logos used in this presentation are the property of their respective owners
Slide 12: <1.5% Current Share of $1 Trillion Addressable Opportunity
< 1.5% Current Share of $1 Trillion Addressable Opportunity | Investor Presentation November 2016 Top Customers are Benefitting from XPO’s Platform Number of XPO’s Services Used by Top 100 Customers (3) 80 of XPO’s top 100 customers use two or more service lines 21% of sales generated from XPO’s top
Slide 13: Leading Position in Some of the Fastest Growing Industry Sectors
#2 largest global provider and e-fulfillment leader in Europe Non-commoditized service offering with multiple specializations Contract Logistics 37% Leading Position in Some of the Fastest Growing Industry Sectors #2 largest LTL provider in North America: 99% of U.S. zip codes Highest service levels
Slide 14: Well-Defined Bridge to 2018 Target of $1.575 Billion EBITDA
Well-Defined Bridge to 2018 Target of $1.575 Billion EBITDA Company-Specific Initiatives Are Independent of Macro | Investor Presentation November 2016 10% adjusted EBITDA margin achievable by 2018 Equates to 200 basis points of margin improvement, compared with 2016 projection excluding truckload f
Slide 15: XPO Logistics Key Lines of Business
XPOLogistics Key Lines of Business
Slide 16: Contract Logistics: Long-Term Recurring Revenue
Contract Logistics Long-Term Recurring Revenue | Investor Presentation November 2016 Asset-light business characterized by long-term contractual relationships, low cyclicality and a high-value-add component that minimizes commoditization Deep expertise in high-growth sectors that trend toward outsou
Slide 17: Freight Brokerage: High Growth and High Return
Freight Brokerage High Growth and High Return | Investor Presentation November 2016 Non-asset business that places shippers’ freight with qualified carriers through brokers that match capacity with shipper demand Variable cost model is resilient across the cycle High free cash flow conversion and mi
Slide 18: Last Mile Demand Propelled by Major Tailwinds
Last Mile Demand Propelled by Major Tailwinds | Investor Presentation November 2016 Asset-light business that arranges the final stage of heavy goods delivery from distribution centers or retail stores to end consumers’ home or business Customers include nearly all of the top 30 big-box retailers an
Slide 19: North American LTL: Rapid Progress on Profit Improvement Plan
North American LTL Rapid Progress on Profit Improvement Plan | Investor Presentation November 2016 Asset-based business utilizing employee drivers, a fleet of tractors and trailers for line-haul, pick-up and delivery of pallets, and a network of terminals Grew operating income by 40% in Q3 2016 year
Slide 20: Intermodal and Drayage Benefiting from Mexico Near-Shoring
Intermodal and Drayage Benefiting from Mexico Near-Shoring | Investor Presentation November 2016 Asset-light business that arranges the long-haul portion of containerized freight, including rail brokerage, local drayage and on-site operational services 3rd largest intermodal provider in North Americ
Slide 21: European Transport: Largest Owned Fleet in Europe
European Transport Largest Owned Fleet in Europe | Investor Presentation November 2016 Leading European transport platform providing less-than-truckload, truckload, truck brokerage, and new last mile service Road transport across all of Europe is a $455 billion sector, of which XPO has less than 1%
Slide 22: Technology Across Lines of Business
Last Mile Patented technology enables real-time visibility and management of customer satisfaction Online order creation and management Customer satisfaction-focused design Truck Brokerage / Expedite Freight Optimizer offers powerful tools to source optimal capacity for each load Largest web-based T
Slide 23: XPO Logistics Financial Performance
XPOLogistics Financial Performance
Slide 24: Accelerating Free Cash Flow
Accelerating free cash flow At least $175 million of free cash flow targeted for full year 2016 Highly flexible net capex of less than 3% of revenue, with ability to decrease in a downturn Long-term leverage target of 3 – 4x net debt / EBITDA Approximately 89% of debt will not mature until 2021 or l
Slide 25: Cash Flow Profile
% Cash Flow Profile | Investor Presentation November 2016 $ in Millions Flexible asset / non-asset model gives XPO the ability to meet customers’ needs while enhancing returns 2016 Targets Low Net Capex as a % of Revenue vs. Competitor Groups (1) (1) Brokers include CH Robinson, Echo Global Logistic
Slide 26: Third Quarter 2016 Highlights
Third Quarter 2016 Highlights | Investor Presentation November 2016 (1) See appendix for reconciliations of adjusted net income and adjusted EBITDA to GAAP net income, and free cash flow to cash flow from operations $3.7 billion of gross revenue $21.3 million of net income, $49.8 million of adjusted
Slide 27: Strategic Sale of Asset-Based Truckload Operation
Strategic Sale of Asset-Based Truckload Operation | Investor Presentation November 2016 On October 27, 2016, XPO completed the sale of its North American truckload operation to TransForce for $558 million in cash, subject to customary adjustments: The transaction is expected to: Improve XPO’s growth
Slide 28: Financial Outlook
Financial Outlook | Investor Presentation November 2016 On November 2, 2016, the company affirmed these full-year financial targets: 2016: adjusted EBITDA of at least $1.245 billion 2016: free cash flow of at least $175 million 2017: adjusted EBITDA of at least $1.350 billion 2018: EBITDA of at leas
Slide 29: XPO Logistics Supplemental Materials
XPOLogistics Supplemental Materials
Slide 30: Awards and Recognitions
Awards and Recognitions | Investor Presentation November 2016 Inbound Logistics (2016) names XPO a Top 75 Green Supply Chain Partner Forbes (2016) ranks XPO #17 among innovative growth companies, and #263 among America's best employers French Ministry of the Environment and the French Environment an
Slide 31: Business Glossary
Business Glossary | Investor Presentation November 2016 Contract Logistics: An asset-light, technology-enabled business characterized by long-term contractual relationships with high renewal rates, low cyclicality and a high-value-add component that minimizes commoditization. Contracts are typically
Slide 32: Business Glossary (Cont'd)
Business Glossary (Cont’d) Intermodal: An asset-light business that facilitates the movement of long-haul, containerized freight by rail, often with a drayage (trucking) component at either end. Intermodal is a variable cost business, with revenue generated by a mix of contractual and spot market tr
Slide 33: Financial Reconciliations
Financial Reconciliations The following table reconciles XPO’s net income (loss) attributable to common shareholders for the periods ended September 30, 2016 and 2015 to adjusted EBITDA for the same periods. Refer to the “Non-GAAP Financial Measures” section on page 2 of this document. Adjusted EBIT
Slide 34: Financial Reconciliations (Cont'd)
Financial Reconciliations (Cont’d) Refer to the “Non-GAAP Financial Measures” section on page 2 of this document. Free cash flow was prepared assuming 100% ownership of XPO Logistics Europe. The following table reconciles XPO’s cash flows provided by operating activities for the periods ended Septem
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