Xpo, Inc. · NYSE:XPO
Xpo — XPO Logistics — Investor Presentation (July 2020)
88 slides from Xpo's investor presentation, Jul 30, 2020
Slide 1: Investor Presentation July 2020
INVESTOR PRESENTATION JULY 2020 v JULY 2020 Investor Presentation
Slide 2: Disclaimers
INVESTOR PRESENTATION JULY 2020 Disclaimers 1 NON - GAAP FINANCIAL MEASURES As required by the rules of the Securities and Exchange Commission ("SEC"), we provide reconciliations of the non - GAAP financial measures contained in this presentation to the most directly comparable measure under GAAP, w
Slide 3: Update on the COVID-19 pandemic
INVESTOR PRESENTATION JULY 2020 3 Update on the COVID - 19 pandemic XPO is an essential business with a responsibility to keep supply chains moving. We continued to operate throughout the economic shutdown of the pandemic. Now we’re helping our customers navigate the recovery in Europe and the more
Slide 4: Table of contents
INVESTOR PRESENTATION JULY 2020 Table of contents 4 ▪ Investor highlights ▪ Company overview ▪ Financial highlights and key metrics ▪ Business overview – North American contract logistics – European contract logistics – North American less - than - truckload – North American transportation – Europea
Slide 5: Investor highlights: Key factors driving growth and returns
INVESTOR PRESENTATION JULY 2020 Investor highlights: Key factors driving growth and returns 5 Leading positions in fast - growing sectors ▪ Top three industry positions across all major service lines in transportation and logistics ▪ Outsized exposure to sectors with track records of long - term gro
Slide 6: Significant addressable growth opportunities in each area of operation
INVESTOR PRESENTATION JULY 2020 Significant addressable growth opportunities in each area of operation 6 1 C ompany revenue data, excluding intersegment elimination, as of FY 2019 2 Includes only North American and European markets. Sources include Armstrong and Associates, Norbridge , Inc., EVE Par
Slide 7: Global provider of massive capacity for customers
INVESTOR PRESENTATION JULY 2020 Global provider of massive capacity for customers 7 GROUND TRANSPORTATION ASSETS NON - ASSET TRANSPORTATION NETWORK FACILITY ASSETS 10,000 trucks contracted via independent owner - operators 1,000,000+ brokered trucks 555 cross - docks 767 contract logistics facilitie
Slide 8: Key metrics
INVESTOR PRESENTATION JULY 2020 Key metrics 8 US 59% France 12% UK 12% Spain 5% Other 12% REVENUE BY MIX 1 Asset - Based 31% Asset - Light 69% 2019 revenue: $16.6 billion REVENUE BY GEOGRAPHY 1 1 Geographic and mix data as of FY 2019; key statistics as of June 30, 2020 CUSTOMERS Over 50,000 EMPLOYEE
Slide 9: Superior e-commerce platform for fulfillment, reverse logistics and last mile
INVESTOR PRESENTATION JULY 2020 Superior e - commerce platform for fulfillment, reverse logistics and last mile 9 Agile, technology - enabled logistics with visibility, speed and accuracy ▪ Integrated warehouse management, carrier management and reverse logistics ▪ Largest outsourced e - fulfillment
Slide 10: Potential profit growth opportunity of ~$700 million to $1 billion
INVESTOR PRESENTATION JULY 2020 Potential profit growth opportunity of ~$700 million to $1 billion 10 Six of the ten profit growth initiatives are driven by technology POOL OF COST OPPORTUNITIES Pricing benefits 20% New business initiatives 20% Cost initiatives 60% Revenue initiatives KEY INITIATIVE
Slide 11: Technology blueprint focuses on innovation in four areas
INVESTOR PRESENTATION JULY 2020 Technology blueprint focuses on innovation in four areas 11 Singular technology platform propels efficiencies for customers and company Digital freight marketplace ▪ Automated capacity management ▪ Customer self - service, multimodal flexibility Automation and intelli
Slide 12: Key applications of automation and data science in XPO operations
INVESTOR PRESENTATION JULY 2020 Key applications of automation and data science in XPO operations 12 CONTRACT LOGISTICS ▪ Proprietary technology suite manages all distribution processes and warehouse operations ▪ Provides in - house control of robotics and other automation ▪ Integrates last mile wit
Slide 13: Widespread benefits of intelligent automation in logistics
INVESTOR PRESENTATION JULY 2020 Widespread benefits of intelligent automation in logistics 13 ▪ First - mover advantage with advanced automation strongly differentiates XPO as a superior supply chain partner for customers ▪ Superior visibility and control of advanced automation on proprietary platfo
Slide 14: XPO Connect is at the forefront of transportation automation
INVESTOR PRESENTATION JULY 2020 XPO Connect™ is at the forefront of transportation automation 14 Expands revenue and margins ▪ Automates load - tendering, pricing, bidding, buying and tracking ▪ Unlocks cross - selling opportunities across modes ▪ Penetrates tier - two and tier - three customer base
Slide 15: Proprietary technology informs decision-making in real time
INVESTOR PRESENTATION JULY 2020 15 Proprietary technology informs decision - making in real time Forecasting Analytics Model Training Machine Learning TIME AND ATTENDANCE CLOUD APPLICATIONS IOT DATA MOBILE DEVICES AND HANDHELDS TRANSACTIONAL DATA LARGE - FORMAT DISPLAYS
Slide 16: XPO Smart benefits and capabilities
INVESTOR PRESENTATION JULY 2020 16 BENEFITS ▪ Proprietary XPO analytics show the future impact of contemplated management decisions in real time ▪ Business intelligence drives productivity and operational effectiveness through machine learning ▪ Granular - level detail in two to three clicks CAPABIL
Slide 17: Financial highlights and key metrics
INVESTOR PRESENTATION JULY 2020 Financial highlights and key metrics
Slide 18: Industry-leading growth in revenue and adjusted EBITDA
INVESTOR PRESENTATION JULY 2020 Industry - leading growth in revenue and adjusted EBITDA 18 Note: Both charts exclude the impact of the North American truckload unit divested in October 2016 Refer to the “Non - GAAP Financial Measures” section on page 2 of this document 7,533 14,188 15,381 17,279 16
Slide 19: Strong free cash flow generation
INVESTOR PRESENTATION JULY 2020 Strong free cash flow generation 19 $ in millions XPO FREE CASH FLOW (98) 207 399 694 628 -125 0 125 250 375 500 625 750 2015 2016 2017 2018 2019 - 125 Note: 2016 and 2017 data have been recast to reflect the impact of Accounting Standards Update 2016 - 18 Refer to th
Slide 20: Operating flexibility across all economic environments
INVESTOR PRESENTATION JULY 2020 Operating flexibility across all economic environments 20 ▪ Blended model of owned, contracted and brokered capacity for truck transportation – Non - asset portion is predominantly variable - cost – Includes brokerage operations and contracted capacity with independen
Slide 21: Second quarter 2020 results and third quarter 2020 guidance
INVESTOR PRESENTATION JULY 2020 Second quarter 2020 results and third quarter 2020 guidance 21 REVENUE $3.50 billion NET INCOME (LOSS) 1 $(132) million DILUTED EARNINGS (LOSS) PER SHARE $(1.45) ADJUSTED NET INCOME (LOSS) 1 $(57) million ADJUSTED DILUTED EARNINGS (LOSS) PER SHARE ADJUSTED EBITDA $172
Slide 22: Balance sheet and liquidity as of June 30, 2020
INVESTOR PRESENTATION JULY 2020 Balance sheet and liquidity as of June 30, 2020 22 NET DEBT 1 $4.9 billion CASH AND CASH EQUIVALENTS $2.3 billion NET LEVERAGE 3.5x TOTAL LIQUIDITY $2.8 billion Q2 2020 activities ▪ Added new $350 million term loan and letter of credit facility to further strengthen l
Slide 23: Full year 2019 results
INVESTOR PRESENTATION JULY 2020 Full year 2019 results 23 REVENUE $16.65 billion NET INCOME 1 $379 million DILUTED EPS $3.57 ADJUSTED NET INCOME 1 $428 million ADJUSTED DILUTED EPS ADJUSTED EBITDA $1.67 billion CASH FLOW FROM OPERATIONS $791 million FREE CASH FLOW $628 million $4.03 1 Net income att
Slide 24: Share repurchase program
INVESTOR PRESENTATION JULY 2020 Share repurchase program 24 Year - to - date through June 30, 2020, the company repurchased: SHARES PURCHASED 1.7 million shares of XPO common stock 1 PRICE $66.58 average price per share TOTAL COST $114 million approximate total cost of repurchases XPO has approximat
Slide 25: Business overview: North American contract logistics
INVESTOR PRESENTATION JULY 2020 Business overview: North American contract logistics Americas and Asia
Slide 26: #2 logistics provider in North America
INVESTOR PRESENTATION JULY 2020 #2 logistics provider in North America, with operations in Asia and Latin America 26 Strongly positioned with blue - chip customers who need complex solutions ▪ Expansive footprint and scale are competitive advantages ▪ Employer of choice with best - in - class abilit
Slide 27: Preeminent reputation for innovation, expertise and quality of performance
INVESTOR PRESENTATION JULY 2020 Preeminent reputation for innovation, expertise and quality of performance Industry size ~$50 billion 2019 revenue $2.5 billion Countries 14 Locations 374 (North America, 311) Warehouse space ~ 102 million sq. ft. (North America, Asia) Employees ~21,000 Average contra
Slide 28: XPO's footprint and scale are key competitive advantages
INVESTOR PRESENTATION JULY 2020 28 1 Warehouse sq. ft. as of June 30, 2020 and includes both leased and customer square footage XPO’s footprint and scale are key competitive advantages North America 94 million sq.ft . of warehouse space 1 Chile Asia 8 million sq.ft . of warehouse space 1 COUNTRIES O
Slide 29: Sophisticated capabilities, deeply integrated with customer supply chains
INVESTOR PRESENTATION JULY 2020 29 Sophisticated capabilities, deeply integrated with customer supply chains 29 ADVANCED AUTOMATION AND ROBOTICS INBOUND LOGISTICS AND MANUFACTURING SUPPORT REVERSE LOGISTICS AND AFTERMARKET SUPPORT WAREHOUSING ▪ Tech - enabled fulfillment continuously improved by AI
Slide 30: Decades of logistics expertise in diverse verticals
INVESTOR PRESENTATION JULY 2020 XPO has decades of logistics expertise in diverse verticals in North America 30 END MARKETS % 2019 REVENUE 1 EXPERTISE CONSUMER TECHNOLOGY ▪ Direct - to - consumer and retail fulfillment of consumer electronics and other devices ▪ Returns management, OEM - certified r
Slide 31: E-commerce growth continues to drive supply chain complexity
INVESTOR PRESENTATION JULY 2020 $81 $94 $143 2017 2018 2023E US E - COMMERCE LOGISTICS MARKET INCREASING DEMAND FOR AUTOMATION TO MANAGE GROWTH E - commerce growth continues to drive supply chain complexity 31 CONSUMERS EXPECT FASTER DELIVERIES AND SHOP GLOBALLY $ in billions Source: Third - party i
Slide 32: Special software layer enables customization
INVESTOR PRESENTATION JULY 2020 32 Special software layer enables customization Warehouse managemen t Manages all distribution processes within the warehouse walls WMx Order managemen t Centralizes customer order data, enables real - time visibility OMx Connection management Integrates customer syst
Slide 33: XPO Direct shared distribution is a game-changer for customers
INVESTOR PRESENTATION JULY 2020 XPO Direct ™ shared distribution is a game - changer for customers 33 Scale and proximity Speeds up store replenishment and home delivery; reaches 99% of population with one - day and two - day ground delivery; one tracking number end - to - end Better customer experi
Slide 34: Business overview: European contract logistics
INVESTOR PRESENTATION JULY 2020 Business overview: European contract logistics
Slide 35: Leading provider of technology-enabled, customized logistics in Europe
INVESTOR PRESENTATION JULY 2020 Leading provider of technology - enabled, customized logistics in Europe 35 #2 contract logistics provider in Europe, with the largest outsourced e - fulfillment platform ▪ Rigorous reverse logistics management is highly valued by retailers and e - tailers ▪ Strong tr
Slide 36: Best-in-class vertical expertise, advanced technology and scale
INVESTOR PRESENTATION JULY 2020 Best - in - class vertical expertise, advanced technology and scale KEY METRICS 1 36 Industry size ~ $80 billion 2019 revenue $3.6 billion Countries 15 Locations 393 Warehouse space ~ 99 million sq. ft. (9 million sq. m.) Employees ~35,000 Average contract length ~5 y
Slide 37: Logistics network footprint and scale are major competitive advantages
INVESTOR PRESENTATION JULY 2020 37 XPO’s logistics network footprint and scale are major competitive advantages Europe 99 million sq. ft. (9 million sq. m.) of facility space Belgium Ireland Romania Czech Republic Italy Russia Finland Netherlands Spain France Poland Switzerland Germany Portugal Unit
Slide 38: Contract logistics and value-added services
INVESTOR PRESENTATION JULY 2020 CONTRACT LOGISTICS AND VALUE - ADDED SERVICES ▪ Inbound quality assessment and inventory inspections ▪ Tech - enabled fulfillment continuously improved by AI and machine learning ▪ Order pick, pack and customization, custom services, and pre - retailing ▪ In - demand
Slide 39: Diversified geographical exposure with tailored business strategies
INVESTOR PRESENTATION JULY 2020 Diversified geographical exposure with tailored business strategies 39 END MARKETS % 2019 REVENUE 1 POSITIONING UK AND IRELAND ▪ #1 in e - commerce fulfillment ▪ ~262 million units picked and packed per year ▪ Capabilities for ”big and bulky” products 50 - 150 lbs. FR
Slide 40: Serving sectors that are high growth, high margin or macro-resilient
INVESTOR PRESENTATION JULY 2020 Serving sectors that are typically high growth, high margin or macro - resilient 40 END MARKETS % 2019 REVENUE 1 DESCRIPTION E - COMMERCE AND RETAIL ▪ Seamless integration of large footprint: warehouses, transportation capacity, labor and advanced automation ▪ Advance
Slide 41: Leading e-commerce and omnichannel service capabilities
INVESTOR PRESENTATION JULY 2020 SCALE AND FLEXIBILITY ▪ Largest provider of outsourced e - fulfillment services in Europe ▪ Superior ability to ramp up and manage large workforces for peak seasonality ▪ Sophisticated inventory management system optimizes lead times for customers ▪ Multichannel distr
Slide 42: Business overview: North American less-than-truckload
INVESTOR PRESENTATION JULY 2020 Business overview: North American less - than - truckload
Slide 43: LTL has a well-defined opportunity to grow EBITDA to at least $1 billion in 2022
INVESTOR PRESENTATION JULY 2020 LTL has a well - defined opportunity to grow EBITDA to at least $1 billion in 2022 43 Favorable long - term industry fundamentals ▪ Rational pricing dynamics ▪ Rapid growth of e - commerce driving retail shipments to LTL carriers One of the few US providers with natio
Slide 44: Top three provider of LTL in North America
INVESTOR PRESENTATION JULY 2020 Top three provider of less - than - truckload (LTL) in North America 44 KEY METRICS 2 1 Source: SJ Consulting Group; data includes fuel surcharge 2 Estimate of industry size based on industry research; revenue is full year 2019; all other metrics as of June 30, 2020 I
Slide 45: LTL customers of all sizes value XPO's scale and capacity
INVESTOR PRESENTATION JULY 2020 LTL customers of all sizes value XPO’s scale and capacity 45 XPO’s network of LTL terminals in US and Canada
Slide 46: Capacity, density and scale
INVESTOR PRESENTATION JULY 2020 CAPACITY, DENSITY AND SCALE ▪ One of the largest, most modern and safest - equipped fleets in industry ▪ 7,500 tractors and 24,000 trailers 1 ▪ ~ 12,000 professional drivers, operating out of 290 terminals 1 ▪ All types of commodities accepted ▪ Over 75,000 next - day
Slide 47: Technology prioritizes three areas of LTL network optimization
INVESTOR PRESENTATION JULY 2020 Technology prioritizes three areas of LTL network optimization 47 DYNAMIC ROUTEOPTIMIZATION INTELLIGENT LOAD - BUILDING PRICING OPTIMIZATION Technology becomes continually smarter at automating operations for best results ▪ Intelligent routing and real - time visibili
Slide 48: XPO Smart right-sizes shift scheduling and LTL labor mix
INVESTOR PRESENTATION JULY 2020 XPO Smart ™ right - sizes shift scheduling and all components of LTL labor mix 48 ▪ The introduction of real - time visibility is driving an average of ~7% more motor moves per hour on LTL cross - docks, with high employee engagement ▪ Analytics provide deep visibilit
Slide 49: Business overview: North American transportation
INVESTOR PRESENTATION JULY 2020 Business overview: North American transportation Truck brokerage / expedite Intermodal / drayage Last mile Managed transportation
Slide 50: Combination of scale, technology and service range is unique in North America
INVESTOR PRESENTATION JULY 2020 Combination of scale, technology and service range is unique in North America 50 Multimodal solutions with critical mass and leadership positions in fast - growing sectors ▪ Only provider with leading positions and real - time visibility across so many modes ▪ Custome
Slide 51: Brokerage is a vast opportunity to sell XPO's network capacity
INVESTOR PRESENTATION JULY 2020 Brokerage is a vast opportunity to sell XPO’s network capacity 51 KEY METRICS 1 Industry size 2 ~$375 billion 2019 revenue 3 $1.66 billion Locations 23 Employees ~900 Carrier relationships 38,000 Accessible trucks Over 1,000,000 1 Revenue is full year 2019; all other
Slide 52: Demand driven by expansion of transportation outsourcing
INVESTOR PRESENTATION JULY 2020 Demand for XPO solutions driven by expansion of transportation outsourcing 52 6% 7% 7% 7% 8% 9% 10% 10% 10% 11% 11% 12% 12% 13% 14% 14% 16% 17% 19% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 US TRUCK BROKERAGE INDUST
Slide 53: Scale and optionality; XPO Connect platform
INVESTOR PRESENTATION JULY 2020 SCALE AND OPTIONALITY ▪ Services include full truckload, expedite ground, expedite air charter, heavy haul, cross - border shipments, specialized services, global forwarding and managed transportation XPO CONNECT™ PLATFORM ▪ Proprietary cloud - based platform gives sh
Slide 54: Drives efficiency, volume and margin through cutting-edge connectivity
INVESTOR PRESENTATION JULY 2020 Drives efficiency, volume and margin through cutting - edge connectivity 54 CUSTOMERS CARRIERS DRIVE XPO™ APP CARRIER INTERFACE CARRIER MOBILE INTERFACE REAL - TIME TRACKING ENGINE CUSTOMER INTERFACE CUSTOMER MOBILE INTERFACE ROUTE OPTIMIZATION FREIGHT OPTIMIZATION XP
Slide 55: Rapid traction of XPO Connect propelled by carrier adoption
INVESTOR PRESENTATION JULY 2020 55 FULLY MOBILIZES THE PROCUREMENT PROCESS Preview XPO’s freight opportunities using the guest access feature and sign up to start booking DRIVER ENGAGEMENT AND RECRUITMENT Search for available loads, place bids and immediately purchase loads to keep moving LOAD BOOKI
Slide 56: Third largest intermodal provider in North America
INVESTOR PRESENTATION JULY 2020 Third largest intermodal provider in North America 56 Industry size ~$43 billion 2019 revenue $948 million Locations 37 terminals Employees ~ 400 53 - ft. containers, chassis ~10,000, 5,000 Drayage trucks under contract Over 25,000 KEY METRICS 1 ▪ 30 - year relationsh
Slide 57: Unique competitive advantages differentiate XPO's intermodal offering
INVESTOR PRESENTATION JULY 2020 Unique competitive advantages differentiate XPO’s intermodal offering 57 ▪ Proprietary intermodal system tracks door - to - door movements of long - haul freight with GPS on containers ▪ Communicates constantly with railroads to proactively identify any delays ▪ Monit
Slide 58: Largest provider of last mile logistics for heavy goods in North America
INVESTOR PRESENTATION JULY 2020 Largest provider of last mile logistics for heavy goods in North America 58 Industry size ~$13 billion 2019 revenue $873 million Hub locations 85 Employees ~1,800 Carriers / trucks ~1,500 / ~3,600 Annual deliveries Over 10 million ▪ Fully integrated, national platform
Slide 59: Growth in US e-commerce orders for large goods benefits last mile
INVESTOR PRESENTATION JULY 2020 Growth in US e - commerce orders for large goods benefits XPO’s last mile service 59 US E - COMMERCE SALES FORECASTED TO CONTINUE TO INCREASE $ in billions Source: Wall Street research, 2020 135 138 161 190 220 250 287 328 377 435 493 567 707 818 957 1,104 1,249 2008A
Slide 60: Unmatched combination of last mile scale, technology and experience
INVESTOR PRESENTATION JULY 2020 Unmatched combination of last mile scale, technology and experience 60 ▪ Long - term relationships with best - in - class contract carriers ▪ Post - delivery feedback loops resolve issues quickly and protect brand loyalty ▪ Industry - best consumer satisfaction levels
Slide 61: Top five global provider of managed transportation
INVESTOR PRESENTATION JULY 2020 Top five global provider of managed transportation 61 ▪ Integrated with XPO Connect™, industry - leading multimodal technology platform ▪ Rigorous tracking and visibility; worry - free set - up; disaster recovery capabilities ▪ Technology tools collect big data and tu
Slide 62: Business overview: European transportation
INVESTOR PRESENTATION JULY 2020 Business overview: European transportation Truck brokerage Dedicated truckload Less - than - truckload Managed transportation Last mile
Slide 63: Leading positions in fast-growing sectors
INVESTOR PRESENTATION JULY 2020 Leading positions in fast - growing sectors 63 Expansive platform with strong positions across Europe ▪ #1 transportation company by size across UK, France, Spain, Portugal and Morocco ▪ Mix of asset - based and non - asset over - the - road capacity optimized for eac
Slide 64: Leading provider of truck brokerage and LTL transportation in Europe
INVESTOR PRESENTATION JULY 2020 Leading provider of truck brokerage and LTL transportation in Europe 64 ▪ Leading provider of truck brokerage in Europe ▪ Leading less - than - truckload (LTL) provider in the UK, France, Spain and Portugal, with daily service to 31 countries ▪ Dedicated truckload off
Slide 65: Tailored growth strategies for XPO's largest markets
INVESTOR PRESENTATION JULY 2020 TAILORED GROWTH STRATEGIES FOR XPO’S LARGEST MARKETS BY % OF REVENUE 1 XPO’s transportation network covers over 90% of Europe’s GDP 65 FRANCE UNITED KINGDOM AND IRELAND SPAIN AND PORTUGAL 26% 17% 46% ▪ Blended model of XPO - owned trucks and contracted independent car
Slide 66: Strong positioning in highly fragmented transportation marketplaces
INVESTOR PRESENTATION JULY 2020 FRANCE ▪ #1 in less - than - truckload ▪ Top three provider of truck brokerage ▪ #1 provider of dry van truckload ▪ Only LTL provider fully authorized to handle hazardous goods ▪ Differentiated intermodal offerings, such as road transportation + river barge UNITED KIN
Slide 67: LTL locations serving countries across Europe
INVESTOR PRESENTATION JULY 2020 Over 100 LTL locations serving countries across Europe 67 International Hub XPO International Hub Partner Platform XPO Platform Partner ▪ Transportation capabilities from a single pallet to full truckload ▪ ~60,000 pallets delivered daily over domestic networks ▪ ~9,8
Slide 68: Numerous levers to grow revenue and expand margin in Europe
INVESTOR PRESENTATION JULY 2020 Numerous levers to grow revenue and expand margin in Europe EXPAND EXISTING PLATFORM COLLABORATE ACROSS NETWORK CONTINUE TO BUILD TECH ADVANTAGE EXECUTE PRICING INITIATIVES ▪ Take advantage of fragmented industry to drive outsized growth ▪ Increase scale in last mile
Slide 69: Supplemental materials
INVESTOR PRESENTATION JULY 2020 Supplemental materials
Slide 70: Investor highlights: Key factors driving growth and returns
INVESTOR PRESENTATION JULY 2020 Investor highlights: Key factors driving growth and returns 70 Leading positions in fast - growing sectors ▪ Top three industry positions across all major service lines in transportation and logistics ▪ Outsized exposure to sectors with track records of long - term gr
Slide 71: XPO is widely recognized for performance and culture
INVESTOR PRESENTATION JULY 2020 XPO is widely recognized for performance and culture 71 ▪ Named one of the World’s Most Admired Companies by Fortune, 2018, 2019, 2020 ▪ Ranked #1 on the Fortune 500 in the transportation and logistics category by Fortune, 2017, 2018, 2019, 2020 ▪ Named one of Spain’s
Slide 72: Highlights of XPO's people-first culture
INVESTOR PRESENTATION JULY 2020 Highlights of XPO’s people - first culture 72 ▪ Maintaining a US warehouse safety record for OSHA reportable incidents that’s more than four times better than the industry average ▪ Appointed a Chief Diversity Officer and launched a Diversity and Inclusion Council of
Slide 73: Strongly committed to sustainability in transportation and logistics
INVESTOR PRESENTATION JULY 2020 Strongly committed to sustainability in transportation and logistics 73 ▪ Awarded the silver CSR rating in Europe by EcoVadis , with overall score placing XPO in the top 10% of the Freight Transport by Road category, 2019, 2020 ▪ Initiated collaborative research and d
Slide 74: Strongly committed to sustainability (cont.)
INVESTOR PRESENTATION JULY 2020 Strongly committed to sustainability in transportation and logistics (cont.) 74 ▪ By the end of 2020, nearly 75% of XPO’s total space in Europe will operate LED lighting systems ▪ XPO’s warehouse of the future for Nestlé in the UK is an environmentally advanced facili
Slide 75: Highly skilled management team
INVESTOR PRESENTATION JULY 2020 Highly skilled management team 75 Bradley Jacobs Chief Executive Officer United Rentals, United Waste Josephine Berisha Senior Vice President, Global Compensation and Benefits Morgan Stanley Tony Brooks President, Less - Than - Truckload – North America Sysco, PepsiCo
Slide 76: Highly skilled management team (cont.)
INVESTOR PRESENTATION JULY 2020 Highly skilled management team (cont.) 76 LaQuenta Jacobs Chief Diversity Officer Delta Air Lines, Home Depot, Turner Broadcasting Erin Kurtz Senior Vice President, Communications AOL, Thomson Reuters Katrina Liddell Senior Vice President, Transportation Sales – North
Slide 77: Business glossary
INVESTOR PRESENTATION JULY 2020 Business glossary 77 ▪ 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
Slide 78: Business glossary (cont.)
INVESTOR PRESENTATION JULY 2020 Business glossary (cont.) 78 ▪ 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
Slide 79: Business glossary (cont.)
INVESTOR PRESENTATION JULY 2020 Business glossary (cont.) 79 ▪ XPO Connect™: XPO’s fully automated, self - learning digital freight marketplace connects shippers and carriers directly, as well as through company operations. XPO Connect™ gives customers comprehensive visibility across multiple transp
Slide 80: Financial reconciliations
INVESTOR PRESENTATION JULY 2020 Financial reconciliations 80 The following table reconciles XPO’s net (loss) income attributable to common shareholders for the periods ended June 30, 2020 and 2019 to EBITDA and adjusted EBITDA for the same periods. NM - Not meaningful (1) The sum of quarterly net (l
Slide 81: Financial reconciliations (cont.)
INVESTOR PRESENTATION JULY 2020 Financial reconciliations (cont.) 81 (1) The income tax rate applied to reconciling items is based on the GAAP annual effective tax rate, excluding discrete items and contribution - and margin - based taxes. Note: Refer to the “Non - GAAP Financial Measures” section o
Slide 82: Financial reconciliations (cont.)
INVESTOR PRESENTATION JULY 2020 Financial reconciliations (cont.) 82 Note: Refer to the “Non - GAAP Financial Measures” section on page 2 of this document The following table reconciles XPO’s net income attributable to common shareholders for the year ended December 31, 2019 to adjusted net income a
Slide 83: Financial reconciliations (cont.)
INVESTOR PRESENTATION JULY 2020 Financial reconciliations (cont.) 83 Note: 2016 and 2017 data have been recast to reflect the impact of Accounting Standards Update 2016 - 18 Refer to the “Non - GAAP Financial Measures” section on page 2 of this document The following table reconciles XPO’s net cash
Slide 84: Financial reconciliations (cont.)
INVESTOR PRESENTATION JULY 2020 Financial reconciliations (cont.) 84 Note: Refer to the “Non - GAAP Financial Measures” section on page 2 of this document The following table reconciles XPO’s Transportation segment operating (loss) income for the periods ended June 30, 2020 and 2019 to EBITDA and ad
Slide 85: Financial reconciliations (cont.)
INVESTOR PRESENTATION JULY 2020 Financial reconciliations (cont.) 85 Note: Refer to the “Non - GAAP Financial Measures” section on page 2 of this document The following table reconciles XPO’s Logistics segment operating (loss) income for the periods ended June 30, 2020 and 2019 to EBITDA and adjuste
Slide 86: Financial reconciliations (cont.)
INVESTOR PRESENTATION JULY 2020 Financial reconciliations (cont.) 86 Note: Refer to the “Non - GAAP Financial Measures” section on page 2 of this document The following table reconciles XPO’s revenue attributable to its North American last mile business for the period ended June 30, 2020 to net reve
Slide 87: Financial reconciliations (cont.)
INVESTOR PRESENTATION JULY 2020 Financial reconciliations (cont.) 87 Note: Refer to the “Non - GAAP Financial Measures” section on page 2 of this document The following table reconciles XPO’s revenue attributable to its North American less - than - truckload business for the years ended December 31,
Slide 88: Financial reconciliations (cont.)
INVESTOR PRESENTATION JULY 2020 Financial reconciliations (cont.) 88 Note: Adjusted EBITDA was prepared assuming 100% ownership of XPO Logistics Europe Refer to the “Non - GAAP Financial Measures” section on page 2 of this document The following table reconciles XPO’s net income (loss) attributable