Slide 1: FedEx Corporation Fiscal Third Quarter 2024 Earnings
FedEx Corporation Fiscal Third Quarter 2024 Earnings | March 21, 2024 VP of Investor Relations 2 1
Slide 2: FedEx Corporation Fiscal Third Quarter 2024 Earnings
FedEx Corporation Fiscal Third Quarter 2024 Earnings | March 21, 2024 VP of Investor Relations 2 1
Slide 3: Forward-Looking Statements and Non-GAAP Financial Measures
Forward-Looking Statements and Non-GAAP Financial Measures Certain statements in this presentation may be considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, such as statements regarding expected cost savings, the planned consolidation of
Slide 4: Forward-Looking Statements and Non-GAAP Financial Measures
Forward-Looking Statements and Non-GAAP Financial Measures Certain statements in this presentation may be considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, such as statements regarding expected cost savings, the planned consolidation of
Slide 5: Key messages
Key messages • For the third consecutive quarter, delivered operating income growth and margin expansion despite declining revenue … enabled by DRIVE • Progressing on our transformation as we strengthen our value proposition and roll out Network 2.0 while sustaining superior service levels • Narrowi
Slide 6: Key messages
Key messages • For the third consecutive quarter, delivered operating income growth and margin expansion despite declining revenue … enabled by DRIVE • Progressing on our transformation as we strengthen our value proposition and roll out Network 2.0 while sustaining superior service levels • Narrowi
Slide 7: Focused on improving FXE; DRIVE momentum continues in Q3
Focused on improving FXE Factors constraining performance: • Clear international market shift toward deferred services • Time required to fully realign network to match capacity with demand • Inflationary and other cost headwinds How we’re managing: • Redesigning our air network to focus on improvin
Slide 8: Focused on improving FXE; DRIVE momentum continues in Q3
Focused on improving FXE Factors constraining performance: • Clear international market shift toward deferred services • Time required to fully realign network to match capacity with demand • Inflationary and other cost headwinds How we’re managing: • Redesigning our air network to focus on improvin
Slide 9: Advancing Network 2.0
Advancing Network 2.0 Focused on simplifying and clarifying the transition for our workforce, while continuing to provide high-quality service for customers Rolling out Surface Operations structure • Includes three divisions: East and Canada, Central, and West • New leadership structure in the U.S.
Slide 10: Advancing Network 2.0
Advancing Network 2.0 Focused on simplifying and clarifying the transition for our workforce, while continuing to provide high-quality service for customers Rolling out Surface Operations structure • Includes three divisions: East and Canada, Central, and West • New leadership structure in the U.S.
Slide 11: Transportation segment revenue performance
EVP & Chief Customer Officer 11 Transportation segment revenue performance Continue to focus on revenue quality and outstanding service -2% +1% $10.3B $10.1B $8.7B $8.7B -3% $2.2B $2.1B Q3 FY23 Q3 FY24 Q3 FY23 Q3 FY24 Q3 FY23 Q3 FY24 FedEx Express FedEx Ground FedEx Freight • Revenue decline due to
Slide 12: Transportation segment revenue performance
EVP & Chief Customer Officer 11 Transportation segment revenue performance Continue to focus on revenue quality and outstanding service -2% +1% $10.3B $10.1B $8.7B $8.7B -3% $2.2B $2.1B Q3 FY23 Q3 FY24 Q3 FY23 Q3 FY24 Q3 FY23 Q3 FY24 FedEx Express FedEx Ground FedEx Freight • Revenue decline due to
Slide 13: Monthly volume trends and segment yield performance
Monthly volume trends: Sep 2023-Feb 2024 Customer demand remains weak, with sequential improvement in International Export and Freight Q2 average daily volume Q3 average daily volume FedEx Express U.S. Domestic Package YoY FedEx Express International Export YoY Sep Oct Nov Dec Jan Feb Sep Oct Nov De
Slide 14: Monthly volume trends and segment yield performance
Monthly volume trends: Sep 2023-Feb 2024 Customer demand remains weak, with sequential improvement in International Export and Freight Q2 average daily volume Q3 average daily volume FedEx Express U.S. Domestic Package YoY FedEx Express International Export YoY Sep Oct Nov Dec Jan Feb Sep Oct Nov De
Slide 15: Leading with digital innovation
Leading with digital innovation • Announced fdx, the first commerce platform for retailers that connects the entire customer journey • Making it easier for companies to grow demand, increase conversion, optimize fulfillment, and streamline returns • Official launch planned for Fall 2024 15 EVP & Chi
Slide 16: Leading with digital innovation
Leading with digital innovation • Announced fdx, the first commerce platform for retailers that connects the entire customer journey • Making it easier for companies to grow demand, increase conversion, optimize fulfillment, and streamline returns • Official launch planned for Fall 2024 15 EVP & Chi
Slide 17: Transportation segment operating income performance
Transportation segment operating income performance +14% -12% +110% $964M $844M $256M $386M $340M $122M Q3 FY23* Q3 FY24* Q3 FY23 Q3 FY24* Q3 FY23 Q3 FY24 FedEx Express FedEx Ground FedEx Freight • Increase driven by reduced • Growth driven by cost reductions • Decline due to lower fuel operating ex
Slide 18: Transportation segment operating income performance
Transportation segment operating income performance +14% -12% +110% $964M $844M $256M $386M $340M $122M Q3 FY23* Q3 FY24* Q3 FY23 Q3 FY24* Q3 FY23 Q3 FY24 FedEx Express FedEx Ground FedEx Freight • Increase driven by reduced • Growth driven by cost reductions • Decline due to lower fuel operating ex
Slide 19: Narrowing FY24 adjusted EPS outlook range
Reaffirming midpoint while narrowing FY24 adjusted EPS* outlook range Dec 2023 Mar 2024 Low-single-digit Low-single-digit Commentary: Revenue percentage percentage • Expect profit improvement YoY in Q4 decline decline FY24, despite lapping Express and Ground structural benefits executed in Q4 FY23 A
Slide 20: Narrowing FY24 adjusted EPS outlook range
Reaffirming midpoint while narrowing FY24 adjusted EPS* outlook range Dec 2023 Mar 2024 Low-single-digit Low-single-digit Commentary: Revenue percentage percentage • Expect profit improvement YoY in Q4 decline decline FY24, despite lapping Express and Ground structural benefits executed in Q4 FY23 A
Slide 21: Capital allocation priorities
Capital allocation priorities Unwavering focus on efficient and responsible capital allocation $2.5 Share 7.6% of 6.8% of <6.5% of repurchases revenue revenue revenue 7.6% of revenue 6.8% of revenue <6.5% of revenue $3.8* Dividend FY24E capital ($ in billions) return $1.3 FY19-FY22 FY23 FY25 target
Slide 22: Capital allocation priorities
Capital allocation priorities Unwavering focus on efficient and responsible capital allocation $2.5 Share 7.6% of 6.8% of <6.5% of repurchases revenue revenue revenue 7.6% of revenue 6.8% of revenue <6.5% of revenue $3.8* Dividend FY24E capital ($ in billions) return $1.3 FY19-FY22 FY23 FY25 target
Slide 23: Appendix: Non-GAAP Financial Measures
Appendix 23 Non-GAAP Financial Measures Our fiscal 2024 earnings per share (EPS) forecast is a non-GAAP financial measure because it excludes fiscal 2024 mark-to-market (MTM) retirement plans accounting adjustments and estimated costs related to business optimization initiatives in fiscal 2024. Our
Slide 24: Appendix: Non-GAAP Financial Measures
Appendix 23 Non-GAAP Financial Measures Our fiscal 2024 earnings per share (EPS) forecast is a non-GAAP financial measure because it excludes fiscal 2024 mark-to-market (MTM) retirement plans accounting adjustments and estimated costs related to business optimization initiatives in fiscal 2024. Our
Slide 25: Q3 FY24 reconciliation for FedEx Corporation and Express
Q3 FY24 reconciliation for FedEx Corporation Diluted Operating Operating Income Net Dollars in millions, except EPS Earnings Income Margin Taxes1 Income2 Per Share GAAP measure $1,243 5.7% $304 $879 $3.51 Business optimization costs3 114 0.5% 27 87 0.35 Non-GAAP measure $1,357 6.2% $331 $966 $3.86 1
Slide 26: Q3 FY24 reconciliation for FedEx Corporation and Express
Q3 FY24 reconciliation for FedEx Corporation Diluted Operating Operating Income Net Dollars in millions, except EPS Earnings Income Margin Taxes1 Income2 Per Share GAAP measure $1,243 5.7% $304 $879 $3.51 Business optimization costs3 114 0.5% 27 87 0.35 Non-GAAP measure $1,357 6.2% $331 $966 $3.86 1
Slide 27: Q3 FY24 Ground and Q3 FY23 Corporation reconciliation
Q3 FY24 reconciliation for FedEx Ground segment Operating Operating Dollars in millions Income Margin GAAP measure $942 10.8% Business optimization costs 22 0.3% Non-GAAP measure $964 11.1% 27 Q3 FY23 reconciliation for FedEx Corporation Diluted Operating Operating Income Net Dollars in millions, ex
Slide 28: Q3 FY24 Ground and Q3 FY23 Corporation reconciliation
Q3 FY24 reconciliation for FedEx Ground segment Operating Operating Dollars in millions Income Margin GAAP measure $942 10.8% Business optimization costs 22 0.3% Non-GAAP measure $964 11.1% 27 Q3 FY23 reconciliation for FedEx Corporation Diluted Operating Operating Income Net Dollars in millions, ex
Slide 29: Q3 FY23 Express reconciliation; FY24 EPS forecast
Q3 FY23 reconciliation for FedEx Express segment Operating Operating Dollars in millions Income Margin GAAP measure $119 1.2% Business optimization costs 3 — Non-GAAP measure $122 1.2% 29 FY24 earnings per share forecast Dollars in millions, except EPS Adjustments Diluted Earnings Per Share Earnings
Slide 30: Q3 FY23 Express reconciliation; FY24 EPS forecast
Q3 FY23 reconciliation for FedEx Express segment Operating Operating Dollars in millions Income Margin GAAP measure $119 1.2% Business optimization costs 3 — Non-GAAP measure $122 1.2% 29 FY24 earnings per share forecast Dollars in millions, except EPS Adjustments Diluted Earnings Per Share Earnings
Slide 31: FY23 operating income reconciliation; FY24 outlook midpoint
FY23 operating income reconciliation for FedEx Corporation Dollars in millions Operating Income GAAP measure $4,912 MTM retirement plans — accounting adjustment Business optimization costs 273 Goodwill and other asset 117 impairment charges Business realignment costs 36 FedEx Ground legal matter 35
Slide 32: FY23 operating income reconciliation; FY24 outlook midpoint
FY23 operating income reconciliation for FedEx Corporation Dollars in millions Operating Income GAAP measure $4,912 MTM retirement plans — accounting adjustment Business optimization costs 273 Goodwill and other asset 117 impairment charges Business realignment costs 36 FedEx Ground legal matter 35
Slide 33: Footnotes for non-GAAP reconciliation slides
Footnotes for non-GAAP reconciliation slides 1. Income taxes are based on the company’s approximate statutory tax rates applicable to each transaction. 2. Effect of “total other (expense) income” on net income amount not shown. 3. These expenses were recognized at Corporate, other, and eliminations,
Slide 34: Footnotes for non-GAAP reconciliation slides
Footnotes for non-GAAP reconciliation slides 1. Income taxes are based on the company’s approximate statutory tax rates applicable to each transaction. 2. Effect of “total other (expense) income” on net income amount not shown. 3. These expenses were recognized at Corporate, other, and eliminations,