Xpo, Inc. · NYSE:XPO
Xpo — XPO Logistics — Investor Presentation (November 2014)
55 slides from Xpo's investor presentation, Nov 6, 2014
Slide 1: Schedule 14A Proxy Statement - XPO Logistics, Inc.
UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 14A Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 Filed by the Registrant x Filed by a Party other than the Registrant ¨ Check the appropriate box: ¨ Preliminary Proxy Statement ¨ Conf
Slide 2: Schedule 14A filing fee details
(5) Total fee paid: ¨ Fee paid previously with preliminary materials. ¨ Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or t
Slide 3: Investor Presentation November 2014
Investor Presentation November 2014
Slide 4: Forward-Looking Statements Disclaimer
Forward-Looking This company’s deemed “may,” However, These any acquisitions, XPO’s develop companies’ regulation. even 2and law. our future XPO document ifforward-looking filings ability substantially “plan,” perception to and undertakes the results, be, All full largest implement including absence
Slide 5: One of the Largest Providers of Transportation Logistics Services
Oneprovider We #4 #3 #1 Leading Growing Sources 3transportation freight manager facilitate of the for provider presence brokerage Largest rankings: ofover intermodal cross-border last-mile expedited of 33,000 in 3PLs technology-enabled firm freight Transport logistics in shipments deliveries and ser
Slide 6: Clearly Defined Strategy for Value Creation
Clearly Acquire Significantly Open 4We arecold-starts committed Defined companies scale Strategy where to up that providing and sales bring for optimize Value recruitment value world Creation existing and class are canservice highly operations drive scalable revenue to customers as the industry’s mo
Slide 7: Three Global Institutions Invest $700 Million in XPO
$700 Three to –Pension Strong Capital 2017 5$9 Transaction PSP further billion Million financial global Investments, endorsement primarily Plan XPO’s of revenue institutions Strategic completed targets growth will GIC of and raised be Investment XPO’s of strategy invested September used $575 Singapo
Slide 8: Disciplined Execution of Growth Plan
Precise Completed 23 Introduced Added procurement Stratified Created 6Disciplined cold-starts national Execution aleading-edge customers, culture scalable 13 focus and in strategic operations approximately last-mile of on ofIT passionate Growth assigned operational recruiting platform acquisitions o
Slide 9: Strong Relationships and Integrated Network
Strong Integrated 199 Approximately More drayage, Relationships representing 7Access locations than Commitment toexpedited 60,000 network 4,000 more in with 10,700 the owner-operator miles than an and with U.S., toadditional employees 667,000 Shipper last of cross-company Canada, network mileSatisfa
Slide 10: Significant Growth Model: M&A, Cold-starts, Sales
Significant Strategic Cold-starts: to Scale state-of-the-art Market growing Multi-modal: the 8M&A sales most and program: demand: talent areas compelling accounts: productivity: Growth expand become of training focus build logistics market Embedded footprint range on the leadership recruit and the l
Slide 11: Secular Growth Trends Driving Logistics Outsourcing
Secular Growth Outsourcing Conversion Near-shoring Just-in-time Driver Automation We 9to capitalize haveshortage Trends inpositioned e-commerce from lean of on of ofthe Driving logistics each manufacturing production over-the-road transportation XPO’s of these retailing Industry services service tre
Slide 12: Leading Positions in High-Growth Sectors
Leading Market Size Sector($ Truck Long-haul Intermodal manufacturing Heavy last-mile Sources: 10 Growth brokerage goods, Projected Positions billions)(x Armstrong $13 rail $155-6 efficiencies in3-5 $50 times Mexico intimes GDP) &High-Growth 2-3 Associates, Outsourcing times near-sourcing Growth and
Slide 13: Serving Major Industries and Over 15,000 Customers
Major Serving 15,000 Retail, Industrial Manufacturing Life Commercial Aerospace Technology Source: Governmental 11 Sciences Coverage: E-commerce customers Company over U.S., data Mexico and Canada
Slide 14: Compelling Reasons for New Breed Acquisition
Acquisition Compelling Transformational C –M Capitalizes transportation support, Significant accounts, Source: 12ombined ost differentiated Company and New company cross-selling on of reasons other management, trend New Breed for data contract supply Breed for toward of XPO’s customers approximately
Slide 15: XPO Leads in Technology-enabled Contract Logistics
XPO Leads Technology-enabled V 10 Focuses contract –T medical Sources: 13 op echnology, ery years 10 stable Gains the customers equipment logistics on Company most relationships industries atelecom, Preeminent desirable have data and solutions e-commerce, with utilized select with sector Platform st
Slide 16: New Breed's Attractive Financial Model
NewReturn 16% 38% Approximately past Low largely (1) 14 three capex revenue return Breed’s devoted years on requirements onAttractive CAGR invested invested 99% to ITcontractual for development capital capital Financial the (4.2% past equals (FY of revenue 10 Model revenue 2013) years ongoing renewa
Slide 17: Industry-defining Technology Integration
Industry-defining Integration –Combination Sources: 15XPO Breed New Breed’s NLM Company ofof is acquisition proprietary transportation the two Technology data largest robust has IT web-based managed will doubled management create transportation XPO’s manager strong system ITdifferentiation ofworkfor
Slide 18: New Breed Transaction Details
Details $615 Adds Multiple Transaction 16 million approximately ofofthe approximately completed cash Newpurchase Breed $597 September Transaction million 8.0 price times of 2, trailing revenue 2014 12 (trailing months12adjusted monthsEBITDA ended June 30, 2014)
Slide 19: Proceeds of $500 Million Senior Notes
$500 Proceeds –7.875% High Additive Long-term 17Callable Million yield senior to used at market leverage $415 XPO’s Senior to notes finance million could target: option, Notes maturing present the accounts Issued 3September acquisition toSeptember 4attractive times August receivable 2016 EBITDA of1,
Slide 20: Acquired ACL, Last Mile Logistics Provider
Acquired Compelling Non-asset, Moves Adds Complementary Pipeline 18 approximately high active ACL multi-regional, reasons volumes in for delivery July last for 160 of2014 mile the e-commerce employees, schedules last transaction acquisitions mile allow logistics purchases 14 locations XPOprovider La
Slide 21: ACL Transaction Details
Detailsapproximately $36.5 Adds Multiple Transaction 19 million ofofthe approximately completed ACL cash purchase Transaction $63July million 5.9 2014 price times of revenue trailing (trailing 12 months 12 adjusted months ended EBITDA June 30, 2014)
Slide 22: Acquired Pacer's Intermodal Business
Acquired Gained –30 Added Sources: 20 Access Third #1years’ Decades-deep provider $980 instant largest SJ to experience Pacer 60,000 Consulting million ofscale provider in relationships cross-border March miles in of North revenue Group, ofof 2014 intermodal network American with Mexico Inc., (FYthe
Slide 23: Major Growing Intermodal Market Opportunity
Major $15 Growing One Enables Rail Intermodal Sources: 21 billion of is Intermodal more the shippers SJ atfastest-growing sector can three Consulting fuel-efficient lower to in Market lower five North shipper’s Group, times Opportunity transportation than America areas GDP truckload Inc., cost of tr
Slide 24: High-Growth Cross-Border Mexico Sector
High-Growth Near-shoring Competitively Faster Can Growth Large 2.8 Sources: 22 million beopportunity speed-to-market more driven AlixPartners trucks cost in Cross-Border priced by Mexico effective move billions to convert labor and than cross-border – fast of company than force Mexico overseas dolla
Slide 25: Intermodal Integration Energetically Underway
Integration Strong Energetically Q3: New On Source: 23 track Intermodal Rail value Company toOptimizer of realize proposition cross-selling Intermodal volume data $15 technology million upas Isintermodal 6% aDriving large, and ofplatform targeted revenue single-source Results to XPO incost up betacu
Slide 26: Largest Provider of Last Mile Logistics for Heavy Goods
Acquired Rebranded Largest Facilitates Leading, Strong Source: 24 customer-centric provider Company proprietary 3PD approximately as XPO in of August data Last last-mile software culture Mile 2013 seven logistics forbuilt million workflow by forlast-mile experienced heavy and goods customer deliveri
Slide 27: Last Mile's Exciting Market Potential
Last Mile’s XPO Heavy Strong Only Highly Sources: 25 30% Last goods tailwinds fragmented Norbridge, Mile currently Exciting home serves from with delivery going Inc. Market e-commerce onemany and through ofgrowing Potential EVE the small, fastest-growing Partners 3PLs and regional at outsourcing fiv
Slide 28: XPO Capitalizing on ACL Acquisition
XPO efficiencies, Capitalizing Cost Acquired Highly Acquisition Source: 26 Hasscalable Company Optima a Strong of onACL major supplier, productivity, Service data Platform brought advantages leading Solutions for deep access Last arranger relationships ofin scale Mile to November trucks, of andlast
Slide 29: Acquired and Rebranded NLM, Expedited Manager
Acquired Rebranded #1 Manages Online Carriers Benefits Source: 27 web-based auction Company bid from an NLM ason annual XPO expediter, trend system loads in data December NLM run toward that proprietary rate made arejust-in-time of2013 awarded XPO moretothe than XPO electronically inventories, #1thr
Slide 30: Focused Sales and Marketing Effort
Focused Differentiate Single Strategic National Branch Capture 72% Sources: 28 ofpoint network top more Sales accounts SJ accounts 50 Consulting of XPO of customers and contact expands the team team by Marketing $32 providing for Group, focused marketing billion our are each using reach Effort Inc.,
Slide 31: Increasing Productivity Through Proprietary Technology
Increasing One Proprietary Highly Total (1) 29 Includes common ITscalable budget Productivity freight full ITof load year platform approximately optimizer execution ITthrough budgets for tools freight and Technology for $115 for tendering Pacer brokerage pricing million andvia and New for inautomate
Slide 32: Growth Through Freight Brokerage Cold-starts
Growth 23 12 Freight Up Low Hire Position Source: 30 cold-starts freight from strong capital brokerage Company through in $120 brokerage; prime industry investment million Cold-starts recruitment cold-starts data veterans 10 12can freight months deliver on as areas forwarding; branch anago annual ou
Slide 33: CEO Bradley Jacobs and Track Record
CEO Bradley Founded Hamilton Amerex United 31 Waste: Waste Rentals: Rentals Oil and Resources: Associates: led stock S. Created stock Built Jacobs four outperformed outperformed Grew world’s highly 5th Built largest global successful one largest S&P solid of oil S&P world’s equipment trading 500 was
Slide 34: Highly Skilled Management Team
Highly Troy John Scott Gordon General Louis Karl Paul Dominick President, Julie Greg Senior Mario Chief The 32 full Meyer Smith Luna Hardig Cooper Ritter Malat Operating Financial Strategy Executive Commercial Information DeJoy Harik Vice Skilled Devens Counsel management Intermodal Freight Muzi Pac
Slide 35: Deep Operational Bench
Deep Dave Bud President, Will Chief Tom Senior Drew Doug Jenna Regional Jake Sr. Lou Jim Strategic Chris Vice 33 Operational Commiskey Amo Workmon O’Shea Schnell Connolly President, Bench Rowe Duffell Wilkerson Technology Sales George Sargent Vice Accounts Vice Sales Electrolux, XPO and President, E
Slide 36: Revenue Growth and Trajectory
Revenue 2011 Approximately Organic Net Gross Q3 $194 +242% (1) $662 34 Includes company-wide, ‘13 revenue revenue revenue Revenue Q3 growth and trajectory ‘14 only up Margin ofup $2.6 ($ 403% up $177 partial 242% millions) 48% 2014 billion Growth Organic million benefit vs.annual 2013 growth of ACL
Slide 37: Key Financial Statistics by Business Unit
Key‘13 Freight +45% +240% $519 $153 $25 Q3 Revenue 35 Revenue $19 Financial $36 +212% Q3 Brokerage ($‘14 millions) Growth $60 Statistics Q3 Expedited ‘13byQ3 Business ‘14Transportation Q3 Unit, ‘13 Q32014 ‘14Freight vs. 2013Forwarding
Slide 38: First Months Quarterly Revenue Growth
FirstQ2 31% $109 $194 $257 $282 $581 $662 $45 Q1 2012 Revenue 36 $55 Average 33 $114 2013 Q3 Months $71 ($Q4 $137 2014 millions) Quarterly Q1ofQ2 Growth Q3Growth Q4Strategy Q1Rate Q2 Q3
Slide 39: Financial Targets
Financial As Annual Full $9 $575 37 billion ofyear million December revenue EBITDA 2017 Targets of revenue of EBITDA run 31, runrate 2014 rateofofatatleast least$3 $150 billion million
Slide 40: Incentivized Management Equity and Capitalization
Incentivized Equity Common Preferred Warrants Convertible Stock Fully (1) shares assuming, of (5) 38 $37.67 Based Dilutive Diluted Options on ownership (Strike Shares Stock aon on pro effect Senior XPO September SEC aShares and pro forma Equivalent Price 10.5 76.6 aligns Management beneficial of RSU
Slide 41: Clear Path for Significant Value Creation
Clearmanagement Significant Leading Compelling Passionate Top 39 Path positions for culture growth value Significant talent proposition in of embedded fastest-growing on-time with Value skills performance in asCreation XPO’s a multi-modal, that areas uniquely business of andtransportation productivi
Slide 42: Additional Information and Participants in Solicitation
Additional “Investment”) STATEMENT THEY INFORMATION www.xpo.com. Participants XPO directors regarding documents be 40 anyand will WILL sale isits file the Information may available ofin executive direct CONTAIN asecurities with AND Solicitation You proxy beABOUT obtained, the and may OTHER instateme
Slide 43: Presentation Script, November 5, 2014
November 5, 2014 Presentation Script The following script should be read in conjunction with the accompanying slide presentation, which contains, among other information, source data for certain information set forth in the script. Thank you for joining us today. The third quarter was transformation
Slide 44: New Breed acquisition script
New Breed operates in the top echelon of this space. We completed the acquisition on September 2, making XPO a preeminent U.S. provider of sophisticated supply chain innovations for blue chip customers. We bought New Breed for $615 million in cash on a cash-free, debt-free basis. The value of the tr
Slide 45: Technology and ACL acquisition script
• Both XPO and New Breed have an intense commitment to cutting edge technology. The combination doubles our XPO IT workforce to more than 600 talented IT professionals focused on new ways to serve our customers. • We expect to integrate our XPO NLM technology with New Breed’s transportation manageme
Slide 46: Strategy and market positions script
• Optimize our existing operations with vigorous recruitment and training programs and state-of-the-art IT; and • Open cold-starts in locations where we can hire a large number of qualified salespeople to drive returns. Today, we’re one of the fastest-growing logistics companies in North America, wi
Slide 47: Cross-border intermodal and near-shoring script
exciting: we’re the number one provider of cross-border intermodal, with the benefit of 30 years of Pacer experience in Mexico. It’s estimated that approximately 2.8 million trucks move cross-border each year, so there’s a large potential universe for conversion to rail. Cross-border freight movemen
Slide 48: Intermodal operations script
We put our intermodal operations under the leadership of Paul Smith, who had been Pacer’s vice president of network management. With Pacer, Paul was responsible for optimizing all aspects of the intermodal network, including capacity flow and asset management, market-based pricing, and capacity plan
Slide 49: Strategic accounts group script
Our strategic accounts group is ramping up very quickly, and we’re getting a good reception from large shippers. Some of this is because XPO’s profile is much higher now than a year ago. But there’s also a market dynamic working in our favor: shippers are concerned about tight capacity and driver sh
Slide 50: Scale, optimization and acquisitions script
We use detailed carrier profiling that identifies each carrier’s strengths, equipment, preferred lanes and performance metrics. And we have similar profiling for our customers, that pinpoints both operational and load requirements. We also have the ability to manage our customers’ specific routing g
Slide 51: Cold-starts strategy script
This brings us to the third part of our strategy, and an equally important one: cold-starts. Of the 23 cold-starts we mentioned earlier, 12 are in freight brokerage. Each location is led by a highly experienced branch president. Talent is the most important factor for cold-starts – both leadership a
Slide 52: Management team script
Scott Malat is our chief strategy officer. Scott’s responsible for our company’s strategy and capital structure, analyzing potential acquisition opportunities, and managing our technology organization. Prior to joining XPO, he was the senior transportation analyst covering air, rail, trucking and sh
Slide 53: Third quarter results and raised 2014 outlook script
accomplished this by capitalizing on our increasing scale and lane density, and by improving the productivity of our sales force. In our freight brokerage unit, we increased revenue by 240% year-over-year, including organic growth of 58%. In our expedited business, we increased revenue by more than
Slide 54: Forward-looking statements (script)
the absence of these words does not mean that the statements are not forward-looking. These forward-looking statements are based on certain assumptions and analyses made by us in light of our experience and our perception of historical trends, current conditions and expected future developments, as
Slide 55: Additional information on proxy and investment
2014 annual meeting of shareholders, filed with the SEC on April 25, 2014. Investors and shareholders may obtain more detailed information regarding the direct and indirect interests of XPO and its executive officers and directors in the Investment by reading the proxy statement regarding the Invest
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