FedEx Corporation · NYSE:FDX
FedEx — Non-Deal Roadshow (December 2021)
34 slides from FedEx's roadshow presentation, Dec 16, 2021
Slide 1: FedEx Corporation Investor Relations
FedEx Corporation Investor Relations December 16, 2021
Slide 2: Forward-Looking Statements
Forward-Looking Statements Certain statements in this presentation may be considered forward-looking statements, such as statements relating to management’s views with respect to future events and financial performance and underlying assumptions. Forward-looking statements include those preceded by,
Slide 3: Unmatched Global Network
Unmatched Global Network Links More Than 99% of World’s GDP • Over 220 countries and territories, every address in the U.S. • 695 aircraft and more than 210,000 motorized vehicles • More than 5,000 operating facilities; more than 650 airports served worldwide • Delivers 17M shipments per day • More
Slide 4: Broad Portfolio of Services
Broad Portfolio of Services FY21 Revenues: $84 billion Team Members: More than 600,000 Countries and Territories Served: More than 220 $42.1 Billion 50% Express $30.5 Billion 37% Ground $7.8 Billion 9% Freight $3.5 Billion* 4% Other & eliminations* FedEx Express, FedEx Ground, and FedEx Freight show
Slide 5: Strategic Operating Principles
Strategic Operating Principles “Ultimately, this creates greater value for our customers and shareholders alike” - Frederick W. Smith, FedEx Corporation – Chairman & CEO Compete Collectively Operate Collaboratively Innovate Digitally • FedEx brand unites distinct • Strategic shift to build a • Innov
Slide 6: Bundle of Solutions
Bundle of Solutions % of U.S. Revenue • Our portfolio of solutions creates a strong value proposition FedEx Express (FXE) 1.1% • 97.1% of U.S. revenue comes from customers of two or more operating FXE+FXG FXE+FXF companies 17.7% All 0.2% Opcos • We manage service offerings as 79.0% a portfolio for t
Slide 7: FedEx Long-Term Financial Goals
FedEx Long-Term Financial Goals • Increase EPS 10%–15% per year • Grow profitable revenue • Achieve 10%+ operating margin • Improve cash flows • Increase ROIC • Increase returns to shareowners
Slide 8: Positioning for Long-Term Growth
Positioning for Long-Term Growth • E-commerce, including B2B e-commerce, is increasing demand for our services • FedEx Express integrating TNT Express and continuing to transform and optimize the FedEx Express international business while modernizing its aircraft fleet and major sort facilities • Fe
Slide 9: FedEx Business Trends
FedEx Business Trends Meeting E-Commerce Demands • Year-round, seven-day-per-week U.S. residential delivery by FedEx Ground • Significantly later pick up times offered with FedEx Extra Hours Service • Widespread retail convenience network with Walgreens, Dollar General, and our own FedEx Office loca
Slide 10: 94% of people in the U.S. are within 5 miles of a FedEx hold location
94% of people in the U.S. are within 5 miles of a FedEx hold location Customers want to drop off or pick up at places convenient to their everyday lives — the FedEx retail convenience network offers nearly 60,000 U.S. locations. Now U.S. consumers can pick up their packages at more than 21,000 conve
Slide 11: Pricing Strategy: Grow Yields
Pricing Strategy: Grow Yields • Focused on long-term profitable growth • FedEx Express and FedEx Ground anticipate increasing shipping rates an average of 5.9% in January 2022 • FedEx Freight anticipates increasing rates an average of 5.9% to 7.9% in January 2022 • Additional changes to fees and sur
Slide 12: Constrained Labor Market
Constrained Labor Market • The competition for talent, particularly for frontline workers, has driven wage rates, overtime, and pay premiums higher • In addition, constrained labor markets have created widespread inefficiencies in our networks • The difficult labor market negatively affected our bot
Slide 13: FedEx Express Long-Term Opportunity
FedEx Express Long-Term Opportunity • Integration of TNT will provide growth opportunities and reduce operational costs • Improving hub automation • Modernizing air fleet for greater reliability and energy efficiency • Continuing yield management • International revenue growth
Slide 14: Aligning Synergies with TNT Integration
Aligning Synergies with Integration focused on more complex, higher value markets Improved Efficiency of Grow Revenue with Optimized Pickup and Integrated Global Staff Functions and Best-in-Class Service Delivery Operations Express Network Processes (SG&A) Portfolio
Slide 15: Milestones for Integration
Milestones for Integration EndFY20 of FY20 FY21 FY22 • European Ground • Integrating linehaul • • Expecting International final air Interoperability- and pickup-and- network phase of air Flow volume delivery operations interoperability network integration between networks in April 2022 supported by
Slide 16: FedEx Ground: Building a Better Business
FedEx Ground Building a Better Business • Superior service, innovation, and speed advantage • Three distinct services: FedEx Ground®, FedEx Home Delivery®, FedEx Ground Economy® • Flexible business model • Now operating seven-day residential delivery to virtually all of the U.S. population • FedEx G
Slide 17: Strong Portfolio of Residential Package Services
Strong Portfolio of Residential Package Services FedEx Express FedEx Ground FedEx Ground • 1–2 days transit time Home Delivery: Ground Economy: • Time-definite • 1–5 days transit time • 2–8 days transit time • MBG* • Day-definite • No MBG • Declared value up • MBG* • No declared value to $50K • Decl
Slide 18: FedEx Ground Revenue Market Share Has Grown to More Than 30%
FedEx Ground Revenue Market Share Has Grown to More Than 30% $9 0 50 % $8 0 Revenue ($ Billions) 40 % $7 0 Market Share $6 0 30 % $5 0 $4 0 20 % $3 0 $2 0 10 % $1 0 $0 0% CY98 CY99 CY00 CY01 CY02 CY03 CY04 CY05 CY06 CY07 CY08 CY09 CY10 CY11 CY12 CY13 CY14 CY15 CY16 CY17 CY18 CY19 CY20 FedEx Ground R
Slide 19: FedEx Ground Annual Revenue of $30.5B
FedEx Ground Annual Revenue of $30.5B with a CAGR of 14% Since FY01 $3 0 $2 7 Revenue ($ Billions) $2 4 $2 1 $1 8 $1 5 $1 2 $9 $6 $3 $0 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FedEx Ground Revenue Source: FedEx analysis.
Slide 20: FedEx Freight Competitive Advantages
FedEx Freight Competitive Advantages • The only nationwide LTL that offers Priority and Economy services from one network • Priority: Fastest published times of any nationwide LTL* • Focused on improving margins with a better balance of volume, pricing, and capacity • Expanding FedEx Freight Direct
Slide 21: LTL Industry Revenue Market Share
LTL Industry Revenue Market Share 30% FedEx Yellow XPO TFI* ODFL ABFS Saia 25% 20% 15% 10% 5% 0% CY04 CY05 CY06 CY07 CY08 CY09 CY10 CY11 CY12 CY13 CY14 CY15 CY16 CY17 CY18 CY19 CY20 Source: FedEx Analysis * UPS Freight acquired by TFI on April 30, 2021
Slide 22: FedEx Commits to Goal to Achieve Carbon-Neutral Operations by 2040
FedEx Commits to Goal to Achieve Carbon-Neutral Operations by 2040 Key steps toward reaching the carbon neutral goal include: Vehicle Electrification. By 2040, the entire FedEx parcel pickup and delivery fleet will be zero–emission electric vehicles Sustainable Fuels. FedEx will continue to invest i
Slide 23: Corporate Social Responsibility
Corporate Social Responsibility Environmental Impact • Since FY05, FedEx has reduced aircraft emission intensity by 27% • In FY20 alone, FedEx aircraft modernization and FedEx Fuel Sense programs saved more than 255 million gallons of fuel and avoided more than 2 million metric tons of CO2e emission
Slide 24: Corporate Social Responsibility - Awards & Recognition
Corporate Social Corporate Responsibility- Social Responsibility-Awards Awards &&Recognition Recognition • World’s Most Admired Companies 2021 - FORTUNE • This is the 21st consecutive year that FedEx has ranked among the top 20 in the FORTUNE Most Admired Companies List. • America’s Most Responsible
Slide 25: Corporate Operating Margin
Corporate Operating Margin 9.0% 8.0% 7.8% 7.5% 7.4% 7.0% 7.0% 6.5% 6.4% 6.0% 5.0% 4.5% 4.0% 3.5% 3.0% 2.0% 1.0% 0.0% FY18 FY19 FY20 FY21 GAAP Adjusted Non-GAAP reconciliations are included herein.
Slide 26: Earnings Per Share
Earnings Per Share $25.00 $20.00 $19.45 $18.17 $16.79 $15.31 $15.52 $15.00 $10.00 $9.50 $4.90 $5.00 $2.03 $0.00 FY18 FY19 FY20 FY21 GAAP Adjusted Non-GAAP reconciliations are included herein.
Slide 27: Capital Expenditures
Capital Expenditures (% of Revenues) 12.0% 10.0% 9.6% 8.5% 8.7% 8.5% 7.9% 8.0% 7.0% 6.0% 4.0% 2.0% 0.0% FY16 FY17 FY18 FY19 FY20 FY21
Slide 28: Dividends Per Share
Dividends Increased at a 5-Year CAGR of 21% $3.00 $2.60 $2.60 $2.60 $2.50 Dividends Per Share $2.00 $2.00 $1.60 $1.50 $1.00 $1.00 $0.80 $0.60 $0.48 $0.52 $0.56 $0.50 $0.40 $0.44 $0.44 $0.32 $0.36 $0.22 $0.28 $0.00 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 F
Slide 29: Explanatory Note on Non-GAAP Financial Measures
Explanatory Note on Non-GAAP Financial Measures The company reports its financial results in accordance with accounting principles generally accepted in the United States (“GAAP”). We have supplemented the reporting of our financial information determined in accordance with GAAP with certain non-GAA
Slide 30: FY21 Reconciliation for FedEx Corp.
FY21 Reconciliation for FedEx Corp. Dollars in millions, except EPS Op Op Income Net Diluted Income Margin Taxes1 Income2 EPS3 GAAP Measure $5,857 7.0% $1,443 $5,231 $19.45 Mark-to-Market Retirement Plan --- --- (281) (895) (3.33) Accounting Adjustments4 Loss on Debt Extinguishment --- --- 96 297 1.
Slide 31: FY20 Reconciliation for FedEx Corp.
FY20 Reconciliation for FedEx Corp. Dollars in millions, except EPS Op Op Income Net Diluted Income Margin Taxes1 Income2 EPS GAAP Measure $2,417 3.5% $383 $1,286 $4.90 Mark-to-Market Retirement Plan — — 211 583 2.22 Accounting Adjustment4 Goodwill And Other Asset Impairment 435 0.6% 19 416 1.58 Cha
Slide 32: FY19 Reconciliation for FedEx Corp.
FY19 Reconciliation for FedEx Corp. Dollars in millions, except EPS Op Op Income Net Diluted Income Margin3 Taxes1 Income2 EPS GAAP Measure $4,466 6.4% $115 $540 $2.03 Mark-to-Market Retirement Plan --- --- 902 2,981 11.22 Accounting Adjustment4 TNT Express Integration Expenses5 388 0.6% 74 314 1.18
Slide 33: FY18 Reconciliation for FedEx Corp.
FY18 Reconciliation for FedEx Corp. Dollars in millions, except EPS Op Op Income Net Diluted Income Margin Taxes1,3 Income2,3 EPS GAAP Measure $4,272 6.5% ($219) $4,572 $16.79 FedEx Supply Chain Goodwill and 380 0.6% 1 379 1.39 Other Asset Impairments7 TNT Express Integration Expenses5 477 0.7% 105
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 – Does not sum to total due to rounding. 4 –The MTM retirement plan