Ryder System, Inc. · NYSE:R
Ryder System — Investor Day (June 2024)
118 slides from Ryder System's investor day presentation, Jun 13, 2024
Slide 1: 2024 Investor Day
2024 INVESTOR DAY June 13 | NYC RYDER 2024 INVESTOR DAY // SUPPLY CHAIN | DEDICATED TRANSPORTATION | FLEET MANAGEMENT SOLUTIONS
Slide 2: Welcome and Opening Remarks
Welcome and Opening Remarks Calene Candela VP, Investor Relations RYDER 2024 INVESTOR DAY // SUPPLY CHAIN | DEDICATED TRANSPORTATION | FLEET MANAGEMENT SOLUTIONS 2
Slide 3: Safe Harbor and Non-GAAP Financial Measures
Safe Harbor and Non-GAAP Financial Measures Note Regarding Forward-looking Statements: Certain statements and information included in this news release are “forward-looking statements” under the Federal Private Securities Litigation Reform Act of 1995, including our expectations regarding: our forec
Slide 4: Agenda
Agenda 8:30 am Welcome and Opening Remarks 10:20 am Dedicated Transportation Solutions: Accelerating Calene Candela Scale and Density VP, Investor Relations Steve Martin EVP, Dedicated Transportation Solutions Ryder Next Horizon: Transformation Unleashed Robert Sanchez Fleet Management Solutions: En
Slide 5: Ryder Next Horizon: Transformation Unleashed
Ryder Next Horizon: Transformation Unleashed ROBERT SANCHEZ Chairman & Chief Executive Officer RYDER 2024 INVESTOR DAY // SUPPLY CHAIN | DEDICATED TRANSPORTATION | FLEET MANAGEMENT SOLUTIONS 5
Slide 6: Video: Behind the Scenes in Daily Life
Video: Behind the Scenes in Daily Life RYDER 2024 INVESTOR DAY // SUPPLY CHAIN | DEDICATED TRANSPORTATION | FLEET MANAGEMENT SOLUTIONS 6
Slide 7: Key Messages
Key Messages Industry leader driving outperformance through the cycle with 01 complementary portfolio addressing customers' needs Achieved significant transformative milestones reflecting 02 execution of balanced growth strategy Next phase of strategy focused on accelerating profitable growth 03 sup
Slide 8: Ryder 2023 Snapshot (NYSE: R)
Ryder 2023 Snapshot (NYSE: R) DIVERSIFIED CUSTOMER BASE1 Leading Provider of Outsourced Logistics and Transportation Solutions in North America Food & Beverage 21% Retail & Consumer Goods 18% Transportation & Logistics 15% 1933 $11.8B ~47,500 ~41,000 Founded Total Employees3 Commercial Automotive 13
Slide 9: Complementary Business Segments Provide Broad Range of Value-added Solutions
Complementary Business Segments Provide Broad Range of Value-added Solutions FMS DTS SCS Vehicle leasing and rental, Drivers, routing, scheduling, Distribution / transportation maintenance, and support and administration management, dedicated services transportation, brokerage, e-commerce, and last
Slide 10: Culture Grounded in Our Vision, Mission, and Values
Culture Grounded in Our Vision, Mission, and Values VISION To perfect the supply chains that drive our economy OUR VALUES Trustworthy Integrity anchors us in everything we do. We live by MISSION our word and actions. We work together to perform our best and hold ourselves accountable. To responsibly
Slide 11: In 2019, We Announced Our Balanced Growth Strategy
In 2019, We Announced Our Balanced Growth Strategy RYDER 2024 INVESTOR DAY // SUPPLY CHAIN | DEDICATED TRANSPORTATION | FLEET MANAGEMENT SOLUTIONS 11
Slide 12: Implemented and Executed Transformative Actions
Implemented and Executed Transformative Actions De-risk and Enhance Returns Drive Long-term Optimize the Model and Free Cash Flow Profitable Growth Lowered residual value estimates; Drove value-based pricing discipline Maintained strong balance sheet reduced reliance on used vehicle across all
Slide 13: We Have Transformed
We Have Transformed 2018: Pre-transformation 2024F: Ryder Today CHANGE (∆) Freight Cycle Peak Expected Freight Cycle Trough 40% Revenue Mix 44% $8.4B FMS ~$13B +16 pts 56% SCS / DTS 60% (SCS / DTS) Comparable EPS $5.95 $11.75 – $12.50 ~2X ROE 13% 15.5% – 16.5% +250 – 350 bps SCS 3-year Revenue CAGR
Slide 14: Structural Changes Have Significantly Improved Earnings
Structural Changes Have Significantly Improved Earnings KEY EARNINGS DRIVERS Shares / Other FMS SCS / DTS $12.501 New maintenance initiative, Profitable Growth +$1.45 lease pricing, growth +$2.50 +$2.60 $5.95 2018 Comparable EPS 2024F Comparable EPS Prior Cycle Peak Expected Cycle Trough Well-Positi
Slide 15: Significant Growth Opportunities within Large Total Addressable Markets
Significant Growth Opportunities within Large Total Addressable Markets $256B $29B $20B ~18% Outsourced1 ~4% Outsourced1 ~25% Outsourced1 Supply Dedicated Fleet Chain Transportation Management Solutions Solutions Solutions $1.4T $660B $80B Addressable Market 1 Addressable Market1 Addressable Market1
Slide 16: Secular Trends Are Driving Demand for Outsourcing
Secular Trends Are Driving Demand for Outsourcing DYNAMIC LABOR INCREASING COSTS AND DISRUPTIVE TECHNOLOGIES, SUPPLY CHAINS CONSTRAINTS COMPLEXITY; GOVERNMENT OMNICHANNEL, AND INCENTIVES AND REGULATIONS ENERGY TRANSITION Focus on resilient and Labor challenges pressure Higher vehicle maintenance Aut
Slide 17: Strategy is Delivering Improved Returns and Capacity to Invest
Strategy is Delivering Improved Returns and Capacity to Invest in Innovation and Growth Further Improve Create Compelling Invest in Full-cycle Returns Value through Customer-centric and Generate Operational Excellence Innovation Profitable Growth Next Phase of Balanced Growth Strategy Builds on Tran
Slide 18: Create Compelling Value through Operational Excellence
Create Compelling Value through Operational Excellence KEY STRATEGIC INITIATIVES Continuous improvement process • New $50M multi-year maintenance cost FMS to drive maintenance and savings initiative operations efficiencies • Well-positioned to benefit from long-term SCS Leverage multi-client network
Slide 19: Investing in Customer-centric Innovation to Lead the Industry
Investing in Customer-centric Innovation to Lead the Industry SELECT CUSTOMER-FACING TECHNOLOGIES ACQUISITION SPOTLIGHT • First invested in Baton through RYDERSHARE RYDERGYDE RYDERVIEW RYDERSHIP RyderVentures in 2021; completed • Real-time visibility of • Application that manages • Leading last mile
Slide 20: Further Improve Full-cycle Returns and Generate Profitable Growth
Further Improve Full-cycle Returns and Generate Profitable Growth KEY STRATEGIC INITIATIVES Differentiate lease pricing with focus • Lease pricing full annual benefit of $125M1 expected FMS on higher return segments to be realized in 2025 Expand share of wallet within • Cross-sell co-packaging / co-
Slide 21: Clear Path to Higher Returns
Clear Path to Higher Returns +300bps +300 bpsROE ROE Low Twenties SCS / DTS e-Comm and RLM optimization, High Teens acquisition synergies, ROE flex operating structure, growth FMS New maintenance initiative, lease pricing, growth Prior Target New Target Over the Cycle Over the Cycle Increasing ROE T
Slide 22: Transformed Business Model Poised to Deliver Higher Highs
Transformed Business Model Poised to Deliver Higher Highs Exceeding Prior Peak $16.37 (2022: $16.37) Record 2022 $12.501 results include outsized UVS gains and rental CYCLE DOWNTURN CYCLE UPTURN Contractual growth UVS and rental Strategic initiatives Contractual growth Share repurchases Strategic in
Slide 23: Long-term Financial Model
Long-term Financial Model PRIOR TARGETS NEW TARGETS ROE High Teens Low Twenties Operating Revenue Growth Total Ryder HSD HSD Fleet Management MSD MSD Supply Chain LDD LDD Dedicated HSD HSD EBT as % of Operating Revenue Fleet Management LDD Low Teens Supply Chain HSD HSD Dedicated HSD HSD Leverage (D
Slide 24: Sustainability at Ryder
Sustainability at Ryder Safety, Security, and Diverse Workforce and Environmental Governance Preparedness Supplier Network • Optimizing customer supply chains • Lytx in-cab safety program resulted • Maintain pay parity for employees of • Cybersecurity program is certified to reduce costs and environ
Slide 25: Accountable and Engaged Board of Directors
Accountable and Engaged Board of Directors – Expertise and Experience Support our Long-term Vision SKILLS PROFILE C-suite Leadership 91% Business Development & M&A 91% Public Company Operations 91% Financial & Accounting 73% Robert Sanchez Robert Eck Robert Hagemann Michael Hilton Tamara Lundgren Lu
Slide 26: Cycle-tested and Execution-focused Leadership Team
Cycle-tested and Execution-focused Leadership Team T O D AY ’ S P R E S E N T E R S Robert Sanchez Karen Jones Steve Sensing Steve Martin Tom Havens John Diez Chairman & CEO EVP, CMO President, SCS & DTS EVP, DTS President, FMS EVP, CFO Joined: 1993 2013 1992 1988 1993 2002 ADDITIONAL EXECUTIVE LEAD
Slide 27: Disrupting and Leading the Industry with Practical Innovation
Disrupting and Leading the Industry with Practical Innovation Karen Jones EVP, CMO, & Head of New Product Development RYDER 2024 INVESTOR DAY // SUPPLY CHAIN | DEDICATED TRANSPORTATION | FLEET MANAGEMENT SOLUTIONS 27
Slide 28: Key Messages
Key Messages Investing in and developing emerging technologies that 01 holistically address customer needs and lead the industry Customer-centric, technology-agnostic mindset enables 02 the widest breadth of innovation Disciplined, strategic approach to innovation driving 03 long-term value RYDER 20
Slide 29: Ryder Customer Advisory Board (CAB) Programs
Ryder Customer Advisory Board (CAB) Programs Customer-centric Innovation CAB PROGRAM BACKGROUND OBJECTIVES • Launched in 2014 • Create a forum of thought leaders • 60+ Ryder customers across industries to shape our future solution development • Fortune 500 and large private companies • Preview and i
Slide 30: BUILD: Strategic Investments Built on Customer-driven Need
BUILD: Strategic Investments Built on Customer-driven Need for Innovative Solutions DIGITAL TECHNOLOGIES E-COMMERCE ASSET SHARING EV / AV BENEFITS RYDERELECTRIC+TM • Creating customer stickiness and driving incremental value to win new business (e.g., RyderShareTM helps drive ~35% of new business re
Slide 31: Video: Ryder-built Technology
Video: Ryder-built Technology RYDER 2024 INVESTOR DAY // SUPPLY CHAIN | DEDICATED TRANSPORTATION | FLEET MANAGEMENT SOLUTIONS 31
Slide 32: PARTNER: Strategic Investments Built on Customer-driven Need
PARTNER: Strategic Investments Built on Customer-driven Need for Innovative Solutions DIGITAL TECHNOLOGIES E-COMMERCE ASSET SHARING EV / AV BENEFITS RYDERELECTRIC+TM • Creating customer stickiness and driving incremental value to win new business (e.g., RyderShareTM helps drive ~35% of new business
Slide 33: Well-positioned to Assist Customers When Ready to Transition to EVs
Well-positioned to Assist Customers When Ready to Transition to EVs Launched: May 2023 FACTORS AFFECTING ADOPTION RYDER ELECTRIC + | RYDER’S TURNKEY ELECTRIC VEHICLE SOLUTION Total Cost of Transport: while light duty is relatively on par with ICE Leading the industry counterparts, heavy duty costs ~
Slide 34: BUY: Strategic Investments Built on Customer-driven Need
BUY: Strategic Investments Built on Customer-driven Need for Innovative Solutions DIGITAL TECHNOLOGIES E-COMMERCE ASSET SHARING EV / AV BENEFITS RYDERELECTRIC+TM • Creating customer stickiness and driving incremental value to win new business (e.g., RyderShareTM helps drive ~35% of new business reve
Slide 35: Ryder Freight Ecosystem: Built through Baton
Ryder Freight Ecosystem: Built through Baton (2024 – 2027 Timeline) BENEFITS Internal Facing Technology Customer Facing Technology Increasing visibility and cross-sell opportunities Operator Execution Platform across all segments Ryder TMS RyderShareTM Customer Data Trucks Drivers Capturing freight
Slide 36: Opportunity: Prudent, Strategic Approach to AI
Opportunity: Prudent, Strategic Approach to AI BUSINESS PROCESS CUSTOMER FACING IMPROVEMENT APPS PRODUCT DEVELOPMENT IT and Operations evaluating use cases and off-the- Incorporation of AI into our technology products to shelf applications as well as in-house development to provide unparalleled valu
Slide 37: RyderVentures: Our Goal is to Invest $50M Over 5 Years
RyderVentures: Our Goal is to Invest $50M Over 5 Years… APPROACH Invested in 15 companies to date Strategic-focused investor vs. financial-only investor ‘Seed’ through ‘C’ round investments RYDERVENTURES Early test bed to pilot technology and prove business models – early design partner Take key lea
Slide 38: Key Takeaways
Key Takeaways 01 02 03 RYDERELECTRIC+TM Investing in and Customer-centric, Disciplined, strategic developing emerging technology-agnostic approach to technologies that mindset enables the innovation driving holistically address widest breadth of long-term value RYDEROPSBOXTM customer needs and innov
Slide 39: Supply Chain Solutions
Supply Chain Solutions Perfecting Supply Chains with Vertical Expertise and Integrated Solutions STEVE SENSING President, Supply Chain Solutions & Dedicated Transportation Solutions RYDER 2024 INVESTOR DAY // SUPPLY CHAIN | DEDICATED TRANSPORTATION | FLEET MANAGEMENT SOLUTIONS 39
Slide 40: Supply Chain Solutions Key Messages
Supply Chain Solutions Key Messages Strengthening market leadership as provider of integrated 01 logistics solutions from port-to-door across North America Capturing large and growing market opportunity through 02 deep industry expertise supported by data-driven insights Operational excellence lever
Slide 41: Supply Chain Solutions Snapshot
Supply Chain Solutions Snapshot 2023 PERFORMANCE $4.9B $3.6B 6.4% $375M Total Revenue Operating Revenue EBT as % of Comparable EBITDA Operating Revenue 2023 OPERATING STATISTICS >100M+ sq. ft. $10B ~13,800 +900 Warehouse Footprint Freight Under Management1 Total Vehicles Customer Accounts PORT-TO-DO
Slide 42: Supply Chain Solutions Transformation Unleashed
Supply Chain Solutions Transformation Unleashed KEY MILESTONES SINCE 2019 Focused on disciplined Adjusted contract terms to 1 Balanced and diversified revenue mix 2 value-based pricing and facilitate quicker and more enhanced contracts efficient cost recovery 26% Increased customer Continuous im
Slide 43: Significant Market Opportunity Enabling Robust Growth
Significant Market Opportunity Enabling Robust Growth $256B STRENGTHENING CAPABILITIES WITHIN HIGH PERFORMING ~18% Outsourced1 VERTICALS THROUGH TARGETED ACQUISITIONS CONTINUED INVESTMENT IN CUSTOMER-FACING TECHNOLOGY Supply Chain Solutions CAPTURING OPPORTUNITY FROM SECULAR TRENDS FAVORING OUTSOURC
Slide 44: Supply Chain Solutions Sustainable Competitive Advantages
Supply Chain Solutions Sustainable Competitive Advantages DEEP VERTICAL NORTH AMERICA FOCUSED ENABLING TECHNOLOGIES AND EXPERTISE INTEGRATED SUPPLY CHAIN SOLUTIONS CONTINUOUS IMPROVEMENT • Differentiated knowledge and expertise • Seamless customer service across N.A. • Visibility and IT capabilities
Slide 45: Integrated Port-to-Door Solutions across Key Verticals
Integrated Port-to-Door Solutions across Key Verticals ~70% of SCS Revenue from Customers Leveraging Multiple Port-to-Door Solutions1 CORE SUPPLY CHAIN SOLUTIONS CAPABILITIES ENHANCED THROUGH STRATEGIC ACQUISITIONS Transportation Dedicated Distribution Value-added e-Commerce Last Mile Management Tra
Slide 46: Expanding CPG Vertical Wallet Share through Recent IFS Acquisition
Expanding CPG Vertical Wallet Share through Recent IFS Acquisition BACKGROUND BACKGROUND IFS OFFERINGS DELIVERING VALUE • Identified need of top customers • Proven model in food and non-food products for co-packaging and co- • 15 multi-client and dedicated operations Customer Value manufacturing ser
Slide 47: Case Study: Lead Logistics Provider for General Motors
Case Study: Lead Logistics Provider for General Motors BACKGROUND UNIQUE OFFERING RYDER VALUE • Need for a leading logistics Full suite of value-add supply chain and provider with supply chain and manufacturing support services • Proprietary technology provides best- manufacturing services to suppor
Slide 48: Case Study: Quenching a Thirst for Supply Chain Visibility
Case Study: Quenching a Thirst for Supply Chain Visibility and Optimization BACKGROUND UNIQUE OFFERING RYDER VALUE • Faced with challenges of an Seamlessly implemented RyderShareTM real- evolving beverage landscape, Pabst time visibility tool during peak season • Seamless start-up and operational Br
Slide 49: Case Study: Omnichannel End-to-End Fulfillment at Stance Socks
Case Study: Omnichannel End-to-End Fulfillment at Stance Socks BACKGROUND UNIQUE OFFERING RYDER VALUE • Growing apparel brand needed • With established service level assistance with demand planning agreements, SOPs, and continuous improvement initiatives, Ryder has • Ability to offer port-to-door •
Slide 50: Supply Chain Solutions Strategic Initiatives
Supply Chain Solutions Strategic Initiatives Create Compelling • Leverage multi-client network Value through • Continuous improvement mindset leverages value-based Operational Excellence automation, robotics, and AI to improve efficiencies Invest in • Continue to invest in customer-facing technology
Slide 51: Continuous Improvement Philosophy to Accelerate Operational Excellence
Continuous Improvement Philosophy to Accelerate Operational Excellence OUR CULTURE OF CONTINOUS START IMPROVEMENT WITHIN SUPPLY CHAIN Recognize Collaborative Customer Opportunity Design Solution Implement Solution with SOLUTIONS… Startup Effectiveness Team • Encourage employee suggestions through “t
Slide 52: Video: BJC Supply Chain Transformation
Video: BJC Supply Chain Transformation RYDER 2024 INVESTOR DAY // SUPPLY CHAIN | DEDICATED TRANSPORTATION | FLEET MANAGEMENT SOLUTIONS 52
Slide 53: Supply Chain Solutions: Key Takeaways
Supply Chain Solutions: Key Takeaways 01 02 03 04 Strengthening market Capturing large and Operational excellence Strengthening leadership as provider growing market leverages data analytics, capabilities in growing of integrated logistics opportunity through value-based automation verticals through
Slide 54: Q&A
Q&A RYDER 2024 INVESTOR DAY // SUPPLY CHAIN | DEDICATED TRANSPORTATION | FLEET MANAGEMENT SOLUTIONS 54
Slide 55: Break
BREAK RYDER 2024 INVESTOR DAY // SUPPLY CHAIN | DEDICATED TRANSPORTATION | FLEET MANAGEMENT SOLUTIONS 55
Slide 56: Dedicated Transportation Solutions
Dedicated Transportation Solutions Accelerating Scale and Density STEVE MARTIN EVP, Dedicated Transportation Solutions RYDER 2024 INVESTOR DAY // SUPPLY CHAIN | DEDICATED TRANSPORTATION | FLEET MANAGEMENT SOLUTIONS 56
Slide 57: Dedicated Transportation Solutions Key Messages
Dedicated Transportation Solutions Key Messages Strengthened position as a leading provider of dedicated 01 transportation solutions through Cardinal acquisition Acquisition integration is on track with 02 meaningful synergies expected Drive operational efficiencies by leveraging increased scale 03
Slide 58: Dedicated Transportation Solutions Snapshot
Dedicated Transportation Solutions Snapshot 2023 PERFORMANCE $1.8B $1.3B 9.3% $121M Total Revenue Operating Revenue EBT as % of Comparable EBITDA Operating Revenue DEDICATED TRANSPORTATION SOLUTIONS + + = ChoiceLease Vehicles and Professional Drivers Technology, Visibility, Dedicated Maintenance and
Slide 59: Dedicated Transportation Solutions Transformation Unleashed
Dedicated Transportation Solutions Transformation Unleashed KEY MILESTONES SINCE 2019 1 2 3 4 Added scale and density to Improved quality of portfolio Captured significant upselling Invested in industry-leading accelerate profitable growth through enhanced contracts opportunities and maintenance tec
Slide 60: Significant Growth Opportunity from Large, Non-outsourced Private Fleet Market
Significant Growth Opportunity from Large, Non-outsourced Private Fleet Market $29B BUILDING FOUNDATION TO ACCELERATE PROFITABLE GROWTH ~4% Outsourced1 • Maintained pricing discipline and optimized contracts through customer portfolio management Dedicated • Focused approach to building scale / densi
Slide 61: Dedicated Transportation Solutions Sustainable Competitive Advantages
Dedicated Transportation Solutions Sustainable Competitive Advantages FMS OPERATIONAL DRIVER LEADING-EDGE CUSTOMER SYNERGY EXCELLENCE RETENTION TECHNOLOGIES • Sales, purchasing power, • Recognized safety programs • 100% company drivers, • 100+ logistics engineers; and asset management • Exceptional
Slide 62: Cardinal Acquisition Completed in February 2024
Cardinal Acquisition Completed in February 2024 Ryder + Cardinal’s National Footprint Expected Results HSD Synergies expected to return FY25 EBT% back EBT% to HSD target $40M – Expected annual $60M savings in 2026 +$1B Expected to add ~$1B in annualized total revenue 14,000 11,900 700+ and ~$800M in
Slide 63: Cardinal Acquisition Integration
Cardinal Acquisition Integration STRATEGIC BENEFITS EXPECTED SYNERGIES • Adds scale and density in our existing dedicated business driving operating efficiencies and MAINTENANCE Transition all vehicles to FMS platform – complete 1H24 delivering better value • Highly diversified portfolio serving lon
Slide 64: Dedicated Transportation Solutions Large, Diversified Customer Base
Dedicated Transportation Solutions Large, Diversified Customer Base 90% >50% ~50% Customer Retention Rate 1 Sales Captured through FMS Upselling of New Accounts Were Private Fleet Conversions CUSTOMER COUNT BY INDUSTRY2 SELECT CUSTOMERS Industrial 25% Retail 23% • Remain diversified within CPG 13% r
Slide 65: Video: Compelling Value from Outsourcing Private Fleets
Video: Compelling Value from Outsourcing Private Fleets RYDER 2024 INVESTOR DAY // SUPPLY CHAIN | DEDICATED TRANSPORTATION | FLEET MANAGEMENT SOLUTIONS 65
Slide 66: Dedicated Transportation Solutions Strategic Initiatives
Dedicated Transportation Solutions Strategic Initiatives Create Compelling • Deploy Flex operating structure Value through Operational Excellence • Leverage Brokerage to enhance Dedicated customer freight solutions • Leverage insights from RyderShareTM and data analytics to drive Invest in continuou
Slide 67: Ryder Flex Transforms DTS Operating Structure
Ryder Flex Transforms DTS Operating Structure START FEATURES Recognize Evaluate and Research and Ideate • New Baton proprietary technology for customer and Opportunity Define Problem Gauge Benefit Solutions regional optimization • Establish optimal mix of centralized and on-site operations Moving fr
Slide 68: Dedicated Transportation Solutions: Key Takeaways
Dedicated Transportation Solutions: Key Takeaways 01 02 03 04 Strengthened position as Acquisition integration is Drive operational Well-positioned to a leading provider of on track with meaningful efficiencies by leveraging continue to drive dedicated synergies expected increased scale and profitab
Slide 69: Fleet Management Solutions
Fleet Management Solutions Enhancing Returns and the Customer Experience TOM HAVENS President, Fleet Management Solutions RYDER 2024 INVESTOR DAY // SUPPLY CHAIN | DEDICATED TRANSPORTATION | FLEET MANAGEMENT SOLUTIONS 69
Slide 70: Fleet Management Solutions Key Messages
Fleet Management Solutions Key Messages Strong execution through the cycle, well-positioned for 01 profitable growth, and to benefit from cycle upturn Enhancing returns through maintenance initiatives and 02 pricing discipline Improve customer experience through operational 03 excellence and technol
Slide 71: Fleet Management Solutions Snapshot
Fleet Management Solutions Snapshot 2023 PERFORMANCE $5.9B $5.1B $665M Total Revenue Operating Revenue EBT 2023 OPERATING STATISTICS ~250K ~13K ~4,800 ~760 Total Vehicles Contractual Customers Technicians Maintenance Shops SelectCare PRODUCT PORTFOLIO 14% Contractual Providing Outsourced Transportat
Slide 72: Fleet Management Solutions Transformation Unleashed
Fleet Management Solutions Transformation Unleashed KEY MILESTONES SINCE 2019 1 2 3 4 Transformed maintenance Executed price segmentation Expanded Used Vehicle Sales Implemented our enhanced operating model and initiatives to deliver higher retail capacity to deliver higher asset management playbook
Slide 73: Fleet Management Solutions Large, Diversified Customer Base and Fleet Mix
Fleet Management Solutions Large, Diversified Customer Base and Fleet Mix CONTRACTUAL SELECT CONTRACTUAL ~13K REVENUE BASE CUSTOMERS FLEET MIX1 Contractual Customers 19% 8% 24% 21% 38% ~90% Customer Retention Rate 57% 33% <2% 2023 Revenue Largest Customer Customers by Fleet Count: Tractors Trailers
Slide 74: Large Addressable FMS Market to Achieve Growth Targets
Large Addressable FMS Market to Achieve Growth Targets WELL-POSITIONED TO CAPTURE GROWTH FROM $20B SECULAR OUTSOURCING TRENDS ~25% Outsourced1 Fleet Management INCREASED VEHICLE DEMAND FOR TECHNICIAN / Solutions COST AND MAINTENANCE DIGITIZATION LABOR SHORTAGES COMPLEXITY $80B Addressable Market1 GO
Slide 75: Fleet Management Solutions Sustainable Competitive Advantages
Fleet Management Solutions Sustainable Competitive Advantages Comprehensive Capabilities Span Full Spectrum of Fleet Transportation Needs NETWORK SCALE – DEEP MAINTENANCE CUSTOMER RISK DIGITAL PRODUCTS AND HIGH ENTRY BARRIER EXPERTISE MITIGATION FLEXIBLE SERVICES • ~760 maintenance shops • Best-in-c
Slide 76: Fleet Management Solutions Strategic Initiatives
Fleet Management Solutions Strategic Initiatives • Maintenance continuous improvement – targeting incremental Create Compelling $50M savings Value through Operational Excellence • Proactive asset management – preparing for cycle upturn and emissions pre-buy Invest in Customer-centric • Invest in tec
Slide 77: Leveraging Continuous Improvement to Enhance Returns
Leveraging Continuous Improvement to Enhance Returns START APPLYING CONTINOUS IMPROVEMENT Recognize Evaluate and Research and Ideate WITHIN FLEET MANAGEMENT SOLUTIONS… Opportunity Define Problem Gauge Benefit Solutions • Clear toll-gate approach structured to mitigate risk and assure business value
Slide 78: Video: Driving Operational Excellence in Maintenance
Video: Driving Operational Excellence in Maintenance RYDER 2024 INVESTOR DAY // SUPPLY CHAIN | DEDICATED TRANSPORTATION | FLEET MANAGEMENT SOLUTIONS 78
Slide 79: In 2022, We Unveiled an Enhanced Asset Management Playbook
In 2022, We Unveiled an Enhanced Asset Management Playbook… STRENGTHENING FREIGHT CYCLE WEAKENING DEMAND PLAYBOOK DEMAND PLAYBOOK • Drive profitable lease sales • Extend lease contracts • Invest rental growth capital in truck • Redeploy rental vehicles to lease, classes dedicated, and supply chain •
Slide 80: Upcoming Pre-buy Cycle Expected to Provide Strategic Growth Opportunities
Upcoming Pre-buy Cycle Expected to Provide Strategic Growth Opportunities BACKGROUND PRE-BUY CREATES OPPORTUNITIES • New EPA Emission standards for heavy duty vehicles set to take effect in 2027 • Lease: Securing new OEM production provides • New compliant vehicles are expected to have a significant
Slide 81: Technology Spotlight: RyderGyde
Technology Spotlight: RYDERGYDE Industry-leading fleet app that allows customers to manage all aspects of a fleet with seamless interaction RYDERGYDE Connecting Customers with Ryder Fleet Manager Vehicle Driver Shop CUSTOMER VALUE INTERNAL EFFICIENCIES ~9,000 Current Customers, ~65,000 Users Improve
Slide 82: Segmented Lease Pricing and Focus on Higher Return Vehicles
Segmented Lease Pricing and Focus on Higher Return Vehicles % OF POWER PORTFOLIO RENEWED SEGMENTED PRICING IS IMPROVING UNDER NEW PRICING MODEL RETURNS AND SHIFTING FLEET MIX TO 100% HIGHER RETURN VEHICLES 80% • Rolled out new lease pricing segmentation in 2018; 80% of power portfolio completed as o
Slide 83: Fleet Management Solutions Key Takeaways
Fleet Management Solutions Key Takeaways 01 02 03 Strong execution Enhancing returns Improve customer through the cycle, well- through maintenance experience through positioned for profitable initiatives and pricing operational excellence growth, and to benefit discipline and technology to from cycl
Slide 84: Clear Financial Strategy to Deliver Enhanced Returns
Clear Financial Strategy to Deliver Enhanced Returns John Diez EVP & Chief Financial Officer RYDER 2024 INVESTOR DAY // SUPPLY CHAIN | DEDICATED TRANSPORTATION | FLEET MANAGEMENT SOLUTIONS 84
Slide 85: Financial Key Messages
Financial Key Messages Above-market returns delivered to shareholders 01 reflecting strategy execution Outperformance expected to accelerate based on enhanced 02 quality of contractual portfolio and benefits from cycle upturn 03 Increasing long-term ROE target Robust balance sheet capacity to invest
Slide 86: Demonstrated Execution Resulted in Transformed Business Model
Demonstrated Execution Resulted in Transformed Business Model FMS EBT % REVENUE MIX SHIFT SCS / DTS EARNINGS ROE Improved and Growing SCS and DTS SCS / DTS Growth Bolstering Record De-risked Model Contribution Contractual Earnings Returns 2018 2023 SCS / DTS Earnings ($M) 2023 19% 13% $352 2022 29%
Slide 87: A Resilient, Diversified, and Higher-performing Business
A Resilient, Diversified, and Higher-performing Business FOCUS ON OPERATIONAL EXCELLENCE TOTAL REVENUE ($B) COMPARABLE EPS YIELDS SIGNIFICANT RESULTS Revenue growth across Execution on margin expansion all three segments initiatives and growth Capitalize on secular trends Higher recurring revenue $1
Slide 88: Raised Returns by Upgrading Lease Portfolio
Raised Returns by Upgrading Lease Portfolio CHOICELEASE MARGIN STRATEGIC BENEFITS • Mostly long-term leases of 4 to 7 years 28% Execution on ChoiceLease margin • De-risked pricing through lower expansion and growth initiatives residual value estimates +19% ChoiceLease Revenue • Differentiated and se
Slide 89: Reaffirming 2024 Outlook
Reaffirming 2024 Outlook MARKET ASSUMPTIONS 2024 FORECAST • Muted macroeconomic growth Operating Revenue Growth • Freight conditions expected to gradually ~10% improve in 2H24 • Secular trends continue to favor Comparable EPS $11.75 - $12.50 outsourcing • Class 8 U.S. tractor production down 25%; co
Slide 90: Downside Risk Low as We Approach Expected End of Freight Recession
Downside Risk Low as We Approach Expected End of Freight Recession Historical Sales Price as % of Original Cost and Current Residual Value Estimates TRUCK RESIDUAL INDEX1 TRACTOR RESIDUAL INDEX1 185 185 165 165 145 145 125 125 105 105 85 85 65 Residual 65 Residual 45 Estimate for 45 Estimate for Acc
Slide 91: Raising ROE Target to Low 20s Over Freight Cycle
Raising ROE Target to Low 20s Over Freight Cycle CLEAR PATH TO ACHIEVE HIGHER RETURNS 30% • New multi-year maintenance cost- 25% savings initiative 20% • Incremental benefits from enhanced NEW TARGET pricing of new and renewed leases 15% PRIOR TARGET Low Twenties High Teens • Profitable contractual
Slide 92: Strong Visibility to Higher Returns
Strong Visibility to Higher Returns +300bps +300 bpsROE ROE Low Twenties SCS / DTS e-Comm and RLM optimization, High Teens acquisition synergies, ROE flex operating structure, growth FMS New maintenance initiative, lease pricing, growth Prior Target New Target Over the Cycle Over the Cycle Ongoing E
Slide 93: Favorably Positioned for Cycle Upturn
Favorably Positioned for Cycle Upturn UPTURN CONDITIONS KEY OPPORTUNITIES • Grow rental fleet to capitalize on Improved freight market increased demand • UVS gains above normalized levels FMS Pre-buy activity ahead of 2027 • Higher ChoiceLease sales EPA engine technology change • Higher UVS proceeds
Slide 94: Earnings Power Expected to Create Capacity to Grow Further
Earnings Power Expected to Create Capacity to Grow Further 2024F-2026F Invest in Growth CAPITAL DEPLOYMENT CAPACITY1 • Invest in our business at attractive returns – lease and rental fleet growth $13B - $14B – Cost discipline and sustained lease pricing expected to increase cash generation Cash from
Slide 95: Strong Fundamentals Against Peers
Strong Fundamentals Against Peers 23% 16% 20% 20.8x 20% 7% 6% 15.6x 5% 14% 13% 11% 9.7x 3% 3% TSR 5-year Average Revenue 5-year CAGR EBT 5-year CAGR1 ROE1 NTM P/E Annualized Ryder S&P 400 Value S&P 400 Transportation All data based on information sourced from CapIQ Note: 5-year defined as 2018-2023.
Slide 96: Financial Key Takeaways
Financial Key Takeaways 01 02 03 04 Above-market returns Outperformance Increasing long-term Robust balance sheet delivered to expected to accelerate ROE target capacity to invest in shareholders reflecting based on enhanced growth and return strategy execution quality of contractual capital to shar
Slide 97: Ryder Next Horizon: Invest with Us
Ryder Next Horizon: Invest with Us ROBERT SANCHEZ Chairman & Chief Executive Officer RYDER 2024 INVESTOR DAY // SUPPLY CHAIN | DEDICATED TRANSPORTATION | FLEET MANAGEMENT SOLUTIONS 97
Slide 98: Why Invest in Ryder
Why Invest in Ryder NEW TARGETS Industry leader driving outperformance 01 through the cycle with complementary portfolio addressing customers' needs ROE Low Twenties Operating Revenue Growth Total Ryder HSD Achieved significant transformative 02 milestones reflecting execution of balanced growth str
Slide 99: Q&A Session
Q&A Session RYDER 2024 INVESTOR DAY // SUPPLY CHAIN | DEDICATED TRANSPORTATION | FLEET MANAGEMENT SOLUTIONS 99
Slide 100: Solutions Showcase
Solutions Showcase Expanded SCS Capabilities RyderShare Darin Cooprider E.J. Smith SVP, Consumer Packaged Goods Group Director Warehouse Automation & Technology FMS Technology: RyderGyde & RyderElectric+ Gary Allen Jason Leon VP, Supply Chain Excellence VP, Chief Technology & Product Officer Nearsho
Slide 101: Appendix
Appendix RYDER 2024 INVESTOR DAY // SUPPLY CHAIN | DEDICATED TRANSPORTATION | FLEET MANAGEMENT SOLUTIONS 101
Slide 102: Non-GAAP Reconciliations
Non-GAAP Reconciliations RYDER 2024 INVESTOR DAY // SUPPLY CHAIN | DEDICATED TRANSPORTATION | FLEET MANAGEMENT SOLUTIONS 102
Slide 103: Comparable EPS Reconciliation
Comparable EPS Reconciliation Full Year 2024 Full Year 2018 Full Year 2022 Full Year 2023 Forecast EPS from continuing operations (GAAP) $5.43 $16.96 $8.73 $10.95 – $11.70 Non-operating pension costs, net 0.09 0.14 0.68 0.74 Restructuring and other, net 0.08 – – – FMS U.K. exit – (1.61) (0.40) – Cur
Slide 104: Adj. ROE Reconciliation
Adj. ROE Reconciliation1 ($M) 2013 2014 2015 2016 2017 2018 Net earnings $238 $218 $305 $263 $720 $285 Other items impacting comparability — 115 18 13 24 22 Tax impact 1 (2) (44) (7) (5) (535) 2 Adjusted net earnings $236 $289 $315 $271 $209 $308 Average total shareholders’ equity $1,594 $1,926 $1,8
Slide 105: Adj. ROE Reconciliation (Cont'd)
Adj. ROE Reconciliation1 (Cont’d) 2024 2019 2020 2021 2022 2023 ($M) Forecast Net earnings $(24) $(122) $519 $867 $406 $495 Other items impacting comparability 38 90 (10) (83) 157 5 Tax impact 1 (6) 3 7 46 8 (5) Adjusted net earnings $8 $(29) $516 $830 $571 $495 Average total shareholders’ equity $2
Slide 106: Supply Chain Solutions (SCS)
Supply Chain Solutions (SCS) FULL YEAR ($M) Revenue 2023 Omnichannel retail $1,207 Automotive 1,061 Consumer packaged goods 926 Industrial and other 431 SCS Operating Revenue 1 3,625 Subcontracted Transportation and Fuel 1,250 SCS Total Revenue $4,875 Earnings Before Tax (EBT) SCS Earnings Before Ta
Slide 107: Dedicated Transportation Solutions (DTS)
Dedicated Transportation Solutions (DTS) FULL YEAR ($M) Revenue 2023 DTS Operating Revenue1 $1,298 Subcontracted Transportation and Fuel 487 DTS Total Revenue $1,785 Earnings Before Tax (EBT) SCS Earnings Before Tax $121 SCS EBT as a % of SCS Total Revenue 6.8 % SCS EBT as a % of SCS Operating Reven
Slide 108: Comparable Segment EBITDA
Comparable Segment EBITDA FOURTH QUARTER ($M) 2023 YTD SCS DTS Earnings before income tax $231 $121 Interest expense / (income) 8 (3) Depreciation 1 136 3 Used vehicle sales, net1 — — Comparable Segment EBITDA 2 $375 $121 Note: Amounts may not be additive due to rounding. Segment EBITDA excludes eli
Slide 109: Fleet Management Solutions (FMS)
Fleet Management Solutions (FMS) FULL YEAR ($M) Revenue 2023 2018 ChoiceLease $3,181 $2,832 Commercial Rental 1,178 961 SelectCare and other 694 590 FMS Europe — — FMS Operating Revenue 1 5,053 4,383 Fuel Services Revenue 2 877 876 FMS Total Revenue $5,930 $5,259 Earnings Before Tax (EBT)3 FMS Earni
Slide 110: Operating Revenue Growth
Operating Revenue Growth 2023 OPERATING REVENUE GROWTH RECONCILIATION ($M) 2023 2022 Change Total Revenue $11,783 $12,011 (2) % Subcontracted Transportation and Fuel (2,286) (2,731) (16) % Operating Revenue 1 $9,497 $9,280 2 % 2024 OPERATING REVENUE GROWTH RECONCILIATION ($M) 2024 Forecast 2023 Chan
Slide 111: Cash Flow Reconciliation
Cash Flow Reconciliation ($M) 2023 2024 Forecast Net Cash Provided by Operating Activities from Continuing Operations $2,353 $2,400 Proceeds from Sales (Primarily Revenue Earning Equipment) 1 827 600 Other, net 1 – – Total Cash Generated2 3,180 3,000 Purchases of Property and Revenue Earning Equipme
Slide 112: Speaker Bios
Speaker Bios RYDER 2024 INVESTOR DAY // SUPPLY CHAIN | DEDICATED TRANSPORTATION | FLEET MANAGEMENT SOLUTIONS 112
Slide 113: Robert Sanchez
Robert E. Sanchez is chairman and chief executive officer of Ryder System, Inc. (NYSE: R), a leading supply chain, dedicated transportation, and commercial fleet management solutions company. He was named CEO in January 2013 and chairman of the board in May 2013. Over the course of more than 30 year
Slide 114: Karen Jones
Karen Jones is executive vice president, chief marketing officer (CMO), and head of new product development for Ryder System, Inc., a leading supply chain, dedicated transportation, and commercial fleet management solutions company, and a member of Ryder’s executive leadership team. As CMO, she is r
Slide 115: Steve Sensing
Steve Sensing is president of Supply Chain Solutions (SCS) and Dedicated Transportation Solutions (DTS) at Ryder System, Inc., a leading supply chain, dedicated transportation, and fleet management solutions company. In this role, Mr. Sensing is responsible for the management, operations, sales, and
Slide 116: Steve Martin
Steve W. Martin is executive vice president of Dedicated Transportation Solutions (DTS) for Ryder System, Inc., a leading supply chain, dedicated transportation, and fleet management solutions company. In this role, Mr. Martin is responsible for the strategic direction, customer satisfaction, growth
Slide 117: Tom Havens
Tom Havens is president of Fleet Management Solutions (FMS) for Ryder System, Inc., a leading supply chain, dedicated transportation, and fleet management solutions company. In this role, Mr. Havens leads all areas of business operations for the company's FMS business providing full-service leasing,
Slide 118: John Diez
John Diez is executive vice president and chief financial officer (CFO) for Ryder System, Inc., a leading supply chain, dedicated transportation, and fleet management solutions company. He is responsible for Ryder’s financial management functions, including finance and accounting, treasury, tax, aud