United Parcel Service, Inc. · NYSE:UPS
United Parcel Service — Q3 2022 Earnings Presentation
30 slides from United Parcel Service's earnings presentation, Oct 25, 2022
Slide 1: 3Q22 Earnings Call
3Q22 Earnings Call October 25, 2022 © 2022 United Parcel Service of America, Inc. UPS, the UPS brandmark, and the color dark brown tone are trademarks of United Parcel Service of America, Inc. All rights reserved.
Slide 2: Ken Cook, Investor Relations Officer
Ken Cook Investor Relations Officer 2
Slide 3: Speakers
UPS Speakers Carol B. Tomé Chief Executive Officer Brian Newman Chief Financial Officer © 2021 United Parcel Service of America, Inc. UPS, the UPS brandmark, and the color dark brown tone are trademarks of United Parcel Service of America, Inc. All rights reserved. 3
Slide 4: Forward-Looking Statements and Non-GAAP Reconciliations
Forward-Looking Statements and Non-GAAP Reconciliations Forward-Looking Statements This presentation and our filings with the Securities and Exchange Commission contain and work stoppages or slowdowns by our employees; results of negotiations and ratifications of in the future may contain “forward-l
Slide 5: Diluted EPS
Diluted EPS 3Q22 3Q21 $2.96 $0.03 $2.99* $3.00 $3.00 $0.06 $2.71* $2.65 $2.50 $2.50 $2.00 $2.00 $1.50 $1.50 $1.00 $1.00 $0.50 $0.50 $0.00 $0.00 3Q22 EPS Transformation & Other 3Q22 Adj. EPS* 3Q21 EPS Transformation & Other 3Q21 Adj. EPS* * Non-GAAP financial measure. See Appendix for reconciliation
Slide 6: Carol B. Tomé
Carol B. Tomé Chief Executive Officer 6
Slide 7: Thank You UPSers
Thank You UPSers Are Unstoppable
Slide 8: Consolidated Results
Consolidated Results GAAP Adjusted In $ Millions In $ Millions 3Q22 3Q21 Change 3Q22 3Q21 Change (except per share) (except per share) Total Revenue $24,161 $23,184 4.2% Total Revenue $24,161 $23,184 4.2% Operating Profit $3,113 $2,896 7.5% Operating Profit* $3,149 $2,970 6.0% Operating Margin 12.9%
Slide 9: Moving to the Next Phase of Our Strategic Framework
Moving to the Next Phase of Our Strategic Framework • Building on strong foundation of better not bigger • Moving faster to grow in our targeted market segments • Combining digital solutions with our global integrated network • Creating a powerful offering of logistics as a service © 2022 United Par
Slide 10: Customer First, People Led, Innovation Driven
Customer First, People Led, Innovation Driven • Winning in Europe on time-in-transit and visibility advantages • Continuing to win with SMBs as DAP revenue exceeded $1.6B through 3Q Customer First Net Promoter Score • Extended Independent Pilots Association and aircraft maintenance contracts • Creat
Slide 11: We Are Ready to Deliver Another Successful Peak
We Are Ready to Deliver Another Successful Peak • Industry-leading service for the last four peak seasons • Made enhancements to our peak plans: • Sped up digital hiring process, enabling qualified candidates to receive a job offer within 25 minutes • Digitized driver helper training so new hires ca
Slide 12: Reaffirming 2022 Financial Targets
Reaffirming 2022 Financial Targets • Consolidated revenue around $102B • Consolidated adjusted operating margin* about 13.7% • Adjusted return on invested capital* above 30% * Non-GAAP financial measure. See Appendix for reconciliation to GAAP financial measure. © 2022 United Parcel Service of Ameri
Slide 13: Brian Newman
Brian Newman Chief Financial Officer 13
Slide 14: Consolidated Results
Consolidated Results GAAP Adjusted In $ Millions In $ Millions 3Q22 3Q21 Change 3Q22 3Q21 Change (except per share) (except per share) Total Revenue $24,161 $23,184 4.2% Total Revenue $24,161 $23,184 4.2% Operating Profit $3,113 $2,896 7.5% Operating Profit* $3,149 $2,970 6.0% Operating Margin 12.9%
Slide 15: U.S. Domestic: 3Q Average Daily Volume Decline 1.5%
U.S. Domestic 3Q Average Daily Volume Decline 1.5% ADV growth rate improved relative to 1H22 as volume from 2Q wins entered the network Monthly B2C ADV (Y/Y) 3Q22 ADV Change (Y/Y) • B2C declined 2.2% 60% • Split was 57% B2C -1.5% vs. Last Year 20,000 30% -17 -160 19,835 -119 0% 19,539 In Thousands -
Slide 16: U.S. Domestic: 3Q Revenue Increased 8.2% to $15.4B
U.S. Domestic 3Q Revenue Increased 8.2% to $15.4B Revenue-quality efforts continue to deliver results as RPP increased 9.8% Revenue Change (Y/Y) Revenue Per Piece $12.50 +8.2% vs. Last Year $11.50 +$1.4B $15.4B $15.0 $10.50 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 In Billions -$212M $14.0 $14.2B • 3Q reve
Slide 17: U.S. Domestic: 3Q Operating Profit of $1.7B
U.S. Domestic 3Q Operating Profit of $1.7B 7th consecutive quarter of positive operating leverage Operating Profit (In Millions) • Adjusted operating expense* increased 7.0% GAAP $259 $1,666 o Wages and benefits contributed ~310 basis $1,407 points of the expense growth rate increase 3Q21 Operating
Slide 18: International: 3Q Total Average Daily Volume Down 5.2%
International 3Q Total Average Daily Volume Down 5.2% Domestic ADV down 9.4%; export ADV down 0.6% Asia Monthly ADV (Y/Y) Europe Monthly ADV (Y/Y) 35% 70% 25% 40% 15% 5% 10% -5% -20% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec -15% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2022 2021 2022 2
Slide 19: International: Generated Operating Profit of $1.0B
International Generated Operating Profit of $1.0B Remained agile and flexed our network in response to changing market conditions Operating Profit (In Millions) • Revenue per piece increased 6.4%, which included impacts from fuel, currency and GAAP $1,051 -$54 $997 a 510 basis point increase from th
Slide 20: Supply Chain Solutions: Operating Profit Growth and Margin Expansion
Supply Chain Solutions Generated Operating Profit Growth and Margin Expansion Operating Profit (In Millions) +$12 $438 $450 • Revenue of $4B, a decline of $268M year over GAAP year; included a $92M negative impact from currency 3Q21 Operating Profit Performance 32Q22 Operating Profit Operating Margi
Slide 21: Cash Flow and Dividends
Cash Flow and Dividends 3Q22 YTD Cash From 3Q22 YTD Free Cash Flow* of $8.5B $16.0 Operations of $10.8B $12.0 $14.0 $10.0 $12.0 $10.0 $8.0 In Billions In Billions $8.0 $6.0 $6.0 $4.0 $4.0 $2.0 $2.0 $0.0 $0.0 1Q YTD 2Q YTD 3Q YTD 4Q YTD 1Q YTD 2Q YTD 3Q YTD 4Q YTD CFO 2021 CFO 2022 FCF* 2021 FCF* 202
Slide 22: Reaffirming Full-Year 2022 Financial Targets
Reaffirming Full-Year 2022 Financial Targets We are remaining agile in a dynamic macro environment Expect macro environment to Full-year 2022 Outlook remain dynamic with full-year • Consolidated Financial Targets: global GDP growing 2.8% and o Revenue around $102B U.S. GDP growing 1.7% o Adjusted
Slide 23: Questions & Answers
Questions & Answers © 2022 United Parcel Service of America, Inc. UPS, the UPS brandmark, and the color dark brown tone are trademarks of United Parcel Service of America, Inc. All rights reserved. 23
Slide 24: Appendix
Appendix © 2022 United Parcel Service of America, Inc. UPS, the UPS brandmark, and the color dark brown tone are trademarks of United Parcel Service of America, Inc. All rights reserved. 24
Slide 25: Reconciliation of GAAP and Non-GAAP Financial Measures
Reconciliation of GAAP and Non-GAAP Financial Measures Non-GAAP Financial Measures; Reconciliations Pension and Postretirement Adjustments From time to time we supplement the reporting of our financial information determined under generally We recognize changes in the fair value of plan assets and n
Slide 26: Reconciliations
Reconciliations © 2022 United Parcel Service of America, Inc. UPS, the UPS brandmark, and the color dark brown tone are trademarks of United Parcel Service of America, Inc. All rights reserved. 26
Slide 27: Reconciliations
Reconciliations © 2022 United Parcel Service of America, Inc. UPS, the UPS brandmark, and the color dark brown tone are trademarks of United Parcel Service of America, Inc. All rights reserved. 27
Slide 28: Reconciliations
Reconciliations © 2022 United Parcel Service of America, Inc. UPS, the UPS brandmark, and the color dark brown tone are trademarks of United Parcel Service of America, Inc. All rights reserved. 28
Slide 29: Reconciliations
Reconciliations © 2022 United Parcel Service of America, Inc. UPS, the UPS brandmark, and the color dark brown tone are trademarks of United Parcel Service of America, Inc. All rights reserved. 29
Slide 30: Reconciliations
Reconciliations © 2022 United Parcel Service of America, Inc. UPS, the UPS brandmark, and the color dark brown tone are trademarks of United Parcel Service of America, Inc. All rights reserved. 30
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