Werner Enterprises, Inc. · NASDAQ:WERN
Werner Enterprises — 2013 Global Transportation Conference
25 slides from Werner Enterprises's conference presentation, May 15, 2013
Slide 1: Werner Enterprises 2013 Global Transportation Conference
Werner Enterprises 2013 Global Transportation Conference May 15, 2013
Slide 2: Disclosure Statement
DISCLOSURE STATEMENT This presentation includes forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on Werner Enterprises’ current plans, and are not guarantees of future performance. They are subject to risk and uncertai
Slide 3: About Werner Enterprises
ABOUT WERNER ENTERPRISES H Premium Truckload Transportation and Logistics Services Provider 2012 Revenue: $2.0 Billion 2012 Net Income: $103 Million NASDAQ: WERN Market cap: $1.7 Billion 2012 Quest for Quality Multiple Award Winner in Truckload and 3PL Logistics 2 2
Slide 4: The Path of Werner Progress
THE PATH OF WERNER PROGRESS 2003 2009 • Brokerage and • Safety improvement initiative begins Intermodal expansion • Australia launch 2007 1956 1998 • LH fleet reduction • Founded by • First to install C.L. Werner electronic driver logs (EOBR) 1986 • IPO 2012 • $103M earnings (record high to date) 20
Slide 5: Revenue Sources
REVENUE SOURCES Vertical: 60% 49% 51% 50% % of Revenues* 50% 40% Retail/CP 30% 26% 24% 24% Grocery Products 17% 16% Manuf./Industrial 20% 14% 8% 9% 12% Logistics/Other 10% 0% 2010 2011 2012 * top 50 customers Customers: 100% 80% 74% 74% 73% % of Revenues 60% 60% 61% Top 5 60% 40% 40% Top 10 40% 40%
Slide 6: Domestic Freight Market: Market Share & Growth Opportunities
DOMESTIC FREIGHT MARKET: MARKET SHARE & GROWTH OPPORTUNITIES U.S. Freight Market Revenues in billions of $* Werner Enterprises Other (Pipeline, Air, Water) Growth Opportunities $73B Rail intermodal, 10% $300 $280B $15B $277B 2% Truckload, $280B $250 Rail carload, 37% $56B Revenue in billions 8% $200
Slide 7: Revenue Profile
REVENUE PROFILE Goal 1Q13 • Freight Management • Brokerage • Intermodal • Cross Border 1/3 28%* Asset-Light • Global Logistics LOGISTICS Van DEDICATED 1/3 38% Temperature Flatbed Controlled Asset Medium / Long Haul Regional Fleets ONE-WAY TRUCKLOAD 1/3 34% Network Temperature Team Werner Optimizatio
Slide 8: Freight Market Update
FREIGHT MARKET UPDATE ONE-WAY TRUCKLOAD 8 7
Slide 9: Comprehensive Solutions
COMPREHENSIVE SOLUTIONS Freight Management Freight Movement Global Implementation Technological Advantages Werner provides With an asset-backed Providing door-to-door Sophisticated complete 3PL supply network of 7,090 services for technology tools chain solutions across trucks, 9,500 alliance compan
Slide 10: Fuel Price Trends
FUEL PRICE TRENDS $5.00 1Q 2Q 3Q 4Q $4.80 $4.60 $4.40 $4.20 Price Per Gallon (in $) $4.00 $3.80 $3.60 $3.40 $3.20 $3.00 $2.80 $2.60 $2.40 $2.20 $2.00 $1.80 $1.60 $1.40 $1.20 2009 2010 2011 2012 2013 *Dept. of Energy (DOE) fuel price survey (Nat'l avg.) of truck stops used by shippers/carriers for bi
Slide 11: Green Initiatives
GREEN INITIATIVES Werner Enterprises is a SmartWaySM Transport partner. SmartWay is a collaboration between the EPA and the freight industry, to increase energy efficiency and reduce air pollution. Werner has earned a Shipper Index Factor score (SIF) of 1.25, the highest possible score. Fuel Efficie
Slide 12: Werner Safety Improvements
WERN SAFETY IMPROVEMENTS INS/CLAIMS % of REVENUES* ACCIDENTS PER MM 8% 15 27% reduction 2007 to 2012 7.3% 14 7% 6.6% 13 11.9 6.3% 12 11.1 % of Tkg Revs (net of FSC) 6% 5.4% 11 10.1 5.2% 5.0% 10 9.0 8.7 5% 9 8.4 8 4% 7 6 3% 5 4 2% 3 2 1% 1 0% 0 2007 2008 2009 2010 2011 2012 2007 2008 2009 2010 2011 2
Slide 13: Regulatory – HOS and EOBR
REGULATORY – HOS AND EOBR HOS impact Utilization decrease per tractor in the market The FMCSA announced various changes on shippers effective February 2012, with a compliance date of July 2013. Decreased driver wage potential Primary rule changes 34 hour restarts will Decreases capacity, increases t
Slide 14: Supply - Capacity
SUPPLY - CAPACITY Total Public Truckload Fleet Capacity 54,000 49,000 Including owner 44,000 operators, capacity at public fleets is 39,000 nearly 20 percent below peak 4Q06 levels 34,000 29,000 24,000 1Q04 2Q04 3Q04 4Q04 1Q05 2Q05 3Q05 4Q05 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q0
Slide 15: Supply – Aging Fleets
SUPPLY – AGING FLEETS U.S. Class 8 Trucks Average Age 7 Age in Years 6.5 6 5.5 5 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Class 8 Tractor Maintenance Expense Sources: ACT Research Co. and Wards 14
Slide 16: Driver Market
DRIVER MARKET Driver Wages Relative to Food Prep Workers “…to attract the higher share of workers needed for the 10 year growth projection, the trucking industry must return to the wage position that MARKET DRIVER prevailed in the 1990s.” - ATA 2010 U.S. Census Driver Age Profiles “Roughly 25 percen
Slide 17: Cash Flow and Cap Ex
CASH FLOW AND CAP EX $300 * $250 * ** ** Millions of Dollars $200 $150 $150M $100 $100M $50 $0 al 00 01 02 03 04 05 06 07 08 09 10 11 20 12 go 20 20 20 20 20 20 20 20 20 20 20 20 20 13 Cash Flow from Operations Cap Ex, Net * Increased cap ex in 2006 and 2007 prior to 2007 EPA engine emission change.
Slide 18: Enhancing Shareholder Return
ENHANCING SHAREHOLDER RETURN $ Per Share $200 $2.50 $2.36 $180 $169M $2.25 $1.80 $160 $2.00 $1.76 $1.70 $140 $128M $130M $122M $1.75 Millions of $ $120 $1.45 $104M $1.50 $1.28 $99M $100 $1.25 $80 $1.00 $60 $50M $0.75 $.70 $40 $0.50 $20 $0.25 $0 $0.00 2006 2007 2008 2009 2010 2011 2012 2006 2007 2008
Slide 19: Trucks
TRUCKS 9,200 10% Keep fleet count flat, focused on reaching TL 9,000 OI% target of 11% 8% 8,800 6% Average # of Trucks In Service 8,600 4% 8,400 2% % Change YOY 8,200 0% 8,000 -2% 7,800 -4% 7,600 7,400 -6% 7,200 -8% 7,000 -10% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Average
Slide 20: Operating Margin Trends
OPERATING MARGIN TRENDS* 11 OP INC - % OF REVENUES 10 9 8 7 6 5 4 3 2 1Q 2Q 3Q 4Q 2010 2011 2012 2013 EPS TRENDS $0.45 $.42 $0.40 $.38 $.40 $.40 $.33 $.33 $.34 $.35 $0.35 $.29 $.29 $0.30 $.22 $.24 $0.25 EPS $0.20 $.15 $0.15 $0.10 $0.05 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q $0.00 2010 2011
Slide 21: EPS Trends
EPS TRENDS $1.60 $1.40 $1.40 $1.40 $1.25 $1.22 $1.20 $1.08 $1.10 $1.02 $1.00 $0.94 $0.90 $0.76 $0.76 $0.79 $0.80 $0.72 $0.61 $0.61 $0.60 $0.60 $0.51 $0.46 $0.46 $0.41 $0.40 $0.34 $0.27 $0.25 $0.22 $0.22 $0.17 $0.20 $0.13 $0.00 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 1
Slide 22: WERN Targeting an Annualized 11% TL Operating Margin
WERN TARGETING AN ANNUALIZED 11% TL*OPERATING MARGIN 11.0% 9.3% 9.0% 9.0% 8.7% 7.9% 6.8% 5.9% 5.0% 2005 2006 2007 2008 2009 2010 2011 2012 Target * Truckload Transportation Services (includes One-Way TL and Dedicated). Above percentages include fuel (fuel surcharge revenues and fuel expense). 25 21
Slide 23: WERN Targeting a 15% ROE & 9% ROA
WERN TARGETING A 15% ROE & 9% ROA ROE 14.5% 13.6% 15.0% 11.3% 11.1% 8.8% 8.1% 7.5% 2006 2007 2008 2009 2010 2011 2012 Target ROA 8.4% 9.0% 6.9% 6.6% 7.7% 5.4% 5.2% 4.6% 2006 2007 2008 2009 2010 2011 2012 Target 26 22
Slide 24: Return on Invested Capital (ROIC) vs. Share Price Growth
RETURN ON INVESTED CAPITAL (ROIC*) VS. SHARE PRICE GROWTH 16% $25 15% 14% 13% Return on Invested Capital $20 Share Price (year-end) 12% 11% 10% 9% $15 8% 7% 6% 5% $10 4% 3% 2% 1% $5 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Share Price (year-end) ROIC* *ROIC is a non-GAAP measure.
Slide 25: Global, Comprehensive Portfolio
Global, Comprehensive Portfolio Award-Winning Customer Service Technology Driven Customizable Logistics Strategies Consistent, Credible and Conservative
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