Fedex Corporation · NYSE:FDX
Fedex — Q4 2024 Earnings Presentation
20 slides from Fedex's earnings presentation, Jun 25, 2024
Slide 1: FedEx Corporation Fiscal Fourth Quarter 2024 Earnings
FedEx Corporation Fiscal Fourth Quarter 2024 Earnings | June 25, 2024 1 VP of Investor Relations 2 2 1
Slide 2: Forward-Looking Statements and Non-GAAP Financial Measures
Forward-Looking Statements and Non-GAAP Financial Measures Certain statements in this presentation may be considered forward-looking statements, such as statements regarding expected cost savings, the optimization of our network through Network 2.0, future financial targets, business strategies, man
Slide 3: Key messages; Q4 and FY24 results overview
Key messages • Delivered strong full-year earnings growth despite lower revenue • Achieved YoY operating profit growth and margin expansion in every quarter of FY24, enabled by DRIVE • Advanced actions to transform the network … continued rollout of Network 2.0 and finalized the transition to one Fe
Slide 4: DRIVE is changing the way we work
DRIVE is changing the way we work Achieved target of $1.8B in structural cost-out in FY24 Air Network & Intl. G&A Savings Surface Network • Delivered ~$500M in cost • Delivered ~$550M in cost • Delivered ~$750M in cost savings in FY24 savings in FY24 savings in FY24 • Savings driven by structural •
Slide 5: Looking ahead
Looking ahead Targeting adjusted EPS* growth of 12% to 24% in FY25 Conducting an assessment of the role of FedEx Freight in value-creation plans On track for cost savings target of $4B in FY25 compared to FY23 baseline; expect another $2B to follow from Network 2.0 Focused on lowering capital intens
Slide 6: Transportation segment revenue performance
Transportation segment revenue performance Revenue inflected positive in the fourth quarter 0% +2% $10.4B $10.4B $8.30B $8.49B +2% $2.27B $2.31B Q4 FY23 Q4 FY24 Q4 FY23 Q4 FY24 Q4 FY23 Q4 FY24 FedEx Express FedEx Ground FedEx Freight • Revenue was flat, with package • Revenue up on yield and volume
Slide 7: Transportation segment yield performance
Transportation segment yield performance Pricing environment remains competitive but rational YoY yield by fiscal quarter 30% 25% 20% 15% 10% 5% 0% -5% -10% -15% Q4 FY22 Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 Q1 FY24 Q2 FY24 Q3 FY24 Q4 FY24 FedEx Express International Export FedEx Express U.S. Domestic Fed
Slide 8: Transportation segment operating income performance
EVP & Chief Financial Officer 15 15 Transportation segment operating income performance +13% -18% +13% $1,137M $1,004M $519M $427M $448M $506M Q4 FY23* Q4 FY24* Q4 FY23 Q4 FY24* Q4 FY23 Q4 FY24 FedEx Express FedEx Ground FedEx Freight • Decline driven primarily by lower • Increase driven by continue
Slide 9: FY25 outlook
FY25 outlook FY25 Commentary: Low-to-mid single-digit Revenue • Revenue growth driven by improving percentage growth demand trends in U.S. domestic parcel and international export Adjusted EPS* $20 - $22 • Remain committed to aggressively managing cost structure to continue to improve operating prof
Slide 10: Capital allocation priorities
Capital allocation priorities Continuing to reduce capital intensity while increasing capital returns $6.8B $6.2B $5.2B $5.2B $2.5B Stock repurchases 7.6% of of 6.8% of 6.8% ofof <6.5% of 7.2% revenue 5.9% $3.8B** Dividend revenue revenue revenue revenue revenue FY25E capital return $1.3B ($ in bill
Slide 11: Q&A / Appendix
Q&A Q&A 21 21 Appendix 22 22 11
Slide 12: FY24 adjusted operating income bridge
FY24 adjusted operating income bridge $1.8B $6.2B $5.4B $0.1B ($0.7B) ($0.4B) FY23 Revenue, Intl. Variable DRIVE FY24 adjusted net of cost export comp adjusted operating increases yield operating income* pressure income* *Non-GAAP financial measure; see appendix for more information 23 23 Non-GAAP f
Slide 13: Q4 FY24 reconciliation for FedEx Corporation
Q4 FY24 reconciliation for FedEx Corporation Diluted Operating Operating Income Net Dollars in millions, except EPS Earnings Income Margin1 Taxes2 Income3 Per Share GAAP measure $1,555 7.0% $554 $1,474 $5.94 MTM retirement plans — 0.0% (135) (426) (1.72) accounting adjustment4 Business optimization
Slide 14: Q4 FY24 Ground and FY24 reconciliation
Q4 FY24 reconciliation for FedEx Ground segment Operating Operating Dollars in millions Income Margin GAAP measure $1,104 13.0% Business optimization costs 33 0.4% Non-GAAP measure $1,137 13.4% 27 27 FY24 reconciliation for FedEx Corporation Diluted Operating Operating Income Net Dollars in millions
Slide 15: FY24 reconciliation for Express and Ground segments
FY24 reconciliation for FedEx Express segment Operating Operating Dollars in millions Income Margin1 GAAP measure $776 1.9% Asset impairment charges 157 0.4% Business optimization costs 143 0.4% Non-GAAP measure $1,076 2.6% 1 See “Footnotes for Non-GAAP Reconciliation Slides” below for details 29 29
Slide 16: Q4 FY23 reconciliation for FedEx Corporation
Q4 FY23 reconciliation for FedEx Corporation Diluted Operating Operating Income Net Dollars in millions, except EPS Earnings Income Margin Taxes1,2 Income3 Per Share1 GAAP measure $1,503 6.9% $590 $1,538 $6.05 MTM retirement plans — — (157) (493) (1.94) accounting adjustment4 Goodwill and other asse
Slide 17: FY23 reconciliation for FedEx Corporation
FY23 reconciliation for FedEx Corporation Diluted Operating Operating Income Net Dollars in millions, except EPS Earnings Income Margin1 Taxes2 Income3 Per Share GAAP measure $4,912 5.4% $1,391 $3,972 $15.48 MTM retirement plans — — (157) (493) (1.92) accounting adjustment4 Business optimization cos
Slide 18: FY25 earnings per share forecast
FY25 earnings per share forecast Dollars in millions, except EPS Adjustments Diluted Earnings Per Share Earnings per diluted share before MTM retirement $18.25 to $20.25 plans accounting adjustments (non-GAAP)10 Business optimization costs $560 Income tax effect2 (130) Net of tax effect $430 1.75 Ea
Slide 19: Return on invested capital and free cash flow
FY24 and FY23 return on invested capital Dollars in millions Fiscal 2024 Fiscal 2023 Numerator Adjusted operating income (non-GAAP) $6,241 $5,373 Provision for income taxes (non-GAAP)11 (1,548) (1,386) Adjusted operating income after taxes (non-GAAP) $4,693 $3,987 Denominator Average invested capita
Slide 20: Footnotes for non-GAAP reconciliation slides
Footnotes for non-GAAP reconciliation slides 1. Does not sum to total due to rounding. 2. Income taxes are based on the company’s approximate statutory tax rates applicable to each transaction. 3. Effect of “total other (expense) income” on net income amount not shown. 4. The MTM retirement plans ac