Xpo, Inc. · NYSE:XPO
Xpo — XPO Logistics — Q3 2015 Earnings Presentation
35 slides from Xpo's earnings presentation, Nov 4, 2015
Slide 1: XPO Investor Presentation: Con-way Acquisition, Q3 2015 Results, Financial Targets
XPO Investor Presentation and Transcript Acquires Con-way Inc. Reports Third Quarter 2015 Results Issues Financial Targets November 2015 Exhibit 99.1
Slide 2: Disclaimers: Forward-Looking Statements
Disclaimers Forward-Looking Statements This document includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including the expected ability to integrate operations, cross-sell
Slide 3: XPO Is A Top Ten Global Leader
XPO Is A Top Ten Global Leader XPO provides cutting-edge supply chain solutions to the most successful companies in the world #2 contract logistics provider worldwide by square footage #2 freight brokerage firm worldwide by net revenue #1 last mile logistics provider for heavy goods in North America
Slide 4: Built to Serve Customers' Growing Needs
Built to Serve Customers’ Growing Needs | XPO Investor Presentation November 2015 Sector Market Size ($ billions) Projected Growth (x GDP) Contract Logistics (North America and Europe) $120 2 to 3 times Road Transport (Europe) $85 ~ 2 times Truck Brokerage (North America) $50 2 to 3 times Less-than-
Slide 5: Blue Chip Customers
| XPO Investor Presentation November 2015 Blue Chip Customers Any trademarks or logos used in this presentation are the property of their respective owners
Slide 6: Blue Chip Customers
| XPO Investor Presentation November 2015 Blue Chip Customers Any trademarks or logos used in this presentation are the property of their respective owners
Slide 7: $400+ Million 2015 IT Spend Is Among Industry's Highest
$400+ Million 2015 IT Spend Is Among Industry’s Highest | XPO Investor Presentation November 2015 XPO is committed to staying at the forefront of innovation to help customers operate their supply chains more efficiently World-class IT team of over 1,000 professionals Over 200 IT projects in 2015 Sop
Slide 8: CEO Bradley S. Jacobs
CEO Bradley S. Jacobs | XPO Investor Presentation November 2015 Prior to XPO, founded and led four highly successful companies, including two world-class publicly-traded corporations United Rentals: Built world’s largest equipment rental company United Waste: Created 5th largest solid waste business
Slide 9: Highly Skilled Management Team
Highly Skilled Management Team | XPO Investor Presentation November 2015 Partial list Ashfaque Chowdhury CIO, Contract Logistics, Americas New Breed Troy Cooper Chief Operating Officer United Rentals, United Waste Louis DeJoy CEO, Contract Logistics, Americas New Breed Gordon Devens General Counsel
Slide 10: Highly Skilled Management Team (Cont'd)
Highly Skilled Management Team (Cont’d) | XPO Investor Presentation November 2015 Partial list Scott Malat Chief Strategy Officer Goldman Sachs, UBS, JPMorgan Chase Karl Meyer Chief Executive Officer, Last Mile 3PD, Home Depot Dominick Muzi President, Global Forwarding Priority Solutions, AIT Worldw
Slide 11: Acquired Con-way Inc. October 30, 2015
Acquired Con-way Inc. October 30, 2015
Slide 12: Transaction Summary
Transaction Summary Purchase Price Transaction Value: Approximately $3.0 billion, including $290 million of net debt Transaction Multiple: Approximately 5.7x consensus 2015E EBITDA of $528 million Financing Sources and Closing In connection with the completion of the acquisition, XPO entered into a
Slide 13: Acquisition Catapults XPO to Second Largest LTL Provider
Acquisition Catapults XPO to Second Largest LTL Provider XPO has one of North America’s largest and most reliable less-than-truckload (LTL) networks LTL in North America is a $35 billion sector Best-in-class LTL platform for reliable, time-definite pickup and delivery High-value-add, networked busin
Slide 14: XPO Has PF $15 Billion Revenue and $1.1 Billion EBITDA
XPO Has PF $15 Billion Revenue and $1.1 Billion EBITDA Transaction accelerated XPO to new critical mass | XPO Investor Presentation November 2015 Revenue and EBITDA are pro-forma for the combination, trailing 12 months Sources: Con-way company data and XPO company data XPO’s Global Organization Pre-
Slide 15: Actions Expected to Increase Profit by $170 – $210 Million
Actions Expected to Increase Profit by $170 – $210 Million | XPO Investor Presentation November 2015 Sources: Con-way company data and XPO company data In the next 24 months, XPO expects to realize cost synergies from executing these actions, with initial benefits in the first 12 months: Improving p
Slide 16: Menlo Services Are Highly Synergistic to XPO
Menlo Services Are Highly Synergistic to XPO | XPO Investor Presentation November 2015 Source: Con-way company data The acquisition of Menlo Logistics, Con-way’s asset-light subsidiary, created immediate synergies in three areas of service Supply chain 22 million square feet of contract logistics sp
Slide 17: Additional Compelling Reasons for Con-way Transaction
Additional Compelling Reasons for Con-way Transaction | XPO Investor Presentation November 2015 Sources: Con-way company data and XPO company data Consolidates XPO’s position as a major outsourced provider in the high-growth e-commerce sector Adds blue chip accounts with e-fulfillment contracts in N
Slide 18: XPO Gained Massive Capacity to Serve Customers
XPO Gained Massive Capacity to Serve Customers Strategic ownership of LTL assets benefits XPO and its customers during periods of tight capacity XPO has a blended “asset right” transportation model of brokered, owned and contracted capacity in North America, similar to its model in Europe Combined g
Slide 19: XPO's Combined Revenue
| XPO Investor Presentation November 2015 XPO’s Combined Revenue Note: Freight Brokerage includes truck brokerage, intermodal, last mile and expedite Pro-forma for the Con-way acquisition, trailing 12 months as of June 30, 2015 Sources: Con-way company data and XPO company data By Line of Business B
Slide 20: Third Quarter 2015 Financial Highlights
Third Quarter 2015 Financial Highlights
Slide 21: 160% Compounded Annual Growth
160% Compounded Annual Growth First 45 Months of XPO’s Growth Strategy | XPO Investor Presentation September 2015 TTM Revenue ($ millions) 2012 2013 2014 2015
Slide 22: Third Quarter 2015 Results
Third Quarter 2015 Results | XPO Investor Presentation November 2015 Adjusted EBITDA ($ millions) (1) Revenue ($ millions) For a reconciliation of adjusted EBITDA to GAAP net loss, see Appendix +257% YOY +586% YOY $2,362 $166.1
Slide 23: Financial Targets
Financial Targets Taking the Con-way acquisition into account, the company has annual revenue of $15 billion and adjusted EBITDA of $1.1 billion. The company has issued the following new financial targets: For 2016 Full year adjusted EBITDA of at least $1.25 billion based on existing operations For
Slide 24: Strong Financial Model and Market Relationships
| XPO Investor Presentation November 2015 As of November 3, 2015, the company had approximately $530 million of cash, and an undrawn $1 billion asset-backed revolver Positive and accelerating free cash flow Asset-light business: assets account for less than a quarter of free cash flow Net capex of o
Slide 25: Acquired Norbert Dentressangle (ND) June 8, 2015
Acquired Norbert Dentressangle (ND) June 8, 2015
Slide 26: Acquired ND as Platform for Growth in Europe
Acquired ND as Platform for Growth in Europe Contract Logistics 2014 Revenue €2.6 billion 27,800 employees Leading outsourced European e-fulfillment platform Also provides reverse logistics, cold chain, chemicals handling, value-added warehousing Global Forwarding 2014 Revenue €0.2 billion 650 emplo
Slide 27: Preeminent European Transportation Network
Preeminent European Transportation Network 36-year history as global partner to blue chip customers Customer verticals include retail, food and beverage, manufacturing, chemicals, agriculture, e-commerce and high tech Serves customers with a blended transportation model of brokered, owned and contra
Slide 28: Leadership in European E-Fulfillment
Leadership in European E-Fulfillment €242 million revenue in e-commerce logistics in 2014 Business focused in the UK, Spain and France Strong growth potential with approximately 5% market share in estimated €5 billion European e-fulfillment market Expected to increase at 9% to 10% CAGR over the next
Slide 29: XPO Logistics Summary
XPOLogistics Summary
Slide 30: Positioned for EBITDA Growth and Value Creation
Positioned for EBITDA Growth and Value Creation XPO is a top ten global transportation and logistics company, providing cutting-edge supply chain solutions to the most successful companies in the world Highly integrated, unique, multi-modal organization with blended transportation model Became the s
Slide 31: XPO Logistics Supplemental Materials
XPOLogistics Supplemental Materials
Slide 32: Common Stock Equivalent (as of 9/30/2015)
Common Shares 108.4 million (1) Preferred Shares 10.4 million Warrants 10.5 million (7.4 million dilutive) (2) Convertible Senior Notes 4.0 million shares (3) Stock Options and RSUs 2.7 million shares dilutive (4) Fully diluted shares outstanding 132.9 million shares Appendix Common Stock Equivalent
Slide 33: XPO Business Glossary
XPO Business Glossary Contract Logistics: An asset-light, technology-enabled business characterized by long-term contractual relationships with high renewal rates, low cyclicality and a high-value-add component that minimizes commoditization. Contracts are typically structured as either fixed-variab
Slide 34: XPO Business Glossary
XPO Business Glossary Intermodal: An asset-light business that facilitates the movement of long-haul, containerized freight by rail, often with a drayage (trucking) component at either end. Intermodal is a variable cost business, with revenue generated by a mix of contractual and spot market transac
Slide 35: Appendix: Net Loss to Adjusted EBITDA Reconciliation
Appendix The following table reconciles XPO’s net loss attributable to common shareholders for the three months ended September 30, 2015 and 2014 to adjusted EBITDA for the same periods | XPO Investor Presentation November 2015