Xpo, Inc. · NYSE:XPO
Xpo — XPO Logistics — Investor Presentation (August 2012)
23 slides from Xpo's investor presentation, Aug 22, 2012
Slide 1: Investor Presentation
Investor Presentation August 2012
Slide 2: Disclaimer
Disclaimer This presentation contains, and XPO Logistics, Inc. (the “Company”) may from time to time make, written or oral “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. All
Slide 3: Overview and Growth Strategy
Overview and Growth Strategy
Slide 4: The XPO Growth Strategy
The XPO Growth Strategy Disciplined focus on creating shareholder value Build a multi-billion dollar, non-asset based, third party logistics business Primary focus on truck brokerage Execute selective acquisitions and cold-starts Optimize operations company-wide Apply best practices with highly skil
Slide 5: Bradley Jacobs founded and led four highly successful companies
Bradley Jacobs founded and led four highly successful companies Amerex Oil Associates: Built one of world’s largest oil brokerage firms Hamilton Resources: Grew global oil trading company to ~$1 billion United Waste: Created fifth largest solid waste business in North America United Rentals: Built w
Slide 6: A Large Market Opportunity
A Large Market Opportunity Sources: American Trucking Association, Armstrong & Associates, EVE Partners LLC Worldwide logistics: >$3 trillion U.S. logistics: &>$1 trillion U.S. trucking: ~$350 billion U.S. truck brokerage ~$50 billion
Slide 7: Truck brokerage sector is growing at 2x to 3x GDP
Truck brokerage sector is growing at 2x to 3x GDP Long-term outsourcing trend; short-term cyclical headwind Brokers add efficiency to both shippers and carriers Shippers gain access to hundreds of thousands of carriers Carriers gain access to millions of loads $300 billion of loads each year do not
Slide 8: More than 10,000 licensed brokers in the U.S.
More than 10,000 licensed brokers in the U.S. Only about 25 brokers with more than $200 million in revenue Large potential acquisition universe Lack of working capital can motivate sellers Truck Brokerage Is a Highly Fragmented Market Sources: Armstrong & Associates
Slide 9: Capitalize on attractive acquisition universe
Capitalize on attractive acquisition universe Focus primarily on truck brokers Target initial sweet spot: $20 million to $200 million revenue Rapidly scale acquired companies Provide access to centralized carrier capacity in Charlotte Move onto technology platform Aggressively expand sales force Acq
Slide 10: Acquired 32-year old business in May 2012
Acquired 32-year old business in May 2012 Operations in South Carolina, North Carolina, Texas and Florida $22 million in annual brokerage revenue Highly scalable; plan to triple in size Completed integration in 90 days Acquisition of Continental Freight Services
Slide 11: Acquired 20-year old business on August 3, 2012
Acquired 20-year old business on August 3, 2012 Highly scalable brokerage operations in Toronto, Montreal, Vancouver and Cleveland $100 million in annual revenue Strong base of over 1,000 customers Significant synergies with XPO Acquisition of Kelron Logistics
Slide 12: Cold-start plan ahead of schedule
Cold-start plan ahead of schedule Q4 2011: Phoenix Q2 2012: Ann Arbor and Dallas Q3 2012: Chicago, Jacksonville, Montgomery and Morris County, NJ Led by industry veterans with strong track records Targeting 20 locations over the next several years Cold-starts Are High Return Opportunities
Slide 13: Provide shared services and carrier procurement
Provide shared services and carrier procurement Expand carrier procurement team to 100 people by December Cover freight more efficiently Enable sales offices to focus on new business National Operations Center in Charlotte
Slide 14: Highly Skilled Management Team
Highly Skilled Management Team Partial list below Sean Fernandez NCR, Avery Dennison, Arrow Electronics Chief Operating Officer John Hardig Stifel Nicolaus, Alex. Brown Chief Financial Officer Scott Malat Goldman Sachs, UBS, JPMorgan Chase Chief Strategy Officer Gordon Devens AutoNation, Skadden Arp
Slide 15: Optimize Existing Operations
Optimize Existing Operations Expedited Transportation Non-asset based expedited service provider through Express-1, Inc. Non-asset based ground, air and ocean freight forwarder through Concert Group Logistics, Inc. Freight Forwarding Truck Brokerage Non-asset based premium freight brokerage services
Slide 16: South Bend operation good example of cold-start opportunity
South Bend operation good example of cold-start opportunity Minimal upfront investment Grew to approximately $30 million in revenue after three years Add salespeople to continue growth Truck Brokerage
Slide 17: Top in domestic expedite
Top 5 in domestic expedite Grow business in attractive sectors Cross-border Mexico Temperature-controlled Defense Opened new hub in Birmingham in August Positioned for shift in manufacturing to the southeast Expedited Transportation Source: Company data
Slide 18: Currently a $65 million player in a $150 billion market
Currently a $65 million player in a $150 billion market Significant opportunity to grow market share Added locations in Los Angeles, Charlotte, Atlanta and Newark in 2012 Currently 27 stations Plan to build footprint to 35 stations over two years Freight Forwarding Source: Company data
Slide 19: Differentiate XPO through superior technology
Differentiate XPO through superior technology Rolled out first phase of platform in March 2012 Added pricing tools in July 2012 Purchase transportation more efficiently as data pool grows Scalable Technology Platform Source: Company data
Slide 20: 2011 revenue: $177 million
2011 revenue: $177 million 2012 target: $500 million revenue run rate by year-end Sufficient liquidity for acquisitions, cold-starts and infrastructure $191 million cash, zero debt as of June 30, 2012 Marketing new accounts receivable facility Key Financial Statistics
Slide 21: Management team aligned with shareholders through equity ownership
Management team aligned with shareholders through equity ownership Management owns approximately 53% of the company on a fully-diluted basis(1) Incentivized Management Common Stock Equivalent Capitalization (Shares) Common Shares 17.7 million Preferred Shares 10.7 million Warrants (Strike Price $7 p
Slide 22: Conclusion
Conclusion
Slide 23: Large, growing, fragmented industry
Large, growing, fragmented industry Significant value creation through cold-starts Strong pipeline of acquisition targets Scale up existing and acquired operations Highly experienced management team aligned with shareholder interests Summary of Opportunities