Fedex Corporation · NYSE:FDX
Fedex — Q2 2023 Earnings Presentation
14 slides from Fedex's earnings presentation, Dec 20, 2022
Slide 1: FedEx Corporation Fiscal 2023 second quarter earnings
FedEx Corporation Fiscal 2023 second quarter earnings December 20, 2022 1 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, future financial targets, bus
Slide 2: Presenters: Mickey Foster and Rajesh Subramaniam
Mickey Foster VP of Investor Relations 3 3 Rajesh Subramaniam President & CEO 4 4 2
Slide 3: Key messages; Fiscal second quarter 2023 overview
Key messages • Exceeded earnings target in a more challenged environment • Accelerating FY23 cost actions • Improved service & customer experience • Moving with urgency on DRIVE initiatives 5 5 Fiscal second quarter 2023 overview Fiscal 2Q23 results Commentary • Revenue pressured by softer global de
Slide 4: Accelerating progress on FY23 cost reduction plan
Accelerating progress on FY23 cost reduction plan Cost savings vs. June plan FY23 cost out to ramp in 2H FY23 Expected FY23 cost ~$3.7B savings ~$1.4B Q2 FY23 savings ~$0.9B ~$1.1B ~$3.7B ~$0.9B FY23 YTD savings ~$1.2B ~$0.3B Q1 FY23 Q2 FY23 Q3 FY23E Q4 FY23E Total FY23E cost savings Moving with spe
Slide 5: DRIVE program building momentum
DRIVE program building momentum Transformation Office facilitated by Sriram Krishnasamy Domain Executive Sponsors FedEx Express FedEx Ground Shared & Allocated Expenses Richard Karen John Brie Richard Smith Smith Reddington Smith Mike Lenz Carere & John Smith Air U.S. Express Global Europe EU Dock L
Slide 6: Transportation segment revenue performance
Brie Carere EVP & Chief Customer Officer 11 Transportation segment revenue performance FedEx Express FedEx Ground FedEx Freight -6% +2% $11.6B $10.9B $8.3B $8.4B +8% $2.3B $2.5B Q2 FY22 Q2 FY23 Q2 FY22 Q2 FY23 Q2 FY22 Q2 FY23 • Volume declines accelerated • Higher yields, driven by fuel • Strong gro
Slide 7: Revenue quality & pricing initiatives; Commercial momentum
Revenue quality & pricing initiatives Laser focused on high-value segments • Small & medium-sized customers • Intra-Europe & Intercontinental Running proven pricing playbook • General rate increases • Technology enhancing revenue outcomes • Rigorous surcharge implementation 13 13 13 Commercial momen
Slide 8: Transportation segment operating income performance
Mike Lenz EVP & CFO 15 Transportation segment operating income performance FedEx Express* FedEx Ground FedEx Freight -65% +24% +32% $1,020M $598M $481M $440M $352M $334M Q2FY22 Q2FY23 Q2FY22 Q2FY23 Q2FY22 Q2FY23 • Volume declines accelerated • Increase driven by 13% yield • Increase driven by yield
Slide 9: Now expect FY23 cost savings of ~$3.7B vs. plan; Capital spend & return
Now expect FY23 cost savings of ~$3.7B vs. plan - Flight reductions - Reducing vendor utilization - Sort closures & consolidations - Productivity enhancements - Deferring certain technology projects - Refined peak pay premiums - Sort closures - Closing certain FedEx Office locations - Reduction of S
Slide 10: Monthly volume trends; Fiscal 2023 outlook
Monthly volume trends: June-November 2022 FedEx Express U.S. Domestic Package year-over-year FedEx Express International Priority Package year-over-year June July August September October November June July August September October November -9% -10% -8% -13% -10% -10% -10% -14% -12% -12% -16% -16% F
Slide 11: Q&A / Appendix
Q&A 21 21 Appendix 22 22 11
Slide 12: Q2 FY23 Reconciliation for FedEx Corporation
Q2 FY23 Reconciliation for FedEx Corporation Diluted Operating Income Net Earnings Dollars in millions, except EPS Income Margin1 Taxes2 Income3 Per Share GAAP measure $1,176 5.2% $271 $788 $3.07 Business optimization 36 0.2% 9 27 0.11 costs4 Non-GAAP measure $1,212 5.3% $280 $815 $3.18 1,2,3,4 See
Slide 13: Q2 FY22 Reconciliation for FedEx Corporation
Q2 FY22 Reconciliation for FedEx Corporation Diluted Operating Income Net Earnings Dollars in millions, except EPS Income Margin Taxes2 Income3 Per Share1 GAAP measure $1,597 6.8% $336 $1,044 $3.88 MTM retirement plans — — 65 195 0.73 accounting adjustments5 Business realignment 44 0.2% 10 34 0.13 c
Slide 14: FY23 Earnings Per Share Forecast; Footnotes
FY23 Earnings Per Share Forecast Diluted Earnings Dollars in millions, except EPS Adjustments Per Share Earnings per diluted share (non- GAAP)7 $12.50 to $13.50 Business optimization costs $150 Income tax effect2 (35) Net of tax effect $115 0.45 Business realignment costs $16 Income tax effect2 (4)