FedEx Corporation · NYSE:FDX
FedEx — Non-Deal Roadshow (October 2022)
21 slides from FedEx's roadshow presentation, Oct 3, 2022
Slide 1: FedEx Corporation Investor Relations
FedEx Corporation Investor Relations October 3, 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, business strategies, m
Slide 2: Unmatched Global Network / Broad Portfolio of Services
Unmatched Global Network Links More Than 99% of World’s GDP • Over 220 countries and territories, every address in the U.S. • Over 700 aircraft and more than 215,000 motorized vehicles • More than 5,000 operating facilities; more than 650 airports served worldwide • Delivers more than 14.5M shipment
Slide 3: Strategic Operating Principles / Bundle of Solutions
Strategic Operating Principles Deliver Today, Innovate for Tomorrow Compete Collectively Operate Collaboratively Innovate Digitally • FedEx brand unites • Strategic shift to build a • Innovating Executive long-termdigitally incentives distinct operating holistic approach that linked toallows FedEx T
Slide 4: FY23 savings and Global Transformation Program cost targets
In FY23, FedEx expects to generate total cumulative savings of approximately $2.2-$2.7 billion compared to our prior plan 7 By FY25, under the Global Transformation Program, FedEx is targeting ~$4 billion in incremental annualized cost savings compared to FY22 in support of “Deliver Today, Innovate
Slide 5: Network 2.0 and FY25 Priorities
Network 2.0 ► OPERATIONAL INSIGHTS PLATFORM ► IMPROVED ASSET EFFICIENCY ► EFFICIENT WAYS OF WORKING $2B+ FUTURE VALUE UNLOCKED BY FY27 ~ $2B ONE-TIME EXPENSE INITIAL GOALS BY FY27 100 FEWER STATIONS THAN TODAY 10%+ P&D ROUTE EFFICIENCY VS. TODAY OPTIMIZED LINEHAUL NETWORK *Network 2.0 incremental to
Slide 6: FY25 Financial Outlook
Lower Capital Intensity C A P I TA L E X P E N D I T U R E S Operational, technological, and digital innovation to maximize utilization 7.9% 7.2% 6.5% of revenue of revenue of revenue Rigorous 'ROIC lens’ to all new capital outlays FY18-FY21 FY22 FY25 Target Steady reduction over forecast period and
Slide 7: Executive Compensation Program Enhancements / Positioning for Long-Term Growth
Executive Compensation Program Enhancements Long Term Incentive (LTI) program targets for FY23-25 include: 1. Earnings per share (EPS) (50%) 2. New performance metric tied to FedEx’s total shareholder return (TSR) relative to S&P 500 index (25%) 3. Capital expenditures as a percentage of revenue (25
Slide 8: FedEx Business Trends: Meeting E-Commerce Demands
FedEx Business Trends Meeting E-Commerce Demands • Year-round, seven-day-per-week U.S. residential delivery by FedEx Ground • Significantly later pick up times offered with FedEx Extra Hours Service • Widespread retail convenience network with Walgreens, Dollar General, and our own FedEx Office loca
Slide 9: Pricing Strategy / FedEx Express Long-Term Opportunity
Pricing Strategy: Improving Revenue Quality • Focused on long-term profitable growth • Utilizing capacity for highest yielding customers • FedEx Express and FedEx Ground increasing shipping rates an average of 6.9% in January 2023 • FedEx Freight increasing rates an average of 6.9% to 7.9% in Januar
Slide 10: Sustained FedEx Express Profit Growth in Europe / FedEx Ground
Sustained FedEx Express Profit Growth in Europe • Air network integration • SG&A reduction • Continued business optimization 19 FedEx Ground We have invested to develop a ‘future-ready’ network 11 - 12% • Superior service, innovation, and speed FEDEX GROUND ADJUSTED advantage OPERATING MARGIN TARGET
Slide 11: FedEx Ground: Achieving sustained double-digit margin
FedEx Ground: Achieving sustained double-digit margin • FY25 Adjusted Operating Margin Target of 11-12% 1 • Focus on maximizing asset utilization and ROIC • Consistent safety and service excellence 1. Non-GAAP financial measure; see appendix for more information 21 Strong Portfolio of Residential Pa
Slide 12: FedEx Ground Revenue Market Share Has Grown to More Than 30%
FedEx Ground Revenue Market Share Has Grown to More Than 30% $1 10 50 % $1 00 Revenue ($ Billions) $9 0 40 % $8 0 Market Share $7 0 30 % $6 0 $5 0 20 % $4 0 $3 0 $2 0 10 % $1 0 $0 0% CY9 8CY9 9CY0 0CY0 1CY0 2CY0 3CY0 4CY0 5CY0 6CY0 7CY0 8CY0 9CY1 0CY1 1CY1 2CY1 3CY1 4CY1 5CY1 6CY1 7CY1 8CY1 9CY2 0CY
Slide 13: FedEx Freight: Driving 22% adjusted operating margin by FY25
FedEx Freight: Driving 20 – 22% adjusted operating margin by FY25* Improve revenue quality Pricing discipline and profitable share growth Invest in our people and network Deliver outstanding service Continue to innovate Dimension in Motion and RFID Technology *Non-GAAP financial measure; see appendi
Slide 14: Corporate Social Responsibility: Carbon-Neutral Operations by 2040
FedEx Commits to Goal to Achieve Carbon-Neutral Operations by 2040 Key steps toward reaching the carbon neutral goal include: Vehicle Electrification. By 2040, the entire FedEx parcel pickup and delivery fleet will be zero–emission electric vehicles Sustainable Fuels. FedEx will continue to invest i
Slide 15: Corporate Social Responsibility - Awards & Recognition
Corporate Social Responsibility - Awards & Recognition • 100 Best Companies to Work For 2022 - FORTUNE • World’s Most Admired Companies 2022 - FORTUNE • This is the 22nd consecutive year that FedEx has ranked among the top 20 in the FORTUNE Most Admired Companies List. • America’s Most Responsible C
Slide 16: Earnings Per Share / Capital Expenditures
Earnings Per Share $25.00 $20.61 $20.00 $19.45 $18.17 $14.33 $15.52 $15.00 $9.50 $10.00 $4.90 $5.00 $2.03 $0.00 FY19 FY20 FY21 FY22 GAAP Adjusted Non-GAAP reconciliations are included herein. See Appendix 31 Capital Expenditures (% of Revenues) 10.0% 9.0% 8.5% 8.7% 8.5% 7.9% 8.0% 7.2% 7.0% 7.0% 6.0%
Slide 17: Dividends Increased at a 5-Year CAGR of 13%
Dividends Increased at a 5-Year CAGR of 13% $3.50 $3.00 $3.00 IN LAST 5 YEARS, $2.60 $2.60 $2.60 $2.50 WE HAVE RETURNED Dividends Per Share $2.00 $2.00 $3.4B $1.60 in dividend payments $1.50 $1.00 $4.7B $1.00 $0.80 in share repurchases 16% $0.44 $0.44 $0.48 $0.52 $0.56 $0.60 $0.50 $0.28 $0.32 $0.36
Slide 18: FY22 Reconciliation for FedEx Corp.
Explanatory Note on Non-GAAP Financial Measures The company reports its financial results in accordance with accounting principles generally accepted in the United States (“GAAP”). We have supplemented the reporting of our financial information determined in accordance with GAAP with certain non-GAA
Slide 19: FY21 and FY20 Reconciliation for FedEx Corp.
FY21 Reconciliation for FedEx Corp. Dollars in millions, except EPS Op Op Income Net Diluted Income Margin Taxes1 Income2 EPS3 GAAP Measure $5,857 7.0% $1,443 $5,231 $19.45 Mark-to-Market Retirement Plans --- --- (281) (895) (3.33) Accounting Adjustments4 Loss on Debt Extinguishment --- --- 96 297 1
Slide 20: FY19 Reconciliation and Footnotes
FY19 Reconciliation for FedEx Corp. Dollars in millions, except EPS Op Op Income Net Diluted Income Margin3 Taxes1 Income2 EPS GAAP Measure $4,466 6.4% $115 $540 $2.03 Mark-to-Market Retirement Plans --- --- 902 2,981 11.22 Accounting Adjustments4 TNT Express Integration Expenses5 388 0.6% 74 314 1.
Slide 21: Full-Year Fiscal 2022 Return on Invested Capital
Full- Year Fiscal 2022 Notes: Return on Invested Capital 1 – Represents the hypothetical interest expense implied within rentals expenses the company would incur if property Dollars in millions under operating leases were owned or accounted for as finance leases. Estimated using the weighted-average