Werner Enterprises, Inc. · NASDAQ:WERN
Werner Enterprises — Stephens Inc. Fall Investment Conference 2012
29 slides from Werner Enterprises's conference presentation, Nov 14, 2012
Slide 1: Fall Investment Conference
Fall Investment Conference November 14, 2012
Slide 2: Disclosure Statement
DISCLOSURE STATEMENT This presentation includes forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on Werner Enterprises’ current plans, and are not guarantees of future performance. They are subject to risk and uncertai
Slide 3: Werner Enterprises Profile
WERNER ENTERPRISES PROFILE • Premium provider of Transportation and Logistics Services • Operating throughout North America, Asia and Australia • 2011 Revenue: $2.0B • 2011 Operating Income: $174M • 2011 Net Income: $103M • World Headquarters: Omaha, NE • NASDAQ: WERN • Market cap: $1.6B • 2012 Ques
Slide 4: The Path of Werner Progress
THE PATH OF WERNER PROGRESS 2003 2009 • Brokerage and • Safety improvement initiative begins Intermodal expansion • Australia launch 2007 1956 1998 • LH fleet reduction • Founded by • First to install C.L. Werner electronic driver logs (EOBR) 1986 • IPO 2011 • $103M earnings 2008 (record high to dat
Slide 5: Consistently Growing & Financially Strong
WERNER ENTERPRISES CONSISTENTLY GROWING & FINANCIALLY STRONG - GENERATING FREE CASH THROUGHOUT THE CYCLE 2,400 2,100 Revenues Millions of Dollars 1,800 1,500 1,200 900 600 300 0 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 Debt to Equity 1000 Debt Equity Millions of Dollars 800 6
Slide 6: Revenue Sources
REVENUE SOURCES Vertical: 60% 49% 51% % of Revenues* 50% 46% 40% Retail/CP 30% 29% 26% Grocery Products 24% 18% 17% 16% Manuf./Industrial 20% 8% 9% Logistics/Other 10% 7% 0% 2009 2010 2011 *top 50 customers Customers: 100% 80% 76% 74% 74% % of Revenues 61% 60% 60% Top 5 60% 41% 40% 40% Top 10 40% To
Slide 7: Domestic Freight Market: Market Share & Growth Opportunities
DOMESTIC FREIGHT MARKET: MARKET SHARE & GROWTH OPPORTUNITIES U.S. Freight Market Revenues in billions of $* Werner Enterprises Other (Pipeline, Air, Water) Growth Opportunities $73 Rail intermodal, 10% $300 $280 $277 $15 2% Truckload, $250 $280 Rail carload, Revenue in billions 37% $56 8% $200 $150
Slide 8: Revenue Profile
REVENUE PROFILE Goal 3Q12 • Freight Management • Brokerage • Intermodal • Cross Border 1/3 28%* Asset-Light • Global Logistics LOGISTICS Van DEDICATED 1/3 37% Temperature Flatbed Asset-Intensive Controlled Medium / Long Haul Regional Fleets ONE-WAY TRUCKLOAD 1/3 35% Flatbed Temperature Team Werner C
Slide 9: Freight Market Update: One-Way Truckload
FREIGHT MARKET UPDATE ONE-WAY TRUCKLOAD 8 8
Slide 10: Comprehensive Solutions
COMPREHENSIVE SOLUTIONS Freight Management Freight Movement Global Implementation Technological Advantages Werner provides With an asset-backed Providing door-to-door Sophisticated complete 3PL supply network of 7,300 services for technology tools chain solutions across trucks, 8,500 alliance compan
Slide 11: Fuel Price Trends
FUEL PRICE TRENDS 1Q 2Q 3Q 4Q $5.00 $4.80 $4.60 $4.40 Price Per Gallon (in $) $4.20 $4.00 $3.80 $3.60 $3.40 $3.20 $3.00 $2.80 $2.60 $2.40 $2.20 $2.00 $1.80 $1.60 $1.40 $1.20 2008 2009 2010 2011 2012 * Dept. of Energy (DOE) fuel price survey (Nat'l avg.) of truck stops used by shippers/carriers for b
Slide 12: Green Initiatives
GREEN INITIATIVES Werner Enterprises is a SmartWaySM Transport partner. SmartWay is a collaboration between the EPA and the freight industry, to increase energy efficiency and reduce air pollution. Werner has earned a Shipper Index Factor score (SIF) of 1.25, the highest possible score. Fuel efficie
Slide 13: WERN Safety Improvements
WERN SAFETY IMPROVEMENTS INS/CLAIMS CPM ACCIDENTS PER MM 33% reduction 2006 to 2011 12 ¢ 10.7 15 11 ¢ 14 12.6 9.6 13 10 ¢ 9.0 9.3 11.9 12 11.1 9¢ 8.0 7.9 11 10.1 8 ¢ 10 9.0 7¢ 9 8.4 6¢ 8 7 5¢ 6 4 ¢ Each 1.0 CPM reduction worth 7¢/share 5 3¢ 4 2¢ 3 2 1¢ 1 0¢ 0 2006 2007 2008 2009 2010 2011 2006 2007
Slide 14: Regulatory – HOS and EOBR
REGULATORY – HOS AND EOBR HOS impact Utilization decrease per tractor in the market The FMCSA announced various changes on shippers effective February 2012, with a compliance Decreased driver wage potential date of July 2013. Decreases capacity, increases the number of tractors Primary rule change 3
Slide 15: Supply – Capacity
SUPPLY – CAPACITY Total Public Truckload Fleet Capacity 33,000 Including owner operators, truckload 31,000 capacity at public fleets is nearly 20 29,000 percent below peak 4Q06 levels 27,000 25,000 23,000 4Q06 2Q09 4Q11 2Q05 3Q05 4Q05 1Q06 2Q06 3Q06 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 3Q09
Slide 16: Supply – Aging Fleets
SUPPLY – AGING FLEETS U.S. Class 8 Trucks Average Age Age in Years Class 8 Tractor Maintenance Expense Cost per mile Sources: ACT Research Co. and Wards 15
Slide 17: Driver Market
DRIVER MARKET Driver Wages Relative to Food Prep Workers “…to attract the higher share of workers needed for the 10 year growth projection, the trucking industry must return to the wage MARKET DRIVER position that prevailed in the 1990s.” - ATA 2010 U.S. Census Driver Age Profiles “Roughly 25 percen
Slide 18: Cash Flow and Cap Ex
CASH FLOW AND CAP EX $300 ** $250 ** $225M range Millions of Dollars $200 $210M $150 $100 $50 $0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 *2011 2012 Cash Flow from Operations Cap Ex, Net goal * All equipment replacement, no fleet growth in 2011 ** Increased cap ex in 2006 and 2007 prio
Slide 19: Enhancing Shareholder Return
ENHANCING SHAREHOLDER RETURN $ Per Share $200 $2.50 $2.36 $180 $169M $2.25 $1.80 $160 $130M $2.00 $1.76 $140 $128M $1.75 Millions of $ $1.45 $120 $104M $1.50 $99M $1.28 $100 $1.25 $80 $1.00 $.70 $60 $50M $0.75 $40 $0.50 $20 $0.25 $0 $0.00 2006 2007 2008 2009 2010 2011 2006 2007 2008 2009 2010 2011 T
Slide 20: Trucks
TRUCKS 9,200 10% Keep fleet count flat at approx. 7,300 trucks - 9,000 focused on reaching TL OI% target of 11% 8% 8,800 6% Average # of Trucks In Service 8,600 4% 8,400 % Change YOY 2% 8,200 0% 8,000 -2% 7,800 -4% 7,600 7,400 -6% 7,200 -8% 7,000 -10% 2000 2001 2002 2003 2004 2005 2006 2007 2008 200
Slide 21: Miles Per Truck and Length of Haul
MILES PER TRUCK AND LENGTH OF HAUL 2,440 700 Reduction of long-haul; growth 680 2,410 of Dedicated and Regional 660 2,380 640 Miles Per Truck Per Week Length of Haul (Loaded) 620 2,350 600 2,320 580 560 2,290 540 520 2,260 500 2,230 480 460 2,200 440 2,170 420 2000 2001 2002 2003 2004 2005 2006 2007
Slide 22: Rates
RATES 10% $1.57 Rate improvement momentum, + 3.8% in 2011 9% $1.52 8% 7% Revenue Per Total Mile, $1.47 Net of Fuel Surcharge 6% % Change YOY $1.42 5% $1.37 4% 3% $1.32 2% $1.27 1% $1.22 0% $1.17 -1% -2% $1.12 -3% $1.07 -4% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Revenue Per Total
Slide 23: Improving Rate Trends – Last Quarters
IMPROVING RATE TRENDS – LAST 15 QUARTERS $1.600 5% 4% RPTM: Revenue per Total Mile (Ex-Fuel) $1.550 3% 2% YOY RPTM % Change $1.500 1% 0% $1.450 -1% $1.400 -2% -3% $1.350 -4% 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 RPTM: Revenue per Total Mile (Ex-Fuel) YOY RPTM % C
Slide 24: Werner Operating Stats
WERNER OPERATING STATS 3Q12 to 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 3Q11 Miles per truck 29,307 30,666 30,255 29,910 29,115 30,174 29,643 29,139 28,980 29,139 28,725 <3%> DH (empty) miles per 64 61 61 62 64 66 67 65 66 66 69 3% trip Tractor/non driver ratio 4.1 4.0 4.1 4.0 4.0 4.0
Slide 25: Operating Margin Trends
OPERATING MARGIN TRENDS* 11 OP INC - % OF REVENUES 10 9 8 7 6 5 4 3 2 1Q 2Q 3Q 4Q 2008 2009 2010 2011 2012 EPS TRENDS $0.45 $.42 $0.40 $.40 $.40 $.38 $.34 $0.35 $.33 $.33 $.31 $.29 $0.30 $.29 $.25 $.26 $.26 $.25 $0.25 $.22 EPS $0.20 $.18 $0.15 $.15 $.12 $.10 $0.10 $0.05 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q
Slide 26: EPS Trends
EPS TRENDS $1.60 $1.40 $1.40 $1.25 $1.22 $1.20 $1.08 $1.10 $1.02 $1.00 $0.94 $0.90 $0.76 $0.76 $0.79 $0.80 $0.72 $0.61 $0.61 $0.60 $0.60 $0.51 $0.46 $0.46 $0.41 $0.40 $0.34 $0.27 $0.25 $0.22$0.22 $0.17 $0.20 $0.13 $0.00 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 24
Slide 27: WERN Targeting an Annualized 11% TL Operating Margin
WERN TARGETING AN ANNUALIZED 11% TL*OPERATING MARGIN 11.0% 9.3% 9.2% 9.0% 8.7% 7.9% 6.8% 5.9% 5.0% LTM 2005 2006 2007 2008 2009 2010 2011 Sept Target 2012 • Truckload Transportation Services (includes One-Way TL and Dedicated). Above percentages include fuel (fuel surcharge revenues and fuel expense
Slide 28: WERN Targeting a 15% ROE & 9% ROA
WERN TARGETING A 15% ROE & 9% ROA ROE 14.5% 14.1% 15.0% 11.3% 11.1% 8.8% 8.1% 7.5% 2006 2007 2008 2009 2010 2011 LTM Target Sept 2012 ROA 8.3% 8.1% 9.0% 6.9% 6.6% 5.4% 5.2% 4.6% LTM 2006 2007 2008 2009 2010 2011 Target Sept 2012 26 27
Slide 29: i FB
2 i FB Likes Global, Award-Winning Comprehensive Customer Portfolio Service Customizable Consistent, Logistics Credible and Strategies Conservative Technology Driven
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