FedEx Corporation · NYSE:FDX
FedEx — Non-Deal Roadshow (March 2025)
45 slides from FedEx's roadshow presentation, Mar 20, 2025
Slide 1: Investor Relations
Investor Relations March 20, 2025
Slide 2: Forward-Looking Statements and Non-GAAP Financial Measures
Forward-Looking Statements and Non-GAAP Financial Measures Certain statements in this presentation may be considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act, such as statements regarding expected cost savings, the optimization of our network thro
Slide 3: Unmatched global network
Unmatched global network Linking more than 99% of world’s GDP Over 220 710 More than More than Delivers countries aircraft 5,000 500,000 more and and more operating employees than 17M territories, than facilities; worldwide shipments including 200,000 more than per day* every motorized 650 address i
Slide 4: Broad portfolio of services
Broad portfolio of services FY24 revenues: $87.7 billion 85% Federal Express $33.0B Ground Services $41.7B Express Services 11% FedEx Freight 4% Other and $9.4B Federal Express and FedEx Freight show segment revenue. Other and eliminations eliminations includes revenue from FedEx Dataworks, FedEx Of
Slide 5: Bundle of solutions
Bundle of solutions % of revenue • Our portfolio of solutions creates a strong value proposition Express 0.9% • 96.7% of U.S. revenue comes from customers of two or E+G E+F 18.2% 0.1% more transportation services E+G+F 78.1% • We manage service offerings as a portfolio for the benefit Ground Freight
Slide 6: FY25 outlook
FY25 outlook Dec 2024 Mar 2025 • Revising revenue, adjusted diluted Revenue Approximately Flat Flat to slightly down EPS and capital spend outlook • Global industrial weakness continues Adjusted to constrain demand; maintaining $19.00 - $20.00 $18.00 - $18.60 Diluted EPS* focus on revenue quality Ef
Slide 7: Illustrative adjusted operating income bridge based on FY25 EPS outlook midpoint
Illustrative adjusted operating income* bridge based on the midpoint of FY25 adjusted diluted EPS* outlook $6.2B ($1.1B) $2.2B $6.2B ($0.4B) ($0.4B) ($0.3B) FY24 adjusted Revenue, USPS Int’l Two fewer DRIVE FY25E operating income* net of contract export operating adjusted cost expiration yield days
Slide 8: FedEx Freight spin-off update
FedEx Freight spin-off update Separation Management Office is leading the preparation work to ensure a smooth transition • Making progress on all fronts Completed a $16 billion debt exchange offer and consent solicitation in February • Creates more flexibility for both companies’ capital structures
Slide 9: Maintaining customer, operational, and technology cooperation
Maintaining customer, operational, and technology cooperation Commercial and Technology agreements Operational capabilities FedEx Freight to continue providing linehaul for Commercial agreements will create seamless FedEx, including Tricolor, Peak season, and drayage experience for customers support
Slide 10: Next steps
Next steps Tax-free spin-off expected to be executed by June 2026 Separation Management Office preparing each company for transition Expect to share key separation milestones along the way Maintaining business-as-usual standard to ensure we continue to deliver the highest quality service to our cust
Slide 11: DRIVE & Network 2.0: Building momentum with significant value potential
DRIVE & Network 2.0: Building momentum with significant value potential One FedEx represents significant cost savings creation opportunity beyond FY25 To date, DRIVE Implementation of all Network 2.0 represents has identified programs will generate $4B $2B $6B Cost savings in FY25 Cost savings in FY
Slide 12: Delivered $600M of structural cost savings in Q3 FY25
Delivered $600M of structural cost savings in Q3 FY25; quarterly savings to continue building sequentially into Q4 Surface Network Air Network & Int’l. G&A • Realized $135M in cost savings • Realized $245M in cost savings • Realized $220M in cost savings in Q3 in Q3 in Q3 • Optimizing surface lineha
Slide 13: Achieved target of $1.8B in structural cost savings in FY24
Achieved target of $1.8B in structural cost savings in FY24 compared to an FY23 baseline Surface Network Air Network & Intl. G&A Savings • Delivered ~$750M in cost • Delivered ~$500M in cost • Delivered ~$550M in cost savings in FY24 savings in FY24 savings in FY24 • Efficiency improvements in • Sav
Slide 14: Surface network initiatives to deliver $1.2B in cost savings in FY25
Surface network initiatives to deliver $1.2B in cost savings in FY25* Linehaul operations Dock operations P&D operations U.S. surface operations $450M $300M $150M $300M Safety Improving outcomes *DRIVE savings by domain reflect targets given in April of 2023, results by domain may vary. 14
Slide 15: Delivering transformational improvement
Delivering transformational improvement Global Air Network Europe ~$700M in FY25* ~$600M in FY25* Tracked through KPIs that monitor Cost per Cost per available Asset success (key indicators) pound ton mile utilization *DRIVE savings by domain reflect targets given in April of 2023, results by domain
Slide 16: Optimizing profitability across European networks
Optimizing profitability across European networks Focusing Europe on execution and enhancing profitability Air Road P&D Domestic >750 flights 28 road hubs and >600 stations Lowering per week >50K connections across 32 cost to serve per week countries Information as of April 2023 16
Slide 17: G&A: Building momentum with significant value potential
G&A: Building momentum with significant value potential Procurement Functional excellence Technology $600M in FY25* $400M in FY25* $500M in FY25* *DRIVE savings by domain reflect targets given in April of 2023, results by domain may vary. 17
Slide 18: Realizing functional excellence across the enterprise
Realizing functional excellence across the enterprise Leaner, Tech-enabled Streamlined nimbler optimized functions leadership processes supporting operations Right “shape” of Tech-enabled processes Greater efficiency the enterprise driving execution efficiency through right-shoring transactional cap
Slide 19: Network 2.0: $2B permanent cost reduction in FY27
Interoperable network eliminates Network redundancy, generating $2B in 2.0 permanent cost reduction in FY27 Enable one truck, Eliminate redundant Capitalize on Optimize between one neighborhood linehaul and reduce efficiency benefits air and surface empty miles of consolidated sort modes to balance
Slide 20: Providing structural cost reductions across surface operations
Providing structural cost reductions Network across surface operations 2.0 Pickup & delivery interoperability Facilities footprint consolidation Now 2.0 Now 2.0 P&D duplication One truck, one ~70% of buildings Moving to a network neighborhood are within 20 miles design that results in deployment tar
Slide 21: Capital allocation priorities
Capital allocation priorities Continuing to reduce capital intensity while increasing capital returns $6.8B $6.2B $5.2B $4.9B $2.5B Stock repurchases 7.6% 7.2% 6.8% of 6.8% of of 5.9%ofof <6.5% of $3.8B* revenue Dividend revenue revenue revenue revenue revenue FY25E capital return $1.3B FY22 FY23 FY
Slide 22: Well-positioned to capture opportunity in a large and growing market
Well-positioned to capture opportunity in a large and growing market E-commerce remains the growth B2B higher-margin verticals engine of parcel volume demand top-tier service • ~90% of expected parcel industry • Target segments generate high growth comes from e-commerce* margins • Anticipate address
Slide 23: Differentiation for premium segments
Differentiation for premium segments Focus on high-value segments Market leading value proposition for SMB Business-to-business (B2B) Weekend coverage Faster service Healthcare Loyalty program Earned discounts Small and medium businesses (SMB) Modern FedEx Ship Manager® 23
Slide 24: FedEx Business Trends
FedEx Business Trends Meeting e-commerce demands • Year-round, seven-day-per-week U.S. residential delivery through our ground services* • Significantly later pick up times offered with FedEx Extra Hours Service • Widespread retail convenience network with Walgreens, Dollar General, Albertson’s and
Slide 25: 94% of people in the U.S. are within five miles of a FedEx hold location
94% of people in the U.S. are within five miles of a FedEx hold location • Customers want to drop off or pick up at places convenient to their everyday lives — the FedEx retail convenience network offers nearly 50,000 U.S. locations • Now U.S. consumers can pick up their packages at more than 19,000
Slide 26: Pricing Strategy
Pricing Strategy Improving revenue quality • Focused on long-term profitable growth • Utilizing capacity for highest-yielding customers • Shipping rates for express and ground services increased by an average of 5.9% in January 2025 • FedEx Freight shipping rates increased by an average of 5.9%-6.9%
Slide 27: Strong portfolio of residential package services
Strong portfolio of residential package services Express Home Delivery Economy • 1–3 days transit time • 1–5 days transit time • 2–7 days transit time • Time-definite • Day-definite • No declared value • Money Back Guarantee • Declared value up to $50K • Lighter-weight • Declared value up to $50K •
Slide 28: FedEx ground revenue market share has grown to more than 30%
FedEx ground revenue market share has grown to more than 30% 50% $110 $100 Revenue ($ Billions) $90 40% Market Share $80 $70 30% $60 $50 20% $40 $30 $20 10% $10 $0 0% CY98CY99CY00CY01CY02CY03CY04CY05CY06CY07CY08CY09CY10CY11CY12CY13CY14CY15CY16CY17CY18CY19CY20CY21CY22CY23CY24 FedEx Ground Revenue Fed
Slide 29: LTL industry revenue market share
LTL Industry Revenue Market Share LTL industry revenue market share 30% FedEx Yellow XPO TForce ODFL ABFS Saia 25% 20% 15% 10% 5% 0% CY04 CY05 CY06 CY07 CY08 CY09 CY10 CY11 CY12 CY13 CY14 CY15 CY16 CY17 CY18 CY19 CY20 CY21 CY22 CY23 CY24 Source: FedEx Analysis 29
Slide 30: Sustainability: Carbon neutral global operations by 2040
Sustainability: Carbon neutral global operations by 2040 Key steps we’re taking toward our goal: Aviation. Efforts to reduce overall fuel usage Facilities. Making our hubs, stations, and retail through conservation programs and fleet locations worldwide more sustainable through modernization, includ
Slide 31: Corporate social responsibility
Corporate social responsibility Awards & recognition World’s Most Admired Companies 2025 Best Places to Work in IT 2024 FORTUNE ComputerWorld • Our 24th consecutive year we’ve been ranked among the top 20 in the FORTUNE Most Trusted Brands 2024 Most Admired Companies List Morning Consult World’s Mos
Slide 32: Consolidated operating margin
Consolidated operating margin 8.0% 7.4% 7.3% 7.1% 7.0% 7.0% 6.7% 6.3% 6.0% 6.0% 5.4% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% FY21 FY22 FY23 FY24 GAAP Adjusted Non-GAAP reconciliations are included herein. See Appendix. 32
Slide 33: Earnings per share
Earnings per share $25.00 $20.61 $20.00 $19.45 $18.17 $17.21 $17.80 $15.48 $14.96 $15.00 $14.33 $10.00 $5.00 $0.00 FY21 FY22 FY23 FY24 GAAP Adjusted Non-GAAP reconciliations are included herein. See Appendix. 33
Slide 34: Capital expenditures
Capital expenditures (% of Revenues) 10.0% 9.0% 8.7% 8.5% 7.9% 8.0% 7.2% 7.0% 6.8% 7.0% 5.9% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% FY18 FY19 FY20 FY21 FY22 FY23 FY24 34
Slide 35: Dividends increased at a five-year CAGR of 14%
Dividends increased at a five-year CAGR of 14% $6.00 $5.04 Over the past five $5.00 $4.60 years, we have provided returns to $4.00 our stockholders Dividends Per Share $3.00 $3.00 $2.00 $2.60 $2.60 $2.60 $4.6B $2.00 $1.60 in dividend payments $1.00 $1.00 $0.80 $6.3B $0.60 $0.52 $0.56 $0.40 $0.44 $0.
Slide 36: Appendix
Appendix
Slide 37: Non-GAAP financial measures
Non-GAAP financial measures FY25 EPS and ETR forecasts Our fiscal 2025 diluted earnings per share (“EPS”) forecast is a non-GAAP financial measure because it excludes fiscal 2025 mark-to-market (“MTM”) retirement plans accounting adjustments and estimated costs related to business optimization initi
Slide 38: GAAP to non-GAAP reconciliations
GAAP to non-GAAP reconciliations FedEx Corporation Q3 FY25 Q3 FY24 Diluted Diluted Operating Operating Income Net Earnings Operating Operating Income Net Earnings Dollars in millions, except EPS Income Margin Taxes1 Income2 Per Share Income Margin Taxes1 Income2 Per Share GAAP measure $ 1,292 5.8% $
Slide 39: GAAP to non-GAAP reconciliations
GAAP to non-GAAP reconciliations FY25 Diluted Earnings Per Share Forecast Full-Year FY25 Outlook Diluted Earnings Dollars in millions, except EPS Adjustments Per Share Diluted earnings per share before MTM retirement plans accounting adjustments (non-GAAP)6 $15.15 to $15.75 Business optimization cos
Slide 40: GAAP to non-GAAP reconciliations: FY24 Operating Income
GAAP to non-GAAP reconciliations FY24 Operating Income Full-Year FY24 Dollars in millions, except EPS Actual Operating income (GAAP measure) $ 5,559 7 MTM retirement plans accounting adjustment — 3 Business optimization costs 582 4 Asset impairment charges 157 8 Remeasurement of state deferred incom
Slide 41: FY24 reconciliation for FedEx Corporation
FY24 reconciliation for FedEx Corporation Operating Income Net Diluted Earnings Dollars in millions, except EPS Operating Margin Income Taxes1 Income2 Per Share3 GAAP measure $5,559 6.3% $1,505 $4,331 $17.21 MTM retirement plans — 0.0% (135) (426) (1.69) accounting adjustment4 Business optimization
Slide 42: FY23 reconciliation for FedEx Corporation
FY23 reconciliation for FedEx Corporation Operating Income Net Diluted Earnings Dollars in millions, except EPS Operating Margin3 Income Taxes1 Income2 Per Share GAAP measure $4,912 5.4% $1,391 $3,972 $15.48 MTM retirement plans — — (157) (493) (1.92) accounting adjustment4 Business optimization cos
Slide 43: FY22 reconciliation for FedEx Corporation
FY22 reconciliation for FedEx Corporation Operating Income Net Diluted Earnings Dollars in millions, except EPS Operating Margin Income Taxes1 Income2 Per Share GAAP measure $6,245 6.7% $1,070 $3,826 $14.33 Mark-to-Market Retirement Plans — — 379 1,199 4.49 Accounting Adjustments4 Business realignme
Slide 44: FY21 reconciliation for FedEx Corporation
FY21 reconciliation for FedEx Corporation Operating Income Net Diluted Earnings Dollars in millions, except EPS Operating Margin Income Taxes1 Income2 Per Share3 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
Slide 45: Footnotes for historical non-GAAP reconciliation slides
Footnotes for historical non-GAAP reconciliation slides 1. Income taxes are based on the company’s approximate statutory tax rates applicable to each transaction. 2. Effect of “total other (expense) income” on net income amount not shown. 3. Does not sum to total due to rounding. 4. The MTM retireme