Werner Enterprises, Inc. · NASDAQ:WERN
Werner Enterprises — BB&T Capital Markets 29th Annual Transportation Services Conference 2014
28 slides from Werner Enterprises's conference presentation, Feb 13, 2014
Slide 1: 29th Annual Transportation Services Conference
29TH ANNUAL TRANSPORTATION SERVICES CONFERENCE FEBRUARY 13, 2014
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: About Werner Enterprises
ABOUT WERNER ENTERPRISES H Premium Truckload Transportation and Logistics Services Provider 2013 Revenue: $2.0B 2013 Net Income: $87M NASDAQ: WERN Market Cap: $1.8B Avg Daily Trading Volume (3 mo. 12/13) 561k 2013 Quest for Quality Repeat Award Winner 2
Slide 4: The Path of Werner Progress
THE PATH OF WERNER PROGRESS 2003 2009 • Brokerage and • Safety improvement initiative begins Intermodal expansion • Australia launch 1998 2007 1956 • First to install • LH fleet reduction • Founded by electronic logging C.L. Werner device (ELD) 1986 • IPO • 11% OI margin target • Maintain truck flee
Slide 5: Revenue Sources
REVENUE SOURCES Vertical: 60% 51% 50% 50% 47% % of Revenues* 40% Retail/CP 30% 27% Grocery Products 24% 24% 16% 14% Manuf./Industrial 20% 14% 9% 12% 12% Logistics/Other 10% 0% 2011 2012 2013 * Top 50 customers Customers: 100% 80% 74% 73% 74% % of Revenues 60% 61% 61% Top 5 60% 40% 40% Top 10 40% 40%
Slide 6: Domestic Freight Market: Market Share & Growth Opportunities
DOMESTIC FREIGHT MARKET: MARKET SHARE & GROWTH OPPORTUNITIES U.S. Freight Market Revenues in billions of $* Other (Pipeline, Werner Enterprises Air, Water) Growth Opportunities $73B 9% Parcel $300 $280B $277B $45B Truckload 6% $280B Rail Intermodal 36% $250 $15B Revenue in billions 2% $200 Rail Carl
Slide 7: Revenue Profile
REVENUE PROFILE • Freight Management LOGISTICS/CB - % of Revenues 30% • Brokerage 29% 28% • Intermodal 27% • Cross Border 26% • Global Logistics 25% Goal 4Q13 Asset-Light 24% 23% LOGISTICS 22% 21% 20% 4Q07 4Q08 4Q09 4Q10 4Q11 4Q12 4Q13 1/3 28%* Van DEDICATED Flatbed Temperature 1/3 38% Controlled As
Slide 8: Freight Market Update
FREIGHT MARKET UPDATE ONE-WAY TRUCKLOAD 7
Slide 9: 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 over 7,000 services for technology tools chain solutions across trucks, 11,000 alliance
Slide 10: Logistics YOY Revenue Growth
LOGISTICS YOY REVENUE GROWTH Werner Logistics YOY Revenue Growth Accelerating Despite Competitive Logistics Market 22 20 18 2013 - $361M 16 2012 - $324M Percentage Growth 14 12 10 8 6 4 2 0 -2 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 9
Slide 11: Werner & Mexico: Growing Strength in Numbers
WERNER & MEXICO GROWING STRENGTH IN NUMBERS Werner Mexico: • Top 3 Mexico CB TL carrier • 15 years in market • >12% of consolidated revenues • Strong relationships with top Mexican carriers • 31% revenue growth 2011-2013 vs. Manufacturing: • MX MFG wages (adjusted for productivity) to be 30% lower t
Slide 12: Green Initiatives
GREEN INITIATIVES Current Fuel Efficiency Initiatives Werner’s Impact From 2007 to 2013 we reduced: Aerodynamic trucks & trailers Weight reduction strategies 77 860,000 Million Automated tire inflation systems Tons Gallons Newest diesel engine technology Computerized truck idling program
Slide 13: Safety Trends
SAFETY TRENDS INS/CLAIMS % of REVENUES* ACCIDENTS PER MM 8% 7.3% 15 7% 6.6% 14 6.3% 13 11.9 % of Tkg Revs (net of FSC) 6% 12 11.1 5.4% 5.2% 5.5% 11 10.1 5.0% 9.8 5% 10 9.0 9.0 9 8.3 4% 8 7 3% 6 5 2% 4 3 1% 2 1 0% 0 2007 2008 2009 2010 2011 2012 2013 2007 2009 2011 2013 * Trucking revenues, less fuel
Slide 14: Regulatory - CSA
REGULATORY - CSA January 2014 Def. Alert CSA BASIC WERN Threshold CSA SMS Summary Data Unsafe Driving 50 65 Fatigued Driving (HOS) 20 65 Total Carriers 786,345 Driver Fitness 58 80 Controlled Sub/Alcohol 44 80 Inspected Carriers 42% 329,718 Vehicle Maintenance 53 80 HAZMAT (Non‐Public) WERN well bel
Slide 15: Regulatory - HOS
REGULATORY - HOS Implementation Date: July 1, 2013 July 2013 Primary rule changes: 34-hour restarts, must include two periods between 1 a.m. and 5 a.m., and 1 week (168 hrs.) between 34-hour restarts New - requires a 30 minute break after 8 hours of driving 2-3% Estimated decrease to mileage pro
Slide 16: Supply - Capacity
SUPPLY - CAPACITY Total Public Truckload Fleet Capacity 54,000 49,000 Including owner 44,000 operators, capacity at public fleets is 39,000 14% below peak 4Q06 levels 34,000 29,000 24,000 Source: KeyBanc 15
Slide 17: Supply - Aging Fleets
SUPPLY – AGING FLEETS 7 U.S. Class 8 Trucks Average Age 6.5 Age in Years 6 5.5 5 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Class 8 Tractor Maintenance Expense Current Average Age of a U.S. Class 8 Truck Fleet 6.6 yrs 16 Sources: ACT Research Co. and Wa
Slide 18: Supply - Industry Driver Shortage
SUPPLY-INDUSTRY DRIVER SHORTAGE MACRO TRUCKING CAPACITY CONSTRAINTS Declining Unemployment Rate Reduced Government Funding Assistance for New Drivers 35% % of new Werner drivers receiving government assistance 25% 12% 15% Increased Labor Competition 2010 2011 2012 2013 Growing home construction jo
Slide 19: Cash Flow and Cap Ex
CASH FLOW AND CAP EX $300 * $250 * ** ** Millions of Dollars $200 $200M $150 $150M $100 $50 $0 00 01 02 03 04 05 06 07 08 09 10 11 12 20 13 t. es 20 20 20 20 20 20 20 20 20 20 20 20 20 20 14 Cash Flow from Operations Cap Ex, Net 18
Slide 20: Returning Value to Shareholders
RETURNING VALUE TO SHAREHOLDERS $900 Cumulative Amount Returned $800 $700 $600 $840M Millions of $ $500 returned over $400 the last 7 yrs. (>$11/share) $300 $200 $100 $0 2006 2007 2008 2009 2010 2011 2012 2013 Share Repurchases Quarterly Dividends Special Dividends 19
Slide 21: Trucks
TRUCKS 9,200 10% 9,000 Keep fleet count flat, focused on reaching 8% TL OI% target of 11% 8,800 6% Average # of Trucks In Service 8,600 4% 8,400 2% % Change YOY 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 2009 2010 2011 2012 2013 Ave
Slide 22: Operating Margin Trends
OPERATING MARGIN TRENDS* 11 OP INC - % OF REVENUES 10 9 8 7 6 5 4 3 2 1Q 2Q 3Q 4Q 2011 2012 2013 EPS TRENDS $0.45 $0.42 $0.40 $0.38 $0.40 $0.40 $0.34 $0.35 $0.35 $0.35 $0.29 $0.29 $0.30 $0.30 $0.22 $0.24 $0.25 EPS $0.20 $0.15 $0.10 $0.05 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q $0.00 2011 2012 2013 * Tot
Slide 23: EPS Trends
EPS TRENDS $1.60 $1.40 $1.40 $1.40 $1.25 $1.22 $1.18 $1.20 $1.10 $1.08 $1.02 $1.00 $0.94 $0.90 $0.79 $0.80 $0.76 $0.76 $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 22
Slide 24: WERN Targeting an Annualized 11% TL Operating Margin
WERN TARGETING AN ANNUALIZED 11% TL*OPERATING MARGIN 11.0% 9.3% 9.0% 9.0% 8.7% 7.9% 7.2% 6.8% 5.9% 5.0% 2005 2006 2007 2008 2009 2010 2011 2012 2013 Target * Truckload Transportation Services (includes One-Way TL and Dedicated). Above percentages include fuel (fuel surcharge revenues and fuel expens
Slide 25: WERN Targeting a 15% ROE & 9% ROA
WERN TARGETING A 15% ROE & 9% ROA ROE 14.5% 13.6% 15.0% 11.3% 11.1% 11.7% 8.8% 8.1% 7.5% 2006 2007 2008 2009 2010 2011 2012 2013 Target ROA 8.4% 9.0% 6.9% 7.7% 6.6% 6.5% 5.4% 5.2% 4.6% 2006 2007 2008 2009 2010 2011 2012 2013 Target 24
Slide 26: ROIC vs. Share Price Growth
RETURN ON INVESTED CAPITAL (ROIC*) VS. SHARE PRICE GROWTH $30 16% 14% $25 Return on Invested Capital 12% Share Price (year-end) $20 10% $15 8% 6% $10 4% $5 2% $0 0% 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Share Price (year-end) ROIC* *ROIC is a non-GAAP measure. Net income p
Slide 27: Global,
Global, Comprehensive Portfolio Award-Winning Customer Service Technology Driven Customizable Logistics Strategies Consistent, Credible and Conservative
Slide 28: Thank You
THANK YOU For more information visit: www.werner.com Follow us on Facebook and Twitter
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