Xpo, Inc. · NYSE:XPO
Xpo — XPO Logistics — Investor Presentation (November 2011)
16 slides from Xpo's investor presentation, Nov 29, 2011
Slide 1: Investor Presentation
Investor Presentation November 29, 2011
Slide 2: Disclaimer
Disclaimer This presentation contains, and XPO Logistics, Inc. (the “Company”) may from time to time make, written or oral “forward- looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Al
Slide 3: The XPO growth strategy
The XPO growth strategy Build a multi-billion dollar third-party logistics business Execute selective acquisitions and organic growth Optimize operations company-wide Apply best practices through highly skilled management team
Slide 4: Bradley Jacobs track record
Bradley Jacobs United Waste stock outperformed S&P 500 by 5.6x from 1992 to 1997 United Rentals stock outperformed S&P 500 by 2.2x from 1997 to 2007 Founded and led four highly successful companies: – Amerex Oil Associates: Built one of world’s largest oil brokerage firms – Hamilton Resources: Grew
Slide 5: Transportation is a large industry
Transportation is a large industry Worldwide logistics spend: U.S. logistics spend: U.S. trucking spend: Global freight forwarding spend: U.S. truck brokerage spend: Sources: American Trucking Association, Armstrong & Associates, EVE Partners LLC > $3 trillion > $1 trillion ~ $350 billion ~ $150 bil
Slide 6: Truck brokerage is a highly fragmented market
Truck brokerage is a highly fragmented market More than 10,000 licensed truck brokers in the U.S. Only about 25 brokers have more than $200 million in revenue Large potential acquisition universe Lack of working capital can motivate sellers Source: Armstrong & Associates
Slide 7: 15% brokerage penetration likely to increase
15% brokerage penetration likely to increase Truck brokerage sector is growing at about 2x to 3x GDP Long-term outsourcing trend Brokers add efficiency to both shippers and carriers – Shippers gain access to hundreds of thousands of carriers – Carriers gain access to millions of shipments $300 billi
Slide 8: Acquisition and integration strategy
Acquisition and integration strategy Rapidly scale acquired companies Attractive acquisition universe Targeting non-asset based transportation companies Primarily focused on truck brokers Initial sweet spot: $30 million to $200 million in revenue Aggressively expand sales force Focus on ROIC Grow th
Slide 9: Coldstarts typically offer high returns
Coldstarts typically offer high returns Plan is for coldstarts to be a significant component of revenue over time Targeting 20 greenfield locations within two to three years Experienced management leading the roll-out Phoenix is the first coldstart
Slide 10: Highly skilled management team
Highly skilled management team Sean Fernandez Chief Operating Officer Scott Malat SVP, Strategic Planning Tom Connolly SVP, Acquisitions Dick Metzler SVP, Acquisitions Greg Ritter SVP, Brokerage Operations Troy Cooper VP, Finance Mario Harik Chief Information Officer Gordon Devens SVP and General Co
Slide 11: Truck brokerage (Bounce)
Truck brokerage (Bounce) Good example of coldstart opportunity Grew to nearly $30 million in revenue after three years YOY growth of 45% in revenue and 78% in operating income in 3Q 2011 Growth plan: Increase sales force and apply best practices
Slide 12: Expedited transportation (Express-1)
Expedited transportation (Express-1) Gain more share of estimated $5 billion potential market Capitalize on strong position Increase current utilization of owner-operators Recruit more owner-operators Source: Company data
Slide 13: Freight forwarding (CGL)
Freight forwarding (CGL) Opportunity to grow by taking market share Approximately $70 million player in a $150 billion market Plan to grow footprint from 25 to 35 locations over two years with company-owned and independently-owned stations Capitalize on presence in growing international market Sourc
Slide 14: XPO key financial statistics and stock stats
XPO key financial statistics XPO stock stats TTM revenue: $175 million Diluted share count: 24.0 million (19.4 million excluding shares in respect of warrants) $71.5 million cash; $2.5 million debt Symbol NYSE Amex: XPO Market capitalization (a) $175 million Enterprise value (a) $106 million Note: T
Slide 15: Financing growth
Financing growth First phase of XPO’s growth is pre-funded May expand credit line Expect sufficient liquidity for first phase of acquisitions, coldstarts and infrastructure
Slide 16: Summary of opportunities
Summary of opportunities Large, fragmented, growing industry Create value with acquisitions and coldstarts Business has potential to grow even in a downturn
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