Werner Enterprises, Inc. · NASDAQ:WERN
Werner Enterprises — Citi Global Industrials Conference 2012
28 slides from Werner Enterprises's conference presentation, Sep 19, 2012
Slide 1: Industrials Conference
Industrials Conference September 19, 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 Intermodal expansion • Australia launch 1956 2007 • Founded 1998 • LH fleet reduction by C.L. • Electronic driver Werner logs (EOBR) 1986 • IPO 2011 • $103M earnings 2008 (record high to date) • Balanced portfolio
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 Werner Enterprises in billions of $* Growth Opportunities Other Rail (Pipeline, Air, intermodal, Water), $74 $300 $11 Truckload, $250 $268 $255 $255 Revenue in billions Rail carload, $46 $200 $150 LTL, $40 $100
Slide 8: Revenue Profile
REVENUE PROFILE Goal 2Q12 • Freight Management • Brokerage • Intermodal • Cross Border 1/3 27%* Asset-Light • Global Logistics LOGISTICS Van DEDICATED 1/3 38% 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
FREIGHT MARKET UPDATE ONE-WAY TRUCKLOAD 8 8
Slide 10: Logistics
LOGISTICS Brokerage Intermodal Werner Global Freight Logistics Management 9 9
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: Trucking Safety Regulatory Changes
TRUCKING SAFETY REGULATORY CHANGES Expected Effect on Timing Industry Capacity WERN CSA December 2010 Our 5 basic scores are satisfactory (well below the deficiency threshold) HOS July 2013 Electronic driver logs -14 years - FMCSA approved EOBR July 2015 Electronic driver logs -14 years - (July 2012
Slide 15: Maintenance CPM & Avg. Co. Truck Age
MAINTENANCE CPM* & AVG. CO. TRUCK AGE 20.0 19.8¢ 3.5 2012 opportunity – decreasing average truck age should help 19.0 3.0 Avg. Co. truck age Maintenance CPM 18.0 17.9¢ 2.5 17.0 16.7¢ 2.0 16.2¢ 16.0 15.8¢ 1.5 15.1¢ 15.0 1.0 2006 2007 2008 2009 2010 2011 14 14
Slide 16: Cash Flow and Cap Ex
CASH FLOW AND CAP EX $300 ** $250 ** Millions of Dollars $200 $210M range $180M $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 17: 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 18: 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 19: 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 20: DH Miles Per Trip
DH MILES PER TRIP 100 30 million fewer empty miles in 2011 compared to 2007, due to lower 90 DH miles per trip 80 70 60 50 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 *Total company (includes Dedicated) DH – Deadhead (empty miles) 19 19
Slide 21: 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 22: Improving Rate Trends – Last Quarters
IMPROVING RATE TRENDS – LAST 13 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 RPTM: Revenue per Total Mile (Ex-Fuel) YOY RPTM % Change
Slide 23: Werner Operating Stats
WERNER OPERATING STATS 2Q12 to 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 2Q11 Miles per truck 29,307 30,666 30,255 29,910 29,115 30,174 29,643 29,139 28,980 29,139 <3%> DH (empty) miles per 64 61 61 62 64 66 67 65 66 66 0% trip Tractor/non driver 4.1 4.0 4.1 4.0 4.0 4.0 4.0 3.9 3.9 4.0 0% ra
Slide 24: 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 $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 3Q 4
Slide 25: 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 26: WERN Targeting an Annualized 11% TL Operating Margin
WERN TARGETING AN ANNUALIZED 11% TL*OPERATING MARGIN 11.0% 9.7% 9.3% 9.0% 8.7% 7.9% 6.8% 5.9% 5.0% LTM 2005 2006 2007 2008 2009 2010 2011 June Target 2012 • Truckload Transportation Services (includes One-Way TL and Dedicated). Above percentages include fuel (fuel surcharge revenues and fuel expense
Slide 27: WERN Targeting a 15% ROE & 9% ROA
WERN TARGETING A 15% ROE & 9% ROA ROE 14.5% 15.0% 15.0% 11.3% 11.1% 8.8% 8.1% 7.5% LTM 2006 2007 2008 2009 2010 2011 June Target 2012 ROA 8.3% 8.6% 9.0% 6.9% 6.6% 5.4% 5.2% 4.6% LTM 2006 2007 2008 2009 2010 2011 June Target 2012 26 26
Slide 28: 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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