United Parcel Service, Inc. · NYSE:UPS
United Parcel Service — Q2 2024 Earnings Presentation
27 slides from United Parcel Service's earnings presentation, Jul 23, 2024
Slide 1: 2Q24 Earnings Call
2Q24 Earnings Call July 23, 2024 © 2023 United Parcel Service of America, Inc. UPS, the UPS brandmark, and the color dark brown tone are trademarks of United Parcel Service of America, Inc. All rights reserved.
Slide 2: PJ Guido, Investor Relations Officer
PJ GUIDO Investor Relations Officer © 2024 United Parcel Service of America, Inc. UPS, the UPS brandmark, and the color dark brown tone are trademarks of United Parcel Service of America, Inc. All rights reserved. 2
Slide 3: UPS Speakers
UPS Speakers CAROL B. TOMÉ Chief Executive Officer BRIAN DYKES Chief Financial Officer © 2024 United Parcel Service of America, Inc. UPS, the UPS brandmark, and the color dark brown tone are trademarks of United Parcel Service of America, Inc. All rights reserved. 3
Slide 4: Forward-Looking Statements and Non-GAAP Reconciliations
Forward-Looking Statements and Non-GAAP Reconciliations Forward-Looking Statements This presentation and our filings with the Securities and Exchange Commission including terrorist attacks, epidemics or pandemics; exposure to changing contain and in the future may contain “forward-looking statements
Slide 5: Diluted EPS 2Q24 vs 2Q23
Diluted EPS 2Q24 2Q23 $3.00 $3.00 $2.50 $0.12 $2.54 $2.50 $2.42 $2.00 $0.11 $0.03 $1.79 $2.00 $1.65 $1.50 $1.50 $1.00 $1.00 $0.50 $0.50 $0.00 $0.00 2Q24 EPS One-Time International Transformation & 2Q24 2Q23 EPS Transformation & Other 2Q23 Regulatory Matter Other Adj. EPS* Adj. EPS* © 2024 United Par
Slide 6: Carol B. Tomé, Chief Executive Officer
CAROL B. TOMÉ Chief Executive Officer © 2024 United Parcel Service of America, Inc. UPS, the UPS brandmark, and the color dark brown tone are trademarks of United Parcel Service of America, Inc. All rights reserved. 6
Slide 7: Thank You UPSers
Thank You UPSers U.S. Domestic Returned to Volume Growth
Slide 8: 2Q24 Consolidated Results
2Q24 Consolidated Results In $ Millions 2Q24 2Q23 Change Y/Y (except per share) Revenue $21,818 $22,055 -1.1% Adj. Operating Profit* $2,064 $2,919 -29.3% Adj. Operating Margin* 9.5% 13.2% -370 bps Adj. Diluted EPS* $1.79 $2.54 -29.5% “Our second-quarter performance was a significant turning point fo
Slide 9: UPS to Acquire Estafeta
UPS to Acquire Estafeta • Increases our logistics capabilities in Mexico • Connects Estafeta to the reach of our global integrated network • Further supports customers that are shifting manufacturing and distribution closer to the United States • Targeting to close this acquisition by the end of thi
Slide 10: Customer First, People Led, Innovation Driven
Customer First, People Led, Innovation Driven • Opened first dedicated healthcare facility in Dublin, IE; increased size of Roermond, NL facility and expanded ultra-cold storage capabilities • Expanded weekend services to six additional U.S. markets; UPS is the only private U.S.-based carrier that p
Slide 11: Updated Full-Year 2024 Outlook
Updated Full-Year 2024 Outlook Consolidated guidance* • Expect revenue of approximately $93.0B • Expect adjusted operating margin** of approximately 9.4% • Restarting share repurchasing program targeting $1.0B of share repurchases annually, including ~$500M in 2024 *Includes Coyote revenue and opera
Slide 12: Brian Dykes, Chief Financial Officer
BRIAN DYKES Chief Financial Officer © 2024 United Parcel Service of America, Inc. UPS, the UPS brandmark, and the color dark brown tone are trademarks of United Parcel Service of America, Inc. All rights reserved. 12
Slide 13: 2Q24 Consolidated Results
2Q24 Consolidated Results In $ Millions 2Q24 2Q23 Change Y/Y (except per share) Revenue $21,818 $22,055 -1.1% Adj. Operating Profit* $2,064 $2,919 -29.3% Adj. Operating Margin* 9.5% 13.2% -370 bps Adj. Diluted EPS* $1.79 $2.54 -29.5% “The second quarter represented an important turning point for our
Slide 14: U.S. Domestic: 2Q Average Daily Volume Increased 0.7% Y/Y
U.S. Domestic 2Q Average Daily Volume Increased 0.7% Y/Y Returned to volume growth for the first time since the fourth quarter of 2021 ADV Change (Y/Y) Monthly ADV Growth (Y/Y) 4.0% +0.7% Y/Y 0.0% -4.0% -120 +340 -8.0% -96 +2.3% -7.1% -8.8% -12.0% 17,740 17,864 -16.0% In Thousands Jan Feb Mar Apr Ma
Slide 15: U.S. Domestic: 2Q Revenue of $14.1B, Down 1.9% Y/Y
U.S. Domestic 2Q Revenue of $14.1B, Down 1.9% Y/Y Revenue per piece decline driven by increase in SurePost e-commerce volume Revenue Change (Y/Y) -1.9% Y/Y 2Q revenue per piece (RPP) declined 2.6%: • Base rates increased RPP growth rate ~90 basis $15.0 points +$0.1B -$0.4B • Combination of product m
Slide 16: U.S. Domestic: Delivered $997M in Adjusted Operating Profit
U.S. Domestic Delivered $997M in Adjusted Operating Profit* in 2Q Held the adjusted cost per piece* growth rate to only 2.5%, despite union wages increasing nearly 12% U.S. Domestic Results • Total adjusted expense* increased 3.2%, despite 11.7% Change increase in union wage rates 2Q24 2Q23 Y/Y o Le
Slide 17: International: 2Q Average Daily Volume Down 2.9% Y/Y
International 2Q International Average Daily Volume Down 2.9% Y/Y Eleven of our top 20 export countries demonstrated Y/Y average daily volume growth Total Asia* Monthly ADV (Y/Y) Total Europe** Monthly ADV (Y/Y) 30% 0% 20% -2% 10% -4% 0% -6% -10% -8% -20% -10% -30% -12% Jan Feb Mar Apr May Jun Jul A
Slide 18: International: Generated 2Q Adjusted Operating Profit of $824M
International Generated 2Q Adjusted Operating Profit* of $824M Strong base pricing and positive region/product mix drove an increase in revenue per piece International Results Change 2Q24 2Q23 • Revenue per piece increased 2.4% Y/Y driven by Y/Y strong base pricing and the positive impact of region
Slide 19: Supply Chain Solutions: Revenue of $3.3B, Up 2.6% Y/Y
Supply Chain Solutions Revenue of $3.3B, Up 2.6% Y/Y Remained agile and leaned into areas of growth in the face of a dynamic market Supply Chain Solutions Results • Strong e-commerce demand in international air Change freight drove increase in volume and revenue 2Q24 2Q23 Y/Y • In ocean freight, tot
Slide 20: 2Q24 YTD Cash Flow and Dividends
2Q24 YTD Cash Flow and Dividends Cash From Free Cash Dividends Operations Flow* Paid $5.3B $3.4B $2.7B $1.63 per share © 2024 United Parcel Service of America, Inc. UPS, the UPS brandmark, and the color dark brown tone are trademarks of United Parcel Service of America, Inc. All rights reserved. * N
Slide 21: 2024 Full-year Outlook
2024 Full-year Outlook Moving to point estimate as it represents best view of the many moving parts within our business Considerations Outlook • In 2024, expect global • Full-year 2024 Consolidated: GDP to be up 2.7% and • Revenue of ~$93.0B U.S. GDP to be up 2.4% • Adjusted operating margin* of ~9.
Slide 22: Questions & Answers
Questions & Answers © 2023 United Parcel Service of America, Inc. UPS, the UPS brandmark, and the color dark brown tone are trademarks of United Parcel Service of America, Inc. All rights reserved. 22
Slide 23: Appendix
Appendix © 2023 United Parcel Service of America, Inc. UPS, the UPS brandmark, and the color dark brown tone are trademarks of United Parcel Service of America, Inc. All rights reserved. 23
Slide 24: Reconciliation of GAAP and Non-GAAP Financial Measures
Reconciliation of GAAP and Non-GAAP Financial Measures Reconciliation of GAAP and Non-GAAP Financial Measures One-Time Compensation Payment We supplement the reporting of our financial information determined under generally accepted accounting principles We supplement the presentation of our operati
Slide 25: Reconciliations
Reconciliations © 2024 United Parcel Service of America, Inc. UPS, the UPS brandmark, and the color dark brown tone are trademarks of United Parcel Service of America, Inc. All rights reserved. 25
Slide 26: Reconciliations
Reconciliations © 2024 United Parcel Service of America, Inc. UPS, the UPS brandmark, and the color dark brown tone are trademarks of United Parcel Service of America, Inc. All rights reserved. 26
Slide 27: Reconciliations
Reconciliations © 2024 United Parcel Service of America, Inc. UPS, the UPS brandmark, and the color dark brown tone are trademarks of United Parcel Service of America, Inc. All rights reserved. 27
United Parcel Service — Q2 2024 Earnings Presentation on 6ix