C.h. Robinson Worldwide, Inc. · NASDAQ:CHRW
C.h. Robinson Worldwide — Q2 2019 Earnings Presentation
21 slides from C.h. Robinson Worldwide's earnings presentation, Jul 31, 2019
Slide 1: Earnings Conference Call – Second Quarter 2019
Earnings Conference Call – Second Quarter 2019 July 31, 2019 Robert Biesterfeld, CEO Scott Hagen, Corporate Controller and Interim CFO Robert Houghton, VP of Investor Relations 1
Slide 2: Safe Harbor Statement
Safe Harbor Statement Except for the historical information contained herein, the matters set forth in this presentation and the accompanying earnings release are forward-looking statements that represent our expectations, beliefs, intentions or strategies concerning future events. These forward-loo
Slide 3: Q2 2019 – Key Themes
Q2 2019 – Key Themes ▪ Solid second quarter financial results ▪ Softening freight environment ▪ Price and cost declines in most service lines ▪ Growth in truckload contractual volume 3 3
Slide 4: Results Q2 2019
Results Q2 2019 in thousands, except per share amounts and headcount Three Months Ended June 30 Six Months Ended June 30 2019 2018 % Change 2019 2018 % Change Total Revenues $3,908,840 $4,276,037 (8.6%) $7,660,050 $8,201,364 (6.6%) Total Net Revenues $695,216 $671,483 3.5% $1,374,016 $1,297,408 5.9%
Slide 5: Other Income Statement Items
Q2 2019 Other Income Statement Items ▪ Q2 effective tax rate of 23.4% vs. 25.6% last year ▪ Interest expense decline due to lower debt levels ▪ $2.8 million favorable impact from currency revaluation ▪ Weighted average diluted shares outstanding down 1.7 percent ‹#› 5
Slide 6: Cash Flow and Capital Distribution
Q2 2019 Cash Flow and Capital Distribution Cash Flow from Operations Capital Distribution + 85.0% + 32.0% $199.6M $179.8M Share $136.2M Repurchases Cash $107.9M Dividends ▪ $91.7 million increase in cash flow ▪ $179.8 million returned to driven by improved working capital shareholders performance an
Slide 7: Balance Sheet
Q2 2019 Balance Sheet in thousands June 30, 2019 December 31, 2018 % Change Accounts Receivable, Net(1) $2,279,261 $2,322,073 (1.8%) Accounts Payable(2) $1,261,615 $1,182,927 6.7% Net Operating Working Capital(3) $1,017,646 $1,139,146 (10.7%) ▪ Total debt balance $1.25 billion ▪ $600 million senior
Slide 8: Third Quarter 2019 Trends – July
Third Quarter 2019 Trends – July ▪ July to date total company net revenue per business day has decreased approximately 8 percent when compared to July 2018 ▪ North America truckload volume per business day has decreased approximately 6 percent on a year- over-year basis in July 8 8
Slide 9: NAST Truckload Cost and Price Change
NAST Truckload Cost and Price Change(1) YoY Price Change YoY Cost Change NAST Truckload Q2 ▪ NAST Truckload cost and price change chart represents truckload shipments in North America. Volume (2.5%) Pricing(1)(2) (11.5%) ▪ Includes the impact of the truckload service line previously Cost(1)(2) repor
Slide 10: NAST Results by Service Line
Q2 2019 NAST Results by Service Line Truckload, Less Than Truckload and Intermodal in thousands Three Months Ended June 30 ▪ Year-over-year price Net Revenues 2019 2018 % Change declines in truckload and Truckload $352,912 $325,005 8.6% LTL LTL $121,526 $118,176 2.8% Intermodal $6,021 $9,101 (33.8%)
Slide 11: NAST Operating Income
Q2 2019 NAST Operating Income Q2 Operating Income Q2 Operating Margin % + 8.8% + 120 bps $204.7M 42.1% $188.2M 40.9% ▪ Increased net revenues ▪ Average headcount increased 1.8 percent ▪ Lower variable compensation ▪ Five consecutive quarters of year-over-year operating margin expansion ‹#› 11
Slide 12: Global Forwarding Results by Service Line
Q2 2019 Global Forwarding Results by Service Line Ocean, Air and Customs in thousands Three Months Ended June 30 ▪ Ocean net revenue decline due to lower pricing Net Revenues 2019 2018 % Change ▪ Air net revenue decline due Ocean $85,389 $86,820 (1.6%) to declines in pricing and Air $25,212 $28,722
Slide 13: Global Forwarding Operating Income
Q2 2019 Global Forwarding Operating Income Q2 Operating Income Q2 Operating Margin % (10.6%) (190 bps) $29.8M 20.7% $26.6M 18.8% ▪ Decline in net revenues ▪ 0.7 percent increase in average headcount ▪ Space Cargo acquisition contributed 3.5 percentage points to Global Forwarding headcount growth ‹#›
Slide 14: All Other and Corporate Results
Q2 2019 All Other and Corporate Results Robinson Fresh, Managed Services and Other Surface Transportation in thousands Three Months Ended June 30 Net Revenues 2019 2018 % Change Robinson Fresh $31,236 $32,644 (4.3%) Managed Services $20,099 $20,074 0.1% Other Surface Transportation $15,527 $15,028 3
Slide 15: Final Comments
Final Comments ▪ Expect current market conditions to continue through the balance of 2019 ▪ Continued investments in technology ▪ Focused on long-term strategies of taking market share and improving operating leverage ‹#› 15
Slide 16: Appendix
Appendix 16
Slide 17: Transportation Results
Q2 2019 Transportation Results(1) in thousands Three Months Ended June 30 Six Months Ended June 30 Transportation 2019 2018 % Change 2019 2018 % Change Total Revenues $3,638,612 $3,953,139 (8.0%) $7,143,544 $7,590,779 (5.9%) Total Net Revenues $665,614 $639,943 4.0% $1,317,290 $1,235,981 6.6% Net Re
Slide 18: NAST Results
Q2 2019 NAST Results in thousands, except headcount Three Months Ended June 30 Six Months Ended June 30 2019 2018 % Change 2019 2018 % Change Total Revenues $2,872,053 $3,163,185 (9.2%) $5,668,837 $6,071,604 (6.6%) Total Net Revenues $486,418 $459,706 5.8% $972,968 $898,108 8.3% Net Revenue Margin %
Slide 19: Global Forwarding Results
Q2 2019 Global Forwarding Results in thousands, except headcount Three Months Ended June 30 Six Months Ended June 30 2019 2018 % Change 2019 2018 % Change Total Revenues $592,483 $617,597 (4.1%) $1,130,050 $1,171,351 (3.5%) Total Net Revenues $141,936 $144,031 (1.5%) $269,172 $267,068 0.8% Net Reven
Slide 20: All Other and Corporate Results
Q2 2019 All Other and Corporate Results in thousands, except headcount Three Months Ended June 30 Six Months Ended June 30 2019 2018 % Change 2019 2018 % Change Total Revenues $444,304 $495,255 (10.3%) $861,163 $958,409 (10.1%) Total Net Revenues $66,862 $67,746 (1.3%) $131,876 $132,232 (0.3%) Incom
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