Exhibit 99.1
Management Presentation
April 2014
Forward-Looking Statements Disclaimer
This document includes 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, including XPO’s full year 2014 and full year 2017 financial targets. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements. In some cases, forward-looking statements can be identified by the use of forward-looking terms such as “anticipate,” “estimate,” “believe,” “continue,” “could,” “intend,” “may,” “plan,” “potential,” “predict,” “should,” “will,” “expect,” “objective,” “projection,” “forecast,” “goal,” “guidance,” “outlook,” “effort,” “target” or the negative of these terms or other comparable terms. However, the absence of these words does not mean that the statements are not forward-looking. These forward-looking statements are based on certain assumptions and analyses made by us in light of our experience and our perception of historical trends, current conditions and expected future developments, as well as other factors we believe are appropriate in the circumstances.
These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions that may cause actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. Factors that might cause or contribute to a material difference include, but are not limited to, those discussed in XPO’s filings with the SEC and the following: economic conditions generally; competition; XPO’s ability to find suitable acquisition candidates and execute its acquisition strategy; the expected impact of acquisitions, including the expected impact on XPO’s results of operations; XPO’s ability to raise debt and equity capital; XPO’s ability to attract and retain key employees to execute its growth strategy; litigation, including litigation related to alleged misclassification of independent contractors; the ability to develop and implement a suitable information technology system; the ability to maintain positive relationships with XPO’s networks of third-party transportation providers; the ability to retain XPO’s and acquired businesses’ largest customers; XPO’s ability to successfully integrate acquired businesses and realize anticipated synergies and cost savings; and governmental regulation. All forward-looking statements set forth in this document are qualified by these cautionary statements and there can be no assurance that the actual results or developments anticipated will be realized or, even if substantially realized, that they will have the expected consequences to, or effects on, XPO or its businesses or operations. Forward-looking statements set forth in this document speak only as of the date hereof, and XPO undertakes no obligation to update forward-looking statements to reflect subsequent events or circumstances, changes in expectations or the occurrence of unanticipated events except to the extent required by law.
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One of the Largest 3PLs in North America
We facilitate over 22,000 deliveries per day
#4 freight brokerage firm and Top 50 logistics company #3 provider of intermodal services #1 provider of cross-border Mexico intermodal #1 manager of expedited shipments #1 provider of last-mile logistics for heavy goods
International and domestic freight forwarder
Growing presence in managed transportation and LTL
Sources for rankings: Transport Topics, Journal of Commerce and company data
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Clearly Defined Strategy for Value Creation
Acquire companies that bring value and are highly scalable Significantly scale up and optimize existing operations Open cold-starts where sales recruitment can drive revenue
We are on track or ahead of plan with all three legs of our growth strategy
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Precise Execution of Growth Plan
Completed 11 strategic acquisitions and established 24 cold-starts in two years
Created leading edge recruiting and training programs
Introduced scalable IT platform
Added national operations centers for shared services, carrier procurement and last-mile operations
Stratified customers, assigned a single point of contact to each
Created a culture of passionate on-time performance
Disciplined focus on operational excellence
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Massive Commitment to Shipper Satisfaction
Built integrated network across North America in two years
Over 3,000 employees at 120 locations in the U.S. and Canada
12,000 customers in the manufacturing, industrial, retail, food and beverage, commercial, life sciences and government sectors
Over 24,000 active, vetted carriers
Approximately 400 additional trucks under exclusive contract
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Acquired Pacer in March 2014
Provides instant scale in the $15 billion intermodal sector, the fastest-growing freight mode in North America
– Third largest provider of intermodal services
– Largest provider of cross-border Mexico intermodal
Creates company-wide cross-selling opportunities in every area of XPO service
Establishes strong platform for organic growth and M&A
Enhances XPO’s value proposition as a large, single-source supply chain partner with deep capacity
Sources: SJ Consulting Group, Inc., American Trucking Associations and company data
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Transformational Impact on Scale
120 locations
Over 24,000 active, vetted carriers Access to 60,000 miles of network rail routes
22,000 deliveries a day
Locations
XPO 3PD Pacer
Source: Company data
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Acquired 3PD in August 2013
Largest provider of heavy goods, last-mile logistics in North America
High value, high margin business, rapidly growing due to e-commerce and outsourcing
Strengthens XPO’s position with shippers as a large, single-source provider
Industry-leading customer experience IT can be used by XPO
Acquired Optima Service Solutions in November 2013
– Highly scalable supplier to 3PD, leader in last-mile delivery of large appliances and electronics
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Leading Positions in High-Growth Sectors
Market Projected Size Growth
Sector ($ billions) (x GDP) Growth Drivers
Truck brokerage $50 2-3 times Outsourcing and technology
Long-haul rail efficiencies and Intermodal $15 3-5 times near-sourcing of manufacturing in Mexico
Heavy goods,
$13 5-6 times Outsourcing and e-commerce last-mile
Sources: Armstrong & Associates, Norbridge, Inc., EVE Partners LLC, FTR Associates, SJ Consulting Group, Inc., Bureau of Economic Analysis, US Department of Commerce
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Acquired NLM in December 2013
Makes XPO the largest manager of expedited shipments in North America
#1 provider of web-based transportation management for expedited, through XPO NLM portal
XPO NLM manages more than $600 million of annual gross transportation spend
– Proprietary online auction system allows carriers to bid on loads that are then awarded electronically
Capitalizes on trend toward just-in-time inventories
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Significant Growth Embedded in XPO’s Model
Strategic accounts: market to large shippers
Cold-starts: expand footprint in markets with best access to sales talent
Scale and productivity: recruit sales reps and provide state-of-the-art training and IT
Supply chain offering: build leadership positions in the fastest-growing areas of logistics
Performance: become the logistics partner of choice due to our relentless focus on on-time pickup and delivery
M&A program: focus on the top 100 pipeline prospects
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Focused Sales and Marketing Effort
Differentiate XPO by providing a passionate commitment to customer satisfaction across a range of services
Single point of contact for each customer
– Strategic accounts team marketing to largest 1,200 shippers
– National accounts team focused on next largest 5,000 companies
– Branch network expands our reach to hundreds of thousands of small and medium-sized shippers
Capture more of the $32 billion less-than-truckload opportunity
Source: SJ Consulting Group, Inc.
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Increasing Productivity through Technology
One common IT platform for freight brokerage in all cold-starts and acquired companies
Proprietary freight optimizer tools for pricing and load-covering put in place in 2012
Highly scalable load execution and tendering via automated load-to-carrier matching
Total IT budget of more than $70 million for 2014 (1)
(1) Includes IT budget for Pacer
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Growth through Cold-starts
Hire strong industry veterans as branch presidents Position in prime recruitment areas Rapidly scale up by adding salespeople Low capital investment can deliver outsized returns 24 cold-starts
– 11 in freight brokerage, 12 in freight forwarding, one in expedited
– Brokerage cold-starts on a combined annual revenue run rate of more than $150 million
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CEO Bradley S. Jacobs
Founded and led four highly successful companies, including world-class public corporations
Amerex Oil Associates: Built one of world’s largest oil brokerage firms Hamilton Resources: Grew global oil trading company to ~$1 billion United Waste: Created 5th largest solid waste business in North America United Rentals: Built world’s largest equipment rental company
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
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Highly Skilled Management Team Partial list
Sean Fernandez NCR, Avery Dennison, Arrow Electronics
Chief Operating Officer
John Hardig Stifel Nicolaus, Alex. Brown
Chief Financial Officer
Scott Malat Goldman Sachs, UBS, JPMorgan Chase
Chief Strategy Officer
Troy Cooper United Rentals, United Waste
Senior Vice President, Operations and Finance
Gordon Devens
AutoNation, Skadden Arps
General Counsel
Mario Harik
Oakleaf Waste Management
Chief Information Officer
Dave Rowe
Echo Global Logistics
Chief Technology Officer
Karl Meyer
3PD, Inc., Home Depot
Chief Executive Officer, 3PD division
Julie Luna
Pacer International, Union Pacific Railroad
Chief Commercial Officer
Tom Connolly
EVE Partners
Senior Vice President, Acquisitions
Lou Amo
Electrolux, Union Pacific, Odyssey Logistics
Vice President, Carrier Procurement
The full management team can be found on www.xpologistics.com
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Deep Bench of Industry Experience Partial list
Chris Healy
Boyd Brothers, Caliber Logistics, Roberts Express
President, Expedited Transportation
Will O’Shea
Ryder Integrated Logistics, Cardinal Logistics
Chief Sales and Marketing Officer, 3PD division
Gregory Ritter
Knight, C.H. Robinson
Senior Vice President, Strategic Accounts
Jake Schnell
C.H. Robinson
Sr. Operational Process and Integration Manager
Jenna Sargent
OHL, Schneider Logistics
Regional Sales and Operation Manager
Marie Fields
C.H. Robinson, American Backhaulers
Director of Training
Kip Douglass
Crowley Maritime, Coyote
Regional Vice President
Drew Wilkerson
C.H. Robinson
Branch President, Charlotte
Doug George
AFN, Ryder Integrated Logistics
Branch President, Dallas
Evan Laskaris AFN, CEVA Logistics, Menlo
Director of Operations, Chicago
Andrew Armstrong
Livingston International, Echo Global Logistics
Sales and Operations Manager
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First 24 Months of Growth Strategy
Revenue ($ millions)
$257
$194
$137 $109 $114 $71 $55 $45
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2012 2013
28% quarter-over-quarter CAGR
Source: Company data
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Key Financial Statistics
Revenue trajectory
– 2011 revenue of $177 million
– Currently at approximately $2 billion annual revenue run rate
4Q growth by business unit, 2013 vs. 2012
– Freight brokerage: revenue up 202%, gross margin up 790 bps
– Expedited: revenue up 19%, gross margin up 100 bps
– Freight forwarding: revenue flat, gross margin up 80 bps
Source: Company data
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Financial Targets
Full year 2014
Annual revenue run rate of at least $2.75 billion by December 31
Annual EBITDA run rate of at least $100 million by December 31
At least $400 million of acquired historical annual revenue, excluding the Pacer acquisition
Full year 2017
Revenue of $7.5 billion
EBITDA of $425 million
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Incentivized XPO Management
Equity ownership aligns management team with shareholders
Management and directors own approx. 29% of the company (1)
Common Stock Equivalent Capitalization as of 4/1/14
Common Shares 52.5 million
Preferred Shares 10.5 million
Warrants (Strike Price $7 per share) 10.6 million (8.1 million dilutive) (2) Convertible Senior Notes 7.3 million shares (3) Stock Options and RSUs 2.2 million shares dilutive (4)
Fully Diluted Shares Outstanding 80.6 million shares
(1) Based on SEC beneficial ownership calculation as of April 1, 2014
(2) Dilutive effect of warrants calculated using treasury method (market close price of $29.41 as of 3/31/14); total warrant proceeds of $73.9 million (3) Assumes conversion in full of $120.6 million in aggregate principal amount of outstanding 4.50% convertible senior notes due 2017
(4) As of April 1, 2014, dilutive effect of outstanding RSUs and stock options calculated using treasury method (market close price of $29.41 as of 3/31/14)
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Clear Path for Significant Value Creation
Assembled top management talent with skills uniquely suited to our growth strategy
Built a $177 million company into the 4th largest freight broker in North America in two years
Established leading positions in the fastest-growing areas of transportation logistics
Intent on making XPO an irreplaceable, single-source provider through a passionate culture of on-time performance
We’re making the best use of our resources to build our value to customers and drive profitable growth
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