C.H. Robinson€¦ · C.H. Robinson 2017 analysis of May 2015 FMCSA’s MCMIS Census Data Carriers...
Transcript of C.H. Robinson€¦ · C.H. Robinson 2017 analysis of May 2015 FMCSA’s MCMIS Census Data Carriers...
C.H. Robinson7th Annual Intellisight Conference – August 15, 2018
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-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from our historical experience or our present expectations, including, but not limited to such factors as changes in economic conditions, including uncertain consumer demand; changes in market demand and pressures on the pricing for our services; changes in the availability of equipment and services from third party providers, including the availability of contracted truckload carriers and changes in prices; changes in political and governmental conditions domestically and internationally; catastrophic events such as environmental events or terrorist attacks; failure to retain employees; failure of any of our technology or operating systems, including due to data security breaches or hacking; competition and growth rates within the third party logistics industry; risks associated with our decentralized operations; seasonality in the transportation industry; risks associated with litigation and insurance coverage; risks associated with operations outside of the U.S.; risks associated with the produce industry, including food safety and contamination issues; fuel prices and availability; risk of unexpected or unanticipated events or opportunities that might require additional capital expenditures; our dependence on our largest customers; risks associated with identifying suitable acquisitions and investments and with integrating acquired companies; risks associated with our long-term growth and profitability; and other risks and uncertainties detailed in our Annual and Quarterly Reports.
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C.H. ROBINSON OVERVIEW
• Global provider of transportation services and logistics solutions
• Select and hire the appropriate transportation for shipment
• Purchase or market fresh produce and sell to customers
• Non-asset based business model
$14.9BTOTAL GROSS
REVENUE
#193ON
FORTUNE
500
OVER
120KCUSTOMERS
73KCARRIERS
AND SUPPLIERS
ACTIVE IN 2017
INBOUND LOGISTICS
A TOP 3PL1998 – 2018
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SERVICE LINES
Truckload
Less-Than-
Truckload
Intermodal
Ocean
Air
Customs
Sourcing
Managed
Services(1)
4
52%
17%
13%
5%
Based on 2017 net revenue.
5%
4%
3%
1%
• We deliver an average of 3 services per top 500 customer
(1) Includes other logistics services.
NORTH AMERICAN SURFACE TRANSPORTATION
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(1) Total revenues do not include intersegment revenues.
(2) Represents LTM results as of June 30, 2018.
LTM NET REVENUES(2)
:
LTM OPERATING INCOME(2)
:
LTM TOTAL REVENUES(1)(2)
:
Truckload
Less Than Truckload
Intermodal
• Largest truckload network in North America
• Largest LTL 3PL in the U.S.
• Direct programs on all Class 1 railroads
GLOBAL FORWARDING
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LTM NET REVENUES(2)
:
LTM OPERATING INCOME(2)
:
LTM TOTAL REVENUES(1)(2)
:
Ocean
Air
Customs
• #1 NVOCC from China to the U.S.
• 175k metric tonnes moved in 2017
• Over 1M transactions in 2017
Over $900 million in acquisitions since 2012
(1) Total revenues do not include intersegment revenues.
(2) Represents LTM results as of June 30, 2018.
ROBINSON FRESH
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LTM NET REVENUES(2)
:
LTM OPERATING INCOME(2)
:
LTM TOTAL REVENUES(1)(2)
:
Sourcing
• Largest provider of fresh produce in North America
• 100 million lbs. of fruits and vegetables sourced weekly
• Network of 1,600 growers
Transportation
• 40,000 deliveries per week to 10,000 locations
(1) Total revenues do not include intersegment revenues.
(2) Represents LTM results as of June 30, 2018.
ALL OTHER & CORPORATE
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LTM NET REVENUES(1)
:
Managed Services Other Surface Transportation
• Managed transportation management system
• Over $3.5 billion in freight under management
• Shipments across 170 countries
LTM NET REVENUES(1)
:
• Presence in 13 countries in Europe
(1) Represents LTM results as of June 30, 2018.
$167$184 $200
$213$227
2016 2017 2018E 2019E 2020E
65 67 69 72 76
2017 2018 2019 2020 2021
WE COMPETE IN A GROWING INDUSTRY
30 31 32 3435
2017 2018 2019 2020 2021
Global Air Freight Market ForecastIn million tonnes
Source: Technavio
U.S. 3PL Market Forecast$ in billions
Source: Armstrong & Associates
In million TEUs
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Global Ocean Freight Market Forecast
FREIGHT BROKERAGE MODEL IS INCREASINGLY RELEVANT
10Source: Armstrong & Associates
U.S. Freight Brokerage Penetration of Total Freight Market
4%5%
6% 6%7%
8%9% 9%
10%
8%
10%11%
12%13%
15% 15%16%
19%
SIZE AND SCALE MATTER
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$1,525
$521
$395$339 $330 $305 $300
$180 $164 $151
Source: Transport Topics
2017 – Largest North America Freight Brokers By Estimated Net Revenues ($ in millions)
DIVERSIFIED CUSTOMER BASE
Over 120K customers active in 2017
12
21%
15%
15%14%
12%
6%
5%
5%
Percentage of 2017
Gross Revenues
Food & Beverage
Manufacturing
Retail
Auto / Industrial
Chemicals
Paper / Packaging
Professional Services
Technology
Healthcare
Energy / Utilities
Transport
Government / Education
29K 32K 35K 36K 37K 42K 46K 46K
110K 113K 120K
200
7
200
8
200
9
201
0
201
1
201
2
201
3
201
4
201
5
201
6
201
7
Growing Customer Base
• Top 500 customers are 43% of net revenues
Acquisition
ESTABLISHED CUSTOMER RELATIONSHIPS
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Client Relationship Length(1)
99.6% 99.2% 99.2% 99.8%
2014 2015 2016 2017
Annual Retention Rates(1)
• 99.5% average retention rate since 2014
3% 6%
91%
0 - 5 years 5 - 10 years 10+ years
• Majority of top 500 customers have continued to do business with C.H. Robinson for 10+ years
(1) Based on 2017 net revenues of top 500 customers.
1-5 TRUCKS6-50
TRUCKS51-399TRUCKS
400-3,999TRUCKS
4,000+TRUCKS
North AmericaCarriers 183,916 20,691 1,890 227 22
% of Total NA Carriers 89% of tota l 10% of tota l 0.9% of tota l 0.1% of tota l 0.0% of tota l
2017 CHRW ActiveCarriers
46,567 10,437 1,874 227 22
% of Carrier Segment 25% 50% 99% 100% 100%
NORTH AMERICA CARRIER NETWORK
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2 0 6 , 7 4 6 for-hire motor carriers 1 , 0 0 3 , 9 3 9 truck tractors
C.H. Robinson 2017 analysis of May 2015 FMCSA’s MCMIS Census Data
Carriers included: For hire, USA 48 State, active status updated in 2014 and 2015; Carriers excluded: Bus companies, government vehicles, private, forwarders and brokers.
C.H. Robinson North America Carrier Share
EXTENSIVE CAPACITY RELATIONSHIPS
Intermodal coverage with direct access to ALL CLASS 1 North American railroads
TOP 10 NVOCC within the global ocean carrier portfolio
20 core air carriers move 72% of our volume
More than 1,600 growers and 119 MILLION cases of fresh produce sold annually
Capacity relationships with OVER 100 LTL carriers
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VOLUME GROWTH OVER TIME
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(5%)
0%
5%
10%
15%
20%
2010 2011 2012 2013 2014 2015 2016 2017
Cass Freight Index C.H. Robinson TL
North America
• Truckload volume 2010-2017 CAGR: 5%
• LTL volume 2010-2017 CAGR: 15%
Global
• Ocean volume 2013-2017 CAGR: 10%
• Air volume 2013-2017 CAGR: 15%
Volume Growth YoY - C.H. Robinson
vs. Cass Freight Index
11%
13%
15%
17%
19%
21%
23%
(15%)
(10%)
(5%)
0%
5%
10%
15%
20%
25%
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
TR
AN
SP
OR
TA
TIO
N N
ET R
EV
EN
UE M
AR
GIN
YO
Y %
CH
AN
GE I
N C
OS
T A
ND
PR
IC
EMAINTAIN MARGIN THROUGH THE FREIGHT CYCLE
YoY Price Change
YoY Cost Change
Trans Net Revenue Margin
North America Truckload Price and Cost YoY % Change(1),
Transportation Net Revenue Margin
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Average: 17.1%
Average Trans Net Revenue Margin
(1) YoY change in cost and price exclude the estimated impact of fuel.
NAVISPHERE® – EMPOWERING DIGITAL SUPPLY CHAINS
47 MILLIONDigital transactions
MONTHLYwith customers& carriers
Over 75% of
primary means of customer interaction is
AUTOMATED
Over 50% of
shipments powered by Navisphere are fully
AUTOMATED
200K+organizations
CONNECTEDto our system
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Online ecosystem connecting
customers and suppliers
Real time global visibility to
every shipment
Seamless electronic integration
Order & route optimization
through mobile application
Customized solutions for
individual customers
Inventory & purchases order
management
®
FINANCIAL PERFORMANCE
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$1,806
$2,523
Q2 2013 LTM Q2 2018 LTM
$2.74
$4.07
Q2 2013 LTM Q2 2018 LTM
+$717M, +6.9% CAGR +$1.33, +8.2% CAGR
Net Revenues EPS
$ in millions,
except per share amounts
2Q YTD PERFORMANCE
NET REVENUE +13.6%
INCOME FROM
OPERATIONS+11.0%
NET INCOME +29.3%
DILUTED EPS +29.7%
% GROWTH2Q YTD 2017
$1,142.4
$1,297.4
$369.8
$410.6
$233.2
$301.5
$1.65
$2.14
2Q YTD 2018
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$ in millions, except per share amounts
$0.00
$0.50
$1.00
$1.50
$2.00
$0
$1,000
$2,000
$3,000
$4,000
$5,000
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
An
nu
al Divid
en
ds p
er Sh
are ($
actual)
Cu
mu
lati
ve C
apit
al R
etu
rne
d (
$ in
mill
ion
s)
CAPITAL RETURNED TO SHAREHOLDERS
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• $5.6B cumulative cash returns to shareholders
• 22.0% CAGR
• Dividends per Share CAGR of 19.1%
• Added to the Dividend Aristocrat Index in 2017
LONG-TERM GROWTH TARGETS
NAST
ANNUAL GROWTH TARGET (1)
5 – 10%
GLOBAL FORWARDING 10%+
ROBINSON FRESH 4 – 8%
OTHER (2) 10%+
NET REVENUE
ENTERPRISE GROWTH TARGETS (1)
OPERATING INCOME: Equal to or greater than net revenue growth
EPS: 10%+(1) Long-term growth targets represent an over time perspective and do not necessarily represent an expected annual growth rate.
(2) Other includes Managed Services, European Surface Transportation, and all other services. 22
C.H. Robinson7th Annual Intellisight Conference – August 15, 2018