GXO Logistics : First Quarter 2024 Results Presentation

May 7, 2024

First quarter 2024 results

© GXO Logistics, Inc.

Disclaimer

Non-GAAPFinancial Measures: As required by the rules of the Securities and Exchange Commission ("SEC"), we provide reconciliations of the non-GAAP financial measures contained in this presentation to the most directly comparable measure under GAAP, which are set forth in the financial tables included in the attached appendix.

GXO's non-GAAP financial measures in this presentation include: adjusted earnings before interest, taxes, depreciation and amortization ("adjusted EBITDA"), adjusted EBITDA margin, adjusted EBITDA CAGR, adjusted earnings before interest, taxes and amortization ("adjusted EBITA"), adjusted EBITA margin, adjusted EBITA, net of income taxes paid, adjusted net income, adjusted net income attributable to GXO, adjusted earnings per share (basic and

diluted) ("adjusted EPS"), adjusted diluted EPS CAGR, free cash flow, free cash flow conversion, organic revenue, organic revenue growth, organic revenue CAGR, net leverage ratio, net debt, return on invested capital ("ROIC") and net capital expenditures ("net capex").

We believe that the above adjusted financial measures facilitate analysis of our ongoing business operations because they exclude items that may not be reflective of, or are unrelated to, GXO's core operating performance, and may assist investors with comparisons to prior periods and assessing trends in our underlying businesses. Other companies may calculate these non-GAAP financial measures differently, and therefore our measures may not be comparable to similarly titled measures used by other companies. GXO's non-GAAP financial measures should only be used as supplemental measures of our operating performance.

Adjusted EBITDA, adjusted EBITA, adjusted net income attributable to GXO and adjusted EPS include adjustments for transaction and integration costs, as well as restructuring costs and other adjustments as set forth in the financial tables included in the attached appendix. Transaction and integration adjustments are generally incremental costs that result from an actual or planned acquisition, divestiture or spin-off and may include transaction costs, consulting fees, retention awards, internal salaries and wages (to the extent the individuals are assigned full-time to integration and transformation activities) and certain costs related to integrating and separating IT systems. Litigation expenses primarily relate to the settlement of ongoing legal matters. Restructuring costs primarily relate to severance costs associated with business optimization initiatives.

We believe that free cash flow and free cash flow conversion are important measures of our ability to repay maturing debt or fund other uses of capital that we believe will enhance stockholder value. We calculate free cash flow as cash flows from operations less net capex; we calculate net capex as capital expenditures plus proceeds from sale of property and equipment. We calculate free cash flow conversion as free cash flow divided by adjusted EBITDA, expressed as a percentage.

We believe that adjusted EBITDA, adjusted EBITDA margin, adjusted EBITA, adjusted EBITA margin, and adjusted EBITA, net of income taxes paid improve comparability from period to period by removing the impact of our capital structure (interest and financing expenses), asset base (depreciation and amortization), tax impacts and other adjustments as set out in the attached tables, which management has determined are not reflective of core operating activities and thereby assist investors with assessing trends in our underlying businesses. We believe that adjusted net income, adjusted net income attributable to GXO and adjusted EPS improve the comparability of our operating results from period to period by removing the impact of certain costs and gains, which management has determined are not reflective of our core operating activities, including amortization of acquisition-related intangible assets.

We believe that organic revenue and organic revenue growth are important measures because they exclude the impact of foreign currency exchange rate fluctuations, revenue from acquired businesses and revenue from disposed business. We believe that net leverage ratio and net debt are important measures of our overall liquidity position and are calculated by adding bank overdrafts and removing cash and cash equivalents from our total debt and net debt as a ratio of our adjusted EBITDA. We calculate ROIC as our adjusted EBITA, net of income taxes paid, divided by the average invested capital. We believe ROIC provides investors with an important perspective on how effectively GXO deploys capital and use this metric internally as a high-level target to assess overall performance throughout the business cycle. Management uses these non-GAAP financial measures in making financial, operating and planning decisions and evaluating GXO's ongoing performance.

With respect to our financial targets for full-year 2024 organic revenue growth, adjusted EBITDA, adjusted diluted EPS, and free cash flow conversion and our 2027 financial targets of organic revenue CAGR, adjusted EBITDA, adjusted EBITDA CAGR, adjusted diluted EPS CAGR, free cash flow conversion and ROIC, a reconciliation of these non-GAAP measures to the corresponding GAAP measures is not available without unreasonable effort due to the variability and complexity of the reconciling items described above that we exclude from these non-GAAP target measures. The variability of these items may have a significant impact on our future GAAP financial results and, as a result, we are unable to prepare the forward-looking statements of income and cash flows prepared in accordance with GAAP, that would be required to produce such a reconciliation.

Non-GAAPValuation Measure: Adjusted EBITDAR is a valuation measure that is not specified in GAAP. Adjusted EBITDAR excludes rent expense from adjusted EBITDA and is useful to management and investors in evaluating GXO's relative performance because adjusted EBITDAR considers the performance of GXO's operations, excluding decisions made with respect to capital investment, financing and other non-recurring charges. Adjusted EBITDAR is also a measure commonly used by management, research analysts and investors to value companies in the logistics industry. Since adjusted EBITDAR excludes interest expense and rent expense, it allows research analysts and investors to compare the value of different companies without regard to differences in capital structures and leasing arrangements. As such, our presentation of Adjusted EBITDAR should not be construed as a financial performance or operating measure.

With respect to our target for full-year 2024 adjusted EBITDAR, a reconciliation of this non-GAAP measure to the corresponding GAAP measure is not available without unreasonable effort due to the variability and complexity of the reconciling items described above that we exclude from this non-GAAP target measure. The variability of these items may have a significant impact on our future GAAP financial results and, as a result, we are unable to prepare the forward-looking statement of income, prepared in accordance with GAAP, that would be required to produce such a reconciliation.

Forward-LookingStatements : This presentation 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. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements, including our full year 2024 financial targets of organic revenue growth, adjusted EBITDA, adjusted diluted EPS and adjusted EBITDA to free cash flow conversion; our 2027 financial targets of organic revenue CAGR, adjusted EBITDA, adjusted EBITDA CAGR, adjusted diluted EPS CAGR, free cash flow conversion and ROIC; the expected incremental revenue in 2024, 2025 and 2026; our 2024 valuation target for adjusted EBITDAR; our expected net leverage in 2024 and 2025; the expected impact of the acquisition of Wincanton on our results of operations; and our goals of (i) 80% global operations using LED lightning by 2025, (ii) 80% global landfill diversion rate by 2025, (iii) 50% renewably sourced energy by 2030,

1. 30% greenhouse gas emissions (Scope 1&2) reduction by 2030 vs. 2019 baseline, (v) 100% carbon neutral (Scope 1&2) by 2040, (vi) 15% reduction in Total Recordable Incident Rate by 2027 across Americas and APAC vs. 2022 baseline, and (vii) 15% reduction in Lost Time Incident Rate by 2027 across UK and European operations vs. 2022 baseline. 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," "trajectory" 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 the company in light of its experience and its perception of historical trends, current conditions and expected future developments, as well as other factors the company believes 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, the risks discussed in our filings with the SEC and the following: economic conditions generally; supply chain challenges, including labor shortages; competition and pricing pressures; our ability to align our investments in capital assets, including equipment, service centers and warehouses, to our respective customers' demands; our ability to successfully integrate and realize anticipated benefits, synergies, cost savings and profit improvement opportunities with respect to acquired companies, including the acquisition of Wincanton; acquisitions may be unsuccessful or result in other risks or developments that adversely affect our financial condition and results; our ability to develop and implement suitable information technology systems and prevent failures in or breaches of such systems; our indebtedness; our ability to raise debt and equity capital; litigation; labor matters, including our ability to manage our subcontractors, and risks associated with labor disputes at our customers' facilities and efforts by labor organizations to organize our employees; risks associated with defined benefit plans for our current and former employees; our ability to attract or retain necessary talent; the increased costs associated with labor; fluctuations in currency exchange rates; fluctuations in fixed and floating interest rates; fluctuations in customer confidence and spending; issues related to our intellectual property rights; governmental regulation, including environmental laws, trade compliance laws, as well as changes in international trade policies and tax regimes; governmental or political actions, including the United Kingdom's exit from the European Union; natural disasters, terrorist attacks or similar incidents; damage to our reputation; a material disruption of the company's operations; the inability to achieve the level of revenue growth, cash generation, cost savings, improvement in profitability and margins, fiscal discipline, or strengthening of competitiveness and operations anticipated or targeted; failure in properly handling the inventory of our customers; the impact of potential cyber - attacks and information technology or data security breaches; and the inability to implement technology initiatives or business systems successfully; our ability to achieve Environmental, Social and Governance goals; and a determination by the IRS that the distribution or certain related spin-off transactions should be treated as taxable transactions. Other unknown or unpredictable factors could cause actual results to differ materially from those in the forward-looking statements. Such forward-looking statements should therefore be construed in the light of such factors.

All forward-looking statements set forth in this presentation are qualified by these cautionary statements and there can be no assurance that the actual results or developments anticipated by us will be realized or, even if substantially realized, that they will have the expected consequences to or effects on us or our business or operations. Forward-looking statements set forth in this presentation speak only as of the date hereof, and we do not undertake any 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.

© GXO Logistics, Inc.

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Presenters

Malcolm Wilson		Baris Oran		Richard Cawston		Kristine Kubacki
Chief Executive Officer		Chief Financial Officer		Chief Revenue Officer		Chief Strategy Officer

© GXO Logistics, Inc.

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Highlights

	1Q 2024
Revenue	$2.5 billion
Revenue growth	6%
Organic revenue growth(1)	1%
Net income (loss)	$(36) million(2)
Adjusted EBITDA(1)	$154 million
Operating cash flow	$50 million
Free cash flow(1)	$(17) million
Diluted EPS	$(0.31)
Adjusted diluted EPS(1)	$0.45

(1) Refer to the 'Non-GAAP Financial Measures' section on slide 2 and Appendix for related information.

1. 1Q 2024 net loss of $36 million, which includes a one-off legacy litigation expense of $63 million pre-tax.
   (3) Based on closing March 31, 2024, FX rates of 1.26 GBP/USD and 1.08 EUR/USD.
   (4) Based on 2024 average FX rates of 1.27 GBPUSD and 1.09 EURUSD

Signed new business	Pipeline has increased
wins of more than	to $2.2 billion as of 1Q
$250 million(3)	2024(3)
annualized revenue
in 1Q 2024, +55% YoY	Operating return on
	invested capital of
$676 million of new	33% in 1Q 2024(1)
FY 2024 revenue won
through 1Q 2024,(4)	Completed acquisition
equivalent to 7% YoY	of Wincanton on
revenue growth	April 29
$243 million of new	Placed
FY 2025 revenue won	$1.1 billion of new
through 1Q 2024(3)	5- and 10-year bonds
$26 million YoY	in 2Q
increase in free cash
flow for 1Q 2024(1)

© GXO Logistics, Inc.

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1Q 2024 profitability

Net income

$26M

$(36M)

1Q 2023

1Q 2024

Adjusted diluted EPS(1)

$0.49
	$0.45
1Q 2023	1Q 2024

Adjusted EBITDA(1)

$158M	$154M
1Q 2023	1Q 2024

(1) Refer to the 'Non-GAAP Financial Measures' section on slide 2 and Appendix for related information.

© GXO Logistics, Inc.

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1Q 2024 revenue growth

(In millions USD)

	~1%	~3%	~2%
	FX	$2,456
	Organic1	Net M&A
$2,323

1Q 2023 Revenue Organic growth

Net M&A

FX

1Q 2024 Revenue

Revenue grew 6% year over year in 1Q, of which 1% was organic.

(1) Refer to the 'Non-GAAP Financial Measures' section on slide 2 and Appendix for related information.

© GXO Logistics, Inc.

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Strong cash flow

and investment grade balance sheet

1Q 2024 cash flow

1Q 2024 balance sheet

Cash flow from operations	1Q 2023:
$50 million
$39 million
Free cash flow(2)	1Q 2023:
$(17) million
$(43) million
Operating return on	Long-term target:
invested capital(2)
33%	>30%

Total debt(1)

$1,637 million

Net debt(2)

$1,216 million

Net leverage(2)

1.6x

Mostly fixed-rate borrowings

No debt maturities in the next 12 months; $1,222 million liquidity available at end 1Q

Following acquisition of Wincanton, acquisition net leverage expected to be 2.5x at FY2024 and ~1.9.x at FY2025

1. Includes finance leases and other debt of $108 million as of March 31, 2024.
2. Refer to the 'Non-GAAP Financial Measures' section on slide 2 and Appendix for related information.

$1.1 billion of new 5- and 10-year notes issued in 2Q.

©©GXOGXOLogistics,Logistics,IncInc..

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2024 wins and extensions

© GXO Logistics, Inc.

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New contract wins and outsourcing underpin 2024 and 2025 growth

Expected incremental revenues

won through 1Q 2024

$676M(1) signed
for 2024
	Additional $243M(2)
	signed for 2025
		Additional $101M(2)
		signed for 2026
2024	2025	2026

1Q 2024 contract wins by source

22%

Won from competitors

Sites transferred from other 3PLs

	25%
53%				Outsourcing
			Sites previously
New activity				operated by
			customers in-house
Sites set up
to support
customer growth

Signed new business wins of +55% vs. 1Q 2023.

On track to outperform $1 billion of wins from 2023.

1. Based on 2024 average FX rates of 1.27 GBPUSD and 1.09 EURUSD
2. Based on closing March 31, 2024, FX rates of 1.26 GBP/USD and 1.08 EUR/USD

© GXO Logistics, Inc.

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FY 2024 guidance(1,2)

		Prior		Standalone		Standalone
						+ Wincanton
Organic revenue growth(3)		2% - 5%		2% - 5%		2% - 5%
Adjusted EBITDA(3,5)		$760 - $790		$760 - $790		$805 - $835
	million		million		million
Adjusted EBITDA(3)		30% - 40%		30 - 40%		30 - 40%
to free cash flow conversion
Adjusted diluted EPS(3)		$2.70 - $2.90		$2.70 - $2.90		$2.73 - $2.93
Adjusted EBITDAR(4)		$1.90 - $1.95		$1.90 - $1.95		$1.95 - $2.0
	billion		billion		billion

1. Based on FX rates of 1.24 GBPUSD and 1.08 EURUSD
2. As updated on April 24, 2024
3. Refer to the 'Non-GAAP Financial Measures' section on slide 2.
4. Adjusted EBITDAR is a valuation measure that is not specified in GAAP. Adjusted EBITDAR is commonly used by management, research analysts and Investors to value companies in the logistics industry. Adjusted EBITDAR should not be construed as a financial performance or operating measure. Refer to the 'Non-GAAP Valuation Measures' section on slide 2.
5. We anticipate the following quarterly adjusted EBITDA phasing in 2024 for the guidance current + adjusting for Wincanton's contribution: 1Q: c.19%; 2Q: c.22%; 3Q: c.28%; and 4Q: c.31%.

© GXO Logistics, Inc.

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