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GXO LOGISTICS, INC.

(GXO)
  Report
Delayed Nyse  -  04:00 2022-12-01 pm EST
46.35 USD   -1.09%
11/29Insider Buy: Gxo Logistics
MT
11/29Deutsche Bank Adjusts GXO Logistics Price Target to $53 From $68, Maintains Buy Rating
MT
11/15GXO Deploys Most Technology in Its History
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GXO Logistics : Contract Sensitivity

08/18/2022 | 06:24pm EST

Investor presentation

August, 2022

Disclaimer

This presentation is being provided for informational purposes only and is intended solely to facilitate a discussion with the recipient regarding certain illustrative examples of customer contract performance. No representation or warranty, express or implied, is or will be given by the Company or its affiliates, directors, officers, employees, agents or any other person as to the accuracy, completeness, reasonableness or fairness of any information contained in this presentation and no responsibility or liability whatsoever is accepted for the accuracy or sufficiency thereof or for any errors, omissions or misstatements, negligent or otherwise, relating thereto.

This presentation should not be relied upon for the purpose of evaluating the performance of the Company or for any other purpose, and neither the Company nor any of its affiliates, directors, officers, partners, employees or agents nor any other person, shall be liable for any direct, indirect or consequential liability, loss or damages suffered by any person as a result of this presentation or their reliance on any statement, estimate, target, projection or forward-looking information in or omission from this presentation and any such liability is expressly disclaimed. In all cases, interested parties should conduct their own investigation and analysis of the Company and the information contained herein.

You are cautioned not to place undue reliance on the utility of the information in this presentation as a predictor of future performance of the Company. The information in this presentation is illustrative only and may not be indicative of the Company's overall financial or operational performance in any given scenario or future trading conditions.

All information herein speaks only as of the date hereof, in the case of information about the Company. The Company does not undertake any duty to update or revise the information contained herein, publicly or otherwise.

Forward-Looking Statements

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. 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: the severity, magnitude, duration and aftereffects of the COVID-19 pandemic and government responses to the COVID-19 pandemic, including vaccine mandates; economic conditions generally; supply chain challenges, including labor shortages; competition and pricing pressures; our ability to align our investments in capital assets, including equipment, and warehouses, to our customers' demands; our ability to successfully integrate and realize anticipated synergies, cost savings and profit improvement opportunities with respect to acquired companies; 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 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; fluctuations in currency exchange rates; fluctuations in fixed and floating interest rates; issues related to our intellectual property rights; governmental regulation, including 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; a material disruption of GXO'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; the impact of potential cyber-attacks and information technology or data security breaches; the inability to implement technology initiatives successfully; the expected benefits of the spin-off and uncertainties regarding the spin-off, including the risk that the spin-off will not produce the desired benefits; and a determination by the IRS that the distribution or certain related spin-off transactions should be treated as taxable transactions.

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.

The following examples are for illustrative purposes only.

©2022 GXO Logistics, Inc.

2 2

Process from RFP to go-live

ILLUSTRATIVE

GXO has the resources and flexibility to serve the full spectrum of client mandates -

from quick scale ups to meet urgent needs, to long-term initiatives that require significant planning

Receipt of RFP to qualification

Solution design and pricing

Proposal submitted to short list

Short list to verbal award / preferred supplier

Contract finalization and operational project ramp-up

0

3

6

9

12

15

18

Months

Illustrative completion timelines

Quick scale-up

~3 months

Significant projects

~12-18 months

©2022 GXO Logistics, Inc.

3

All GXO contracts are structured to manage

risks by passing

through costs

All GXO

contracts

revenue 2Q22

breakdown

~55%

of contracts

are hybrid-

closed book

~45%*

of contracts

are open

book

  • Open book contracts are cost plus. Hybrid-closed book contracts are partly cost plus and partly fixed price. Margins are protected in both cases with a high degree of variable costs
  • Hybrid-closedbook contracts typically see higher upfront investment and higher depreciation expenses; this results in a higher EBITDA margins. Excluding passed through depreciation charges, EBITA margins on both open and hybrid-closed book contracts are broadly similar

©2022 GXO Logistics, Inc.

*Includes the effect of the Clipper Logistics acquisition. Based on public disclosure of Clipper Logistics being 76% open book in FY2021.

Contract maturity curve*

ILLUSTRATIVE

Revenue maturity curve

100%

90%

Roughly 12

80%

months for

contract to

reach full run

70%

rate revenue

60%

50%

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

Months

Open book

Hybrid-closed book

©2022 GXO Logistics, Inc.

EBITDA margin maturity curve

15%

All contracts

designed to be

Mature margins

profitable at

reached after ~12

initiation

months

0%

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

Months

Open book

Hybrid-closed book

  • Open book contracts see faster margin maturity curves than hybrid-closed book contracts
  • Both sets of contracts can take up to four quarters to reach full revenue run-rate
  • Both sets of contracts can take around four quarters to reach full margin maturity as productivity
    and automation efficiencies become apparent

5

* Examples are based off illustrative contracts and the analysis excludes any impact of seasonality. This is not representative of all contracts.

This is an excerpt of the original content. To continue reading it, access the original document here.

Disclaimer

GXO Logistics Inc. published this content on 18 August 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 18 August 2022 22:23:01 UTC.


ę Publicnow 2022
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Financials (USD)
Sales 2022 9 004 M - -
Net income 2022 233 M - -
Net Debt 2022 1 696 M - -
P/E ratio 2022 23,9x
Yield 2022 -
Capitalization 5 559 M 5 559 M -
EV / Sales 2022 0,81x
EV / Sales 2023 0,73x
Nbr of Employees 75 000
Free-Float 99,4%
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Mean consensus BUY
Number of Analysts 16
Last Close Price 46,86 $
Average target price 54,87 $
Spread / Average Target 17,1%
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Managers and Directors
Malcolm Wilson Chief Executive Officer & Director
Vaughn Mandy CEO & Founder
Baris Oran Chief Financial Officer
Bradley S. Jacobs Chairman
Sandeep Sakharkar Chief Information Officer
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