c.h. robinson€¦ · c.h. robinson 2017 analysis of may 2015 fmcsa’s mcmis census data carriers...

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C.H. Robinson 7 th Annual Intellisight Conference – August 15, 2018

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Page 1: C.H. Robinson€¦ · 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

C.H. Robinson7th Annual Intellisight Conference – August 15, 2018

Page 2: C.H. Robinson€¦ · 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

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.

2

Page 3: C.H. Robinson€¦ · 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

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

3

Page 4: C.H. Robinson€¦ · 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

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.

Page 5: C.H. Robinson€¦ · 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

NORTH AMERICAN SURFACE TRANSPORTATION

5

(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

Page 6: C.H. Robinson€¦ · 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

GLOBAL FORWARDING

6

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.

Page 7: C.H. Robinson€¦ · 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

ROBINSON FRESH

7

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.

Page 8: C.H. Robinson€¦ · 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

ALL OTHER & CORPORATE

8

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.

Page 9: C.H. Robinson€¦ · 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

$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

9

Global Ocean Freight Market Forecast

Page 10: C.H. Robinson€¦ · 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

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%

Page 11: C.H. Robinson€¦ · 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

SIZE AND SCALE MATTER

11

$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)

Page 12: C.H. Robinson€¦ · 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

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

Page 13: C.H. Robinson€¦ · 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

ESTABLISHED CUSTOMER RELATIONSHIPS

13

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.

Page 14: C.H. Robinson€¦ · 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

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

14

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

Page 15: C.H. Robinson€¦ · 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

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

15

Page 16: C.H. Robinson€¦ · 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

VOLUME GROWTH OVER TIME

16

(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

Page 17: C.H. Robinson€¦ · 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

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

17

Average: 17.1%

Average Trans Net Revenue Margin

(1) YoY change in cost and price exclude the estimated impact of fuel.

Page 18: C.H. Robinson€¦ · 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

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

18

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

®

Page 19: C.H. Robinson€¦ · 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

FINANCIAL PERFORMANCE

19

$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

Page 20: C.H. Robinson€¦ · 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

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

20

$ in millions, except per share amounts

Page 21: C.H. Robinson€¦ · 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

$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

21

• $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

Page 22: C.H. Robinson€¦ · 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

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

Page 23: C.H. Robinson€¦ · 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

C.H. Robinson7th Annual Intellisight Conference – August 15, 2018