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Financial Results Shows XPO Logistics on Firm Ground

[ February 25, 2016   //   ]

XPO Logistics announced its financial results for the fourth quarter and full year of 2015 on February 24. In doing so, the company reports $218 million of adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) for the fourth quarter, reflecting two months’ contribution from the Con-way acquisition.
“In the fourth quarter, we delivered organic adjusted EBITDA growth of 33%, and organic revenue growth of 8.4% ex-fuel,” detailed Bradley Jacobs, chairman and CEO of XPO Logistics. “EBITDA growth in our transportation segment was led by our asset-light freight brokerage business, which continues to improve productivity through technology and the increasing tenure of our sales force.”
He continued: “We completed the Con-way transaction one month into the quarter. The integration is going extremely well, and we have already taken out over $50 million of costs in annual savings in the first three months, while improving customer service levels. We’re on track with our plan to deliver $170 million to $210 million of profit improvement within two years.”

For the full year 2015, the company reported total revenue of $7.6 billion, a 223.5% increase from 2014.

Jacobs pointed out that the company grew organic net revenue margin by 280 basis points to 21.7% for freight brokerage, last mile, expedite and global forwarding combined,. “In our logistics segment, we realized higher-than-expected EBITDA and operating income, led by our European logistics business,” he said. “We’re winning multi-year contracts with world-class customers in Europe, some of which can use our new last mile network. Globally, our transportation and logistics segments both have deep roots in e-commerce, the single biggest growth trend in retail.”

Looking at 2016, XPO Logistics has a high-impact agenda that includes accelerated cross-selling, the strategic sourcing of nearly $3 billion of spend, the optimization of its purchased transportation, and the global integration of corporate services. “These and other major initiatives give us the ability to grow the business across a range of economic conditions,” Jacob emphasized.

This reaffirms full year targets for adjusted EBITDA of $1.25 billion in 2016 and $1.7 billion in 2018
As of December 31, 2015, the company had approximately $290 million of cash and cash equivalents, and a $1 billion asset-backed revolver. Approximately 72% of the company’s debt will mature in 2021 or later.

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