- Today’s investors meeting outlines strategic roadmap to deliver
for customers, stockholders, and team members
- Adjusted consolidated operating income targeted to increase
$3.0–$4.5 billion in fiscal 2025 vs. fiscal 2022
- Fiscal 2025 ratio of capital expenditures to revenue expected
to be at or below 6.5%
- Adjusted earnings per share (EPS) expected to grow between
14–19% CAGR through fiscal 2025
- Targeting 18–22% annualized Total Shareholder Return (TSR)
through fiscal 2025
FedEx Corp. (NYSE: FDX) is hosting an investors meeting today
where President and Chief Executive Officer Raj Subramaniam and the
FedEx leadership team will present a strategic plan to deliver more
value for customers, stockholders, and team members. FedEx will
also outline its fiscal 2025 financial targets.
“The FedEx team and its unparalleled network have been
connecting the world and creating opportunities since our
founding,” Subramaniam said. “As we enter the next phase of FedEx,
we will unlock value from this foundation to deliver outstanding
returns to all of our stakeholders. Our strategy is focused on
driving yields, expanding margins, and elevating returns through
profitable growth and capital efficiency. We have tremendous
momentum and a committed leadership team focused on delivering
today, while innovating for tomorrow.”
Fiscal 2025 Financial
Targets
FedEx is targeting to deliver 18–22% annualized TSR through
fiscal 2025 based upon these balanced financial goals for fiscal
2025:
- 4–6% compound annual revenue growth through fiscal 2025
- 10% adjusted consolidated operating margin, driven by
- 11–12% FedEx Ground adjusted operating margin
- 8–9% FedEx Express adjusted operating margin
- 20–22% FedEx Freight adjusted operating margin
- Adjusted dividend payout ratio of at least 25%
- Ratio of capital expenditures to revenue equal to or less than
6.5% and an increase of 200 basis points in FedEx’s return on
invested capital (ROIC) compared to fiscal 2022
- Fiscal 2025 adjusted consolidated operating income improvement
of $3.0–$4.5 billion compared to fiscal 2022 adjusted consolidated
operating income
- Compound annual growth rate for adjusted EPS of 14–19% through
fiscal 2025.
Deliver Today, Innovate for Tomorrow
Strategy
The FedEx executive leadership team will discuss its strategy
and detailed plans to Deliver Today, Innovate for Tomorrow
during today’s investors day. The plans will guide the company’s
short- and long-term priorities to maximize value for customers,
stockholders, and team members.
During today’s presentations, the leadership team will focus on
how FedEx is Delivering Today by:
- Delivering revenue quality with a differentiated value
proposition, targeting high-value customer segments
- Expanding margins through more efficient networks
- Increasing stockholder returns through profitable growth,
lowered capital intensity, and increased ROIC focus
The leadership team will also outline how FedEx is Innovating
for Tomorrow by:
- Enabling intelligent supply chains by leveraging its
technology, data, and digital capabilities
- Leading through its continued commitment to sustainability
- Reinventing work and empowering people
Speakers will include Subramaniam; Mike Lenz, executive vice
president and chief financial officer; Brie Carere, executive vice
president and chief customer officer; and other key members of the
FedEx executive leadership team.
Webcast and Materials
The Investors Meeting will be streamed beginning at 8:30 a.m.
CDT on June 29, 2022 at investors.fedex.com. Individuals may view
the presentation and download the materials presented during the
meeting. This release contains only a short summary of the
information to be presented and should be read in conjunction with
the management presentations and other materials, including the
appendix of non-GAAP financial measures, made available on the
Investor Relations website.
Corporate Overview
FedEx Corp. (NYSE: FDX) provides customers and businesses
worldwide with a broad portfolio of transportation, e-commerce, and
business services. With annual revenue of $94 billion, the company
offers integrated business solutions through operating companies
competing collectively, operating collaboratively, and innovating
digitally under the respected FedEx brand. Consistently ranked
among the world's most admired and trusted employers, FedEx
inspires its 550,000 employees to remain focused on safety, the
highest ethical and professional standards, and the needs of their
customers and communities. FedEx is committed to connecting people
and possibilities around the world responsibly and resourcefully,
with a goal to achieve carbon-neutral operations by 2040. To learn
more, please visit fedex.com/about.
Additional information is contained in the company’s annual
report on Form 10-K, Form 10-Qs, Form 8-Ks, and Statistical Books.
These materials are available on the company’s website at
investors.fedex.com. The Investor Relations page of our website,
investors.fedex.com, contains a significant amount of information
about FedEx, including our Securities and Exchange Commission (SEC)
filings and financial and other information for investors. The
information that we post on our Investor Relations website could be
deemed to be material information. We encourage investors, the
media, and others interested in the company to visit this website
from time to time, as information is updated and new information is
posted.
Certain statements in this press release may be considered
forward-looking statements, such as statements regarding future
financial targets, business strategies, management’s views with
respect to future events and financial performance, and the
assumptions underlying such targets, strategies, and statements.
Forward-looking statements include those preceded by, followed by,
or that include the words “will,” “may,” “could,” “would,”
“should,” “believes,” “expects,” “forecasts,” “anticipates,”
“plans,” “estimates,” “targets,” “projects,” “intends,” or similar
expressions. Such forward-looking statements are subject to risks,
uncertainties, and other factors which could cause actual results
to differ materially from historical experience or from future
results expressed or implied by such forward-looking statements.
Potential risks and uncertainties include, but are not limited to,
economic conditions in the global markets in which we operate; our
ability to meet our labor and purchased transportation needs while
controlling related costs; a significant data breach or other
disruption to our technology infrastructure; the continuing effect
of the COVID-19 pandemic; anti-trade measures and additional
changes in international trade policies and relations; the effect
of any international conflicts or terrorist activities, including
as a result of the current conflict between Russia and Ukraine; our
ability to successfully implement our business strategy,
effectively respond to changes in market dynamics, and achieve the
anticipated benefits and associated cost savings of such strategies
and actions, including our ability to successfully implement our
FedEx Express workforce reduction plan in Europe and to continue to
transform and optimize the FedEx Express international business,
particularly in Europe; our ability to achieve our fiscal 2025
financial performance goals; damage to our reputation or loss of
brand equity; changes in the business or financial soundness of the
U.S. Postal Service, including strategic changes to its operations
to reduce its reliance on the air network of FedEx Express; changes
in fuel prices or currency exchange rates, including significant
increases in fuel prices as a result of the ongoing conflict
between Russia and Ukraine; our ability to match capacity to
shifting volume levels; the effect of intense competition; an
increase in self-insurance accruals and expenses; our ability to
effectively operate, integrate, leverage, and grow acquired
businesses and realize the anticipated benefits of acquisitions and
other strategic transactions; the future rate of e-commerce growth
and our ability to successfully expand our e-commerce services
portfolio; the timeline for recovery of passenger airline cargo
capacity; evolving or new U.S. domestic or international laws and
government regulations, policies, and actions; future guidance,
regulations, interpretations, challenges, or judicial decisions
related to our tax positions; legal challenges or changes related
to service providers engaged by FedEx Ground and the drivers
providing services on their behalf; our ability to quickly and
effectively restore operations following adverse weather or a
localized disaster or disturbance in a key geography; our ability
to achieve our goal of carbon-neutral operations by 2040; and other
factors which can be found in FedEx Corp.’s and its subsidiaries’
press releases and FedEx Corp.’s filings with the SEC. Any
forward-looking statement speaks only as of the date on which it is
made. We do not undertake or assume any obligation to update or
revise any forward-looking statement, whether as a result of new
information, future events, or otherwise.
The financial targets and guidance included in this press
release reflect FedEx’s expectations for fiscal years 2023 through
2025 and are provided on a non-GAAP basis as FedEx cannot predict
certain items which are included in reported GAAP results. See
“Reconciliations of Non-GAAP Financial Measures to GAAP Financial
Measures” below for additional information on non-GAAP financial
measures and reconciliations of non-GAAP financial measures to GAAP
financial measures. The financial targets and outlook provided
herein assume the company’s current economic forecast and fuel
price expectations, no additional COVID-19-related business
restrictions, and no additional adverse geopolitical
developments.
RECONCILIATIONS OF NON-GAAP FINANCIAL
MEASURES TO GAAP FINANCIAL MEASURES
Fiscal 2022 and 2021 Financial
Measures
FedEx reports its financial results in accordance with
accounting principles generally accepted in the United States
(“GAAP” or “reported”). We have supplemented the reporting of our
financial information determined in accordance with GAAP with
certain non-GAAP (or “adjusted”) financial measures, including our
fiscal 2022 and 2021 consolidated adjusted operating income,
adjusted operating margin, adjusted net income, and adjusted
diluted earnings per share (“EPS”), fiscal 2022 consolidated return
on invested capital (“ROIC”), and fiscal 2022 adjusted dividend
payout ratio.
Adjusted Operating Income and Margin, Net Income, and Diluted
EPS
Our fiscal 2022 and 2021 consolidated operating income and
margin, net income, and diluted EPS have been adjusted to exclude,
as applicable:
- Mark-to-market (“MTM”) retirement plans accounting adjustments
in fiscal 2022 and 2021;
- Business realignment costs in fiscal 2022 and 2021;
- Costs related to a FedEx Ground legal matter in fiscal
2022;
- TNT Express integration expenses incurred in fiscal 2022 and
2021; and
- Loss on debt extinguishment in fiscal 2021.
We have provided these non-GAAP financial measures for the same
reasons that were outlined in our fourth quarter fiscal 2022
earnings release issued on June 23, 2022.
Return on Invested Capital and Adjusted Dividend Payout
Ratio
Our consolidated ROIC for fiscal 2022 is calculated, in part,
using non-GAAP financial measures. Adjusted operating income is
included in the numerator, as we believe it is most indicative of
our core operating performance. We add back to adjusted operating
income interest on average operating leases, which we believe
improves the comparability of ROIC between FedEx and other
companies with different capital structures, and subtract adjusted
current income taxes calculated using our adjusted current income
tax rate in order to determine the after-tax adjusted return earned
in the current period. Additionally, one input of the denominator
is average net working capital as of May 31, 2022 and May 31, 2021,
adjusted to exclude (i) average cash and cash equivalents in excess
of those required to support daily business operations and cash
equivalents held in restricted offshore accounts from average
current assets, as these items do not contribute to the generation
of operating returns, and (ii) the current portion of long-term
debt and operating lease liabilities from average current
liabilities, as we consider these items part of total invested
capital used to support the generation of operating returns. We
have provided reconciliations of our 2022 adjusted current income
tax rate to our 2022 current income tax rate and of our average
adjusted total current assets and total current liabilities as of
May 31, 2022 and May 31, 2021 to our average total current assets
and total current liabilities as of May 31, 2022 and May 31, 2021
under “Full-Year Fiscal 2022—Return on Invested Capital” below.
We believe ROIC is a meaningful measure of how effectively we
are deploying our key assets and using capital to generate profits.
Numerous methods exist for calculating ROIC. Accordingly, the
method used by FedEx may differ from the methods used by other
companies. We encourage you to understand the methods used by
another company to calculate ROIC before comparing its ROIC to
ours.
Our adjusted dividend payout ratio for fiscal 2022 is calculated
as cash dividends paid on our common stock in fiscal 2022 divided
by fiscal 2021 adjusted consolidated net income. We calculate our
adjusted dividend payout ratio, in part, using a non-GAAP financial
measure that we believe excludes items that may not be indicative
of, or are unrelated to, our core operating performance. We believe
our adjusted dividend payout ratio is a meaningful measure of how
effectively we have returned profits to holders of our common
stock.
Fiscal 2023 and 2025
Forecasts
We have also provided forecasts for the following metrics for
fiscal 2025: consolidated adjusted operating income and adjusted
operating margin, adjusted net income, and adjusted EPS; adjusted
FedEx Ground, FedEx Express, and FedEx Freight segment operating
margins; adjusted dividend payout ratio; and ROIC. Additionally, we
have provided an adjusted dividend payout ratio forecast for fiscal
2023.
Other than our forecasted adjusted dividend payout ratio for
fiscal 2023, we do not provide a reconciliation of these non-GAAP
financial forecasts to the most directly comparable GAAP forecasts
because we are unable to provide a meaningful or accurate
calculation or estimation of reconciling items without unreasonable
effort. For example, we are unable to predict the amount of the
fiscal 2025 MTM retirement plans accounting adjustments, as they
are significantly impacted by changes in interest rates and the
financial markets. Additionally, we may incur costs during fiscal
2023, 2024, and 2025 related to business optimization initiatives
as well as other costs that are unrelated to our core operating
performance and/or extraordinary in nature. We are currently unable
to forecast the amount and timing of these additional costs. These
items are inherently uncertain and depend on various factors, many
of which are beyond our control, and as such, any associated
estimate and its impact on our GAAP financial measures could vary
materially.
Our non-GAAP financial measures are intended to supplement and
should be read together with, and are not an alternative or
substitute for, and should not be considered superior to, our
reported financial results. Accordingly, users of our financial
statements should not place undue reliance on these non-GAAP
financial measures. Because non-GAAP financial measures are not
standardized, it may not be possible to compare these financial
measures with other companies’ non-GAAP financial measures having
the same or similar names. As required by SEC rules, the tables
below present a reconciliation of our fiscal 2022 and 2021 non-GAAP
financial measures and fiscal 2023 forecasted adjusted dividend
payout ratio to the most directly comparable GAAP measures.
Full-Year Fiscal 2022
Operating
Income
Net
Diluted Earnings
Dollars in millions, except EPS
Income
Margin
Taxes1
Income2
Per Share
GAAP measure
$
6,245
6.7
%
$
1,070
$
3,826
$
14.33
MTM retirement plans accounting
adjustments3
—
—
379
1,199
4.49
Business realignment costs4
278
0.3
%
64
214
0.80
FedEx Ground legal matter5
210
0.2
%
50
160
0.60
TNT Express integration expenses6
132
0.1
%
29
103
0.39
Non-GAAP measure
$
6,865
7.3
%
$
1,592
$
5,502
$
20.61
Return on Invested
Capital
Dollars in millions
Numerator
Adjusted operating income (non-GAAP)
$
6,865
Interest on average operating leases7
463
Adjusted operating income with add-back
for interest on average operating leases
$
7,328
Adjusted current income taxes
(non-GAAP)8
(870)
Lease-adjusted after-tax net operating
income
$
6,458
Denominator9
Average adjusted net working capital10
(non-GAAP)
$
3,714
Average net property and equipment
36,922
Average operating lease right-of-use
assets, net
15,998
Average goodwill
6,768
Average other assets, net of other
liabilities
3,393
Average invested capital
$
66,795
Return on invested capital
9.7%
Adjusted Dividend Payout
Ratio
Dollars in millions
Cash dividends paid in fiscal 2022
$
793
Fiscal 2021 net income (GAAP)
5,231
Dividend payout ratio (GAAP)
15%
Cash dividends paid in fiscal 2022
$
793
Fiscal 2021 adjusted net income
(non-GAAP)
4,885
Adjusted dividend payout ratio
(non-GAAP)
16%
Full-Year Fiscal 2021
Operating
Income
Net
Diluted Earnings
Dollars in millions, except EPS
Income
Margin
Taxes1
Income2
Per Share11
GAAP measure
$
5,857
7.0
%
$
1,443
$
5,231
$
19.45
MTM retirement plans accounting
adjustments3
—
—
(281)
(895)
(3.33)
Loss on debt extinguishment
—
—
96
297
1.11
TNT Express integration expenses6
210
0.3
%
48
162
0.60
Business realignment costs5
116
0.1
%
26
90
0.33
Non-GAAP measure
$
6,183
7.4
%
$
1,332
$
4,885
$
18.17
Fiscal 2023 Adjusted Dividend Payout
Ratio Forecast
Dollars in millions
Cash dividends expected to be paid in
fiscal 2023
$
1,175
Fiscal 2022 net income (GAAP)
3,826
Dividend payout ratio (GAAP)
31%
Cash dividends expected to be paid in
fiscal 2023
$
1,175
Fiscal 2022 adjusted net income
(non-GAAP)
5,502
Adjusted dividend payout ratio
(non-GAAP)
21%
Notes:
1 –
Income taxes are based on the company’s
approximate statutory tax rates applicable to each transaction.
2 –
Effect of “total other (expense) income”
on net income amount not shown.
3 –
Reflects the year-end adjustment to the
valuation of the company’s defined benefit pension and other
postretirement plans. For fiscal 2022, the MTM retirement plans
accounting adjustments also include the second quarter TNT Express
MTM retirement plans accounting adjustment related to a noncash
loss associated with the termination of a TNT Express European
pension plan and a curtailment charge related to the U.S. FedEx
Freight pension plan. For fiscal 2021, the MTM retirement plans
accounting adjustments also include the second quarter TNT Express
MTM retirement plans accounting adjustment related to a noncash
loss associated with amending a TNT Express European pension plan
to harmonize retirement benefits.
4 –
Business realignment costs were recognized
at FedEx Express.
5 –
These charges were recognized at FedEx
Corporation.
6 –
These expenses were recognized at FedEx
Corporation and FedEx Express.
7 –
Represents the hypothetical interest
expense implied within rentals expenses the company would incur if
property under operating leases were owned or accounted for as
finance leases. Estimated using the weighted-average discount rate
for operating leases, which was 2.85% for 2022, applied to the
total of the average current and long-term operating lease
liabilities as of May 31, 2022 and May 31, 2021, respectively. See
“Fiscal 2022 and 2021 Financial Measures—Return on Invested Capital
and Adjusted Dividend Payout Ratio” above for additional
information.
8 –
Calculated as 2022 adjusted operating
income with the add-back for interest on average operating leases
multiplied by the 2022 adjusted current income tax rate of 11.9%.
Our current income tax rate for 2022 of 15.3% is calculated by
dividing our current tax provision by income before income taxes,
and has been adjusted as follows:
Current income tax rate (GAAP)
15.3%
MTM retirement plans accounting
adjustments
(3.7)%
Business realignment costs
0.5%
FedEx Ground legal matter
(0.4)%
TNT Express integration expenses
0.2%
Adjusted current income tax rate
(non-GAAP)
11.9%
See “Fiscal 2022 and 2021 Financial
Measures—Return on Invested Capital and Adjusted Dividend Payout
Ratio” above for additional information.
9 –
Other than average adjusted net working
capital, amounts are averages of the applicable line items included
in FedEx’s condensed consolidated balance sheets for the fiscal
years ended May 31, 2022 and May 31, 2021, respectively.
10 –
Calculated as our average total current
assets for the years ended May 31, 2022 and May 31, 2021, adjusted
as follows, minus our average total current liabilities for the
years ended May 31, 2022 and May 31, 2021, adjusted as follows:
Dollars in millions
Average total current assets
(GAAP)
$
20,473
Average cash and cash equivalents in
excess of those required to support daily business operations and
those held in restricted offshore accounts
(5,232)
Adjusted average total current assets
(non-GAAP)
$
15,241
Average total current liabilities
(GAAP)
$
13,967
Average current portion of long-term
debt
(114)
Average current portion of operating lease
liabilities
(2,326)
Adjusted average total current liabilities
(non-GAAP)
$
11,527
Average adjusted net working capital
(non-GAAP)
$
3,714
See “Fiscal 2022 and 2021 Financial
Measures—Return on Invested Capital and Adjusted Dividend Payout
Ratio” above for additional information.
11 –
Does not sum to total due to rounding.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220629005260/en/
Media Contact: Jenny Robertson 901-434-4829 Investor
Contact: Mickey Foster 901-818-7468
FedEx (NYSE:FDX)
Gráfico Histórico do Ativo
De Fev 2024 até Mar 2024
FedEx (NYSE:FDX)
Gráfico Histórico do Ativo
De Mar 2023 até Mar 2024