XPO-organisation de transport_E (3)

XPO Logistics “remains on course” to deliver an earnings before interest, tax, depreciation and amortisation (EBITDA) of $1.25bn this year, after this week posting $249m for the first quarter.

“The first quarter is seasonally our slowest in terms of revenues,” chief executive Brad Jacobs told The Loadstar. “But the $249m adjusted EBIDTA was higher than we had budgeted for, so we are in a very high trajectory and are very confident.”

He says that although the third quarter is traditionally the strongest for the company, during the summer retail season, some of that business has slipped into the fourth quarter.

XPO now appears to have its focus fully on integrating the range of companies it has acquired over the past few years – particularly last year’s major purchases of France’s Norbert Dentressangle and US trucking firm Con-way.

Group revenue for the quarter soared year on year, increasing 404.4% to $3.5bn, with net revenue up 510.5% to $1.6bn – largely due to the contributions of ND and Con-way to XPO’s transport and logistics divisions.

Chief financial officer John Hardig said ND had contributed about $1bn and Con-way about $1.3bn, although Mr Jacobs added that the rump XPO, that existed before the two purchases, showed strong organic growth.

“If you looked at the “legacy” businesses we had in 2014, these grew 11.9% year-on-year,” he said.

Both ND, and Con-way through its Menlo brand, had significant exposure to the contract logistics field and built on XPO’s earlier 2014 purchase of New Breed Holding for $650m.

XPO’s logistics segment, which also includes its much smaller freight forwarding operation, generated gross revenue of $1.3bn for the quarter, up 795.4% from $140.8m in the same period in 2015. The gross margin was $156.7m, up 691.4% from $19.8m and adjusted EBITDA for the division was $87.8m, up 336.8% from $20.1m.

According to the recently released Global Contract Logistics 2016 report, authored by Transport Intelligence, XPO is now the second-largest global contract logistics provider, behind DHL Supply Chain, with an estimated global market share of 2.5%.

Mr Jacobs said XPO’s “pipeline” of contract logistics in North America had almost tripled since the beginning of the year, from $150m on 1 January to $400m today; while in Europe, it had grown to €513m from €404m this time last year.

“We have completely outperformed the market,” he said, attributing a lot of this growth to realising cross-selling opportunities across the group’s different divisions.

“The largest customer we have recently started doing truck brokerage with us and is now our largest truck brokerage client; a major packaging customer in Europe is now a Norther American contract logistics and intermodal customer; and a European e-commerce customer is now using our North American intermodal and drayage services,” he told The Loadstar.

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