AGXO N

PRESS RELEASE 

Highlights

– Third quarter revenue of $2.0 billion, up 24.6% from the third quarter 2020, net income of $72 million, and adjusted EBITDA of $163 million

– Generated $105 million of cash flow from operating activities and free cash flow of $50 million in the third quarter, equivalent to 31% of adjusted EBITDA

– New customer wins expected to have a 2022 incremental revenue impact of approximately $700 million • E-commerce, omnichannel retail and technology revenue up 22% and reverse logistics revenue up 21% from the third quarter 2020

– FY21 guidance raised

– GXO receives preliminary ‘AA’ ESG rating from MSCI

GREENWICH, Conn. — November 1, 2021 — GXO Logistics, Inc. (NYSE: GXO) today announced its financial results for the third quarter ended September 30, 2021. Revenue increased to $2.0 billion for the third quarter, compared with $1.6 billion for the same period in 2020. Net income attributable to GXO was $72 million for the third quarter, including a benefit of $42 million from the impact of one-time tax items, compared with $18 million for the same period in 2020.

Basic earnings per share was $0.63 for the third quarter, compared with $0.16 for the same period in 2020. Adjusted net income attributable to common shareholders, a non-GAAP measure, was $65 million for the third quarter, compared with $27 million for the same period in 2020. Adjusted diluted earnings per share, a non-GAAP measure, was $0.56 for the third quarter, compared with adjusted diluted earnings per share of $0.23 for the same period in 2020.

Adjusted earnings before interest, taxes, depreciation and amortization (“adjusted EBITDA”), a non-GAAP measure, increased to $163 million for the third quarter, compared with $142 million in pro forma adjusted EBITDA for the same period in 2020. The company reported adjusted EBITDA of $130 million for the third quarter 2020.

For the third quarter 2021, the company generated $105 million of cash flow from operations and $50 million of free cash flow, a non-GAAP measure. In the third quarter of 2021, GXO won new customer contracts with more than $1 billion in aggregate lifetime value and an expected incremental revenue impact of approximately $200 million in 2022. The company’s expected 2022 incremental revenue impact from the third quarter and prior period wins is approximately $700 million.

Reconciliations of non-GAAP financial measures used in this release are provided in the attached financial tables.

GXO Debuts with Industry-Leading ESG Rating

GXO has received an ‘AA’ ESG rating from MSCI. MSCI’s rating places GXO as the highest among its largest industry peers.1 GXO’s environmental targets include achieving carbon neutrality by 2040, using LED lighting in 80% of our global operations by 2025, having 50% of our global electricity consumption from renewable sources by 2030, meeting an 80% global landfill diversion rate by 2025 and achieving a 30% reduction in greenhouse gasses from 2019 to 2030.

GXO was also recognized by the Human Rights Campaign on the Corporate Equality Index for LGBTQ+ inclusion.

GXO Guidance GXO has updated its pro forma full year 2021 financial targets, as follows:

– Revenue of $7.6 billion to $7.8 billion (previously $7.5 billion to $7.7 billion);

– Adjusted EBITDA of $607 million to $637 million (previously $605 million to $635 million);

– Depreciation and amortization of $240 million to $250 million 2;

– Interest expense of $20 million to $25 million; • Effective tax rate of 25% to 27% (previously 26% to 28%);

– Net capital expenditures of $225 million to $250 million (previously $240 million to $250 million).

GXO’s full year 2022 guidance remains unchanged:

– 8% to 12% organic revenue growth;

– Adjusted EBITDA of $705 million to $740 million; 

– Adjusted EBITDAR3 of approximately $1.5 billion.

CEO Comments

Malcolm Wilson, chief executive officer of GXO, said, “We executed extremely well in the third quarter. We reported strong net income growth, as well as the highest revenue and adjusted EBITDA of any quarter in our operations’ history despite unprecedented near-term global supply chain challenges. Our sales pipeline reached a record level, fueled by significant new customer demand. Looking ahead, we expect continued growth driven by the three massive secular tailwinds of automation, e-commerce and outsourcing.”

“In the third quarter, we won new customer contracts with an aggregate lifetime value of over $1 billion, positioning us well to deliver on our expected 2022 organic revenue growth of 8% to 12%. Our revenue retention rate has improved through 2021 versus the number reported at our investor day, demonstrating our customers’ loyalty to GXO’s value-added solutions.”

“We’re pleased that GXO has been recognized by MSCI with a ‘AA’ ESG rating, affirming our industry leadership. As a business, we want to set the benchmark for ESG across the supply chain and we’re making good progress on our targets for 2025 and beyond. We look forward to implementing more carbon negative warehouses and empowering our team members with our automated solutions.”

1 MSCI ESG Research provides MSCI ESG Ratings on companies on a scale of AAA (leader) to CCC (laggard), according to exposure to industry-specific ESG risks and the ability to manage those risks relative to peers. 2 Excludes acquisition-related amortization expense of $60 million, acquisition-related depreciation of $16 million, and the impact of depreciation expense allocated by XPO of $16 million through August 2, 2021. 3 Adjusted earnings before interest, taxes, depreciation, amortization and rent, a non-GAAP measure.

– The full press release can be found here.

– The investor pack is here.

– Conference Call: GXO will hold a conference call on Tuesday, November 2, 2021, at 8:30 a.m. Eastern Time. Participants can call toll-free (from US/Canada) 877-407-8029; international callers dial +1 201-689-8029. Conference ID: 13723355. A live webcast of the conference will be available on the Investor Relations area of the company’s website, investors.gxo.com. The conference will be archived until November 16, 2021. To access the replay by phone, call toll-free (from US/Canada) 877-660-6853; international callers dial +1 201-612-7415. Use participant passcode 13723355.

– Stock up to a new record of ~$93 in after-hour trade on Monday.

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