Record quarterly revenues at GXO Logistics

GXO

As the 3PL seeks to drive efficiencies and profitability into its business model, GXO Logistics saw an 13.5% uptick in operating income y-o-y to US $42m and revenue growth of 11.5% to US $2.3bn.

Though the headline profit growth might sound exciting, this still amounts to just a 1.8% margin. Keen to drive efficiencies into the network, GXO CEO Malcolm Wilson said, “Operational tech was up a record 64% y-o-y, and we are accelerating our deployment of artificial intelligence, which boosts productivity significantly. We also continued to make strong progress on our key initiatives: we are seeing the benefits of our central efficiencies program sooner than expected, and the integration of Clipper is largely complete.”

The integration of Clipper allows GXO to accelerate the use of GXO Direct into its UK operations. The UK is GXO’s largest market (including the USA) where it saw 19.9% growth y-o-y to $844m in the quarter.

Wilson said that such growth is set to continue in the UK with a deal to handle the logistics for Big 5 supermarket chain Sainsbury’s: “Our new project with Sainsbury’s, a leading grocery retailer in the UK, is the largest annual revenue contract awarded in GXO’s history and represents nearly $1bn in lifetime value. Through the end of April, we’ve secured over $800 million of incremental revenue for 2023, while bringing our pipeline to a near-record level.” Its interest in its home market the USA only saw 4.8% growth in revenues by comparison, to $714m

Despite the marginal profitability of his operations, Wilson is excited about the year ahead: “Our first quarter performance, strong wins, growing pipeline, and excellent execution put us squarely on track for achieving our raised 2023 guidance and delivering our 2027 targets.”

Author: Richard Shrubb

Source: GXO