UPS has announced its strategic priorities, three-year financial targets and new ESG targets, where it highlighted priorities for its Customer First, People Led, Innovation Driven strategy; discussed targeted areas of growth including small and medium-sized businesses, healthcare and international; provided 2023 financial targets; and discussed newly established ESG targets.
Customer First: The company’s Customer First strategy strives to provide an effective digital experience powered by its global smart logistics network. The company aims to showcase the actions it is taking to make it simpler to do business with UPS, by removing friction when doing business with UPS, as measured by gains in Net Promoter Score, or NPS. The company has targeted a 2023 NPS score of 50 or higher.
People Led: The company discussed the measures it is taking to improve the employee experience and increase the likelihood that an employee recommends UPS as a great place to work. The company has established a 2023 “likelihood to recommend” target of 80% or higher.
Innovation Driven: By highlighting technology and productivity initiatives, the company addressed its approach to creating shareowner value by delivering consistently higher returns on invested capital, as well as returns to shareowners through dividends and share repurchases.
“We are creating a new UPS, rooted in the values of the company. Our strategic priorities are evolving to reflect the changing needs of our customers and our business, and what matters most to our stakeholders,” said Carol Tomé, UPS chief executive officer.
Outlook
2023 Financial Targets
The company discussed its 2023 financial targets as follows:
Consolidated revenue ranging from approximately $98bn to approximately $102bn.
Consolidated adjusted* operating margin ranging from approximately 12.7% to approximately 13.7%.
Cumulative capital spending from 2021–2023 of approximately $13.5bn to approximately $14.5bn.
Adjusted return on invested capital ranging from approximately 26%to approximately 29%.
ESG Targets
UPS also announced a new set of company-wide ESG targets, including its pledge to be carbon neutral across scope 1, 2 and 3 emissions in its global operations by 2050. Interim 2035 environmental sustainability targets include:
50% reduction in CO2 per package delivered for its global small package operations (2020 base year).
100% of company facilities powered by renewable electricity.
30% of the fuel used in its global air fleet be sustainable aviation fuel.
