XPO Logistics has reported first quarter revenues of $3.54bn, down from $3.55bn a year ago. However, excluding first quarter 2016 revenue from the North American truckload unit divested in October 2016, revenue was up by $122.6m.
Adjusted EBITDA was $290m, up by 16% year-on-year, though this excludes $21m of integration and rebranding costs.
The company reaffirmed its full-year targets for adjusted EBITDA of at least $1.35bn for 2017 and at least $1.575bn for 2018.
In the Transportation segment, revenues reached $2.28bn, down from $2.30bn in Q1 2016. However, Q1 2016 revenues included $129m of revenues from the now divested North American truckload business. Organic revenue growth for the segment was led by last mile and truck brokerage, partially offset by lower revenue in expedited and global forwarding, and unfavourable foreign exchange rates. Adjusted EBITDA improved by 13.4%, thanks to a 390 basis point improvement in adjusted operating margin in the North American less-than-truckload unit, as well as growth in North American last mile and European transportation.
In the Logistics division, revenues amounted to $1.30bn, up from $1.26bn in Q1 2016. The year-over-year increase in revenue was primarily due to contract logistics growth in Europe, notably e-commerce and cold chain contracts in the UK, the Netherlands and Italy. This was partially offset by the unfavourable impact of currency fluctuations, particularly with British pound sterling. In North America, growth was largely driven by gains in the e-commerce, food & beverage, and industrial sectors, partially offset by a decline in managed transportation revenue. Adjusted EBITDA increased to $98.8m, up from $87.8m a year ago. The gain was largely down to revenue growth, productivity improvements in European contract logistics and SG&A cost reduction in North American contract logistics.
Bradley Jacobs, Chairman and Chief Executive Officer of XPO Logistics, said, “We started the year on a strong note by solidly beating our expectations for earnings, and continuing to expand margins in both transportation and logistics. In North American less-than-truckload, we increased operating income by a robust 49%, in part by running our line-haul, cross-dock and pickup-and-delivery operations more efficiently. Our market-leading position in e-commerce continued to drive growth in last mile and contract logistics, and our intermodal unit won the largest contract in any business line in XPO history.”
Jacobs continued, “We anticipate that our performance will remain on a trajectory of high growth and high returns. We have a larger, more integrated sales organization feeding active bids into our $3bn pipeline. The $716m of sales we closed through March was a first quarter record for our company, up significantly from $429m a year ago. Our global procurement team has already achieved $80m of annual savings, and we’re using our technology to better utilize our labor and capacity – all while helping our customers manage their supply chains more efficiently.”
Source: XPO Logistics