UPS (NYSE:UPS) will host its investor and analyst conference today
beginning at 9:00 a.m. EDT. The virtual event will be available in
its entirety through a live webcast and replay at
investors.ups.com.
The company will highlight priorities for its Customer First,
People Led, Innovation Driven strategy; discuss targeted areas of
growth including small and medium-sized businesses, healthcare and
international; provide 2023 financial targets; and discuss newly
established ESG targets.
- Customer First: The company’s Customer First strategy
strives to provide the best digital experience powered by its
global smart logistics network. The company will showcase the
actions it is taking to make it simpler and more helpful to do
business with UPS. Customer First focuses on 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 will discuss 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 percent or higher.
- Innovation Driven: By highlighting technology and
productivity initiatives, the company will address 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 TargetsToday the company will discuss its
2023 financial targets as follows:
- Consolidated revenue ranging from approximately $98 billion to
approximately $102 billion.
- Consolidated adjusted* operating margin ranging from
approximately 12.7 percent to approximately 13.7 percent.
- Cumulative capital spending from 2021–2023 of approximately
$13.5 billion to approximately $14.5 billion.
- Adjusted return on invested capital ranging from approximately
26 percent to approximately 29 percent.
* “Adjusted” amounts are non-GAAP financial measures. See the
appendix to this release for a discussion of non-GAAP financial
measures, including required reconciliations.The company is only
able to provide operating margin and return on invested capital
guidance on an adjusted (non-GAAP) basis because it is not possible
to predict or provide a reconciliation reflecting the impact of
future pension mark-to-market or other unknown or unanticipated
potential adjustments which would be included in reported (GAAP)
results and which could be material.
ESG TargetsThe company is also announcing 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.
UPS has published its ESG strategy at investors.ups.com/esg.
Contacts:UPS Media Relations: 404-828-7123 or pr@ups.comUPS
Investor Relations: 404-828-6059 (option 2) or investor@ups.com
# # #
About UPSUPS (NYSE: UPS) is one of the world’s largest
package delivery companies with 2020 revenue of $84.6 billion, and
provides a broad range of integrated logistics solutions for
customers in more than 220 countries and territories. The company’s
more than 540,000 employees embrace a strategy that is simply
stated and powerfully executed: Customer First. People Led.
Innovation Driven. UPS is committed to reducing its impact on the
environment and supporting the communities we serve around the
world. UPS also takes a strong and unwavering stance in support of
diversity, equality, and inclusion. The company can be found on the
Internet at www.ups.com, with more information at
about.ups.com and www.investors.ups.com.
Forward-Looking StatementsThis release contains
“forward-looking statements” within the meaning of the Private
Securities Litigation Reform Act of 1995. Statements other than
those of current or historical fact, and all statements accompanied
by terms such as “will,” “believe,” “project,” “expect,”
“estimate,” “assume,” “intend,” “anticipate,” “target,” “plan,” and
similar terms, are intended to be forward-looking statements.
Forward-looking statements are made subject to the safe harbor
provisions of the federal securities laws pursuant to Section 27A
of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934.
From time to time, we also include written or oral
forward-looking statements in other publicly disclosed materials.
Such statements may relate to our intent, belief, forecasts of, or
current expectations about our strategic direction, prospects,
future results, or future events; they do not relate strictly to
historical or current facts. Management believes that these
forward-looking statements are reasonable as and when made.
However, caution should be taken not to place undue reliance on any
forward-looking statements because such statements speak only as of
the date when made and the future, by its very nature, cannot be
predicted with certainty.
Forward-looking statements are subject to certain risks and
uncertainties that could cause actual results to differ materially
from our historical experience and our present expectations or
anticipated results. These risks and uncertainties, include, but
are not limited to: continued uncertainties related to the impact
of the COVID-19 pandemic on our business and operations, financial
performance and liquidity, our customers and suppliers, and on the
global economy; changes in general economic conditions, in the U.S.
or internationally; significant competition on a local, regional,
national and international basis; changes in our relationships with
our significant customers; changes in the regulatory environment in
the U.S. or internationally; increased or more complex physical or
data security requirements; legal, regulatory or market responses
to global climate change; results of negotiations and ratifications
of labor contracts; strikes, work stoppages or slowdowns by our
employees; the effects of changing prices of energy, including
gasoline, diesel and jet fuel, and interruptions in supplies of
these commodities; changes in exchange rates or interest rates;
uncertainty from the expected discontinuance of LIBOR and
transition to any other interest rate benchmark; our ability to
maintain our brand image; our ability to attract and retain
qualified employees; breaches in data security; disruptions to the
Internet or our technology infrastructure; interruptions in or
impacts on our business from natural or man-made events or
disasters including terrorist attacks, epidemics or pandemics; our
ability to accurately forecast our future capital investment needs;
exposure to changing economic, political and social developments in
international and emerging markets; changes in business strategy,
government regulations, or economic or market conditions that may
result in impairment of our assets; increases in our expenses or
funding obligations relating to employee health, retiree health
and/or pension benefits; potential additional U.S. or international
tax liabilities; potential claims or litigation related to labor
and employment, personal injury, property damage, business
practices, environmental liability and other matters; our ability
to realize the anticipated benefits from acquisitions,
dispositions, joint ventures or strategic alliances; our ability to
realize the anticipated benefits from our transformation
initiatives; cyclical and seasonal fluctuations in our operating
results; our ability to manage insurance and claims expenses; and
other risks discussed in our filings with the Securities and
Exchange Commission from time to time, including our Annual Report
on Form 10-K for the year ended December 31, 2020 and subsequently
filed reports. You should consider the limitations on, and risks
associated with, forward-looking statements and not unduly rely on
the accuracy of predictions contained in such forward-looking
statements. We do not undertake any obligation to update
forward-looking statements to reflect events, circumstances,
changes in expectations, or the occurrence of unanticipated events
after the date of those statements. Company goals are aspirational
and not guarantees or promises that all goals will be met.
Statistics and metrics relating to ESG matters are estimates and
may be based on assumptions or developing standards.
Non-GAAP Financial Measures; Reconciliations
From time to time we supplement the reporting of our financial
information determined under generally accepted accounting
principles ("GAAP") with certain non-GAAP financial measures.
These include: "adjusted" compensation and benefits; operating
expenses; earnings before interest, taxes, depreciation and
amortization (“EBITDA”); operating profit; operating margin; other
income and (expense); income before income taxes; income tax
expense; effective tax rate; net income; and earnings per share. We
present revenue and revenue per piece on a constant currency basis.
Additionally, we disclose free cash flow, return on invested
capital (“ROIC”) and the ratio of adjusted total debt to adjusted
EBITDA.
We believe that these non-GAAP measures provide meaningful
information to assist users of our financial statements in more
fully understanding our financial results and cash flows and
assessing our ongoing performance, because they exclude items that
may not be indicative of, or are unrelated to, our underlying
operations and may provide a useful baseline for analyzing trends
in our underlying businesses. These non-GAAP measures are used
internally by management for business unit operating performance
analysis, business unit resource allocation and in connection with
incentive compensation award determinations.
Non-GAAP financial measures should be considered in addition to,
and not as an alternative for, our reported results prepared in
accordance with GAAP. Our adjusted financial information does not
represent a comprehensive basis of accounting. Therefore, our
adjusted financial information may not be comparable to similarly
titled information reported by other companies.
Restructuring and Other Charges
Adjusted EBITDA, operating profit, operating margin, income
before income taxes, net income and earnings per share may exclude
the impact of charges related to any restructuring programs,
including transformation costs and asset impairments.
Costs Related to Legal Contingencies and Expenses
Adjusted EBITDA, operating profit, operating margin, pre-tax
income, net income and earnings per share may exclude the impact of
costs related to certain of our legal contingencies and expenses
that are associated with non-routine legal matters. We believe this
adjusted information provides a useful comparison of year-to-year
financial performance without considering the impact of these
non-routine contingencies and expenses. We evaluate our performance
on this adjusted basis.
Changes in Foreign Currency Exchange Rates and Hedging
Activities
Currency-neutral revenue, revenue per piece and operating profit
exclude the period over period impact of foreign currency exchange
rate changes and any foreign currency hedging activities.
These measures are calculated by dividing current period reported
U.S. dollar revenue, revenue per piece and operating profit by the
current period average exchange rates to derive current period
local currency revenue, revenue per piece and operating profit. The
derived amounts are then multiplied by the average foreign exchange
rates used to translate the comparable results for each month in
the prior year period (including the impact of any foreign currency
hedging activities). The difference between the current period
reported U.S. dollar revenue, revenue per piece and operating
profit and the derived current period U.S. dollar revenue, revenue
per piece and operating profit is the period over period impact of
foreign currency exchange rate and hedging activities.
Mark-To-Market Pension and Postretirement Adjustments
We recognize changes in the fair value of plan assets and net
actuarial gains and losses in excess of a 10% corridor for our
pension and postretirement defined benefit plans immediately as
part of other pension income (expense). We supplement our
presentation of certain financial data with non-GAAP measures that
exclude the impact of gains and losses recognized in excess of the
10% corridor and the related income tax effects. We believe
excluding these mark-to-market impacts provides important
supplemental information by removing the volatility associated with
short-term changes in market interest rates, equity values, and
similar factors.
The deferred income tax effects of mark-to-market pension and
postretirement adjustments are calculated by multiplying the
statutory tax rates applicable in each tax jurisdiction, including
the U.S. federal jurisdiction and various U.S. state and non-U.S.
jurisdictions, by the adjustments.
Free Cash Flow
We calculate free cash flow as cash flows from operating
activities less capital expenditures, proceeds from disposals of
property, plant and equipment, and plus or minus the net changes in
finance receivables and other investing activities. We believe free
cash flow is an important indicator of how much cash is generated
by our ongoing business operations and we use this as a measure of
incremental cash available to invest in our business, meet our debt
obligations and return cash to shareowners.
Return on Invested Capital
ROIC is calculated as the trailing twelve months (“TTM”) of
adjusted operating income divided by the average of total debt,
non-current pension and postretirement benefit obligations and
shareowners’ equity, at the current period end and the
corresponding period end of the prior year. Because ROIC is not a
measure defined by GAAP, we calculate it, in part, using non-GAAP
financial measures that we believe are most indicative of our
ongoing business performance. We consider ROIC to be a useful
measure for evaluating the effectiveness and efficiency of our
long-term capital investments.
Adjusted Total Debt / Adjusted EBITDA
Adjusted total debt is defined as our long-term debt and finance
leases, including current maturities, plus non-current pension and
postretirement benefit obligations. Adjusted EBITDA is defined as
earnings before interest, taxes, depreciation and amortization
adjusted for restructuring and other costs and investment income
and other. We believe the ratio of adjusted total debt to adjusted
EBITDA is an important indicator of our financial strength, and is
a ratio used by third parties when evaluating the level of our
indebtedness.
Forward-Looking Non-GAAP Metrics
From time to time when presenting forward-looking non-GAAP
metrics, we are unable to provide quantitative reconciliations to
the most closely correlated GAAP measure due to the uncertainty in
the timing, amount or nature of any adjustments, which could be
material in any period.
UPS Media Relations: 404-828-7123 or pr@ups.com
UPS Investor Relations: 404-828-6059 (option 2) or investor@ups.com
United Parcel Service (NYSE:UPS)
Historical Stock Chart
From Apr 2024 to May 2024
United Parcel Service (NYSE:UPS)
Historical Stock Chart
From May 2023 to May 2024