The road ahead for XPO is a tour that the trucking company has only just begun to travel.
On the first day of November 2022, XPO completed its spin-off of RXO, creating two publicly traded companies. XPO is a less-than-truckload transportation provider—that is, shipping goods to customers who do not have enough volume to fill an entire truckload. Meanwhile, RXO is the fourth largest truck broker in the US.
Exactly one week later, Carl Anderson joined XPO as chief financial officer.
“What makes me excited and makes me a part of a company where there are so many opportunities to take it to a different level,” Anderson said. fortune He sees only opportunity ahead, saying there is a gap in value between XPO and its peers. As CFO, he works to increase profits and better position the company in the eyes of the market.
From XPO Logistics
Anderson expressed his interest in finance for two events. The stock market crash of 1987 and the money and banking classes he took while attending Michigan State University. His career has combined his love for the capital market with the transportation industry. “Living in the Detroit area, you naturally gravitate to the auto industry,” says Anderson.
After earning a bachelor’s degree in economics, he served as a senior financial analyst at First Chicago Corp. He spent a decade at General Motors Acceptance Corp., the capital finance arm of the auto giant. At the time, it had struggled with funding issues and lost its investment grade rating. Anderson helped solve the problem and later joined Meritor, where he worked for more than 16 years in a number of senior leadership positions, including chief financial officer. Last year, he led the $3.7 billion sale of Meritor — a supplier of axles, brakes and more to commercial vehicle manufacturers and defense contractors — to Cummins.
Anderson said transportation is attractive because of its economic importance. And since 70% of cargo is moved by trucks, he sees good traction in that subsegment of the industry. First on the supplier side with Meritor, and now on the truck with XPO.
XPO was recently streamlined, after years of acquisitions that included multibillion-dollar deals for Con-way and Norbert Dentressangle. But post spinoff, Anderson said XPO will have the opportunity to be more agile and agile, with a narrow focus on strategic decisions.
“There is always a little bit of a conglomerate discount with the value of the company,” says Anderson. A spinoff would allow “each individual company to be evaluated for its own valuation purposes, relative to a specific peer group.”
Earlier this year, Anderson led XPO through its first earnings report since joining the company. Revenue for the quarter rose to $1.83 billion versus $1.77 billion in the previous year, driven by a 1.4% increase in revenue for the North American unit less trucks, with tons up 0.9%. Anderson said the results were strong compared to negative trends in the industry. XPO, he said, invests in capacity ahead of time when demand increases, so it can better capture a profitable market share.
When asked how he sees the route XPO should navigate in the future, Anderson pointed to the long-term 2027 goals the company released in October, including a compound annual growth rate of 6% to 8% and an increase in adjusted operating ratios. at least 600 basis points. Both targets cover the period from 2021 to 2027.
“We don’t have to depend on a lot of outside factors,” Anderson said. “We depend on ourselves, which is even more exciting, because if we can execute – which I know we will – we have a bright future.”
Wall Street may need more convincing. The company’s stock fell 14% on the day of its latest earnings report, and analysts at Wells Fargo and Jefferies were among those who downgraded the stock. Wells Fargo said it was a “transitional year” for XPO.
XPO exuded optimism when addressing industry analysts. “In North America, we are driving tonnage growth at the top of the industry [less-than-truckload] in Q4, and we ended the year with over $1 billion of adjusted Ebitda, making good on the Target we set five years earlier,” said CEO Mario Harik during a conference call. “We see strong demand from customers, especially many new customers launched in in 2022.”
From XPO Logistics
As Anderson settled into his new CFO role at XPO, his approach was to spend a lot of time with the team and set clear goals. He aims to keep the team moving forward on the goals they are working on, which is also in line with what XPO is trying to achieve. Anderson says that every team, and also every individual on the team, should have goals that align with the goals of the company.
They also encourage employee empowerment, encouraging team members to make decisions. “When people can see, every day, that whatever they do has an impact on the company, it creates a lot of energy and enthusiasm,” Anderson said.
And about what he does personally? “Being able to partner with businesses, to be able to grow the company is very, very profitable, and give strategic direction to the company, which is beneficial not only for shareholders, but beneficial for all employees,” said Anderson.
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