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ethics • empowerment • execution. Presenter comments may contain forward-looking statements, which are subject to risk and uncertainties. Our SEC filings contain additional information about factors that could cause actual results to differ from management’s expectations.
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ethics • empowerment • execution Presenter comments may contain forward-looking statements, which are subject to risk and uncertainties. Our SEC filings contain additional information aboutfactors that could cause actual results to differ from management’s expectations.
WHO IS C.H. ROBINSON WORLDWIDE? • A leading third-party provider of transportation,distribution and other logistics services • One of the world’s largest non asset-based transportation companies with 2006 gross revenues of $6.6 billion • 7,150committed, service-driven employees • More than 25,000 customers • Over 45,000 carriers under contract worldwide • 218 branch offices worldwide
C.H. ROBINSON SERVICE LINES Transportation 88% Sourcing 8% Information Services 4% Percentage of Total Gross Profits Service Lines
TRUCKINGTRANSPORTATIONL O G I S T I C SS U P P L Y C H A I NB U S I N E S S S T R A T E G Y WHAT IS A THIRD PARTY LOGISTICS (3PL) COMPANY? DEFINITIONS VARY:
WHY IS THE 3PL INDUSTRY GROWING? • Flexibility and service • Fixed costs become variable costs for shippers • Leveraged economies of scale • Immediate access to implemented information technology • Broad logistics knowledge, with industry specialists • Anticipated continuation of capacity shortages
CHRW GLOBAL TRANSPORTATION & LOGISTICS SERVICES • Truckload • LTL (pallet to partial) • Intermodal • Ocean / NVOCC • Air • Customs Brokerage • Transportation Management
SOURCING • Procurement, distribution, and marketing of fresh produce • Customers: grocery retailers, foodservice companies, wholesalers, and repackers
Information Services INFORMATION SERVICES • Carrier services: T-Chek Systems • Fuel card – Fuel, phone and cash • Fuel tax management • Online information services
CORE COMPETENCIES Carrier/Supplier Relationships Customer Relationships People Business Processes & Technology
MAJOR CUSTOMERS: INDUSTRIES SERVED IN 2006 9% 40% 24% 12% 15% Top 100 Customers Represent 34% of Total Gross Profit
STRONG CUSTOMER RELATIONSHIPS Logistics Information Provider Value-added Logistics Services Mode Management Spot Market Transactional Facility Management On-site Personnel Supply Chain Mgmt Dedicated, Single Source Core Carrier Designation
MEDIUM CARRIERS (100-399 TRACTORS) LARGE CARRIERS (OVER 400 TRACTORS) SMALL CARRIERS (LESS THAN 100 TRACTORS) Percentage of 2006 CHRW Shipments, by Carrier Size AGGREGATING THE NATION’S CARRIER BASE 10% 13% 77% 40,000 Contract Carriers in North America
MOTIVATED AND CREATIVE EMPLOYEES • Empowered to serve customers • Compensation systems support growth and variable cost model • Average tenure of managers is 11 years with the company • Compensation and equity incentives align management with goals of shareholders
BUSINESS PROCESSES AND TECHNOLOGY • All North American operations are networked to provide consistent, real-time information • Core operating systems are internally developed • Continuous improvement and upgrade to enhance productivity and functionality • Increasing levels of customer and carrier electronic connectivity
CHRW LONG-TERM STRATEGIC GOALS • North American market penetration of current services • Develop new third-party logistics services • Build continental branch networks • Strengthen global forwarding network Global Service Provider
CHRW IS A GROWTH COMPANY (Gross profits in millions) $1,082.5 Asia South America Europe Info. Services N.A. Sourcing N.A. Misc. N.A.-based Ocean/Air N.A. Intermodal N. A. Truckload & LTL $179.1 YEAR BRANCHES EMPLOYEES 1996 108 1,665 1997 119 1,925 1998 120 2,205 1999 131 3,125 2000 137 3,677 2001 139 3,770 2002 150 3,814 2003 158 4,112 2004 176 4,806 2004 176 4,806 2005 196 5,776 2006 214 6,768
GROSS PROFIT GROWTH (dollars in millions) $1,082.5 14.6% $921.0 $804.0 19.7% 10-year CAGR $206.0
INCOME FROM OPERATIONS (dollars in millions) $417.8 22.6% $376.8 $307.5 23.6% 10-year CAGR $56.7 * Excludes unusual charges and expenses related to the company’s initial public offering 2000-2003 results restated for adoption of SFAS 123
EPS FROM CONTINUING OPERATIONS (in dollars) $1.53 23.4% $1.37 $1.11 22.9% 10-year CAGR $0.22 * Excludes unusual charges and expenses related to the company’s initial public offering Adjusted for December 2000 stock split and October 2005 stock split 2000-2003 results restated for adoption of SFAS 123
CHRW SUMMARY BALANCE SHEET DATA (dollars in millions) September 30, 2007 • Cash and Investments $410.8 • Current Assets $1,369.0 • Total Assets $1,785.0 • Current Liabilities $748.7 • Stockholders’ Equity $1,026.5 • Long Term Debt $0.0
C.H. ROBINSON WORLDWIDE • History of consistent growth in revenuesand profitability • Strong balance sheet and free cash flow • Motivated management and employees-aligned with the goals of shareholders