Transcript UPS Presentation Template

United Parcel Service
Jeremy Gogel
3-2-2006
Finance 4201
Stock Profile
Last Trade:74.71
Day's Range:74.63 - 75.9152
Wk Range:66.10 - 79.97
Volume:2,858,600
Avg Vol (3m):2,577,950
Market Cap:82.45B
P/E (ttm):21.54
(24.22 Ind avg.)
EPS (ttm):3.47
(1.04 Ind avg.)
Div & Yield:1.52 (2.00%)
2
World’s Largest Package
Delivery Company
•Started in 1907 in Seattle.
•2005 Annual Revenue $33.4 billion
• Deliver 13.6 million packages daily (150
packages per second)
• 7.9 million daily customers
• Reaches more than 200 countries/territories
worldwide
• Every address in the United States
• UPS has more than 88,000 vehicles
• Approximately 360,000 employees
• UPS is the 11th largest airline in the World (581
aircraft owned)
3
4
What can BROWN do for you?
UPS has three different business segments
• US Package Operation
International Package Operation
Non-Package Unit (UPS Supply Chain Solutions)
5
UPS Package Services
U.S. Services
UPS Next Day Air® Early A.M.®
UPS Next Day Air®
UPS Next Day Air Saver®
UPS 2nd Day Air A.M.®
UPS 2nd Day Air
3 Day Select®
UPS Guaranteed Ground
International Services
UPS Worldwide ExpressSM
UPS Worldwide Express PlusSM
UPS Worldwide ExpressSM NA1
UPS Express Saver
UPS WorldEaseSM
UPS Worldwide ExpeditedSM
UPS Standard
6
Domestic Segment
•Ground volume increased 4 percent (408,000 packages) per day.
•Revenue per piece was up 2.1 percent
•New technology had a negative impact on profitability of about $150
million
•Growth is focused on better alignment of resources, cross-selling of
integrated solutions and expansion of the product portfolio
7
International Segment
•International operations achieved large gains in 2004
•Favorable currency translation accounted for only $54
million of the $412 million increase in profits
•Operating profit was over $1 billion for the first time and
•Operating margins increased to 16.6%; best in industry
8
Global Leader in Supply Chain Services
Supply Chain Solutions
International Trade Management Consulting
Logistics and Distribution
Transportation Management and Freight Forwarding
Service Parts Logistics
Financial Services
Global Trade Finance
Export-import Lending
Electronic Services
UPS Internet Shipping
UPS OnLine® WorldShip®
9
Supply Chain Solutions
•UPS Supply Chain Solutions is the largest business unit within
the non-package segment.
•Total supply chain spending around the world is over $3 trillion.
Only about 10 percent is currently outsourced. The outsourced
market, however, is growing at a 12 percent annual rate.
•UPS has targeted several industries where it sees substantial
supply chain management growth opportunities, including the
health care, automotive, high-tech, retail, consumer, and
government sectors.
10
Growth Opportunities
•UPS invests hundreds of millions of dollars annually for facilities, vehicles, and aircraft.
•Construction continued on the expansion of the company’s automated air hub in Cologne,
Germany — the largest hub outside the United States.
•UPS is extending its presence in Asia. UPS has gained 12 additional air routes to more
extensively serve parts of China, Japan, and Hong Kong.
•Network improvements reduced transit times by one day on ground service between 20
metropolitan areas, including Atlanta, Baltimore/Washington, D.C., Chicago, Dallas,
Houston, Kansas City, Los Angeles, Philadelphia, and Pittsburgh.
•UPS will continue enhancing transit times in 2005 and beyond.
11
UPS
USPS
FDX
Deutsche Post
Industry
83.12B
N/A
33.56B
N/A
1.19B
N/A
346,410
215,838
704,716
3.21K
Qtrly Rev
Growth (yoy):
21.50%
N/A
10.30%
N/A
18.80%
Revenue (ttm):
42.58B
60.74B
30.85B
69.91B
1.53B
100.00%
N/A
67.17%
N/A
32.11%
7.76B
N/A
4.17B
N/A
111.30M
14.43%
N/A
8.67%
N/A
5.85%
Net Income
(ttm):
3.87B
2.17B
1.58B
1.45B
16.66M
EPS (ttm):
3.468
N/A
5.114
N/A
0.83
P/E (ttm):
21.72
N/A
21.59
N/A
23.8
PEG (5 yr
expected):
1.36
N/A
1.18
N/A
1.47
P/S (ttm):
1.95
N/A
1.09
N/A
0.64
Market Cap:
Employees:
Gross Margin
(ttm):
EBITDA (ttm):
Oper Margins
(ttm):
12
Valuation
Beta: .49
Growth Rate: 7% (I think this is low)
Rate of Return: 8%
Value: $100 per share
Buffett: $80.28 (7% for first 10, 2% thereafter)
Analysts: $85.36-$91.96 for fiscal 2006.
14
Recommendation
Hold
Why?
•I really like the dividend;
its increased by 81% since 2003.
•I think UPS can capitalize on the
increasing supply chain market.
•Very little risk, but still room for
growth.
15
Questions?
16