C H Robinson Worldwide : CHRW Q3 2023 Earnings Call Presentation

Dave Bozeman, President & CEO

Arun Rajan, Chief Operating Officer

Mike Zechmeister, Chief Financial Officer

Chuck Ives, Director of Investor Relations

Q3 2023

Earnings Presentation

November 1, 2023

Safe Harbor Statement

Except for the historical information contained herein, the matters set forth in this presentation and the accompanying earnings release are forward-looking statements that represent our expectations, beliefs, intentions or strategies concerning future events. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from our historical experience or our present expectations, including, but not limited to factors such as changes in economic conditions, including uncertain consumer demand; changes in market demand and pressures on the pricing for our services; fuel price increases or decreases, or fuel shortages; competition and growth rates within the global logistics industry; freight levels and increasing costs and availability of truck capacity or alternative means of transporting freight; risks associated with significant disruptions in the transportation industry; changes in relationships with existing contracted truck, rail, ocean, and air carriers; changes in our customer base due to possible consolidation among our customers; risks with reliance on technology to operate our business; cyber- security related risks; risks associated with operations outside of the United States; our ability to successfully integrate the operations of acquired companies with our historic operations; climate change related risks; risks associated with our indebtedness; interest rates related risks; risks associated with litigation, including contingent auto liability and insurance coverage; risks associated with the potential impact of changes in government regulations; risks associated with the changes to income tax regulations; risks associated with the produce industry, including food safety and contamination issues; the impact of war on the economy; changes to our capital structure; changes due to catastrophic events including pandemics such as COVID-19; risks associated with the usage of artificial intelligence technologies; and other risks and uncertainties detailed in our Annual and Quarterly Reports. Any forward-looking statement speaks only as of the date on which such statement is made, and we undertake no obligation to update such statement to reflect events or circumstances arising after such date.

©2023 C.H. Robinson Worldwide, Inc. All Rights Reserved.

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Thoughts from President & CEO, Dave Bozeman

• Customers value the quality, stability and reliability that we provide, and they prefer partners who have the financial strength to invest through cycles and the expertise to provide innovative tech-enabled solutions
• Focus on delivering quality and improvements to customers has been reflected in very positive customer feedback and high net promoter scores
• We are executing on our plans to streamline our processes, remove waste and decouple volume growth from headcount growth
• Cost reductions and productivity gains are ahead of our stated targets
• Accelerating clock speed and driving focus on concurrent workstreams that are addressing the highest leverage areas to eliminate productivity bottlenecks
• Utilizing generative AI, in conjunction with machine learning, to leverage our large data set as a force multiplier
• Strength of our people, scaled network, financial model and investments in improving efficiency position us well for the eventual freight market rebound

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Q3 Highlights

■ Global freight markets continue to be impacted by	Q3	2023
weak demand and excess capacity, resulting in a
loose market and suppressed transportation rates
■ Focused on providing superior service to our	$4.3B	$635M
customers and carriers and continuing to
streamline our processes by removing waste and	Total Revenues	Adj. Gross Profits
manual touches
-27.8% Y/Y	-28.4% Y/Y
■ Balance sheet continues to be strong, and we
continue to invest in improving the customer and	$114M	$0.68
carrier experience and in decoupling volume growth
from headcount growth	Income from Ops.	Net Income/Share
■ Cost reductions and productivity improvements are
-60.5% Y/Y	-61.8% Y/Y
ahead of plan	$138M of adjusted income from	$0.84 of adjusted net income per
■ 18% YTD improvement in shipments/person/day	operations, excluding $24.5M of	share, excluding $24.5M of
restructuring charges(1)	restructuring charges(1)
against a goal of 15% Y/Y improvement by Q4

1. Adjusted gross profits, adjusted income from operations - excluding restructuring charges and adjusted net income per share - excluding restructuring charges are non-GAAP financial measures. Refer to	4
page 23 for further discussion and a GAAP to Non-GAAP reconciliation.

Complementary Global Suite of Services

Over half of total revenues came from customers to whom we provide both surface transportation and global forwarding services.(1)

North American Surface Transportation (NAST)

• Adjusted gross profit (AGP) per load/order declined Y/Y in both TL and LTL
• Load-to-truckratios indicate the truckload market remains soft by historical standards
• Significant market share opportunities remain in highly fragmented market
• Focused on initiatives that improve the customer and carrier experience and lower our cost to serve
• 18% YTD improvement in productivity driven by increased automation of in-transit tracking, case management and appointments

Q3 2023 Adjusted
Gross Profits(2)	-31.6%
	Y/Y

-31.4%	+4.6%
Y/Y	Y/Y

Global Forwarding (GF)

• Reduced global demand and excess capacity has led to declining prices for ocean and air freight
• Sequential increase in ocean volume
• Continuing to diversify our trade lane and industry vertical exposure

All Other & Corporate

• Robinson Fresh integrated supply chain solutions generating increased AGP
• Managed Services Q3 AGP relatively flat Y/Y
• Other Surface Transportation AGP increased 1.3% Y/Y

1.	Measured over trailing twelve months.	5
2.	Adjusted gross profits is a non-GAAP financial measure explained later in this presentation. The difference between adjusted gross profits and gross profits is not material.

NAST Q3'23 Results by Service

• Truckload volume down 6.0% year-over-year(2)
• Truckload AGP per shipment decreased 36.5% due
  to declining profit per shipment on both contractual and transactional volume(2)
• LTL volume down 2.0% and AGP per order decreased 13.5%(2)
• Other AGP decreased primarily due to a decrease in Intermodal services
• Added 4,900 new carriers in Q3 vs. 11,100 in Q3 last year

Adjusted Gross Profit(1)

($ in millions)

	3Q23	3Q22	%▲
Truckload ("TL")	$223.0	$374.1	(40.4)%
Less than Truckload ("LTL")	$136.4	$161.0	(15.3)%
Other	$27.2	$28.7	(5.5)%
Total Adjusted Gross Profits	$386.5	$563.8	(31.4)%
Adjusted Gross Profit Margin %	12.5%	14.1%	(160 bps)

1.	Adjusted gross profits is a non-GAAP financial measure explained later in this presentation. The difference between adjusted gross profits and gross profits is not material.	6
2.	Growth rates are rounded to the nearest 0.5 percent.

Truckload Price and Cost Change (1)(2)(3)

Mile	50%
40%
per
Cost	30%
and	20%
in Price	10%
0%
% Change
-10%
-20%
YoY
-30%
	2016	2017	2018	2019	2020	2021	2022	2023

YoY Price Change		YoY Cost Change

• 70% / 30% truckload contractual / transactional volume mix in Q3
• Average routing guide depth of 1.2 in Managed Services business vs. 1.3 in Q3 last year

Truckload	Q3

Volume(2)(4)-6.0%

Price/Mile(1)(2)(3)-16.5%

Cost/Mile(1)(2)(3)-13.5%

Adjusted Gross Profit(4)

-40.4%

1. Price and cost change represents YoY change for North America truckload shipments across all segments.
2. Growth rates are rounded to the nearest 0.5 percent.

3.	Pricing and cost measures exclude fuel surcharges and costs.	7
4.	Truckload volume and adjusted gross profit growth represents YoY change for NAST truckload.

Truckload AGP $ per Shipment Trend

NAST Adjusted Gross Profit $ per Truckload Shipment (left axis)		NAST Adjusted Gross Profit Margin % (right axis)
Average NAST AGP $ per Truckload Shipment (left axis)

Gross Profit $ per Truckload	Shipment
NAST Adjusted
	2014	2015	2016	2017	2018	2019	2020	2021	2022	2023

20%

19%

18%

17%

16%

15%

14%

13%

12%

11%

NAST Adjusted Gross Profit Margin %

• AGP $ per Truckload Shipment reflects market conditions better than AGP Margin % (1)
• Within Q3, AGP $ per Truckload was relatively flat through the quarter.

1. Adjusted gross profits is a non-GAAP financial measure explained later in this presentation. The difference between adjusted gross profits and gross profits is not material.

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Global Forwarding Q3'23 Results by Service

• Reduced global demand and excess capacity impacted ocean and air pricing and volumes on a year-over-year basis
• Ocean AGP decreased due to a 34.5% decrease in AGP per shipment and a 0.5% decline in shipments(2)
• Air AGP decreased due to a 35.5% decrease in AGP
  per metric ton shipped and a 2.0% decline in metric tons shipped(2)
• Customs AGP decreased primarily due to an 8.0% decline in volume(2)
• On a sequentialbasis, ocean volume increased 2.5%

Adjusted Gross Profit (1)

($ in millions)

		3Q23	3Q22	%▲
	Ocean	$103.8	$159.7	(35.0)%
	Air	$29.7	$47.1	(36.8)%
	Customs	$24.9	$27.9	(10.7)%
	Other	$11.5	$13.7	(16.5)%
	Total Adjusted Gross Profits	$169.9	$248.4	(31.6)%
	Adjusted Gross Profit Margin %	23.6%	16.4%	720 bps

1. Adjusted gross profits is a non-GAAP financial measure explained later in this presentation. The difference between adjusted gross profits and gross profits is not material.

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2. Growth rates are rounded to the nearest 0.5 percent.

All Other & Corporate Q3'23 Results

Robinson Fresh

• Increased AGP driven by a 23.0%(2) increase in case volume, primarily in retail and integrated supply chain solutions for foodservice customers

Managed Services

• Total freight under management of $1.5B in Q3 down Y/Y due to declining freight rates

Other Surface Transportation

■ Increased AGP driven by Europe LTL services

Adjusted Gross Profit (1)

($ in millions)

	3Q23	3Q22	%▲
Robinson Fresh	$31.1	$27.7	12.3%
Managed Services	$29.4	$29.6	(0.6)%
Other Surface Transportation	$17.9	$17.7	1.3%
Total	$78.4	$75.0	4.6%

1.	Adjusted gross profits is a non-GAAP financial measure explained later in this presentation. The difference between adjusted gross profits and gross profits is not material.	10
2.	Growth rates are rounded to the nearest 0.5 percent.