Ryder System : 2024 Ryder Annual Report

Published: 2025-03-12 08:47:04 ET R

2024 ANNUAL REPORT

UNLEASHING OUR POTENTIAL

2024 ANNUAL REPORT

CORPORATE PROFILE

Ryder System, Inc. is a $12.6 billion fully integrated port-to-door logistics and transportation company. We operate behind the scenes managing critical fleet, transportation, and supply chain functions for more than 40,000 customers, many of which make products consumers use every day.

RYDER OPERATES IN THREE

COMPLEMENTARY BUSINESS SEGMENTS:

42%

% OF TOTAL

REVENUE

39%

SCS

SUPPLY CHAIN SOLUTIONS

Offers end-to-end suite of solutions that includes warehousing, distribution, transportation logistics, e-commerce and omnichannel fulfillment, and last mile delivery to turn logistics networks into competitive advantages.

19%

DTS

DEDICATED TRANSPORTATION SOLUTIONS

Provides all the benefits of a private fleet by combining the best of Ryder's leasing and maintenance capabilities with the safest and most professional drivers and technology in the industry.

FMS

FLEET MANAGEMENT SOLUTIONS

Offers full-service leasing, contract maintenance, and commercial rental of trucks, tractors, and trailers to help businesses of all sizes across virtually every industry deliver for their customers.

QUICK FACTS

1933

50,700

YEAR FOUNDED

FULL-TIME EMPLOYEES

~250,000

$10B

VEHICLES

FREIGHT UNDER

SERVICED

MANAGEMENT

>40,0001

>100M

COMMERCIAL

SQ. FT. OF

CUSTOMERS

WAREHOUSE SPACE

DIVERSIFIED CUSTOMER BASE (as a % of operating revenue)

Food & Beverage

23%

Retail & Consumer Goods

16%

Industrial

14%

Transportation & Logistics

13%

Automotive

12%

Housing

Technology

Business & Personal Services

Other

1Represents total customers across all product lines. Customers utilizing multiple product lines may be counted more than once.

NYSE: R Ryder System, Inc. LEADING PROVIDER OF OUTSOURCED LOGISTICS AND TRANSPORTATION SOLUTIONS IN NORTH AMERICA

2 | RYDER 2024 ANNUAL REPORT

2024 ANNUAL REPORT

STRATEGY

"Across all phases of the current freight cycle, our earnings and return profile has outperformed prior cycles."

ROBERT SANCHEZ CHAIR AND CHIEF EXECUTIVE OFFICER

HIGHER EARNINGS AND RETURN PROFILE REFLECTS

TRANSFORMATIVE CHANGES

2018: Pre-transformaon

2024: Post-transformaon

CHANGE ( )

Freight Cycle Peak

Expected Freight Cycle Trough

+17 pts

FMS

Revenue Mix

44% $8.4B

39%

$12.6B 61%

56%

SCS/DTS

(SCS/DTS)

Comparable EPS

$5.95

$12.00

2.0x

Adjusted ROE (ROE)

13%

16%

+300 bps

CREATING INCREMENTAL CAPITAL DEPLOYMENT CAPACITY

Earnings power of contractual business is expected to drive strong operang cash ﬂow, creang incremental debt capacity

Capital deployment capacity supports capital allocaon priores

Incremental

Debt

Capacity*

Cash from

Growth Capex

Strategic M&A

Share Buybacks

Available

for Flexible Deployment

Replacement

Opera•ons and

Used Vehicle Proceeds

Dividends

Capex

*Debt capacity based on 2.75x leverage (midpoint of target range)

SINCE 2021

~$7.9B

~$1.1B

~$950M

INVESTED IN

DISCRETIONARY SHARE

VEHICLE CAPEX

STRATEGIC M&A

REPURCHASES

Comparable EPS and ROE are non-GAAP financial measures.

For a reconciliation of these non-GAAP financial measures, see page 49 and 51 of our Annual Report on Form 10-K for the year ended December 31, 2024.

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2024 ANNUAL REPORT

STRATEGY

CURRENT PHASE OF BALANCED GROWTH STRATEGY BUILDS ON TRANSFORMED BUSINESS MODEL

CREATE COMPELLING VALUE

THROUGH OPERATIONAL

EXCELLENCE

Continuous improvement process to drive maintenance and operations efficiencies - $50M multi-year maintenance cost savings initiative

Leverage multi-client network; well-positionedto benefit from long-termgrowth trends

Continue to deploy Ryder Flex operating structure - improve efficiencies while driving increased customer service levels

INVEST IN

CUSTOMER-CENTRIC

INNOVATION

Proprietary technologies differentiate services and provide customer value:

Baton, a Ryder Technology Lab

- creating a first-of-its-kind

AI-powered digital platform and optimization engine

FURTHER IMPROVE FULL-CYCLE

RETURNS AND GENERATE

PROFITABLE GROWTH

Differentiate lease pricing with focus on higher return segments

Expand share of wallet within vertical subsegments-crosssell co-packaging and co-manufacturing within CPG and expand to other verticals

Integrate Cardinal acquisition to realize synergies and benefit from top-gradetalent; $40-60M synergies expected by 2026

ONGOING EXECUTION OF STRATEGY EXPECTED TO FURTHER LIFT RETURNS PROFILE

I N C R E A S E D

ROE TARGET

LOW 20S

OVER THE CYCLE

ROE is a non-GAAP financial measure. For a reconciliation of this non-GAAP financial measure, see page 51 of our Annual Report on Form 10-K for the year

ended December 31, 2024.

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2024 ANNUAL REPORT

CEO LETTER

"During 2024, the business generated comparable earnings per share of $12.00, which is significantly above the $5.95 of comparable earnings per share generated in 2018, prior to our business transformation and representing prior freight cycle peak."

R O B E R T S A N C H E Z

C H A I R A N D C H I E F E X E C U T I V E O F F I C E R

$456M

RETURNED IN CASH

TO SHAREHOLDERS

14%

INCREASED DIVIDEND

D E A R S H A R E H O L D E R S:

I'm extremely proud of the Ryder team for delivering solid results throughout 2024 despite an extended freight cycle downturn. We continue to outperform prior cycles, driven by our high-quality contractual portfolio and reflecting the actions we've taken under our balanced growth strategy to de-risk the business, increase the return profile, and accelerate growth in our asset-light Supply Chain Solutions (SCS) and Dedicated Transportation Solutions (DTS) businesses. We continue to see long-term growth opportunities in all three of our business segments, supported by secular trends that favor outsourcing decisions, large addressable markets, and the value of our solutions.

2024 R E S U LT S

During 2024, the business generated comparable earnings per share (EPS) of $12.00, which is significantly above the $5.95 of comparable earnings per share generated in 2018, prior to our business transformation and representing prior freight cycle peak. The business also delivered adjusted return on equity (ROE) of 16%, which is in line with our expectations for an extended freight cycle downturn and reflects the benefits of our initiatives focused on enhancing returns. The strength of our contractual businesses continues to demonstrate the enhanced quality of the portfolio and increased resilience of our business model. Operating revenue grew by 8%, reflecting the Cardinal and IFS acquisitions. Through organic growth, strategic acquisitions, and innovative technology, we have shifted our revenue mix towards SCS and DTS, with 61% of 2024 revenue coming from these asset- light businesses, compared to 44% in 2018.

For several years, you have heard me speak of my optimism toward Ryder's transformation journey. During 2024, we continued to outperform key metrics relative to prior cycles, demonstrating the effectiveness of the strategy. The next phase of our balanced growth strategy focuses on creating compelling value through operational excellence, investing in customer-centric innovation, and further improving full-cycle returns and generating profitable growth. At the Investor Day we hosted in June 2024, we increased our ROE target over the cycle from high teens to low 20s. We are confident in our ability to achieve this new target over time as we continue to execute on our initiatives.

Comparable EPS, ROE and operating revenue are non-GAAP financial measures.

For a reconciliation of these non-GAAP financial measures, see page 49-51 of our Annual Report on Form 10-K for the year ended December 31, 2024.

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2024 ANNUAL REPORT

Lease or Buy?

Evaluating the Rising Costs of Truck Fleet Ownership

Data-driven analysis for fleet owners and managers to understand the total cost of ownership (TCO) and make informed decisions about fleet management strategy.

LEARN MORE ABOUT THE VALUE PROPOSITION OF RYDER CHOICELEASE HERE.

C A PA C I T Y TO S U P P O R T C A P I TA L A L LO C AT I O N P R I O R I T I E S

The earnings power of our contractual portfolio provides us with increased capital deployment capacity, which we expect to use to support profitable growth and return capital to shareholders. During 2024, we returned $456 million in cash to shareholders through share repurchases and dividends.

We repurchased 2.5 million shares and increased our dividend by 14%. Since 2021, we have repurchased approximately 19% of our shares outstanding and increased the average dividend growth rate to 12%.

C U S TO M E R - C E N T R I C I N N OVAT I O N A N D T H O U G H T L E A D E R S H I P

Ryder is at the forefront of identifying new technology for operational advancements. This has led Ryder to develop a suite of customer-centric technology solutions for enhanced supply chain visibility (RyderShare™), control of last mile orders (RyderView™), fleet management (RyderGyde™), and e-commerce fulfillment (RyderShip™), and even new services like our retail mobile maintenance solution (Torque by Ryder™).

Ryder also acts as an extended research and development arm for our suppliers and customers. We are at the table with vehicle manufacturers, technology innovators, and industry peers to develop solutions our customers can implement to reach their goals. In 2024, one area fleet operators frequently asked us about centered on the cost, benefit, and complexities

of converting to electric. As a result, Ryder published "Charged Logistics: The Cost of Electric Vehicle Conversion for U.S. Commercial Fleets." Using extensive Ryder historical data and current market prices for both electric and internal combustion engine (ICE) vehicles as well as charging infrastructure, Ryder examined the potential economic impacts of implementing an all-

EV fleet in California and Georgia, states where electricity, fuel, and labor costs range from highest in the country to more modest. The results of the study delivered data-driven insights that fleet operators, regulators, vehicle manufacturers, and technology innovators will find valuable as they evaluate the opportunities and costs of fleet electrification.

C O R P O R AT E R E S P O N S I B I L I T Y

We strive daily to uphold our corporate values of being Responsible, Determined, and Trustworthy, as well as live up to our tagline of "Ever better!" and its message of continuous improvement. With 50,000 plus employees living those values every day, instilling them as a natural part of Ryder's workplace culture, I'm proud to say that their efforts did not go unnoticed. For the 13th year in a row, FORTUNE named Ryder one of the "World's Most Admired Companies" for 2025. Of course, one of our most important distinctions is cultivating a positive, inclusive, and innovative work environment for our employees, and I was proud to see Ryder named among Newsweek's "America's Greatest Workplaces" as well as being named a 2024 "Top Company for Women to Work in Transportation" by Women in Trucking. Finally, to be the best, you must employ the best. Ryder has long seen the

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2024 ANNUAL REPORT

LEARN MORE ABOUT SUSTAINABILITY AT RYDER HERE.

Ryder sustainability reporting includes an annual Corporate Sustainability Report (CSR) and CDP Corporate Response.

value in recruiting military veterans, which is why we were proud to be honored as a 2024 VETS Indexes Recognized Employer for our commitment to recruiting, hiring, retaining, developing, and supporting veterans and the military-connected community.

Ryder employees live and work in communities across North America. And it's not only the business we conduct, but how we conduct our business that has a direct impact on those communities. In October, we hosted our annual United Way workplace campaign. Between employee contributions and Ryder's corporate gift, we raised a record $1.15 million.

Ryder is focused on optimizing supply chains by improving efficiencies, conserving resources, and minimizing waste. Doing business responsibly, efficiently, and safely is ingrained in our culture and supports creating value for all Ryder stakeholders. The U.S. EPA named Ryder a 2024 SmartWay® Excellence Award winner and SmartWay® High Performer for outstanding environmental performance and freight sustainability leadership in our dedicated transportation business. Ryder has earned the SmartWay Excellence Award-the EPA's highest accolade in this program-six times since 2013.

LO O K I N G A H E A D

On behalf of Ryder's leadership team and all our employees, thank you for your investment and confidence in Ryder. We remain focused on executing our balanced growth strategy, which is delivering profitable growth and we expect will continue increasing shareholder value with more opportunity ahead.

Sincerely,

Robert Sanchez

Chair and Chief Executive Officer

March 2025

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2024 ANNUAL REPORT

PERFORMANCE

(in millions except per share amounts)

ROE

Comparable EBITDA

29%

$2,722

$2,665

$2,776

19%

16%

2022

2023

2024

Comparable EPS

$16.37

$12.95

$12.00

2022

2023

2024

2022

2023

2024

Cash Flow from Operations

$2,310

$2,353

$2,265

2022

2023

2024

Operating Revenue

Dividend Per Common Share

$9,280

$9,497

$10,266

2022

2023

2024

$3.04

$2.66

$2.40

202220232024

ROE, comparable EBITDA, comparable EPS, and operating revenue are non-GAAP financial measures. For a reconciliation of these non-GAAP financial measures, see pages 49-51 of our Annual Report on Form 10-K for the year ended December 31, 2024.

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2024 ANNUAL REPORT

UNLEASHING OUR POTENTIAL

STRENGTHENING OUR MARKET LEADERSHIP

"We continue to be a market leader in third-party logistics, providing port-to-door services across North America. By bringing in and leveraging new capabilities across industry verticals, Ryder is leveraging the complementary services we've achieved through strategic investments and acquisitions and increasing the value

we offer to our customers."

S T E V E S E N S I N G

P R E S I D E N T, S U P P LY C H A I N S O L U T I O N S A N D D E D I C AT E D T R A N S P O R TAT I O N

S O L U T I O N S

ADDING SCALE AND DENSITY WITH CARDINAL ACQUISITION

The 2024 acquisition of Cardinal Logistics advances Ryder's strategy to accelerate profitable growth in its dedicated business by adding scale and density, driving operating efficiencies, and delivering better value. Primarily serving the consumer packaged goods, omnichannel, grocery, building products, automotive, and industrial verticals, Cardinal brings to Ryder a highly diversified portfolio serving long-tenured blue-chip customers.

In 2024, Ryder integrated Cardinal operations, facilities, and equipment into its dedicated transportation, fleet management, and supply chain businesses. The transaction is expected to be accretive in 2025. The acquisition of Cardinal complements and strengthens Ryder's position as a leading specialized dedicated transportation provider in North America and establishes Ryder as the second largest Dedicated provider in our industry.

EXPANDING RYDER'S CPG WALLET SHARE

Through the 2023 acquisition of Impact Fulfillment Services (IFS), Ryder is now a one-stop-shop for customers with added co-packing and co-manufacturing capabilities. Their proven model in both food and non-food products, as well as 15 multi-client and dedicated operations, enables Ryder to address an identified need of top customers for co-packing and co-manufacturing services. While Ryder already serves the top 10 U.S. food and beverage companies, this acquisition has expanded and strengthened our relationships with existing customers while also attracting new customers in additional verticals.

OMNICHANNEL EXCELLENCE: THE KEY TO CUSTOMER SATISFACTION

Ryder released its 10th annual e-commerce consumer study, "The Influence of Omnichannel Excellence on Consumer Behavior." The survey of more than 1,300 U.S. shoppers explored preferences, expectations, sentiment, and behavior pertaining to purchasing, omnichannel experiences, packaging, shipping, returns, and sustainability. This latest study demonstrates that, while consumers maintain a robust appetite for e-commerce, they are simultaneously embracing in-person shopping, presenting an impetus for merchants to refine their omnichannel strategies.

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2024 ANNUAL REPORT

UNLEASHING OUR POTENTIAL

INNOVATION

DRIVEN BY

CUSTOMER-

CENTRIC MINDSET

RYDERSHARETM

RYDERSHARETM CUSTOMER BENEFITS

Real-time visibility of your goods on trucks and inside warehouses

Ryder's one-of-a-kind visibility and collaborative logistics technology RyderShare™ enables everyone involved in moving goods through supply chains - shippers, receivers, carriers, and service providers - to work together in real-time to prevent costly delays and find efficiency gains.

Productivity

Increased productivity up to 50%

Labor Efficiency

Labor efficiency savings up to 50%

On-Time Performance On-timeperformance of 99%

Organizational Reaction Improved organizational reaction time by 90%

The platform gives Ryder customers unprecedented visibility into their supply chains, and in fact is the only digital platform from a 3PL that provides end-to- end visibility, collaboration, and exception management across the supply chain. It is clear customers are seeing the value in the platform as 35% of new business revenue in SCS and DTS can be attributed to RyderShare™.

RYDERVIEWTM

RyderView™ is the industry's leading comprehensive last mile digital application that gives customers real-time visibility and control of orders-and their brand- while enhancing the delivery experience for their consumers. The platform allows companies and consumers to schedule deliveries, track orders, receive notifications, and access actionable data. In 2024, Ryder Last Mile completed more than 700,000 orders that utilized the RyderView™ application.

RYDERGYDETM

Designed to enhance the way customers manage their fleets, RyderGyde™ offers a full suite of fleet management tools so they can easily schedule and see the status of maintenance service, access complete vehicle history, view real-time contracted fuel rates, and access roadside assistance. This allows businesses to manage their fleets more efficiently.

As of 2024, RyderGyde™ is utilized by 9,000 customers and has more than 65,000 users.

RYDERSHIPTM

In 2022, Ryder acquired nationwide e-commerce and omnichannel fulfillment services provider Whiplash. This acquisition amplified Ryder's e-commerce network, bringing with it a best-in-class technology and operating platform. RyderShip™ is the only digital platform purpose-built for e-commerce fulfillment that is customizable to customers' needs and easily integrates with their entire ecosystem.

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Disclaimer

Ryder System Inc. published this content on March 12, 2025, and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on March 12, 2025 at 12:46:06.056.