Profits grow, revenues fall at XPO Logistics

Revenues at XPO Logistics fell by 3.5% in 2019. Worldwide revenue at the company fell to £12.8 billion from £13.2bn though at the same time, operating income grew 16.6% to £632.8 million.

XPO Logistics European division fell 2.1% to £2.79 billion, though again margins grew 2.6% to £429.3 million. The gross margin is higher in the European business at 14.6% than the North American business (10%).

The 3PL’s largest customer reduced its business though this was offset by revenue growth in consumer packaged goods, aerospace, and food and beverage verticals in North America, and in e-commerce and chemicals in Europe.

Bradley Jacobs, chairman and chief executive officer of XPO Logistics, said, “We delivered a good fourth quarter and a good year. I’m particularly pleased that we grew fourth quarter EPS by 50% year-over-year, and adjusted EPS by 56%. We also increased net income by 18% and adjusted EBITDA by 14% in the quarter.”

XPO indicated in January that it could divest some of its business, though nothing was said in this trading statement.

Jacobs said: “In truck brokerage, we increased volume year-over-year with lower headcount, propelled by our XPO Connect digital platform. Our technology also helped our logistics segment generate a double-digit adjusted EBITDA margin in the quarter for the first time since 2015.

“In 2020, we’ll continue to focus on maximising shareholder value, while remaining intensely committed to the satisfaction of our customers and employees,” he added.