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Supply Chain Solutions
SUPPLY CHAIN
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2022 Q4
2 Feb 23
Asia export average daily volume declined 10.3% driven by lower global demand and disruptions to manufacturing output from the changes in China's COVID policy.
asia volume doewn 10.3%
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2022 Q4
2 Feb 23
he decline was primarily driven by a 12.9% decrease in domestic average daily volume and weakness out of Asia due to COVID.
Asia/COVId\ impact
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2022 Q4
2 Feb 23
nternational segment
INTERNATIONAL SEGMENT
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2022 Q4
2 Feb 23
SMBs made up 26.5% of our total U.S. domestic volume in the fourth quarter, an increase of 70 basis points from one year ago, and the 10th consecutive quarter of increased SMB penetration.
smb volume up 70bp to 26.5% og us dom volume
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2022 Q4
2 Feb 23
B2C average daily volume declined 3% in the fourth quarter compared to last year. B2B average daily volume in the fourth quarter was down 5.2% year-over-year, driven by declines in retail and industry sectors that are more sensitive to rising interest rates, like manufacturing and distribution. In the fourth quarter, B2B represented 35.3% of our volume, which was down slightly from 35.8% in the same time period last year.
b2c and b2b declined
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2022 Q4
2 Feb 23
In the fourth quarter, average daily volume was down 3.8% versus the same time period last year, with about half of the decrease coming from our largest customer, per the mutually beneficial contractual agreement we reached some time ago.
In the fourth quarter, volume in October and November came in as we expected, including a surge in late-November from Black Friday through Cyber week. In December, volume fell short of our expectations, reflecting consumer spending cutbacks at the height of the holiday season.
half the 3,8% volume decrease was from "largest customer"
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2022 Q4
2 Feb 23
U.S. domestic,
US DOMESTIC
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2022 Q4
2 Feb 23
In the U.S. inflation-sensitive consumers returned to more pre pandemic shopping patterns and holiday retail sales were lower than expected, especially after Cyber week. Internationally, demand in Europe remained under pressure. Ocean and air freight rates declined and exports out of Asia worsened due to COVID conditions in China.
shopping season weajker in US
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2022 Q4
2 Feb 23
s a demonstration of competence in our business going forward, and in concert with our capital allocation principles, the UPS board has approved a $0.10 increase in the quarterly dividend from $1.52 per share to $1.62 per share. This is the 14th consecutive year, we have increased the UPS dividend.
dividend increase
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2022 Q4
2 Feb 23
healthcare, in 2022, our healthcare portfolio reached $9.2 billion in revenue, and the quality of our offerings was best-in-class.
Our goal is to become the number one complex healthcare logistics provider in the world. Today, we have nearly 17 million square feet of healthcare compliance distribution space globally, with leading cold chain logistics capabilities. In 2023, we expect our healthcare portfolio to generate more than $10 billion in revenue.
We don't just look at volume and revenue to measure our success.
heathcare colour 9bn in 2022, 10bn expeced in 2023
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2022 Q4
2 Feb 23
Looking at SMBs, they made up 28% of our total U.S. volume in 2022, an increase of 120 basis points compared to 2021.
smb now 28% of rev
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2022 Q4
2 Feb 23
Deal Manager in 2022, we've made progress towards dynamic pricing. Deal Manager digitizes the pricing process, and applies pricing science to present the right offer to our SMB customers the first time, so we are able to close deals faster and with better revenue quality. In 2022, our U.S. win rate with Deal Manager was 22 percentage points higher than the baseline.
So we are moving quickly to expand access to Deal Manager to more than 40 countries in 2023.
Deal manager (smb) colour
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2022 Q4
2 Feb 23
We missed our revenue target by about 2%, but as Brian will detail, nearly all of this mess was due to a stronger dollar than originally anticipated. Consolidated operating profit in 2022 totaled $13.9 million, 5.4% higher than last year, and consolidated operating margin reached 13.8%. We generated $9 billion in free cash flow and diluted earnings per share were $12.94, an increase of 6.7%.
headline numbers, 9bn in fcf , missed reve tsarget --largely due to fx
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2022 Q4
2 Feb 23
Since its inception, we've had huge success with DAP, our Digital Access Program and making it easier for SMB customers to do business with UPS. In 2022, we generated more than $2.3 billion in DAP revenue exceeding our targets.
We expect the momentum to continue and plan to generate around $3 billion in global DAP revenue in 2023.
DAP rev 2.3bn in 2022, and will be 3bn in 2023
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2022 Q4
2 Feb 23
We experienced geopolitical tensions, including a war and global inflation drove food and energy costs higher. We saw both relief and concern as China pivoted away from its zero COVID policy. Global supply chains continue to adjust and demand and pricing for air and ocean freight softened accordingly. Consumers returned to pre-pandemic shopping behaviors, as retailers have been successful and attracting consumers back into stores. And we won't even talk about the weather, which candidly presented challenges throughout the year.
2022 headwinds discussion
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2022 Q4
2 Feb 23
While our consolidated operating margin declined by 10 basis points from last year, to 14.1%, our U.S. operating margin expanded to 12.8% and reached the levels not seen in 10 year.
overall mgn declined, but US margin expsanded
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2022 Q4
2 Feb 23
we expected volume levels to decline from last year and they did, but more than we planned due to macro conditions that Brian will discuss.
volume declined more than expected
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2022 Q4
2 Feb 23
We expected to fill this gap with other enterprise volume, but macro conditions made that challenging.
challenging
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2022 Q2
28 Sep 22
nd we expect our cost per piece growth rate will be lower than in the first half of the year as we continue to implement our productivity initiatives. The combination of our revenue and cost initiatives will enable us to grow revenue per piece faster than cost per piece and achieve our 11.6% full year operating margin target.
cpp growth lower, will hit mgn target of 11.6% in US DOM
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2022 Q2
1 Aug 22