Ryder System (R) Barclays 43rd Annual Industrial Select Conference summary

Strategic transformation and business model evolution

• Adopted a balanced growth strategy in 2019, shifting focus from used truck market reliance to a more diversified, asset-light, and contractual business mix.

• De-risked operations by lowering residual value assumptions on leases and exiting underperforming geographies and services.

• Increased lease pricing spread from 60 to 150 basis points, prioritizing profitability over volume growth.

• Logistics and dedicated business now comprise 60% of revenues, up from 35% a decade ago.

• Acquisitions, such as Cardinal Logistics, have delivered targeted synergies and operational efficiencies.

Financial performance, guidance, and capital allocation

• Earnings before tax have grown to $700 million, with volatility from rental and used trucks now a smaller proportion of total earnings.

• 2024 guidance projects earnings improvement driven by internal initiatives, not market recovery, with $70 million in self-help programs identified.

• Record sales in logistics and supply chain expected to contribute to double-digit top-line growth as new contracts ramp up in the second half of the year.

• Capital expenditures for 2024 are focused on replacement, not fleet growth, reflecting cautious customer sentiment.

• Share repurchases are prioritized for excess cash, with leverage expected to remain within the 2.5x-3x range barring major acquisitions.

Market environment and operational outlook

• Current market conditions remain stable but subdued, with no significant pickup yet in rental or used truck demand.

• Early indicators like PMI and spot rates are positive, but improvements typically lag by six months.

• Tariffs and regulatory changes, such as EPA 2027 standards, are being managed through lease pricing and operational flexibility.

• Private fleet customers are scaling down post-COVID, with potential for increased outsourcing as driver markets tighten.

• Asset management flexibility allows redeployment of vehicles across business segments, supporting operational resilience.