GXO Logistics, Inc.

revenue growth guidance of 6 to 8% and we're raising our full year adjusted EBITDA guidance by $10 million bringing the midpoint of our range to $740 million. This quarter we won our highest ever value of new sales wins beating our prior record which was set in the second quarter of 2022. Among our contracts signed this quarter are new partnerships and expansions with a terrific group of customers, including Boeing, Eddie Bauer, PepsiCo, Sainsbury's, Schneider Electric, and TJ Maxx. We recently announced an expansion with Abercrombie & Fitch to the UK after launching our first operation for them, a highly automated distribution center utilizing goods-to-person robotics here in the US last year. And IKEA recently ranked our site in the US number one in its global network for productivity, service quality, and inventory accuracy. A few weeks ago, we also announced the signing of a multi-year agreement with Heineken. Over the past two years, we've significantly transformed their distribution network, enhancing efficiency, service, and sustainability. In the quarter, we also launched our business in Germany, which is an exciting new market for us, and we're looking forward to meaningfully growing there over the coming quarters and years. I want to provide an update on one more point. We mentioned last quarter that we were in the process of strengthening our tech organization to ensure we have the right structure to meet the huge demand for our services. This means both looking at the organizational needs today where we're increasing our total operational tech by over 60% year over year on a quarterly basis and anticipating our growth over the coming years. I'm pleased to say that we've completed that review. And you may have seen last week's announcement regarding the appointment of Adrian Stoch to the role of Chief Automation Officer. Some of you have met Adrian already. He served as the president of our consumer division in the US since 2021, where he's driven record wins and has been looking after some of our highest profile customers in this capacity. He has delivered substantial improvement in productivity through the deployment of automation and technology in complex consumer solutions. In his new role, He'll be looking after our operational tech, including automation, machine learning, and artificial intelligence as they relate to our on-the-ground operations on a global basis. I'm delighted to have Adrian's unique expertise in this capacity going forward. So, in summary, we're proud that we're one of the few companies in our industry that is expecting to grow top and bottom line this year. Since our spin, we've demonstrated our strength and resilience in a changing macroeconomic backdrop quarter by quarter. On top of that, we continue to deliver record levels of new sales wins, which will propel our future growth and underpin our confidence in our 2027 targets. And with that, I'll ask Bill to update you on what we're seeing on the ground. Bill, over to you.

Thanks, Malcolm. Good morning, everyone. As Malcolm said, we are very excited to have delivered a record amount of new sales wins this quarter, nearly $500 million. beating our previous record. With our record pre-pipeline, we are continuing to see many more opportunities for growth. We see more and more brands partnering with GXO to modernize their supply chains and optimize their operations. What is really changing of late is that this is now happening at a greater pace and scale than we've ever seen before. This is a dynamic, growing market. And we are winning a larger share of these bigger business opportunities. And this is all due to the GXO difference. As we had first mentioned last year, customers are increasingly realizing the possibility of what logistics done right can achieve and that business as usual will no longer work. You see this in our second quarter wins with some notable newly outsourced business, including Eddie Bauer, Ingersoll Rand, and Sainsbury's. With Sainsbury's, we have already successfully gone live with two of the six sites that we were awarded in April. And these sites are doing millions of case picks per week. This highlights just how fast we can move on the ground. Sainsbury's is a very exciting partnership for GXO, and it also showcases our leading capabilities for large outsourcing deals. As customers continue to seek large transformative deals, We are in a prime position to convert more and more of the $300 billion in-source market. We are also seeing many of our customers deepen their existing partnerships with GXO. We are very excited to be going live on a huge new European site for JD Sports, which highlights how we are expanding our partnership, which started in the UK and is now expanding across Europe. We are also working with this customer to support driving their growth globally, where they are looking to leverage our best-in-class capabilities. We also grew partnerships with a number of other existing customers, including Havianas, Nike, and PepsiCo. This is proof positive of the GXO difference, reflecting the transformative value that a scaled, tech-enabled partner with decades of experience can bring to customers. Stepping back, the makeup of our wins and our pipeline continues to reflect the diversity and vibrancy of our business. As an example, our rapidly growing industrials activity in the U.S. has already won almost as much business from global leaders like Boeing and Schneider Electric in the first half of the year as it did in the whole of last year. Our pipeline stands at $2.1 billion. up year over year, and this even after our record new business wins in the quarter. Over half our pipeline is made up of new logos, that is, companies that are looking to outsource and reevaluate their supply chains. This plays to GXO's core competency, and it is worth mentioning that our pre-pipeline is also up about 30% year over year. One of our customers recently told me that GXO is, And I quote the report in the storm. We understand the market. We understand the need for agility. And we bring to life the quantum leap that they can gain through our scale, expertise, and technologies. That is why they turn to us. And we are deploying this game-changing technology at a breathtaking pace. including a site soon to go live with approximately 5,000 automated shuttles and pouches in what will be one of Europe's largest and most automated e-com sites. As Malcolm mentioned, we recently added Adrian Stalk to our global leadership team in the new role of Chief Automation Officer. I've known Adrian and worked with him since he joined GXO, and he is the real deal. He joined to lead our consumer business and demonstrated right away his expertise running complex customer operations. For example, one of Adrian's recent automation transformations drove an 18% reduction in cost per unit for the customer. As we highlighted at our investor day, as more customers in more markets embrace the increasingly critical need for automation, GXO wins more market share. And this grows our top and bottom lines further. With Adrian at the helm, it is safe to say that our pace of tech deployment is just getting started. We are really excited by our growth. We are winning larger opportunities, many of which are first-time outsourcing. And our existing customers are turning to us to help support their ambitious growth plans. And as our winds and pipelines show, We are set up for a very strong 2024. And with that, I'll hand you over to Baris to walk you through our numbers and guidance. Baris, over to you.

Thanks, Bill, and good morning, everyone. We are very proud of results this quarter, and we are confident in our outlook for the remainder of 2023 and beyond. As Malcolm mentioned, For the second quarter of 2023, we generated revenue of $2.4 billion, an increase of 11% year-over-year, including 3% organic revenue growth. Our technology, aerospace, and continental European parts of the business continue to lead the pack on organic revenue growth. And we saw this trend continue through July. Our adjusted EBITDA in the quarter was $190 million, up 8% year-over-year. We are delivering consistent adjusted EBITDA margins as a result of our resilient business model. Despite the non-operational impact from FX hedges and pensions, which was 70 basis points, our margins are strong and resilient. This was driven by our productivity initiatives, both central and at the site level. Our margins are up quarter over quarter by 100 basis points. And all of this gives us great confidence in our margin expectation for the second half of the year. Our adjusted limited earnings per share was $0.70, up from $0.68 in the prior year. Our operating cash flow was $61 million, and our free cash flow totaled $3 million. Taking into account the strength of cash flows we anticipate for the remainder of the year, we prepaid $115 million of debt ahead of schedule. Demand for our services continue to expand as seen in the record number of wins. And we continue to write high quality contracts with Blue Chip customers that deliver attractive returns. Our revenue from automated operations continues to grow faster than our overall growth level, and our operating return invested capital remains well above 30% target. Looking ahead to our expectations for the full year 2023, we are reiterating our organic revenue growth guidance range of 6 to 8%. We are also maintaining our approximately 30% free cash flow conversion rate for the full year of 2023. With respect to our balance sheet, we will continue to deploy our capital in the best interest of our shareholders, including deleveraging, buybacks, and equity M&A. We are also pleased for the second quarter in a row to raise our full-year profit guidance for both adjusted EBITDA and adjusted diluted earnings per share. We're raising our adjusted EBITDA guidance by $10 million bringing our full year range to between $725 million to $755 million. This reflects better than expected performance in our operations. We are also raising our adjusted diluted earnings per share guidance by $0.05, bringing our full year range to $2.45 to $2.65 per share. Looking beyond 2023, we believe we are in a great position for next year, with nearly a half a billion dollars of incremental business already secured for 2024. In addition, we have over $100 million locked in for 2025. One of my core focus areas at CFO is to continue to maximize shareholder value by allocating capital into contracts with high returns, attractive growth, and strong cash flow generation. And there are a lot of opportunities to do this. And with that, I'll hand you over to Mark.