ryder systems inc

Ryder Systems, Inc.

Chris Jursek

Chris Murphy

Mike Rothstein

Jeff Shields

Shane Tompkins

Company Summary

• As a global leader in transportation and supply chain management, Ryder Systems operates in two major business segments:– Fleet Management Solutions (FMS)– Supply Chain Solutions (SCS)

• Employs 28,900 people • Maintains a fleet of 209,500 vehicles

Company History

• 1933: Jim Ryder begins Miami, FL concrete hauling business with a single 1931 Model “A” Ford

• 1939: Ryder fleet grown to 50 trucks while changing its focus from distribution to leasing

• 1960: Ryder Systems, Inc. incorporates as a publicly traded company and is listed on the New York Stock exchange in 1960 under the symbol “R.N”.

• 1978: total revenue exceeds $1 billion. • 80’s & 90s: Steadfast expansion and innovation, Ryder Systems

listed in the Fortune® 500 largest companies in the United States. • In the new millennium, Ryder Systems has continued to provide

top tier services while supplementing organic growth though acquisitions.

Vision, Mission, and Values

• Bring compelling value to customers through outsourcing.

• To provide innovative supply chain and fleet solutions that are reliable, safe, and efficient; enabling customers to deliver on their promises.

• Trust, Innovation, Collaboration, Expertise, Safety

Key Personnel

• Robert E. Sanchez

-Chair of the Board, President, CEO• Art A. Garcia

-Executive Vice President, CFO• Dennis C. Cooke

-President of Global Fleet Management Solutions• John H. Williford

-President of Global Supply Chain Solutions

Organizational Structure

Goals

• Fleet Management Solutions– Drive fleet growth through marketing, innovation, and

acquisitions– Deliver industry-leading maintenance program– Optimize asset utilization and management

• Supply Chain Solutions– Provide differentiated quality of service and best execution– Develop capabilities that can be applied and utilized in Ryder’s

targeted industry verticals– Create a culture of innovation, fostering new and high value

solutions for customers– Focus on continues improvement and standardization– Successfully implement targeted sales and marketing strategies

Current Strategies

Grand Strategy

• Grow fleet management and supply chain outsourcing services by targeting private markets and key industry verticals

• Supported by key organizational priorities– Operational Excellence– Innovation– Growth Focus– Talent & Culture– Information Technology

Business Strategy

• Fleet Management Solutions– By outsourcing fleet management to Ryder,

customers can focus on core business and improve efficiency and productivity, while also lowering costs

• Supply Chain Solutions– Organizes customer supply chain, aligned by

industry verticals (Automotive, Industrial, Consumer Packaged Goods, Hi-Tech, and Retail)

Functional Strategies

• Marketing– Implements initiatives designed to compel private fleet

operators and for-hire carriers to outsource all or some portion of their fleet management needs

– Marketing and sales operations are heavily dependent on building a value added brand through customer service and relationship selling

• Capital Structure– Debt financing ($4,189,425,000)– Equity financing ($1,896, 714,000)

Functional Strategies

FMS (63% of revenue)

– Full Service Lease (64%)– Commercial Rental– Contract Maintenance– Related Maintenance– Fleet Support System

SCS (37% of revenue)

– Dedicated Carriage (57%)– Professional Services– Distribution Management– Transportation Management

• Operations

• Operates in many industries such as R&CPG, Automotive, Hi-Tech, Industrial, Food and Beverage, while also providing business & personal service.

Financial Analysis

Liquidity

2013 2012 2011 Ind. Avg.

Current Ratio 0.86 0.82 0.93 1.85

Quick Ratio 0.81 0.71 0.87 -

Working Capital -$168,646 -$232,428 -$85,650 -

D

Solvency

2013 2012 2011

Debt Ratio 82% 82% 79%

Debt-Equity 3.80 4.67 4.78

LT Debt-Equity 2.07 2.35 2.36

Times InterestEarned 2.69 2.16 2.10

C

Activity

2013 2012 2011 Ind. Avg.

Asset Turnover 0.71 0.75 0.79 0.50

Inventory Turnover 79.27 78.00 72.91 144.01

Acc Rec Turnover 8.26 8.07 8.02 8.06

Working Capital Turnover 0.03 0.04 0.01 0.03

B

Profitability

2013 2012 2011 Ind. Avg

Gross Profit 20.6% 20.03% 20.57% 35.7%

Net Profit 3.70% 3.36% 2.81% 6.20%

Return on Assets 2.73% 2.65% 2.38% 2.3%

Return on Equity 14.14% 15.08% 12.47% 12.7%

EBIT (Operating Income)

7.64% 4.84% 4.62% 8.12%

Earnings per Share $4.57 $4.11 $3.31 -

C

Competitive Environment

Macro

• Political– High degree of regulation at the federal, state, and local

levels

• Economic– Stabilized, future conditions unknown

• Environment– Introduction and development of natural gas and other

alternative fuels

• Global– Organizational globalization

Industry

Direct

Internal

Internal

SWOT Analysis

Organizational Strengths

• Operations– Ryder is known for having effective and efficient

operations within both (FMS and SCS) business segments along with excellent customer service

• Financials– Ryder has been able to consistently and reliably

pay interest, effectively managing their financial obligations

Organizational Weaknesses

• Operations– High costs are apparent in gross profit margin

• Finances– Carrying significant amount of debt– Sensitive to fluctuations in economic conditions– Approximately $1.4 billion maturing in 2016

Organizational Opportunities

Organizational Threats

Models for Strategic Analysis

Abell’s Strategy Evolution

Product Life Cycle

Hofer’s Market Life Cycle/Competitive Strength

BCG Portfolio Matrix

Ansoff’s Product/Market Matrix

GE 9-Cell Matrix

Dawar & Frost Strategy Options for Local vs Global Competitors

Pearce & Robinson International Strategy Options

Christensen, Berg, & Salter Grand Strategy Matrix

Problems

Debt

Operating Costs

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