C H Robinson Worldwide : 2023Annual Report

Fellow sharehol

It is an honor and a privilege to be leading C.H. Robinson into the next chapter of the company's growth and success. The strength of our superior global services, scale, people, and capabilities attracted me to this opportunity, and we are positioning ourselves to build on the strong existing foundation and execute on significant growth opportunities to create lasting value for C.H. Robinson shareholders, employees, and the communities and customers we serve.

As we close the book on 2023 and focus on the future, I would like to share with you the highlights of our performance, the challenges we faced, and the path that we're charting forward. Despite difficult market conditions in 2023, we remained focused on our strategic priorities and delivering on our commitments to customers.

2023 Business Results

The combination of weak freight demand and excess carrier capacity that began in the middle of 2022 continued throughout 2023 and resulted in an elongated freight recession with suppressed freight rates. As a result, 2023 adjusted gross profits declined 27% in our North American Surface Transportation business and 36% in our Global Forwarding business, which reduced our overall profitability and cash flow.

The softer market conditions, coupled with planned efforts to improve our productivity, led to a target of reducing our overall cost structure by $150 million on an annualized basis by the fourth quarter of 2023. We took decisive actions to improve our cost structure,enhance our operational efficiency, and strengthen our competitive position. Through an increased focus on removing waste and manual touches from our processes, and by leveraging our technology platform, data analytics, and automation capabilities, we exceeded our productivity targets and delivered nearly $350 million in net annualized cost savings in 2023.

Our 2023 net promoter scores were the highest on record for the company, which is a testament to our steadfast commitment to deliver quality and continuous improvements to our customers. They continue to value the quality, stability, and reliability that we provide, as well as our financial strength that enables us to invest through cycles in value-added solutions. As we continue to improve the customer experience and our cost to serve, I'm focused on ensuring that we're well positioned for the eventual freight market rebound, with a durable cost structure that drives operating leverage.

Charting our Path Forward-Fit, Fast, and Focused

My initial focus when joining C.H. Robinson included diagnosing the company's four Ps-people, processes, products, and portfolio-and then quickly taking actions to chart our path forward. It was quickly apparent that we have deep logistics expertise and longstanding relationships with our customers and carriers. Combined with the company's cutting-edge technology and large data set, our people are able to provide innovative, tech-enabled solutions powered by our information advantage for the benefit of our customers and carriers.

It also became apparent that there have been some missteps, such as the structural cost base growing too much during the pandemic and market share being ceded in certain segments of the business. We made significant progress on reducing our cost structure in 2023, but it needs to continue to improve. We'll get fit by embedding Lean practices, removing waste, and expanding our digital capabilities. This will enable us to strengthen our productivity and optimize our organization structure in order to be the most efficient operator, in addition to the highest value provider.

As our customers' logistics needs continue to become increasingly complex, we'll leverage our robust capabilities to power vertical-centric and value-added solutions. We'll move fast, with greater clock speed and urgency, to seize opportunities and solve problems for our customers and carriers. We will arm our team of experts with the right capabilities to bring us into the future, enabled by our innovative and cutting-edge technology.

We'll be focused on profitable growth in our four core modes-North American truckload and less than truckload (LTL), and global ocean and air-as the engines to ignite growth, by reclaiming share in eroded segments and expanding our addressable market through value-added services and solutions that drive new volume. We're aligning our actions and decisions across the enterprise as One Robinson to create one unified experience for all our stakeholders, drive better synergies across our portfolio of services, and focus on the areas of our business that drive profitable growth.

I am optimistic about the future of our company and our industry. Our One Robinson approach, combined with our industry-focused solutions, our four core modes, and our expert people lay the foundation for our next level of industry leadership, growth, and innovative solutions. As we build on our strong value proposition, expand our loyal customer base, and empower our resilient and talented team, we are well positioned to capitalize on the eventual freight market recovery. We will win for our customers, carriers, and employees, which we expect will translate to sustainable and profitable growth for our shareholders.

On behalf of the senior leadership team, I would like to thank you for your continued trust and support. We appreciate your partnership, and we look forward to sharing our progress with you in the next year.

Sincerely,

Dave Bozeman

President and Chief Executive Officer

Legend

Financial Highlights

(dollars in thousands, except per share data)

2023

2022

Total Revenues

Adjusted Gross Profits*Adjusted Gross Profit Margin

$17,596,443 $2,604,608 14.8%

$24,696,625 -28.7%

$3,593,177 -27.5%

14.5% +30 bp

Income from Operations

$514,607

$1,266,782 -59.4%

Net Income

$325,129

$940,524 -65.4%

Diluted EPS

$2.72

$7.40 -63.2%

Cash Returned to Shareholders

$380,747

117% of Net Income

*Adjusted gross profits is calculated as gross profit excluding amortization of internally developed software utilized to directly serve our customers and contracted carriers. For additional information, see Item 7 of Part II, Management's Discussion and Analysis of Financial. Condition and Results of Operations in our Annual Report on Form 10-K.

Return on Average Stockholders' Investment

23.5%

2023 Net Income/Average Stockholders' Equity

Dividends Per Share

$2.44

$2.26 +8.0%

Key Metrics

(dollars in thousands)

90,000+

Active Customers

NAST

450,000+

Contract Carriers on Our Platform

Global Forwarding

15,000+

Employees Worldwide

All Other

Adjusted Gross Profits

$1,593,854

Income From Operations

$459,960

Largest Truckload Network in North America

Largest LTL 3PL in the U.S.

Adjusted Gross Profits

$689,365

Income From Operations

$85,830

Ocean

1.35 Million TEUs Moved in 2023

#1 NVOCC from U.S. to Oceania

#2 NVOCC from India to U.S.

#3 NVOCC from Asia to U.S.

2023 Truckload Shipments by Carrier Size

Adjusted Gross Profits

$321,389

Robinson Fresh®

One of the Largest Providers of Fresh Produce in the U.S.

TMC/Managed Services

$6 Billion in Freight Under Management

Europe Surface Transportation

Presence in 12 Countries in Europe

17%

2023 Gross Revenues by Customer Industry

100-400 Trucks

> 400 Trucks

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2023

or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____ to _____

Commission File Number: 000-23189

C.H. ROBINSON WORLDWIDE, INC.

(Exact name of registrant as specified in its charter)

Delaware

41-1883630

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

14701 Charlson Road Eden Prairie, Minnesota 55347

(Address of principal executive offices, including zip code)

Registrant's telephone number, including area code: 952-937-8500

Securities registered pursuant to Section 12(b) of the Act:

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ No ☐ Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Date File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or emerging growth company. See definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒ Accelerated filer

☐ Non-accelerated filer

☐ Smaller reporting company

☐ Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to § 240.10D-1(b). ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The aggregate market value of voting stock held by non-affiliates of the registrant as of June 30, 2023, was $10,946,231,526 (based upon the closing price of $94.35 per common share on that date as quoted on The Nasdaq Global Select Market).

As of February 14, 2024, the number of shares outstanding of the registrant's common stock, par value $0.10 per share, was 116,890,760.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Registrant's Proxy Statement relating to its 2024 Annual Meeting of Stockholders (the "Proxy Statement") are incorporated by reference in Part III.

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C.H. Robinson Worldwide Inc. published this content on 21 March 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 01 April 2024 20:47:42 UTC.