American logistics giant UPS announced it will be making the most dramatic changes of its existence ever—largely by increasing investments in smart logistics, innovation, and automation—as it seeks to meet its financial targets for the next two years.
The company made its plans known during the company’s recent investor conference in New York City, where it provided an update to its multi-year growth strategies and transportation and operations network transformation, and disclosed long-term financial targets.
“Over the next several years, you will see the most sweeping transformation of our network in its history,” said David Abney, UPS chairman and CEO. “We are adding more flexible capacity, more technology, more capabilities and becoming more efficient, ultimately to improve customer and shareowner value.”
According to a company statement, UPS’s plans include accelerating investment in its next-generation “Smart Logistics Network” and in automation to improve performance, as well as offering customers more innovative solutions to drive their future growth. The company also seeks to tap into the growth of the online B-to-B and B-to-C markets.
At the conference, chief financial officer Richard Peretz presented the company’s 2017 outlook and updated its financial objectives for the next two years.
Highlights for the 2018 and 2019 long-term financial targets are to achieve revenue growth of 4% to 6% and to increase adjusted diluted earnings per share by 5% to 10%, it said.
Peretz also outlined plans for capital investments of 6% to 7% of revenue annually.
“The strong financial hallmarks of UPS remain unchanged,” said Peretz. “We are great stewards of capital, generate strong cash from operations and have a generous shareowner distribution policy.”
“We continue to deliver the highest operating margins in the industry,” continued Peretz. “This legacy combined with our future growth prospects makes UPS a high-quality investment today, and for years to come as we build the smart logistics network.”
