FedEx is flying higher.FY16 once again showcased the successful strategy of managing our portfolio of services to achieve outstanding growth.
To Our Shareowners,
In FY16, FedEx reached new heights as one of the world’s unique enterprises. Through disciplined strategy and execution, our shareowners, team members and customers benefited greatly from new solutions and higher revenues and profits, despite an environment of low economic growth.
In FY13, we stated we would meet the FedEx Express profit improvement goal — to exit FY16 with an annual run rate of $1.6 billion in additional operating profit — and we did it. Moreover, we believe FedEx Express profitability and productivity will continue to increase for years to come, assuming continued modest growth in the U.S. and global economies.
We announced we would acquire the Dutch delivery company TNT Express in the first half of calendar 2016. We officially acquired the company on May 25.
We committed to continue improving FedEx Corporation’s margins, earnings per share, cash flows and returns over the long term. We successfully advanced each of these goals in FY16.
TNT Express: Strategic Integration
TNT Express is the largest acquisition in FedEx history, and its benefits are expected to be equally significant. The addition will transform our global portfolio of solutions, particularly in Europe, substantially lower our cost to serve our European markets by increasing density in our pickup and delivery operations and accelerate our global growth.
Trade: Removing Barriers
Free trade increases the world’s prosperity by opening markets, and it has been an American policy objective since 1934, when disastrous tariffs that shackled global commerce were overturned. History shows that trade made easy, affordable and fast begets more trade.
Fuel Efficiency: Accelerating Results
Five years ahead of plan, FedEx Express surpassed its goal to boost vehicle fuel efficiency 30 percent by 2020 from a 2005 baseline. When we set the goal, we knew that most of the technology we needed didn’t exist at the time. But we got the job done thanks to a well-defined strategy: Reduce, Replace, Revolutionize.