$250m in new business wins help GXO to steady revenue growth


Business wins worth an annualised $250m helped global pure play contract logistics player GXO Logistics to a 5.7% y-o-y growth in revenues to $2,456m in the first quarter of 2024. Adjusted EBITDA fell 2.5% y-o-y to $154m, though the company made an operating loss of $39m in the quarter, down from plus $42m in Q1 2023, due to a litigation charge. 

Contract wins help organic growth

GXO Logistics CEO Malcolm Wilson said, “We’re seeing strengthening demand from global blue-chip customers to realise operational efficiencies today while planning fulfilment strategies to meet their future needs.”

In terms of new business wins:

  • 53% of these were new activity as existing clients expanded or new clients wanted new operations
  • 25% were from companies outsourcing previously in-house run operations
  • And 22% was business won from competitor contract logistics companies

Acquisitions continues to drive growth

The majority of GXO’s revenue growth in the quarter was due to its acquisition strategy. The latest in this strategy was the purchase of UK based, publicly listed contract logistics player Wincanton for GBP $762m, completed last week.

At the time Wilson said, “By combining Wincanton’s footprint and proven expertise in the UK and Ireland with our global reach and transformative technology, we can provide a wider reach of services to new and existing customers across geographies – and accelerate our long-term growth trajectory.”

Wincanton is the UK’s last publicly listed pure-play contract logistics player, with the country’s weak currency due to Brexit making such acquisitions particularly attractive for players like GXO. It isn’t clear whether GXO plans for more acquisitions in the UK. French logistics giant CMA CGM has just bought privately held Bolloré Logistics for EUR €4.85bn as it expands its own logistics business to rival that of GXO. CMA CGM was beaten in its own bid for Wincanton, refusing to up its offer to Wincanton’s shareholders in March this year.

UK still largest market

Where it comes to geographical sources of income, the UK was still GXO’s biggest market in the quarter, seeing 8.2% y-o-y revenue growth to USD $913m. The company’s home market, the United States, was 22% smaller with revenues of $747m.

Future large acquisitions by GXO this side of the Atlantic are not out of the question, with many mid-sized pure play contract logistics players of potential interest, though most of these are in the EU not the UK.

If acquisitions are indeed the core growth strategy of GXO, it will be interesting to see how the geographical mix morphs in the coming years. Wilson concluded, “We’re investing in our sales organisation, expanding automation and AI across our footprint, and diversifying into new geographies and verticals.”