Dear Ryder Shareholder:
Thank you for investing in Ryder during what was another year of record performance for our company. We’re making meaningful progress on our strategic priorities and growing the business. We grew operating revenue by 5% and comparable earnings per share by 14%, achieving new record levels. We closed the year with strong results in Fleet Management Solutions, especially in our core lease and rental product lines. We continued to sign more customers for our new on-demand maintenance product which is already in place with 30 large fleets, in advance of our broader rollout planned for mid-2015. We were also encouraged that our Supply Chain Solutions business demonstrated revenue growth throughout the year and returned to earnings growth in the fourth quarter following some challenges earlier in the year.
The strong sales activity we generated through the end of 2014 helped Ryder enter 2015 with strong momentum to further accelerate growth. We continue to benefit from improving economic conditions in North America, which is our primary market. We’re also making meaningful progress on our strategy to penetrate non-outsourced transportation and logistics markets, supported by ongoing macro-trends that favor outsourcing. Our team is well positioned to deliver profitable growth, and we are deploying capital effectively with widening returns, to drive revenue to new heights.
A Business Built on Trust
Our entire business is built around our demonstrated ability to deliver on what we promise to our customers. We feel the same way about our commitment to you, our investors. We’re proud that our results and the trust we’ve earned helped Ryder deliver a 30% increase in total shareholder returns for 2014, more than double the growth of 14% for the S&P 500 over the same period. In last year’s letter to shareholders we outlined six deliverables that we were focused on for 2014. Here is a point-by-point review of those six objectives with an assessment of how we performed:
- Accelerate revenue growth – Operating revenue growth accelerated from 4% in 2013 to 5%, reaching a record level for 2014.
- Grow revenue in all product lines – Fleet Management Solutions operating revenue grew 6% and Supply Chain Solutions operating revenue increased 5% for the year.
- Continue to grow the full service lease fleet – We grew our lease fleet by 3,200 vehicles, exceeding our target of 2,000 vehicles, and reaching the highest growth rate our largest product line has achieved in more than a decade. This represents the third consecutive year of organic lease fleet growth.