United Parcel Service Inc

Content

1. Company Overview 1.1 Company Profile Atlanta-based company, UPS is the world's largest express delivery company 1.2 Key Business Segments U.S. Domestic Package International Package Non-Package (Supply Chain & Freight) 2. Industry Overview Key Segments 2.1 Industry Definition and Segmentation 2.2 Market Overview Development of Express Services Industry Characteristics Major Client Segments 2.3 Trend Analysis Mergers and Acquisitions Mode Air Express Market Gaining Maturity Increasing Focus on Diverse Services Increasing Preference for Deferred Air Services 2.4 Competitive Landscape Parcel and Air Express Market Share Ground Parcel Market Share Overnight Air Express Market Share 3. Major Competitors Key Segments Analysis 3.1 Company Profile FedEx Corporation Deutsche Post AG (DHL) TNT N.V. 3.2 Revenue In the peer group, Deutsche Post recorded the highest revenue growth at a CAGR of 14.4% during 2002-05. 3.3 Product/Services Portfolio 3.4 Geographic Concentration US accounts for more than 75% of revenues for both UPS and FedEx. 3.5 Segment Strategy UPS Improvement of Ground Package Shipping Penetration into Chinese market FedEx Launch of New Technology-based Services Targeting Chinese Market Deutsche Post AG Focus on Regaining Market Share Create Brand Awareness for DHL TNT N.V. Continued Cost-cutting Plans Express Growth via Acquisitions 3.6 SWOT Analysis UPS Strengths - Brand Recognition, Economies of Scale Weakness - Weak Corporate Governance Practice Opportunities Tie-up with international Hubs and Events, Synergy Opportunities Threats - Pricing Pressures, Increase in Fuel Prices FedEx Corporation Deutsche Post AG TNT N.V. 4. Comparative Assessment Key Segments 4.1 Competitive Positioning Market Position UPS is the leading provider of small package express delivery market followed by FedEx Market Share- UPS has the largest share of both worldwide and US market Volumes Delivered (Daily Delivery/Annual) Infrastructure/Network (Access Points/Drop Boxes/Aircrafts/Road Vehicles) Geographical Presence 4.2 Business Strategy Growth Strategy Product Strategy Technology Strategy 4.3 Product Offering Product offering is almost the same for all four companies. However, TNT intends to exit from non-network related logistics business. 4.4 Growth Trend 4.4.1 Projected Growth 4.5 Customer Base Private and Business Customers (2005) 5. Comparables Analysis 5.1 Stock Market Performance UPS stock performed moderately during the period March 2005 to March 2006, reporting a return of 2.5% 5.1.1 Price Earnings (P/E) Analysis Amongst all the four companies, UPS reported the highest P/E ratio of 21.66, closest to the industry average of 21.99. 5.1.2 Other Valuation Multiples Analysis UPS is leading its peers in price/EBITDA ratio, price/book and price/sales ratio, representing an improved operating performance of the company. 5.2 Ratio Analysis 5.2.1 Income Statement Analysis Profitability Ratios - UPS has a relatively higher operating and net margin compared to its peers 5.2.2 Balance Sheet Analysis Liquidity Ratios - UPS is comfortably placed as far as its liquidity position is concerned among its peers Debt-Equity Ratio - UPS long-term debt equity ratio lags at 0.19, far behind its peers as well as the industry average Asset Turnover Ratio FedExs highest asset turnover ratio is indicative of the efficiency with which FedEx is able to use its assets for generating revenue 6. Conclusion Competitor Assessment based on: Competitive Positioning Business Strategy Growth Trend Projected Growth Product Offerings Customer Satisfaction Operating Margins Liquidity Analysis List of Tables/Figures Table 1.1 Key Facts Table 1.2 Revenues of US Domestic Package Division, UPS (2004-05) Table 1.3 Revenues of International Package Division, UPS (2004-05) Table 1.4 Revenues of Non-Package Operations, UPS (2004-05) Table 2.1 Deferred Air Market Share % (1998-2005) Table 2.2 Parcel and Air Express Market Share (1995-2005) Table 2.3 Ground Parcel Market Share (1995-2005) Table 2.4 Overnight Air Express Market Share (1995-2005) Table 3.1 UPS Product/Services Portfolio Table 3.2 FedEx Product/Services Portfolio Table 3.3 Products and Services of Mail Division, Deutsche Post AG Table 3.4 Products and Services of Express Division, Deutsche Post AG Table 3.5 Products and Services of Logistics Corporate Division, Deutsche Post AG Table 3.6 Products and Services of Mail Division, TNT Table 3.7 Products and Services of TNT Express Table 3.8 Sandds Business Performance (2001-04) Table 4.1 Competitive Positioning Table 4.2 Business Strategies Comparison Table 4.3 Product Offering Comparison Table 4.4 Revenue Growth Comparison (2002-2005) Table 4.5 Net Income Growth Comparison (2002-2005) Table 4.6 Projected Revenues Comparison (2006-2008) Table 4.7 Projected Net Income Comparison (2006-2008) Table 4.8 Customer Base Comparison Figure 1.1 Timeline (UPS) Figure 1.2 Corporate Hierarchy Chart Figure 2.1 Industry Segmentation Figure 2.2 US Courier, Express & Parcel Services Market (2004) Figure 3.1 UPS Revenues (2002-2005) Figure 3.2 UPS Revenues Breakdown by Segment (2004-2005) Figure 3.3 FedEx Revenues (2002-2005) Figure 3.4 FedEx Revenues Breakdown by Segment (2004-2005) Figure 3.5 Deutsche Post AG Revenues (2002-2005) Figure 3.6 Deutsche Post AG Revenues Breakdown by Segment (2004-2005) Figure 3.7 TNT Revenues (2002-2005) Figure 3.8 TNT Revenues Breakdown by Segment (2004-2005) Figure 3.9 UPS Revenue: Geographical breakup (2004-2005) Figure 3.10 FedEx Revenue: Geographical breakup (2004-2005) Figure 3.11 Deutsche Post AG Revenue: Geographical breakup (2004-2005) Figure 3.12 TNT Revenue: Geographical breakup (2004-2005) Figure 5.1 Stock Performance Comparison: (March 2005-March 2006) Figure 5.2 P/E Ratio Comparison (April 2006) Figure 5.3 Price/EBITDA Ratio, Price/Book and Price/Sales Ratio (April 2006) Figure 5.4 Profitability Ratios Comparison (2005) Figure 5.5 Liquidity Ratios Comparison (2005) Figure 5.6 Debt-Equity Ratio Comparison (2005) Figure 5.7 Asset Turnover Ratio Comparison (2005) Figure 5.8 Accounts Receivable Comparison (2005)