Ahead of logistics business spinoff, XPO taps new CFO

Dive Brief:

Transportation and contract logistics company XPO on Tuesday named Baris Oran CFO for its soon-to-be spinoff company, GXO Logistics.
In December 2020, XPO announced it would be splitting its logistics business, which provides supply-chain services including warehousing and e-commerce, from its trucking and freight brokerage business.
The transaction, aimed at boosting both companies’ share prices, is expected to close in the second half of 2021, XPO said; at that point, company shareholders will own stock in both XPO and GXO.

Dive Insight:

Oran will join the Greenwich, Conn.-based company next month, as CFO of XPO’s logistics division. He arrives after five years as CFO of Sabanci Holding, an Istanbul-based investments manager. Prior to that, he was CFO of Turkish textiles manufacturer Kordsa.

"I’ve been involved in multiple successful IPOs that helped crystalize shareholder value," Oran told CFO Dive. "As the chairman of an omnichannel retail company, I oversaw the best performance in the company’s 20-year history, thanks to advanced data analytics and an e-commerce expansion."

In the new role and new industry, Oran is excited by the large "addressable opportunity" in the logistics space.

"From day one, GXO will be the second-largest contract logistics company in the world, in a market that’s still largely untapped," he said. "One of our biggest priorities will be helping grow GXO’s market share. Right now, XPO’s logistics business has about 5% of a $130 billion market; we want to grow that after the spinoff."

Because the GXO business model is "asset-light," he said, it can generate "significant free cash flow throughout various cycles."

"We’ll be largely independent of macroeconomic conditions, so we’ll be able to focus on driving revenue growth and expanding margins right away," he said.

Oran follows a string of XPO hires for filling out its future standalone logistics business. In January, it promoted its European logistics business CEO, Malcolm Wilson, to CEO of GXO. In March, it named its senior VP of logistics technology, Sandeep Sakharkar, GXO's incoming chief information officer.

“GXO’s brand identity captures the qualities that make us an industry leader: our ability to deliver faster, leaner, smarter logistics for customers at lower cost, using advanced automation and data science,” Wilson said in the March press release sharing GXO’s official name. “I’m looking forward to leading our global team to the many new opportunities in our future.”

"Malcolm and the management team know how to generate incredible shareholder value, and they excel at operational execution and capital allocation," Oran said.

XPO’s logistics business has served customers such as food corporation Nestlé SA, furniture giant IKEA and aircraft manufacturer Boeing, according to the Wall Street Journal.

The company benefited from the pandemic-fueled e-commerce boom last year. In the quarter ending December 2020, it reported nearly $4.7 billion in revenue, a 13% year-over-year increase, which it credited to “rebounded demand from COVID-impacted second quarter lows.” The logistics division generated about $6.2 billion in revenue in the 2020 calendar year, up about 1% from the prior year. It accounted for 38% of XPO’s revenue last year.

E-commerce is a key area, alongside automation and outsourcing, in which Oran expects GXO to "win," he said.

Continued e-commerce growth, alongside rising automation and outsourcing in the logistics industry, is likely to contribute to GXO’s success, Oran told the Journal. "I can't stress enough how strong those trends are, and how excited GXO is to capitalize on the tailwinds they've created for us," he told CFO Dive.