Element Fleet Management Corporation · TSX:EFN
Element Fleet Management — Q2 2024 Earnings Presentation
24 slides from Element Fleet Management's earnings presentation, Aug 14, 2024
Slide 1: Q2 2024 Investor Presentation
Q2 2024 Investor Presentation Element Fleet Management (TSX: EFN)
Slide 2: Forward-looking statements and disclaimer
Forward-looking statements and disclaimer This presentation contains certain forward-looking statements and forward-looking information regarding Element Fleet Management Corp. (“Element”) and its business which are based upon Element’s current expectations, estimates, projections, assumptions and b
Slide 3: Contents
• Element fleet…………………………………………………………..slide 4 • Q2 2024 Highlights………………………………………………slide 5 • Q2 and YTD financial highlights • Executing on our growth strategy • Vehicles under management • Growing adjusted FCF per share and Contents • return of capital Looking Ahead…………………….………………………………..slide 13
Slide 4: Element Fleet – the largest pure-play publicly traded automotive fleet manager
Element Fleet – the largest pure-play publicly traded automotive fleet manager in the world 1.5M Vehicles Under Dublin 98% Management Minneapolis Toronto Baltimore Client Revenue 55%+ Retention Mexico City Singapore Adj. Operating US$1B Margin Sydney 2023 Net Melbourne Auckland Revenue Our Purpose:
Slide 5: Q2 2024 Highlights
Q2 2024 Highlights Q 0, Oselement
Slide 6: Key Drivers Q2 2024 Results (vs Q2/23)
Q2 2024 HIGHLIGHTS Key Drivers Q2 2024 Results (vs Q2/23) (In US$ millions unless otherwise noted) Record net revenue growth Net revenue Services revenue $274.6M 14.1% $140.1M 10.8% Continued strength in services revenue Adj. operating income1 Adj. operating margin1 Favourable market dynamics and re
Slide 7: Q2 YTD 2024 Results (vs Q2 YTD/23) Key Drivers
Q2 2024 HIGHLIGHTS Key Drivers Q2 YTD 2024 Results (vs Q2 YTD/23) (In US$ millions unless otherwise noted) Higher service penetration and utilization rates Net revenue Services revenue1 $537.0M 15.4% $287.2M 18.7% Onboarding clients with higher service attachment rates Adj. operating income2 Adj. op
Slide 8: Record net revenue and solid operating margin expansion
Q2 2024 HIGHLIGHTS Record net revenue and solid operating margin expansion (US$millions, except per share) Adjusted1 Reported Key Metrics Q2 2024 QoQ YoY Q2 2024 QoQ YoY Services revenue $140.1 (4.7%)2 10.8% $140.1 (4.7%) 10.8% Net financing revenue $122.4 14.2% 15.8% $122.4 14.2% 15.8% Syndication
Slide 9: Profitable net revenue growth, primarily fueled by…
Q2 2024 HIGHLIGHTS Profitable net revenue growth, primarily fueled by… • Unlevered strong services revenue growth Net revenue streams, and adjusted operating margin • Increasing penetration rates Net financing revenue Services revenue Syndication revenue LTM adjusted operating margin (%) • Driving g
Slide 10: Share of wallet expansion…
Q2 2024 HIGHLIGHTS Share of wallet expansion… 2Q23 -> 2Q24 services revenue (In US$ millions unless otherwise noted) 10.8% 3.5 140.1 7.2 0.3 2.7 • YoY growth largely driven by higher penetration 126.4 rates - providing more financing and/or services to more of our existing clients’ vehicles - deepen
Slide 11: …across our global fleet
Q2 2024 HIGHLIGHTS …across our global fleet End-of-period global VUM (in thousands) Financed only Serviced & financed Serviced only Over the long term, Element drives growth in vehicles 1,000 1,486 1,463 1,467 1,523 893 1,541 1,500 1,501 1,485 1,490 881 under management (‘VUM’) through: 822 827 846
Slide 12: Growing adjusted FCF per share and returning capital
Q2 2024 HIGHLIGHTS Growing adjusted FCF per share and returning capital Capital allocation priorities: $1.0 Billion (U.S. dollars) 1. Prudently invest in our business; Total amount of capital returned to shareholders since 2020 through common share buybacks 2. Tangible leverage ratio management (tar
Slide 13: Looking Ahead
Looking Ahead Q 0, Oselement
Slide 14: Full-year 2024 results guidance
LOOKING AHEAD Full-year 2024 results guidance 1 FY 2024 guidance: FY 2023 FY 2024(prior) FY 2024 (new) (US$ millions, unless otherwise noted) Net revenues $959.1 $1,020 – 1,040 $1,060 – 1,080 In light of our strong Implied YoY growth % 6-8% 11-13% first half 2024 Adjusted operating margin Adjusted o
Slide 15: Ample opportunity to continue growing
LOOKING AHEAD Ample opportunity to continue growing Addressable markets: U.S. & Canada U.S. and Canada: 30% Self-managed fleets • US$4.4 billion of total annual net revenue opportunity FMC-managed fleets Element 45% • ~55% self-managed 55% 70% Other FMCs Mexico: • US$2.7 billion of total annual net
Slide 16: Originations growth and geographic distribution
LOOKING AHEAD Originations growth and geographic distribution Continued originations U.S. and Canada Mexico Australia and New Zealand growth $2,500 (In US$ millions) 1. Resilient client demand $2,000 $1,976 2. Sustained commercial success 3. Improving OEM production volumes and order to delivery $1,
Slide 17: Favourable market dynamics supporting conversion of self-managed fleets
LOOKING AHEAD Favourable market dynamics supporting conversion of self-managed fleets Growing Fleet Data-driven Incumbent scale complexity electrification insights advantage The need to simplify Transition to EV Element leverages its Element has 1.5 million the complexities of fueled by corporate ac
Slide 18: Laying the foundation for future growth – Leasing & Strategic Sourcing Initiatives
LOOKING AHEAD Laying the foundation for future growth – Leasing & Strategic Sourcing Initiatives Expect to generate between $30-45 million of run-rate net revenue, and • Centralizing accountability for U.S. and Canadian between $22 - 37 million of run-rate leasing in Dublin, Ireland adjusted operati
Slide 19: Accelerating Digitization and Automation with the Acquisition of Autofleet
Accelerating Digitization and Automation • • • • • • with the Acquisition of Autofleet • • • • • • • • • • • • • • • • • • • • • • • • • • • Definitive agreement to acquire Autofleet, an innovator in fleet and • • • • • • • • mobility optimization • • • • • • • • • • • • • • • • • Autofleet has a ro
Slide 20: The economics of transitioning from ICE to EV
LOOKING AHEAD The economics of Higher capital costs transitioning from ICE to EV = higher net financing and syndication revenue Accident services • The transition is expected to be net revenue positive, Electricity with near-term economic benefits driven primarily by: Comprehensive telematics • Incr
Slide 21: Sustainability
Sustainability Q 0, Oselement
Slide 22: Sustainability highlights
SUSTAINABILITY • • • • • • • • Sustainability highlights • • • • • • • • • • • • • • • • • • • • • • • • In June 2024, we issued our fourth annual sustainability report titled “Sustainable Momentum: Building on Progress”, which reflects our • • • • • • • • 2023 achievements • • • • • • • • Highlight
Slide 23: Recognition
SUSTAINABILITY • • • • • • • • • • Recognition • • • • • • • • • • • • • • • Our • efforts • in • 2023• were• recognized • • by the following organizations: • • • • • • • • Geotab CDP Climate Globe and Mail • • • Board • •Games • • • Innovation Award Scored a B, which is the Australian Workplace “Ma
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