Slide 1: Q1 2024 Investor Presentation
Q1 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: Change in Element's Presentation Currency to U.S. Dollars
Change in Element’s Presentation Currency to U.S. Dollars Commencing Q1 2024, Element changed its presentation currency from Canadian dollars to U.S. dollars. This change more accurately reflects the predominant currency of its revenue, expenses, and cash flows and enhances comparability to its peer
Slide 4: Contents
• Q1 2024 Highlights………………………………………………slide 5 • Executing on our growth strategy • Vehicles under management • A capital-lighter business model • Growing adjusted FCF per share and return of capital • Originations Contents • Looking Ahead…………………….………………………………..slide 14 • 2024 guidance • Strategic in
Slide 5: Q1 2024 Highlights
Q1 2024 Highlights
Slide 6: Q1 Key Drivers and Q1 2024 Results
Q1 2024 HIGHLIGHTS Q1 Key Drivers Q1 2024 Results (vs Q1/23) (In US$ millions unless otherwise noted) Record net revenue growth Net revenue Services revenue1 $262.5M 16.8% $147.1M 27.3% Continued strength in services revenue Adj. operating income2 Adj. operating margin2 Favourable market dynamics an
Slide 7: Financial results
Q1 2024 HIGHLIGHTS Financial results (US$millions, except per share) Adjusted1 Reported Key Metrics Q1 2024 QoQ YoY Q1 2024 QoQ YoY Services revenue $147.1 13.4% 27.3% $147.1 13.4% 27.3% Net financing revenue $107.2 4.9% 9.1% $107.2 4.9% 9.1% Syndication revenue $8.2 (38.0)% (24.8)% $8.2 (38.0)% (24
Slide 8: Profitable net revenue growth, fueled by capital-light revenue
Q1 2024 HIGHLIGHTS Profitable net revenue growth, fueled by… • Our continued focus on growing capital light Net revenue streams, and adjusted operating margin services revenue by increasing penetration and utilization rates and driving greater volume Net financing revenue Services revenue through ou
Slide 9: Share of wallet expansion
Q1 2024 HIGHLIGHTS Share of wallet expansion… 1Q23 -> 1Q24 services revenue (In US$ millions unless otherwise noted) 27.3% 13.7 147.1 • Increased penetration - providing more financing 6.7 1.0 and/or services to more of our existing clients’ 10.2 vehicles - deepens our value proposition (by further
Slide 10: …across our global fleet
Q1 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 under 1,000 1,486 1,463 1,467 1,523 1,541 1,500 1,501 1,485 1,490 management (‘VUM’) through: 850 822 827 881 893
Slide 11: A capital-lighter business model…
Q1 2024 HIGHLIGHTS A capital-lighter business model… (In US$ millions unless otherwise noted) Syndicated assets and pre-tax return on • The second pillar of our capital-lighter business common equity (pROcE) have grown since 2021 model is syndication - the sale of fleet lease Net earning assets ($)
Slide 12: Growing adjusted FCF per share and returning capital
Q1 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: Originations growth and geographic distribution
Q1 2024 HIGHLIGHTS Originations growth and geographic distribution Growth drivers: U.S. and Canada Mexico Australia and New Zealand 1. Resilient client demand $2,000 (In US$ millions) 2. Sustained commercial success 3. Improving OEM production volumes and order to delivery $1,542 cycle times $1,500
Slide 14: Looking Ahead
Looking Ahead Q 0, Oselement
Slide 15: Full-year 2024 results guidance
LOOKING AHEAD Full-year 2024 results guidance 1 FY 2024 guidance FY 2023 FY 2024 (US$ millions, unless otherwise noted) Net revenues $959.1 $1,020 – 1,040 confident in our Implied YoY growth % 6-8% ability to meet, or Adjusted operating margin Adjusted operating income 55.3% $530.6 55.0% – 55.5% $56
Slide 16: 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 • Centralizing accountability for U.S. and Canadian million of run-rate net revenue, and leasing in Dublin, Ireland between $22 - 37 million of run-rate • Enhancing our
Slide 17: Accelerating Digitization and Automation Initiatives
LOOKING AHEAD • • • • • • • • • • • • • • • • Accelerating Digitization and • • • • • • • • • • • • • • • • Automation Initiatives • • • • • • • • • Client-centric and focused on enhancing the client • •• • • • • • experience • • • • • • • • • We strive to position ourselves as a leading industry pl
Slide 18: Revenue growth levers
LOOKING AHEAD Retaining our clients 98% client revenue retention. Growing share of wallet Selling more services and financing to existing clients and increasing utilization of our services. Revenue growth Earning market share levers Converting self-managed fleets into Element clients More than half
Slide 19: 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 20: Ample opportunity
LOOKING AHEAD Ample opportunity U.S. & Canada We estimate the addressable market in the U.S. and Canada to represent $4.4 billion of annual net revenue 30% opportunity, with 55% being self-managed (i.e. Self-managed fleets approximately $2.5 billion of annual net revenue FMC-managed fleets opportuni
Slide 21: 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 22: Sustainability
Sustainability Q 0, Oselement
Slide 23: Sustainability highlights
SUSTAINABILITY • • • • • • • • Sustainability highlights • • • • • • • • • • • • • • • • • • • • • • • • Governance: We are ranked among the top 8% of companies • • • • • • • • (in the S&P/TSX Composite Index) in the Globe & Mail’s 2023 annual “Board Games” rankings. • •• • • • • • • • • • • • • • S
Slide 24: Commitments and Achievements
SUSTAINABILITY • • • • • • • • • • • • • • • • Commitments and • • • • • • • • • • • • • • • • Achievements • • • • • • • • • Transition 350,000 client vehicles into EVs by 2030 through Arc • •• • • • • • by Element, our global “wing-to-wing” Electric Vehicle solution • • • • • • • • tailored to ava
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