Element Fleet Management Corporation · TSX:EFN
Element Fleet Management — Q4 2020 Earnings Presentation
17 slides from Element Fleet Management's earnings presentation, March 2021
Slide 1: Q4 2020 Investor Presentation
Q4 2020 Investor Presentation
Slide 2: Forward-looking statements
Forward-looking statements 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 beliefs. In some
Slide 3: Disclaimer
Disclaimer An investment in the securities of Element involves significant risks. A discussion of some of the material risks affecting Element and its business appears under the heading “Risk Factors” in Element’s Annual Information Form dated March 3, 2021, and under the headings “Risk Management”
Slide 4: Business overview: largest pure-play automotive fleet manager in the world
Business overview Element is a global B2B / B2G services company and the largest pure-play automotive fleet manager in the world $450 M • Market leader in North America and Australia / New Zealand Annual Free Cash Flow1 • Resilient recurring revenues from a growing base of loyal, world-class clients
Slide 5: Resilient business model delivering solid results throughout economic cycles
Business overview Our business model is designed to be resilient, consistently delivering solid financial results throughout economic cycles 1 Essential services business • Fleet vehicles are mission-critical for clients to sustain revenues and/or meet stakeholder needs, ensuring continuity of deman
Slide 6: Q4 2020 Results
Q4 2020 Results Qo, Opelement
Slide 7: Resilient fourth quarter and 2020 results, completed Transformation
Q4 2020 results Resilient fourth quarter and 2020 results, complete $200+ million Transformation and kicking-off 2021 with significant client wins 1. Q4 adjusted operating income increased $3.1 million quarter-over-quarter to $132.1 million; equivalent to $0.23 on a per share basis and translating t
Slide 8: Adjusted operating income improved quarter-over-quarter
Q4 2020 results Adjusted operating income improved quarter-over quarter, as net revenue grew and adjusted operating margin expanded For the three-month For the twelve-month periods ended periods ended (values in $000’s for stated amounts, except per share amounts) Dec 31, Sep 30, Dec 31, Dec 31, Dec
Slide 9: Transformation has improved operating leverage and increased free cash flow
Q4 2020 results Transformation has improved operating leverage and increased free cash flow Operating leverage Transformation program 280 Net revenue 100% Adjusted operating income margin 257 250 246 247 243 247 242 240 219 221 221 226 80% 211 200 60% C$ mm 51.9% 53.9% 52.3% 53.0% 53.4% 50.3% 50.5%
Slide 10: Syndication and transformation enhance returns on equity and accelerate de-leveraging
Q4 2020 results Syndication and transformation continue to enhance returns on equity and accelerate de-leveraging Pre-tax return on common equity Transformation program 16% 14.6% 14.6% 14.1% 14.3% 13.9% 14.0% 12.2% 11.9% 12.3% 11.3% 11.7% 12% 10.8% 8% 4% 0% 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q
Slide 11: Strategic priorities
Strategic priorities Qo, Opelement
Slide 12: Strategic priorities for 2021 and beyond
Strategic priorities Having transformed the business, we are focused on achieving our strategic priorities for 2021 and beyond 2018-2020 2021 – 2022 – 2023 – … Solidify and grow Transform Aggressively pursue organic revenue growth the core the operating platform and leverage our scalable operating p
Slide 13: Aggressively pursuing profitable net revenue growth
Strategic priorities We are aggressively pursuing profitable net revenue growth Five sources of global net revenue growth in 2021: 1 Retaining existing clients (improving on 98% industry average) 2 Increasing client profitability and service penetration (share of wallet) 3 Winning new clients from o
Slide 14: Self-managed fleets: a large opportunity for organic net revenue growth
Strategic priorities Self-managed fleets represent a very large opportunity for sustained organic net revenue growth across our footprint Self-managed fleets Element 1 FMC -managed fleets Other FMCs U.S. & Canada Australia & New Zealand Mexico 25% 15 FMCs 30% 15% 75% 85% OEMs, 45% 45% 20% banks, 55%
Slide 15: Well positioned to lead through gradual electrification of fleets
Strategic priorities We are well positioned to support our clients and lead our industry through the gradual electrification of automotive fleets Although EV and hybrid penetration of our clients’ fleets is currently immaterial… Gasoline vehicles Hybrid vehicles 3 Diesel vehicles Electric vehicles (
Slide 16: Advancing a capital-lighter business model
Strategic priorities Advancing a capital-lighter business model by increasing service penetration and syndication, which enhances return on equity We reduced our liabilities by over $2.4 billion in 2020, while maintaining shareholders’ equity essentially flat. In doing so, we lowered tangible levera
Slide 17: A global fleet leader
Dominant market position in A global North America and the market leader in Australia / New Zealand fleet leader Resilient recurring revenues from a growing base of loyal, world-class clients across 700+ industries Element is the largest pure- Ample free cash flow returned to play automotive fleet m
Element Fleet Management — Q4 2020 Earnings Presentation on 6ix