Finning International Inc. · TSX:FTT

Finning International — Q2 2005 Earnings Presentation

14 slides from Finning International's earnings presentation, Aug 9, 2005

  1. Slide 1: Investor Conference Call Q2 2005 Results

    Investor Conference Call Q2 2005 Results August 9, 2005

  2. Slide 2: Forward Looking Information

    Forward Looking Information This presentation contains forward-looking statements and information which reflect the current view of Finning International Inc. ("Finning" or the "Company") with respect to future events and financial performance. Any such forward-looking statements are subject to risk

  3. Slide 3: Q2 Results – Another record

    Q2 Results – Another record Normalized EPS ƒ Record quarterly revenue 2004 $0.53 $1.3B (up 23% from Q2 ‘04) 2005 ƒ Record Q2 net income $0.42 $0.40 $0.37 $45.6M (up 64% from Q2 ’04) ƒ Normalized EPS up 32% ƒ Strong outlook: - order book provides good visibility for balance of 2005 and for H1 2006 Q1

  4. Slide 4: Normalizing Items

    Normalizing Items C$ per share Q2 Q2 2005 2004 Basic EPS 0.52 0.35 +49% Restructuring charges & project costs 0.01 0.03 Interest rate swap (mark to market) - (0.05) Canary Wharf legal settlement - 0.07 Normalized EPS 0.53 0.40 +32% Included in Normalized EPS: LTIP 0.04 0.07 Foreign Exchange* 0.02 Pe

  5. Slide 5: Cash Flow – Large improvement

    Cash Flow – Large improvement (C$ million) Q2 Q2 2005 2004 Cash from operations 139.6 125.6 +11% (before changes in working capital) Cash flow 117.4 56.3 +108% (after changes in working capital) 5

  6. Slide 6: Canada - Very strong results

    Canada - Very strong results (C$ million) Q2 Q2 2005 2004 Revenue 509.5 363.1 +40% Operating Costs 442.3 306.3 Depreciation / Amortization 26.0 24.9 EBIT (Normalized) 41.2 31.9 +29% EBIT Margin 8.1% 8.8% ƒ Continued very strong business growth ƒ Sales mix oriented to new equipment sales (45% vs. 39%

  7. Slide 7: FINSA – Very strong results

    FINSA – Very strong results (C$ million) Q2 Q2 2005 2004 Revenue 274.3 203.1 +35% Operating Costs 243.1 178.2 Depreciation / Amortization 6.9 5.9 EBIT (Normalized) 24.3 19.0 +28% EBIT Margin 8.9% 9.3% ƒ Continued very strong business growth ƒ Sales mix oriented to new equipment sales (55% vs. 42% in

  8. Slide 8: Hewden – Improvement continues

    Hewden – Improvement continues (C$ million) Q2 Q2 2005 2004 Revenue 174.4 175.7 -1% Operating Costs 121.1 122.3 Depreciation / Amortization 35.8 36.5 EBIT (Normalized) 17.5 16.9 +3% EBIT Margin 10.0% 9.6% ƒ Quarter over quarter improvement in EBIT & EBIT margin continues ƒ Revenues up 6% & EBIT up 1

  9. Slide 9: Finning (UK) – Sales up, results still weak

    Finning (UK) – Sales up, results still weak (C$ million) Q2 Q2 2005 2004 Revenue 313.3 290.7 +8% Operating Costs 284.2 257.6 Depreciation / Amortization 20.2 23.1 EBIT (Normalized) 8.9 10.0 -11% EBIT Margin 2.8% 3.4% ƒ 3 businesses: construction equipment, power systems, materials handling ƒ Total r

  10. Slide 10: Finning (UK) Construction Equipment and Power Systems

    Finning (UK) ƒ Construction Equipment UK Revenue Breakdown Q2 2005 - Q2 revenue up 13% vs. Q2 ’04 (in local currency) Materials - Order back-log at attractive levels Handling 27% - Focus on cost reduction Construction Equipment 58% - Finning/CAT market study: planning Power Systems the implementatio

  11. Slide 11: Finning (UK) Materials Handling

    Finning (UK) ƒ Materials Handling - Q2 Revenue up 8% vs. Q2 ‘04 (in local currency) - Gross margin under competitive pressure (FX, manufacturer pricing, running costs) - EBIT contribution $2.5 M lower Q2/Q2 and $7.9 M lower 6 mos./6 mos. - Cost reduction plan being implemented to reduce SG&A costs -

  12. Slide 12: Year-to-Date Results

    Year-to-Date Results C$ millions 6 Mos. 6 Mos. (except per share) 2005 2004 Revenue 2,424.9 2,000.8 +21% EBIT 149.9 119.8 +25% Net Income 83.0 51.7 +60% Diluted EPS 0.93 0.65 +43% Normalized Basic EPS 0.95 0.77 +23% 12

  13. Slide 13: Outlook - Overall very strong

    Outlook - Overall very strong ƒ $60 by ’06 cost savings - Approximately 100 projects in total - 38 projects completed to date ($17mm p.a. ongoing savings) ƒ 2005 Outlook 13

  14. Slide 14: Outlook - Overall very strong

    Outlook - Overall very strong ƒ Record high commodity prices (oil, copper, coal) ƒ General construction in Western Canada and South America - very strong ƒ Strong order book – good visibility for balance of ’05 and for ‘06 ƒ Broad based actions underway at each of the three UK operations 14

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