Canadian National Railway Company · TSX:CNR
Canadian National Railway — Q1 2021 Earnings Presentation
21 slides from Canadian National Railway's earnings presentation, Apr 26, 2021
Slide 1: First Quarter 2021 Financial and Operating Results
First Quarter 2021 Financial and Operating Results April 26, 2021 TSX: CNR NYSE: CNI
Slide 2: Forward-Looking Statements and Non-GAAP Measures
Forward-Looking Statements Certain statements included in this presentation constitute "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995 and under Canadian securities laws, including statements based on management’s assessment and a
Slide 3: Additional Information
Additional Information No Offer or Solicitation This presentation does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or s
Slide 4: JJ Ruest
JJ Ruest President and Chief Executive Officer
Slide 5: CN's Foundation of Excellence and Core Strengths
CN’s Foundation of Excellence and Core Strengths Precision Scheduled Railroading pioneer; first to champion and integrate PSR across our full network The first and leading North American railway, with a deep and rich history of operating in the U.S. ESG leadership; the only Class I in Dow Jones Sust
Slide 6: Recap of our Superior Proposal to Combine With KCS
Recap of our Superior Proposal to Combine With KCS Higher Premium, ✓ Proposal of US$325 per share; 21% premium to the CP proposal (1) More Upfront Cash ✓ KCS shareholders will participate in the upside and value creation Best in Class ✓ CN and KCS will create the premier railway for the 21st century
Slide 7: Strong Progress on Proposed Combination Since April 20th
Strong Progress on Proposed Combination Since April 20th CN is fully engaged and on track towards a successful combination with KCS 1. The KCS Board determined that CN’s proposal could reasonably be expected to lead to a “Company Superior Proposal” (1) − We have begun to engage with the KCS Board an
Slide 8: Q1 Highlights and Guidance
Q1 Highlights and Guidance Diluted EPS Operating Ratio Revenues Reported Adjusted (1) Reported Adjusted (1) $1.37 $1.23 62.5% 66.3% $3.5B 4% 1% 320 bps 60 bps flat Free Cash Flow (1) Fuel Efficiency (2) RTMs $539M 0.92 61.5B 6% 4% 5% Intermodal growth: 19%; $12M savings, ~60k tons of C
Slide 9: Rob Reilly
Rob Reilly Executive VP and Chief Operating Officer
Slide 10: Q1 Operating Metrics
Q1 Operating Metrics Quick recovery following polar vortex in February Workload 6% Train Length 5% Through Dwell flat Total GTMs, billions vs Q1-20 In feet vs Q1-20 Entire railroad, hours vs Q1-20 8,581 9.3 120.8 43.7 8,340 8,335 8.3 8.3 7.7 8.3 41.8 114.0 8,065 35.3 7,977 Q1-20 Q1-21 Jan Feb Ma
Slide 11: Realizing Efficiencies Across the Railroad
Realizing Efficiencies Across the Railroad Capitalizing on our strong track record of efficiency, while improving safety and deploying technology to drive sustainable growth for the future • Fuel efficiency improved by 4%, to 0.92 US gallons of locomotive fuel consumed per 1,000 gross ton miles, sav
Slide 12: Demand Recovery Expected to Continue
Demand Recovery Expected to Continue Leveraging the continued economic recovery to further drive growth Grain and Fertilizers • Record Q1 for western Canadian grain movement, continued strong export demand driving very low carry-out supply levels • Positive outlook for domestic and export potash aft
Slide 13: Delivering Record Grain Performance
Delivering Record Grain Performance • March 2021 - Thirteenth consecutive record month of Canadian grain movement • Attracted major grain customer expansion investment in Vancouver and 70% of new efficient high throughput grain elevators, providing CN with exclusive access to 24 new facilities Posit
Slide 14: Confidence in Ability to Deliver Strong Results as Economy Rebounds
Confidence in Ability to Deliver Strong Results as Economy Rebounds • Network fluid and operating metrics improving • Pipeline of solid growth opportunities • Managing yield and driving productivity • Capex plan for long-term growth and service resiliency • Digital Scheduled Railroading as competiti
Slide 15: Ghislain Houle
Ghislain Houle Executive VP and Chief Financial Officer
Slide 16: Stable Q1 Earnings In-line with Expectations
Stable Q1 Earnings In-line with Expectations Change Favorable In millions of Canadian dollars, except EPS data, unless otherwise indicated 2021) 2020) (Unfavorable) Revenues $ 3,535) $ 3,545) -% Operating expenses 2,208) 2,330) Operating income 1,327 1,215) 9% Interest expense (130) (139) Other comp
Slide 17: Free Cash Flow
Free Cash Flow In millions of Canadian dollars, unless otherwise indicated YTD 2021) • Continual access to low-cost financing supports steady reinvestment and enables strategic agenda Net income $ 974) Non-cash adjustments 418) • Capital expenditures: Income tax payments (188) • Continued focus on p
Slide 18: Updating 2021 Financial Outlook
Updating 2021 Financial Outlook (1) • Now targeting double-digit adjusted diluted EPS growth versus 2020 adjusted diluted EPS of $5.31 based on: (2) − High single-digit volume growth in terms of RTMs − Overall pricing above rail inflation at a minimum − Canadian to U.S. dollar exchange rate of appro
Slide 19: JJ Ruest
JJ Ruest President and Chief Executive Officer
Slide 20: CN-KCS is Unique, Highly Strategic, and Value Accretive
CN-KCS is Unique, Highly Strategic, and Value Accretive Premier Canada-U.S.-Mexico railway network Unparalleled stakeholder benefits: Safer, Faster, Cleaner, Stronger Accelerate ESG-driven growth and enhanced choice for the customer + EBITDA synergies approaching US$1B – preliminary estimate (1) Str
Slide 21: Creating The Premier North American Railway for the 21st Century
Prince Creating The Rupert East Coast access enabling international Edmonton supply chains Premier North Vancouver Kansas City Speedway: Saskatoon Winnipeg Montreal Halifax American new competitive route between Minneapolis- KC, Detroit & Chicago St-Paul Toronto Railway for the Omaha Detroit Pittsbu
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