Finning International Inc. · TSX:FTT

Finning International — Investor Presentation (March 2014)

14 slides from Finning International's investor presentation, Mar 20, 2014

  1. Slide 1: Investor Presentation

    INVESTOR PRESENTATION Scott Thomson, President and CEO Toronto March 20, 2014

  2. Slide 2: Forward Looking Information

    Forward Looking Information This report contains statements about the Company’s business outlook, objectives, plans, strategic priorities and other statements that are not historical facts. A statement Finning makes is forward-looking when it uses what the Company knows and expects today to make a s

  3. Slide 3: Compelling Value Proposition

    Compelling Value Proposition  Passionate and committed employees  Right people in the right places to execute on the plan  Best products, best territories  Aligned with Caterpillar, world’s best heavy equipment company  Resource-rich territories with significant organic growth opportunities  C

  4. Slide 4: Diverse & Growing Customer Base

    Diverse & Growing Customer Base 63% of new equipment deliveries from non-mining * Agriculture, industrial and government segments 4

  5. Slide 5: Powerful, Sustainable Business Model

    Powerful, Sustainable Business Model 5

  6. Slide 6: Priorities Will Drive Improved Return on Invested Capital (ROIC)

    Priorities Will Drive Improved Return on Invested Capital (ROIC) All priorities are linked directly to EBIT or Invested Capital 6

  7. Slide 7: Strengthening Balance Sheet

    Strengthening Balance Sheet FCF per Share (dollars) Net debt to total capital ratio (%) 53 52 51 51 50 48 47 45% 42 41 TARGET RANGE 35% Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2011 2012 2013 2014 Net debt / EBITDA Positive free cash flow through the cycle Target Range  Strong cash flow from operatio

  8. Slide 8: Market Outlook

    Market Outlook Canada  Continued stable oil sands activity  Solid infrastructure activity and market share gains to drive growth in Core and BCP  Growing power systems opportunities (LNG)  Product support remains solid South America  Slower pace of growth - copper producers are focused on produ

  9. Slide 9: Key Takeaways

    Key Takeaways  Focus on what we can control: costs, working capital and capital investment  Significant increase in invested capital has offset profitability improvements over last three years  Opportunity to materially increase Return on Invested Capital over time  Improved profitability, prima

  10. Slide 10: Appendix

    FInNhnING ] APPENDIX

  11. Slide 11: Finning 101

    Finning 101 World’s largest Caterpillar dealer:  New equipment and engines sales  Used equipment sales The Northwest Yukon  Products support / parts and service Territories  Equipment rental Main industries: British Fort McMurray Columbia Alberta  Mining (oil sands, copper, coal) Edmonton  Con

  12. Slide 12: Return on Invested Capital

    Return on Invested Capital Historical Performance  Significant Investments: - Drills & Shovels 30.0% - Fort MacKay Economic  Underperforming working capital 25.0% downturn  ERP implementation 20.0% 15.0% 10.0% 5.0% 0.0% 2006 2007 2008 2009 2010 2011 2012 2013 ROIC 27.6% 26.8% 15.0% 10.2% 15.3% 16

  13. Slide 13: Q4 2013 Results

    Q4 2013 Results Earnings C$ millions Q4 2013 Q4 2012* % change Revenue 1,796 1,746 3 Gross profit 554 524 6 GP margin 30.9% 30.0% SG&A (403) (384) (5) SG&A as % of revenue (22.4)% (22.0)% Equity earnings 0 2 Other income (expenses) (6) 6 EBIT 145 148 (2) EBIT margin 8.1% 8.5% Net income 93 103 (9) B

  14. Slide 14: Q4 2013 Results

    Q4 2013 Results Invested Capital Q4 2013 Q3 2013 Inventory ($ millions) 1,756 1,904 Inventory turns (times) 2.7 2.4 Invested capital ($ millions) 3,138 3,342 Invested capital turnover (times) 2.0 2.0 Working capital to sales ratio (%) 26.5 26.7 Return on invested capital (%) 15.7 15.8 Net debt to in

Finning International — Investor Presentation (March 2014) on 6ix