Finning International Inc. · TSX:FTT

Finning International — Shareholder Meeting (May 2005)

39 slides from Finning International's shareholder meeting presentation, May 11, 2005

  1. Slide 1: Annual General Meeting May 11, 2005

    Annual General Meeting May 11, 2005

  2. Slide 2: Conrad Pinette, Chairman of the Board

    Annual General Meeting May 11, 2005 Conrad Pinette Chairman of the Board

  3. Slide 3: Board of Directors

    Board of Directors ƒ Conrad Pinette ƒ Andrew Simon ƒ Ricardo Bacarreza ƒ Mike Waites ƒ Jim Dinning ƒ Doug Whitehead ƒ Tim Howden ƒ John Willson ƒ Jeff Mooney ƒ John Cleghorn (retiring) ƒ Donald O’Sullivan

  4. Slide 4: Annual General Meeting May 11, 2005

    Annual General Meeting May 11, 2005

  5. Slide 5: Doug Whitehead, President and CEO

    Annual General Meeting May 11, 2005 Doug Whitehead President and CEO

  6. Slide 6: 2004 Highlights

    2004 Highlights ƒ Very strong market conditions in 2004 ƒ Record revenue - $4.2B ƒ Order book doubles from Dec 2003 ƒ Total shareholder return in 2004 – 18% ƒ Dividend increased to $0.11 per quarter

  7. Slide 7: Q1 2005 Highlights

    Q1 2005 Highlights ƒ Record Q1 revenue - $1.15B up 19% from Q1 2004 ƒ Record Q1 earnings - $37.4M up 56% ƒ Earnings per share - $0.42 up 35%

  8. Slide 8: Market Conditions

    Market Conditions ƒ Strong commodity markets ƒ Driving broad economic growth ƒ Strong construction equipment markets ƒ Dramatic increase in demand for new equipment

  9. Slide 9: Finning (Canada)

    Finning (Canada) ƒ Record 2004 revenues and near record EBIT ƒ Sales of new equipment, power systems, parts and service, and Yukon equipment rentals Northwest Territories all up over 2003 British Alberta Columbia Edmonton Vancouver

  10. Slide 10: Finning South America

    Finning South America ƒ Strong mining sector supporting general and infrastructure Bolivia construction Santa Cruz ƒ Recent acquisitions well timed Chile Argentina ƒ Record revenue Uruguay and EBIT Santiago Buenos Aires Montevideo ƒ Over 1,000 employees hired in 2004

  11. Slide 11: Finning (UK)

    Finning (UK) ƒ Challenging year for UK dealership ƒ Continued revenue Scotland growth offset by Glasgow higher costs ƒ Ongoing integration of Lex Harvey England ƒ Acquired Perkins dealership in Cannock December 2004 Wales

  12. Slide 12: Hewden

    Hewden ƒ $190M investment in rental assets ƒ Enhancing customer Scotland service Glasgow ƒ Results improving England Cannock Wales

  13. Slide 13: Global Diversification & Balance

    Global Diversification & Balance FINNING FINNING FINNING HEWDEN POWER & (CANADA) (UK) LTD. SOUTH AMERICA ENERGY SYSTEMS Revenue Revenue Revenue Revenue Revenue (32%) (21%) (19%) (17%) (11%) 12 months to December 31, 2004

  14. Slide 14: End Market Diversification New Equipment Deliveries

    End Market Diversification New Equipment Deliveries* Mining Other 9% 28% Petroleum 7% Forestry 9% Construction Power 27% 20% * New equipment deliveries for 12 months ended December 31, 2004

  15. Slide 15: Revenue Diversification

    Revenue Diversification ƒ Serve broad range of industries ƒ Involved through entire equipment life cycle ƒ Strengthens customer relationships and enhances profitability

  16. Slide 16: Revenue Diversification

    Revenue Diversification Revenue = $4.2B Gross Profit = $1.24B Parts, Service Parts, Service and Rental and Rental 54% 78% Equipment Sales Equipment Sales 46% 22% As at December 31, 2004

  17. Slide 17: Focused on Safety

    Focused on Safety ƒ Over 13,000 employees ƒ Record 2 million hours without a lost time injury at Finning (Canada) in 2004 ƒ Decline in lost time injury frequency rate to 0.78 LTI per 200,000 work hours Lost Time Injury Frequency (LTI) 2.48 2.5 2.22 1.98 2.0 1.5 0.97 1.0 0.78 0.5 0.0 2000 2001 2002 2

  18. Slide 18: Annual General Meeting May 11, 2005

    Annual General Meeting May 11, 2005

  19. Slide 19: Wayne Bingham, Executive Vice President and CFO

    Annual General Meeting May 11, 2005 Wayne Bingham Executive Vice President and CFO

  20. Slide 20: Attractive Revenue Growth

    Attractive Revenue Growth $ billions 5 = 14% CAGR 4.2 4 3.6 3.2 3.2 3 2.5 2.2 2 1 0 1999 2000 2001 2002 2003 2004

  21. Slide 21: Net Income

    Net Income $ millions 160 4% G R =1 CA 140 132 132 120 115 104 100 80 73 60 60 40 20 0 1999 2000 2001 2002 2003 2004

  22. Slide 22: Growing Normalized Basic EPS

    Growing Normalized* Basic EPS = 18% $2.0 CAGR 1.75 1.75 1.66 1.54 $1.5 0.95 $1.0 0.75 $0.5 $0.0 1999 2000 2001 2002 2003 2004 *Excludes items not reflective of ongoing earnings

  23. Slide 23: Cash Flow

    Cash Flow Cash flow $ millions Cash flow after changes in working capital 600 506 496 500 400 384 300 244 200 100 0 2003 2004

  24. Slide 24: Relative Share Price Performance

    Relative Share Price Performance 5 years to December 31, 2004 300 Finning International Inc. 250 200 150 S&P/TSX Composite Index 100 50 31-Dec-99 31-Dec-00 31-Dec-01 31-Dec-02 31-Dec-03 31-Dec-04

  25. Slide 25: Growing Dividend

    Growing Dividend ƒ Dividend increased in Feb 2005 ƒ Annual indicated dividend - $0.44/share $0.12 $0.11 $0.10 $0.09 $0.08 $0.07 $0.06 $0.05 $0.04 $0.03 $0.02 $0.01 $0.00 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2001 2002 2003 2004 2005

  26. Slide 26: November 2004 Equity Offering

    November 2004 Equity Offering ƒ Issue of 10 million new common shares ƒ $305M raised to redeem a non-controlling interest in Hewden ƒ Strengthens financial position and supports credit rating BBB+ / BBB (high) ƒ Cleaner, more transparent balance sheet

  27. Slide 27: Top-Rated Corporate Governance

    Top-Rated Corporate Governance ƒ Exemplary corporate governance standards ƒ Ranked No. 1 by Canadian Business Magazine in 2003 and 2004 ƒ Ranked No. 2 by Globe & Mail Report on Business in 2004 ƒ Improved risk management system implemented in 2004

  28. Slide 28: Record Q1 2005 Results

    Record Q1 2005 Results Q1 ’05 Q1 ’04 % change Revenue (billions) $1.15 $0.97 +19% Basic EPS $0.42 $0.31 +35% Normalized Basic EPS $0.42 $0.37 +14%

  29. Slide 29: Q1 2005 Cash Flow

    Q1 2005 Cash Flow $ millions Cash Flow Q1 ’05 Q1 ’04 Before change in working capital $122.0 $116.5 After change in working capital $60.4 $108.3 From operating activities $(9.0) $25.3

  30. Slide 30: Focus on Costs

    Focus on Costs ƒ Target $60 million by ‘06 ƒ Broad portfolio of projects ƒ Hewden initiatives ƒ Asset reduction ƒ Company-wide savings

  31. Slide 31: Doug Whitehead, President and CEO

    Annual General Meeting May 11, 2005 Doug Whitehead President and CEO

  32. Slide 32: Finning International Inc. Caterpillar

    FINNING INTERNATIONAL INC. = a CATERPILLAR

  33. Slide 33: Record Order Backlog

    Record Order Backlog C$ millions 1000 800 600 400 200 0 J F M A M J J A S O N D J F M A M J J A S O N D J F M 2003 2004 2005

  34. Slide 34: Canada - Outlook

    Canada - Outlook ƒ Rich and diverse resource industry ƒ Solid general construction market ƒ Strong power systems market ƒ Order backlog up three-fold vs. prior year

  35. Slide 35: South America - Outlook

    South America - Outlook ƒ Attractive copper and gold prices driving mine expansion ƒ Strong construction spending in Chile and Argentina ƒ Order backlog up almost 50% from Dec 2004

  36. Slide 36: UK Dealership - Outlook

    UK Dealership - Outlook ƒ Market growth driven by healthy economy, large population base and government spending on infrastructure ƒ CAT market share project designed to double unit sales and improve profitability ƒ Order backlog up 67% from March 2004

  37. Slide 37: Hewden - Outlook

    Hewden - Outlook ƒ Cost control and efficiency improvement program paying off ƒ Results improving ƒ Operating at plan

  38. Slide 38: Power Systems - Outlook

    Power Systems - Outlook ƒ Diversified product line and wide range of applications ƒ Growth opportunities in all geographic markets

  39. Slide 39: Strong and Ready for the Future

    Strong and Ready for the Future

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