Element Fleet Management Corporation · TSX:EFN
Element Fleet Management — Q3 2024 Earnings Presentation
26 slides from Element Fleet Management's earnings presentation, Nov 14, 2024
Slide 1: Q3 2024 Investor Presentation
Q3 2024 Investor Presentation Element Fleet Management (TSX: EFN)
Slide 2: Forward-looking statements and disclaimer
Forward-looking statements and disclaimer 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 b
Slide 3: Contents
• About Element……………………………………………………….slide 4 • Q3 2024 Highlights………………………………………………slide 6 • Q3 and YTD financial highlights • Key drivers of net revenue growth • Vehicles under management • Originations Contents • Return of capital • Looking Ahead…………………….………………………………..slide 15 • Initial full-year
Slide 4: Largest pure-play publicly traded automotive fleet manager in the world
Element - The largest pure-play publicly traded automotive fleet manager in the world 1.5M Vehicles Under Management Dublin 98% Minneapolis Toronto Client Revenue Baltimore Retention 55%+ Mexico City Singapore Adj. Operating Margin US$1B Sydney 2023 Net Auckland Melbourne Revenue Our Purpose: Move t
Slide 5: Global industry leader
• • • • • • • • Global industry leader • • • • • • • • • • • • • • • • • • • • • • • • • We provide services and financing to large and • • • • • • • • mid-sized corporate/commercial and • • • • • • • • government/public service fleets • • • • • • • • • We specialize in large, complex fleets of miss
Slide 6: Q3 2024 Highlights
Q3 2024 Highlights Q ‘o) Ogelement
Slide 7: Q3 2024 Results (vs Q3/23) Key Highlights
Q3 2024 HIGHLIGHTS Q3 2024 Results (vs Q3/23) Key Highlights (In US$ millions unless otherwise noted) Net revenue Services revenue Robust growth across all revenue categories $280M 12% $147M 12% Double-digit services revenue Adj. operating income1 Adj. operating margin1 growth $161M 15% 57.7% 120 bp
Slide 8: Q3 YTD 2024 Results (vs Q3 YTD/23) Key Drivers
Q3 2024 HIGHLIGHTS Key Drivers Q3 YTD 2024 Results (vs Q3 YTD/23) (In US$ millions unless otherwise noted) Higher services penetration and utilization Net revenue Services revenue1 $817M 14% $434M 16% Onboarding clients with higher service attachment rates Adj. operating income2 Adj. operating margi
Slide 9: Record net revenue and solid operating margin expansion
Q3 2024 HIGHLIGHTS Record net revenue and solid operating margin expansion (US$millions, except per share) Adjusted1 Reported Key Metrics Q3 2024 QoQ YoY Q3 2024 QoQ YoY Services revenue $147 5% 12% $147 5% 12% Net financing revenue $116 (5%) 11% $116 (5%) 11% Syndication revenue $17 38% 29% $17 38%
Slide 10: Key drivers of net revenue growth
Q3 2024 HIGHLIGHTS Key drivers of net revenue growth Net revenue streams, and adjusted operating margin • Strong services revenue growth Net financing revenue Services revenue Syndication revenue LTM adjusted operating margin (%) • Increasing penetration rates • Driving greater volume through our $3
Slide 11: Increased services penetration and utilization
Q3 2024 HIGHLIGHTS Increased services penetration and utilization 3Q23 -> 3Q24 services revenue 170 12% 160 • Increased penetration - providing more 150 11.3 2.5 1.5 0.5 146.9 services to more of our existing clients’ vehicles 140 131.1 130 - deepens our value proposition (by further 120 lowering To
Slide 12: VUM and services attachment
Q3 2024 HIGHLIGHTS VUM and services attachment End-of-period global VUM3 (in thousands) Financed only Serviced & financed Serviced only Over the long term, we aim to drive growth in vehicles 1,486 1,463 1,467 1,523 1,541 1,500 1,501 1,485 1,490 1,499 1,497 under management (‘VUM’) through: 1,000 810
Slide 13: 10% year-over-year growth in originations driving net earning asset growth
Q3 2024 HIGHLIGHTS 10% year-over-year growth in originations driving net earning asset growth Originations (in millions) $2,000 U.S. and Canada Mexico Australia and New Zealand Drivers of originations growth this quarter include: 1. Resilient client demand 2. Improving OEM production volumes $1,500
Slide 14: Sustained commercial success driving return of capital to shareholders
Q3 2024 HIGHLIGHTS Sustained commercial success driving return of capital to shareholders Capital allocation priorities: $527 Million Total amount of capital returned to shareholders 1. Prudently invest in our business since 2022 through common share buybacks and 2. Tangible leverage ratio managemen
Slide 15: Looking Ahead
Looking Ahead Q ‘o) Ogelement
Slide 16: Initial Full-Year 2025 Guidance
LOOKING AHEAD Initial Full-Year 2025 Guidance1 • We expect new client growth, including the Annual growth Initial Full-year 2025 guidance continued conversion of self-managed fleets, rates and resilient client demand for our services & Net revenue 6.5 – 8.5% solutions to underpin full-year net reven
Slide 17: Ample organic growth opportunities
LOOKING AHEAD Ample organic growth opportunities U.S. and Canada 30% Self-managed fleets $10 billion addressable market FMC-managed fleets Element 55% 45% 70% Other FMCs • The estimated addressable market in the U.S. and Canada represents a ~$4.4 billion net revenue opportunity • The Mexico and ANZ
Slide 18: Favourable dynamics supporting self-managed fleet conversion
LOOKING AHEAD Favourable dynamics supporting self- managed fleet conversion 1. Growing complexity: The need to simplify the complexities of managing large fleets to lower total cost of fleet operation 2. Electrification: Transition to EV fueled by corporate decarbonization goals; EV expertise is req
Slide 19: A strong foundation for future growth with key initiatives
LOOKING AHEAD • • • • • • • • A strong foundation for future growth •• •• •• •• •• •• •• •• with key initiatives • • • • • • • • • • • • • • • • • Centralizing accountability for U.S. and Canadian leasing in Dublin, Ireland • • • • • • • • • • • • • • • • • Enhancing our consistent, superior client
Slide 20: Creating a powerful digital ecosystem to help unlock opportunities
LOOKING AHEAD We are creating a powerful digital ecosystem to help unlock opportunities • EV and Energy Management • Collision and Safety • Autonomous Management • Maintenance and Uptime • Payments and Embedded Finance • Connected Vehicles • Smart Mobility Management • Marketplace • Sustainability •
Slide 21: Element and Autofleet - a global digital mobility business
LOOKING AHEAD Element and Autofleet - a global digital mobility business Combined, Element and Autofleet will become a competitive differentiator through a holistic, end-to-end fleet and mobility offering for clients around the world • Global scale • Leading-edge technology platform • Largest public
Slide 22: Continue to deliver for our clients and our shareholders
LOOKING AHEAD Continue to deliver for our clients and our shareholders 1. An enhanced client experience through delivering new and innovative fleet and mobility solutions 2. Digitization and automation will enable us to scale our business more quickly - driving business optimization 3. Emerging tren
Slide 23: Sustainability
Sustainability Q ‘o) Ogelement
Slide 24: Sustainability highlights
SUSTAINABILITY • • • • • • • • Sustainability highlights • • • • • • • • • • • • • • • • • • • • • • • • In June 2024, we issued our fourth annual Sustainability Report titled “Sustainable Momentum: Building on Progress”, which reflects our 2023 • • • • • • • • achievements • • • • • • • • Highlight
Slide 25: Recognition
SUSTAINABILITY • • • • • • • • • • Recognition • • • • • • • • • • • • • • • Our • efforts • in • 2023 • were• recognized • • by the following organizations: • • • • • • • • Geotab CDP Climate Globe and Mail Innovation Award • • • Board • •Games • • • Scored a B, which is the Australian Workplace •
Slide 26: 26
26
Element Fleet Management — Q3 2024 Earnings Presentation on 6ix