Element Fleet Management Corporation · TSX:EFN
Element Fleet Management — Element Financial — Shareholder Meeting (June 2016)
31 slides from Element Fleet Management's shareholder meeting presentation, Jun 16, 2016
Slide 1: Annual Meeting of Shareholders, June 16, 2016
A N N UA L M E E T I N G O F S H A R E H O L D E R S T H U R S D A Y, J U N E 1 6 , 2 0 1 6 Element Financial Corporation elementcorp.com
Slide 2: William Lovatt, Chairman
William Lovatt Chairman 2 Element Financial Corporation elementcorp.com
Slide 3: Forward Looking Statements
Forward Looking Statements Certain information in this presentation is forward-looking and related to anticipated financial performance, events and strategies. When used in this context, words such as “will”, “anticipate”, “believe”, “plan”, “intend”, “target” and “expect” or similar words suggest f
Slide 4: Key Governance & Compensation Practice Improvements
Key Governance & Compensation Practice Improvements 1. We strengthened our Board with the appointment of four new directors, being William Lovatt, Richard Venn, the Hon. Brian Tobin and Joan Lamm-Tennant (our first female director) 2. The roles of Chairman and CEO were split, and an independent Chai
Slide 5: Corporate Governance – Board of Directors
Corporate Governance – Board of Directors William Lovatt (1) Richard Venn (1) (2) Steven Hudson Chairman Vice-Chairman FCA, BBA FCA MBA Former Executive Vice President and Director of DBRS and Bank of N.T. Chief Executive Officer, Element CFO of Great-West Lifeco Inc., London Butterfield & Sons Ltd.
Slide 6: CEO Pay for Performance
CEO Pay for Performance CEO’s compensation versus EFN share price performance 6 Element Financial Corporation elementcorp.com
Slide 7: Milestones: 2015 Achievements
Milestones 2015 Achievements January Increased 2015 Adjusted Operating Earnings Outlook to $1.05 per share February Expanded Rail Finance team March Closed US$405 million offering of Secured Railcar Equipment Notes March Appointed William Lovatt as Chairman and Richard Venn as Vice Chariman May Clos
Slide 8: GE Fleet Integration PSU Vesting
GE Fleet Integration PSU Vesting Performance Condition Vesting Performance Target Canadian Investment Grade Issuer Rating from DBRS, S&P, Receipt of Canadian Investment Grade Moody’s or Fitch (resulting in annual interest cost savings Issuer Rating 1/3 under the senior credit facility of $16 million
Slide 9: Realized versus Realizable Compensation
Realized versus Realizable Compensation 9 Element Financial Corporation elementcorp.com
Slide 10: Post Separation Compensation Changes
Post Separation Compensation Changes ● Management and the Board are developing a compensation structure that reflects shareholder feedback and is “right-sized” to the scale of each of the separated businesses while continuing to provide strong incentive for business growth; ● For Senior Management,
Slide 11: Illustrative Compensation Example
Illustrative Compensation Example Total Annual Base Salary STIP M/LTIP Opportunity PSU performance measures Paid as regular Final payout is based on Including base salary, will be inclusive of a TSR salary the results of the STIP and LTIP grant. measure, as well as other executive’s scorecard; appro
Slide 12: Steven Hudson, Chief Executive Officer
Steven Hudson Chief Executive Officer 12 Element Financial Corporation elementcorp.com
Slide 13: Strong Year-Over-Year Performance
Strong Year-Over-Year Performance As at and for the three-month period ending March 31, 2015 March 31, 2016 Total Assets $12.5 bln $23.9 bln Tangible Leverage 3.92:1 4.58:1 Return on Average Earning Assets(1) 3.3% 3.6% Return on Average Common Equity(2) 11.0% 13.9% Market Capitalization $4.5 bln $5.
Slide 14: Separation Update: Separation Benefits
Separation Update Separation Benefits ● February 2016 announcement to separate Element into two market leading public companies - Element Fleet Management – World’s largest publicly-traded Fleet Management Service Company - Commercial Finance – North American leader in commercial finance transitioni
Slide 15: Separation Update: Separation Benefits
Separation Update Separation Benefits ● Proven Access to Optimal Funding - Element Fleet, through its proven funding program (“Chesapeake”) and its balance sheet - Commercial Finance, through its Family of Funds and its balance sheet ● Compelling Investment Thesis and Valuation - Commercial Finance
Slide 16: Separation Announcement Impact on Share Value
Separation Announcement Impact on Share Value EFN TSX Composite Index TSX Financial Services Index 35% Element announces business separation 30% 25% 20% 15% 10% 5% 0% 16 Element Financial Corporation elementcorp.com
Slide 17: Strategic Benefits – What
Strategic Benefits – What > ELEMENT FINANCIAL (Current Business) ELEMENT FLEET MANAGEMENT + ELEMENT COMMERCIAL ASSET MANAGEMENT 1. Focused and Independent • Commercial Lending Business • Operating Business • Fund Management Business Businesses ‒ Service/Fee Revenue ‒ Investors Requirement for ‒ Targ
Slide 18: Separation Update: Element Fleet Management and Board
Separation Update Element Fleet – Management and Board Announcements ● Richard Venn – Chairman ● Steven Hudson – Board Member ● Bradley Nullmeyer – CEO ● Michel Béland – CFO ● Karen Martin – Treasurer ● Daniel Jauernig – President & COO ● Kristi Webb – CEO of North American Fleet ● Jim Halliday – EV
Slide 19: Separation Update: Commercial Finance Management and Board
Separation Update Commercial Finance – Management and Board Announcements ● Bill Lovatt – Chairman ● Bradley Nullmeyer – Board Member ● Steve Hudson – CEO ● Jim Nikopoulos – Sr. Vice President & General Counsel ● TBD – Chief Financial Officer ● AVIATION & RAIL FINANCE — David McKerroll – President —
Slide 20: Separation Update: Proposed Timetable
Separation Update Proposed Timetable Item Date Press release announcing separation February 16, 2016 Separation Q&A announcing governance structure and management teams April 5, 2016 Appointment of Board Ad Hoc Committee to oversee separation process April 5, 2016 Q1 2016 Earnings Release (including
Slide 21: Bradley Nullmeyer, CEO Element Fleet
Bradley Nullmeyer Chief Executive Officer Element Fleet 21 Element Financial Corporation elementcorp.com
Slide 22: Element Fleet, June 2016
ELEMENT FLEET JUNE 2016 22 Element Financial Corporation elementcorp.com
Slide 23: Element Fleet: Strategic Vision – Fleet Management Overview
Element Fleet ● On separation, Element Fleet will be the largest publicly traded fleet management services company in the world ● More than 50% of Element Fleet’s revenue is now derived from service and fee revenue as Element Fleet continues to increase its technology service offerings ● Scale drive
Slide 24: Element Fleet: Category Leader, Quality Client Base
Element Fleet Category Leader Quality Client Base ● #1 fleet management company in ● Diversified, high-quality, long- High levels of satisfaction North America tenured base of commercial yield long-term customer customers ● Scalable platform providing relationships innovative, end-to-end services an
Slide 25: Element Fleet Service Offerings
Element Fleet Service Offerings Acquisition Remarketing Financing Personal Usage Title, Licensing & Expense & Registration Rental Services Telematics Fuel Services Risk & Safety Managed Accident Maintenance Management Tolls, Violations & Compliance 25 Element Financial Corporation
Slide 26: The Element-Arval Alliance
The Element-Arval Alliance Delivering global capabilities across 47+ countries Austria CANADA Belgium Montreal Brazil Mississauga Czech Republic Calgary China Edmonton Denmark Vancouver Finland France USA Germany Japan Sparks Greece Thailand Minneapolis Hungary Houston India Plantation Italy Denver
Slide 27: A Leading Service Company
Element Fleet is a leading provider of global fleet management services A Leading "Service Company” 27
Slide 28: Steven Hudson, CEO Commercial Finance
Steven Hudson Chief Executive Officer Commercial Finance 28
Slide 29: Commercial Finance Highlights
Commercial Finance Highlights • Transition Commercial Finance into an integrated structuring, advisory and asset Total Earning Assets $, millions management business 10,000 • Rail originations from Trinity program and Rail Commercial & Vendor Aviation ECAF 9,000 direct program deferred (i.e. tempora
Slide 30: Aviation: Transition to Asset Manager Well Advanced
Commercial Finance Aviation: Transition to Asset Manager Well Advanced Transportation ECAF I ECAF II Fund I ECAF I ECAF II Transportation Fund I • Closed June 2015 • Target launch Q3 2016 • Target launch late 2016 • US$ 1.6 billion • US$ 1.1 billion • US$ 0.5 billion • 48 commercial aircraft • Comme
Slide 31: Questions
Questions Element Financial Corporation elementcorp.com