Finning International Inc. · TSX:FTT

Finning International — Investor Presentation (June 2015)

16 slides from Finning International's investor presentation, Jun 4, 2015

  1. Slide 1: Investor Presentation

    INVESTOR PRESENTATION Scott Thomson, President & CEO Steve Nielsen, EVP & CFO Mauk Breukels, VP Investor Relations & Corporate Affairs Montreal, Toronto June 4-5, 2015

  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: Overview of Finning International

    Overview of Finning International  World’s largest Caterpillar dealer  We sell, rent and provide parts and service for Caterpillar equipment and engines Yukon The Northwest  Serving customers for over 80 years and delivering value to public Territories shareholders for over 45 years  Operating i

  4. Slide 4: Finning Update

    Finning Update 1 Challenging macro environment; however, many areas of strength  Challenges and volatility in global commodity prices  Strong conviction that we have high-quality territories with great long-term opportunities  Each region has multiple areas of strength and diverse customer base 

  5. Slide 5: Economic Growth by Region

    Economic Growth by Region GDP Growth Forecast (1) 4.2% 3.4% 3.2% 3.5% 2014A 2.9% 2.6% 2.5% 2.4% 2015E 1.9% 1.9% 1.9% 1.7% 1.5% 2.5% 2016E 0.5% 2015E (1 Year Ago) (0.7%) Western Canada Chile Argentina U.K. Credit Rating  AAA  AA–  CCC+  AAA (S&P) (2) Macro  Oil & gas  Copper  Political  Coal

  6. Slide 6: Taking Action – Safe, Engaged, Inspired Team

    Taking Action – Safe, Engaged, Inspired Team Category Actions Statistics  Global best practices TRIF(1) 2013 2014 % Change  Aligned on Life Saving Rules Finning Int’l 0.99 0.75 25% Focus on  Pre-task hazard assessment for all jobs Canada 1.69 1.16 31% Safety  Highest personal protective equipmen

  7. Slide 7: Taking Action – Cost Reductions

    Taking Action – Cost Reductions NAVIGATING DOWNTURN Workforce reductions Canada EBIT Margin 7.0% 6.5% Decisive actions to reduce cost structure  Headcount  ~10% in Canada and 6.0% and maintain profitability during lower South America 5.8% 6.0% market activity  Workforce optimization in all region

  8. Slide 8: Taking Action – Asset Utilization & Capital Discipline

    Taking Action – Asset Utilization & Capital Discipline Canada Facilities Map Capital Discipline ($ millions) (1) Facility Closures YT 300 Branch NT Depot The Cat Rental Store 200 Hay River Fort Nelson Finning Locations BC AB 100 Tumbler Ridge Whitecourt Edson Drayton Valley Hinton Edmonton(2) Squami

  9. Slide 9: Strong Free Cash Flow and Balance Sheet

    Strong Free Cash Flow and Balance Sheet Free Cash Flow ($ millions) Net Debt to Invested Capital (%) 500 ($37) $441 $483 400 53 52 51 51 50 300 48 47 200 43 41 41 100 39 36 0 31 -100 -200 -300 Q1/12 Q2/12 Q3/12 Q4/12 Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 Q1/12 Q2/12 Q3/12 Q4/12 Q1/13

  10. Slide 10: Capturing Strategic & Financial Opportunities

    Capturing Strategic & Financial Opportunities Category Details  Acquisition of Saskatchewan dealership  Contiguous territory that creates growth opportunities and benefits for customers and employees Acquisition  $230 million purchase price funded with cash  Immediately accretive to earnings per

  11. Slide 11: Acquisition of Caterpillar Dealer in Saskatchewan

    ACQUISITION OF CATERPILLAR DEALER IN SASKATCHEWAN

  12. Slide 12: Transaction Overview

    Transaction Overview  Kramer family to retire after a remarkable 70 years of service  Finning to purchase the operating assets of the Caterpillar dealership of Kramer Ltd.  Finning to become the approved Caterpillar dealer in Saskatchewan in July 2015, subject to customary closing conditions  Sa

  13. Slide 13: Compelling Strategic Rationale

    Compelling Strategic Rationale  Contiguous Caterpillar dealership in a highly attractive growth territory  Significant customer overlap and opportunity to create seamless relationships across Saskatchewan, Alberta and British Columbia  Opportunity to leverage distinct economic, cultural and geolo

  14. Slide 14: Leverages Product Support Capabilities

    Leverages Product Support Capabilities  Highly complementary business in contiguous territory  Leverages product support Fort McKay Service Facility infrastructure and capabilities along Alberta and Saskatchewan border Fort McMurray  Customers will benefit from improved equipment and parts availa

  15. Slide 15: Highly Connected Western Canadian Market

    Highly Connected Western Canadian Market  Leverages distinct economic, cultural & geological ties and trade flows across Western Canada Northwest Territories Horn River British Alberta Athabasca Basin Manitoba Uranium Columbia Montney Fort Fort St. Peace River McMurray Oil Sands John Athabasca Oil

  16. Slide 16: Strong Long-Term Growth Opportunities

    Strong Long-Term Growth Opportunities  Diversifies Finning’s revenue base into highly attractive Saskatchewan GDP by Industry (2) growth territory Mining, Oil & Other Gas 23%  Strong provincial economy driven by natural resource 21% extraction and agriculture Public Administration (1) 6%  2015 GD

Finning International — Investor Presentation (June 2015) on 6ix