Finning International Inc. · TSX:FTT
Finning International — Investor Day (December 2004)
27 slides from Finning International's investor day presentation, Dec 14, 2004
Slide 1: Investor Day
Investor Day December 14, 2004 Ian Reid President Finning (Canada)
Slide 2: Finning (Canada)
Finning (Canada) Caterpillar equipment sales, rentals, customer support services Key sectors: mining, construction, oil & gas, forestry, government and pipeline Employees: 2,900 Yukon Locations: 85 Northwest Territories 2003 revenue: $1.46B 2004 LTM* revenue: $1.48B British Alberta “best
Slide 3: Finning (Canada) Opportunities
Finning (Canada) Opportunities “Typical” high potential industries: mining, forestry, petroleum, construction, agriculture, etc. Large and difficult geography - opportunity to differentiate our service offering Extremes of weather and abrasion - parts & service consumption PLUS additional hi
Slide 4: Review of 2004 - Highlights
Review of 2004 - Highlights Forecasting to meet/exceed EBIT target despite Product availability and reliability challenges Lack of major oil sands deliveries (mining revenue down 50%) Growth in Compact Product and The CAT Rental Stores Corporate restructure/enhanced sales focus on major in
Slide 5: Infrastructure & Roads - Alberta
Infrastructure & Roads - Alberta Primary projects include the North/South trade corridor between Edmonton and Calgary, provincial highway rehabilitation projects, and the Edmonton & Calgary ring road projects Contractor demand for new & used equipment is extremely high in all sectors Road cons
Slide 6: Infrastructure & Roads - BC
Infrastructure & Roads - BC $6.5B initiated over 4 years 3 year capital program Significant program to deliver
Slide 7: Petroleum Well Completion Forecast
Petroleum Well Completion Forecast Western Canadian Completed Wells 2004 - 21,312 25000 20000 2005 - 24,205 15000 10000 5000 0 05 04 03 02 01 00 99 98 97 96 95 94 93 92 91 90 89 88 87 86 85 84 83 Year
Slide 8: North American Oil Reserves Remaining
North American Oil Reserves Remaining as of December 31, 2001 Reference: (EUB) (CAPP) (IPE) (US DOE)
Slide 9: Forest Industry
Forest Industry Alberta market share ‘04 YTD increased 22% over 2003… increased 80% over 2001 BC coastal forestry market share exceeds 50% as new CAT products meet customer expectations and industry moves to mechanized harvesting methods Skidder sales increase 47% in 2003, 60% in 2004 and fore
Slide 10: Forest Industry
Forest Industry BC annual allowable cut (69Mcm/1.5M log truck loads) increased 15% due to mountain pine beetle infestation of 4 to 5 million hectares of interior forests
Slide 11: Mining – Hot in all parts of Territory!
Mining – Hot in all parts of Territory! Diamond Mine Expansion BC Mines Rebound! Oilsands Whitehorse Yellowknife Mountain Coal (Metallurgical) Edmonton Yukon Vancouver Metals Prairie Coal (Thermal)
Slide 12: Oil Sands – Opportunities Overview
Oil Sands – Opportunities Overview “The greatest concentration of economic development in the world today” Oil Sands Reserves Athabasca, Cold Lake & Peace River oil sand deposits contain 1.7 - 2.5 trillion barrels of bitumen Athabasca deposit is the world’s largest single oil deposit at 1.3 tr
Slide 13: Oil Sands – Growth Opportunities
Oil Sands – Growth Opportunities $87B of projects in place or announced $46B of new projects/expansions announced $33B of conventional oil sands (truck and shovel) $13B of SAGD (not as big an opportunity) Total industry opportunity through 2012 based on current growth projections and equip
Slide 14: Oil Sands – Investors
Oil Sands - Investors SUNCOR Syecrude x Sy AlbiansAnpbs ENERGY _ _ ConocoPhillips 4 T OU LD | Canadian Natural ransAlta PETRO-CANADA . ENCANA. nexen ImperialOi = SO 2 a DEER CREEK S) Synenco Energy Inc E Terasen = 5 Pipelines SE OPTI Hk CANADA INC. ATCO Ze NBRIDGE eens iC DECVOW &s MEG Energy Corp.
Slide 15: Oil Sands – Oil Production
Oil Sands – Oil Production 2004 800,000 b/d + including SAGD Syncrude 2004 255,000 b/d 2007 360,000 b/d 2008/09 500,000 b/d Suncor 2004 255,000 b/d 2008 450,000 d/b (incl. SAGD) 2010/12 550,000 b/d (incl. SAGD) Albian 2002/03 155,000 b/d 2005/10 525,000 b/d Exxon/Mobil 2010 Kearl Lake Deer
Slide 16: Oil Sands – Leases
Oil Sands – Leases Kearl Lake - Exxon CNRL Deer Creek Albian
Slide 17: Billions of Barrels
Comparative Oil Reserves 311** 265 Billions of Barrels 177* 3 22 Canada U.S. Alberta Saudi Canada Conventional Conventional Total Arabia Oil Sands 1.7 Trillion Barrels estimated to be in place in Alberta’s oil sands *177 Billion Barrels – established “reserves” **311 Billion Barrels - ultimately rec
Slide 18: Oilsands – 797's World's Largest Fleet!
Oilsands – 84 797’s World’s Largest Fleet!
Slide 19: Alberta Government Oil Sands Revenue
Alberta Government Oil Sands Revenue 3,500 3,000 2,500 $ Millions 2,000 1,500 1,000 500 0 98 00 02 04 06 08 10 12 14 16 18 20 22 24 Royalties AB Corporate Tax Personal Income Tax * Assumption; long range crude oil prices of $20 U.S./bbl. Source: Nichols Applied Management
Slide 20: Diamonds
Diamonds
Slide 21: Diamonds
Diamonds econ © Wresvip ist wr —. ere Lake tena ae di 9 os, aD Fax Pit wringer
Slide 22: Pipeline Projects Mackenzie / Alaska / Alberta
Pipeline Projects Mackenzie / Alaska / Alberta Expansion / Integration / Maintenance TransCanada Mackenzie Alaska B2C Expansion
Slide 23: Enbridge – Proposed Gateway Pipeline
Enbridge – Proposed Gateway Pipeline
Slide 24: Terasen – Trans Mountain Expansion
Terasen – Trans Mountain Expansion
Slide 25: Cost Savings Initiatives
Cost Savings Initiatives “$60 million by ’06” Finning (Canada) is committed to driving operating excellence through Six Sigma Full time resources, committed leadership and consistently applying Six Sigma tools are the foundation for long-term savings 2005 savings for the first 8 projects is
Slide 26: Competitive and Strategic Differentiation
Competitive and Strategic Differentiation (see appendix for details) Investment in People Finning (Canada) leads the industry in safety Recruitment and training of technicians for the future. CAT “THINK BIG” program…first in Canada Investment in Facilities Closure and outsourcing of major comp
Slide 27: Summary
Summary Opportunity and Outlook All major sectors remain strong Stable governments with improved finances Product support focus of the past paying annuities with record parts & service levels New initiatives and strategies further widening the gap from competition Challenges and Risks Stro