Canadian National Railway Company · TSX:CNR
Canadian National Railway — Q4 2020 Earnings Presentation
17 slides from Canadian National Railway's earnings presentation, Jan 26, 2021
Slide 1: Fourth Quarter and Full Year 2020 Financial Results
Fourth Quarter and Full Year 2020 Financial Results January 26, 2021 TSX: CNR NYSE: CNI
Slide 2: Forward-Looking Statements
Forward-Looking Statements Certain statements included in this presentation constitute "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995 and under Canadian securities laws. By their nature, forward-looking statements involve risks,
Slide 3: JJ Ruest, President and Chief Executive Officer
JJ Ruest President and Chief Executive Officer
Slide 4: Q4 Highlights – Strong Finish to a Challenging Year
Q4 Highlights – Strong Finish to a Challenging Year Diluted EPS Operating Ratio Revenues $1.43 61.4% $3.66B 17% 460 bps 14% (adjusted) (1) 380 bps (adjusted) (1) 2% YTD Free Cash Flow (1) Fuel Efficiency (2) RTMs $3,227M 0.89 63.2B 62% 6% 10% ~$25M savings, 115k tons of CO2 avoided (
Slide 5: Rob Reilly, Executive VP and Chief Operating Officer
Rob Reilly Executive VP and Chief Operating Officer
Slide 6: Entering 2021 with a Fluid and Efficient Network
Entering 2021 with a Fluid and Efficient Network Workload 9% Train Length 2% Through Dwell 1% Total GTMs, billions vs Q4-19 In feet vs Q4-19 Entire railroad, hours vs Q4-19 125.3 8,886 8,987 9.6 8.1 8.3 8.4 8.0 115.0 8,514 114.0 113.7 8,371 7,977 102.4 Q4-19 Q1-20 Q2-20 Q3-20 Q4-20 Q4-19 Q1-20
Slide 7: Continuing to Drive Productivity and Cost Saving Initiatives
Continuing to Drive Productivity and Cost Saving Initiatives Industry-Leading Operational Productivity Safety as a Core Value Locomotive Fuel Efficiency Initiatives • Direct savings of ~$60M and ~275K • Safety performance improved in • Absorbing additional volumes at low tons of CO2 emissions avoide
Slide 8: James Cairns and Keith Reardon
James Cairns Senior VP, Rail Centric Supply Chain Keith Reardon Senior VP, Consumer Product Supply Chain
Slide 9: Demand Recovery Expected to Continue
Demand Recovery Expected to Continue Focus on yield management Rail Centric – Overall industrial production improving Consumer Products – Continued strength in while energy sector remains challenged consumer spending and inventory restocking Grain and Fertilizers International intermodal market • Re
Slide 10: Ghislain Houle, Executive VP and Chief Financial Officer
Ghislain Houle Executive VP and Chief Financial Officer
Slide 11: Q4 Earnings – Volume Momentum Driving Solid Performance
Q4 Earnings – Volume Momentum Driving Solid Performance Change Favorable In millions of Canadian dollars, except EPS data, unless otherwise indicated 2020) 2019) (Unfavorable) Revenues $ 3,656) $ 3,584) 2% Operating expenses 2,245) 2,366) Operating income 1,411) 1,218) 16% Interest expense (134) (13
Slide 12: Q4 Operating Expenses – Tightly Managed Costs
Q4 Operating Expenses – Tightly Managed Costs Change at constant Change currency (1) In millions of Canadian dollars, unless Favorable Favorable otherwise indicated 2020 2019 (Unfavorable) (Unfavorable) Labor and fringe benefits $ 755 $ 749 (1%) (1%) Higher incentive compensation and pension expense
Slide 13: Unprecedented Year with Pandemic Followed by Uneven Recovery
Unprecedented Year with Pandemic Followed by Uneven Recovery Demonstrating the resiliency of our franchise Change Favorable In millions of Canadian dollars, except EPS data, unless otherwise indicated 2020) 2019) (Unfavorable) Revenues $ 13,819) $ 14,917) (7%) Operating expenses 9,042) 9,324) Operat
Slide 14: Delivered Record Free Cash Flow in 2020
Delivered Record Free Cash Flow in 2020 In millions of Canadian dollars, unless otherwise indicated YTD 2020) Strong Balance Sheet is a Competitive Advantage Net income $ 3,562) Non-cash adjustments 2,562 Continual access to low cost financing supports steady reinvestment and enables strategic agend
Slide 15: 2021 Financial Outlook
2021 Financial Outlook (1) • Targeting to deliver adjusted diluted EPS growth in the high single- digit range versus 2020 adjusted diluted EPS of $5.31 based on: (2) • Mid single-digit volume growth in terms of RTMs • Overall pricing above rail inflation at a minimum • Canadian to U.S. dollar exchan
Slide 16: JJ Ruest, President and Chief Executive Officer
JJ Ruest President and Chief Executive Officer
Slide 17: Clear Focus Ahead
Clear Focus Ahead • Managing yield and driving productivity • Generating steady and solid free cash flow • Leading to bring technology into rail operations and customer experience • Remaining mindful of industry long-term disruptors • Solid and broad agenda on ESG Driving sustainable, profitable gro
Canadian National Railway Company — Q4 2020 Earnings Presentation on 6ix