Element Fleet Management Corporation · TSX:EFN
Element Fleet Management — Q3 2017 Earnings Presentation
30 slides from Element Fleet Management's earnings presentation, 2017
Slide 1: Q3-2017 Review & Financial Results
Q3-2017 Review & Financial Results Element Fleet Management Element Fleet Management Q3-2017 Earnings Call
Slide 2: Agenda
Agenda • Growing in Core Fleet • Q3 Highlights • Operations Update • Financial Review Element Fleet Management Q3-2017 Earnings Call 2
Slide 3: Growing in Core Fleet
Bradley Nullmeyer CEO Growing in Core Fleet Element Fleet Management Q3-2017 Earnings Call
Slide 4: Growing in Core Fleet
Growing in Core Fleet Element Fleet Management Corp. (TSX:EFN) Element Fleet Management is a leading global fleet management company, providing world class services and financing for commercial vehicle fleets • Market leadership in North America and an industry leading position in Australia and New
Slide 5: Global Capabilities
Global Capabilities 3+ Million Vehicles Element Fleet Management Q3-2017 Earnings Call 5
Slide 6: Q3 Highlights: Core Fleet
Q3 Highlights Core Fleet • Core Adjusted Basic EPS of $0.18 ($0.19 EPS assuming FX rate from Q2) • FY 2017 Core Fleet guidance of $0.71 to $0.73 reiterated • Solid originations of $1.4B, up 6% vs. Q3/2016 • Completed US$1 billion ABS offering at historic low spread (US$3.2B year to date) ‒ Programma
Slide 7: Q3 Highlights: Non-Core Assets
Q3 Highlights Non-Core Assets • Executed strategy to maximize value for non-Core assets (~$1.0B of assets, 6% of total) ‒ Sold 60% of HD Trucks segment for $138M, above book ‒ Sold 100% of Rail Notes, above book ‒ ECAF investment and NZ equipment finance portfolio continue to perform • Continue to e
Slide 8: Operations Update
Daniel Jauernig President and COO Operations Update Element Fleet Management Q3-2017 Earnings Call
Slide 9: Non-Core Assets
Non-Core Assets 19th Capital • Our goal with the non-core 19th Capital joint venture is to maximize the value of our investment in the JV and use the capital received from these initiatives to optimize Element’s capital structure • 19th Capital continues to dispose of older inefficient HD trucks, th
Slide 10: Core Fleet Business Update
Core Fleet Business Update • Average earning assets, on a currency neutral basis, grew by 2.7% compared to Q2/2017 • Originations in Q3/2017 were $1.44B, up 6% compared to $1.36B in Q3/2016 • Post integration issues have largely been resolved, we are now focused on optimizing our processes and syste
Slide 11: GM Maven Partnership
GM Maven Partnership Urban Mobility • GM Urban Mobility’s Maven initiative is a leader in on-demand vehicle access − Fastest growing Mobility brand in North America • Maven’s Key Needs: − Increase rental utilization to meet growing member demand − On-demand, reliable access to cars is key to member
Slide 12: Splend Partnership
Splend Partnership On-demand Ride Share • Element is partnering with successful suppliers of vehicle management to the ride sharing industry by providing its comprehensive fleet management services • Splend is an Australian based supplier of vehicles and services to on-demand ride sharing and delive
Slide 13: Integrated Scheduling
Integrated Scheduling Through Driver Apps Helps drivers easily tackle fleet task, whenever and wherever Element Fleet Management Q3-2017 Earnings Call 13
Slide 14: Real-Time Customer Support
Real-Time Customer Support Live data views Customized 3D Vehicle Map Fuel Station Locator Hurricane Harvey – All Inventories Hurricane Irma – Miami Area Garage locations of vehicles to aid client’s Fleet managers Active gas stations as of Sept 7, 2017 in preparation for storm Element Fleet Managemen
Slide 15: Fleet Roundtable
Fleet Roundtable #PoweredByPeople Attendee Satisfaction New to Roundtable Tech Education (Xcelerate) Customers/Prospects 94% 38% 98% +20% ATTENDANCE Social Engagement Top Rated Content 5 TECHNOLOGY TRENDS 8,238 19,000 DISRUPTIVE SHIFTS IN TWITTER LINKEDIN AUTOMOTIVE TRENDS Element Fleet Management Q
Slide 16: Review of Financial Results
Samir Zabaneh CFO Review of Financial Results Element Fleet Management Q3-2017 Earnings Call
Slide 17: Adjusted Earnings Per Share
Adjusted Earnings Per Share As of and for the three months ended Sept. 30, 2017 Adjusted Basic EPS Q3 2016 Q1 2017 Q2 2017 Q3 2017 Fleet Management $0.20 $0.18 $0.18 $0.18 Non-core assets $0.05 $0.06 $0.05 $0.03 Total $0.25 $0.24 $0.23 $0.21 Adjusted Basic EPS (constant currency) Q3 2016 Q1 2017 Q2
Slide 18: Key Operating Metrics
Key Operating Metrics As of and for the three months ended Sept. 30, 2017 In millions, except per share amounts and where otherwise noted Core Fleet Non-Core Total Management Assets Average net earning assets $12,130.8 $1,143.5 $13,274.3 Average interim funding $985.0 - $985.0 Average funded assets
Slide 19: Core Fleet Management Net Revenue
Core Fleet Management Net Revenue Net Revenue Summary In millions, except per share amounts and where otherwise noted Net Revenue Q3 2016 Q2 2017 Q3 2017 Service and other revenue $142.8 $143.4 $134.9 Net interest and rental revenue $83.5 $81.1 $84.2 Total net revenue $226.3 $224.5 $219.1 Net Revenu
Slide 20: Core Fleet Management Net Revenue: Yield
Core Fleet Management Net Revenue Yield to Average Earning Assets In millions, except per share amounts and where otherwise noted Q3 2016 Q2 2017 Q3 2017 Net interest and rental revenue $83.5 $81.1 $84.2 Average earning assets $12,807.5 $12,447.9 $12,130.8 Net interest and rental revenue margin 2.61
Slide 21: Consolidated Adjusted Operating Expenses
Consolidated Adjusted Operating Expenses In millions, except per share amounts and where otherwise noted Category Q3 2016 Q2 2017 Q3 2017 Salaries, wages and $75.8 $79.3 $80.8 benefits General and administrative $43.3 $43.8 $39.0 expenses Total adjusted operating $119.1 $123.1 $119.8 expenses % of n
Slide 22: Non-Core Assets
Non-Core Assets Net Revenue Summary In millions, except per share amounts and where otherwise noted Net Revenue Q3 2016 Q2 2017 Q3 2017 Service and other revenue $0.4 $10.2 $6.2 Net interest and rental revenue $19.1 $12.9 $11.0 Total net revenue $19.4 $23.1 $17.2 Yield to Average Earning Assets Q3 2
Slide 23: Non-Core Assets Total Assets
Non-Core Assets Total Assets In millions, except per share amounts and where otherwise noted June 30, Sept. 30, Category Description 2017 2017 19th Capital Group LLC Senior term loans (A&B) and revolver equipment loan $824.5 $777.2 19th Capital Group LLC Equity ownership (49.99%) $81.4 $69.0 32.5% i
Slide 24: Treasury Update
Treasury Update Balance Sheet Capacity to Fund Planned Growth • Committed facilities (available & outstanding) amounted to $17.9B as of $30 September 30, 2017 $25 • At September 30, 2017, $20 BILLIONS Element had $4.6B in available financing to fund $15 ongoing originations $10 • Committed facilitie
Slide 25: Growing in Core Fleet
Bradley Nullmeyer CEO Growing in Core Fleet Element Fleet Management Q3-2017 Earnings Call
Slide 26: Growing in Core Fleet: The Future of Fleet Management
Growing in Core Fleet The Future of Fleet Management • Delivered $0.18 EPS in quarter from Core Fleet • Core business continues to perform with new customers and completion of post-integration work • ABS platform largest in industry and now regular programmatic issuer • Investment in technology and
Slide 27: Questions
QUESTIONS Element Fleet Management Q3-2017 Earnings Call
Slide 28: Appendix
Appendix Element Fleet Management Q3-2017 Earnings Call
Slide 29: Consolidated Revenue and Income
Consolidated Revenue and Income Constant Currency Basis For the three months ended For the nine months ended Sept 30, June 30, Sept. 30, Sept. 30, Sept. 30, In $000s for stated values 2016 2017 2017 2016 2017 Fleet Management net revenue 219,537 213,442 219,066 670,013 655,521 Non-core net revenue 1
Slide 30: Fleet Management Revenue Mix
Fleet Management Revenue Mix 60%+ Recurring Service Revenue % of Net Revenue Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Service and other revenue 63.1% 62.2% 60.6% 63.9% 61.6% Net interest and rental revenue 36.9% 37.8% 39.4% 36.1% 38.4% We expect service-related revenues to comprise a majority of cash
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