Finning International Inc. · TSX:FTT
Finning International — Investor Day (December 2004)
12 slides from Finning International's investor day presentation, Dec 14, 2004
Slide 1: Investor Day
Investor Day December 14, 2004 Doug Whitehead President and Chief Executive Officer
Slide 2: Strategy
Strategy Leverage Caterpillar relationship Diversify by: Geography Industry served Revenue stream Grow parts, service, and rentals Enhances earnings stability and predictability Pursue prudent growth Organic growth plus strategic acquisitions Set and achieve challenging, but real
Slide 3: CAT Relationship
CAT Relationship We will be Caterpillar’s best global business partner, providing unrivalled services that earn customer loyalty
Slide 4: Geographic Diversification and Balance
Geographic Diversification and Balance FINNING FINNING FINNING HEWDEN POWER & (CANADA) (UK) LTD. SOUTH AMERICA STUART ENERGY SYSTEMS Revenue Revenue Revenue Revenue Revenue (30%) (22%) (19%) (17%) (12%) 9 months to Sept 30, 2004
Slide 5: End Market Diversification
End Market Diversification New Equipment Deliveries* Construction Forestry 27% 8% Power Petroleum 20% 6% Other 11% Mining 28% * New equipment deliveries for 9 months ended Sept. 30, 2004
Slide 6: Focus on Customers
Focus on Customers Develop customized solutions that boost customers’ return on equipment investment Lower customers’ total owning and operating costs over equipment lifespan Minimize customers’ risk of owning and operating equipment
Slide 7: Revenue Diversification
Revenue Diversification Sales Revenue = $2.3B Sales Revenue = $4B Rental Finance Rental 24% 3% 4% 55% Finance 39% 1% Parts and Service Parts and 32% Service 30% Equipment Equipment 45% 61% 1997 2004 LTM* * 12 months to Sept. 30, 2004
Slide 8: Gross Profit Stability
Gross Profit Stability Gross Profit = $609M Gross Profit = $1.2B Rental Finance Rental 5% 80% 9% 28% 69% Parts and Service Parts and 55% Service Finance 51% 1% Equipment Equipment 31% 20% 1997 2004 LTM* * 12 months to Sept. 30, 2004
Slide 9: Prudent, Consistent Growth
Prudent, Consistent Growth Organic growth plus strategic acquisitions Revenue C$ millions 4,000 Hewden (U.K.) 2001 3,500 Lex Harvey H. Leverton (U.K.) 2003 3,000 1997 2,500 Gildemeister (Chile) Bolivia 1993 2003 2,000 1,500 Bowmaker/Caledonian (U.K.) Argentina/Uruguay 1983 2003 1,000 500 R. Angus
Slide 10: Clear Performance Targets
Clear Performance Targets Set and achieve challenging, but realistic, financial and operating targets 15% revenue & earnings growth 20% return on equity 30% market share in core markets
Slide 11: Cost Savings Program
Cost Savings Program Target “$60 million by ’06” Hewden Stuart initiatives Disposition of non core assets Company-wide efficiencies
Slide 12: Value Proposition
Value Proposition Reliable earnings stream Diversified (geographies & customers) Large parts & service component Dividend to investors Growth Organic (from existing service areas) Prudent M&A transactions to supplement Maintain conservative financial position Don’t “bet the farm”