Finning International Inc. · TSX:FTT
Finning International — Shareholder Meeting (May 2006)
35 slides from Finning International's shareholder meeting presentation, May 10, 2006
Slide 1: Annual General Meeting
Annual General Meeting May 10, 2006
Slide 2: Conrad Pinette, Chairman of the Board
Annual General Meeting May 10, 2006 Conrad Pinette Chairman of the Board
Slide 3: Board of Directors
Board of Directors Conrad Pinette Donald O’Sullivan Ricardo Bacarreza Andrew Simon Jim Dinning Doug Whitehead Tim Howden John Willson Jeff Mooney
Slide 4: Annual General Meeting
Annual General Meeting May 10, 2006
Slide 5: Doug Whitehead, President & CEO
Annual General Meeting May 10, 2006 Doug Whitehead President & CEO
Slide 6: Presentation Agenda
Presentation Agenda 2005 and Q1 2006 achievements Financial review Outlook Q&A
Slide 7: Forward-Looking Statements
Forward-Looking Statements This presentation contains forward-looking statements and information which reflect the current view of Finning International Inc. ("Finning" or the "Company") with respect to future events and financial performance. Any such forward-looking statements are subject to risks
Slide 8: 2005 - A Strong Year
2005 - A Strong Year Very strong market conditions in 2005 Exceptional performance in Canada and South America driven by strong commodity markets Sales of new equipment up by 33% Provides foundation for increasing parts and service revenues and future profitability
Slide 9: 2005 - Highlights
2005 - Highlights Record revenue - over $4.8B Second year of 16% year-over-year growth Record earnings and cash flow Dividend increased to $0.13 per quarter
Slide 10: 2005 - Meeting Demand
2005 - Meeting Demand Peak demand from customers Tight supply for equipment and parts Shortage of skilled labour Finning employees met the challenge
Slide 11: Q1 2006 Highlights
Q1 2006 Highlights Record order backlog - over $1B Record Q1 revenue - $1.2B up $91M from ‘05 Record Q1 net income - $56.9M up $20M from ‘05 Record Q1 EPS - $0.64 up $0.22 from ‘05 EPS excluding gains - $0.54 up $0.12 from ‘05 Continued challenges from strong C$ and tight supply of equipment, parts
Slide 12: Canada
Canada Capitalized on strong demand from all sectors to deliver over $2B in revenues and $150M in EBIT in ‘05 Robust resource sector promises continued growth Established new OEM Remanufacturing business Edmonton Vancouver (Corporate Headquarters)
Slide 13: South America
South America Contributed over $1B in revenue and over $95M in EBIT in ‘05 Continued strength of mining sector supporting general and infrastructure Santiago construction
Slide 14: UK Operations
UK Operations Revenue increased to over $1.1B up 8% in ’05 Gains from construction and power systems offset by materials handling Cost savings programs gaining traction Q1 ‘06 EBIT contribution almost doubled from ‘05 Cannock
Slide 15: Hewden
Hewden Steady progress in ‘05 Revenue gain offset by foreign exchange impact Glasgow Streamlined operations delivering lower costs and improved earnings Manchester
Slide 16: Power Systems
Power Systems* Very successful 2005 Revenue and EBIT both up by approximately 27% Target - $1B in revenue by 2008 Expect continued strong demand for engines and support services across all sectors * Power Systems results are reported within other Finning divisions
Slide 17: Annual General Meeting
Annual General Meeting May 10, 2006
Slide 18: Mike Waites, Executive VP & CFO
Annual General Meeting May 10, 2006 Mike Waites Executive VP & CFO
Slide 19: Revenue Growth
Revenue Growth $ billions 5 $4.8 G R = 14 % C A $4.2 4 $3.6 $3.2 $3.2 3 $2.5 2 1 0 2000 2001 2002 2003 2004 2005
Slide 20: Net Income
Net Income $ millions 180 =1 7% CAGR $164 160 140 $132 $132 120 $115 $104 100 80 $73 60 40 20 2000 2001 2002 2003 2004 2005
Slide 21: Earnings Per Share
Earnings Per Share $2.25 14% CAGR = $2.00 $1.85 $1.75 $1.72 $1.71 $1.50 $1.45 $1.37 $1.25 $1.00 $0.95 $0.75 $0.50 $0.25 0 2000 2001 2002 2003 2004 2005
Slide 22: Cash Flow
Cash Flow Cash flow after changes in working capital Free cash flow before dividends $ millions 600 500 $479 400 300 $247 200 $98 100 0 -100 -200 ($194) -300 2004 2005
Slide 23: Growing Dividend
Growing Dividend Dividend was increased 6 times since 2001 Annual indicated dividend - $0.52 per share 5 year CAGR = 21% $0.13 $0.12 $0.11 $0.10 $0.09 $0.08 $0.07 $0.06 $0.05 $0.04 $0.03 $0.02 $0.01 $0.00 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2001 2002 2003 2004 2005 2006
Slide 24: Focus On Costs
Focus On Costs Target - $60 million in annual cost savings by December 2006 Over 100 cost savings projects undertaken Achieved almost $47 million in ongoing annual savings
Slide 25: Financial Management
Financial Management Healthy balance sheet Debt to total capital - 46.6% as at Dec 31, 2005 $800 million credit facility with international syndicate of banks
Slide 26: Q1 2006 Results
Q1 2006 Results Q1 2006 Q1 2005 Change Revenue $1.24B $1.15B +8% Net Income $56.9M $37.4M +52% Basic EPS $0.64 $0.42 +52% EPS excluding significant gains $0.54 $0.42 +28% Cash Flow after w/c changes $136M $44M +206% Free Cash Flow before dividends $41M ($38M) +208%
Slide 27: Doug Whitehead, President & CEO
Annual General Meeting May 10, 2006 Doug Whitehead President & CEO
Slide 28: Consolidated Order Backlog
Consolidated Order Backlog C$ millions 1,200 1,000 800 600 400 200 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2003 2004 2005 2006
Slide 29: Outlook - Canada
Outlook - Canada High commodity prices driving rich and diverse resource sectors Solid general construction market Growing rental and remanufacturing businesses Booming Alberta oil sands creating strong demand
Slide 30: Outlook - South America
Outlook - South America Record copper and gold prices driving mine expansion Strong construction spending in Chile and Argentina Growing Caterpillar fleet driving high margin parts and service business
Slide 31: Outlook - Group UK Operations
Outlook - Group UK Operations Reasonable economic activity Continuing competitive challenges Focus on margin enhancement Working closely with CAT to build market share and enhance profitability
Slide 32: Driven to Outperform
Driven to Outperform FINnING
Slide 33: Annual General Meeting
Annual General Meeting May 10, 2006
Slide 34: Conrad Pinette, Chairman of the Board
Annual General Meeting May 10, 2006 Conrad Pinette Chairman of the Board
Slide 35: Annual General Meeting
Annual General Meeting May 10, 2006
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