Finning International Inc. · TSX:FTT
Finning International — Investor Presentation (October 2008)
11 slides from Finning International's investor presentation, October 2008
Slide 1: OEM Remanufacturing
OEM Remanufacturing Scott McLaughlan, President Investor Presentation October 2008
Slide 2: The Reman Business Model
The Reman Business Model End-of-life Advanced New part Assemble & component salvage content test technology Definition: return end-of-life components to same as new condition in a manufacturing environment. » Profitability consistent with traditional parts & service business.
Slide 3: Competitive Landscape
Competitive Landscape End-of-life Advanced New part Assemble & component salvage content test technology • Rebuild, recondition, repair…not remanufacturing ◦ Job shop, dependent on high skill, cannot easily scale ◦ Some components only available as new • Limited/no salvage: must re-use parts to be c
Slide 4: Value Proposition
Value Proposition • Reman components reduce equipment owning & operating costs ◦ Cost/hour, cost/ton etc… • Performance & service life equal to new at a fraction of the cost ◦ Typically 50% to 75% the cost of new ◦ Lower priced components exist, but cost more over the long-term • Critical customer r
Slide 5: O & O Cycle
O & O Cycle Higher volume drives efficiencies that further reduce O & O costs Reman sells machines by reducing owning & operating costs Higher machine populations generate more reman business
Slide 6: Sizing the Opportunity
Sizing the Opportunity • Mining and heavy construction customers ◦ Purchase based on owning & operating cost expectations ◦ Value low owning & operating cost more than initial price • Equipment overhauls from Center of Excellence ◦ 100 machines = $15MM component revenue • Salvage ◦ Partnership with
Slide 7: Sizing the Opportunity
Sizing the Opportunity • Mining & heavy construction is primary growth driver 1 797 = $1MM in component reman • Oilsands opportunity: every 2 years 2008 Units Projected to Total Market Dec 31 2008 Projected to 2013 CAT Total Total Units 797 Sized Trucks ** 172 297 577 793 Sized Trucks 119 129 238 77
Slide 8: Sizing the Opportunity
Sizing the Opportunity 46 units/wk Weekly Sales of Major Components average in 2008 70 60 50 17 units/wk average in 2005 Unit Sales 40 30 20 10 0
Slide 9: Monetize the Opportunity
Monetize the Opportunity Availability of reman allows MARC contracts Capital Investment •Cranes, test stands, salvage •Technology advancement Availability •$100MM component inventory BARRIERS MARC Aftermarket Contracts Quality & Reliability •Highly technical component •High cost of failure Single So
Slide 10: Delivering the Value Proposition
Delivering the Value Proposition AVAILABILITY QUALITY & RELIABILITY • $100MM component asset • 5 contamination control • 90% on-the-shelf available • ISO 9001:2000 certified • Integrated planning process • Component testing - Customer, OEM, Cat • Defined product improvement process SERVICE COST EF
Slide 11: Capturing the Opportunity
Capturing the Opportunity • Facility designed for 2012 volume ◦ Current demand originates from machines sold in 2006/7 ◦ Expecting 30% growth in both 2009 & 2010 797 Growth Year Population YoY P2Yr Avg. 2006 95 20.3% -- 2007 105 10.5% 15.0% 2008 155 50.5% 15.4% 2009 197 24.7% 30.5% 2010 225 14.2% 37
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