Finning International Inc. · TSX:FTT

Finning International — Investor Presentation (December 2014)

24 slides from Finning International's investor presentation, Dec 17, 2014

  1. Slide 1: Investor Update Toronto

    INVESTOR UPDATE Toronto December 17, 2014

  2. Slide 2: Forward Looking Information

    Forward Looking Information This report contains statements about the Company’s business outlook, objectives, plans, strategic priorities and other statements that are not historical facts. A statement Finning makes is forward-looking when it uses what the Company knows and expects today to make a s

  3. Slide 3: Compelling Value Proposition

    Compelling Value Proposition  Highly diversified business  Geography: Three unique, high-quality OECD regions  End markets: Serving a diversified spectrum of sectors and customers  Revenue mix: Balance between equipment sales and product support  Robust financial position  Profitable in all ye

  4. Slide 4: Diversification

    Diversification Geographic End Market Diversification Diversification *Other: agriculture, industrial Embedded Product Support Growth and government segments 4

  5. Slide 5: Strong Full-Cycle Growth

    Strong Full-Cycle Growth Consolidated New Equipment & Product Support Revenue 7,000 2% 7% (5%) 6,000 New Equipment 50% CAGR 5% 5,000 7% Average $2,547 27% (3%) Min $1,899 (32%) $Million 4,000 13% Product Support 3,000 4% 12% CAGR 11% 13% 2,000 13% 11% 0% 12% 18% 8% 1,000 0 2005 2006 2007 2008 2009 2

  6. Slide 6: Strong Full-Cycle Growth: Canada

    Strong Full-Cycle Growth Canada New Equipment & Product Support Revenue 2008 – 2014 Machine Population – Canada Compound Annual Growth Rate: 4% 3,500 10% New Equipment 3,000 10% (8%) 15% CAGR 6% 58% 797 Off-Highway Trucks 2,500 18% Average $1,255 39% Min $818 172 ➔ 287 (39%) (19%) 2,000 $Million 1,5

  7. Slide 7: South America - Case Study

    South America - Case Study Responding to Market Downturn YTD ended Sep 30, 2014 vs. YTD ended Sep 30, 2013(1) Part & Components Inventory  Total revenue 17% down 9%  Workforce 8% to 6,900 people  SG&A 13%  EBIT margin of 9.2%(2) vs. 9.4%  Equipment margin maintained  Net Capital Expenditure

  8. Slide 8: Strengthening Balance Sheet

    Strengthening Balance Sheet Net Debt to Invested Capital Ratio (%) Annual Dividends 0.6850 0.5975 0.55 0.51 0.47 0.43 0.44 0.36 0.28 0.20 0.22 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 8

  9. Slide 9: Talent Management

    Talent Management Right People in the Right Roles Scott Thomson President & CEO Neil Dickinson EVP & CFO Juan Carlos search in progress Managing Villegas Marcello Andy Supported by: Director, Finning President, Finning Marchese Fraser Dave Gillian UK & Ireland Anna Marks Cummings Platt Canada Presid

  10. Slide 10: Safety

    Safety  Safety is a core value  Strong executive leadership and visibility  Global Alignment  Incident Investigation protocol  Life Saving Rules  Personal Protective Equipment standards  Next Steps  3 year road map to achieve world class safety performance 4 TRIF(1) 3 Canada UK & Ireland 2 S

  11. Slide 11: Operational Priorities

    Operational Priorities Priorities will drive improved Return on Invested Capital (ROIC) Service Excellence Service Excellence Target ∆ 2013-2016  Drives lowest equipment owning and operating costs  Maximizes equipment uptime and improves customer loyalty Consolidated EBIT $ $40 – 60M  Increases

  12. Slide 12: Canada Progress Update

    CANADA PROGRESS UPDATE

  13. Slide 13: Talent Management

    Talent Management Juan Carlos Villegas President, Finning Canada & COO, Finning International Gary David Joel Cristian Chad Kevin John Mona Agnew Primrose Harrod Chavez Hiley Tatlow Pollesel Hale VP Strategy EVP Core SVP Power VP Operational SVP Human SVP Service SVP, Mining VP Finance & Solutions I

  14. Slide 14: Market Leadership

    Market Leadership Canada  Growing market share in non-mining through better execution; margins maintained  Better sales coverage – higher participation and closing of deals  Restructured incentive schemes motivate sales force  Improved forecasting capability and inventory quality: #1 CAT dealer

  15. Slide 15: Service Excellence

    Service Excellence New service model is being installed and sustained Service model install execution Prince George: large branch results (YTD ended Oct 31, 2014) – will be completed in 2015 Operational In Progress Scheduled Warranty Main Drivers of Service Bid Variance & Goodwill EBIT improvement 2

  16. Slide 16: Supply Chain

    Supply Chain Inventory Management  Parts service levels running at or above targets Supply Chain – Parts KPIs 2014 2013  Significant reduction in emergency orders 24 hour availability (%) 87 80  Significant improvement in Parts Net Promoter Score and customer satisfaction 72 hour availability (%)

  17. Slide 17: Asset Utilization

    Asset Utilization Allocating work and assets across facilities  Completed to date:  Shovels and Drills moved from its Fort McMurray location into Mildred Lake branch; vacated building subleased  Power Systems Fort McMurray moved into local branch; location vacated  Edmonton used equipment, power

  18. Slide 18: Progress Scorecard

    PROGRESS SCORECARD

  19. Slide 19: Focusing on the Metrics We Control

    Focusing on the Metrics We Control All priorities are linked directly to EBIT or Invested Capital 19

  20. Slide 20: Canada Progress Scorecard

    Canada Progress Scorecard EBIT(1) and ROIC(1) LTM 2014(2) LTM 2013(2) EBIT ($ millions) 279 257 EBIT margin (%) 7.8 7.8 Return on invested capital (%) 16.8 15.3 Invested Capital Q3 2014 Q2 2014 Q1 2014 Q4 2013 Q3 2013 Invested capital(3) ($ millions) 1,714 ↔ 1,756 1,682 1,488 1,716 Invested capital

  21. Slide 21: South America Progress Scorecard

    South America Progress Scorecard EBIT(1) and ROIC(1) LTM 2014(2) LTM 2013(2) EBIT ($ millions) 226 248 EBIT margin (%) 9.8 9.6 Return on invested capital (%) 16.7 17.9 Invested Capital Q3 2014 Q2 2014 Q1 2014 Q4 2013 Q3 2013 Invested capital(3) (C$ millions) 1,298  1,274 1,443 1,391 1,379 Invested

  22. Slide 22: UK & Ireland Progress Scorecard

    UK & Ireland Progress Scorecard EBIT(1) and ROIC(1) LTM 2014(2) LTM 2013(2) EBIT ($ millions) 53 44 EBIT margin (%) 5.1 5.1 Return on invested capital (%) 17.1 16.8 Invested Capital Q3 2014 Q2 2014 Q1 2014 Q4 2013 Q3 2013 Invested capital(3) (C$ millions) 344  309 296 265 268 Invested capital(3) (£

  23. Slide 23: Consolidated Progress Scorecard

    Progress Scorecard Consolidated EBIT(1), ROIC(1), FCF LTM 2014(2) LTM 2013(2) Market Share EBIT ($ millions) 525 513 Core Equipment(4)  3.6 points EBIT margin (%) 7.6 7.7 Power Systems Revenue –  28% Canada(5) Return on invested capital (%) 15.9 15.5 Free Cash Flow ($ millions) 463 321 Invested Ca

  24. Slide 24: Investor Update Toronto

    INVESTOR UPDATE Toronto December 17, 2014

Finning International — Investor Presentation (December 2014) on 6ix