Element Fleet Management Corporation · TSX:EFN
Element Fleet Management — Q2 2017 Earnings Presentation
26 slides from Element Fleet Management's earnings presentation, 2017
Slide 1: Q2-2017 Review & Financial Results
Q2-2017 Review & Financial Results Element Fleet Management Element Fleet Management Q2-2017 Earnings Call
Slide 2: Agenda
Agenda • Long-Term Shareholder Value Creation • Operations Update • Financial Review • Long-Term Shareholder Value Creation Element Fleet Management Q2-2017 Earnings Call 2
Slide 3: Long-Term Shareholder Value Creation
Bradley Nullmeyer CEO Long -Term Shareholder Value Creation Element Fleet Management Q2-2017 Earnings Call
Slide 4: Long-Term Shareholder Value Creation: Delivering For The Future
Long-Term Shareholder Value Creation Delivering For The Future • Segmented Core Fleet Management Operations during the quarter (~$12.5B of assets, 92%) ‒ Increased transparency and focus on Core Fleet ‒ Delivered $0.18 EPS ($0.36 YTD) ‒ 2017 guidance of $0.71 to $0.73 for Core Fleet only ‒ Strong or
Slide 5: Long-Term Shareholder Value Creation: Non-Core Operations
Long-Term Shareholder Value Creation Delivering For The Future • Segmented Non-Core Operations (~$1.4B of assets, 8%) ‒ Increased transparency ‒ Delivered $0.05 EPS during quarter ($0.11 YTD) ‒ No guidance provided for 2017 due to timing uncertainty of earnings ‒ Each category carries strategic plan
Slide 6: Long-Term Shareholder Value Creation
Long-Term Shareholder Value Creation 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 Aus
Slide 7: Global Capabilities: 3+ Million Vehicles
Long-Term Shareholder Value Creation Global Capabilities: 3+ Million Vehicles Element Fleet Management Q2-2017 Earnings Call 7
Slide 8: Operations Update
Daniel Jauernig President and COO Operations Update Element Fleet Management Q2-2017 Earnings Call
Slide 9: Non-Core Assets Update
Non-Core Assets Update 19th Capital • As part of the separation, Element Fleet retained certain former “fleet-like” assets of Element Financial’s C&V division • Strategy was to increase the penetration of our fleet service offerings to this heavy duty truck portfolio • In late Q4/2016, the JV was fo
Slide 10: North American Post Integration Update
North American Post Integration Update • In January, we successfully migrated all of GE Fleet’s U.S. and Canadian customers and portfolio onto Element’s new and enhanced fleet management system (“FMS”) • All former GE Fleet customers have been live on Xcelerate and Driver Xcelerate since February an
Slide 11: Business Update
Business Update • Total earning assets (including interim funding), on a currency neutral basis, grew by 4.3% on a YTD basis in 2017 compared to Q4/2016 • Originations in Q2/2017 were $1.9B, up significantly from $1.4B in Q1/2017 and up 15.2% compared to Q2/2016 • We have a solid pipeline of custome
Slide 12: Connected Data
Connected Data Creates new ways to connect to Element Integrates data provided by GM OnStar to deliver fleet insights Choice in connection and data packages bundled based on key customer needs Choice in connection and Simplified logistics through data packages bundled OEM embedded hardware based on
Slide 13: Review of Financial Results
Samir Zabaneh CFO Review of Financial Results Element Fleet Management Q2-2017 Earnings Call
Slide 14: Consolidated Earnings Per Share
Consolidated Earnings Per Share In millions, except per share amounts and where otherwise noted Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Basic (1) $0.17 $0.07 $(0.01) $0.11 $0.07 Fully diluted (1) $0.17 $0.07 $(0.01) $0.11 $0.07 After-tax adjusted operating income per share $0.25 $0.25 $0.24 $0.24 $0
Slide 15: Key Operating Metrics
Key Operating Metrics As of and for the three months ended June 30, 2017 In millions, except per share amounts and where otherwise noted Core Fleet Non-Core Total Management Assets Net earning assets $12,391.0 $1,261.8 $13,652.8 Net revenue $224.5 $23.0 $247.5 Adjusted operating expenses $121.5 $1.6
Slide 16: Non-Core Assets
Non-Core Assets Asset Breakdown as of June 30, 2017 In millions, except per share amounts and where otherwise noted Category Description Total Assets Senior term loans (A&B) and revolver equipment 19th Capital Group LLC $824.5 loan 19th Capital Group LLC Equity ownership (49.99%) $81.4 32.5% interes
Slide 17: Balance Sheet Allocation
Balance Sheet Allocation Key Criteria and Assumptions Key Output for Q2/2017 In millions, except per share amount and where otherwise noted Core Fleet Management • Target 7.5x tangible leverage ratio in our Core % of Consol. Total Finance Assets $14,304 91% Fleet Management business Secured Borrowin
Slide 18: Income Statement Allocation
Income Statement Allocation Key Criteria and Assumptions Key Output for Q2/2017 In millions, except per share amount and where otherwise noted Core Fleet Management Revenue % of Consol. • Services revenue based on actual revenue Net Revenue Services & Other Revenue $143 93% recognized in the current
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 Q2 2016 Q1 2017 Q2 2017 Service and other revenue $135.4 $128.4 $143.4 Net interest and rental revenue $87.1 $83.6 $81.1 Total net revenue $222.5 $212.0 $224.5 Yield to A
Slide 20: Core Fleet Management Revenue Mix
Core Fleet Management Revenue Mix Continued Growth in Recurring Service Revenue % of Net Revenue Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Service and other revenue 60.9% 63.1% 62.2% 60.6% 63.9% Net interest and rental revenue 39.1% 36.9% 37.8% 39.4% 36.1% Element ElementFleet FleetManagement Manageme
Slide 21: Non-Core Assets Net Revenue
Non-Core Assets Net Revenue Net Revenue Summary In millions, except per share amounts and where otherwise noted Net Revenue Q2 2016 Q1 2017 Q2 2017 Service and other revenue $6.6 $19.1 $10.2 Net interest and rental revenue $20.2 $7.3 $12.9 Total net revenue $26.8 $26.4 $23.0 Yield to Average Earning
Slide 22: Consolidated Adjusted Operating Expenses
Consolidated Adjusted Operating Expenses In millions, except per share amounts and where otherwise noted Category Q2 2016 Q1 2017 Q2 2017 Salaries, wages and $71.0 $74.9 $79.3 benefits General and administrative $44.4 $40.4 $43.8 expenses Total adjusted operating $115.4 $115.3 $123.1 expenses % of n
Slide 23: Core Fleet Management Treasury Update
Core Fleet Management Treasury Update Balance Sheet Capacity to Fund Planned Growth • Committed facilities (available & outstanding) amounted to $17.9B as of $30 June 30, 2017 $25 At June 30, 2017, $20 Element had $3.4B in available financing to fund Billions $15 ongoing originations $10 • Committed
Slide 24: Long-Term Shareholder Value Creation
Bradley Nullmeyer CEO Long-Term Shareholder Value Creation Element Fleet Management Q2-2017 Earnings Call
Slide 25: The Future of Fleet Management
Long-Term Shareholder Value Creation The Future of Fleet Management • Developed Core and Non-Core separation and strategic plan underlying each Non-Core asset • Delivered $0.18 EPS in quarter from Core Fleet and $0.05 from Non-Core • Core business continues to perform with new customers, increased t
Slide 26: Questions
QUESTIONS Element Fleet Management Q2-2017 Earnings Call
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