Finning International Inc. · TSX:FTT

Finning International — CIBC Whistler Institutional Investor Conference 2015

19 slides from Finning International's conference presentation, Jan 22, 2015

  1. Slide 1: Investor Presentation

    INVESTOR PRESENTATION Greg Palaschuk, VP Treasurer Mauk Breukels, VP Investor Relations & Corporate Affairs CIBC Whistler Institutional Investor Conference January 22, 2015

  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: Overview of Finning International

    Overview of Finning International  World’s largest Caterpillar dealer  We sell, rent and provide parts and service for Caterpillar equipment and engines Yukon The Northwest  Serving customers for over 80 years and delivering value to public Territories shareholders for 45 years  Operating in 7 c

  4. Slide 4: Broadest Range of Quality Products

    Broadest Range of Quality Products Over 300 equipment product lines 4

  5. Slide 5: 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 new equipment sales and product support  Remain focused on what we can control: costs

  6. Slide 6: Highly Diversified Business

    Highly Diversified Business Geographic End Market Diversification Diversification *Other: agriculture, industrial Embedded Product Support Growth and government segments 6

  7. Slide 7: 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

  8. Slide 8: Consolidated – Strong Full-Cycle Growth

    Consolidated – Strong Full-Cycle Growth Consolidated New Equipment & Product Support Revenue New Equipment CAGR 5% $Million Average $2,547m Min $1,899m Product Support CAGR 11% Product support provides resilient revenue stream through the cycle Percentage values above the bars indicate combined grow

  9. Slide 9: Canada – Strong Full-Cycle Growth

    Canada – Strong Full-Cycle Growth New Equipment & Product Support Revenue 2008 – 2014 Machine Population – Canada Compound Annual Growth Rate: 4% 3,500 New Equipment 8% CAGR 6% 3,000 11% 2% 10% Average $1,255m 13% (8%) 33% 10% 2,500 12% 15% Min $818m 797 Off-Highway Trucks 58% 32% 172 ➔ 287 $Million

  10. Slide 10: 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

  11. Slide 11: 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

  12. Slide 12: 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 12

  13. Slide 13: Investor Presentation

    INVESTOR PRESENTATION Greg Palaschuk, VP Treasurer Mauk Breukels, VP Investor Relations & Corporate Affairs CIBC Whistler Institutional Investor Conference January 22, 2015

  14. Slide 14: Appendix - Canada Progress Update

    APPENDIX - CANADA PROGRESS UPDATE

  15. Slide 15: 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

  16. Slide 16: 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

  17. Slide 17: 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

  18. Slide 18: 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 (%)

  19. Slide 19: 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

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