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October 24, 2012 Investor Presentation OEM Remanufacturing

Oem tour oct 24, 2012 final_new

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Page 1: Oem tour oct 24, 2012 final_new

October 24, 2012

Investor Presentation

OEM Remanufacturing

Page 2: Oem tour oct 24, 2012 final_new

October 24, 2012

Investor Presentation

Mauk Breukels, VP Investor Relations

Page 3: Oem tour oct 24, 2012 final_new

Forward Looking Information

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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 statement about the future. Forward-looking statements may include words such as aim, anticipate,

assumption, believe, could, expect, goal, guidance, intend, may, objective, outlook, plan, project, seek, should, strategy, strive, target, and will. Forward-looking statements in this report

include, but are not limited to, statements with respect to: expectations with respect to the economy and associated impact on the Company’s financial results; expected revenue and SG&A

levels and EBIT growth; anticipated generation of free cash flow (including projected net capital and rental expenditures), and its expected use; anticipated defined benefit plan contributions;

the expected target range of Debt Ratio; the impact of new and revised IFRS that have been issued but are not yet effective; the expected timetable for completion of the proposed

transaction between the Company and Caterpillar to acquire the distribution and support business formerly operated by Bucyrus in Finning’s Canadian dealership territory; growth prospects

for the former Bucyrus business being acquired by the Company in Finning’s dealership territories (Bucyrus) and the competitive advantages of the business being acquired; expected future

financial and operating results generated from Bucyrus; anticipated benefits and synergies of Bucyrus; the expected financing structure for the Bucyrus transaction in Finning (Canada); and

the expected impact of Bucyrus on Finning’s earnings. All such forward-looking statements are made pursuant to the ‘safe harbour’ provisions of applicable Canadian securities laws.

Unless otherwise indicated by us, forward-looking statements in this report describe Finning’s expectations at October 24, 2012. Except as may be required by Canadian securities laws,

Finning does not undertake any obligation to update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise.

Forward-looking statements, by their very nature, are subject to numerous risks and uncertainties and are based on several assumptions which give rise to the possibility that actual results

could differ materially from the expectations expressed in or implied by such forward-looking statements and that Finning’s business outlook, objectives, plans, strategic priorities and other

statements that are not historical facts may not be achieved. As a result, Finning cannot guarantee that any forward-looking statement will materialize. Factors that could cause actual results

or events to differ materially from those expressed in or implied by these forward-looking statements include: general economic and market conditions; foreign exchange rates; commodity

prices; the level of customer confidence and spending, and the demand for, and prices of, Finning’s products and services; Finning’s dependence on the continued market acceptance of

Caterpillar’s products and Caterpillar’s timely supply of parts and equipment; Finning’s ability to continue to improve productivity and operational efficiencies while continuing to maintain

customer service; Finning’s ability to manage cost pressures as growth in revenues occur; Finning’s ability to attract suffic ient skilled labour resources to meet growing product support

demand; Finning’s ability to negotiate and renew collective bargaining agreements with satisfactory terms for Finning’s employees and the Company; the intensity of competitive activity;

Finning’s ability to successfully integrate the distribution and support business formerly operated by Bucyrus after that transaction closes; Finning’s ability to raise the capital needed to

implement its business plan; regulatory initiatives or proceedings, litigation and changes in laws or regulations; stock market volatility; changes in political and economic environments for

operations; the integrity, reliability, and availability of information technology and the data processed by that technology; operational benefits from the new ERP system. Forward-looking

statements are provided in this report for the purpose of giving information about management’s current expectations and plans and allowing investors and others to get a better

understanding of Finning’s operating environment. However, readers are cautioned that it may not be appropriate to use such forward-looking statements for any other purpose.

Forward-looking statements made in this report are based on a number of assumptions that Finning believed were reasonable on the day the Company made the forward-looking statements.

Refer in particular to the Outlook section of the MD&A. Some of the assumptions, risks, and other factors which could cause results to differ materially from those expressed in the forward-

looking statements contained in this report are discussed in the Company’s current Annual Information Form (AIF) in Section 4.

Finning cautions readers that the risks described in the AIF are not the only ones that could impact the Company. Additional risks and uncertainties not currently known to the Company or

that are currently deemed to be immaterial may also have a material adverse effect on Finning’s business, financial condition, or results of operations.

Except as otherwise indicated, forward-looking statements do not reflect the potential impact of any non-recurring or other unusual items or of any dispositions, mergers, acquisitions, other

business combinations or other transactions that may be announced or that may occur after the date hereof. The financial impact of these transactions and non-recurring and other unusual

items can be complex and depends on the facts particular to each of them. Finning therefore cannot describe the expected impact in a meaningful way or in the same way Finning presents

known risks affecting its business.

All amounts in this presentation are in Canadian dollars unless otherwise noted

Page 4: Oem tour oct 24, 2012 final_new

Finning International Inc. (TSX:FTT)

World’s largest Caterpillar dealer

3 regions, 7 countries

15,000 employees

Key industries

Mining (oil sands, copper, coal)

Construction

Power systems

Market cap ~ $4.0 billion

Revenue

FY2011 = $5.9 billion

YTD ended Jun 30, 2012 = 3.2 billion

Quarterly dividend = $0.14 per share

Vancouver (head office)

Edmonton

Fort McMurray

Santiago

Antofagasta

South America 33%

UK & Ireland 14%

Canada 53%

Cannock

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British Columbia

Yukon

Alberta

The Northwest Territories

Bolivia

Argentina

Chile

Uruguay

United Kingdom

Ireland

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October 24, 2012

Investor Presentation

Andy Fraser, President, Finning Canada

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Finning Canada Revenue Profile

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Mining

34%

Power

Systems

12%

Construction

35%

Mining

64%

Power Systems

8%

Construction

27%

Product Support Revenue

by Industry New Equipment Sales

by Industry

Forestry

3%

Other

5%

YTD ending June 30, 2012

Petroleum

11%

Other*

1%

* Includes petroleum, forestry and other sectors

Revenue

by Line of Business

New

Equipment

45% Product

Support

42%

Used

Equipment

5%

Rental

8%

Page 7: Oem tour oct 24, 2012 final_new

Oil Sands Mining Fleet Growth

7 * Includes units projected from June 30, 2012 to the end of 2016

99%

100%

89%

91%

98%

87%

88%

1,539

85

90

255

293

408

158

250

320 – 340 Ton Trucks (future 795F/MT5500)

Total

Large Graders (16)

Ultra Large Graders (24)

Large Tractors (D8 & D9)

Ultra Large Tractors (D11 & D10)

100 – 200 Ton Trucks (777-789)

240 Ton Trucks (793)

400 Ton Trucks (797)

40

69

80

165

158

67

147

86

90

287

322

416

278

Finning’s Market Share

Caterpillar Units at Jun 30, 2012 Equipment Type

Total Units at Jun 30, 2012

Additional CAT Units Projected 2012 to 2016*

726

131

182

1,792

Projections include the existing projects and their expansions, as well as

contractor equipment for: Syncrude (Base & Aurora), Suncor (Steepbank &

Millennium), Shell/Albian (Muskeg River & Jackpine), CNRL (Horizon),

Exxon/Imperial (Kearl), Suncor (Fort Hills)

Page 8: Oem tour oct 24, 2012 final_new

Mining Product Support Infrastructure

OEM - component remanufacturing facility (Edmonton)

COE - equipment assembly and rebuild facility (Red Deer)

New oil sands service facility (Fort McKay)

16 bays; 160,000 sq. ft.

$110 million investment: 2011 and 2012

To be completed by end of 2012

Parts distribution center (Edmonton)

Two parts warehouses (Mildred Lake and

Fort McMurray)

$59 million inventory; 20,900 line items

Multiple field service locations

Over 200 fully equipped field service trucks

Three oil sands branches

850+ regional employees 8

New Fort McKay oil sands service facility

Page 9: Oem tour oct 24, 2012 final_new

Summary

Solid core business

Sustainable product support growth – large and aging equipment population

Focus on disciplined execution

Driving operational excellence

2012 priorities

Improve operating profitability

Successfully integrate Bucyrus

Focus on working capital and free cash flow

2013 tailwinds

Expanded product offering - Bucyrus

Fort McKay oil sands facility operational

Product support opportunities

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Page 10: Oem tour oct 24, 2012 final_new

October 24, 2012

Investor Presentation

Craig Priddle, President & CEO, OEM Remanufacturing

Page 11: Oem tour oct 24, 2012 final_new

Vital Statistics

Division of Finning International

Primary focus is Finning Canada product support

325,000 square foot purpose built “5 Star” facility

700 employees

86% employee engagement score (2011 employee survey)

Three shift operation

3rd shift added March 2011

Fully integrated facility

Investments in inspection, salvage and testing technologies

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Page 12: Oem tour oct 24, 2012 final_new

End-of-life

component

Advanced salvage

technology

New part

content

Assemble

and test

Return end-of-life components to same as new

condition in a manufacturing environment

The Reman Business Model

Profitability consistent with traditional product support business

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Value Proposition

Reman components reduce equipment owning and operating costs

Typically 50% to 75% the cost of new components

Critical customer requirements

Availability

Quality and reliability

Cost efficiency

Supporting services

Finning Canada mining and heavy construction focus

COE partnership

Strong relationship, highly complementary

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Page 14: Oem tour oct 24, 2012 final_new

Operational Excellence at OEM

Strategic focus on operational excellence

6 Sigma & Lean Manufacturing

Long term goal is a continuous improvement culture

Ongoing focus on waste reduction

Standard Operating Procedures

Document best practices

Establish baseline for improvement

OEM University

Formalized training to support growth

Train to standard operating procedures

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Page 15: Oem tour oct 24, 2012 final_new

Large Component Production Forecast (Units)

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2016

2015

2014

2013

2012

0 1,000 2,000 3,000 4,000 5,000 6,000

Engines Powertrain

Page 16: Oem tour oct 24, 2012 final_new

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