Element Fleet Management Corp. (TSX:EFN) (“Element” or the
“Company”), the largest pure-play automotive fleet manager in the
world, today announced record financial and operating results for
the three months ended September 30, 2022; a 29% common
dividend increase; the Company’s intention to renew its normal
course issuer bid (“NCIB”); and full-year 2023 results guidance.
Third quarter net income of $103.7 million
represents $0.25 on a per share basis. Q3 adjusted operating income
("AOI") of $165.4 million was 31.7% higher than Q3 last year
("year-over-year"). This year's Q3 AOI represents $0.30 of adjusted
EPS, which is 9 cents per share growth year-over-year. Element grew
Q3 free cash flow ("FCF") per share 11 cents year-over-year to
$0.38.
“Element powered through the many headwinds
confronting businesses in 2022 to deliver record third quarter
results, a testimony to the resilience of our business model and
the people that serve our clients so well,” said Jay Forbes, the
Company’s President and Chief Executive Officer. "The growth we are
generating from increasing both vehicles under management and our
share of wallet has given us the insight and confidence to increase
our annual organic net revenue growth benchmark to 6% to 8%,
materially better than our previous 4-6% target," Mr. Forbes
continued. “This level of revenue growth - atop a scalable
operating platform and enabled by our capital-lighter business
model - is expected to generate compelling long-term value for our
shareholders, as illustrated by today’s 29% increase in the common
dividend.”
Full-year 2023 results
guidance
Element provided full-year 2022 results guidance
last quarter, both including and excluding net revenue (and
resulting operating income and cash flow) from Element actions
being taken this year that are not expected to generate similar
levels of net revenue next year or in subsequent years. The
guidance excluding such revenue is 2022 "organic" results
guidance.
Element expects to deliver the following results
for full-year 20231 |
Implied
year-over-year growth2 |
|
|
|
• |
Net revenue of $1.14 to $1.17 billion |
6-9% |
|
|
|
• |
Operating margin of 54-55% |
100
bps |
|
|
|
• |
Adjusted operating income of $615 to $645 million |
7-12% |
|
|
|
• |
Adjusted EPS of $1.12 to $1.17 |
9-14% |
|
|
|
• |
Free cash flow per share of $1.45 to $1.50 |
16-20% |
1. Based on a CAD:USD exchange rate of
1.29:1
2. Year-over-year growth rates are implied based
on Element's expectation of full-year 2022 “organic” performance
that is at or near the top-end of the Company's 2022 “organic”
results guidance ranges.
Both adjusted EPS and FCF per share growth will
be aided by common share buybacks under Element's NCIB, the upshot
of which is a projected weighted average outstanding common share
count of 385-395 million for 2023.
Element expects originations of approximately
$7.5 to $8.0 billion in 2023 (implying approximately 25-35%
year-over-year volume growth) and plans to syndicate in the range
of $4.0 to $4.5 billion of lease assets in 2023, consistent with
the growth in originations.
The Company provides further details in its
Supplementary Information document for the third quarter, available
on Element's website.
Profitable revenue growth atop a
scalable operating platform
Element's third quarter net revenue grew 19.0%
year-over-year (17.0% in constant currency) to $290.8 million.
Approximately $17 million of such revenue was a product of
Element actions being taken this year that are not expected to
generate similar levels of net revenue (and resulting operating
income and cash flow) next year or in subsequent years. (Element
generated approximately $8 million of such revenue in Q2 this year
and does not expect any in Q4, or the full year 2023.)
The Company's "organic" Q3 net revenue of
$273.8 million (ie. excluding such $17 million of Q3
revenue) represents 12.1% growth year-over-year (10.2% in constant
currency). Q3 "organic" services revenue growth was 19.3% (16.4% in
constant currency) and "organic" net financing revenue growth was
6.0% (5.4% in constant currency) year-over-year.
Net revenue growth was demonstrably profitable
as year-over-year pre-tax income and AOI growth rates - at 25.4%
and 31.7%, respectively - exceeded the year-over-year net revenue
growth rate. The same is true of the Company's "organic" results:
AOI of $148.4 million grew 18.2% (16.3% in constant currency)
year-over-year, exceeding the comparable net revenue growth
rates.
Pre-tax income margin expanded to 49.0% and
operating margin expanded 547 basis points year-over-year to 56.9%
for the quarter. Q3 "organic" operating margin was 54.2%,
representing 281 bps of expansion year-over-year.
Element's Q3 EPS were $0.25 and adjusted EPS
were $0.30, the latter up 9 cents per share or 42.9%
year-over-year. Q3 "organic" adjusted EPS of $0.26 was up 5 cents
per share or 23.8% year-over-year.
A capital-lighter business
model
Element's services revenue growth is one of two
thrusts of the Company's capital-lighter business model. (Services
revenue has much lower funding needs than net financing revenue:
only the net working capital required to procure parts and services
for clients.)
Third quarter services revenue increased
$28.9 million or 23.8% year-over-year ($25.9 million or 20.9%
in constant currency). "Organic" services revenue of
$144.4 million represents 19.3% growth year-over-year (16.4%
in constant currency), driven by:
- The speed at which Element is
converting new client and share of wallet wins into active services
being provided to new and existing clients (penetration);
- Element clients' increasing use of
services (utilization) due to increased vehicle activity levels in
general, and - due to the ongoing, unprecedented OEM production
delays - the advanced average age of clients' vehicles in
particular; and, to a lesser extent,
- Parts and labour cost inflation
across Element's networks of supplier-partners.
The Company's Supplementary Information document
for the quarter contains further details of Q3 services revenue
composition and growth.
Element's syndication of fleet assets to third
parties - financial buyers with a lower cost of capital - is the
second thrust of the Company's capital-lighter business model.
Element syndicated $599.2 million of assets
in the third quarter, generating $16.0 million of net revenue or a
2.67% "yield" on assets syndicated. Reported Q3 syndication revenue
benefitted from approximately $2.5 million of non-recurring
revenue contribution, meaning "organic" syndication revenue "yield"
on assets syndicated was approximately 2.25% for the quarter.
Following quarter-end, in October this year,
Element syndicated another tranche of Canadian fleet assets,
further expanding the market to derive superior economic value from
the Company's balance sheet assets.
Element's advance of its capital-lighter
business model continues to enhance ROE: year-over-year at
September 30, return on common equity had improved to 11.7% and
pre-tax return on common equity improved 210 basis points to 17.8%
-- the Company's highest yet. Using the last four quarters'
"organic" AOI to calculate pre-tax return on common equity, the
result is 17.0%.
Growing free cash flow per share and the
return of capital to shareholders
Element generated $0.38 of FCF per share in the
third quarter, which is 11 cents per share growth
year-over-year.
Per share growth is aided by Element’s return of
capital to common shareholders through buybacks pursuant to the
Company’s NCIB. Combined with Element's common dividend payout, the
Company returned $92.3 million cash to common shareholders in
the third quarter.
When Element announced the establishment of its
NCIB in 2020, the Company noted the program represented the first
year of what management envisioned as a regular, ongoing return of
capital strategy. Element renewed its NCIB in November 2021 and
today, the Company announced its intention to renew its NCIB once
again. Further details can be found on page 10 below.
Element also announced today a 29% increase to
its common dividend, from $0.31 to $0.40 per share annually,
effective immediately and therefore to be reflected in the Q4 2022
common dividend authorized and declared today to be paid in respect
of Q4 2022 on January 13, 2023.
With this increase, Element’s common dividend
represents 30% of the Company’s last twelve months’ (at September
30, 2022) FCF per share, the mid-point of the Company's 25% to 35%
target payout range.
Element expects its common dividend to continue
to grow - consistent with FCF per share growth - and thereby become
a larger component of the Company’s return of capital strategy.
Further, Element continues to plan to redeem its
outstanding preferred share series - at the time but in lieu of
rate reset - thereby further maturing and optimizing the Company’s
capital structure.
Adjusted Operating Results as
reported
|
Three-month periods ended |
Nine-month periods ended |
(in $000’s for stated values, except per share amounts) |
September 30,2022 |
June 30,2022 |
September 30,2021 |
September 30,2022 |
September 30,2021 |
|
$ |
$ |
$ |
$ |
$ |
Net revenue |
|
|
|
|
|
Servicing income, net |
149,931 |
150,037 |
121,075 |
431,810 |
348,749 |
Net financing revenue |
124,859 |
123,252 |
109,328 |
363,292 |
329,700 |
Syndication revenue, net |
15,998 |
14,844 |
13,937 |
44,619 |
49,891 |
Net revenue |
290,788 |
288,133 |
244,340 |
839,721 |
728,340 |
Adjusted operating expenses1 |
|
|
|
|
|
Salaries, wages and benefits |
80,708 |
77,786 |
78,493 |
234,706 |
224,772 |
General and administrative expenses |
29,654 |
28,944 |
24,355 |
86,395 |
77,327 |
Depreciation and amortization |
15,020 |
15,456 |
15,866 |
44,411 |
36,802 |
Adjusted operating expenses |
125,382 |
122,186 |
118,714 |
365,512 |
338,901 |
Adjusted operating income |
165,406 |
165,947 |
125,626 |
474,209 |
389,439 |
Provision for taxes applicable to adjusted operating income |
42,179 |
42,317 |
31,419 |
121,643 |
96,124 |
Cumulative preferred share dividends |
5,923 |
8,103 |
8,103 |
22,129 |
24,309 |
After-tax adjusted operating income attributable to common
shareholders1 |
117,304 |
115,527 |
86,104 |
330,437 |
269,006 |
Weighted average number of shares outstanding [basic] |
395,117 |
398,242 |
416,353 |
398,287 |
427,753 |
After-tax adjusted operating income per
share1 [basic] |
0.30 |
0.29 |
0.21 |
0.83 |
0.63 |
Adjusted Operating Results in constant
currency2
|
Three-month periods ended |
Nine-month periods ended |
(in $000’s for stated values, except per share amounts) |
September 30,2022 |
June 30,2022 |
September 30,2021 |
September 30,2022 |
September 30,2021 |
|
$ |
$ |
$ |
$ |
$ |
Net revenue |
|
|
|
|
|
Servicing income, net |
149,931 |
152,706 |
124,002 |
431,810 |
353,487 |
Net financing revenue |
124,859 |
123,681 |
109,995 |
363,292 |
329,497 |
Syndication revenue, net |
15,998 |
15,261 |
14,508 |
44,619 |
51,111 |
Net revenue |
290,788 |
291,648 |
248,505 |
839,721 |
734,095 |
Salaries, wages and benefits |
80,708 |
78,716 |
79,904 |
234,706 |
226,949 |
General and administrative expenses |
29,654 |
29,351 |
24,842 |
86,395 |
78,202 |
Depreciation and amortization |
15,020 |
15,695 |
16,180 |
44,411 |
37,186 |
Adjusted operating expenses |
125,382 |
123,762 |
120,926 |
365,512 |
342,337 |
Adjusted operating income |
165,406 |
167,886 |
127,579 |
474,209 |
391,758 |
Provision for taxes applicable to adjusted operating income |
42,179 |
42,811 |
31,908 |
121,643 |
96,696 |
Cumulative preferred share dividends |
5,923 |
8,103 |
8,103 |
22,129 |
24,309 |
After-tax adjusted operating income attributable to common
shareholders |
117,304 |
116,972 |
87,568 |
330,437 |
270,753 |
Weighted average number of shares outstanding [basic] |
395,117 |
398,242 |
416,353 |
398,287 |
427,753 |
After-tax adjusted operating income per share
[basic] |
0.30 |
0.29 |
0.21 |
0.83 |
0.63 |
____________________
1 Please refer to the Descriptions of Non-GAAP Measures
section of the MD&A for a description of this non-GAAP
measure.2 Please refer to the Effect of Foreign Currency
Exchange Rate Changes section of the MD&A for reconciliations
of certain non-GAAP "constant currency" measures to their
counterpart IFRS measures as reported.
CEO LETTER TO SHAREHOLDERS
My fellow shareholders,
With today’s release of our third quarter
results and the accompanying provision of our full-year 2023
guidance, it is abundantly clear that Element’s “pivot to growth”
has fully taken hold.
Yet, for all the success to date, we are still
in the early innings – perhaps even just the first inning – of
realizing the full potential of our organic revenue growth
strategy. Executing atop our transformed, industry-leading,
scalable operating platform, and combined with our capital-lighter
business model and return of capital strategies, we believe Element
can create consistent and outstanding shareholder value for many
years to come.
With a view to sharing the deeper insights that
underpin our confidence and excitement about the near- and
long-term future of our business, we will be hosting an Investor
Day on Tuesday, November 29 in Toronto (and online for those unable
to join us in person). You can register to attend by clicking
here.
The purpose of the event is to give participants
“a look under the hood” of our business and to introduce you to a
representative sample of the many talented people responsible for
Element’s success.
Specifically, we’ll show you how we are
successfully executing on each of our five organic revenue growth
drivers; how our scalable operating platform underpins a
consistent, superior client experience while expanding operating
margins; and how we advance our capital-lighter business model to
enhance returns on equity and liberate cash flow to return to
shareholders.
I am confident you will leave our Investor Day
with a better understanding of the unique characteristics of
Element’s business and a deeper appreciation for the compelling
attributes of our value proposition.
With that ahead of us in three weeks, I want to
devote the rest of this letter to (a) giving you a better sense of
our latest thinking on (i) OEM production delays and (ii)
consolidation in our industry, and (b) providing a summary reminder
of how certain macroeconomic dynamics affect our business.
OEM production delays
We continue to maintain regular contact at the
highest organizational levels with our North American OEM partners.
Production volumes are improving and OEMs’ willingness to take
orders is also increasing. We expect to originate approximately
25-35% more new vehicles in 2023 than we will have this year, and
2024 should be another year-over-year improvement. The positive
impact of this recovery will be greatest on our business in the
U.S. and Canada. Mexico will emerge having been the least impacted
region in our footprint, while ANZ is likely to carry an excess
order backlog for the longest period given Custom Fleet’s
dependence on vehicle production in Asia.
Consolidation in our
industry
It is encouraging to see new investors discover
and endorse what we have known and been acting on for years: the
attractive dynamics of our industry and resilience of the fleet
management business model. We believe further consolidation within
our industry by established, long-term-return-driven investors
bodes well for the health of the industry and, as market leader,
the health of Element’s business.
Moreover, the current round of industry
consolidation has and will continue to afford us ample opportunity
to steal market share as other FMCs are forced to focus on the
complexities of integration and/or acclimating to new ownership.
Having “been there, done that” five and more years ago, Element can
now maintain a singular focus on delivering a consistent, superior
service experience that makes the complex simple for clients. Our
high (and rising) Net Promoter Scores suggest that word of
Element’s strengths continue to travel within – and be well
received by – the close-knit community of in-house automotive fleet
professionals.
Lastly, we have been quite content to sit on the
sidelines as this deal-making has taken place. We see no need for
Element to pursue higher-risk, inorganic growth when an estimated
half to two-thirds of the addressable markets in which we operate
remain unpenetrated and we have a proven strategy and ability to
convert self-managed fleets into Element clients across those
markets.
How macroeconomic dynamics affect our
business
Given the continuing macroeconomic
uncertainties, allow me to reiterate some of the features of our
business model that position us to withstand (if not benefit from)
these ongoing challenges.
1. Rising interest rates are managed through matched
funding
We are largely interest rate agnostic given our
staunch commitment to matched funding.
Coincident to accepting a client’s vehicle
order, we set the terms – interest rate, fixed or floating, and
duration – of both the funding we will use to purchase that vehicle
and the lease we will enter with the client in respect of that
vehicle.
In doing so, we ensure
- the difference
(aka. margin) between the interest rate on our funding and the
interest rate on the corresponding lease is acceptable to Element,
all things considered (eg. client credit quality, industry and
business, history with Element, intended vehicle use, etc.);
- the nature of the
interest rate on our funding and the interest rate in that lease
are the same – either fixed or floating – to ensure our interest
margin remains stable for the life of the contract; and
- the duration over
which we will repay our funding is the same as the period over
which our client will make their lease payments to Element.
As a result, the prevailing interest rate when a
client places (and we accept) their vehicle order is largely
immaterial to our financing business; we ‘lock in’ our
margin/spread on that interest rate for the duration of the lease
on the vast preponderance of our assets, and diligently manage this
risk-mitigant.
2. Our business benefits from inflation
Inflation contributes to profitable revenue
growth both directly and indirectly, with the latter a greater and
longer-lasting contribution.
Directly
The majority of Element’s revenue is directly
tied to the cost of vehicles and services procured on behalf of our
clients. Accordingly, inflationary increases in these costs result
in net revenue growth for Element given our cost-plus model.
That said, the inflation dynamic plays out
differently between our two largest revenue streams. While Services
revenue will see a more immediate impact in those categories that
are “Cost +”, Net Financing revenue benefits will be gradual as
increased interest income (arising from higher vehicle purchase
prices) is driven by Originations and recognized over each lease
term.
While inflation will likely outpace our
continuous improvement initiatives and result in rising operating
costs and capital investments for our business, at approximately
48% and 7% of revenue respectively, Element will nonetheless be a
strong net beneficiary of inflationary trends.
Indirectly
Element’s chief value proposition to clients
(and prospects) is the material reduction of the total cost of
their fleet operations (TCO), and inflation makes this proposition
even more compelling.
As vehicle, parts, labour and fuel prices rise,
the concessions we procure by leveraging our scale to negotiate
with suppliers become even more valuable to clients. We already see
increased client/driver utilization of our supply networks given
current inflationary trends, as well as clients enrolling in
incremental Element service offerings (penetration) to help manage
their TCO.
We also see self-managed fleet owners and
operators – a key source of long-term growth – more interested in
the financial advantages of outsourcing to Element because of these
trends.
The financial benefits to Element from inflation
remain aligned with our clients’ interests, because our chief value
proposition is the material reduction of clients’ TCO – by up to
20% from self-managed fleet levels. This proposition is acutely
compelling in an inflationary and/or recessionary environment.
3. Our low-credit-risk assets easily weather
downturns
The ~1.5 million vehicles we manage are
essential to our blue-chip client base, providing (i) continuity of
demand for both vehicle replacements and service consumption, and
(ii) a low risk of credit losses.
Our “credit first, collateral second” philosophy
will continue to protect our investors from any material escalation
of credit losses because of:
- Our focus on
maintaining a high credit quality client base;
- Our highly
diversified client base, where no single industry accounts for more
than 5% of our vehicles under management;
- The protection we
see in bankruptcy as our cross-collateralized leases, which
underlie mission-critical assets, are typically one of the first
contracts affirmed; and
- Our active and
efficient management of collateral gaps, which protects us if we
have to sell assets in the exceedingly rare case of a client
liquidation.
4. Recurring, recession-resistant revenues
Element’s net revenue, operating income and cash
flow have proven resilient. Despite COVID-19 lockdowns and “shelter
in place” edicts throughout 2020, our annual net revenue declined
just 3.1% that year, adjusted operating income declined 2.4% and
free cash flow per share decreased 3 cents year-over-year.
We view the impacts of the pandemic on our 2020
business as akin to a severe economic downturn. Element’s business
model withstood those circumstances that year while we accelerated
the organization’s transformation program and initiated the pivot
to our current, successful focus on organic revenue growth.
Our business model is replete with self-leveling
attributes. For instance, as an industry-first delay in vehicle
production created an immediate and sustained drop in new vehicle
originations (and an attendant deferral of revenue and cash flow),
we also experienced (i) an increase in used vehicle values, which
generated extraordinary gains on the sale (GOS) of end-of-lease
vehicles in ANZ; and (ii) a rapid increase in maintenance and
operating costs as fleet vehicles age beyond their optimal point of
replacement. The heightened services revenue from maintaining and
managing older vehicles, combined with higher net finance revenue
from elevated GOS, have largely offset the financial headwinds to
Element from the OEM production delays.
* * *
In conclusion, Element remains a business with
the remarkable ability to thrive in almost any set of conditions,
which we have amply demonstrated in recent years.
This is true because of the industry we lead and
the business model we have honed, but most of all because of the
incredible people that work at Element.
I look forward to introducing you to some of
them in three weeks – on Tuesday, November 29, 2022 in Toronto (and
online) – at our Investor Day.
Until then,
Jay
Conference Call and Webcast
A conference call to discuss these results will
be held on Wednesday, November 9, 2022 at 8:30 a.m. Eastern
Time.
The conference call and webcast can be accessed
as follows:
Webcast: |
https://services.choruscall.ca/links/elementfleet2022Q3.html |
|
|
Telephone: |
Click here to join the call most efficiently, or dial one of
the following numbers to speak with an operator: |
|
|
|
Canada/USA toll-free: 1-800-319-4610 |
|
|
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International: +1-604-638-5340 |
The webcast will be available on the Company’s
website for three months thereafter. A taped recording of the
conference call may be accessed through December 9, 2022 by dialing
1-800-319-6413 or +1-604-638-9010 and entering the access code
9490.
Dividends Declared
The Company’s Board of Directors has authorized
and declared a quarterly dividend of $0.10 per outstanding common
share of Element for the fourth quarter of 2022. The dividend will
be paid on January 13, 2023 to shareholders of record as at the
close of business on December 30, 2022.
Element’s Board of Directors also declared the
following dividends on Element’s preferred shares:
Series |
TSX Ticker |
Amount |
Record Date |
Payment Date |
Series A |
EFN.PR.A |
$0.4333125 |
December 15, 2022 |
December 30, 2022 |
Series C |
EFN.PR.C |
$0.3881300 |
December 15, 2022 |
December 30, 2022 |
Series E |
EFN.PR.E |
$0.3689380 |
December 15, 2022 |
December 30, 2022 |
The Company’s common and preferred share
dividends are designated to be eligible dividends for purposes of
section 89(1) of the Income Tax Act (Canada).
Normal Course Issuer Bids
On November 4, 2020, the TSX approved Element's
notice of intention to commence a Normal Course Issuer Bid (the
“2020 NCIB”). The 2020 NCIB allowed the Company to repurchase on
the open market (or as otherwise permitted), at its discretion
during the period commencing on November 10, 2020 and ending on the
earlier of November 9, 2021 or the completion of purchases under
the NCIB, up to 43,929,594 common shares of the Company, subject to
the normal terms and limitations of such bids. The Company
repurchased 34,420,833 common shares for cancellation under the
2020 NCIB for an aggregate amount of approximately
$474.5 million at a volume weighted average price of $13.78
per common share.
On November 10, 2021, the TSX approved Element's
notice of intention to renew its Normal Course Issuer Bid (the
"2021 NCIB"). The 2021 NCIB allows the Company to repurchase on the
open market (or as otherwise permitted), at its discretion during
the period commencing on November 15, 2021 and ending on the
earlier of November 14, 2022 or the completion of purchases under
the NCIB, up to 40,968,811 common shares, subject to the normal
terms and limitations of such bids, which include the number of
common shares purchased in any 12 month period being limited to 10%
of the common shares outstanding at the commencement of such
period. As of September 30, 2022, under the 2021 NCIB,
17,792,900 common shares had been repurchased for cancellation for
an aggregate amount of approximately $236.0 million at a
volume weighted average price of $13.27 per common share.
The Company applies trade date accounting in
determining the date on which a share repurchase is reflected in
the consolidated financial statements. Trade date accounting is the
date on which the Company commits itself to purchase the
shares.
In furtherance of the Company’s return of
capital plan, Element intends to renew its Normal Course Issuer Bid
(the “2022 NCIB”) for its common shares. If accepted by the TSX,
the Company would be permitted under the 2022 NCIB to purchase for
cancellation, through the facilities of the TSX or such other
permitted means, up to 10% of the public float (calculated in
accordance with TSX rules) of Element’s issued and outstanding
common shares during the 12 months following such TSX acceptance at
prevailing market prices (or as otherwise permitted). The actual
number of the Company’s common shares, if any, that may be
purchased under the 2022 NCIB, and the timing of any such
purchases, will be determined by the Company, subject to applicable
terms and limitations of the NCIB (including any automatic share
purchase plan adopted in connection therewith). There cannot be any
assurance as to how many common shares, if any, will ultimately be
purchased pursuant to the 2022 NCIB. If the 2022 NCIB renewal is
accepted by the TSX, any subsequent renewals of the 2022 NCIB will
be in the discretion of the Company and subject to further TSX
approval.
Non-GAAP Measures
The Company’s condensed consolidated financial
statements have been prepared in accordance with International
Financial Reporting Standards (IFRS) as issued by the International
Accounting Standards Board (IASB) and the accounting policies
Element adopted in accordance with IFRS.
The Company believes that certain non-GAAP
measures can be useful to investors because they provide a means by
which investors can evaluate the Company’s underlying key drivers
and operating performance of the business, exclusive of certain
adjustments and activities that investors may consider to be
unrelated to the underlying economic performance of the business of
a given period. Throughout this News Release, management used a
number of terms and ratios which do not have a standardized meaning
under IFRS and are unlikely to be comparable to similar measures
presented by other organizations. A full description of these
measures can be found in the Management Discussion & Analysis
that accompanies the unaudited interim condensed financial
statements for the quarter ended September 30, 2022.
Element’s unaudited interim condensed
consolidated financial statements and related management discussion
and analysis as at and for the three- and nine-month periods ended
September 30, 2022 have been filed on SEDAR
(www.sedar.com).
About Element Fleet
Management
Element Fleet Management (TSX: EFN) is the
largest pure-play automotive fleet manager in the world, providing
the full range of fleet services and solutions to a growing base of
loyal, world-class clients – corporates, governments and
not-for-profits – across North America, Australia and New Zealand.
Element enjoys proven resilient cash flow, a significant proportion
of which is returned to shareholders in the form of dividends and
share buybacks; a scalable operating platform that magnifies
revenue growth into earnings growth; and an evolving
capital-lighter business model that enhances return on equity.
Element’s services address every aspect of clients’ fleet
requirements, from vehicle acquisition, maintenance, accidents and
remarketing, to integrating EVs and managing the complexity of
gradual fleet electrification. Clients benefit from Element’s
expertise as the largest fleet solutions provider in its markets,
offering unmatched economies of scale and insight used to reduce
fleet operating costs and improve productivity and performance. For
more information, visit www.elementfleet.com/investors.
This press release includes forward-looking
statements regarding Element and its business. Such statements are
based on the current expectations and views of future events of
Element’s management. In some cases the forward-looking statements
can be identified by words or phrases such as “may”, “will”,
“expect”, “plan”, “anticipate”, “intend”, “potential”, “estimate”,
“believe” or the negative of these terms, or other similar
expressions intended to identify forward-looking statements,
including, among others, statements regarding Element’s
enhancements to clients’ service experience and service levels;
enhancement of financial performance; improvements to client
retention trends; reduction of operating expenses; increases in
efficiency; EV strategy and capabilities; global EV adoption rates;
redemption of the Series I Shares; dividend policy and the payment
of future dividends; creation of value for all stakeholders;
expectations regarding syndication; growth prospects and expected
revenue growth; level of workforce engagement; improvements to
magnitude and quality of earnings; executive hiring and retention;
focus and discipline in investing; balance sheet management and
plans to reduce leverage ratios; anticipated benefits of the
balanced scorecard initiative; Element’s proposed share purchases,
including the number of common shares to be repurchased, the timing
thereof and TSX acceptance of the NCIB and any renewal thereof; and
expectations regarding financial performance. No forward-looking
statement can be guaranteed. Forward-looking statements and
information by their nature are based on assumptions and involve
known and unknown risks, uncertainties and other factors which may
cause Element's actual results, performance or achievements, or
industry results, to be materially different from any future
results, performance or achievements expressed or implied by such
forward-looking statement or information. Accordingly, readers
should not place undue reliance on any forward-looking statements
or information. Such risks and uncertainties include those
regarding the ongoing COVID-19 pandemic, risks regarding the fleet
management and finance industries, economic factors and many other
factors beyond the control of Element. A discussion of the material
risks and assumptions associated with this outlook can be found in
Element's annual MD&A, and Annual Information Form for the year
ended December 31, 2021, each of which has been filed on SEDAR and
can be accessed at www.sedar.com. Except as required by applicable
securities laws, forward-looking statements speak only as of the
date on which they are made and Element undertakes no obligation to
publicly update or revise any forward-looking statement, whether as
a result of new information, future events, or otherwise.
Contact:
Michael Barrett
Vice President, Investor Relations
(416) 646-5698
mbarrett@elementcorp.com
Element Fleet Management (TSX:EFN)
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