INVESTOR MEETING - Finning...Non-GAAP financial measures ... AMAZON • AME • UILD DIRET •...

INVESTOR MEETING

Vancouver

May 10, 2018

Agenda

10:00 Welcome and Introduction Mauk Breukels, VP Investor Relations

10:05 Strategic Plan Scott Thomson, President & CEO

10:25 People Chad Hiley, CHRO

10:30 Finning Digital Dave Cummings, EVP & CIO

10:50 South America Marcello Marchese, President, Finning South America

11:10 Canada Juan Carlos Villegas, President, Finning Canada

11:30 Break

11:45 UK & Ireland Kevin Parkes, Managing Director, Finning UK & Ireland

11:55 Global Supply Chain Steve Nielsen, EVP & CFO

12:05 Financial Performance Steve Nielsen, EVP & CFO

12:15 Closing Remarks Scott Thomson, President & CEO

12:20 Q&A

Monetary amounts are in Canadian dollars and from continuing operations unless noted otherwise2

Disclosures

Forward-looking information

This presentation includes “forward-looking information” (as defined in applicable Canadian securities legislation) that is based on

expectations, estimates and projections that management believes are reasonable as of the date of this presentation, but may

ultimately turn out to be incorrect.

Wherever possible, words such as “anticipate”, “believe”, “expect”, “intend”, “project”, “plan”, “forecast”, “opportunity”, “target”,

“potential” and similar words, as well as any number or year followed by “E” (which stands for “estimated”) have been used to

identify these forward-looking statements. Information in this presentation has been furnished for information only and is accurate at

the time of presentation on May 10, 2018, but may later be superseded by more current information. Except as required by law,

Finning does not undertake any obligation to update the information, whether as a result of new facts becoming known, future events

occurring or otherwise.

Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the actual results,

performance or achievements of Finning to be materially different from any future results, performance or achievements expressed or

implied by the forward-looking information in this presentation. Important information identifying and describing such risks,

uncertainties and other factors is contained in Finning’s most recently filed annual information form (under the headings “Forward-

Looking Information” and “Key Business Risks”) and in the management’s discussion and analysis of financial results (MD&A) portions

of Finning’s most recent annual and quarterly financial reports (under the headings “Risk Factors and Management” and “Forward-

Looking Disclaimer”). These documents may be accessed on the Finning website at www.finning.com (in the financial reports section

on the Investors page) or the SEDAR website at www.sedar.com.

Non-GAAP financial measures

This presentation includes the following “non-GAAP financial measures”: “equipment backlog”, “inventory turns” and “ROIC” (return

on invested capital). These financial metrics do not have a standardized meaning under International Financial Reporting Standards

(IFRS) or Generally Accepted Accounting Principles (GAAP), and therefore may not be comparable to similar measures presented by

other issuers. For additional information regarding these financial metrics, including definitions and reconciliations from each of these

non-GAAP financial measures to their most directly comparable measure under GAAP, where available, see the heading “Description

of Non-GAAP Financial Measures and Reconciliations” in our most recent MD&A. Management believes that providing certain non-

GAAP financial measures provides users of the Company’s consolidated financial statements with important information regarding the

operational performance and related trends of the Company's business. By considering these measures in combination with the

comparable IFRS measures set out in the MD&A, management believes that users are provided a better overall understanding of the

Company's business and its financial performance during the relevant period than if they simply considered the IFRS measures alone.

3

http://www.sedar.com/

STRATEGIC PLAN

INVESTOR MEETING

Vancouver, May 10, 2018

Scott Thomson, President and CEO

SUPPLY CHAIN

Improved Performance

EARNINGS

TORQUE

CAPITAL

EFFICIENCIES

2017 ROIC and FCF

Safety and Employee Engagement Customer Loyalty

Cost Control

Operational Efficiency

Supply Chain

Improvements

Outstanding Safety

Performance

Stronger Employee

EngagementContinued

Improvement

2013 to 2017

points

2013 – 2017 Achievements

14

SERVICE

EXCELLENCE

ASSET UTILIZATION

MARKET

LEADERSHIP

Parts and equipment

turns improvement

Canada service EBIT

Canada, UK & Ireland

Core equipment and

parts market share

5

The Future - Megatrends

A Shift in Resource

Supply and DemandIndustry 4.0

Data & Insights

Driving Value

C2BNew Competitive

Landscape

A New

Societal Deal

Opportunities to

enhance customer

intimacy

Sustainable operations and

stakeholder value creation

Emerging market demand

with secure supply

Digitally enabled lean Smart Iron increasingly

important

Customer centricity

critical

6

The Future – Macro-Economic Trends

Finning Region Macro-Economic Trends Infrastructure Spending (2018-2020)

WESTERN CANADA

Oil sands – product support focus

Construction, power systems,

other mining – robust growth

C$55 billion

CHILE Copper mining recovery

Improved business confidenceUS$12 billion

ARGENTINA Improved investment climate

Political risks remainUS$20 billion

UK & IRELAND Digital business

Stable economy£95 billion

PROJECTED OPPORTUNITY - 1.7 bcf/d

2019-2026

LNG Canada - $40 billion investment

~300 Gas

Compression

Prime and

Standby

Power

Well

ServiceEngines

~$300M Engines + Product Support

Vaca Muerta

US$7bnINVESTMENT

2018-2021

Source: BNA

Source: GI Hub

7

bcf/d – billion cubic feet per day

PURPOSE

We believe in partnering and

innovating to build and power

a better world.

VISIONLeveraging our global expertise and

insight, we are a trusted partner in

transforming our customers’ performance.

VALUESWe are trusted

We are collaborative

We are innovative

We are passionate

Strategic Framework

Customer Centricity

Lean & Agile Global Finning

Global Supply Chain

Digital Enterprise

Growth and Diversification

GLOBAL STRATEGIC PRIORITIES

8

ERP

Data Driven

Decision

Making

Investment Aligned with 2018-2020 Priorities

CAT

Complementary

M&A

Global

Supply Chain

• Forecast to Cash

• Centralized

Procurement

Ultra-Class

Mining

Vehicles

• Autonomy

• Electric Drive

RUN

Strategy

CUSTOMER

CENTRICITY

DIGITAL

ENTERPRISELEAN & AGILE SUPPLY CHAIN

GROWTH &

DIVERSIFICATION

Asset Light

Footprint

Disciplined

Processes

Omni-Channel

e-commerce

Connected

Assets

Performance

Solutions

RUN - Rental, Used, New

Product Support

• Condition Monitoring

• Data-driven Lead

Generation

• Rebuild Opportunities

• Customer Support

Agreements

• Integrated Knowledge

Centre

Data and

Analytics

9

Strong Alignment with Caterpillar

FOUNDATION

ROICOPACC

Exceptional

Customer Experience

Connectivity & Digital as

Product Support Drivers

Operational

Excellence

Safety / Talent / Sustainability

10

0.99

0.36

2013 2018 Mar YTD

Safe, Talented and Inclusive Team

Executive Office Candidates Women on Board of Directors

SAFETY

TALENT INCLUSION

Total Recordable Injury Frequency (TRIF)

2014 2018

1 42014 2018

1 4

11

Execution Velocity – Global Leverage

New operating model

5 YEARS AGO 2018 FORWARD

Shared

ServicesFinning

Canada

Finning

South

America

Finning

Digital

FinningInternationalFinning

UK & Ireland

Finning

UK &

Ireland

Finning

International

Finning

South

America

Finning

Canada

12

Value Creation

Outcomes

Transformed

Customer Experience

Sustainable Product

Support Growth

Improved Operating and

Financial Performance

Attractive Opportunities

to Grow and Diversify

13

PEOPLE

INVESTOR MEETING


Chad Hiley, Chief Human Resources Officer

76

3

1

2014 2015 2016 2017

Talent – Strengthened and Diversified Leadership Team

Number of Recruited Executives

Women in Leadership Roles (%)

3 year plan to develop leaders at all levels in the

organization with over 1,300 leaders to participate

Employee Engagement Highlights 2017

20 19

7

2623

13

Canada UK & Ireland South America

2014 2017

15

Broadening Safety and Sustainability

TRIF TIF Widening the parameters of an injury with

the goal of preventing future incidents

Attention to leading indicators – hazard

identifications and near misses

Relentless focus on significant incidents

Safety

+ Employee Health

+ Environment

+ Inclusive Workforce

+ Community Investment

SUSTAINABILITY

TRIF: Canada Saskatchewan

0.94 0.880.56

6.4

2.1

0

2015 2016 2017

TRIF – Total Recordable Incident Frequency (recordable incidents per 200,000 hours)

TIF – Total Incident Frequency (incidents per 200,000 hours)

16

FINNING DIGITAL

INVESTOR MEETING


Dave Cummings, EVP Digital and Technology

85YEARS

12,500EMPLOYEES

BUILT ON KNOWLEDGE & EXPERIENCE OF

Digital investment focused on strengthening the

differentiators of our existing business

Combination of Finning and new digital capabilities creates value

18

Value Growth Enabled by Technology

Value

Driver

Machine

Reliability

Robust product

and reliable parts

and service

network

Machine

Productivity

Equipment and

operator

performance

monitoring

Fleet

Productivity

Fleet-wide

visibility of assets

Network

Optimization

Analysis of large

data volumes,

customer insight

Enabler Quality design

and service

Onboard

technologies

Low-cost sensors

and wireless

Analytics and

Artificial

Intelligence

Status Mature Proven & growing Early adoption Emerging

Differentiators and role of digital and technology in equipment industry have changed over time

19

OUR PRIORITIES:

Improving Customer Performance

Use data to improve parts and service process

Integrating data, equipment and customer knowledge

Generating insights to deliver customer performance solutions

Enhancing the Customer Experience

Integrating physical & digital channels

Increasing B2B purchase and fulfillment options

Greater visibility and transparency on stock and delivery times

Creating Internal Value

Analytic sciences to create internal efficiency insights

Data to insights for timely and improved decision making

Digital innovation to reinvent our processes

Improved working capital efficiency and profitability

Creating Value for Customers and Generating Internal Efficiency and Profitability

Value Priorities

20

Investing in Talent

37%Gender Diversity

70%External Hires

AMAZON • AMEC • BUILD DIRECT • TRIMBLE • CAT • HOOTSUITE • GE DIGITAL •

MICROSOFT • PWC • SAMSUNG • SCHNEIDER ELECTRIC • SHAW •

SIERRA WIRELESS • TECK • TELUS • TOSHIBA • BC HYDRO •

VANCITY • VISION CRITICAL

12 Languages

35%Ethnic Diversity

20% Spanish

30%Finning Expertise

Performing well above gender

diversity rates in the technology

and industrial sectors

Talent sourced from tech,

industrial and other sectors

where digital expertise exists

Our team diversity reflects our

international presence and

customer base

18Nationalities

Built a tightly integrated team of experts with industry sector, geography, ethnic and gender diversity

Finning brings domain expertise (i.e. equipment, market and customer

expertise) as a critical ingredient in our overall team make-up

21

Finning Cloud - Analytics

Apps &

Services

Customer Experience Platform

Connecting Equipment

IntegratedProcurement

eCommerce

GLOBALIZING AND MODERNIZING DIGITAL CAPABILITIES & IT INFRASTRUCTURE

Condition

Monitoring

Data Sources

CRM

HumanCapital Management

ERP

Digital Quoting

Core Business Systems Customer Relationship Omni-Channel Connected Eco-System

Supply chain

Analytics Services & APIsData Assets Analytics Models

Customer Segmentation IoT Sensors

Performance

SolutionsDigital

Finning

Invested in foundation of traditional information technology and digital capabilities

Investing in Technology

22

Path to Demonstrable Growth

0

50

100

150

2015 2016 2017 2018E 2019E

Performance Solutions Revenue (CAD$M)

0%

40%

80%

2015 2016 2017 2018E 2019E

Connected Assets % of addressable population

DRIVE PARTS CHANNEL SHIFTVolume Online

LIFT CHANNEL Capabilities

DRIFT UPCustomer Share

GET CONNECTEDNew & Retrofit (Cat and non-Cat)

EXPANDServices

DELIVER INSIGHTSData and Domain Driven

PARTNERDeliver Outcomes

ADVISE ON PERFORMANCEAnalyze & Recommend

INFORM ON PERFORMANCEVisibility and Monitoring

Parts and Service Digital Commerce

Equipment Connectivity

Performance Solutions

0.0%

15.0%

30.0%

2015 2016 2017 2018E 2019E

Online Parts % of addressable opportunity

Over last three years we have invested in digital – and grown the key value performance metrics significantly

0

5

10

15

20

25

30

35

40

45

50

2016 2017 2018E 2019E

Digital Investment (CAD$M)

BUILD DIGITAL ASSETS“On the Edge” Talent, Connectivity

INTERNAL VALUE FOCUSImprove Core Processes

MARKET FOCUSPerformance Solutions

Digital Investments

Success Based Funding

23

Digital Performance

2017 Year End Trajectory

Global Finning Cloud Implemented

50

25%*

employees who registered

Parts.Cat.ComDeployed in All Regions

+270%Increase in Retro-fit

Connections

23Web Sites

Consolidated37%

Gender Diversity

+$85mYoY B2B Commerce Online Revenue

Growth (new and channel shift)

~ $150mOnline LeadGeneration

(2017)

+50%Performance Solutions Revenue

45%YoY growth in Parts Online

Global BusinessDiverse and Talented Digital Team

42%Connected Cat Assets

(year end 2017)

1

24

SOUTH AMERICA

INVESTOR MEETING


Marcello Marchese, President, Finning South America

CUSTOMER PRIORITIES

Chile and Argentina Infrastructure Opportunities

EASY TO DO BUSINESS WITHCOMPETITIVE &

INNOVATIVE SOLUTIONS

Improved business confidence with new

government

Governmental plan for infrastructure and

highway development

Infrastructure investments expected to grow

Public Private Partnerships plan launched by

government – US$17 billion in 60 key projects

75% expected to be invested between 2018-2022

Road Infrastructure Investment Chile

Source: Chilean Chamber of Construction

Road Infrastructure Investment Argentina

0

2

4

6

8

10

12

2013-2017 2018-2022

US$ billion

Source: Argentina Government PPP program

0

2

4

6

8

10

12

14

2013-2017 2018-2022

US$ billion

26

CUSTOMER PRIORITIES

Argentina – Oil & Gas Activity Accelerates

INTEGRAL SERVICESEXPERTISE & CAPABILITIES

# Wells Forecast in Argentina

0

500

1000

1500

2000

2500

2017 2018 2019 2020 2021 2022

Num

ber

of W

ells

Source: Argentina Chamber of Construction

Conventional Shale Tight

US$7bn

INVESTMENT

2018-2021 Source: BNA

US$340M opportunity

for Finning

Finning well positioned:

infrastructure &

capabilities investments

27

Capturing Product Support Growth Opportunities

0

13

18

23

0

5

10

15

20

25

Not connected Add

Connectivity

Add CSA Add

Performance

Solutions

Current equipment population with CSAs 12%

Contract renewal rate 66%

New equipment sales with CSAs 47%

Number of CSAs at Dec 2016 4,500

Number of CSAs at Dec 2017 5,600

CSAs (customer support agreements) and Performance Solutions

Increase POPs (parts sales as a percentage of total parts opportunity)

Improve customer satisfaction

Have large impact in construction markets

South America Construction CSA Opportunity South America Construction POPs

basis points

28

Capturing Product Support Growth Opportunities

Leads and sales management process improvements using advanced technology

Condition monitoring

Digital and marketing automation

Lead Generation Tool – in early phase of implementation

Positive impact on product support growth

Lead Management Process2017 Results

Product Support

Sales Representative

19%

42%

Lead Generation Tool

Leads Assigned in CRM

5,090 Signals

985

Opportunities

413

Sales

Identification & qualification

Inside Sales

Representative

80

90

100

110

120

2014 2015 2016 2017 2018E

Construction Product Support RevenueUS$ indexed to 100 in 2014

29

Key Growth Drivers

0

100

200

300

400

Dec-16 Dec-17 Mar-18

South America Equipment Backlog US$ million

South America

Revenue

Q1 2018

Mining

60%

Construction

29%

Power Systems

9%

Rental

2%

Copper Mining Recovery

Ultra-Class Truck

Underground Mining

Product Support Growth

Lead Generation Tool & CSAs

Integrated Knowledge Centre

Infrastructure and

Oil & Gas Opportunities

Business friendly governments

30

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028

New Projects

Chile – Mining Recovery

Declining ore grades create underground opportunities

Better investment climate

Better copper prices

Existing Projects

New Projects

Chile Copper Production (base scenario)

Source: Cochilco 2017 Report

Replacement & Expansion

Projects

Ton (thousand) fine copper

Over US$12bn underground projects under construction

Copper Production & Chile Product Support Revenue

Cu

2016 2017

#39 #8Fraser Institute Mining Investment

Attractiveness Index – Chile Ranking

31

4.5

5.0

5.5

6.0

6.5

300

500

700

900

1,100

1,300

1,500

2011 2012 2013 2014 2015 2016 2017 2018E 2019E 2020E

Product Support Revenue Copper Production

US$ million Ton (million) fine copper

Copper production source: Cochilco 2017 Report, Alumbrera annual production

REACTIVE ACTIVE ANTICIPATE

Product Support Operational Performance

• From transaction to value-add

• Data driven information: technology and autonomy

• Improved equipment reliability and availability

• Optimized performance: lowest cost per ton

• Improved productivity: highest tons per hour

5 31 30

55

2018E 2019E 2020E

Brownfield Greenfield

Positioned to Capture Growth in Mining

Predictive Maintenance

+Mining Expertise

=Superior Results

DELIVERABLES

Ultra Class Opportunity

(est.) (>300 tons)

32

Integrated Knowledge Centre

33

Integrated Knowledge Centre (IKC)Reduces Cost and Improves Productivity/Safety for Mining Customers

Benefits

Data Driven

Insights and Actions

Innovative Integrated

Process Models and

Technologies

CUSTOMER

CENTRICITY

DIGITAL

ENTERPRISE

Additional 797Caterpillar

Orders

5-30% 3-7pts

Truck Availability

Improvements

Cost/Ton

Reductions

Operations

Best Practices

Product

Improvement

Maintenance

Best Practices

34

Caterpillar 794 AC Electric Drive Truck Advantage

Best in Class Equipment & Operational Support to Reduce Cost per Ton

BIGGER PAYLOAD

FASTERSuperior braking & control

SAFER

FUEL EFFICIENT

SERVICEABILITYModular design; Parts commonality with mechanical drive; All caterpillar components

EXCELLENT PHYSICALAVAILABILITY

2018 Chile Investment:

Population

12 operating

8 new

20 trucks

Number of customers 5

Hours accumulated 180,000

Highest truck hours 33,000

Availability >90%

COMPETITIVE

ADVANTAGE

Experience To Date – Americas

trucks4

tons320

35

CANADA

INVESTOR MEETING


Juan Carlos Villegas, President, Finning Canada

CUSTOMER

CENTRICITY

Caterpillar Autonomy Solution

Superior Technology / Over 20% Productivity Improvement

ADVANCED FLEET

PRODUCTION SYSTEM

FASTERthan manned & competition

SCALABLE~100 trucks vs. 30 from competition

250+ auxiliary vs. 30 from competition

AUTOMATED FUELINGnot available from competition

RETROFIT CAPABILITY TODAYCaterpillar 793 F and 797 F;

Komatsu 930-E4 DYNAMIC ASSIGNMENT

TECHNOLOGYsuperior to fixed assignment technology

INTEROPERABLEwith manned & competitive fleets

SAFETY

Eliminate operator fatigue, distraction & training issues

Absolute control on truck path and speed

Object detection system

PRODUCTIVITY

Flexibility – work within existing operations

Capacity – smart trucks

Interoperability

Something for Every Mine Trend to autonomy:

REMOTE

CONTROL

AUTONOMOUS

AUTO

ASSIST

SEMI-

AUTONOMOUS

37

Caterpillar Autonomous Truck

313

31

55

76

114

0

50

100

150

200

250

2012 2013 2014 2015 2016 2017 2018 E

* Competition 115 Trucks

Material moved (tons) 700M+

Distance driven (kilometer) 25M+

Lost time injuries zero

Truck population 55

Support equipment population 100+

Productivity improvement vs. manned fleet >20%

200+

Caterpillar Global Autonomous Truck Population

6Customers

7Sites

Caterpillar

supporting

3 Customers

6Sites

Largest global

autonomous population

by end of 2018 Competition

supporting

Fortescue Solomon World’s Largest

CAT Supported Autonomous Mine

CAT Autonomous Truck

2013-2017

*

38

Finning Autonomy Trials

Underground Autonomous

Copper – El Teniente R1600H

HAULING

UNDERGROUND

DOZING

Finning – South America

Oil Sands – Imperial Oil 797F D11

Copper – Teck 793F D10

Steelmaking Coal – Teck D11

Finning – Canada

remote control dozer

39

Mining Pivoting to Growth

Total Mining

Equipment Population 7,500

310797 Population

Average Age (years) 9

Rebuild

Forecast(2019 vs 2018)

3x

+110%

Mining

market size

(units)

Market share

Product

support

Service

profitability

0

10

20

30

40

50

60

70

80

Total - Original Total - Rebuilt

5 6 7 8 9 10 11 12 13 14 15

797 Population by Age and Rebuilds

2018 vs 2017

Original

Age

Rebuilt

# of trucks

40

Participation and share

Parts revenue

Service profitability

Industry growth in all provinces

Construction Continues to Rebound in 2018

2013 2014 2015 2016 2017 2018E

Service EBIT %

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

2013 2014 2015 2016 2017 2018E

Market Size

units

0%

41

38%

46%53%

59% 57%63%

0%

10%

20%

30%

40%

50%

60%

70%

2013 2014 2015 2016 2017 2018 F

Participation

2018 E

Key Growth Drivers

Grow RUN sales using

data-driven insights

Leverage connectivity to

drive insights and

parts share

Transform retail

experience for

the mid-market

0

300

600

900

Dec-16 Dec-17 Mar-18

Canada Equipment Backlog $ million

Canada Revenue

Q1 2018

Oil Sands

35%

Coal & Metals Mining

25%

Construction

24%

Power Systems

12%

Rental

3%

RUN - Rental Used New

42

Canada From To

Caterpillar % of fleet 40% 60%+

Line items ~1,000 ~500

Targeted machine life 5 years 3 years

Machine specification:

rent vs saleVaried Identical

Rental Transformation - RUN

Highlights

Flexible options

for customers

Revenue realization –

everything for sale

Rental integrated

into dealership

Maximized rental ROIC

throughout the cycle

NEW< 3 months

USED> 36 months

RENTAL1-36 months

Adds from inventory

Primary source of used

inventory (60%+)

Retail sale at peak residual value

6%3% 30%

Overall margin

improvement with

higher mix of rental

and used sales

Maximize asset value

with ex-rentals for

used sales

+30%

RATES

+6%

UTILIZATION

43

2017 vs 2016

Grow New Equipment Sales Using Data-Driven Insights

Analytics are driving market

knowledge and team behaviors

New sales quoting tool, processes and

reporting ensure margin control

Coverage of existing and new customers

Active measurement of participation and

equipment availability

Lower cost sales channels (online, inside sales)

Investing in new relationships based on

shovel ready and future projects

Sales teams focused on region and industry

44

Leverage Connectivity to Deliver Insights and Parts Share

Significant opportunity to capture parts market share with mid-size customer

Finning has 2 x share with largest customers vs. mid-tier customers

Connectivity

Customer Support

Agreements Ease

Condition

Monitoring

Cat Digital

Inspection

SOS

History

Repair

Quote

Match CSA to

segment needs

Standard on new

machines

Revenue from connected

assets up 2.5 times (Q1/18 vs Q1/17)

Digital tools for

transparency and trust

Growing online parts

sales (+23% in 2017)

Q1/17 Q1/18

183%

Retrofits

45

Transform Retail Experience for Mid-Market

Offer flexible options for customers across RUN needs (Rental, Used, New)

Customer-centric retail experience, integrating RUN into locations

Freeing up service capacity to support mid-market

Increasing rental and used inventory to provide flexible options at multiple price points

Consolidated Used Supply

Consistent service standards

Standardized repair options

New delivery model pilots

Pop-ups

Small trucks

Increase % in-field

Used Retail Centre,

Edmonton - May 2018

Consolidated inventory of

used machines

Demonstration area

Service Capacity for Mid-Market

46

Reduced Cost Structure

2014 - 2016 CANADA

Annual savings $150M

Workforce(1) 21%

Facility footprint 25%

Fixed SG&A(2) 22%

(1) Excluding Saskatchewan operations acquired in 2015

(2) Adjusted for significant items, excluding Saskatchewan operations.

Please refer to 2017 MD&A for an explanation of significant items

Maintaining Cost Discipline

50

75

100

125

150

2013 2014 2015 2016 2017

Increased Absorption Rates (%)

Absorption rate is calculated as product support gross profit divided

by total SG&A costs

47

UK & IRELAND

INVESTOR MEETING


Kevin Parkes, Managing Director, Finning UK & Ireland

UK Market Evolution: Shift from Mining to Core

Opportunity

90km section

Self delivery model

Circa 700 core assets

3 year time line

Value for advice

£500bn Infrastructure Opportunity

Energy Water Transportation Other

HS2

Heathrow

Expansion

23

7

0

20

40

60

80

2014 2018E

Mining Parts % of parts revenue

48

59

2014 2018E

Core Parts% of parts revenue

HS2 is the Largest Rail Project in the UK

75

80

85

90

95

100

105

2014 2015 2016 2017 2018E

Parts Revenue Recovered Since Mining

Collapse (£M indexed to 100 in 2014)

49

Lean & Agile Business Model

>6

Parts Turns

>5

New Equipment

Turns

Maintain Working Capital Discipline

through growth cycle

Sustainable Fixed Cost Reduction

through geographic consolidation and

business line leverage

Closed

Location

20% reduction in

non-service

employees

Aged Inventory

<5%

Invested Capital Turnover

Working Capital to Sales Ratio

Improved Inventory Management

REVENUE

Less product

support in

the mix

SG&A

Reduced cost structure maintains profitability on

lower margin revenue stream

EBIT

Driven by

lower cost

structure

Successfully Repositioned for Profitability

E

E

50

Investing in New Capabilities

Performance Solutions

Margin expansion through value added services

Retail Transformation

Easier to do business, lower cost to serve

OMNI CHANNEL DEVELOPMENT

RETAIL AND ONLINE EXPERIENCE

FOR MACHINES AND GENERATORS

51

Connectivity Enables Lean & Agile Service Model

Non Productive Travel Time

Safety Observations

Customer Experience NPS

Product Support Market Share

ConnectPerformance

SolutionsCSA

Connected Formatted Network

Workforce Management

Connected Engineers

Standard Repair Options

Connected Customers

70%13%

SG&A

12%

1 2 3 4 5

RRR

RRR

RRR

RRR

RR

RR

RR

RR

RR

R

R

R

R

R

R

RR

R

Connected

Vehicles

52

GLOBAL SUPPLY CHAIN

INVESTOR MEETING


Steve Nielsen, EVP and CFO

3.0

3.2

3.4

3.6

3.8

4.0

4.2

2013 2017 Potential 2015 2017 2015 2017 2015 2017

Canada South America UK & Ireland

Improvements - New Equipment

500

550

600

650

700

750

800

2013 2017

Equipment Supply Chain Improvements

Lower Inventory($ millions)

Key Performance Drivers

End-to-End

Process Improvement

Improved Demand and

Supply Planning

Advanced Technology in

Key Processes

3.6

~600

Increased Inventory Turns(X times)

Shorter End-to-End Cycles (days)

23%

0.4x

37%

12%

16%

↑ 0.1 turns ~$20M FCF

0.5x

4.1

54

2.0

2.2

2.4

2.6

2.8

3.0

3.2

3.4

3.6

3.8

4.0

4.2

2013 2017 Potential 2014 2017 2014 2017 2014 2017

Canada South America UK & Ireland

Parts Supply Chain Improvements

500

550

600

650

700

750

2013 2017

~6503.5

Key Performance Drivers

Improved

Inventory Management

Reduced Network Routes

and Touches

Increased Direct Shipments

to Customers

Improvements - Parts

Lower Inventory($ millions)

Increased Inventory Turns(X times)

Increased Customer Loyalty(net promoter score)

11%

15%13%

10%

0.8x

↑ 0.1 turns ~$20M FCF

0.5x4.0

55

Transformed and Globally Leveraged Supply Chain

Global Supply Chain

design puts the customer at

the centre of our business

and focuses on enhancing

their experience across all

channels

Drives Significant Competitive Advantage

Data Driven

Planning

Efficient

Working

Capital

Leverage

Volume and

Scalability

Talent,

Processes and

Technology

56

Supply Chain Benefits Align With Global Strategic Priorities

Customer

Delivery OptionsCustomer Life Cycle

Management

Leverage Global Buying

Power

Global Supplier

Performance

Lower

Cost to Serve

Improve Value for

Cost Proposal

Customer

Centricity

Lean and Agile

Global Finning

Digital

Enterprise

Priorities

1. Equipment Supply

Chain Velocity

Canada UK & Ireland South America

In Progress 2019Complete

2. E-Commerce

Capabilities

3. Strategic

Procurement

Current indirect spend

Annual savings potential

$1B

5%

57

FINANCIAL PERFORMANCE

INVESTOR MEETING


Steve Nielsen, EVP and CFO

Investor Value Proposition

Revenue Growth

Directionally consistent with previous upcycles; key growth drivers provide upside

Earnings Torque

Leverage of incremental revenue on fixed cost

Capital Efficiencies

Supply chain improvements and capital discipline

KEY GROWTH DRIVERS

Markets

Infrastructure Opportunities

Copper Mining Outsized Growth

Power Systems

Product

Support

Customer Support Agreements

Digital / E-Commerce


Rebuilds

Integrated Knowledge Centre(s)

Caterpillar

/ Finning

Ultra-Class Mining Vehicles

Autonomy

Life Cycle Value Machines

Underground

RUN

Complementary Acquisitions

RUN - rental, used, new equipment

59

Earnings Torque

$6.8B

~23%

$6.3B

Business Transformation

Overhead reduction

Facility optimization

Supply chain efficiencies - parts

Cost discipline

Revenue Decline

Lower Cost to Serve

Digital / e-commerce

ERP in South America

Global procurement

Performance insights

Supply chain efficiencies - equipment

Revenue Growth

Reduced SG&A Costs as Percentage of Revenue – Lower Fixed Cost Base

SG&A costs

as % revenue

2013

~20%

2017

~18%

Target

Revenue

60

Financial Objectives – Canada

ROIC Potential

Takeaways

Positive outlook for key industries

Mid-market product support growth

Leading autonomy solution

Rental transformation

Revenue GrowthKEY GROWTH DRIVERS

Markets



Power Systems

Product

Support




Rebuilds


Caterpillar

/ Finning


Autonomy


Underground

RUN


9.5% 19% 20% 21% 22%

9.0% 18% 19% 20% 21%

8.5% 17% 18% 19% 20%

8.0% 16% 17% 18% 18%

7.5% 15% 16% 17% 17%

2.0 2.1 2.2 2.3

EBIT

Mar

gin

IC Turnover

61

Financial Objectives – South America

ROIC Potential

Takeaways

Chilean copper mining recovery

Significant ultra-class truck opportunity

Product support growth through Integrated

Knowledge Centre and Lead Generation Tool

Underground mining opportunity


Markets



Power Systems

Product

Support




Rebuilds


Caterpillar

/ Finning


Autonomy


Underground

RUN

10.0% 20% 21% 22% 23%

9.5% 19% 20% 21% 22%

9.0% 18% 19% 20% 21%

8.5% 17% 18% 19% 20%

2.0 2.1 2.2 2.3

IC Turnover

EBIT

Mar

gin


62

Financial Objectives – UK & Ireland

ROIC Potential

Takeaways

Significant infrastructure and power

opportunities

Lean and agile business model

Digital services

Supply chain velocity

5.0% 18% 19% 19% 20%

4.5% 16% 17% 17% 18%

4.0% 14% 15% 15% 16%

3.5% 13% 13% 13% 14%

3.6 3.7 3.8 3.9

EBIT

Mar

gin

IC Turnover


Markets



Power Systems

Product

Support




Rebuilds


Caterpillar

/ Finning


Autonomy


Underground

RUN


63

7463

54

70

118

0

40

80

120

160

200

2013 2014 2015 2016 2017 2018 E

Net Capital Expenditures ($ millions)

Capital Allocation

Goal - Positive Free Cash Flow Through the Cycle

150-200

GROWTH

Technology


RUN

Complementary Acquisitions

SHAREHOLDERS

Dividends

Share Repurchases

Uses of Cash (2013-2017)

Free Cash Flow

~$1.8 billion

Dividend

Debt repayment

~90% Bucyrus related

Increase in cash

Acquisition of

Saskatchewan dealer

Share

repurchases

Process and technology

investments

Ultra-class mining vehicles

Digital and e-commerce

capabilities


80-90

0.60

0.69

0.73 0.730.75

0.80

0.40

0.50

0.60

0.70

0.80

0.90

2013 2014 2015 2016 2017 2018

Dividend ($ per share) – 6% CAGR

2013 to 2017 - annual dividend paid; 2018 - indicated annual dividend64

CLOSING COMMENTS

INVESTOR MEETING


Scott Thomson, President and CEO

Summary

Positive macro-economic backdrop in all

regions

Use of technology to improve customer

experience and reduce cost to serve

Significant product support growth

opportunities

Positioned for profitable and capital

efficient growth

Strategic priorities to create value for all

stakeholders

Customer Centricity

Lean & Agile Global Finning

Global Supply Chain

Digital Enterprise

Growth and Diversification

GLOBAL STRATEGIC PRIORITIES

66

INVESTOR MEETING

Vancouver

May 10, 2018

INVESTOR MEETING - Finning...Non-GAAP financial measures ... AMAZON • AME • UILD DIRET •...

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