Canadian National Railway Company (CNR) 16th Annual Wells Fargo Industrials & Materials Conference summary

Operational performance and productivity

• Network train speed is up 2% year to date, with car velocity above 200 miles per day and train load up 3%.

• Locomotive fleet productivity has improved by 7%, and overall employee productivity is up 9% GTM per employee.

• Fast Tracking initiative has delivered over CAD 40 million in savings, with more terminals to be optimized.

• Capacity investments in Western Canada and between Chicago and Winnipeg have increased network capacity by 25% in key areas.

• 600 furloughed employees and 200 stored locomotives are available to support future volume growth.

Commercial strategy and market outlook

• Pricing strategy remains focused on value, ahead of rail cost and inflation, and aligned with capacity.

• RTM growth is about 4% in Q2, driven by strong grain volumes and resilience in metals and energy segments.

• Record grain months and strong supply chain performance are noted, but challenging comps are expected in the second half.

• Long-term growth opportunities identified in energy, especially with new deals in the Montney Shale region and LNG exports.

• Automotive business is expected to contribute from 2027 as retooled plants come online.

Financial performance and cost management

• Sequential revenue growth in Q2 is expected, supported by fuel surcharges and business mix.

• Fast Tracking initiative continues to identify cost savings across terminals, assets, and operations.

• Operating ratio (OR) is improving, with a 3% gain in fuel efficiency year to date, though fuel prices are a headwind.

• Focus remains on growing earnings through volume, pricing, and operational efficiency.

• Incremental margins and OR improvement are anticipated beyond 2026, with no specific 2027 guidance.