Canadian National Railway Company (CNR) Desjardins Toronto Conference summary

Business performance and market environment

• Year-to-date volumes increased 1%, with Q4 to date up 6% and November up 15%, aided by easier comparisons due to last year's strike.

• Sectors like petroleum, chemicals, NGL, and frac sand performed well, while lumber and iron ore faced significant challenges.

• Operating ratio improved by 170 basis points in Q3, maintaining a top industry position.

• Freight recession continues to impact volumes, but cost management and operational efficiency remain strong.

• Confident in meeting year-end guidance despite macroeconomic headwinds.

Cost management and workforce strategy

• Implemented a CAD 75 million cost reduction, mainly targeting management positions while protecting frontline supervisors.

• Consolidated treasury and accounting functions to drive synergies.

• Over 700 train crew members on furlough, with a successful recall rate above 90% for seasonal needs.

• No significant macroeconomic improvement expected for next year; focus remains on controlling what can be managed.

Capital expenditure and capacity

• Announced a CAD 550 million CapEx reduction for 2026, aiming for capital efficiency and strong free cash flow yield.

• Maintains 18%-20% CapEx-to-revenue target, with recent investments rejuvenating locomotive fleet and grain car inventory.

• Capacity improvements, such as double tracking key subdivisions, position the company well for future volume rebounds.

• Will reassess CapEx as economic conditions and volume growth change.