Element Fleet Management (EFN) CIBC Eastern Institutional Investor Conference summary

Financial performance and growth outlook

• Year-to-date revenue grew 13%, adjusted EPS up 18%, free cash flow up 11%, and ROE reached 19.9%.

• Medium-term targets remain 6%-8% revenue growth and double-digit EPS growth.

• Market opportunity remains strong with 50% of fleets still self-managed and high client retention at 98%.

• Recent commercial execution challenges and market caution have slowed new business wins and originations.

• Management changes have been made to improve commercial execution, with expected gradual impact.

Originations, vehicles under management, and service revenue

• Originations impacted by deliberate portfolio adjustments and client caution, but excluding one client, originations are up 4%.

• Vehicles under management (VUM) continues to grow 2%-4%, driven by portfolio expansion, not just originations.

• Service revenue growth is supported by increased VUM, product penetration, and utilization, with Q2 showing strong results.

• Significant white space remains for product penetration across all markets and products, especially newer technology offerings.

Financial structure, margins, and capital deployment

• Net financial revenue yield has benefited from leasing focus and improved funding structures, but future increases will moderate.

• Gains on sale remain above pre-COVID levels due to higher prices and more units, though normalization is expected.

• New equity residual financing structure allows retention of future cash flows and tax benefits, with more gradual P&L impact.

• Canadian bonus depreciation offers future optionality for syndication yields but no immediate tax impact.

• Digitization initiatives targeting CAD 20 million in annual savings, focusing on client experience and operational scale.