Finning International (FTT) Q4 2024 earnings summary

Executive summary

• Net revenue reached a record $10.1 billion in 2024, up 6% year-over-year, with Q4 net revenue of $2.6 billion, up 7% from Q4 2023, driven by strong new equipment and product support growth, especially in South America.

• Q4 2024 EBIT was $223 million (8.7% of net revenue), and Q4 EPS was a record $1.02; full-year Adjusted EPS was $3.80.

• Free cash flow for 2024 was $865 million, with Q4 free cash flow at $399 million, both significantly higher than 2023.

• Equipment backlog ended the year at $2.6 billion, up 27% year-over-year, led by mining and power systems.

• Shareholder returns included $322 million in share repurchases and $151 million in dividends, with 23 consecutive years of dividend growth.

Financial highlights

• Product support revenue grew 6% in Q4, led by South America; new equipment sales rose 12% in Q4, while rental revenue declined 14%.

• SG&A as a percentage of net revenue reached a record low of 16.3% for the year and 16% in Q4.

• Gross profit margin for Q4 was 24.5%, down 140 basis points year-over-year due to a higher mix of lower-margin mining equipment.

• Q4 2024 EBIT margin was 8.7%; South America 10.9%, Canada 8.1%, UK & Ireland 5.8%.

• Adjusted ROIC for Q4 was 17.6%; net debt to adjusted EBITDA was 1.5x at year-end.

Outlook and guidance

• Focus remains on maximizing product support, driving resilience, and growing used, rental, and power businesses to improve ROIC.

• South America outlook is strong, driven by copper demand and mining expansions, but faces labor market challenges.

• Canada outlook is mixed, with stable product support demand but uncertainty from government policy changes and tariffs.

• UK & Ireland expect soft construction demand but resilience in product support and growth in power systems and used equipment.

• 2025 capital and rental fleet expenditures expected to exceed 2024’s $219 million, focusing on growth in South America and rental repositioning in Canada.