Element Fleet Management Corp. (TSX:EFN) (“Element” or the
“Company”), the largest publicly traded, pure-play automotive fleet
manager in the world, today announced financial and operating
results for the three months ended December 31, 2024 and
record results for full-year 2024. The following table
presents Element's selected financial results.
|
|
Q4 20241 |
Q3 20241 |
Q4 20231 |
QoQ |
YoY |
2024 |
|
2023 |
|
YoY |
| In US$
millions, except percentages and per share amount |
|
|
|
% |
% |
|
|
% |
| Selected results - as reported |
|
|
|
|
|
|
|
|
| Net
revenue |
270.9 |
|
279.6 |
|
245.1 |
|
(3)% |
11% |
1,087.6 |
|
959.1 |
|
13% |
| Pre-tax income |
121.4 |
|
134.0 |
|
103.4 |
|
(9)% |
17% |
513.6 |
|
448.9 |
|
14% |
| Pre-tax income margin |
44.8 |
% |
47.9 |
% |
42.2 |
% |
(310)
bps |
260
bps |
47.2 |
% |
46.8 |
% |
40
bps |
| Earnings per share (EPS) [basic] |
0.23 |
|
0.24 |
|
0.20 |
|
(1)% |
3% |
0.96 |
|
0.84 |
|
12% |
|
EPS [basic] [$CAD] |
0.32 |
|
0.33 |
|
0.27 |
|
(3)% |
19% |
1.31 |
|
1.13 |
|
16% |
| Adjusted results (excludes one-time strategic
project costs in 2024)1 |
|
|
|
|
|
|
|
|
| Adjusted net revenue2 |
270.9 |
|
279.6 |
|
245.1 |
|
(3)% |
11% |
1,087.6 |
|
959.1 |
|
13% |
| Adjusted operating income (AOI)2 |
143.3 |
|
161.4 |
|
134.9 |
|
(11)% |
6% |
601.2 |
|
530.5 |
|
13% |
| Adjusted operating margin2 |
52.9 |
% |
57.7 |
% |
55.0 |
% |
(480)
bps |
(210)
bps |
55.3 |
% |
55.3 |
% |
— bps |
| Adjusted EPS2 [basic] |
0.27 |
|
0.29 |
|
0.25 |
|
(7)% |
8% |
1.12 |
|
0.98 |
|
14% |
|
Adjusted EPS2[basic] [$CAD] |
0.37 |
|
0.40 |
|
0.33 |
|
(8)% |
12% |
1.53 |
|
1.32 |
|
16% |
| Other
highlights: |
|
|
|
|
|
|
|
|
| Adjusted free cash flow per share2(FCF/sh) |
0.30 |
|
0.36 |
|
0.29 |
|
(17)% |
3% |
1.38 |
|
1.24 |
|
11% |
|
Adjusted2 (FCF/sh) [$CAD] |
0.41 |
|
0.49 |
|
0.40 |
|
(16)% |
2% |
1.89 |
|
1.67 |
|
13% |
| Originations |
1,498 |
|
1,716 |
|
1,490 |
|
(13)% |
1% |
6,732 |
|
6,340 |
|
6% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
- Strategic project costs totaled $20 million, of which $14
million was incurred in 2023 and $6 million in 2024, These costs
were, attributable to leasing initiatives in Ireland, and were $2
million below planned investment as previously communicated. These
costs for the quarterly periods in the above table were as follows:
Q4 2023 ($11 million), Q3 2024 ($2 million), and Nil in Q4 2024.
Additionally, Q3 2024 also included $7 million in
acquisition-related costs, including severance, in connection with
the Autofleet transaction.
- Adjusted results are non-GAAP or supplemental financial
measures, which do not have any standard meaning prescribed by
GAAP under IFRS and are therefore unlikely to be comparable
to similar measures presented by other issuers. For further
information, please see the "IFRS to Non-GAAP Reconciliations"
section in this earnings release. The Company uses “Adjusted
Results” because it believes that they provide useful information
to investors regarding its performance and results of
operations.
"In 2024, we continued to execute our global
growth strategy that builds on our considerable business momentum,
delivering record results and value to clients, team members, and
our shareholders. At the core of our efforts is a digital-first
mindset and an unwavering commitment to operational excellence and
prioritizing client success," said Laura Dottori-Attanasio, Chief
Executive Officer of Element. "Our robust performance relative to
our plan allowed us to accelerate strategic investments aimed at
enhancing our client experience, modernizing operations through
digitization and automation, and strengthening our teams and
culture. We achieved this while delivering within our full-year
adjusted operating margin guidance and exceeding other key
financial metrics. With these investments, we are building a
stronger, more agile, and more innovative foundation to lead in
defining the future of mobility.
Dottori-Attanasio continued, "We expect expense
growth to moderate considerably in 2025 as the acceleration and
benefits of this year’s investments begin to materialize. By
optimizing costs and driving operational efficiencies through
digital innovation, our disciplined approach to strategic investing
in the areas that are critical to client success positions us well
to both deliver on our financial targets and sustain success well
into the future."
Net revenue growth
Element grew 2024 net revenue 13% over 2023
("year-over-year") to $1.1 billion led largely by double-digit
services revenue growth and higher net financing revenue.
Q4 2024 net revenue increased $26 million or 11%
on a year-over-year basis led largely by robust services revenue
growth. Q4 2024 net revenue decreased $9 million or 3% from a
record Q3 2024 led largely by lower net financing revenue, lower
syndication revenue and seasonal factors impacting Gains on Sale
("GOS"). This was partly offset by higher services revenue
quarter-over-quarter.
Service revenue
Element's largely unlevered services revenue is
the key pillar of its capital-light business model, which also
improves the Company's return on equity profile.
2024 services revenue increased a strong 18%
year-over-year to $596 million driven primarily by higher
penetration and utilization rates of our service offerings from new
and existing clients and higher origination volumes.
Q4 2024 services revenue grew a robust 25%
year-over-year and 10% quarter-over-quarter driven primarily
by higher penetration and utilization rates.
Net financing revenue
2024 net financing revenue grew $38 million or
9% year-over-year led largely by higher net earning assets
resulting from higher originations across all geographies. This
increase was partly offset by higher funding costs, including
higher interest expense largely associated with financing the
redemptions of our preferred shares (previously recorded below the
AOI line). GOS was largely unchanged year-over-year, as increased
volumes of vehicles for sale continue to mitigate used vehicle
price normalization.
Q4 2024 net financing revenue increased $1
million or 1% year-over-year led largely by the same reasons cited
in the full-year 2024 explanation above. This increase was partly
offset by a year-over-year decrease in GOS, and higher funding
costs. A higher volume of vehicles for sale was more than offset by
a decrease in used vehicle pricing in Mexico and ANZ.
Q4 2024 net financing revenue decreased $13
million or 11% from Q3 2024. This quarter-over-quarter decrease was
materially led by seasonal factors affecting GOS and for the same
reasons cited directly above. Lower net earning assets and higher
interest expense associated with financing the redemption of our
preferred shares on September 30, 2024, and the impact of
incremental debt due to the acquisition of Autofleet also
contributed to the decrease.
Syndication volume
The Company syndicated a record $3.5 billion of
assets in 2024, an increase of $984 million or 40% from 2023, and
$1.0 billion in Q4 2024 - $330 million or 47% higher than Q4 2023.
This growth was largely associated with higher origination volume,
the Company's ongoing focus on its capital lighter model, and
management of its tangible leverage. Overall, investor demand
remains robust.
2024 syndication revenue decreased $3 million or
6% year-over-year led largely by the bulk syndication of a Canadian
lease portfolio in December 2024 (the "Bulk Sale") in the amount of
$346 million (CAD$474 million). This Bulk Sale further diversified
our funding sources. Initial sale and setup costs impacted yields.
Yields were further impacted by the Company's syndication mix and
scheduled reduction in bonus depreciation driving lower net yields.
Gross yield, which is a measure of the value and demand for our
core syndication product, was relatively unchanged from 2023. For
further information on the Bulk Sale, please refer to the Element
announces new strategic funding relationship section in this press
release.
Q4 2024 syndication revenue decreased $7 million
or 55% year-over-year for the same reasons cited above for the full
year 2024, and $11 million or 64% quarter-over-quarter largely due
to lower net yields and setup costs associated with the sale of the
Canadian portfolio.
Adjusted operating income and adjusted
operating margins
AOI was a record $601 million in 2024, an
increase of $71 million or 13% year-over-year. This resulted in
adjusted EPS of $1.12 in 2024, which is a 14% increase
year-over-year. 2024 adjusted operating margin was 55.3%, unchanged
from last year and at the mid-point of the Company's revised 2024
guidance range between 55.0 to 55.5%. Excluding Autofleet, adjusted
operating margins would have expanded 30 basis points
year-over-year to 55.6%.
Q4 2024 AOI was $143 million, an increase of $8
million or 6% year-over-year. Q4 2024 adjusted operating margin was
52.9% influenced by accelerated strategic investments, seasonal
factors impacting GOS, $3 million in Autofleet operating costs, and
the impact of the bulk sale of a portfolio of Canadian leases,
which the Company believes will benefit 2025 and beyond. Excluding
Autofleet, Q4 2024 adjusted operating margin was 54.1%.
Q4 2024 AOI decreased $18 million or 11%
quarter-over-quarter led largely by the same reasons cited in the
preceding paragraph.
Originations
Element originated $6.7 billion of assets in
2024, which is a $392 million or 6% increase year-over-year led by
growth across all regions.
Q4 2024 originations of $1.5 billion increased
$8 million or 1% year-over-year; however, originations decreased
$218 million or 13% quarter-over-quarter led largely by seasonal
factors including historically slower client order volume during
the summer months.
Order volumes increased significantly in the
last four months of 2024, reaching a record monthly high in
December. This momentum, bolstered by improvements made through our
U.S. & Canada Leasing strategic initiative based in Ireland, is
expected to drive solid origination volumes in the first half of
2025.
The table below sets out the geographic
distribution of Element's originations for 2024 and 2023:
|
(in US$000’s for stated values) |
December 31, 2024 |
December 31, 2023 |
|
|
$ |
% |
$ |
% |
|
United States and Canada |
5,206,339 |
77.34 |
% |
4,850,411 |
76.50 |
% |
| Mexico |
1,035,249 |
15.38 |
% |
1,028,165 |
16.22 |
% |
|
Australia and New Zealand |
489,960 |
7.28 |
% |
461,451 |
7.28 |
% |
|
Total |
6,731,548 |
100.00 |
% |
6,340,027 |
100.00 |
% |
| |
|
|
|
|
|
|
Adjusted free cash flow per share and
returns to shareholders
On an adjusted basis, Element generated $1.38 of
adjusted free cash flow ("FCF") per share in 2024; up 11%
year-over-year driven by growth in net revenues and higher
originations, while investing approximately $77 million in total
capital investments during the year. In Q4 2024, Element
accelerated approximately $47 million of tax payments to the
Australian Tax Office relating to the 2025 to 2027 taxation years.
The tax payments relate to cash tax timing benefits received due to
temporary accelerated depreciation available during the pandemic,
effectively providing the Company with a tax deferral. The
accelerated payment allows for future adjusted free cash flow to
better represent the cash taxes that would be paid in the normal
course of operations during those future years. This acceleration
of Australian cash taxes is excluded from adjusted free cash flow
per share.
Element returned $336 million of cash to
shareholders through common share dividends, common share buybacks
and preferred share redemptions in 2024.
Common dividend and share repurchases
On February 26, 2025, the Board of Directors
(the "Board") authorized and declared a quarterly cash dividend of
CAD$0.13 per common share of Element for the first quarter of 2025.
The dividend will be payable on April 15, 2025 to shareholders of
record as at the close of business on March 31, 2025.
The Company’s common dividends are designated to
be eligible dividends for purposes of section 89(1) of the Income
Tax Act (Canada).
In furtherance of the Company’s return of
capital plan, Element renewed its normal course issuer bid (the
“NCIB”) for its common shares. Under the NCIB, the Company has
approval from the TSX to purchase up to 40,386,699 common shares
during the period from November 20, 2024, to November 19, 2025. The
Company intends to be more active under its NCIB in 2025. The
actual number of the Company’s common shares, if any, that may be
purchased under the NCIB, and the timing of any such purchases,
will be determined by the Company, subject to applicable terms and
limitations of the NCIB (including any automatic share purchase
plan adopted in connection therewith). There cannot be any
assurance as to how many common shares, if any, will ultimately be
purchased pursuant to the NCIB. Any subsequent renewals of the NCIB
will be in the discretion of the Company and subject to further TSX
approval.
During 2024, the Company purchased 630,657
Common Shares for cancellation under its normal course issuer bids,
for an aggregate amount of approximately $11 million at a volume
weighted average price of CAD$23.77 per Common Share. During Q4
2024, the Company purchased 175,357 Common Shares under its NCIB,
for cancellation, for an aggregate amount of approximately $4
million at a volume weighted average price of CAD$28.51 per Common
Share. During January and February 2025, the Company
purchased 1.1 million Common Shares under its latest NCIB, for
cancellation, for an aggregate amount of approximately $22 million
at a volume weighted average price of CAD $28.75 per Common
Share.
Element applies trade date accounting in
determining the date on which the share repurchase is reflected in
the consolidated financial statements. Trade date accounting is the
date on which the Company commits itself to purchase the
shares.
Preparing Element for the
future
In 2024, Element was purposeful in accelerating
strategic investments in support of future growth. The
Company prioritized initiatives that elevate the client experience,
modernize operations through digitization and automation,
strengthen its teams and culture, and emphasized these efforts
through the acquisition of Autofleet. While pursuing these
strategic advancements, the Company exercised operational
discipline to ensure that financial targets were achieved,
maintaining operating margins within its 2024 guidance range of
55.0 to 55.5%. The Company expects expense growth to moderate
considerably in 2025 as the benefits of these investments begin to
materialize.
Notable achievements include:
- Centralizing accountability for its U.S. and Canadian leasing
operations in Ireland and establishing a strategic sourcing
presence in Singapore, with these initiatives expected to generate
between $30 - $45 million of run-rate net revenue, and between $22
- $37 million of run-rate adjusted operating income (“AOI”), by
full-year 2028. Both units are fully operational with an expected
payback period from the Company's investments at less than 2.5
years.
- Acquiring Autofleet’s robust and highly scalable fleet
optimization technology platform to substantially accelerate its
digitization and automation initiatives, enhance the client
experience and accelerate operational scalability, unlocking new
growth and value creation potential. The integration of
Autofleet will enhance the Company's position in the evolving
mobility and vehicle connectivity landscape. Priorities include
developing a Digital Driver Experience app, building a digital
client reporting portal, and gradually migrating Element's
applications to Autofleet's cloud and AI-based platform.
- Launching an Acceleration Office, to fast-track and prioritize
strategic initiatives like our holistic digital and data analytics
transformation, and our expansion into both Insurance and the
Small-to Medium-Sized Fleets space.
- In January 2025, the Company expanded beyond its core by
announcing a new Insurance Risk solution - a fully integrated
insurance and risk management offering. This new service, launched
in a strategic partnership with Hub International Limited ("HUB"),
a leading global insurance brokerage and financial services firm
servicing commercial fleets, is designed to transform how clients
insure and manage commercial fleets. The new service bundles
insurance coverage solutions, including accident management,
subrogation, driver safety programs, and telematics, to deliver a
seamless, vehicle life-cycle experience for clients.
Guidance
Full-year 2024 Guidance
Element delivered full-year 2024 results within
or above the high end of its previously provided guidance ranges on
key metrics, with the exception of originations. The following
table highlights our full-year 2024 guidance (as was updated
alongside its Q2 2024 results release) compared to the full-year
2024 results.
|
In US$, except per share amounts |
Full-year 2024 Guidance |
Full-year 2024 Actuals |
| Net revenue |
$1.060 -
$1.080 billion |
$1.088
billion |
|
YoY Growth |
11-13
% |
13% |
| Adjusted operating margin1 |
55.0% -
55.5% |
55.3% |
| Adjusted operating income |
$575 - 595
million |
$601
million |
|
YoY Growth |
8-12 % |
13% |
| Adjusted EPS [basic] |
$1.07 -
$1.11 |
$1.12 |
|
YoY Growth |
9-13 % |
14% |
| Adjusted free cash flow per share |
$1.32 -
1.36 |
1.38 |
|
YoY Growth |
6-10 % |
11% |
| Originations |
$7.0 - 7.4
billion |
$6.7
billion |
|
YoY Growth |
11-17 % |
6% |
1. Excluding Autofleet, adjusted operating
margin was 55.6% in 2024; representing adjusting operating margin
expansion of 30 basis points year-over-year.
Certain year-over-year growth amounts shown in
this table may not calculate exactly due to rounding.
Full-year 2025 Guidance
The Company expects to see continued growth in
its client base and net revenue, driven by the ongoing transition
to self-managed fleets and robust demand for its services and
solutions. Strong order volumes over the last four months of 2024,
bolstered by enhancements made through our U.S. and Canada leasing
initiative in Ireland, is expected to drive solid originations
volume in the first half of 2025. Originations are preceded by
vehicle orders, which are binding commitments by clients to lease
or purchase vehicles from Element.
Element is committed to generating positive
operating leverage in 2025, and expects to begin realizing the
benefits of the investments undertaken in 2024.
|
In US$, except per share amounts |
Full-year 2025 Initial Guidance |
Full-year 2025 Guidance |
| Net revenue |
6.5 -
8.5% |
$1.160 -
$1.185 billion |
| Adjusted operating income |
High-single
to low-double digit |
$645 - $670
million |
| Adjusted operating margins |
|
55.5 -
56.5% |
| Adjusted EPS [basic] |
High-single
to low-double digit |
$1.20 -
$1.25 |
| Adjusted free cash flow per share |
High-single
to low-double digit |
$1.48-
$1.53 |
| Originations |
Low- to mid-single digit |
$6.9 - $7.1 billion |
The Company's guidance for 2025 incorporates the
effects of several anticipated revenue headwinds, including the
depreciation of the Mexican Peso (the Company has assumed an
MXN-to-USD exchange rate of 20.5:1), higher interest expenses due
to increased local Peso funding in 2025, and financing the
redemption of the preferred shares. In addition, the scheduled
reduction in bonus depreciation in the U.S. is likely to impact
syndication yields. We also anticipate that our 2025 effective tax
rate will average between 24.5% to 26.5%.
The above ranges are prior to any further
material foreign exchange fluctuations, and any adverse impact
related to changes in the trade agreements between the U.S.,
Mexico, and Canada.
Simplified capital
structure
To further optimize the Company's balance sheet
and simplify its capital structure, the Company redeemed the
following during 2024: (1) all of its 5,126,400 issued and
outstanding 6.21% Cumulative 5-Year Rate Reset Preferred Shares
Series C (the “Series C Shares”) on June 20, 2024, at a price of
CAD$25.00 per Series C Share for an aggregate total amount of
approximately US$91.2 million; (2) all of its 5,321,900 issued and
outstanding 5.903% Cumulative 5-Year Rate Reset Preferred Shares
Series E (the "Series E Shares") on September 30, 2024, at a price
of CAD$25.00 per Series E Share for an aggregate amount of US$95
million approximately; and (3) all of its remaining outstanding
4.25% Convertible Unsecured Subordinated Debentures due June 30,
2024 for consideration of approximately 14.6 million Common Shares,
issued from Treasury and delivered to beneficial holders.
Following the redemption of its Series E
preferred shares, the Company no longer has any preferred shares
outstanding.
As at December 31, 2024, total Common Shares
issued and outstanding were 404.5 million.
Element announces new strategic funding
relationship
In December 2024, Element established a new
strategic funding relationship with affiliates of Blackstone’s
Infrastructure & Asset-Based Credit Group (“Blackstone”)
involving a portfolio of Canadian fleet lease receivables valued at
approximately $346 million (CAD$474 million). This initial
transaction, which took place on December 20, 2024, has
characteristics similar to that of a bulk syndication. Through this
arrangement Element benefits from substantial derecognition of
these finance lease receivables, diversifying and optimizing its
funding profile, validating the high-quality of its asset
origination platform, and supporting the Company's continued
growth.
This transaction further assists in diversifying
the Company's funding sources, reducing leverage and driving our
capital lighter model. However, due to the initial sale, overall
yield was negatively impacted by setup costs. These costs are not
expected to recur in future transactions. Consequently, the Company
expects higher syndication yields in 2025, while also benefiting
from the derecognition of finance lease receivables that similar
transactions would offer.
Transitioning to debt-to-capital vs.
tangible leverage ratio ("TLR")
In Q4 2024, in collaboration with its partners,
the Company changed its banking covenants from TLR to
debt-to-capital, which the Company believes is a more meaningful
measure of its leverage. Commencing in Q4 2024, the Company will
prioritize the reporting and management of debt-to-capital metrics,
though TLR will be still disclosed this quarter for consistency.
The bank covenants are set at 80% of debt-to-capital, and the
Company targets a range between 73% to 77%. The Company remains
committed to maintaining a strong investment grade balance sheet
and will continue to monitor TLR as a key internal metric, but it
will be of reduced importance as an operating constraint.
At December 31, 2024, the Company's
debt-to-capital ratio was 74.1% (December 31, 2023 72%) and
its TLR was 7.56:1 (December 31, 2023 5.99:1).
Conference call and webcast
A conference call to discuss these results will
be held on Thursday, February 27, 2025 at 8:00 a.m. Eastern
Time.
The conference call and webcast can be accessed
as follows:
| Webcast: |
https://www.elementfleet.com/fourthquarter2024 |
| |
|
| Telephone: |
Click here to join the call most efficiently, or dial one of
the following numbers to speak with an operator: |
| |
|
| |
Canada/USA toll-free: 1-844-763-8274 |
| |
|
| |
International: +1-647-484-8814 |
| |
|
A taped recording of the conference call may be accessed through
March 27, 2025 by dialing 1-855-669-9658 (Canada/U.S. Toll Free) or
1-412-317-0088 (International Toll) and entering the access code
3917835.
IFRS to Non-GAAP Reconciliations, Non-GAAP Measures and
Supplemental Information
The Company's audited consolidated financial
statements have been prepared in accordance with IFRS as issued by
the IASB and the accounting policies we adopted in accordance with
IFRS. These audited consolidated financial statements reflect all
adjustments that are, in the opinion of management, necessary to
present fairly our financial position as at December 31, 2024
and December 31, 2023, the results of operations,
comprehensive income and cash flows for the three- and 12-month
periods-ended December 31, 2024 and December 31,
2023.
Non-GAAP and IFRS key annualized operating
ratios and per share information of the operations of the
Company:
|
|
|
As at and for the three-month period
ended |
For the year ended |
| (in US$000’s except
ratios and per share amounts or unless otherwise noted) |
|
December 31, 2024 |
September 30, 2024 |
December 31, 2023 |
December 31, 2024 |
December 31, 2023 |
| |
|
|
|
|
|
|
| Key annualized operating ratios |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| Leverage ratios |
|
|
|
|
|
|
| Financial
leverage ratio |
P/(P+R) |
|
74.1 |
% |
|
74.3 |
% |
|
72.4 |
% |
|
74.1 |
% |
|
72.4 |
% |
| Tangible leverage ratio |
P/(R-K) |
|
7.56 |
|
|
7.00 |
|
|
5.98 |
|
|
7.56 |
|
|
5.99 |
|
| Average financial leverage ratio |
Q/(Q+V) |
|
75.0 |
% |
|
75.1 |
% |
|
72.6 |
% |
|
74.7 |
% |
|
71.6 |
% |
| Average tangible leverage ratio |
Q/(V-L) |
|
7.60 |
|
|
6.80 |
|
|
5.75 |
|
|
6.72 |
|
|
5.53 |
|
| |
|
|
|
|
|
|
| Other key operating ratios |
|
|
|
|
|
|
|
Allowance for credit losses as a % of total finance receivables
before allowance |
F/E |
|
0.08 |
% |
|
0.08 |
% |
|
0.08 |
% |
|
0.08 |
% |
|
0.08 |
% |
| Adjusted operating income on average net earning assets |
B/J |
|
7.31 |
% |
|
8.01 |
% |
|
7.20 |
% |
|
7.53 |
% |
|
7.57 |
% |
|
Adjusted operating income on average tangible total equity of
Element |
D/(V-L) |
|
39.34 |
% |
|
37.91 |
% |
|
29.34 |
% |
|
35.76 |
% |
|
30.08 |
% |
| |
|
|
|
|
|
|
| Per share information |
|
|
|
|
|
|
|
Number of shares outstanding |
W |
|
404,502 |
|
|
403,609 |
|
|
389,169 |
|
|
404,502 |
|
|
389,169 |
|
|
Weighted average number of shares outstanding [basic] |
X |
|
404,578 |
|
|
403,609 |
|
|
389,115 |
|
|
396,880 |
|
|
390,297 |
|
|
Pro forma diluted average number of shares outstanding |
Y |
|
404,726 |
|
|
403,768 |
|
|
404,068 |
|
|
404,164 |
|
|
405,242 |
|
|
Cumulative preferred share dividends during the period |
Z |
|
— |
|
|
1,434 |
|
|
4,418 |
|
|
7,222 |
|
|
17,625 |
|
|
Other effects of dilution on an adjusted operating income
basis |
AA |
$ |
— |
|
$ |
0 |
|
$ |
1,184 |
|
$ |
2,412 |
|
$ |
4,859 |
|
| Net income per share [basic] |
(A-Z)/X |
$ |
0.23 |
|
$ |
0.24 |
|
$ |
0.20 |
|
$ |
0.96 |
|
$ |
0.84 |
|
| Net income per share [diluted] |
|
$ |
0.23 |
|
$ |
0.24 |
|
$ |
0.19 |
|
$ |
0.95 |
|
$ |
0.82 |
|
|
|
|
|
|
|
|
|
| Adjusted EPS [basic] |
(D1)/X |
$ |
0.27 |
|
$ |
0.29 |
|
$ |
0.25 |
|
$ |
1.12 |
|
$ |
0.99 |
|
| Adjusted EPS
[diluted] |
(D1+AA)/Y |
$ |
0.27 |
|
$ |
0.29 |
|
$ |
0.24 |
|
$ |
1.10 |
|
$ |
0.96 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Management also uses a variety of both IFRS and
non-GAAP and Supplemental Measures, and non-GAAP ratios to monitor
and assess their operating performance. The Company uses these
non-GAAP and Supplemental Financial Measures because they believe
that they may provide useful information to investors regarding
their performance and results of operations.
The following table provides a reconciliation of
certain IFRS to non-GAAP measures related to the operations of the
Company and other supplemental information.
|
|
|
For the three-month period ended |
For the year ended |
| (in US$000’s
except per share amounts or unless otherwise noted) |
|
December 31, 2024 |
September 30, 2024 |
December 31, 2023 |
December 31, 2024 |
December 31, 2023 |
| Reported results |
|
US$ |
US$ |
US$ |
US$ |
US$ |
|
Services income, net |
|
|
161,461 |
|
|
146,903 |
|
|
129,657 |
|
|
595,540 |
|
|
502,659 |
|
|
Net financing revenue |
|
|
103,453 |
|
|
116,090 |
|
|
102,211 |
|
|
449,130 |
|
|
410,853 |
|
|
Syndication revenue, net |
|
|
5,976 |
|
|
16,643 |
|
|
13,261 |
|
|
42,890 |
|
|
45,587 |
|
| Net revenue |
|
|
270,890 |
|
|
279,636 |
|
|
245,129 |
|
|
1,087,560 |
|
|
959,099 |
|
| Operating expenses |
|
|
141,234 |
|
|
139,367 |
|
|
134,085 |
|
|
544,681 |
|
|
481,749 |
|
| Operating income |
|
|
129,656 |
|
|
140,269 |
|
|
111,044 |
|
|
542,879 |
|
|
477,350 |
|
| Operating margin |
|
|
47.9 |
% |
|
50.2 |
% |
|
45.3 |
% |
|
49.9 |
% |
|
49.8 |
% |
| Total expenses |
|
|
149,463 |
|
|
145,669 |
|
|
141,716 |
|
|
574,003 |
|
|
510,153 |
|
| Income before income taxes |
|
|
121,427 |
|
|
133,967 |
|
|
103,413 |
|
|
513,557 |
|
|
448,946 |
|
| Net income |
|
|
92,057 |
|
|
98,565 |
|
|
81,567 |
|
|
387,137 |
|
|
345,599 |
|
| EPS [basic] |
|
$ |
0.23 |
|
$ |
0.24 |
|
$ |
0.20 |
|
$ |
0.96 |
|
$ |
0.84 |
|
| EPS
[diluted] |
|
$ |
0.23 |
|
$ |
0.24 |
|
$ |
0.19 |
|
$ |
0.95 |
|
$ |
0.82 |
|
| Adjusting items |
|
|
|
|
|
|
| Impact of adjusting items on operating expenses: |
|
|
|
|
|
|
|
Strategic initiatives costs – Salaries, wages, and benefits |
|
|
— |
|
|
4,633 |
|
|
5,329 |
|
|
5,593 |
|
|
5,329 |
|
|
Strategic initiatives costs – General and administrative
expenses |
|
|
— |
|
|
4,283 |
|
|
5,437 |
|
|
7,806 |
|
|
8,342 |
|
| Share-based compensation |
|
|
13,687 |
|
|
12,242 |
|
|
12,346 |
|
|
43,435 |
|
|
36,429 |
|
| Amortization of convertible debenture
discount |
|
|
— |
|
|
— |
|
|
772 |
|
|
1,517 |
|
|
3,038 |
|
| Total impact of adjusting items on operating expenses |
|
|
13,687 |
|
|
21,158 |
|
|
23,884 |
|
|
58,351 |
|
|
53,138 |
|
| Total pre-tax impact of adjusting items |
|
|
13,687 |
|
|
21,158 |
|
|
23,884 |
|
|
58,351 |
|
|
53,138 |
|
| Total after-tax impact of adjusting items |
|
|
10,265 |
|
|
15,667 |
|
|
17,667 |
|
|
43,763 |
|
|
27,478 |
|
| Total impact of adjusting items on EPS [basic] |
|
|
0.03 |
|
|
0.04 |
|
|
0.05 |
|
|
0.11 |
|
|
0.07 |
|
| Total impact of
adjusting items on EPS [diluted] |
|
|
0.03 |
|
|
0.04 |
|
|
0.04 |
|
|
0.11 |
|
|
0.06 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three-month period ended |
For the year ended |
| (in US$000’s
except per share amounts or unless otherwise noted) |
|
December 31, 2024 |
September 30, 2024 |
December 31, 2023 |
December 31, 2024 |
December 31, 2023 |
| Adjusted results |
|
US$ |
US$ |
US$ |
US$ |
US$ |
|
Adjusted net revenue |
|
|
270,890 |
|
|
279,636 |
|
|
245,129 |
|
|
1,087,560 |
|
|
959,099 |
|
| Adjusted operating expenses |
|
|
127,547 |
|
|
118,209 |
|
|
110,201 |
|
|
486,330 |
|
|
428,611 |
|
| Adjusted operating income |
|
|
143,343 |
|
|
161,427 |
|
|
134,928 |
|
|
601,230 |
|
|
530,488 |
|
| Adjusted operating margin |
|
|
52.9 |
% |
|
57.7 |
% |
|
55.0 |
% |
|
55.3 |
% |
|
55.3 |
% |
| Provision for income taxes |
|
|
29,370 |
|
|
35,402 |
|
|
21,846 |
|
|
126,420 |
|
|
103,347 |
|
| Adjustments: |
|
|
|
|
|
|
| Pre-tax income |
|
|
5,481 |
|
|
6,213 |
|
|
8,184 |
|
|
22,465 |
|
|
21,153 |
|
| Foreign tax rate differential and other |
|
|
985 |
|
|
275 |
|
|
5,092 |
|
|
1,474 |
|
|
5,607 |
|
| Provision for taxes applicable to adjusted
results |
|
|
35,836 |
|
|
41,890 |
|
|
35,122 |
|
|
150,359 |
|
|
130,107 |
|
| Adjusted net
income |
|
|
107,507 |
|
|
119,537 |
|
|
99,806 |
|
|
450,871 |
|
|
400,381 |
|
| Adjusted EPS [basic] |
|
$ |
0.27 |
|
$ |
0.29 |
|
$ |
0.25 |
|
$ |
1.12 |
|
$ |
0.98 |
|
| Adjusted EPS
[diluted] |
|
$ |
0.27 |
|
$ |
0.29 |
|
$ |
0.24 |
|
$ |
1.10 |
|
$ |
0.96 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following table summarizes key statement of
financial position amounts for the periods presented.
| Selected
statement of financial position amounts |
|
For the three-month period ended |
For the year ended |
| (in US$000’s unless
otherwise noted) |
|
December 31, 2024 |
September 30, 2024 |
December 31, 2023 |
December 31, 2024 |
December 31, 2023 |
| |
|
US$ |
US$ |
US$ |
US$ |
US$ |
| Total Finance
receivables, before allowance for credit losses |
E |
7,576,386 |
|
7,612,881 |
|
7,225,093 |
|
7,576,386 |
|
7,225,093 |
|
| Allowance for credit
losses |
F |
6,168 |
|
6,069 |
|
5,539 |
|
6,168 |
|
5,539 |
|
|
Net investment in finance receivable |
G |
4,968,294 |
|
5,251,679 |
|
4,964,175 |
|
4,968,294 |
|
4,964,175 |
|
|
Equipment under operating leases |
H |
2,435,430 |
|
2,537,369 |
|
2,646,158 |
|
2,435,430 |
|
2,646,158 |
|
| Net earning
assets |
I=G+H |
7,403,724 |
|
7,789,048 |
|
7,610,333 |
|
7,403,724 |
|
7,610,333 |
|
|
Average net earning assets |
J |
7,848,023 |
|
8,059,992 |
|
7,494,361 |
|
7,980,144 |
|
7,008,655 |
|
| Goodwill and intangible assets |
K |
1,672,701 |
|
1,581,560 |
|
1,596,323 |
|
1,672,701 |
|
1,596,323 |
|
|
Average goodwill and intangible assets |
L |
1,675,336 |
|
1,581,776 |
|
1,589,182 |
|
1,607,766 |
|
1,590,290 |
|
| Borrowings |
M |
8,463,789 |
|
8,472,130 |
|
8,018,132 |
|
8,463,789 |
|
8,018,132 |
|
| Unsecured convertible debentures |
N |
— |
|
— |
|
127,816 |
|
— |
|
127,816 |
|
| Less: continuing involvement liability |
O |
(132,683 |
) |
(125,225 |
) |
(81,851 |
) |
(132,683 |
) |
(81,851 |
) |
| Total debt |
P=M+N-O |
8,331,106 |
|
8,346,905 |
|
8,064,097 |
|
8,331,106 |
|
8,064,097 |
|
| Cash and restricted funds |
P1 |
408,621 |
|
337,247 |
|
350,637 |
|
408,621 |
|
350,637 |
|
| Total net debt |
P2 = P-P1 |
7,922,485 |
|
8,009,658 |
|
7,713,460 |
|
7,922,485 |
|
7,713,460 |
|
|
Average debt |
Q |
8,313,527 |
|
8,582,383 |
|
7,829,218 |
|
8,473,105 |
|
7,361,960 |
|
| Total shareholders' equity |
R |
2,774,315 |
|
2,774,502 |
|
2,943,828 |
|
2,774,315 |
|
2,943,828 |
|
| Preferred shares |
S |
— |
|
— |
|
181,077 |
|
— |
|
181,077 |
|
| Common shareholders' equity |
T=R-S |
2,774,315 |
|
2,774,502 |
|
2,762,751 |
|
2,774,315 |
|
2,762,751 |
|
|
Average common shareholders' equity |
U |
2,768,504 |
|
2,781,421 |
|
2,713,843 |
|
2,770,044 |
|
2,664,760 |
|
|
Average total shareholders' equity |
V |
2,768,504 |
|
2,843,024 |
|
2,949,789 |
|
2,868,593 |
|
2,921,281 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Throughout this press release, management uses
the following terms and ratios which do not have a standardized
meaning under IFRS and are unlikely to be comparable to similar
measures presented by other organizations. Non-GAAP measures are
reported in addition to, and should not be considered alternatives
to, measures of performance according to IFRS.
Adjusted operating expenses
Adjusted operating expenses are equal to
salaries, wages and benefits, general and administrative expenses,
and depreciation and amortization less adjusting items impacting
operating expenses. The following table reconciles the Company's
reported expenses to adjusted operating expenses.
|
|
For the three-month period ended |
For the year ended |
| (in US$000’s except
per share amounts or unless otherwise noted) |
December 31, 2024 |
September 30, 2024 |
December 31, 2023 |
December 31, 2024 |
December 31, 2023 |
| |
US$ |
US$ |
US$ |
US$ |
US$ |
|
Reported Expenses |
149,463 |
145,669 |
|
141,716 |
574,003 |
510,153 |
| Less: |
|
|
|
|
|
|
Amortization of intangible assets from acquisitions |
7,819 |
6,970 |
|
6,971 |
28,734 |
27,912 |
|
Loss (gain) on investments |
410 |
(668 |
) |
660 |
588 |
492 |
| Operating expenses |
141,234 |
139,367 |
|
134,085 |
544,681 |
481,749 |
| Less: |
|
|
|
|
|
| Amortization of convertible debenture discount |
— |
— |
|
772 |
1,517 |
3,038 |
| Share-based compensation |
13,687 |
12,242 |
|
12,346 |
43,435 |
36,429 |
| Strategic initiatives costs - Salaries, wages and
benefits |
— |
4,633 |
|
5,329 |
5,593 |
5,329 |
| Strategic
initiatives costs - General and administrative expenses |
— |
4,283 |
|
5,437 |
7,806 |
8,342 |
| Total
adjustments |
13,687 |
21,158 |
|
23,884 |
58,351 |
53,138 |
| Adjusted
operating expenses |
127,547 |
118,209 |
|
110,201 |
486,330 |
428,611 |
| |
|
|
|
|
|
|
Adjusted operating income or Pre-tax
adjusted operating income
Adjusted operating income reflects net income or
loss for the period adjusted for the amortization of debenture
discount, share-based compensation, amortization of intangible
assets from acquisitions, provision for or recovery of income
taxes, loss or income on investments, and adjusting items from the
table below.
The following tables reconciles income before
taxes to adjusted operating income.
|
|
For the three-month period ended |
For the year ended |
| (in US$000’s except
per share amounts or unless otherwise noted) |
December 31, 2024 |
September 30, 2024 |
December 31, 2023 |
December 31, 2024 |
December 31, 2023 |
| |
US$ |
US$ |
US$ |
US$ |
US$ |
| Income
before income taxes |
121,427 |
133,967 |
|
103,413 |
513,557 |
448,946 |
| Adjustments: |
|
|
|
|
|
|
Amortization of convertible debenture discount |
— |
— |
|
772 |
1,517 |
3,038 |
|
Share-based compensation |
13,687 |
12,242 |
|
12,346 |
43,435 |
36,429 |
|
Amortization of intangible assets from acquisition |
7,819 |
6,970 |
|
6,971 |
28,734 |
27,912 |
|
Loss (gain) on investments |
410 |
(668 |
) |
660 |
588 |
492 |
| Adjusting Items: |
|
|
|
|
|
| Strategic initiatives costs - Salaries, wages and benefits |
— |
4,633 |
|
5,329 |
5,593 |
5,329 |
| Strategic initiatives costs - General and administrative
expenses |
— |
4,283 |
|
5,437 |
7,806 |
8,342 |
| Total pre-tax impact of adjusting items |
— |
8,916 |
|
10,766 |
13,399 |
13,671 |
| Adjusted
operating income |
143,343 |
161,427 |
|
134,928 |
601,230 |
530,488 |
| |
|
|
|
|
|
|
Adjusted operating margin
Adjusted operating margin is the adjusted
operating income before taxes for the period divided by the net
revenue for the period.
After-tax adjusted operating
income
After-tax adjusted operating income reflects the
adjusted operating income after the application of the Company’s
effective tax rates.
Adjusted net income
Adjusted net income reflects reported net income
less the after-tax impacts of adjusting items. The following table
reconciles reported net income to adjusted net income.
|
|
For the three-month period ended |
For the year ended |
| (in US$000’s except
per share amounts or unless otherwise noted) |
December 31, 2024 |
September 30, 2024 |
December 31, 2023 |
December 31, 2024 |
December 31, 2023 |
| |
US$ |
US$ |
US$ |
US$ |
US$ |
| Net
income |
92,057 |
|
98,565 |
|
81,567 |
|
387,137 |
|
345,599 |
|
|
Amortization of convertible debenture discount |
— |
|
— |
|
772 |
|
1,517 |
|
3,038 |
|
|
Share-based compensation |
13,687 |
|
12,242 |
|
12,346 |
|
43,435 |
|
36,429 |
|
|
Amortization of intangible assets from acquisition |
7,819 |
|
6,970 |
|
6,971 |
|
28,734 |
|
27,912 |
|
|
Loss (gain) on investments |
410 |
|
(668 |
) |
660 |
|
588 |
|
492 |
|
|
Strategic initiatives costs - Salaries, wages and benefits |
— |
|
4,633 |
|
5,329 |
|
5,593 |
|
5,329 |
|
|
Strategic initiatives costs - General and administrative
expenses |
— |
|
4,283 |
|
5,437 |
|
7,806 |
|
8,342 |
|
|
Provision for income taxes |
29,370 |
|
35,402 |
|
21,846 |
|
126,420 |
|
103,347 |
|
|
Provision for taxes applicable to adjusted results |
(35,836 |
) |
(41,890 |
) |
(35,122 |
) |
(150,359 |
) |
(130,107 |
) |
|
Adjusted net income |
107,507 |
|
119,537 |
|
99,806 |
|
450,871 |
|
400,381 |
|
| |
|
|
|
|
|
|
|
|
|
|
After-tax adjusted operating income
attributable to common shareholders
After-tax adjusted operating income attributable
to common shareholders is computed as after-tax adjusted operating
income less the cumulative preferred share dividends for the
period.
About Element Fleet
Management
Element Fleet Management (TSX: EFN) is the
largest publicly traded pure-play automotive fleet manager in the
world. As a Purpose-driven company, we provide a full range of
sustainable and intelligent mobility solutions to optimize and
enhance fleet performance for our clients across North America,
Australia, and New Zealand. Our services address every aspect of
our clients’ fleet requirements, from vehicle acquisition,
maintenance, route optimization, risk management, and remarketing,
to advising on decarbonization efforts, integration of electric
vehicles and managing the complexity of gradual fleet
electrification. Clients benefit from Element's expertise as one of
the largest fleet solutions providers in its markets, offering
economies of scale and insight used to reduce operating costs and
enhance efficiency and performance. At Element, we maximize our
clients’ fleet so they can focus on growing their business. For
more information, please visit: https://www.elementfleet.com
This press release includes forward-looking
statements regarding Element and its business. Such statements are
based on management’s current expectations and views of future
events. In some cases the forward-looking statements can be
identified by words or phrases such as “may”, “will”, “expect”,
“plan”, “anticipate”, “intend”, “potential”, “estimate”, “believe”
or the negative of these terms, or other similar expressions
intended to identify forward-looking statements, including, among
others, statements regarding Element’s financial performance,
enhancements to clients’ service experience and service levels;
expectations regarding client and revenue retention trends;
management of operating expenses; increases in efficiency;
Element’s ability to achieve its sustainability objectives; Element
achieving its digital platform ambitions; the Autofleet acquisition
enabling the Company to scale its business more quickly, achieve
operational efficiencies, increase client and shareholder value and
unlock new revenues streams; EV strategy and capabilities; global
EV adoption rates; dividend policy and the payment of future
dividends; the costs and benefits of strategic initiatives;
creation of value for all stakeholders; expectations regarding
syndication; growth prospects and expected revenue growth; level of
workforce engagement; improvements to magnitude and quality of
earnings; executive hiring and retention; focus and discipline in
investing; balance sheet management and plans and expectations with
respect to leverage ratios; and Element’s proposed share
purchases, including the number of common shares to be repurchased,
the timing thereof and TSX acceptance of the NCIB and any renewal
thereof. No forward-looking statement can be guaranteed.
Forward-looking statements and information by their nature are
based on assumptions and involve known and unknown risks,
uncertainties and other factors which may cause Element’s actual
results, performance or achievements, or industry results, to be
materially different from any future results, performance or
achievements expressed or implied by such forward-looking statement
or information. Accordingly, readers should not place undue
reliance on any forward-looking statements or information. Such
risks and uncertainties include those regarding the fleet
management and finance industries, economic factors, regulatory
landscape and many other factors beyond the control of Element. A
discussion of the material risks and assumptions associated with
this outlook can be found in Element’s annual MD&A, and Annual
Information Form for the year ended December 31, 2023, each of
which has been filed on SEDAR+ and can be accessed at
www.sedarplus.ca. Except as required by applicable securities laws,
forward-looking statements speak only as of the date on which they
are made and Element undertakes no obligation to publicly update or
revise any forward-looking statement, whether as a result of new
information, future events, or otherwise.
Contacts:
Rocco Colella
Director, Investor Relations
(437) 349-3796
rcolella@elementcorp.com
Emily Duncan
Manager, Investor Relations
(437) 848-1040
eduncan@elementcorp.com
Sumit Malhotra
SVP & Head of Financial Performance
(437) 343-7723
smalhotra@elementcorp.com
Grafico Azioni Element Fleet Management (TSX:EFN)
Storico
Da Mar 2025 a Apr 2025
Grafico Azioni Element Fleet Management (TSX:EFN)
Storico
Da Apr 2024 a Apr 2025
