Element Fleet Management Corp T.EFN.PR.E

Primary Symbol: T.EFN Alternate Symbol(s): T.EFN.PR.C | ELEEF

Industrials

Element Fleet Management Corp. is a Canada-based global automotive fleet manager. The Company provides business-to-business services and financing to corporations, governments and not-for-profits. It operates in various countries, including the United States, Canada, Mexico, Australia and New Zealand. It provides services and financing for commercial vehicle and equipment fleets, reaching around 56 countries worldwide through the Element-Arval Global Alliance. The Company provides solutions to various industries, such as construction; energy, oil and gas; food and beverage; healthcare; services; transportation, and utilities. Its services include acquisition, electric vehicle, financing, title and registration, collision management, fleet partnerships solutions, fuel, safety, taxable benefits, fleet telematics connectivity solutions, remarketing, sale leaseback, tolls and violations, and strategic fleet consulting. The Company has around 1.5 million client vehicles under management.

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Element Fleet Management Corp

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Post by retiredcfon Mar 13, 2023 9:13am

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Post# 35334332

TD

Have a $23.00 target. GLTA

Element Fleet Management Corp.

(EFN-T) C$18.48

Well-positioned to Steal Share and Meet (or Beat) Targets

Event

Two Days of Investor Meetings

Impact: NEUTRAL

We hosted Element Fleet's management group for two well-attended days of investor meetings (CEO Jay Forbes, President Laura Dottori-Attanasio, and CFO Frank Ruperto). Key themes focused around Ms. Dottori-Attanasio's initial views; a deeper dive into driving growth through taking share, winning mega-fleets, and increasing share of wallet (SOW); update on funding dynamics; and opportunities to optimize the balance sheet.

Current President, and incoming CEO, Laura Dottori-Attanasio joined Element only three weeks ago. Her initial focus is on meeting the Element team and establishing relationships both internally and with clients and partners. Ms. Dottori-Attanasio indicated that her initial focus is on maintaining the strategy established and fostering the culture in place (described as collaborative, accountable, client-centric, and now focused on growth). Continuing to drive growth is a priority, and over time, the new CEO will be looking for opportunities to enhance the strategy.
Growth will be driven by two key factors; growing vehicles under management (VUM) and increasing client SOW behind that VUM. VUM growth is expected to come from taking share from competitors (management is very bullish on the momentum, and the opportunity here), and converting self-managed fleets (a longer sales cycle, but arguably a compelling opportunity, given the potential 15-20% savings from outsourcing fleet management).
The opportunity to take share from competitors seems sizable. Management noted that it is seeing opportunities to win clients as a result of the uncertainty that consolidation and M&A in 2021/2022 has surfaced for fleet customers. This is believed to be a multi-year theme. It also believes that its service levels and value proposition are being increasingly recognized. ...continued on page 2

TD Investment Conclusion

The business has strong momentum, suggesting the timing is appropriate for a thoughtful CEO succession in 2023. We believe the combination of commercial momentum and a healthy order backlog will support the medium-term growth outlook. We are encouraged to see the origination growth this quarter. We believe translating the backlog into originations, further servicing growth, and syndication channels remaining open will be required to maintain the earnings and FCF/share momentum.