Element Fleet Management : Q3 2022 - Supplementary Information

Q3 2022 Supplementary Information

as at September 30, 2022

This supplementary information should be read in conjunction with the

Company's Management Discussion & Analysis dated September 30, 2022.

In this document, the Company presents measures that do not have a standardized meaning under IFRS and may not be comparable to similarly-named or any other non-GAAP measures presented by other organizations. Descriptions of the non-GAAP measures presented in this document can be found in Element's Management Discussion & Analysis that accompanies the financial statements for the most recent quarter or year, which have been filed on SEDAR (www.sedar.com).

Element Fleet Management Corp.

www.elementfleet.com/investors

FORWARD-LOOKING STATEMENTS DISCLAIMER

The following pages provide information management believes is relevant to an assessment and understanding of the financial condition, results and operations of Element Fleet Management Corp. (the "Company" or "Element") as at and for the three- and nine-month periods ended September 30, 2022, and should be read in conjunction with the Company's Q3 Management Discussion & Analysis and unaudited interim condensed consolidated financial statements and accompanying notes for the three- and nine-month periods ended September 30, 2022. All monetary figures are in millions of Canadian dollars unless otherwise noted or for per share amounts. Additional information regarding the Company is available on SEDAR at www.sedar.com and on the Company's website at www.elementfleet.com.

CAUTIONARY STATEMENT

THIS ANALYSIS HAS BEEN PREPARED TAKING INTO CONSIDERATION INFORMATION AVAILABLE TO NOVEMBER 8, 2022. CERTAIN STATEMENTS CONTAINED IN THIS REPORT CONSTITUTE "FORWARD- LOOKING STATEMENTS". IN SOME CASES THE FORWARD-LOOKING STATEMENTS CAN BE IDENTIFIED BY WORDS OR PHRASES SUCH AS "MAY", "CAN", "WILL", "EXPECT", "GUIDANCE", "PLAN", "ANTICIPATE", "TARGET", "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 FUTURE FINANCIAL PERFORMANCE, GROWTH PROSPECTS AND OBJECTIVES, EXPECTATIONS REGARDING SYNDICATION, ABILITY TO DRIVE OPERATIONAL EFFICIENCIES, ASSETS, BUSINESS STRATEGY, COMPETITIVE POSITIONING, ABILITY TO CREATE VALUE FOR SHAREHOLDERS, THE EVOLUTION OF ELEMENT'S BUSINESS, THE AVAILABILITY OF FUNDS FROM OPERATIONS, CASH FLOW GENERATION, STRATEGIC ASSESSMENT, BUSINESS OUTLOOK, ELEMENT'S DIVIDEND POLICY AND THE PAYMENT OF FUTURE DIVIDENDS, ELEMENT'S PROPOSED SHARE PURCHASES, INCLUDING THE NUMBER OF COMMON SHARES TO BE REPURCHASED, THE TIMING THEREOF AND TSX ACCEPTANCE OF THE NORMAL COURSE ISSUER BID AND ANY RENEWAL THEREOF AND OTHER EXPECTATIONS REGARDING FINANCIAL OR OPERATING PERFORMANCE AND METRICS. SUCH STATEMENTS REFLECT THE COMPANY'S CURRENT VIEWS WITH RESPECT TO FUTURE EVENTS AND ARE SUBJECT TO INHERENT RISKS, UNCERTAINTIES AND NUMEROUS ASSUMPTIONS, INCLUDING, WITHOUT LIMITATION, THE IMPACT OF THE COVID-19 PANDEMIC, GENERAL ECONOMIC CONDITIONS, OPERATIONAL CAPABILITIES, TECHNOLOGICAL DEVELOPMENT, SUPPLY CHAIN, RELIANCE ON DEBT FINANCING, INABILITY TO SUSTAIN RECEIVABLES, COMPETITION, INTEREST RATES, REGULATION, INSURANCE, FAILURE OF KEY SYSTEMS, FUTURE CAPITAL NEEDS AND SUCH OTHER RISKS OR FACTORS DESCRIBED FROM TIME TO TIME IN REPORTS OF ELEMENT, INCLUDING HEREIN AND IN ELEMENT'S MD&A AND ANNUAL INFORMATION FORM, WHICH HAVE BEEN FILED ON SEDAR AND MAY BE ACCESSED AT WWW.SEDAR.COM. THE COVID-19 PANDEMIC HAS CAST ADDITIONAL UNCERTAINTY ON ELEMENT'S INTERNAL EXPECATIONS, ESTIMATES, PROJECTIONS, ASSUMPTIONS AND BELIEFS. THE DURATION, EXTENT AND SEVERITY OF THE IMPACT THE COVID-19 PANDEMIC, INCLUDING MESAURES TO PREVENT ITS SPREAD, WILL HAVE ON ELEMENT'S BUSINESS REMAINS UNCERTAIN AND DIFFICULT TO PREDICT AT THIS TIME.

BY THEIR NATURE, FORWARD-LOOKING STATEMENTS INVOLVE NUMEROUS ASSUMPTIONS, KNOWN AND UNKNOWN RISKS AND UNCERTAINTIES, BOTH GENERAL AND SPECIFIC, WHICH CONTRIBUTE TO THE POSSIBILITY THAT PREDICTIONS, FORECASTS, PROJECTIONS AND OTHER FORMS OF FORWARD-LOOKING INFORMATION MAY NOT OCCUR OR BE ACHIEVED. MANY FACTORS COULD CAUSE ELEMENT'S ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS TO BE MATERIALLY DIFFERENT FROM ANY FUTURE RESULTS, PERFORMANCE OR ACHIEVEMENTS THAT MAY BE EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS AND READERS ARE CAUTIONED THAT THE LIST OF FACTORS IN THE FOREGOING PARAGRAPH IS NOT EXHAUSTIVE. SHOULD ONE OR MORE OF THESE RISKS OR UNCERTAINTIES MATERIALIZE, OR SHOULD ASSUMPTIONS UNDERLYING THE FORWARD-LOOKING STATEMENTS PROVE INCORRECT, ACTUAL RESULTS MAY VARY MATERIALLY FROM THOSE DESCRIBED HEREIN AS INTENDED, PLANNED, ANTICIPATED, BELIEVED, ESTIMATED OR EXPECTED. ACCORDINGLY, READERS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON FORWARD-LOOKING STATEMENTS OR INTERPRET OR REGARD FORWARD-LOOKING STATEMENTS AS GUARANTEES OF FUTURE OUTCOMES, AS NO FORWARD-LOOKING STATEMENT MAY BE GUARANTEED. EXCEPT AS MAY BE REQUIRED BY APPLICABLE CANADIAN SECURITIES LAWS, THE COMPANY DOES NOT INTEND, AND DISCLAIM ANY OBLIGATION TO UPDATE OR REWRITE ANY FORWARD-LOOKING STATEMENTS WHETHER ORAL OR WRITTEN AS A RESULT OF NEW INFORMATION, FUTURE EVENTS OR OTHERWISE.

Q3 2022 | Element Fleet Management Corp.

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TABLE OF CONTENTS

Section Content

FEATURED DISCLOSURES

1. 2022 and 2023 guidance
2. Free cash flow per share
3. Services revenue walks
4. Net financing revenue walks
5. Global Order backlog and Originations
6. Vehicles under management (VUM)
7. Diversity of VUM exposure across industries

STRATEGIC PRIORITIES

Aggressively pursue organic growth and demonstrate the scalability of our operating platform by growing annual operating income in excess of the annual net revenue growth rate

1. Net revenue growth in the U.S. and Canada, Australia and New Zealand, and Mexico - in local currencies
2. Global net revenue growth
3. Global operating income growth and operating margin expansion

Advance a capital-lighter business model by growing services revenue and strategically syndicating fleet assets, which enhance return on equity

1. Net revenue streams by geography, and services revenue by geography, nature and product
2. Syndication volume and pre-tax return on common equity

Achieve high single- to low double-digit annual free cash flow per share growth and predictably return excess equity to shareholders by way of growing common dividends and share buybacks

1. Return of capital
2. Maturing our capital structure
3. NCIB activity
4. Common dividends

ASSETS UNDER MANAGEMENT

1. 2Q22 -> 3Q22 End-of-period interim funded assets
2. 2Q22 -> 3Q22 End-of-period net earning assets
3. 2Q22 -> 3Q22 End-of-period syndicated assets

5.2 End-of-period global assets under management on a constant currency basis

Q3 2022 | Element Fleet Management Corp.

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Featured Disclosures this Period

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FEATURED DISCLOSURES

1.1 Full-year 2022 and 2023 results guidance

The continued advancement of our three strategic growth priorities coupled with favourable tailwinds (including the waning impact of the pandemic, the gradual increase in OEM deliveries, and inflation) are fueling strong performance in 2022, which is expected to continue and improve in 2023.

Augmenting our strong, sustainable organic growth this year are net revenues (totaling approximately $25 million) that we do not expect to generate in future years. There was approximately $17 million of such revenue in the third quarter, $8 million in the second quarter, none in the first quarter, and we do not expect any in the fourth quarter. The 2022 "organic" results below exclude this $25 million.

We expect to deliver the following results for full-years 2022 and 2023:

$ millions except per common share

Net revenue

YoY Growth

Operating margin

Adjusted operating income

YoY Growth

Weighted average outstanding common shares (millions) Adjusted earnings per share

YoY Growth

Free cash flow per share

YoY Growth

Originations

YoY Growth

Syndication volume

YoY Growth

1. Based on a CAD:USD exchange rate of 1.29:1.

	2022	2023
expected reported	expected "organic"	expected reported
results	results	results1,2
$1,080-1,100	$1,055-1,075	$1,140-1,170
10-12%	7.5-9.5%	6-9%
54-55%	53-54%	54-55%
$580-600	$555-575	$615-645
13-17%	8-12%	7-12%
390-400	390-400	385-395
$1.03-1.07	$0.98-1.03	$1.12-1.17
22-27%	17-22%	9-14%
$1.27-1.32	$1.20-1.25	$1.45-1.50
21-26%	15-20%	16-20%
		$7,500-8,000
		25-35%

$4,000-4,50035-50%

2. 2023 year-over-year growth rates are impliedbased on our expectation of full-year 2022 "organic" performance at or near the top-end of our 2022 expected "organic" results ranges. 2023 originations and syndication volume year-over-year growth rates are only approximate, based on currently anticipated full-year 2022 volumes.

Q3 2022 | Element Fleet Management Corp.

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