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FINNING Q3 2021 EARNINGS RELEASE November 8 , 2021 Finning reports Q3 2021 results Vancouver , B.C. – Finning International Inc. ( TSX : FTT ) ( “ Finning " , " the Company ” , “ we ” , “ our ” or “ us ” ) reported third quarter 2021 results today . All monetary amounts are in Canadian dollars unless otherwise stated . HIGHLIGHTS All comparisons are to Q3 2020 results unless indicated otherwise . ■ Q3 2021 EPS ( 1 ) of $ 0.61 per share was a record third quarter EPS performance . Q3 2021 revenue of $ 1.9 billion and net revenue ( 2 ) of $ 1.7 billion were up 23 % and 21 % , respectively , from Q3 2020 , driven by stronger new equipment sales in South America and the UK & Ireland and product support revenue growth in all regions . Q3 2021 SG & A ( 1 ) as a percentage of net revenue ( 2 ) was 17.8 % , down 230 basis points from Q3 2020 , and down 50 basis points from Q2 2021 , reflecting savings from our 2020 cost reduction program and ongoing initiatives to further reduce fixed costs . All regions delivered improved operating leverage in Q3 2021 , with consolidated EBIT ( 1 ) as a percentage of net revenue ( 2 ) of 8.6 % , up 160 basis points compared to Adjusted EBIT as a percentage of net revenue ( 2 ) ( 3 ) in Q3 2020 . Q3 2021 EBIT as a percentage of net revenue was 10.4 % in Canada , 9.2 % in South America , and 5.6 % in the UK & Ireland . Adjusted ROIC ( 1 ) ( 2 ) ( 3 ) of 14.7 % was up 510 basis points from Q4 2020 , with a significant increase in all regions . In South America , Adjusted ROIC of 19.0 % was the highest since 2012 . Strong free cash flow ( 2 ) conversion in Q3 2021 resulted in free cash flow of $ 176 million , bringing year - to - date free cash flow to $ 152 million . Our net debt to Adjusted EBITDA ( 1 ) ratio ( 2 ) ( 3 ) was 1.3 at September 30 , 2021 , down from 1.4 at December 31 , 2020 . Consolidated equipment backlog ( 2 ) was $ 1.6 billion at September 30 , 2021 , up from $ 1.4 billion at June 30 , 2021 , driven by increases in the UK & Ireland and Canada . " Our global team continues to successfully execute on our strategic plan to grow product support , reduce costs , and re- invest free cash flow to compound our earnings . Strong operating leverage drove a record third quarter EPS , and we now expect to achieve our mid - cycle EPS and ROIC ( 2 ) targets ahead of schedule . We are working closely with our customers to meet their equipment needs in an environment of increasingly constrained supply . We have been proactively managing our inventory , increasing it by $ 150 million year to date , sourcing used equipment , and offering equipment rebuilds and rental options . Our revenue outlook remains positive , supported by our healthy backlog and strong market conditions , and we continue to expect the mid - cycle environment to transition to up - cycle in 2022 , " said Scott Thomson , president and CEO of Finning International . " As part of our growth strategy , we are expanding our 4Refuel capabilities to support our customers in their transition to low - carbon fuels , including CNG ( ¹ ) , RNG ( ¹ ) , and hydrogen . Natural gas , hydrogen , and electrification are becoming an increasingly important aspect of our business as our customers are progressing towards their long - term goals of achieving net zero greenhouse gas emissions . With Caterpillar accelerating the development of battery - powered mining equipment as well as natural gas blending and fully hydrogen - capable power solutions , we are excited about future opportunities to help our customers meet their goals and utilize sustainable energy sources . In 2022 , we will start using natural gas to power a portion of 4Refuel and Finning service vehicle fleets , which will help us achieve our own greenhouse gas emission reduction target set out in our Sustainability Report . " concluded Mr. Thomson . 1