Celebrating Ten Years of History Helping Transportation in Mexico

Transcription

1 Celebrating Ten Years of History Helping Transportation in Mexico

2 DIRECTORY Pam Turbeville CEO Navistar Financial Corporation José Alfredo Chacón Executive President Navistar Financial Corporation Mexico Antonio Murguía Chief Insurance Services Officer José Reyeros Chief Financial Officer Juan Carlos Navarro Chief Operating Officer Raúl Oliver Chief Business Officer

3 Contents 2 Celebrating Ten Years of History 5 The Origin 9 Ten Years of History 21 The Future of Navistar Financial in Mexico 23 International in Mexico

4 Celebrating 10Years of History Message from Pam Turbeville, CEO Navistar Financial Corporation The year of 2007 brought a new achievement from our company Navistar Financial Corporation Mexico is celebrating this year its tenth anniversary. It is really amazing to think about how much we have accomplished in only ten years. Navistar Financial Mexico has built a rich history of successes helping Camiones y Motores International to sell their trucks in Mexico, enabling them to turn into one of the leading companies in the truck and bus manufacturing industry in the country, thus creating a strong link between both businesses. Perhaps the most amazing contribution of the Navistar Financial Mexico s team is the strengthening of the Mexican economy and its financial system. Working jointly with governmental entities and many financial institutions, Navistar Financial has given persons and Mexican companies the opportunity of getting new, reliable and durable trucks that have helped their business grow and made them permanent. What is the reason for Navistar Financial Mexico s success in such a short period? Each of the members of the team, whose great effort and vision have resulted in lasting relations with Camiones y Motores International, as well as with the government, creditors and clients. This is a team capable of listening to the market needs and of responding with a creative and valuable approach. We are looking forward to seeing more achievements in the next ten years. November,

5 Message from José Alfredo Chacón, Executive President Navistar Financial Corporation Mexico We are celebrating ten years of history in Mexico and I am proud to share our experiences with you. I would like to begin with a special recognition to our staff for their excellent performance and professionalism during this time. We make up a working team that finds a great source of satisfaction in its daily activities. In each of the operations with our distributors and clients, in addition to propitiate wealth creation opportunities for them, we have the chance to contribute directly to the economy, with employment generation, the modernization of the fleet of commercial vehicles and environmental protection. Currently, while we are celebrating a rich history of ten years, we are announcing an ambitious plan for the future that will allow us to expand services into a greater number of participants of the industry, thus impacting the community. We are considering expanding our operations by financing secondhand vehicles, granting working capital loans and insurance for transport equipment, and offering consulting and assistance services for businessmen. I would like to thank sincerely all those who have contributed to making Navistar Financial Mexico the best option in financial solutions. I would like you all to participate in the construction of a better future in Mexico, one full of opportunities, challenges and satisfactions. November,

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7 Theorigin Navistar Financial Corporation Navistar Financial Corporation is the financial arm of International Truck and Engine Corporation, one of the biggest chassis manufacturers in the world for buses, trucks and diesel engines. A subsidiary company of Navistar International Corporation, Inc. based on Warrenville, Illinois, in the United States, this company has over 16,000 employees in more than 40 countries around the world. Its operations started on April 26, 1949 in the United States under the name of International Harvester Credit Corporation (IHCC), and on February 2, 1986 it adopted its current name. Headquarters are located in Schaumburg, Illinois. 5

8 Operations in Mexico Navistar Financial arrived in Mexico in 1997 with the main purpose of supporting the development of International s commercial programs along with its distributors network in the country, financing the acquisition of that brand of trucks and buses, as well as financing units and spare parts inventories of the International dealers network. In order to fulfill the clients expectations and considering the financial system regulatory framework at that moment, Navistar Financial Corporation in Mexico worked through three companies, Arrendadora Financiera Navistar (financial leasing), Servicios Financieros Navistar (SOFOL - financial services), and Navistar Comercial (operating leasing). Multiple Purpose Financial Companies, unregulated entities aiming at providing greater flexibility to their operations and benefiting the customers. The company started operations with six employees and an office in Mexico City; currently it has 113 staff members distributed in the offices of Mexico City, three regional sub directions Mexico City, Guadalajara and Monterrey and three field offices León, Veracruz and Guadalajara. Every office relies on staff dedicated specifically to the attention of that region s distributors and customers, thus covering the 85 points of sale of the International distributors network in the country. From September 2007, the companies Arrendadora Financiera Navistar and Servicios Financieros Navistar have become 6

9 With the purpose of channeling the employees experiences, intelligence and sense of service, the company announced a challenging corporate vision: Bethe best financial company specializing in the transportation industry Such a vision led the team to adopting a series of commitments to its customers, suppliers, staff and shareholders. Being the best means Customers Offer its customers the most comprehensive products and services portfolio; make business easier; quick approval of credit and financial assistance. Suppliers The commitment to creditors, as well as to other goods and services suppliers, is to respect their businesses, transparency, responsibility and the adoption of better practices in order to consolidate long term business relationships. Staff Establish with the staff a mutual lifelong relationship with a high performance work environment. Shareholders Generate a return on equity higher than 20% during the next five years. 7

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11 10years of History Credit Volume In Mexico, Navistar Financial has specialized in and focused its resources on the freight and passenger transportation sector, offering a number of financing schemes for every kind of company. For its distributors network, International relies on a portfolio of financial products ranging from the financing of vehicles and spare parts inventories floor plan program with a penetration of 100%, to the financing of accounts receivable stemming from its in-house credit operations as well as capital and liquidity loans. It also has floor plan programs for distributors of trailers main brands, as well as working capital loans for the main bus bodyvan manufacturers in the country. One of the company s greatest strengths is financing the equipment needs of transportation companies, dealing mainly with small and medium transporters, by offering financing for buying or leasing trucks and buses of the International brand, both to individuals (with business activities) and companies. 9

12 Until today, they have a credit portfolio higher than $7 billion pesos, of which 65% corresponds to credit for transporters and the rest to the distributors network and to key industry suppliers. Over ten years, transporters have been granted financing for the acquisition of 37,000 new units, with credit volume for the end user of $21 billion pesos. The following charts show the evolution of credit granted by the company. Total Serviced Millions Assets of Pesos 8,000 7,276 6,000 5,727 4,000 4,291 3,149 3,263 2,000 2,310 2,975 2,895 1, Aug AnnualAcquisitions totransport Customers Millions of Pesos 8,000 7,436 6,000 4,032 4,000 2,390 2,000 1,363 1,345 1,230 1,070 1, Aug. 2007

13 Navistar Financial has promised to listen to its customers in order to facilitate financing. It relies on specialized resources and processes to address different needs: those of concessionaires of the urban and suburban public transportation service, the federal freight businessman, the private fleet owner, the buyer of light trucks, etc. It is worthwhile mentioning the customers payment behavior. As per its quality, Navistar Financial has one of the best credit portfolios of the financial system, where past due accounts range between 1 and 1.25% of the entire portfolio. Credit requests usually have a 92% approval rate. With the purpose of offering customers a more comprehensive service, a few years ago the company started consulting and intermediation services of insurance policies for protecting the financed equipment. Until now, this activity has allowed Navistar Financial to sell 30,000 insurance policies over the last five years. 11

14 1997 Navistar Financial starts operations in Mexico in N o v e m b e r, w i t h s i x employees. Relevant Events 1999 Starts its regional expansion establishing offices in Monterrey and Guadalajara Makes its first medium term note placement in the Mexican public debt market Signs its first credit line with a Mexican bank worth USD 100 million. Launches its first strategic plan and defines its strategy to small and medium transporters as a strategy. First financing company offering fixed rate financing in the transportation industry. Starts the annual Ipsos-Bimsa program to measure distributors satisfaction annually Starts operating the technological platform that will allow the company to support growth and offer a consistent service. Starts the annual Ipsos-Bimsa program to measure customers satisfaction annually The credit portfolio reaches a value of USD 300 million. Implements a call center to serve its customers. First in the industry of financing trucks and buses in the country. Start business relations with Export Development Canada. 12

15 2003 Enters the Standard and Poor s global listing of commercial credit portfolio servicer. Establishes an alliance with Nacional Financiera for promoting the transport modernization program. Establishes an alliance with Banobras and the World Bank for promoting the environmental improvement support program First Commercial Paper issuance, worth USD 50 million. Starts the assistance program for customers affected by hurricanes and natural disasters The credit portfolio reaches a value of USD 680 million. The company is granted the Best Place to Work award by the Great Place to Work and Top Companies organizations. Standard & Poor s grants the stand alone credit rating (BBB/A-2 national scale). Deregulation of Arrendadora Financiera Navistar and Servicios Financieros Navistar (Sofol), which became SOFOM. The Insurance Division starts operations First domestic securitization of loans in the transportation market, worth USD$50 million. Implements its Corporate Government program. First securitization of transportation lease and loan portfolio placed in the international market,worth USD$ 150 million. Starts the certification program for the International distributors F&I managers. 13

16 Serving Customers Programs to reward and benefit customers Financing is one of the key elements for the development and modernization of transportation in Mexico; this is why over the past ten years Navistar Financial has been focused on offering transporters the widest range of products and financing programs, leasing, insurance and other services for the sector in the industry. Truck Account Reliable Supplier Transportation Modernization Programs This is the ideal program for transporters willing to acquire a truck or a bus in the medium term without a credit record and not able yet to provide a down payment. It is similar to a savings fund, which facilitates them to save for the down payment while serving as a proof of income. Once the customer has complied with the savings plan previously established, Navistar Financial grants him financing for the acquisition of the vehicle he prefers. With the purpose of making quick progress in the fleet modernization of a great number of small transporters, Navistar Financial launched this program by means of which the company or reliable transporters those with good service records from renowned companies may obtain recommendation letters from them, which are then considered by Navistar Financial as a key element in the credit line assessment. Programs like this, which facilitate the access to modern and reliable transportation equipment, provide benefits for all: the shipping company, the transporter and end consumers of goods. In the freight segment, Navistar Financial has worked closely with the Mexican development banking in the modernization of the tractor-trailer fleet by means of countrywide programs, and in the modernization of the polluting buses in the most densely populated Mexican cities. Regarding its activity in supporting Government s projects, Navistar Financial has helped different authorities designing special programs for the renewal of bus fleets aiming at a big number of regions in the country. For the operation of these programs, Navistar Financial relies on collaboration between transporters, local authorities and the company itself. Such alliances allow transporters to access competitive and flexible financing programs. 14

17 The company is interested in its customers success; therefore, the business model its ruled by is based on offering custom-made financing options, acknowledging that every client is unique, with special financial needs, and always looking for the customer s success from the beginning of the relationship. Punctual Customer Award Loyalty Programs All in one: Unit and equipment with one single financing When making monthly payments punctually, the interest rate is reduced as an incentive, and customers receive a cash bonus every six months. Besides, we offer special plans for costumers with a good record, such as an immediate access to new financing to renew or increase their fleet. For every truck financed we offer a free life insurance for the unit operators. Navistar Financial financing programs consider the basic unit and the related equipment for its proper operation (boxes, platforms, dollies, dumps, bodyworks, electronic equipments, etc.) with one single financing. 15

18 The new Member: Insurance Division Navistar Transprotección Navistar Financial incorporated a new member to the company in 2007: The Insurance Division, which main goal is helping customers protecting their assets, as well as offering insurance proposals and solutions for the transportation industry. From 2008, Navistar Transprotección, Insurance Broker, will start operations. 16

19 This division relies on strategic alliances with the best institutions in the insurance market, thus offering a number of options to insure its customers trucks and new or secondhand buses, as well as their facilities and staff. Among the services offered by the division are the following: Professional and specialized consultancy on the subject of insurances. Creation of administration, prevention and risks control programs. Development of catastrophe prevention guides. Support for claim procedures before the insurer and claim tracking up to conclusion. Tracking of legal procedures before the authorities. Reports on catastrophe rate, in order to recommend safety measures. 17

20 Participation in the Mexican System Financial Navistar Financial has been participating in an active and innovative way in the Mexican financial system. In several occasions it has pioneered funding schemes to attract long-term resources with a competitive price. It has achieved the establishment of long-term relationships with first floor financers, who were the first to participate in this great project and who have remained by the company until today. The company set up as a strategic goal to have the access to diversified funding sources. Currently there is a balance between commercial banking, the development bank and the national and international debt market. Introducing Structured Financing Certifications that support growth and generate credibility In 2005, Navistar Financial was the first company in the country in implementing securitization program with transport credit portfolio, partially guaranteed by the federal government through Nacional Financiera. It was rated AAA in the local scale by the three rating agencies. Navistar Financial was incorporated to the global list of Standard and Poor s as Financial Assets Servicer with a rating above the average and with a positive outlook. This measure acknowledges the company on a global level for the adoption of proper corporate practices. Likewise, in 2006 it was the first company in structuring a securitization program with transport credit and lease portfolio. A program that was placed on the American market, where it got the highest Latin American ratings for any deal done. Besides, it was the first transaction of this type with a revolving period. Credit was rated A on a global scale by the three rating agencies. Definitely, theses steps have strengthened the liquidity plan to finance the credit portfolio growth in Mexico. Likewise, Standard & Poor s has granted the company a stand alone credit national rating CaVal mxbbb for the long-term and mxa-2 for the short term. These certifications have allowed Navistar Financial to share with its creditors and suppliers the company s commitment to support healthy practices and create an ambience of full confidence and transparency. 18

21 Collaborators Team During 2006, Navistar Financial accepted the challenge of participating in the evaluation process carried out by the Great Place to Work Institute Mexico and by the Top Companies organization, aiming at qualifying human resources practices and the satisfaction level of collaborators at work, and comparing them with the best companies in Mexico and the world. On March 27, 2007 Navistar Financial was considered by the Great Place to Work Institute Mexico as one of 100 best companies to work in our country, holding the 53rd place. In April of the same year, the Top Companies organization and the magazine Expansion de México included the company within their Super Companies list, as one of the best places to work in Mexico, now ranking in 33rd place of the list among 60 companies. Both acknowledgments are great achievements, which finally result in a commitment to look for highly satisfied and motivated human talent, who in turn provides an amazing service to our customers. According to its mission and purpose, Navistar Financial is committed to invest in the development of its staff; its training model includes leaders development based on the company s principles and values, high level programs handled by the corporation, as well as by the most prestigious institutions of Mexico and the United States. Age % 100% 80% Average ageper Level Navistar Financial Mexico 35 Navistar Financial 41% 43 Management 43% 44 Direction Distribution per gender per Level Navistar Financial Mexico 36% 60% 40% 20% 59% 57% 64% Years of experience 0% Navistar Financial Management Direction Women Men Managing and directive experienceper Level Navistar Financial Mexico Direction Overall Working Experience Management Experience in the Financial Sector 19

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23 The future NavistarFinancial in of Mexico Future is promissory, and it is a future inviting all to participate. Navistar Financial considers itself as the Best Option in Financial Solutions for the Transportation Industry, which main purpose is make its customers succeed, creating a long-term relationship with the International distributors network, and invest in people, processes and technology. Its service strategy is TO CAPTIVATE ITS CLIENTS, EXCEEDING THEIR EXPECTATIONS, EVEN THOSE UNEXPRESSED. The fact of knowing, approaching and creating direct relations with customers, as well as offering them the best quality products and innovative services within world class standards will be the groundwork for this new stage. Navistar Financial is expanding its solutions today, entering new markets in the sector of financial services: Business plans have been created to finance used units, and thus contribute to the strengthening of the transportation industry. By means of secondhand financing, Navistar Financial is expecting to give its customers willing to acquire new trucks the opportunity to sell their vehicles in better conditions. On the other hand, with a proper supply of secondhand vehicles we hope to facilitate the modernization of the fleet from those transporters with very old equipment, who are now unable to acquire new units. The company is becoming involved in factoring, reinforcing the products supply, thus offering a program that covers their financing needs. It will grant working capital loans for the suppliers of the assembly plant and for the distributors network. It will open its insurance intermediation company, Navistar Transprotección, which will start operations in It will launch programs of non-financial services, such as legal consultancy, training for customers from small and medium companies, in administrative, managing and fiscal topics. And finally, it will expand its operations to Latin America in the medium term. 21

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25 in Mexico Navistar Financial is proud to be part of the International companies in Mexico. International has been working in Mexico since 1926 as a technological partner in different aspects, but it was only in 1996 when Camiones y Motores International started commercializing its products directly. Its sales represent about a 30% share of the transportation industry in our country. It relies on an extensive distributors network with 85 points of sale in Mexico made up by successful businessmen who receive financial and technological support to address in a timely manner the requirements from an always demanding and competitive market, while guaranteeing support in service, spare parts and financing for freight and passenger transportation. International has an Assembly Plant in Escobedo, Nuevo León, which was inaugurated on April 22, 1998 with an investment of USD 250 million; it is installed on 272 acres with 915,000 sqf covered and a production capacity of 225 units per day. The International distribution center of spare parts, located in the industrial area of the city of Querétaro, counts on the most advanced technology of the industry for supply, control and movement of parts. With an investment of over USD 11 million and installed in a 108,000 sqf building, it has an inventory of over 7,000 parts. The organization of Idealaese provides the brand with competitive advantages, since it offers companies with full service leasing, commercial vehicles lease from one day up to what the customer requires for the optimal operation of the business, maintenance contracts and 24-hour road assistance, within the whole national territory. 23

26 Relevant Figures 10 years Figures (Portfolio, Capital, Income) 9,000 7,500 6,000 4,500 3,000 1,500 Figures in Million pesos (Profit before taxes) 1,400 1,200 1, Portfolio , , , , , , , Aug. 2007* 5,727 7,276 0 Capital ,005 1,126 Income ,037 1,177 Profit before taxes *Annual figures for income and Profit before taxes 24

27 Indicators Aug. 2007* Solvency PORTFOLIO (Million pesos) ,008 2,310 2,975 3,149 2,895 3,263 4,291 5,727 7,276 % Past due accounts 0.0% 0.0% 0.0% 0.7% 3.0% 2.5% 3.8% 2.8% 1.8% 1.1% 1.3% % Preventive reserves 0.0% -1.3% -2.2% -2.1% -2.1% -2.5% -2.7% -2.6% -2.2% -2.5% -2.3% % Net past due accounts 0.0% -1.3% -2.2% -1.4% 0.8% 0.0% 1.1% 0.2% -0.4% -1.4% -1.0% Leverage ratio Efficiency Administration expenses / Portfolio 44.0% 13.6% 8.0% 4.1% 2.6% 2.8% 2.9% 3.0% 2.6% 2.4% 2.2% Staff members Income / Total number of employees (Million pesos) Portfolio / Total number of employees (Million pesos) *Annual figures for income 25

28 Ejército Nacional 904-piso 11 Col. Palmas Polanco C.P México, D.F