Toromont Industries Ltd. · TSX:TIH
Toromont Industries — Investor Presentation (March 2017)
35 slides from Toromont Industries's investor presentation, March 2017
Slide 1: March 2017
TORO March 2017
Slide 2: Forward-looking Statements
Forward-looking Statements Statements and information herein that are not historical facts are "forward-looking information". Words such as “plans”, “intends”, “outlook”, “expects”, “anticipates”, “estimates”, “believes”, "likely", “should”, "could", "will", "may" and similar expressions often ident
Slide 3: Investment Highlights
Investment Highlights Market Leading Brands And Position Product Support Provides Stability Superior Financial Track Record Continuous Focus on Operational Excellence Strong Balance Sheet Growth Opportunities In Diversified Segments 49 Year Dividend Record, 28 Of Consecutive Growth 3
Slide 4: Safety
Safety Control Proper PPE Immediate Be Fit For Assess All Hazardous for Work Incident Duty Hazards Energy Area/ Task Reporting 4
Slide 5: Multiple Growth Platforms
Multiple Growth Platforms Construction Industries EQUIPMENT GROUP Resource Industries 5
Slide 6: Growth In Revenue
Growth In Revenue GROWTH FUELED BY: ► Expanded Markets and New Branches ► Expanded Service Offerings ► Increased Population and Larger Equipment Fuels Product Support 1,500 30,000 1,250 25,000 1,000 20,000 Estimated Installed Base (Units) Revenue ($millions) 750 15,000 500 10,000 250 5,000 0 0 2002
Slide 7: Equipment Group: Strong Dealer Network
Equipment Group Strong Dealer Network 7 Toromont CAT Mine Site Branches Meadowbank Mary River +2,700 Members Nunavut 1. Agnico Eagle 1 DEDICATED TEAM 2. Goldcorp 3. DeBeers DELIVERS 4. Detour Gold 6 5. Goldcorp Voisey’s SPECIALIZED 6. Vale Bay Newfoundland 7. Baffinland Manitoba & Labrador EQUIPMENT
Slide 8: Diverse Markets Served
Diverse Markets Served Large & Local Contractors 40% 1 Other Large 19% Contractor 24% Other Quarry & 12% Road Aggregate 5% Construction Equipment Infrastructure 15% Services 6% Local Contractor Utilities 16% Industrial 4% 6% Mining Residential 24% 3% Excavation & Earthmoving 4% DIVERSE MARKETS WITH
Slide 9: Diverse Markets Served
Diverse Markets Served Rental and sales mix Estimated rental market opportunity Other Paving 1% Small Tool 1 Sports 4% Sales 8% 4% Fleet 6% Mining 7% Golf Product Courses Support 5% 6% Oil & Gas Building 3% Products 6% Power 38% Rental Landscape 7% 55% Cat Compact Equipment Electrical Sales 8% 19% C
Slide 10: Substantial Infrastructure Deficit
Substantial Infrastructure Deficit 79 % infrastructure ffailing $388 billion* 35% of assets in need of attention* 9 million people by 2031 • $141 billion in very poor and Roads, municipal buildings, sport The Greater Toronto and Hamilton poor conditions and recreational facilities and Area is one of
Slide 11: Infrastructure Commitment Ontario
Infrastructure Commitment Ontario Infrastructure Ontario plans $137 billion ten-year spend (up $3B from plans announced in the prior year) 11 Source: 2016 Ontario Budget
Slide 12: Infrastructure Commitment Federal
Infrastructure Commitment Federal • Including pre-existing programs and commitments in the 2016 Budget and Fall Economic Statement, total committed spend add up to an unprecedented $186 billion over 12 years • To-date, specific projects have been slower to release leading to reluctance for customers
Slide 13: Equipment Group Rental Market
Equipment Group Rental Market 250 POWER GENERATION 200 HEAVY RENTS R12 Revenue ($millions) 150 100 LIGHT EQUIPMENT 50 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Light Equipment Heavy Equipment Power Generation Rent with a Purchase Option Rental - Used 13
Slide 14: Equipment Group Rental Market Opportunity
Equipment Group Rental Market Opportunity 1,400 Total market* Toromont revenue $1,240 1,200 Rental Revenues $ Millions $1,000 1,000 Significant 800 growth 600 opportunity 400 $200 200 $150 $40 186 15% $25 12% $11 28% 15% 0 Battlefield Heavy Rent Power Total ($ Millions) Battlefield Heavy Rent Power
Slide 15: Mining Opportunities
Mining Opportunities Resource Industries CAT 6060FS Diesel Shovel Loads 795F AC Truck CAT R2900G ► Good diversity of commodities in Toromont territories ► Gold has been a significant contributor ► Opportunities continue – albeit tight market ► Significant increase in installed base increases product
Slide 16: Growth In Mining Installed Base
Growth In Mining Installed Base Resource Industries 1,800.0 1400 1,600.0 1200 Current Replacement Value of Fleet ($MM) 1,400.0 1000 1,200.0 Installed Base (Units) 1,000.0 800 800.0 600 600.0 400 400.0 200 200.0 0.0 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Other Undergr
Slide 17: Product Support
Product Support $600 1200 $500 1000 Trailing 12 month Product Support Revenues ($MM) Number of Technicians $400 800 $300 600 $200 400 $100 200 $- 0 Dec Jun Dec Jun Dec Jun Dec Jun Dec Jun Dec Jun Dec Jun Dec Jun Dec Jun Dec Jun Dec Jun Dec Jun Dec Jun Dec '03 '04 '04 '05 '05 '06 '06 '07 '07 '08 '08
Slide 18: Expanded Product Support Offering
Expanded Product Support Offering Largest 2nd largest and Larger customers opportunity expanding adverse to holding opportunity facilities or techs 18
Slide 19: Equipment Management Solutions Advancing
Equipment Management Solutions Advancing ► Increasing focus on EM and CM (condition monitoring) solutions ► Provides further opportunity for differentiation and customer service ► Toromont CAT currently has over 3,500 contracted service agreements in place (PMs and MARCs) 19
Slide 20: Complementary Products Supplement Growth
Complementary Products Supplement Growth Machine Control & Guidance Systems Mobile Crushing & Screening Products 14,000 40,000 12,000 35,000 10,000 30,000 Revenue ($000's) 25,000 Sales ($000's) 8,000 20,000 6,000 15,000 4,000 10,000 2,000 5,000 - - 2008 2009 2010 2011 2012 2013 2014 2015 2016 2008 2
Slide 21: Power Systems Growth Opportunities
Power Systems Growth Opportunities ► Increasing share of higher investment in CHP & alternative energies (MWM) ► Large power plants for remote mine sites (MaK) ► Natural gas-fueled distributed power (District Energy) ► Expanded products – Toshiba UPS & Switch Gear offering, Gorman pumps ► Rental – i
Slide 22: Growth Platform In Manitoba
Growth Platform In Manitoba Six locations : ► Elie ► Portage la Prairie Manitoba ► Neepawa ► Brandon ► Steinbach ► Morden 96 employees including 34 technicians 22
Slide 23: How Will The Equipment Group Continue To Grow?
How Will The Equipment Group Continue To Grow? Mining Power Systems Construction Parts & Service Market Share Product Range ORGANIC GROWTH 23
Slide 24: CIMCO
CIMCO ► 100+ year history ► Strong industrial customer base ► Leader in recreational systems ► U.S. growth opportunity 24
Slide 25: Over 100 Years Of Serving Refrigeration Markets
Over 100 Years Of Serving Refrigeration Markets Revenue Split (2016) Recreational 20% Product Support 42% ME NH VT Industrial MA WI 38% MI RI PA NJ IL DE VW VA NC AR SC ► Strong industrial customer MS AL GA base US Sales FL ► Leader in recreational systems Coverage 400 Mile Sales Ring Note: Total of
Slide 26: Excellent Growth Opportunities
Excellent Growth Opportunities EXPAND MARKETS – TECHNOLOGY & VALUE-ADDED SERVICES ► Increase application of Eco Chill into Industrial Applications ► Expand scope of work – related HVAC, automation & bldg controls ► Application of heat pump systems ► Develop of Ammonia/CO2 solutions EXPAND TERRITORIE
Slide 27: Delivering Results
DELIVERING RESULTS 27
Slide 28: High Performance Capital Management
High Performance Capital Management Return on Opening Net Debt-to-Capitalization Ratio Shareholders’ Equity (%) (%) 29.9 28.9 25.7 0.25 23.0 21.6 21.5 9.1 21.6 0.17 20.0 0.16 18.9* 18.9* 0.13 15.5 0.10 0.10 0.06 0.05 9.1 -0.04 -0.06 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2007 2008 2009 20
Slide 29: Sustained Growth In Dividends Since 1989
Sustained Growth In Dividends Since 1989 Annual Dividends Per Share (Cents) 0.80 Ten Year CAGR 10.9% 0.70 49 Year Dividend Record, 28 Of Dividends Per Share $ 0.60 Consecutive Growth 0.50 0.40 0.30 0.20 0.10 0.00 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Note: Historic pro forma based o
Slide 30: Growth And Profitability Throughout The Cycle
Growth And Profitability Throughout The Cycle Pro Forma Net Earnings from Continuing Operations (Millions) 155.7 145.7 133.2 119.5 123.0 102.7 83.1 76.7 73.0 59.4 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 30
Slide 31: Q4 Results
Q4 Results $ millions except EPS 2016 2015 % Change REVENUES 480.7 472.0 2 OPERATING INCOME 62.9 61.7 2 NET EARNINGS 45.5 44.4 3 EPS (BASIC) 0.58 0.57 2 31
Slide 32: December YTD Results
DECEMBER YTD Results $ millions except EPS 2016 2015 % Change REVENUES 1,867.3 1,802.2 4 OPERATING INCOME 216.6 204.5 6 NET EARNINGS 155.7 145.7 7 EPS (BASIC) 1.99 1.88 6 32
Slide 33: Experienced Management
Experienced Management EXECUTIVE TEAM SCOTT J. MEDHURST 29 years with Toromont President and Chief Executive Officer 29 year career Randy B. Casson Paul R. Jewer David A. Malinauskas President Executive Vice President President Construction Industries & Chief Financial Officer CIMCO 40 years with To
Slide 34: Equity Ownership
Equity Ownership OWNERSHIP: Units $MM % Board 2,688,128 $ 113.8 3.4 Senior Management 927,011 39.3 1.2 Employees (ESPP) 1,393,242 59.0 1.8 TOTAL 5,008,381 $ 212.1 6.4 Balances as at December 31, 2016 with closing price $42.35 Units include shares and DSUs, both of which are purchased EQUITY OWNERSHI
Slide 35: March 2017
TORO March 2017
Toromont Industries — Investor Presentation (March 2017) on 6ix