Toromont Industries Ltd. · TSX:TIH
Toromont Industries — TD Engineering & Construction Conference 2016
31 slides from Toromont Industries's conference presentation, Mar 29, 2016
Slide 1: TD Engineering & Construction Conference
TD Engineering & Construction Conference March 29, 2016
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 48 Year Dividend Record, 27 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: Equipment Group
MULTIPLE GROWTH PLATFORMS Construction Industries EQUIPMENT GROUP Resource Industries 5
Slide 6: Steady Growth in Revenue
STEADY GROWTH IN REVENUE GROWTH FUELED BY: ► Expanded Markets and New Branches ► Expanded Service Offerings ► Increased Population and Larger Equipment Fuels Product Support 1,250 30,000 25,000 1,000 20,000 Estimated Installed Base (Units) Revenue ($millions) 750 15,000 500 10,000 250 5,000 0 0 2002
Slide 7: Strong Dealer Network
Equipment Group STRONG DEALER NETWORK 7 Toromont CAT Mine Site Branches Meadowbank Mary River +2,600 Members Nunavut 1. Agnico Eagle 1 DEDICATED TEAM 2. Goldcorp 3. DeBeers DELIVERS 4. Detour Gold 6 5. Goldcorp Voisey’s SPECIALIZED 6. Vale Bay Newfoundland 7. Baffinland Manitoba & Labrador EQUIPMENT
Slide 8: Toromont CAT Branch Network
TOROMONT CAT BRANCH NETWORK Hamilton Branch Total # of techs Total Sq. Ft. Total Sq. ft. Employees owned Toromont Cat Total 1,921 915 1,013,862 952,400 Number of facilities 34 24 Average Size 29,819 Total Book Value ($MM) 107.5 Facilities Capex past 5 years ($MM) 16.8 8
Slide 9: Diverse Markets Served
DIVERSE MARKETS SERVED Large & Local Contractors 39% 1 Other Large 21% Contractor 23% Other Road 11% Construction Quarry & 14% Aggregate 5% Infrastructure Equipment Services Local Utilities 6% Contractor 4% 16% Industrial 6% Mining Residential 23% 3% Excavation & Earthmoving 4% DIVERSE MARKETS WITH
Slide 10: Battlefield Branch Network
BATTLEFIELD BRANCH NETWORK Stoney Creek Branch & Head Office Total Employees # of techs Total Sq. Ft. Total Sq. ft. owned Battlefield Total 734 173 375,304 271,511 Number of facilities 42 30 Average Size 8,936 Total Book Value ($MM) 51.7 Facilities Capex past 5 years ($MM) 11.4 10
Slide 11: Diverse Markets Served: Rental Opportunities
DIVERSE MARKETS SERVED Rental and sales mix Estimated rental market opportunity Other Paving 3% Small Tool 1 Sports 5% Sales 7% 5% Fleet Mining 6% 5% Golf Courses Power 28% Product 6% Support 7% Rental Oil & Gas Building 6% Products 5% 52% Landscape Cat Compact Manufacturing 10% Equipment 14% Sales
Slide 12: 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 13: Infrastructure Commitment Ontario
INFRASTRUCTURE COMMITMENT ONTARIO Infrastructure Ontario plans $137 billion ten-year spend (up $3B from plans announced in the prior year) Source: 2016 Ontario Budget 13
Slide 14: Infrastructure Commitment Federal
INFRASTRUCTURE COMMITMENT FEDERAL Previous Federal Government had recognized investment priority and committed to increased stable funding: 10 Year New Building Canada Program & Public Transit Fund: $65 Billion investment 14
Slide 15: Infrastructure Commitment Federal: Budget 2016
INFRASTRUCTURE COMMITMENT FEDERAL Budget 2016 increased investment, adding $60 billion in new infrastructure funding. • $3.4B/3yrs – public transit, 44% in Ontario; • $5.0B/5yrs – water, wastewater and green; • $3.4B/5yrs – social infrastructure (includes component for recreational) 15
Slide 16: Rental Market
Equipment Group RENTAL MARKET 250 POWER GENERATION 200 HEAVY RENTS R12 Revenue ($millions) 150 100 LIGHT EQUIPMENT 50 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 Light Equipment Heavy Equipment Power Generation Rent with a Purchase Option Rental - Used 16
Slide 17: Rental Market Opportunity
Equipment Group RENTAL MARKET OPPORTUNITY 1,400 Total market* Toromont revenue $1,210 1,200 Rental Revenues $ Millions 1,000 $930 Significant 800 growth 600 opportunity 400 $200 200 $80 $145 16% 187 15% 0 $28 14% $14 18% Battlefield Heavy Rent Power Total ($ Millions) Battlefield Heavy Rent Power To
Slide 18: Mining Opportunities
Resource Industries MINING OPPORTUNITIES 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 19: Growth in Mining Installed Base
Resource Industries GROWTH IN MINING INSTALLED BASE 1,600.0 1400 1300 1,400.0 1200 Current Replacement Value of Fleet ($MM) 1100 1,200.0 1000 Installed Base (Units) 1,000.0 900 800 800.0 700 600 600.0 500 400 400.0 300 200.0 200 100 0.0 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2
Slide 20: Product Support
PRODUCT SUPPORT $550 1200 $500 $450 1000 $400 Trailing 12 month Product Support Revenues ($MM) Number of Technicians 800 $350 $300 600 $250 $200 400 $150 $100 200 $50 $- 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 '03 '04 '04 '05 '05 '06 '06
Slide 21: Expanded Product Support Offering
EXPANDED PRODUCT SUPPORT OFFERING Largest 2nd largest and Larger customers opportunity expanding adverse to holding opportunity facilities or techs 21
Slide 22: 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 3,500 contracted service agreements in place (PMs and MARCs) 22
Slide 23: 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 2008 2009 2
Slide 24: 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 25: Growth Platform in Manitoba
GROWTH PLATFORM IN MANITOBA Four locations : ► Elie ► Portage la Prairie Manitoba ► Neepawa ► Brandon 91 employees including 36 technicians 25
Slide 26: Expanded Product Lines
EXPANDED PRODUCT LINES Former Toromont Cat Ag + Former Ag West + Former Canpro + Attachments Comprehensive Product Offering Matched with Technology: Comprehensive Support Network 26
Slide 27: Organic Growth
HOW WILL THE EQUIPMENT GROUP CONTINUE TO GROW? Mining Power Systems Construction Parts & Service Market Share Product Range ORGANIC GROWTH 27
Slide 28: CIMCO
CIMCO ► 100+ year history ► Strong industrial customer base ► Leader in recreational systems ► U.S. growth opportunity 28
Slide 29: 100 Years of Serving Refrigeration Markets
100 YEARS OF SERVING REFRIGERATION MARKETS Revenue Split (2015) Recreational 19% Product Support 49% ME NH VT Industrial MA WI 32% MI NY RI CT PA NJ IL OH DE IN MD VW VA MO KY NC TN AR SC MS AL GA TX FL CIMCO OFFICES US Sales Coverage SERVICE ACCOUNT MANAGERS 400 Mile Sales Ring 29
Slide 30: 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 31: TD Engineering & Construction Conference
TD Engineering & Construction Conference March 29, 2016
Toromont Industries — TD Engineering & Construction Conference 2016 on 6ix