Investor Presentation 2019 TSX: TVK
Forward Looking Statement This presentation contains “forward -looking statements” within the meaning of applicable Canadian securities laws, including (but not limited to) statements about the EBITDA projection, future performance of TerraVest Industries Inc. (“TerraVest” or the “Company”) and similar statements concerning anticipated future results, circumstances, performance or expectations. A statement is forward-looking when it uses what TerraVest knows and expects today to make a statement about the future. Forward-looking statements may include words such as anticipate, assumption, believe, could, expect, goal, guidance, intend, may, objective, outlook, plan, seek, should, strive, target and will. These statements relate to future events or future performance and reflect current assumptions, expectations and estimates of Management regarding growth, results of operations, performance, business prospects and opportunities, Canadian/U.S. economic environment and ability to attract and retain customers. Such forward-looking statements reflect current assumptions, expectations and estimates of Management and are based on information currently available to TerraVest as at the date of this Presentation. Forward-looking statements are subject to certain risks and uncertainties, and should not be read as guarantees of future performance or results and actual results may differ materially from the conclusion, forecast or projection stated in such forward-looking statements. These risks, uncertainties and other factors include but are not limited to the following: cyclicality of the oil and gas sectors, weather related issues, economic cycles, input costs, customer expectation for equipment standards, competition, employee/labour, environment, regulatory requirements, exchange rate, availability of capital, cost increases, credit, interest rate and litigation. Such assumptions, expectations, estimates, risks and uncertainties are discussed throughout this Presentation and, in particular, in “Risk Factors” . Consequently, we cannot guarantee that any forward-looking statements will materialize. Readers should not place any undue reliance on such forward-looking statements. 2
Our Company • TerraVest Industries Inc. (“TerraVest” or the “Company”) is a leading provider of products and services to niche infrastructure markets #1 manufacturer of home heating oil products in North America #1 manufacturer of propane, anhydrous ammonia (“NH3”) and natural gas liquids (“NGL”) transport vehicles and storage vessels in Canada and top #3 in the U.S. #1 manufacturer of wellhead processing equipment in Canada • Fiscal 2018 ~ $270 million in revenue, $41.6 million in EBITDA and growing 3
Market Leader in Home Heating Products • Our Home Heating Products division is the #1 player in home heating oil tanks and related accessories in North America, while also producing furnaces and commercial fuel tanks • Strong brand reputation with +65 years of operating history • We are a critical supplier to the heating oil market in North America offering a full suite of products • 5 operating facilities and approx. 300 employees Product Lines Select Customers Residential Furnaces Commercial Fiberglass 4
Market Leader in LPG/NH3/NGL Storage & Transport Equipment • We are the only manufacturer of LPG/NH3/NGL storage and transport equipment with a national footprint in Canada • Strategically located to service mid- west and north-east markets in U.S. • Broadest scope of product offering among all North American competitors • Significant in-house engineering and technical expertise 5
LPG/NH3/NGL Storage & Transport Equipment (cont’d) Product Lines B-Trains Bulk Storage Bobtails Service Trucks Trailers Domestic Tanks Refurb Dispensers Field Service/Installation Nurse Wagons Select Customers 6
Market Leader in Energy Processing Equipment • Our Energy Process Equipment division is the #1 player in wellhead processing equipment in Canada • Strong brand reputation with +50 years of operating history • We are a critical supplier to many of the largest oil and gas producers in North America • 3 operating facilities and approx. 350 employees Product Lines Select Customers Separation Line Heating Tanks Oil Treating 7
Expansive Operational Footprint • TerraVest is the largest Propane/NH3/NGL equipment provider in Canada with coast to coast operations – U.S. operations reside in Michigan, the largest state for propane consumption, and products are sold regionally and nationally • Home Heating products are manufactured in the Northeast, strategically located near the largest market for heating oil products; and • Energy Processing equipment is manufactured in Western Canada Coast to Coast Manufacturing Operations Propane/NH3/NGL Home Heating Energy Processing 8
Participating in the Entire Fuel Infrastructure Supply Chain • TerraVest is involved in all aspects of manufacturing products for the fuel infrastructure supply chain – Products consist of storage vessels at gas plants/refiners through to transport vehicles and domestic tanks at the retail home Nat Gas Propane Propane Transport Rail to Propane Pipeline NGL Transport Propane Pipeline Terminal Retailer to Retailer Terminal Storage Gas Plant Fractionator Agricultural Refinery Residential Commercial /Industrial 9
Strategy and Highlights • Operate market leading and reputable businesses in all of our segments • Offer full scale product suites to become critical suppliers in each of our segments – Add to existing product offering via acquisitions of well-known and reputable businesses – Add to existing product offering via new manufacturing lines and capacity expansions • Continue to invest in state of the art manufacturing technologies across all of our businesses • Young and motivated management team (average age of 43) 10
Strong Financial Performance and High Cash Flow Generation Strong Cash Flow Generation EBITDA Cash Flow Available for Distribution HISTORICAL EBITDA ($MM) $50.0 2013 – 2018A EBITDA CAGR 28.1% $41.6 2015 Peak Oil $40.0 & Gas Market Diversification of Cash Flows through Acquisitions $35.4 $30.0 $24.8 $24.2 $23.1 $27.1 $25.1 $20.0 $12.8 $15.7 $10.0 $11.7 $11.1 $5.9 $0.0 2013 2014 2015 2016 2017 2018 Maint. ($4.1) ($5.0) ($4.4) ($4.0) ($5.4) ($4.2) Capex EBITDA 19% 18% 18% 14% 13% 15% Margin Dividend 72% 44% 29% 63% 66% 27% Payout Ratio 11
History of Successful Acquisitions 2014 2014 2015 2015 2016 Manufacturer of home Manufacturer of oil and Manufacturer of propane Manufacturer of patented Provider of patented sand gas processing service trucks, delivery heating and propane storage tank products for separation equipment to storage products. equipment. Enhanced trucks and transport the oil and gas industry. the oil and gas industry. customer base, trailers. Added a core Diversified cash flow and Complimentary product Differentiated product that manufacturing capability group of leading U.S. fuel created a platform for for existing oil & gas is leveraged to cross sell growth and management distributers as customers customers existing products expertise 2017 2017 2018 Acquisition Criteria ✓ Complimentary businesses Ability to leverage expertise in metal ✓ fabrication ✓ Standalone operational capability Manufacturer and Manufacturer of LPG and Manufacturer of steel and ✓ refurbisher of domestic NH3 transport trailers and fiberglass home heating Quality brand/reputation oil tanks. Enhanced propane tanks. Added to NGL storage vessels. the suite of complimentary Created a national market share ✓ Attractive valuations to shareholders propane products for platform for products in customers Canada 12
History of Organic Growth 2015 2016 2016 2017 2017 Added 25,000 square feet Added new automated Added 10,000 square feet Added automatic CNC Added brand new of manufacturing capacity domestic tank pipe profiler to expand of manufacturing capacity automated domestic tank to existing Pro-Par facility manufacturing line and and heavy craneage to pressure vessel manufacturing line to expand capacity in bulk storage growing line manufacturing capacity, support new transport expanding Fischer’s expanding Pro- Par’s bobtail and transport trailer manufacturing line improve efficiency and product offering to the trailer production product offering to the reduce lead times LPG market LPG market 2018 2018 2018 2019 Investment Criteria ✓ Adds to product offering ✓ Expands capacity ✓ Improves efficiency Internalized ✓ Moved into new 90,000 Moved into new 125,000 Improves quality Added new nondestructive testing to square foot manufacturing square foot facility interchangeable plate rolls increase capacity and facility expanding capacity expanding capacity and to improve efficiency and ✓ improve quality and lead Attractive return on by 100% giving the ability to add lead times times investment new product lines 13
Recommend
More recommend
