Proven Steady Growth November 2012
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 identify forward-looking information and statements. Forward looking statements and information may include, without limitation, statements regarding the operations, business, financial condition, liquidity, expected financial results, performance, obligations, market conditions, prospects, opportunities, priorities, targets, goals, ongoing objectives, strategies and outlook of Toromont and its business units. Forward-looking information and statements contained herein are based on, among other things, Toromont management's current assumptions, expectations, estimates, objectives, plans and intentions regarding projected revenues and expenses, the economic, industry and regulatory environments in which Toromont operates or which could affect its activities, Toromont's ability to attract and retain customers as well as Toromont's operating costs and raw materials supply. By their nature, forward-looking information and statements, and the factors upon which they are based, are subject to risks and uncertainties which may be beyond Toromont's ability to control or predict. Actual results or events could differ materially from those expressed or implied by forward-looking information and statements. Factors that could cause actual results or events to differ from current expectations include, among others: business cycle risk, including general economic conditions in the countries in which Toromont operates; risk of commodity price changes including precious and base metals; risk of changes in foreign exchange rates, including the Cdn$/US$ exchange ate; risk of the termination of distribution or original equipment manufacturer agreements; risk of equipment product acceptance and availability of supply; risk of increased competition; credit risk related to financial instruments; risk of additional costs associated with warranties and maintenance contracts; interest rate risk on financing arrangements; risk of availability of financing; risk of environmental regulation. Additional information on these factors and other risks and uncertainties that could cause actual results or events to differ from current expectations can be found in the “Risks and Risk Management” and “Outlook” section of Toromont’s annual MD&A for 2011 contained in the 2011 Toromont Annual Report. Other factors, risks and uncertainties not presently known to Toromont or that Toromont currently believes are not material could also cause actual results or events to differ materially from those expressed or implied by forward- looking information and statements. Forward-looking information and statements contained herein about prospective results of operations, financial position or cash flows are presented for the purpose of assisting Toromont's shareholders in understanding managements' current view regarding those future outcomes and may not be appropriate for other purposes. Readers are cautioned not to place undue reliance on the forward-looking information and statements contained herein, which are given as of the date of this document, and not to use such information and statements for anything other than their intended purpose. Toromont disclaims any obligation or intention to update or revise any forward-looking information or statement, whether the result of new information, future events or otherwise, except as required by applicable law. 2
Investment Strengths Market Leading Brands & Position Solid Growth Opportunities in Diverse Markets Product Support Enhances Stability Track Record of Superior Financial Performance Strong Balance Sheet 43 Years of Dividends – 23 of Consecutive Growth 3
The Equipment Group The Equipment 4
EQUI QUIPMENT G GROUP UP Dealer Network Equipment Sales by Segment * 15% Power 21% Large Contractor 4% Local Contractor 6% Mining Nunavut Quarry 1 20% 16% Meadowbank Agriculture Other Toromont CAT 18% Mine Site Branches *5 year average New Equipment Sales 6 1. Agnico Eagle Voisey’s Bay 2. Goldcorp Newfoundland 3. DeBeers Manitoba & Labrador 4. Detour Gold 5. Goldcorp 6. Vale 3 Musselwhite Toromont CAT Victor Branches 2 Detour Lake 4 Porcupine 5 Ontario >250 Brands >28,000 Items 37 Toromont CAT Branches 5 History of Successful Consolidation 38 Stores Serving 13,600 Customers
EQUI QUIPMENT G GROUP UP Revenue Growth Trends 1,400 25000 1,200 20000 1,000 Estimated Installed Base (Units) Revenue ($'000,000) 15000 800 600 10000 400 5000 200 0 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Q3'12 R12 Rental Equipment Sales Product Support Sales Estimated Installed Base Growth Fueled by: Expanded Markets and New Branches Mining, Battlefield, Power Systems, Sitech Mid Canada Broadened Product Offerings (e.g., MaK, Metso, Trimble/Sitech) Increased Population and Larger Equipment Fuels Product Support 6 Revenue presented is based on trailing 12 months. Installed units based on management estimates for Toromont CAT.
EQUI QUIPMENT G GROUP UP Product Support $400,000,000 105 Trailing 12 month Product Support Revenues Toromont CAT Product Support Absorption 100 $300,000,000 95 Coverage (%) $200,000,000 90 85 $100,000,000 80 $- 75 Equipment Group Toromont CAT Product Support Absorption % Coverage Ten consecutive quarters of year-over-year growth Added 99 technicians in first nine months of 2012 Toromont CAT Absorption ratio an important measure of sustainability Product support absorption equals Toromont CAT product support gross profit divided by direct and indirect expenses total for Toromont CAT
Growth in Mining Installed Base EQUI QUIPMENT G GROUP UP 1,400.0 1100 1000 ($MM’s) 1,200.0 Current Replacement Value of Fleet ($CDN) 900 800 Mining Installed Base (Units) 1,000.0 700 800.0 600 500 600.0 400 400.0 300 200 200.0 100 0.0 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Other Underground Mining Trucks Shovels Number of Units Substantial Increase in Mining Equipment Installed Base Creates Increased Product Support Opportunity 8 Replacement value based on Nov. 2012 pricing. Installed units based on management estimates.
Exploration Expenditures EQUI QUIPMENT G GROUP UP A Leading Indicator Canadian Exploration Expenditures Mineral Exploration 46% Investment Hits Record Billion Dollar Level Ontario March 5, 2012 1:00 PM Investment in mineral exploration in Ontario in 2011 surpassed $1 billion for the first time, driving economic activity and creating jobs. Ontario leads all Canadian jurisdictions in mineral Newfoundland exploration, with 26 per cent of the country's & Labrador exploration investment activity located within the Manitoba province. Ministry of Northern Development and Mines Nunavut ontario.ca/north 2011 $3.9 Billion (total Canada) Source: Natural Resources Canada Investment Has More than Doubled in 9 Our Territory Over Past 5 Years
EQUI QUIPMENT G GROUP UP Diverse Mining Opportunity CAT 6060FS Diesel Shovel Loads 795F AC Truck Total Revenue by Commodity Served Mining Contractors 11% Others, 12% Gold, 47% Zinc, 2% Diamonds 5% Copper, 8% Nickel, 15% 4 yr average Contribution to Toromont CAT Revenues Good diversity of commodities in Toromont territories Gold has been the significant contributor (65% in ‘12) Opportunities continue to include Gold, with added potential for significant chromite and iron ore 10
EQUI QUIPMENT G GROUP UP Large Prospect Mine Sites 1 Nunavut 2 Large Prospect Mine Sites Newfoundland 1. Mary River, Baffinland Iron Mines 2. Meliadine, AEM & Labrador 3. Hollinger, Goldcorp Inc Manitoba 4. Marathon PGM, Stillwater Mining 5. Ring of Fire, Cliffs Natural Resources 6. Hammond Reef, Osisko Mining 7. Rainy River Resources 5 Ontario Toromont CAT 7 6 4 Select Branches 3 Management Estimates 45+ New Projects and 11 Transformational Expansions on Visible Horizon
Toromont acquired BUCY distribution assets Aug 1 - $13.5 million 12 12 Secures distribution of key products (shovels) plus other opportunities
EQUI QUIPMENT G GROUP UP Infrastructure Major Projects • Windsor Essex Parkway - $1.6B • Hwy 407 • Pan-Am Games investment Ontario • Lower Churchill - $7.4B • Hebron - $6B plus Newfoundland & Labrador • Bipole III - $3.2B • Keeyask Generating Station - $5.6B • East Side Hwy Initiative - $3.0B Manitoba • Potential significant infrastructure requirements to support mining and other initiatives Nunavut Significant Major Projects on top of Infrastructure Sustainment Programs 13
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