TD Engineering & Construction Conference March 28, 2019 STRONGER TOGETHER PLUS FORTS ENSEMBLE
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 simil ar 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 cycles, including general economic conditions in the countries in which Toromont operates; commodity price changes, including changes in the price of precious and base metals; changes in foreign exchange rates, including the Cdn$/US$ exchange rate; the termination of distribution or original equipment manufacturer agreements; equipment product acceptance and availability of supply; increased competition; credit of third parties; additional costs associated with warranties and maintenance contracts; changes in interest rates; the availability of financing; potential environmental liabilities of the acquired businesses and changes to environmental regulation; failure to attract and retain key employees; damage to the reputation of Caterpillar, product quality and product safety risks which could expose Toromont to product liability claims and negative publicity; new, or changes to current, federal and provincial laws, rules and regulations including changes in infrastructure spending; and any requirement of Toromont to make contributions to the registered funded defined benefit pension plans, postemployment benefits plan or the multi-employer pension plan obligations in which it participates in and acquired in excess of those currently contemplated. Risks and uncertainties related to the 2018 significant acquisition could also cause the actual results to differ materially from the estimates beliefs and assumptions expressed or implied in the forward-looking statements, including but not limited to: changes in consumer and business confidence as a result of the change in ownership; the potential for liabilities assumed in the acquisition to exceed our estimates or for material undiscovered liabilities in the 2018 acquisition; the potential for third parties to terminate or alter their agreements or relationships with Toromont as a result of the acquisition; and risks related to integration of the acquired operations with those of Toromont including cost of integration and ability to achieve the expected benefits. Readers are cautioned that the foregoing list of factors is not exhaustive. 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 2018 contained in the 2018 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. 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. STRON RONGER GER TOG OGETHER HER PLUS US FORT ORTS ENSE NSEMBLE BLE 2
Multiple Gr Multiple Growth wth Pla Platf tfor orms ms Construction Industries EQUIPMENT GROUP Resource Industries STRON RONGER GER TOG OGETHER HER PLUS US FORT ORTS ENSE NSEMBLE BLE 3
Long-term Bus Long term Business iness Growth Growth & Returns & Returns 10 Yr TSR CAGR*: Toromont 19.7% S&P/TSX 9.1% TIH 50 th Foundational Newfoundland Crothers Battlefield Powell Hewitt/Atlantic Acquisitions Tractor 1993 1996 2001 2017 1997 (Continuing Ops) *TSR determined based on 10 years to Mar. 11/19 STRON RONGER GER TOG OGETHER HER PLUS US FORT ORTS ENSE NSEMBLE BLE 4
Toromont Today Toromont Today AgWest 3% Toromont Material CIMCO Business Handling 10% 3% Toromont Battlefield Contribution CAT QM QM 29% 4% Revenues Battlefield Legacy 9% Toromont CAT Legacy • Combined CAT dealership 42% represents 71% of revenues • Rental services business contributes 13% • 2017 acquired businesses Year Ended $ 3.5 B contribute 37%, representing significant December 31 2018 opportunity STRON RONGER GER TOG OGETHER HER PLUS US FORT ORTS ENSE NSEMBLE BLE 5
Diversified Diversified Customers Customers & Service & Services Product Equipment Support 49% 40% Rental 11% Product Support is a significant component of the Toromont business model * Year Ended December 31 2018 STRON RONGER GER TOG OGETHER HER PLUS US FORT ORTS ENSE NSEMBLE BLE 6
Str Strong ong Dealer Dealer Netw Networ ork Equipment Group 5,000+ Members (2000+ Technicians) DEDICATED TEAM DELIVERS SPECIALIZED EQUIPMENT AND MUCH MORE 122 Locations >250 Brands >28,000 Items 53 Toromont CAT Locations 69 Locations History of Successful Consolidation STRON RONGER GER TOG OGETHER HER PLUS US FORT ORTS ENSE NSEMBLE BLE 7
Structure – Toromont Cat Central Region Quebec Region Atlantic Region • Leadership appointed • Leadership appointed • Leadership appointed • Runs with limited • Decentralized branch • Decentralized branch integration distraction structure announced structure implemented • NL integrated with Maritimes to form a true Atlantic Region Power Systems – Pan organizational structure implemented Mining Division – Pan organizational structure announced Product Support – Service Product Support – Parts & Logistics • Leadership appointed • Leadership appointed • Opportunity to leverage best • Opportunity to leverage best practices across org practices across org • Manage REMAN as a portfolio • Evaluate Supply Chain Efficiency Balanced Approach to Leadership Selection STRON RONGER GER TOG OGETHER HER PLUS US FORT ORTS ENSE NSEMBLE BLE 8
Battlefield Update • Fully rolling out Battlefield model across Quebec and the Maritimes • Separate Rental Services business from Heavy Equipment Dealership • Management consolidated and integrated • Increased investment in rental fleets – including expansion of allied products • Leveraging existing facilities with view to expansion opportunities 250+ brands including: • Completed francization of Battlefield systems for rollout in April. STRON RONGER GER TOG OGETHER HER PLUS US FORT ORTS ENSE NSEMBLE BLE 9 9
Material Handling Update • All rebranded Toromont – Toromont Material Handling and Manutention Toromont • Separating Material Handling business from Heavy Equipment Dealership • Focused on increasing sales coverage • Planning for systems integration – currently three platforms • Increased investment in rental fleets • Key to success is an efficient organization • Engaged with other Cat dealers in this business to assess success factors • Long-term rental is a significant market opportunity STRON RONGER GER TOG OGETHER HER PLUS US FORT ORTS ENSE NSEMBLE BLE 10 10
Gr Growth In R wth In Revenue enue GROWTH FUELED BY: ► Expanded Markets and New Branches ► Expanded Service Offerings ► Increased Population and Larger Equipment Fuels Product Support 3,000 50,000 2,500 40,000 2,000 Estimated Installed Base (Units) Revenue ($millions) 30,000 1,500 20,000 1,000 10,000 500 0 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Product Support Sales Equipment Sales Rental Estimated Installed Base Revenue presented is based on trailing 12 months. Installed units based on management estimates. STRON RONGER GER TOG OGETHER HER PLUS US FORT ORTS ENSE NSEMBLE BLE 11
Recommend
More recommend
