PROVEN STEADY GROWTH FEBRUARY 2008

Size: px

Start display at page:

Download "PROVEN STEADY GROWTH FEBRUARY 2008"

Lester Smith
5 years ago
Views:

1 PROVEN STEADY GROWTH FEBRUARY

2 FORWARD-LOOKING STATEMENTS This presentation contains forward-looking statements that reflect the view of Toromont with respect to future events and financial performance. Such forward-looking statements are subject to risks and uncertainties and Toromont s actual results could differ materially from current expectations. Toromont assumes no obligation to publicly update or revise its forwardlooking statements. Please refer to Toromont s annual report, annual information form or other filings with Canadian securities regulators for further information on risks and uncertainties. These materials can be found at 22

3 PROVEN STEADY GROWTH 40 YEARS OF STEADY DIVIDEND PAYMENTS & 19 YEARS STRAIGHT OF DIVIDEND INCREASES 15 % 15 % 19 % TOTAL RETURN OVER PAST 10 YEARS A 5% PREMIUM TO S&P/TSX COMPOSITE INDEX EARNINGS GROWTH ON A 10 YEAR CAGR BASIS AVERAGE RETURN ON EQUITY OVER 10 YEARS 33

4 PROVEN STEADY GROWTH DISCIPLINE OF DIVIDENDS Dividends per Share ($) Toromont has: paid dividends for 38 consecutive years increased dividends for 19 consecutive years recently increased annual rate 20% to $0.48 $ % GROWTH

5 HIGH PERFORMANCE OPERATIONS EQUIPMENT GROUP COMPRESSION GROUP 55

6 REVENUE Twelve Months, December 31 ($Million) 2,000 Equipment Compression Equipment Group 11% growth New machine sales up 20% 1,500 Total machine sales up 16% Rental up 10% 1, Product support up 3% Compression Group 4% growth

7 OPERATING INCOME Twelve Months, December 31 ($Million) Equipment Compression Equipment Group 18% growth Higher revenues Improved operating margins Compression Group down 3% Lower Cdn volumes offset mainly by Higher U.S. volumes and productivity Improved refrigeration operations

8 NET EARNINGS Twelve Months, December 31 ($Million) 125 Net earnings up 23% Basic EPS $1.89, up 21% Excluding land sale, Basic EPS of $1.69 up 8%

9 CORE STRENGTHS WINNING BUSINESS DISCIPLINE Return on Equity (%) Return on Capital Employed (%) % TARGET OVER CYCLE 17%-25% BUSINESS UNIT TARGET

10 CORE STRENGTHS DIVERSIFIED CORE MARKETS TOROMONT CAT COMPRESSION GROUP AGRICULTURE FORESTRY ENGINES RENTAL OTHER RENTAL OTHER INDUSTRIAL GENERAL CONSTRUCTION REFRIGERATION AGGREGATES MINING INFRASTRUCTURE PROCESS COMPRESSION NATURAL GAS Domestic GDP Commodity Prices Interest Rates Infrastructure spending North American GDP Natural Gas Prices Currency 10

CORE STRENGTHS COMMITTED MANAGEMENT TEAM

Equipment Division, Toromont CAT President &

President, Canadian JOHN PAUK President,

11 CORE STRENGTHS COMMITTED MANAGEMENT TEAM SCOTT MEDHURST GARRY MIHAICHUK President, Equipment Division, Toromont CAT President & CEO, Toromont Energy Systems RANDY CASSON JERRY FRAELIC IVAN HEIDECKER President, Battlefield The CAT Rental Store STEVE McLEOD President, U.S. Operations, Toromont Energy Systems President, Canadian Operations, Toromont Energy Systems JOHN PAUK President, CIMCO Refrigeration President, Toromont Energy Services 11

12 EQUIPMENT GROUP GROWTH OPPORTUNITIES Revenue ($Million) 1,100 1, Operating Income ($Million)

13 EQUIPMENT GROUP EQUIPMENT GROUP GROWTH OPPORTUNITIES: MINING SECTOR NUNAVUT MANITOBA LABRADOR ONTARIO NEWFOUNDLAND 50 PRODUCING MINES IN OUR TERRITORIES 140 PROJECTS IN VARIOUS STAGES OF DEVELOPMENT 13

14 EQUIPMENT GROUP GROWTH OPPORTUNITIES: MINING SECTOR PRODUCT SUPPORT D10T Track Type Tractor PURCHASE COST PARTS & SERVICE (OVER LIFETIME) $1.3 M 2 3X 777 TRUCK PURCHASE COST PARTS & SERVICE (OVER LIFETIME) $1.5 M 1 2X 14

15 EQUIPMENT GROUP EQUIPMENT GROUP GROWTH OPPORTUNITIES: MINING SECTOR POWER GENERATION Standby & Prime Recent $62 M order for Meadowbank project $20 M for Power Generation $7 M for first sale of O&K Shovels 15

16 EQUIPMENT GROUP EQUIPMENT GROUP GROWTH OPPORTUNITIES: INFRASTRUCTURE 16 $Billions in Government Investment

17 EQUIPMENT GROUP EQUIPMENT GROUP GROWTH OPPORTUNITIES: POWER SYSTEMS 17 Good Growth in Power Requirements

18 EQUIPMENT GROUP EQUIPMENT GROUP GROWTH OPPORTUNITIES: RENTAL 50% of all equipment to enter markets thru rental Market Est. $650 M Growth Plan: New stores Same store sales increases Expansion of high value products 18

19 EQUIPMENT GROUP EQUIPMENT GROUP KEY TAKEAWAYS BACKLOGS AT RECORD LEVELS INFRASTRUCTURE, MINING KEY DRIVERS FOR 2008 LONG-TERM PRODUCT SUPPORT PROMISING 19

20 COMPRESSION GROUP GROWTH OPPORTUNITIES Revenue ($Million) 1, Operating Income ($Million)

21 COMPRESSION GROUP TOROMONT ENERGY SYSTEMS INC. Growth opportunities in U.S. Compression and Processing Continued growth in Servicing of installed base in Canada and U.S. Expansion of US Compression Rental and Service Expand process applications Expansion of international compression and process sales and service Recovery of Canadian market 100% 80% 60% 40% USA Canada 20% 0% The U.S. market has grown its contribution to TESI revenues over the past three years. 21

22 COMPRESSION GROUP COMPRESSION GROUP CANADIAN MARKET PERFORMANCE Canadian Natural Gas Drilling Activity 18,000 16,000 15,645 15,359 15,289 14,000 12,000 11,177 13,944 11,879 12,706 13,578 Completions 10,000 8,000 9,073 6,000 4,000 2, Source: CAODC, NEB Full cycle costs require higher prices or lower costs to promote more activity. Slow rebuild expected for Canadian drilling activity Canadian Compression and Processing fabrication being used for Northern US and International markets as well as Canadian markets 22

23 COMPRESSION GROUP GROWTH OPPORTUNITIES: U.S. MARKET Year Gas Wells Drilled Wells Drilled Canada US International ,078 17,765 7, ,757 21,908 9, ,061 16,985 9, ,951 19,974 9, ,126 23,187 10, ,931 26,076 10, ,965 28,987 11, ,601 32,168 12,690 Forecast ,792 32,201 13, ,085 32,671 13, ,287 34,266 14,121 US Natural Gas - trillion cubic feet Consumption Production History 16% Net Imports EIA 2008 EIA 2007 Projection 15% 21% Direct sale market $2.0 B est. Rental market $ B est. Activity robust: Rockies Barnett Shales Coalbed methane On-Shore lower 48 TESI direct sales strong and growing + Denver an asset Successful integration and expansion of Casper facility Increased capacity in Houston Increased service base 23

COMPRESSION GROUP COMPRESSION GROUP OPPORTUNITIES IN

service & retrofit activity Overhauls typically kick in

growing in Canada and US Service centres are established

24 COMPRESSION GROUP COMPRESSION GROUP OPPORTUNITIES IN SERVICE Initial start-up and warranty activity Product service & retrofit activity Overhauls typically kick in 3 years after installation Toromont installed base growing in Canada and US Service centres are established and staffed Established business in Canada Expanding service in US 24

25 COMPRESSION GROUP COMPRESSION GROUP GROWTH OPPORTUNITIES: OTHER Process compression opportunities growing in size and scope (liquid recovery is valuable and gas treatment is expanding) Industrial & recreation refrigeration backlog at record levels 25

26 COMPRESSION GROUP COMPRESSION GROUP KEY TAKEAWAYS OUTLOOK STRONG, EXCEPT CANADIAN NATURAL GAS IN NEAR TERM U.S. COMPRESSION A DRIVER REFRIGERATION AN IMPROVED CONTRIBUTOR 26

27 PROVEN STEADY GROWTH FEBRUARY

Toromont Announces Results for the Third Quarter of 2018 and Quarterly Dividend

Toromont Announces Results for the Third Quarter of 2018 and Quarterly Dividend November 5, 2018 TORONTO, Nov. 05, 2018 (GLOBE NEWSWIRE) -- Toromont Industries Ltd. (TSX: TIH) reported its financial results