Investor Presentation March 2012 Forward Looking Statement - - PowerPoint PPT Presentation

Investor Presentation

Corporation

March 2012

Corporation

Forward Looking Statement

• This presentation contains certain forward-looking
• statements. Forward looking statements relate to future events or the

Corporation’s future performance, and are based on management’s current expectations and assumptions regarding the business and anticipated financial results of the Corporation. Forward looking statements involve known and unknown risks, uncertainties and other factors beyond the Corporation’s control which may affect the Corporation’s business, or cause management’s expectations and assumptions to prove incorrect. As a result, actual results of

• perations could differ materially from those anticipated or implied by

forward-looking statements. There can be no assurance any forward- looking statement will materialize.

• You can find a discussion of risks and uncertainties pertaining to the

Corporation and its business and other factors that could cause financial results to fluctuate in our regulatory filings on SEDAR at www.sedar.com. The Corporation assumes no obligation to publicly update or revise its forward-looking statements to reflect new information, events or circumstances, except as required by law.

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Corporation

Equipment Industrial Components Power Systems

50% 25% 25%

Three Core Businesses 2011 Revenue

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Corporation

2011 Revenue by Region

117 Branches > 40,000 Customers

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Corporation

2011 Revenue by Market

4% 6% 7%

Industrial/Commercial Construction Forestry Transportation Mining Oil Sands Government and Utilities Other Metal Processing Oil & Gas

16% 13% 11% 9% 9% 11% 14%

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Corporation

2010 2011

87.5 $53.9

2010 2011

$1,377.1 $1,110.9

2011 Consolidated Revenue and Earnings

Revenue

$ Millions

Earnings Before Tax

$ Millions

• Earnings Per Share:

$3.39 (2010) $3.84 (2011)

• Debt to EBITDA: 0.70 to 1 (December 31, 2011)

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62% 24%

Corporation

Investment Considerations

• Dividend Objective: Payout of at least 75% of earnings*
• Current Monthly Dividend:

$0.27 per share

• Yield:

6.75%-7.0% (based on $46-$48 stock price)

• Average Annual ROIC:

17.4%

• last 5 years (tax effected)
• Market Cap:

$750+ million

• No shareholder holds ≥ 10% of issued shares

* Subject to the Corporation’s financial condition, economic outlook and

capital requirements.

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50% of Total Revenue

EQUIPMENT

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Growth Strategies

• Increase equipment market share in key categories

– Sales personnel and management effectiveness training

• Aftermarket parts and service growth

– Parts fill rates – Labour efficiencies

• Branch coverage in key metropolitan areas

– Montreal, Edmonton and GTA

Tigercat

Forestry

Hyster

Material Handling Construction

Hitachi JCB

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Equipment Product Offering and Growth Strategies

Estimated Growth Opportunities Market Opportunity

• Expand support infrastructure in Eastern Canada
• New products and line extensions

– Hitachi 190 tonne and 240 tonne trucks > $500M – Underground mining lines > $400M

• Expand Rotating Equipment Group in Ft. McMurray

> $200M

Hitachi

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Equipment Product Offering and Growth Strategies

Mining

Townley Hitachi

25% of Total Revenue

POWER SYSTEMS

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Applications

• Prime and standby power

Growth Strategies

• Rental market expansion
• Develop national focus
• Expand PM contract

business

• Supported by new

Drummondville Quebec facility

Electric Power Generation

MTU

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Power Systems

Product Offering and Growth Strategies

Applications

• Oil and gas exploration and servicing (fracing)
• Other Off-Highway applications (i.e., marine)

Growth Strategies

• Further develop packaging and integration

capabilities

• Marine opportunities – Gov’t of Canada ship

building contracts

Mechanical Drive Systems

Allison MTU

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Power Systems

Product Offering and Growth Strategies

Applications

• Parts and service for On-Highway

Detroit Diesel engines and Allison transmissions

On-Highway

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Power Systems

Product Offering and Growth Strategies

25% of Total Revenue

INDUSTRIAL COMPONENTS

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Bearings and Power Transmission

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Process Equipment Hydraulic Components and Systems

(SKF, NSK, Timken) (3M, Moyno) (Eaton, Aeroquip, Vickers)

Industrial Components Product Offering

• Leverage technical capabilities by expanding

higher margin engineering services

• Sales growth:

– Bearings and power transmissions in the west and hydraulics in the east – New branches, product line additions and acquisitions

• Upgrade e-commerce capability
• Streamline inventory management and supply

chain processes

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Industrial Components Growth Strategies

Corporation

Going Forward

• Three areas to focus:

1) Sustaining sales and earnings growth

• Base franchise development
• New growth opportunities (value-add emphasis)

2) Implementing excellence in Human Resource capabilities

• Leadership development
• Core teams: sales, technicians, engineers and Branch

Managers 3) Inter-related business opportunities

• Separate businesses to drive accountability for results,

but

• Exploit common markets/customers to broaden Wajax

share.

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Corporation

2012 Outlook

• Expect growth in Canadian economy.
• Global demand for commodities to remain relatively

strong.

• Revenue impact from phasing out LeTourneau mining

loader line expected to be mitigated by increased Hitachi mining equipment deliveries.

• Expect continued growth in revenue and earnings
• more modestly than in 2011.
• Monthly dividend of $0.27 per share March and April

2012.

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Corporation