Investor Presentation March 2013 Forward Looking Statement This - - PowerPoint PPT Presentation

▶
investor presentation
SMART_READER_LITE
LIVE PREVIEW

Investor Presentation March 2013 Forward Looking Statement This - - PowerPoint PPT Presentation

Apr 06, 2023 107 likes •409 views

Investor Presentation March 2013 Forward Looking Statement This presentation contains certain forward-looking statements. Forward looking statements relate to future events or the Corporations future performance, and are based on

slide-1
SLIDE 1

Investor Presentation

March 2013

slide-2
SLIDE 2

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 operations 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.

2

slide-3
SLIDE 3

Wajax Core Businesses 2012 Revenue and EBIT

53% 23% 24% 54% 25% 21%

Revenue EBIT

3

slide-4
SLIDE 4

2012 Revenue by Region

> 40,000 Customers

4

128 Branches

slide-5
SLIDE 5

2012 Revenue by Market

10% 11% 12% 10% 17% 14% 9% 5% 6% 6%

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

43% Direct to Resource Markets

5

slide-6
SLIDE 6

Investment Considerations

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

$0.27 per share ($3.24 annualized)

  • Yield:

7.7% - 8.5% (based on $38-$42 stock price)

  • Target Leverage:

1.5 – 2.0X Debt-to-EBITDA

  • Average Annual ROIC:

16.6%

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

~$700 million

  • No shareholder holds ≥ 10% of issued shares

* Subject to the Corporation’s financial condition, economic outlook and capital requirements. 6

slide-7
SLIDE 7

Creating Value For Shareholders

7

Wajax Strategy Earnings Growth

  • Focus on organic growth: base business and new opportunities
  • Tuck-under acquisitions
  • Ensure debt capacity meets growth requirements
  • Manage debt within 1.50-2.0X Debt/EBITDA range

Capital for Growth Maintain 75% Dividend Base Business

  • Executional

Excellence New Opportunities

slide-8
SLIDE 8

53% of 2012 Revenue

8

slide-9
SLIDE 9

Wajax Equipment Revenue and Growth Priorities

35% 30% 16% 12% 7%

9

2012 Revenue Mix Growth Priorities Base Business: 1) Continue to grow market share in existing categories:

  • Focus: Construction and

Material Handling

  • Continued sales force

effectiveness improvements 2) Expand Mining 3) Grow aftermarket contribution 4) Selected product line extensions and tuck-under acquisitions.

Crane/ Utility Forestry Material Handling

Mining Construction

New Opportunity: 1) Build Rotating Products division

slide-10
SLIDE 10
  • Building on our leadership

position in Hitachi mining shovels 1) Expand infrastructure in Ontario and Eastern Canada 2) New products and services

Hitachi

10

Wajax Equipment Expand Mining Growth Strategies

Grow Mining

slide-11
SLIDE 11

$500 Million*

11

Wajax Equipment Expand Mining Product Offering

  • Representing Fletcher

mining effective Q4 2012

  • Testing selected

underground mining lines new to North American market from YMZ/Zanam

  • Representing new entry

to market in 2014 for drilling equipment

  • Reviewing additional

mining opportunities in equipment, parts and service

  • Provide product with

excellent quality and cost effectiveness

  • Can generate 2X original

costs in parts and service

  • ver 10-year lifetime

$400 Million* $200 Million*

(*Estimated Canadian market size relevant to expected Wajax offering)

Now: Haul Trucks Future: Underground and Drilling

slide-12
SLIDE 12

Wajax Equipment

Product Line Extensions – Bell Articulated Truck

$225 Million*

12

  • Appointed exclusive Canadian distributor November 2, 2012
  • Estimated Canadian unit market size - 500 units / year
  • Estimated Canadian installed base – 300 units
  • Represents immediate parts and service opportunity

(*Estimated Canadian market size)

slide-13
SLIDE 13

Wajax Equipment Developing the Rotating Products Division

29% 71%

13

Plant and Field Services

Estimated Oil Sands Market(1) $1.8B

Products, Parts and Services

(1) Wajax Addressable Products and Services

Wajax Strategy 1) Grow revenue in an expanding array of oil sands products and services

  • Primary focus: products,

parts and services in slurry systems

  • Secondary focus: selective

provisioning of plant and field services

  • Current market share <1%

2) Focus on oil sands markets first and then expand to other Canadian markets

slide-14
SLIDE 14

Wajax Equipment Developing the Rotating Products Division

Slurry Pumps Parts and Service Engineering Support Field Services

14

  • Deliver technologically

superior product at lower cost through exclusive vendor relationships

  • Deliver targeted

turnaround/shutdown maintenance services

  • Design custom

approaches to increase plant maintenance efficiency

slide-15
SLIDE 15

23% of 2012 Revenue

15

slide-16
SLIDE 16

Wajax Power Systems Revenue and Growth Priorities

45% 29% 26%

16

2012 Revenue Mix Growth Priorities Base Business: 1) Expand our success in Off-Highway mechanical drive systems 2) Maintain our position in On-Highway New Opportunity: 1) Establish Wajax as one of Canada’s leaders in commercial EPG

Off-Highway Mechanical Drive Systems

Electric Power Generation (EPG)

On-Highway

slide-17
SLIDE 17

Applications

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

Growth Strategies

  • Leverage product technology advancements by MTU and Allison
  • Expansion of aftermarket capabilities
  • Marine opportunities – e.g., Gov’t of Canada ship building

Allison MTU

17

Wajax Power Systems Mechanical Drive Systems

slide-18
SLIDE 18

Wajax Power Systems Building Our EPG Business

49% 44% 7%

18

Wajax Strategy 1) Currently #3 in the market 2) Lever advantages:

  • National footprint
  • Diverse product portfolio
  • Building a world-class team

3) Focus for Wajax

  • Large projects capability

(>$7M/5MW)

  • Continued success in

standby and prime diesel, rental and gas

Diesel Prime

Gas Continuous

Diesel Standby

Estimated Canadian Market Size(1) $880M

(1) Wajax Addressable Segments

slide-19
SLIDE 19

Wajax Power Systems Génératrice Drummond

19

The 68,000 sq. ft. Génératrice Drummond facility opened in the summer of 2012 and will be used to support continued strength in the Quebec market and as a national integration center. Establishing an Infrastructure to Drive EPG

slide-20
SLIDE 20

24% of 2012 Revenue

20

slide-21
SLIDE 21

Wajax Industrial Components Revenue Mix and Growth Priorities

52% 30% 15% 3%

21

2012 Revenue Mix Growth Priorities Base Business: 1) Expand branch network

  • Organic growth
  • Acquisitions

2) Improve efficiencies

  • Supply chain
  • Inventory management
  • E-commerce

New Opportunity: 1) Expand Engineering and Repair Service

Other Process Equipment

Hydraulics Bearings and Power Transmission

slide-22
SLIDE 22

Wajax Industrial Components Building our Engineering and Repair Services

25% 25% 28% 22%

22

Wajax Strategy 1) Wajax current share estimated at 4%

  • Driven by strength in

hydraulics 12% market share 2) Build services capability:

  • Engineering design and

fabrication services

  • Shop repairs
  • Field Repairs
  • Reliability services

3) National branch network

  • Consider selected

acquisitions to accelerate growth

Instrumentation

Pumps Bearings and Power Transmission

Estimated Canadian Market Size(1) $1.4B

Hydraulics

(1) Wajax Addressable Products/Services

slide-23
SLIDE 23

Process Equipment Hydraulics

23

Wajax Industrial Components Engineering and Repair Services

Bearings and Power Transmission Gate Valve Power Unit

  • Fort McMurray
  • Project Value: $125K

Pillow Block Bearings Sludge Pump

  • Toronto
  • Project Value: $86K
  • Sept-Iles
  • Project Value: $520K
slide-24
SLIDE 24

2012 Results

slide-25
SLIDE 25

2011 2012

$1,466 $1,377

Revenue

($ Millions)

2012 Consolidated Revenue and Earnings

+6%

25

2011 2012

$3.95 $3.84

Earnings

($ Per Share)

+3%

slide-26
SLIDE 26

2012 Net Segment Earnings

2011 2012

$50.2 $56.1

2011 2012

$23.1 $22.1

2011 2012

$32.9 $26.1 +12%

  • 21%
  • 4%

26

7.3%* 7.2%* 9.5%* 7.9%* 6.6%* 6.1%*

($ Millions)

Equipment Industrial Components Power Systems

* Net Segment earnings percentage Revenue Increase: 14% Revenue Decrease: 4% Revenue Increase: 4%

slide-27
SLIDE 27

2013 Outlook

  • 2013 to be challenging as a result of mining,

and oil and gas slowdown and loss of LeTourneau distribution rights.

  • However, quoting activity in mining remains

active.

  • Achieving comparable earnings to 2012

depends on reasonable end market recovery in the second half of 2013.

27

slide-28
SLIDE 28