STRENGTH . DIVERSITY . GROWTH . Investor Presentation October 2008 - - PowerPoint PPT Presentation

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STRENGTH . DIVERSITY . GROWTH . Investor Presentation October 2008 - - PowerPoint PPT Presentation

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STRENGTH . DIVERSITY . GROWTH . Investor Presentation October 2008 Forward-Looking Statements Certain information in this presentation contains forward-looking statements based on managements current expectations and assumptions

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SLIDE 1

STRENGTH . DIVERSITY . GROWTH . Investor Presentation

October 2008

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SLIDE 2

Forward-Looking Statements

  • Certain information in this presentation contains forward-looking

statements based on management’s current expectations and assumptions regarding the business and anticipated financial results of the Fund. There is, however, no assurance forward- looking statements will materialize if known and unknown risks or uncertainties affect the Fund’s business or if management’s uncertainties affect the Fund’s business or if management’s expectations and assumptions prove to be incorrect. In such circumstances, actual results of operations could differ materially from expectations and forward-looking statements.

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

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

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SLIDE 3

Wajax Income Fund Three Distribution Businesses

Revenue*

  • Mobile Equipment

53%

– Construction, Mining and Material Handling Equipment

  • Industrial Components

26%

– Bearings and Power Transmission Parts, Hydraulic and Process Components Hydraulic and Process Components

  • Power Systems

21%

– Diesel and Natural Gas Engines, Power Transmissions

  • 2007 Revenues: $1.192 billion
  • 2007 EBITDA:

$88.3 million

  • Current monthly distributions: $0.36 ($4.32/year)

* Based on 2007 consolidated revenue

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SLIDE 4

Wajax Income Fund Diverse Geographic Coverage

Over 100 branches with 45,000 customers

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SLIDE 5

Wajax Income Fund 2007 Revenue by Region

Western Canada Eastern Canada

  • Central

Canada

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SLIDE 6

Wajax Income Fund 2007 Revenue by Industry

  • Forestry

Other Conventional Oil & Gas

  • Mining
  • Industrial/

Commercial Government & Utilities Construction Transportation Metal Processing Oil Sands

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SLIDE 7

Mobile Equipment Mobile Equipment

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SLIDE 8

Mobile Equipment Diverse Geographic Coverage

30 Locations

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SLIDE 9

Mobile Equipment Diverse Products

Largest multi-line distributor

  • f mobile equipment in Canada
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SLIDE 10

Mobile Equipment 2007 Revenue by Industry

  • Forestry

Other Conventional Oil & Gas

  • Mining
  • Industrial/

Commercial Government & Utilities Construction Transportation Metal Processing Oil Sands

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SLIDE 11

Capitalize on strong demand for mining equipment

  • Hitachi hydraulic shovels
  • LeTourneau wheel loaders

– > 100 units operating across

Mobile Equipment Growth Initiatives

– > 100 units operating across Canada – 50% sold last 3 years – Sales value $1-$10 million per unit – Parts/service - 2X capital cost - 5 yr CAGR 17%

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SLIDE 12

Mobile Equipment Growth Opportunities

  • Recently secured distribution rights for Tigercat full

line of forestry equipment for all of Canada, excluding British Columbia and Saskatchewan

  • High quality line with excellent market acceptance
  • Immediate parts and service opportunity
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SLIDE 13

Mobile Equipment Growth Initiatives

  • Expand JCB construction

equipment territory in Southern Ontario with Greer acquisition

  • Open a new 30,000 sq. ft. crane utility assembly centre

in Red Deer, Alberta, and expand presence in eastern Canada

  • Complete expansion of the Fort McMurray branch
  • Expand the lift truck rental fleet and revamp marketing

approach by customer application

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SLIDE 14

Mobile Equipment Revenue and EBIT

5.0% 5.6% 6.7% 7.2% 8.0%

400,000,000 500,000,000 600,000,000 700,000,000 5.0% 6.0% 7.0% 8.0% 9.0%

Revenue EBIT %

4.2% 5.0%

  • 100,000,000

200,000,000 300,000,000 400,000,000

2003 2004 2005 2006 2007 YTD Q2 2008

0.0% 1.0% 2.0% 3.0% 4.0% 5.0%

  • Equipment 70%
  • Parts and Service 30%
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SLIDE 15

Industrial Components Industrial Components

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SLIDE 16

Industrial Components Locations

58 Locations Serving >22,000 customers

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SLIDE 17
  • Bearings and power transmission parts
  • Hydraulic components and systems and

process equipment

Industrial Components Diverse Products

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SLIDE 18
  • Forestry

Mining Conventional Oil & Gas

Industrial Components 2007 Revenue by Industry

  • Industrial/

Manufacturing Transportation Construction Food & Beverage Metal Processing Other

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SLIDE 19

Industrial Components Growth Opportunity

Acquisitions

  • Product market is approximately $3 billion

annually

  • Current market share is estimated at

Size of market + Lack of dominant competitors Opportunities for growth approximately 10%

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Industrial Components Growth Initiatives

Weir Acquisition

  • Acquired assets of Weir Process Equipment business

September 5, 2008 for $25.4 million.

  • Adjusted sales and EBIT LTM June 2008 $50 million

and $5 million. and $5 million.

  • A leading distributor of pumps, process controls and

instrumentation filtration products and material handling equipment to the following industries: – Oil and gas – Power generation – Mining – Infrastructure

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Industrial Components Growth Initiatives

Revenue

  • Expand offering and market penetration of globally

sourced private label products

  • Introduce new products leveraging 55 branch

network

  • Target contract customers in under-represented

sectors

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SLIDE 22

Industrial Components Other Initiatives

  • Further improve margins

– Low volume accounts – Private label imported products – Freight cost reductions

  • Improve inventory turns
  • New computer system implementation
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SLIDE 23

Industrial Components Revenue and EBIT

4.6% 6.5% 6.4% 6.5%

250,000,000 300,000,000 350,000,000 5.0% 6.0% 7.0%

Revenue EBIT %

1.8% 3.0% 4.6%

  • 50,000,000

100,000,000 150,000,000 200,000,000

2003 2004 2005 2006 2007 YTD Q2 2008

0.0% 1.0% 2.0% 3.0% 4.0%

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SLIDE 24

Power Systems Power Systems

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SLIDE 25

Power Systems Locations

One of the largest distributors in Canada

20 Locations

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SLIDE 26

Power Systems Products

Diesel Engines Transmissions Generators

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SLIDE 27
  • Oil Sands

Other Mining

  • Power Systems

2007 Revenue by Industry

  • Conventional

Oil & Gas Industrial/ Commercial On-Highway Transportation

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SLIDE 28

Power Systems Growth Initiatives

  • Further develop power generation business focussing on

standby and prime power in the industrial/commercial sector

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SLIDE 29

Power Systems Growth Initiatives

  • Expansion of GE Energy product line across Canada

– Strong future bid opportunities ($200M to $300M), especially in Ontario.

  • Evaluate acquisition opportunities
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Power Systems Growth Initiatives – GE Energy

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Power Systems Revenue and EBIT

9.4% 8.9% 8.9% 10.0% 8.8% 8.5% 150,000,000 200,000,000 250,000,000 300,000,000 6.0% 8.0% 10.0% 12.0% Revenue EBIT %

  • 50,000,000

100,000,000 150,000,000

2003 2004 2005 2006 2007 YTD Q2 2008

0.0% 2.0% 4.0% 6.0%

  • Equipment 40%
  • Parts and Service 60%
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Financial Highlights

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SLIDE 33

Wajax Income Fund Financial Highlights

($Cdn millions, except unit and per unit data) (From continuing operations) Full Year 2007 2006 Revenue $1,192.3 $1,206.5 EBIT $78.8 $79.3 Basic earning per unit/share $4.34 $4.31 Distributable cash per unit – basic $4.47 $4.46 Cash distributions declared $4.36 $4.43 Units/shares outstanding 16.6 16.6 Debt-to-EBITDA 0.69x 0.77x

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Wajax Income Fund Financial Highlights

($Cdn millions, except unit and per unit data) YTD Q2 2008 2007 Revenue $596.9 $621.4 Revenue $596.9 $621.4 Basic earning per unit $2.29 $2.03 Distributable cash per unit – basic $2.24 $2.12 Debt-to-EBITDA 0.96x 0.98x

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SLIDE 35

Wajax Income Fund Monthly Distributions

$0.32

Nov-06

$0.33

Aug-07 May-06 $0.30 Aug-06

$0.36*

Sept-08

(Per Unit)

$0.34

May-08

$0.35

Aug-08

* Yield of 13.5% at $32.00 (not including special distributions)

*$4.32 Annually

$0.23

Jan-06

$0.1833

Jun-05

$0.21

Nov-05

$0.25

Mar-06 $0.27 May-06

10 increases in monthly distributions since June 2005

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STRENGTH . DIVERSITY . GROWTH.