Investor Presentation - May 2011

Corporation
Wajax Corporation
Investor Presentation
May 2011
Forward Looking Statement
Corporation
 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 Corporation. There is, however, no assurance
forward-looking statements will materialize if known and unknown
risks or uncertainties affect the Corporation’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 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.
2
Three Core Businesses
Corporation
Mobile
Equipment
Industrial
Components
Power
Systems
50%
27%
23%
3
2010 Revenue by Region
Corporation
118 Branches
> 40,000 Customers
4
2010 Revenue by Market
Corporation
Government and Utilities
Metal Processing
Construction
5%
10%
Other
7% 7%
Industrial/Commercial
16%
10%
12%
13%
Mining
Oil & Gas
10%
Transportation
Oil Sands
10%
Forestry
5
Consolidated
Revenue and Earnings
Corporation
Historical Financial Data
Revenue (Millions)
$1,192
$1,214
$1,112
Net Earnings Per Unit (Basic)
$4.34
$4.57
$1,007
$3.31
$2.06
2007
2008
2009
2010
2007
2008
2009
2010
6
Q1 Consolidated
Revenue and Earnings
Corporation
Earnings Before Tax
$ Millions
Revenue
$ Millions
$303.9
$18.0
$227.4
$8.5
2010
2011
2010
2011
 Monthly dividends $0.18 per share ($2.16 annualized)
 Debt to EBITDA: 1.1 to 1 (March 31, 2011)
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Consolidated Backlog
Corporation
$ Millions
$217.3
$215.7
Q4 2010
Q1 2011
$188.4
Q1 2010
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50% of Total Revenue
EQUIPMENT
9
Equipment
2010 Revenue by Product Type
Crane & Utility
Forestry
Material
Handling
Construction
11%
30%
12%
17%
30%
Mining / Oil Sands
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Equipment
Product Offering and Growth Strategies
Construction
Hitachi
Forestry
JCB
Material Handling
Tigercat
Growth Strategies
 Increase equipment market share in key categories.
– Sales coverage and inventory availability
– Line extensions
 Aftermarket parts and service growth.
– Parts fill rates
– Labour efficiencies
 Branch coverage in key metropolitan areas.
– GTA and Montreal
Hyster
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Equipment
Expanded Distribution Rights
Peterson Pacific
Wirtgen and Vogele
12
Equipment
Product Offering and Growth Strategies
Mining
Hitachi
Underground Mining
Phillips
LeTourneau
 Retail value per unit: $1M - $15M
 Units in operation Canada-wide:
140
 Parts and service consumption
over 10 years - up to 2X capital
cost.
Growth Strategies:
 New products and line
extensions
 Aftermarket parts and
service
– Parts fill rates
– Labour efficiencies
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Equipment
Product Offering and Growth Strategies
Crane / Utility
Weldco
Palfinger
Terex
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Hitachi Japan Supply Chain
 Earthquake and tsunami in Japan caused damage
to certain Hitachi manufacturing facilities. All
facilities are back in production.
 Wajax sources equipment and parts from U.S. and
Japanese facilities.
 Wajax expects to have:
– Adequate stock of Hitachi parts and
construction excavators
– Some mining equipment delays
(2011 revenue impact expected: $40 million)
15
27% of Total Revenue
INDUSTRIAL
COMPONENTS
16
Industrial Components
2010 Revenue by Market
> 15,000 Customers
Other
15%
Food & Beverage
Oil & Gas
Industrial /
Manufacturing
17%
5%
10%
7%
5%
15%
Transportation
Metal
Processing
12%
14%
Construction
Forestry
Mining
17
Industrial Components
Product Offering
Bearings and
Power Transmission
Hydraulic Components
and Systems
Process
Equipment
(SKF, NSK, Timken)
(Eaton, Aeroquip, Vickers)
(Cuno, Moyno)
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Industrial Components
Growth Strategies
 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.
– Private label Hy-Spec and National lines.
 Upgrade e-commerce capability.
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23% of Total Revenue
POWER
SYSTEMS
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Power Systems
2010 Revenue by Market
Other
14% 3%
Oil Sands
On-Highway
Transportation
Mining
25%
7%
24%
27%
Industrial/
Commercial
Oil & Gas
21
Power Systems
Product Offering and Growth Strategies
Electric Power Generation
MTU
GE Jenbacher
Applications
 Prime and standby power
Growth Strategies
 Develop national focus
– Geographic and product line expansion
 Rental market expansion
22
Power Systems
Product Offering and Growth Strategies
Mechanical Drive Systems
MTU
Allison
Applications
 Oil and gas exploration and servicing (fracking)
 Other Off-Highway applications
Growth Strategies
 Develop national focus
– Geographic and product line expansion
 Further develop packaging and integration
capabilities
23
Power Systems
Product Offering and Growth Strategies
On-Highway
Applications
 Parts and service for On-Highway Detroit
Diesel engines and Allison transmissions
Growth Strategies
 Geographic expansion
24
Power Systems
Harper Power Products Acquisition
 ~$71 million revenue
 200 employees
10 Branches
25
Power Systems
New Distribution Rights
Doosan Power Generation
 Distribution rights
for all of Canada
 Standby power
 Rental fleet
application
26
Wajax Rebranding
Corporation
Current
Corporation
New
Corporation
EQUIPMENT
Industries
INDUSTRIAL
COMPONENTS
POWER
SYSTEMS
27
Q1 Summary and 2011 Outlook
Corporation
 Robust energy and mining markets in western
Canada
 Stronger activity in central and eastern Canada
 Expect pre-tax earnings to exceed 2010 levels
 Monthly dividend increase of $0.03 per share to
$0.18 per share for May, June and July
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Corporation