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TIH Q2 Update from the President & CEO

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Scott Medhurst
President & CEO

Scott

Team Toromont,

As all of the TIH businesses cross the halfway mark of our 22 + U strategic plan, we continue to focus on the safety of our people and customers. With current COVID trends, Toromont companies will remain in a continual state of evaluation managing the ongoing changes with flexibility as required.  Over the last few weeks, we also began to gain a better understanding of customer protocols and requirements relating to customer site assess for only those vaccinated.  Given the recent events combined with the upcoming school openings, we will prolong the return to work date beyond September 15, 2021 until further notice.  The work from home structure continues with an understanding that the company will provide one-month advanced notice when an appropriate return date is set.  Your company continues to scope a hybrid operating structure.  Over the last few weeks, there have been some changes to customer interface and technician training requirements on a required basis.   

On the business front, Toromont reported second quarter results on July 28th.  Overall, the company is doing well as we navigate through a complex operating environment.  Our performance benchmarks are based on the 2021 budget and 22 + U/V goals.

The total company safety result improved to 1.58 but remains higher than our goal of less than 1.0 TRIR. The prime product revenues in most of the Toromont business segments was robust during the first half of the year particularly in the second quarter.   Equipment Group customer buying patterns in the second quarter were uncharacteristically strong, which we are obviously grateful for as the economy advances.  The respective Equipment Group business teams are assessing the customer buying patterns as we might be experiencing a pull forward when compared to past years purchasing trends.  Equipment Group rental and product support revenues increased 27% and 15% respectively on a year-over-year comparison but remain below the original plan. 

At CIMCO revenues increased on project execution, while product support activity continued to dampen due to COVID-19 restrictions, particularly within the recreational segment where facilities remained closed or usage limited.

A few key strategic events that took place in the second quarter include:

  • Battlefield expanded the operational footprint in the province of Ontario.A new location opened in Collingwood and the team expects to open a new location in Mississauga early fall.In addition, Jobsite opened a new stand-alone location in Sarnia.Part of the Battlefield 22 + U strategy was to increase rental market share.
  • The Toromont Mining Division was instrumental in advancing a sustainability and climate strategy deal with Caterpillar and Nouveau Monde Graphite (NMG) who are developing a mine in Quebec.Caterpillar will work with NMG in the development of zero emission surface products by 2028.This compliments Toromont Cat’s heavy involvement with Caterpillar’s development of zero emission underground products.These units are operating in a field follow program in Northern Ontario.

In closing, I cannot thank you enough for your continued trust, loyalty and patience during these unprecedented times. We believe the company is placed reasonably well as we continue to face uncertainty.   In times like this, it is important to keep a steady hand, not over-react nor become complacent, as it will take time for the meaning and significance of this pandemic experience to take hold, fully understanding all unintended consequences.  I urge you to be patient, stay safe, support each other and strive to exceed our customer expectations.

 

Stay safe!

Scott Medhurst
President & CEO
Toromont Industries Ltd.

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