2022 Annual Report Message

Fellow Shareholders

As 2022 began, economic activity exceeded the ability of global supply chains to respond. Equipment shortages persisted and a rapid rise in inflation followed. With the help of customers, partners and predictive analytics, the disciplined deployment of the balance sheet and creative sourcing of machines and skilled labour, Toromont adjusted accordingly. By driving forward together, our team produced good results and prepared for the next chapter.

Toromont earned $5.52 per share basic ($5.47 per share diluted), a 37% improvement over 2021 on revenue of $4.2 billion, 9% higher than the prior year. This was a favourable outcome, supported by backlog of $1.3 billion entering the year. Below those headline numbers, supply chain constraints, inflationary pressures, escalating interest rates, volatile foreign exchange rates and labour shortages made for a uniquely complex operating environment.

$171 million
investment (net) in the rental fleet
$1.3 billion
order backlog
34 years
of consecutive dividend increases
5-year average return on opening shareholders’ equity
2022 Revenues: 43% Product support; 42% New & used equipment; 11% Rentals; 4% Refrigeration equipment
Cumulative value of $100 invested after 5 years (assuming reinvestment of dividends): TSX: $139.25; TIH: $191.46
Dividends per share, 5 year CAGR = 15.5% – 2018: $0.92; 2019: $1.08; 2020: $1.24; 2021: $1.36; 2022: $1.56
Return on opening shareholders’ equity – 2018: 22.3%; 2019: 21.4%; 2020: 16.6%; 2021: 19.6%; 2022: 23.5%.

To secure new machines, we worked collaboratively with customers to identify their future resource needs and placed purchase orders with OEMs months earlier than normal. This effort helped, although with demand and extended deliveries, backlog remained relatively unchanged at $1.3 billion at December 31, 2022. Within that number, CIMCO’s backlog increased by 23% over the prior year to $198.4 million, in part reflecting the deferral or delay in construction schedules resulting from supply chain constraints and as many customers returned to operations after prolonged pandemic closures.

Used equipment played a role in satisfying demand. Dollar sales of used machines increased 2% from the prior year as we sourced, consigned, rebuilt and moved more units. To enhance customer convenience, we created Toromont Equip, our ecommerce platform. Here, customers can purchase used equipment from us or market their own machines. We bring value to online transactions by giving buyers various options, including equipment inspections, warranties, purchase financing and maintenance agreements.

Recognizing that customers rely on rental equipment, we invested in our heavy and light rental fleets. We were rewarded with improved machine utilization, 17% year-over-year growth in rental revenues and modernized fleets for the future. That said, our plan called for us to upload more new equipment earlier than supply constraints ultimately allowed. To fill the gap and ensure product availability for customers, we deferred the planned sale of older units at some cost to our long-term financial model.

Product support revenues increased 16% year over year with strong contributions from the Equipment Group and CIMCO due to active machine utilization by customers, and the success of various long-term strategies to provide comprehensive after-sales parts and services. Aided by machine-level connectivity and data analysis, these strategies helped us to forecast component replacement timing and proactively build inventory of needed parts. This helped to offset scarcity of supply, as did increased throughput from our component remanufacturing operations. During the year, we announced a $70 million investment to build an additional remanufacturing facility, slated for occupancy in 2024. This new 137,000 square foot, purpose-built plant in Bradford, Ontario, will increase our ability to contribute to the circular economy by enabling Toromont to preserve, through remanufacturing, more used machine components for customers.

New and proven faces

In the face of strong demand and demographic changes in Canada, labour shortages were acute. In response, Toromont stepped up the pace of recruiting, including from farther afield. We added 271 technicians and apprentices to employ the largest technical workforce in our history.

The year also featured leadership appointments and promotions. We welcomed Isabelle Leclerc to our corporate team in the newly created role of Vice President, Human Resources. Stationed in Montréal, Isabelle is equipped with over 30 years of strategic talent development and transformation management experience. To lead and implement Toromont’s real estate initiatives and optimize management of Toromont’s properties, we recruited Garnet Peirson to the newly created role of Vice President, Real Estate Asset Management and Development. Garnet brings over 20 years of experience, most recently in a Canadian leadership role at a global real estate investment firm.

Recognizing the scope, scale and diversification of our largest business, we named Joel Couture to the newly created position of Chief Operating Officer of Toromont Cat. Joel was previously Vice President, Product Support for Toromont Cat. He joined in 2007 as a management trainee. In December, Adam Miller became Vice President of our Power Systems business. Adam is a 26-year Toromont veteran who previously served as Vice President of Toromont Cat’s Central Region. These appointments are the result of a leadership succession plan. These Toromont Cat internal promotions, including the 2021 appointments of Miles Gregg and William Harvey to President, Construction and President, Mining, respectively, bode well for the future, bringing invaluable operational knowledge and strengthening customer relationships.

Well-executed management succession over the past few years means Toromont has proven, energized, next-generation leadership in place across our business units.

Investing in the future while protecting our balance sheet

While equipment availability somewhat constrained capital deployment, Toromont’s net reinvestment in rental fleets, branches, plants and other capital assets amounted to $215 million, $79 million or 37% higher than in 2021. Capital deployment was disciplined, measured and efficient. Return on opening shareholders’ equity was 23.5% compared to Toromont’s goal of 18% after-tax over a business cycle and 19.6% in 2021. Pre-tax return on capital employed was 32.3% compared to 26.6% in 2021.

Even with higher investment levels, Toromont ended 2022 with $928 million of cash on hand and $500 million of available credit on existing lines. Leverage, represented by net debt to total capitalization decreased to minus 14%, compared to minus 16% at December 2021. In other words, cash and equivalents exceeded debt.

Celebrating 55 years of continuous dividend payments

Toromont’s Board declared a quarterly dividend of $0.43 at its meeting in February 2023. With it, Toromont has now paid dividends every year since becoming a publicly traded company in 1968. Notably, the most recent announcement came with an increase of 10.3%. As such, 2023 marks our 34th consecutive year of higher dividend payouts. In 2022, dividends declared per share amounted to $1.56 compared to $1.36 a year earlier.

The Board also renewed the Normal Course Issuer Bid in September 2022. During 2022, we purchased 473,100 shares at an average per-share cost of $102.52, returning $48.5 million to shareholders.

QM at the five-year mark

It has now been five years since we acquired the authorized Caterpillar dealer for Québec, Western Labrador and the Maritimes, along with the Caterpillar lift truck dealership for most of Ontario. QM, as we called it internally, has more than lived up to our expectations. With QM, Toromont has room to grow in key geographic and end markets including mining, construction, power and material handling, and access to great customers and employee talent. Since acquisition, enterprise-wide performance has improved, supported by branch-level benchmarking of KPIs using Toromont’s Dealer Management System (TDMS). As pleased as we are to now operate together as one energized team with a consistent value proposition, we know there are additional advantages to be gained through scale and ongoing efforts to entrench best-practice disciplines. Toromont’s belief in, and adherence to, the principles of continuous improvement mean we always have more to do and accomplish.

Driving forward together within an ESG mindset

The members of Toromont’s Board, leadership team and workforce have always sought to be good stewards of our resources. A more formal focus on Environmental, Social and Governance (ESG) practices is therefore a natural and positive extension of our culture. Today, through its ESG Committee, our Board leads a structured, progressive effort with a continuous improvement mindset.


  • Operational footprint
  • Sustainable products and services
  • Circular economy


  • Health and safety
  • Building capacity
  • Recruitment
  • Learning and enablement
  • Retention
  • Diversity, equity and inclusion


  • Accountability and executive compensation
  • Code of conduct
  • Cybersecurity and data privacy
  • Paying our fair share of taxes

See our sustainability focus areas highlights

  • Team Toromont assembled this Cat 994K at Côté Gold north of Sudbury, Ontario in 2022. One of three on site, it will load Cat 793F fully autonomous haul trucks, the first in our territories. When machine deliveries are complete, the Cat fleet will include two of the world’s first Cat 6060 front shovels with twin electric motors. Toromont will maintain the equipment in the years to come.

Our Sustainability Report discusses key risk and opportunity areas of focus. For readers of this report, we highlight the following four:

Safety: At Toromont, safety is both a recognized corporate value and a responsibility shared by all. Our Board-reviewed safety program is designed to mitigate risk and create management, team and personal accountability for outcomes. With consistent focus and effort, 80% of our facilities achieved a Total Recordable Injury Rate (TRIR) of zero in 2022. Company-wide, TRIR was down 31% from 2021, a solid improvement. More progress is possible.

Customer sustainability: Products that enable customers to monitor and reduce their carbon footprints while maintaining high levels of productivity and safety are in demand and making their way into our territories. Toromont participates in the advancement of these products, and we are beginning to see green solutions become more significant contributors to revenue. In 2022, we were pleased to be part of the delivery of the first Caterpillar autonomous mining trucks in our territories. Now in use at the Côté Gold Project in northern Ontario, these innovative machines reduce carbon emissions by saving fuel. Elsewhere, through placements of Caterpillar battery electric vehicle (BEV) field-follow units, we are gaining valuable experience in BEV machine operation and maintenance. In all cases, our partnership with Caterpillar is a strategic advantage compounded by the significance of Cat’s R&D investments. As a remanufacturer, Toromont renewed a record dollar volume of components for customers in 2022. As outlined earlier in this letter, we committed to building another remanufacturing facility to enhance our capacity and contribution to the circular economy and it will incorporate state-of-the-art tooling and contamination controls. As a manufacturer of refrigeration equipment, Toromont is at the leading edge of bringing net-zero solutions to customers throughout North America.

Environmental footprint: We continued to take action to manage our footprint including investments in fuel efficient company vehicles, our largest source of emissions. We monitor our GHG emissions annually. Please see our Sustainability Report for further detail.

Diversity, equity and inclusion: We make a concerted, intentional effort to diversify our workforce, including outreach to those who may not have considered a career in our industry. Progress is being made at the highest levels and we are pleased that women make up 33% of our Board of Directors. In 2022, we made headway by recruiting more members of underrepresented groups to Toromont, including women, visible minorities, Indigenous peoples and persons with disabilities. Diversifying our workforce is an important work in progress.

Decentralization with alignment

Market diversification is a Toromont strength, and a risk management advantage in challenging times. Each of our business units is dialed in to the unique needs of their end markets and addresses those needs under the capable direction of empowered leaders who are granted authority with accountability. However, Toromont’s central organizing principles – offering specialized equipment and follow-on product support services – and our core strategies, are identical across all Toromont companies. All are aligned in the application of Toromont’s financial disciplines. Decentralization with alignment proved its worth again in 2022.

  • The Green Leaf initiative at Battlefield Equipment Rentals – The Cat Rental Store and Jobsite Industrial Rental Services promotes the use and availability of alternative energy products, from light towers powered by solar panels to electric drive and hybrid lift equipment such as this battery-operated scissor lift.

Progress reports from the field

Toromont Cat experienced strong demand as customers invested to expand fleets to serve infrastructure needs across public works projects, site preparation and mine development. Large Caterpillar trucks and loading tools were delivered to several mining customers with more to come in 2023. The supply of large gensets to a remote Arctic mine site was another highlight. Just one sea shipment leaves for this mine each year, and Toromont ensured it carried all six units – a testament to teamwork and logistical execution. Utilization of our heavy equipment machine fleet grew and yet maintenance costs were contained through good fleet management. Used equipment availability was bolstered by an increase in machine sourcing outside our borders. This expansion should continue to provide benefits once supply constraints ease.

Customer Value Agreements or CVAs, the bedrock of our aftermarket strategies, reached a record level and provided the basis for us to proactively assist in the maintenance of customer equipment, reduce the total lifetime cost of their ownership and better plan resources. In particular, customer coverage and machine data inputs from connected assets enhanced our insights and allowed us to de-risk customers from parts availability challenges.

In-person training of our team of service technicians resumed after a pandemic pause. This training prepared the business to better meet the growing need for product support across our larger installed base in future years and gave technicians new skills to advance their careers. As customers experience skilled labour shortages, our technical capabilities and capacity have never been more essential.

Battlefield Equipment Rentals – The Cat Rental Store began to realize on the value of recent expansion and improvement strategies. Widespread customer demand for rental units across multiple applications, including road, transit, site preparation and landscaping contributed to higher utilization. Fleet uploads were targeted with emphasis on small compaction equipment and reflected a partial catch up from 2021. An aptly named Green Leaf initiative was introduced to promote the use and availability of products such as hybrid and electric drive lifts, as well as light towers powered by solar panels. Additions to our seasonal product lineup in Québec were well received and served to improve financial performance in winter months. Saint-Jérôme, Québec, became the site of our newest store. We also continued to execute our QM integration footprint strategy focused on customer deliverables and operating efficiencies with the sale of a property in Saint-Laurent, Québec. This also liberated capital for more productive pursuits. Recruitment of technicians and vehicle operators was aggressive.

Jobsite Industrial Rental Services gained momentum. New work was secured with petrochemical customers in its traditional eastern Canadian territories, and we will be able to serve these same customers in western Canada in future where a new hub location will be opened in Edmonton as well as two satellite locations in Fort McMurray, Alberta and Port Coquitlam, British Columbia in early 2023. In 2022, locations were added in Halifax and Montréal within Battlefield stores to bring services closer to regional industries, including shipbuilding and mining. Specialized tool cribs and electronic tracking of tools on assignment continue to be differentiators for this growing business.

SITECH Eastern Canada Ltd. implemented Battlefield’s Systematics Rental Management system to enhance business performance and developed a new go-to-market strategy with Toromont Cat. Demand for 3D construction technology is expected to grow in future years and SITECH is ready.

Toromont Material Handling gained experience with the use of TDMS in managing its eight dedicated branches, work in process and the financial utilization of its rental fleet. The scope of that fleet widened with investments targeted to high-demand markets as well as emerging user groups. The arrival of more rental units in 2022 created future opportunity for more timely retirement of older units. Product support revenues and used machine sales improved over 2021. Standalone branches were opened in Lévis and Limoges, Québec and hubs were created to accelerate turnaround times in preparing used equipment for resale in Ontario and Québec. TMH expanded its footprint west as Mitsubishi Logisnext granted Toromont the opportunity to represent it in Saskatchewan. That gives us dual distribution for Unicarrier and Mitsubishi Cat lift solutions in both Saskatchewan and Manitoba. We responded with boots on the ground in sales and service. For demonstrating best-in-class expertise and superior customer service, Toromont Material Handling was honoured with a Mitsubishi Logisnext Dealer of Excellence Award. Kalmar, a world leader in cargo handling solutions for ports, terminals and heavy industry, named TMH a prime dealer in North American territories, another important 2022 highlight.

AgWest benefitted from a recovery in commodity prices and strong execution leading to higher market penetration and growth in combine and tractor market shares. Improved operational execution and added customer deliverables contributed to much improved overall performance.

CIMCO Refrigeration began a new era as it relocated from its original manufacturing plant, opened in 1917, to a modern headquarters in Burlington, Ontario. Floorspace is configured for efficient production. A packaging and assembly facility also opened in Edmonton, Alberta. A company-wide shared services model was adopted to enhance efficiency and the consistency of CIMCO’s value proposition across North America. New project management technology provided the means to improve control over material and labour costs and enhance scalability for the future. Backlog finished the year at record levels. Bookings were diversified and included breakthrough assignments. The Columbus Blue Jackets became the first National Hockey League team to choose the natural refrigerant
CO2 (R744) for its arena and CIMCO to provide it. CIMCO secured a first order for its Net Zero Naturally heat pump system, which is four times more efficient than gas boilers. CIMCO was commissioned to conduct numerous feasibility studies to provide participating municipalities with a roadmap to guide their facility operations to dramatically reduce their carbon emissions. Similarly, a large food retailer engaged CIMCO for a net zero audit with a view to replacing synthetic refrigerants and natural gas in its operations. This is only the beginning. CIMCO is increasingly well positioned for the future with its growing intellectual property portfolio including Eco Chill heat recovery systems and new Thermal Force 1 products.

Toromont is driving forward together… to deliver value

  • One of the many specialized recreational equipment packages is readied for delivery to a CIMCO customer where it will support the customer’s pathway to net zero.

Driving forward together with technology to serve customers

Information technology plays a pivotal role in the management of Toromont’s operations, fleets, inventories, warehouses and product support activity. It is also increasingly important in improving the product ownership experience for customers. Through telematics, we track machine location, hours of use and fuel burn, diagnose faults remotely and dispatch field service efficiently. Reducing time and fuel in making service calls benefits all parties and the environment. We believe technology and the market intelligence it enables can be put to even greater use in the years ahead to help us understand customers and identify and anticipate opportunity rather than react to it. To that end, we continue to enrich the data sets we collect across our installed base and use the insights to equip our customers and ourselves to be better operators. Together with low and no-carbon emission equipment, technology will energize our future.

Governance and leadership

Through a special committee, our Board is actively engaged in selecting Toromont’s next President and Chief Executive Officer. This committee was struck following the June 2, 2022 announcement that Scott Medhurst would retire from his post over the ensuing 12 to 18 months. This period provides our Board with the ability to conduct a thorough search for a successor and ensures leadership continuity for Toromont in between. Certainly, the breadth, depth and strength of our senior management team ensures we are ready for this important change.

Driving forward together

We thank our customers, employees, business partners and shareholders for taking an active interest in Toromont and contributing to the company’s success.

At the time of writing, macroeconomic factors that created a complex operating environment in 2022 remain. We will vigorously address and manage through these challenges to the very best of our ability using our strengths: our empowered workforce, innovative business partners, proven strategies and an effective business model fuelled by the power of scope, scale and financial flexibility.

Toromont is driving forward together – as one company with 6,800 energized employees – to deliver value. We invite you to drive along with us.

Yours sincerely,

Richard G. Roy
Chair of the Board

Scott J. Medhurst
President and Chief Executive Officer

February 14, 2023