Although market signals are mixed, engagement levels remain high with respect to mining projects in Toromont's territories. The product support contribution and opportunity is expected to continue to grow, however it is not anticipated that 2013 will see a replication of the record 2012 equipment sales into mining projects. The opportunity is high for a resumption of significant deliveries into 2014 and beyond, dependent on projects advancing and Toromont's success in winning the business. The timing of mining projects is expected to have an impact on the earnings pattern.
The parts and service business has seen significant growth and provides a measure of stability, driven by the larger installed base of equipment in the field. The number of technicians has increased, service shops are very active and work-in-process levels remain strong.
Toromont's expanded product offering contributes to growth on multiple fronts. Firstly, the Equipment Group benefits from Caterpillar's expanding product line-up including the former Bucyrus and MWM products, which the Company now represents. In addition, the Equipment Group represents complementary product lines with recent and expanding opportunities including Sitech and Metso. CIMCO has also expanded its product offering to include CO2-based solutions, which are expected to contribute to its growth.
At CIMCO, strong industrial bookings in Canada are an encouraging sign with respect to future prospects. Canadian recreational bookings continue, albeit at lower levels due to recent significant spending. This is expected to ramp back up over time, due in part to a recently introduced Quebec provincial program to replace CFC and HFC refrigerants in recreational facilities. The product support business remains a focus for growth with encouraging results in the United States.
The Company has historically demonstrated its success in delivering good profitability through changing market conditions. We expect to continue to do so.
CONTRACTUAL OBLIGATIONS
Contractual obligations are set out in the following table. Management believes that these obligations will be met comfortably through cash generated from operations and existing long-term financing facilities.
Payments due by period 2013 2014 2015 2013 2017 Thereafter Total----------------------------------------------------------------------------Long-term Debt - principal $ 1,372 $ 1,471 $126,576 $1,690 $28,358 $ 2,963 $162,430 - interest 7,619 7,521 6,067 1,152 849 1,480 24,688Accounts payable 203,468 - - - - - 203,468Operating Leases 2,606 2,017 1,482 1,329 227 1,726 9,387---------------------------------------------------------------------------- $215,065 $11,009 $134,125 $4,171 $29,434 $ 6,169 $399,973--------------------------------------------------------------------------------------------------------------------------------------------------------
KEY PERFORMANCE MEASURES
Management reviews and monitors its activities and the performance indicators it believes are critical to measuring success. Some of the key financial performance measures are summarized in the following table. Others include, but are not limited to, measures such as market share, fleet utilization, customer and employee satisfaction and employee health and safety.
Years ended December 31, 2012 2011 2010 2009 (3) 2008----------------------------------------------------------------------------Expanding Markets and Broadening Product Offerings Revenue growth (1) 9.1% 14.5% 14.8% -18.7% 0.7% Revenue per employee (thousands) (1) $ 481 $ 465 $ 423 $ 364 $ 430Strengthening Product Support Product support revenue growth (1) 13.2% 12.6% 7.4% -3.0% 4.2%Investing in Our Resources Investment in information technology (millions) (1) $12.6 $12.1 $ 10.1 $ 10.6 $ 10.9 Return on capital employed (2) 28.7% 32.4% 10.8% 21.1% 26.4%Strong Financial Position Non-cash working capital (millions) (1) $ 301 $ 176 $ 136 $ 172 $ 197 Total debt, net of cash to total capitalization 25% 13% 17% -6% 4% Book value (shareholders' equity) per share $6.24 $5.27 $15.50 $13.17 $12.06Build Shareholder Value Basic earnings per share growth (1) 18.1% 32.5% 9.6% -18.3% -12.7% Dividends per share growth (4) 17.0% 16.1% 3.3% 7.1% 16.7% Return on equity (5) 30.1% 28.9% 9.1% 15.5% 21.5%(1) Metric presents results on a continuing operations basis.(2) Return on capital employed is defined in the section titled "Non-IFRSFinancial Measures". 2011 ROCE was calculated excluding earnings andcapital employed from discontinued operations.(3) Financial statements for 2009 and previous reflect Canadian GAAP. Thesewere not restated to IFRS.(4) Dividends per share growth in 2011 reflects the announced increase individend subsequent to apportionment of dividend to Enerflex subsequent tospinoff.(5) Return on equity is defined in the section titled "Non-IFRS FinancialMeasures". 2011 ROE was calculated excluding earnings and equity fromdiscontinued operations.
