The Toro Company (TTC) 25th Annual Diversified Industrials & Services Conference summary

Leadership transition and strategic direction

• Incoming CEO Edric Funk emphasizes continuity with evolution, leveraging a strong foundation in innovation, product portfolio, and customer relationships while adapting to evolving market needs.

• Focus will shift toward accelerating commercialization and adoption of autonomous, smart, and alternative energy technologies, building on prior investments.

• Integration across acquired brands and product lines will increase, with more alignment in technology and channels.

• Productivity initiatives like AMP have delivered $125 million in annual run-rate savings, now embedded in company culture.

• Growth, especially in professional and infrastructure markets, will be prioritized alongside ongoing productivity and innovation.

Business mix, end markets, and growth drivers

• Professional markets, including golf, underground infrastructure, and snow management, are the primary focus, with residential products comprising a small share of EBITDA.

• Underground infrastructure is a major growth area, driven by demand for fiber, water, and power installations, as well as aging infrastructure replacement.

• The BOSS snowplow business is margin-accretive, benefiting from recent strong winters and healthy channel inventory.

• Golf remains resilient, with record rounds played, robust investment, and new technology integration in equipment and irrigation.

• Electrification and autonomous solutions are gaining traction, especially in golf, with strong customer interest and early adoption.

Financial performance and outlook

• Earnings were flat for several years due to market disruptions, but recent improvements in inventory and margins have restored double-digit earnings growth guidance.

• Free cash flow conversion exceeds 120%, and leverage is stable at 1.3x, providing strategic flexibility.

• The AMP productivity initiative exceeded its $125 million savings target, with permanent cost reductions supporting future margin expansion.

• The company aims to sustain double-digit earnings growth, driven by productivity, strong end markets, and margin expansion.