2023Annual ReportThe Toro Company8111 Lyndale Avenue South Bloomington, MN 55420-1196 952-888-8801www.thetorocompany.com2023 Toro AR Cover.indd 1-32023 Toro AR Cover.indd 1-31/16/24 8:45 AM1/16/24 8:45 AM Extreme conditions demand cutting-edge innovations. Engineered for durability and efficiency, the BOSS® DXT features a patented dual-trip design to enhance plow protection when striking hidden obstacles. Outfitted with a heavy-duty base angle to provide extended wear resistance, built-in curb guards, and a patented snow catcher, the DXT is ready to take on Mother Nature at its worst.From managing professional sports turf to conquering formidable terrains, Ventrac's 4520 tractor redefines the boundaries of possibility. Offering a selection of over 30 commercial-grade attachments, the 4520 tractor has earned the trust of customers who demand a single machine capable of tackling every grounds task.Trusted by St Andrews Links In Scotland and golf courses worldwide, Toro’s INFINITY® Series sprinklers provide unparalleled versatility and precise water delivery for the ultimate in irrigation efficiency. The patented SMART ACCESS® feature allows for system repairs and future upgrades without digging, while the ratcheting riser provides the flexibility to adjust the area of coverage to match seasonal watering needsor meet water rationing mandates in seconds.The Ditch Witch® AT120 is the world’s largest all-terrain directional drill and was built to dominate the toughest challenges. This machine features a climate-controlled cab, 120,000 lbs. of thrust and pullback, and it packs the punch needed to power through long bores and large diameter installs.The Toro® Dingo® TX 1000 offers the winning combination of compact size, strength and reach. With innovative vertical lift loader arms and a 1,000-lb. rated operating capacity, this powerful machine was specially designed to transport and lift heavier loads – yet still be lightweight and nimble.Helping Customers Enrich the Beauty, Productivity and Sustainability of the LandOur world advances through the vision of those who build, shape and care for it.A hard-working group of people who sees opportunities to enrich our world with beauty and utility.The ambition to turn these possibilities into realities is what unites us — colleagues and customers,partners and communities.And it is what drives us to transform how a local business can cut and plow its way to growth.How a community can spring to life with revitalized infrastructure.How we make more of our world while demanding less of it.How green spaces can bring generations of families together, host epic sports rivalries, and instillcommunity pride.We expand what’s possible through products and technology that are impeccably engineered andgrounded in a century of solving real human needs. And we do it all with breakthroughs that solvebigger, tougher, more impactful challenges — each one uncovered and understood throughrelationships that endure season after season.Together, we seize the opportunities that turn aspirations for the world into new realities that impactlives and livelihoods.Named the official turf maintenance equipment and irrigation provider for the Ryder Cup through 2029, The Toro Company was honored to help support the team at Marco Simone Golf & Country Club in Rome for Ryder Cup 2023 where sustainability was at the forefront of its preparations. Extreme conditions demand cutting-edge innovations. Engineered for durability and efficiency, the BOSS® DXT features a patented dual-trip design to enhance plow protection when striking hidden obstacles. Outfitted with a heavy-duty base angle to provide extended wear resistance, built-in curb guards, and a patented snow catcher, the DXT is ready to take on Mother Nature at its worst.From managing professional sports turf to conquering formidable terrains, Ventrac's 4520 tractor redefines the boundaries of possibility. Offering a selection of over 30 commercial-grade attachments, the 4520 tractor has earned the trust of customers who demand a single machine capable of tackling every grounds task.Trusted by St Andrews Links In Scotland and golf courses worldwide, Toro’s INFINITY® Series sprinklers provide unparalleled versatility and precise water delivery for the ultimate in irrigation efficiency. The patented SMART ACCESS® feature allows for system repairs and future upgrades without digging, while the ratcheting riser provides the flexibility to adjust the area of coverage to match seasonal watering needsor meet water rationing mandates in seconds.The Ditch Witch® AT120 is the world’s largest all-terrain directional drill and was built to dominate the toughest challenges. This machine features a climate-controlled cab, 120,000 lbs. of thrust and pullback, and it packs the punch needed to power through long bores and large diameter installs.The Toro® Dingo® TX 1000 offers the winning combination of compact size, strength and reach. With innovative vertical lift loader arms and a 1,000-lb. rated operating capacity, this powerful machine was specially designed to transport and lift heavier loads – yet still be lightweight and nimble.Helping Customers Enrich the Beauty, Productivity and Sustainability of the LandOur world advances through the vision of those who build, shape and care for it.A hard-working group of people who sees opportunities to enrich our world with beauty and utility.The ambition to turn these possibilities into realities is what unites us — colleagues and customers,partners and communities.And it is what drives us to transform how a local business can cut and plow its way to growth.How a community can spring to life with revitalized infrastructure.How we make more of our world while demanding less of it.How green spaces can bring generations of families together, host epic sports rivalries, and instillcommunity pride.We expand what’s possible through products and technology that are impeccably engineered andgrounded in a century of solving real human needs. And we do it all with breakthroughs that solvebigger, tougher, more impactful challenges — each one uncovered and understood throughrelationships that endure season after season.Together, we seize the opportunities that turn aspirations for the world into new realities that impactlives and livelihoods.Named the official turf maintenance equipment and irrigation provider for the Ryder Cup through 2029, The Toro Company was honored to help support the team at Marco Simone Golf & Country Club in Rome for Ryder Cup 2023 where sustainability was at the forefront of its preparations. Richard M. Olson
Chairman and
Chief Executive Officer
To Our Valued Shareholders,
Fueled by the strength of our brands and product portfolio,
Key to driving long-term profitable growth, we continued to
a more stable supply chain and an unwavering commitment
strengthen our innovation leadership, which is the lifeblood
to serving customers, The Toro Company delivered full-year
of our company. During the year, we prioritized investments
net sales and adjusted diluted earnings per share growth
in new products aligned with market growth trends, such
for fiscal 2023. In what was a very dynamic operating
as the launch of the Ditch Witch® AT120, the world’s largest
environment, we saw strong performance across much of
all-terrain horizontal directional drill. We continued to bolster
our professional segment throughout the year. This included
our market leadership in the underground construction
double-digit top-line growth for our underground and
market with this and other new solutions designed to drive
specialty construction, and golf and grounds businesses.
productivity and increased uptime for our customers.
We acknowledge the year was not without its challenges.
Our strong balance sheet also supported investments in
The combination of unfavorable weather and macro
transformational technologies we are leveraging across
factors led to a sharp reduction in homeowner
our broad portfolio. This includes the development of
demand for residential and professional lawn care
alternative energy, smart connected and autonomous
products during the second half of the fiscal year.
solutions. These technologies provide customers with
Despite these headwinds, we delivered net sales of $4.55
billion and adjusted diluted earnings per share* of $4.21 –
exceeding last year’s record results. This success is truly a
testament to our innovative product portfolio across markets
and the dedication of our talented team of employees
sustainable options and increased productivity, all without
compromising performance. Examples include our electric
Toro® Ultra Buggy®, recently introduced eTimeCutter™
zero-turn mower and new line of Vista® people mover
vehicles, available in both battery and gas options.
and valued channel partners. Throughout, we remained
In the area of smart-connected technologies, we were
committed to capitalizing on growth opportunities in our
honored to have our Toro® Transpira™ direct plant sensing
attractive end markets. This includes the exceptional,
technology recognized by the Irrigation Association
sustained demand we have seen in our underground and
as 2023 New Product of the Year in the agriculture
specialty construction, and golf and grounds businesses, and
category. This reflects our expanding suite of crop
the eventual rebound expected from homeowner markets.
monitoring, decision support and automation solutions
Building upon a rich history of consistently delivering
to help growers enhance irrigation efficiency.
positive financial outcomes and enduring value
With a continued focus on driving productivity and
for all stakeholders, we continued to advance
operational excellence throughout the year, our teams
our strategic priorities throughout the year by
prudently managed production and aligned costs with near-
accelerating profitable growth, driving productivity and
term demand in a quickly changing environment. We are
operational excellence, and empowering people.
carrying this momentum into fiscal 2024 with our recent
launch of a transformational productivity initiative we are
Both partners have entrusted our brand, products
calling Amplifying Maximum Productivity, or AMP. Through
and team to support their initiatives in environmental
this multi-year initiative, we are dedicating resources to
sustainability and to create world-class playing
identify and implement sustainable supply-base, design-
conditions. We are grateful for these and all partnerships
to-value, and route-to-market transformation. We expect
where we have the opportunity to contribute to our
this major initiative to result in more than $100 million of
customers’ success and help them achieve their goals.
incremental annual cost savings by fiscal 2027. We intend
to reinvest some of these savings into the business to
further accelerate innovation and long-term growth.
As always, with our people at the forefront of our
success, we focused on ensuring that our employees
and channel partners were aligned and empowered to
drive the best possible outcomes for all stakeholders.
In a year that played out much differently than originally
expected, our team remained nimble and focused
on supporting our customers with an unwavering
commitment to doing business the right way.
Strategic Leadership Additions
Sustaining Long-Term Growth Priorities
Our balance sheet remains strong, and we continue
to allocate capital with our disciplined approach
and consistent priorities. These priorities include
making strategic investments in our business to fuel
long-term, sustainable growth, both organically and
through acquisitions, followed by returning cash to our
shareholders through dividends and share repurchases.
Our commitment to these priorities is demonstrated by
our actions this year. This included our deployment of
$142 million to fund capital expenditures that support
new product investments, transformational capital
As we continue to advance our strategic business priorities,
projects, advanced manufacturing technologies and
we were very excited to welcome two new leaders to The
capacity for growth. We also returned $202 million to
Toro Company and our enterprise leadership team in fiscal
shareholders through regular dividend payments of
2023. Jason Baab joined us from Oshkosh Corporation, a
$142 million and share repurchases of $60 million.
global manufacturer of specialty vehicles and equipment,
and now serves as vice president of strategy, corporate
development and sustainability. We also welcomed Joanna
Navigating Industry Dynamics with
Resiliency, Leadership and Agility
Totsky from Cooper-Standard Holdings, Inc., a global
We are looking forward to fiscal 2024 with confidence and
supplier to automotive and industrial companies, as vice
optimism supported by our market leadership and strong
president, general counsel and corporate secretary.
business fundamentals. Our teams have a long and proven
Both Jason and Joanna bring strong leadership backgrounds
and extensive experience in fostering growth across multiple
track record of managing through a range of seasonal
fluctuations and macro situations with agility and resiliency.
brands and industries. They will both play instrumental roles
During this period of exceptional demand for underground
in helping navigate the complexities of our evolving markets
and specialty construction, and golf and grounds equipment,
and driving operational transformation across the enterprise.
we expect our agility in flexing production with stabilizing
Forging Meaningful Relationships
In fiscal 2023, we were honored to be chosen as the official
turf maintenance equipment and irrigation provider for the
Solheim Cup at Finca Cortesin Golf Club in Spain and the
Ryder Cup at Marco Simone Golf and Country Club in Rome.
Our collaboration with both customers, along with support
from our dedicated distributor partners, underscores a
collective commitment to upholding the highest standards
of play for these prestigious international events.
supply to help us continue to improve output and lead times.
Additionally, we anticipate this resiliency will help us navigate
through the current rebalancing of homeowner and channel
demand for lawn care solutions and position us well as
this market recovers. While the rebalancing in homeowner
markets has created some near-term headwinds, we
believe our well-established market leadership positions
us to drive positive long-term results. This leadership is
reinforced by our innovative products, trusted brands, and
extensive distribution and support networks. Complementing
our existing channel strategy with a strong footprint in key markets, we also were pleased to announce in fiscal 2023 a new strategic retail partnership with Lowe’s. This relationship helps extend our access to customers in the important zero-turn mower and rapidly expanding 60V battery categories and adds to our end user customer base. As we look across our end markets, we expect demand to remain robust for underground and specialty construction. This is supported by increased private and public spending to address global issues such as aging infrastructure, rural broadband access and alternative energy buildouts. We are focused on helping our customers address these issues with our trusted channel and the most comprehensive equipment lineup in the industry, including solutions for new installations as well as repair, rehab and replacement. For golf, we expect continued strength in demand, driven by sustained momentum in the number of new golfers taking up the sport and rounds played. We are uniquely positioned in this space as the only provider of both turf equipment and irrigation solutions, which has helped us earn our market leadership position. For municipalities and grounds, we expect to continue to see healthy budgets and the prioritization of public green spaces. To capitalize on these trends, we remain focused on developing innovative solutions that drive productivity and efficiency. With many customers focused on furthering their commitments to environmental stewardship, we are well-positioned with an extensive offering of zero exhaust emission alternatives with no compromise on performance. For snow and ice management, we continue to expect more subdued demand following the below average snowfall in 2022-23 that left field inventories elevated. A steady cadence of new product launches continues to enhance our leadership in this market, including our new eight-foot stainless steel BOSS® V-Blade plow and our 72-inch Ventrac® box plow attachment.For residential and commercial irrigation, we continue to watch consumer spending and weather patterns, as well as housing market trends. The extreme weather we experienced across many geographies throughout 2023 highlights the importance of water conservation and applying water efficiently. We are committed to designing solutions that address this need and were honored to be recognized for our efforts in promoting the efficient use of water through our products, education and outreach with our ninth consecutive WaterSense® Award from the U.S. Environmental Protection Agency in October. For agricultural micro irrigation, we expect stable demand, and are monitoring key indicators such as crop prices, weather patterns, and interest rates. We continue to enhance our market position by expanding the breadth of our offerings for growers, including our development of end-to-end automated solutions that drive increased productivity and water efficiency.For both landscape contractors and homeowners, a return to more normal average temperatures and precipitation levels would be favorable, as would an early spring. Despite the recent dynamics, we believe these remain excellent markets for us given our leadership position, extensive lineup on innovative product offerings and strong dealer and retail channel. Building on a Legacy of StrengthLooking forward, we are confident that The Toro Company will not only navigate through these challenging times but emerge stronger. We continue to draw strength from the core elements defining our identity for nearly 110 years – a talented workforce, a focus on cutting-edge innovation, and a commitment to caring relationships based on trust and integrity. I would like to extend my gratitude to our dedicated employees, valued channel partners, loyal customers and steadfast shareholders. Your trust and collaborative efforts are the foundation of our success, and we thank you for being integral to our journey.Sincerely, Richard M. OlsonChairman and Chief Executive Officer*This Annual Report includes certain non-GAAP financial measures. Please refer to the disclosure, entitled “Non-GAAP Financial Measures,” which begins on page 43 of the Form 10-K. FINANCIAL HIGHLIGHTS
Fiscal years ended October 31
$4.55
BILLION
S
E
L
A
S
T
E
N
3
2
0
2
0.9%
vs. 2022
9
1
0
2
0
2
0
2
1
2
0
2
2
2
0
2
ADJUSTED NET EARNINGS1
$443.5M
0.2%
vs. 2022
ADJUSTED NET EARNINGS
AS A PERCENTAGE OF
NET SALES2
9.7%
ADJUSTED
DILUTED EPS1
$4.21
0.2%
vs. 2022
CASH DIVIDENDS PAID ON
COMMON STOCK OUTSTANDING
$141.9M
SHARE REPURCHASES
$60.0M
RETURN ON AVERAGE
INVESTED CAPITAL2
17.6%
AVERAGE NET WORKING
CAPITAL AS A PERCENTAGE
OF NET SALES3
23.3%
R & D INVESTMENT
$173.9M
11.8%
vs. 2022
NET SALES BY
SEGMENT
¢ Professional 80.7%
¢ Residential 18.8%
¢ Other 0.5%
NET SALES BY
PRODUCT TYPE
¢ Equipment 89.4%
¢ Irrigation 10.6%
NET SALES BY
GEOGRAPHIC
LOCATION
¢ United States 79.2%
¢ International 20.8%
1 This Annual Report includes certain non-GAAP financial measures. Please refer to the disclosure, entitled “Non-GAAP Financial Measures,” which begins on page 43 of the Form 10-K.
2 This metric represents a non-GAAP financial metric and a reconciliation of this non-GAAP financial metric can be found in our Investor Presentation, which is available in the Investor
section at www.thetorocompany.com.
3 Defined as average net accounts receivable plus average net inventory, less average accounts payable as a percentage of net sales for a 12-month period.
Executive Officers (as of January 1, 2024)
Board of Directors
Gregory S. Janey
Group Vice President,
Landscapes and Contractor
Margeaux M. King
Vice President,
Human Resources
Peter D. Moeller
Group Vice President,
Underground and
Specialty Construction
Kurt D. Svendsen
Vice President,
Technology
Joanna M. Totsky
Vice President,
General Counsel and
Corporate Secretary
Richard M. Olson
Chairman of the Board,
President and Chief
Executive Officer
Jason P. Baab
Vice President,
Strategy, Corporate
Development and Sustainability
Kevin N. Carpenter
Vice President,
Global Operations and
Integrated Supply Chain
Amy E. Dahl
Vice President,
International
Angela C. Drake
Vice President and
Chief Financial Officer
Edric C. Funk
Group Vice President,
Golf, Grounds and Irrigation
Janet K. Cooper
Retired, Senior Vice
President and Treasurer
Qwest Communications
International Inc.
Dianne C. Craig
President
Lincoln
Joyce A. Mullen
President and
Chief Executive Officer
Insight Enterprises
Richard M. Olson
Chairman of the Board, President
and Chief Executive Officer
The Toro Company
James C. O’Rourke
Former President and
Chief Executive Officer
The Mosaic Company
Jill M. Pemberton
Chief Financial Officer,
North America
LVMH Moët Hennessy
Louis Vuitton
*Lead Independent Director
Gary L. Ellis*
Retired, Executive Vice President
Medtronic plc
Eric P. Hansotia
Chairman, President and
Chief Executive Officer
AGCO Corporation
Jeffrey L. Harmening
Chairman and Chief
Executive Officer
General Mills, Inc.
D. Christian Koch
Chairman, President and
Chief Executive Officer
Carlisle Companies Incorporated
Shareholder Information
Shareholder Assistance
Communications concerning The Toro Company stock, including shareholder change of address, certificate
replacement, share transfer requirements, the direct stock purchase plan, dividends, the dividend reinvestment
plan and similar matters should be directed to our transfer agent at:
Broadridge Shareholder Services
c/o Broadridge Corporate Issuer Solutions
P.O. Box 1342
Brentwood, NY 11717-0718
1-844-956-0809 or 1-303-562-9697
shareholder@broadridge.com
www.shareholder.broadridge.com/TTC
Investor Inquiries
Individual shareholders may direct any questions to invest@thetorocompany.com.
2023Annual ReportThe Toro Company8111 Lyndale Avenue South Bloomington, MN 55420-1196 952-888-8801www.thetorocompany.com2023 Toro AR Cover.indd 1-32023 Toro AR Cover.indd 1-31/16/24 8:45 AM1/16/24 8:45 AM