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INVESTOR PRESENTATIONFebruary 2021
CERVUS EQUIPMENT
FORWARD-LOOKING STATEMENTSThis presentation contains forward-looking statements and forward-looking information within the meaning of applicable securities laws, and are subject to risks and uncertainties that could cause actual results to differ. The use of any of the words"expect", "anticipate", "continue", "estimate", "objective", "ongoing", "may", "will", "project", "should", “believe”, "plans", "intends“, “potential”, “target” and similar expressions are intended to identify forward-looking information or statements.The forward-looking statements and information are based on certain key expectations and assumptions made by Cervus, including expectations and assumptions concerning the results of its due diligence review of the businesses proposed to beacquired by Cervus and the ability to the various approvals required. Additional detail about the material factors and/or assumptions employed to arrive at forward-looking information, as well as the material risk factors that may affect actual results,are contained in the MD&A section of our most recent quarterly filing which is available on the SEDAR website at www.sedar.com. Although Cervus believes that the expectations and assumptions on which such forward-looking statements andinformation are reasonable, undue reliance should not be placed on the forward-looking statements and information as Cervus can give no assurance that they will prove to be correct. By its nature, such forward-looking information is subject tovarious risks and uncertainties, which could cause the actual results and expectations to differ materially from the anticipated results or expectations expressed. Readers are cautioned not to place undue reliance on this forward-looking information,which is given as of the date hereof, and to not use such forward-looking information for anything other than its intended purpose. Cervus undertakes no obligation to update publicly or revise any forward-looking information, whether as a result ofnew information, future events or otherwise, except as required by law.
The Presentation is intended for educational and informational purposes only and do not replace independent professional judgment. Statements of fact and opinions expressed are those of the participants individually. The reader should consultwith a lawyer, accountant and other professionals in respect of contents hereof.
NON-GAAP MEASURESIn this presentation, Cervus has used the terms Absorption, Gross Profit Dollar Growth, Return on Invested Capital (ROIC) and free cash flow, which do not have any standardized meaning under IFRS ("Non-GAAP Measures"). Since Non-GAAP financialmeasures do not have a standardized meaning prescribed by GAAP and are therefore unlikely to be comparable to similar measures presented by other companies, securities regulations require that Non-GAAP financial measures are clearly defined,qualified and reconciled to their nearest GAAP measure. These Non-GAAP measures are calculated and disclosed on a consistent basis from period to period. Such measures have been defined in the accompanying slides. Specific adjusting items mayonly be relevant in certain periods. The intent of Non-GAAP measures is to provide additional useful information respecting Cervus' financial and operational performance to investors and analysts and the measures do not have any standardizedmeaning under IFRS. The measures should not, therefore, be considered in isolation or used in substitute for measures of performance prepared in accordance with IFRS.
Other issuers may calculate these Non-GAAP measures differently Investors should be cautioned that these measures should not be construed as alternatives to revenue, earnings, cash flow from operating activities, gross profit or other measures offinancial results determined in accordance with GAAP as an indicator of Cervus's performance. For additional information regarding Non-GAAP measures, including reconciliations to measures recognized by GAAP, please refer to Cervus’Management’s Discussion and Analysis for our most recent quarter, which is available online at www.sedar.com and through Cervus' website at www.cervusequipment.com
2
3
CERVUS SNAPSHOT
$191MMarket
Capitalization(1)
1.9%Yield on
$0.24/ShareAnnual
Dividend(1)
Book Value$15.84per share at
Q3 2020
$1.1B2019 Annual
Revenue
$3.65Adjusted Free Cash Flow per share for the
TTM ended Q3 2020 (1)
TSX Listed:
CERV
1) Based on January 29, 2021 closing price of $12.46 per share and Cervus' current dividend. Dividends are not guaranteed and are payable at the discretion of the Board.See “Risk Factors” in Cervus' Annual Information Form. Please refer to our Forward-Looking Statements & Non-GAAP Measures disclosures.
4
LEADING INTERNATIONAL DIVERSIFIEDEQUIPMENT SOLUTIONS PROVIDER
The largest John Deere, Peterbilt Truck and Clark Forklift dealers in Canada
38 8 18 64AGRICULTURE INDUSTRIAL TRANSPORTATION
DEALERSHIPS DEALERSHIPS DEALERSHIPS DEALERSHIPS
+ + =
Canada
Australia and New Zealand
26%
11%
8%
30%
0% 20% 40% 60% 80% 100%
Peterbilt – Canada
John Deere – Canada
John Deere – Australia
John Deere – New Zealand
Cervus Representation of OEM* Brands
*OEM: Original Equipment Manufacturer
BEST POSITIONED DEALERSHIP IN OUR SECTOR
64 Locations
544 Service Bays
533 Technicians
>180 Mobile Service Trucks
>$60M In-stock Parts
Stability & Resilience of Product Support –55% - 70% of GP
5All numbers as of Q3 2020
~26% Employee/Director ownedTransitioned from founders to broad experience-based management
INVESTED EMPLOYEES AND MANAGEMENT
John Deere and Peterbilt Motors Quality, Performance and Technology Leaders
WORLD-LEADING BRANDS
Size and Scale - People, Customer Base, Capabilities, Locations, Inventories (equipment/parts), Cycles
LARGEST DIVERSIFIED DEALER
$158M available financing at Q3 2020Industry-leading inventory turns
DOMINANT BALANCE SHEET
CUSTOMER EXPERIENCEEmployees, service, culture, innovation and technology
BALANCED MARKET SHARE & PRODUCT SUPPORTBuild Machine Population to drive growth in annuity of product support
FINANCIAL SUSTAINABILITYAbsorption sustains operations through the bottom of the cycle.
Balance sheet strength - Disciplined management of Used inventory
Key Success FactorsWHAT MAKES A SUCCESSFUL DEALERSHIP
6
Cervus Equipment is a Solutions ProviderTHE CERVUS STRATEGY
Strategic Goals Innovation Investment OEM Targets Shareholder Return
Strategic Goals Solutions beyond Brick
and Mortar New Products Expand Footprint Diversification
Strategic Goals Absorption Gross Margin Return on Invested
Capital (ROIC) Balance Sheet Market Share Service Excellence
7
BUSINESS OBJECTIVES – ACHIEVING 50/50AGRICULTURE TRANSPORTATION MATERIALS HANDLING
PRO
DUCT
SUPP
ORT
GRO
WTH
Mobile on-road parts and service Online parts sales Equipment optimization and seasonal
inspectionsEXPANDING PRECISION AG OFFERINGS New technology and farming practices Driving “engaged” acres Advise on data and business services
Sales training and scorecards Online parts sales Expanded offerings Focus on the customer experienceBUILDING SERVICE CAPACITY Quality quotations and selling Mobile technician footprint Optimizing dealership structure
Related parts sales Sales training Planned maintenance packages Focus on mobile technician utilizationEXPAND TRAINING, RENTALS & STORAGE SOLUTIONS Targeted industry pricing models Development of new training Lead growth and conversion
EQU
IPM
ENT
SALE
S Disciplined used equipment trade-in practices Forward sales of new and used equipment Focus on inventory turns
Consistent sales pipeline Fleet conquests and rig-ups focus Focus on inventory turns
Identify and target conquest accounts Leverage existing network Focus on inventory turns
INCR
EASE
O
PERA
TIO
NAL
EF
FICI
ENCI
ES Align jobs to changing business Maximize geographic footprint Systems alignment and increased
digitalization
Process standardization Technology and training Expense control
Process standardization Technology and training Expense control
8
27.2 25.2
61.2 71.0
88.4
8.8 0.3 1.0
(1.7)
0.0
(0.6)
96.2
0
20
40
60
80
100
120
$ M
illio
ns
Stability in Product Support Revenue Across Cycles
Service & Other Revenue Parts Revenue
87%
102% 102%
94%
101% 100%
75%
80%
85%
90%
95%
100%
105%
110%
115%
120%
Agriculture Transportation Industrial
Abso
rptio
n Pe
rcen
tage
Product Support Revenue Drives Absorption
Q3 2019 YTD Q3 2020 YTD
Absorption is a non-GAAP financial measure, calculated as product support gross profit, divided by total operating costs.Total operating costs is calculated as total SG&A expenses plus net finance costs, less equipment commissions expense, amortization of intangibles, and floorplan interest expense.Please refer to our Forward-Looking Statements & Non-GAAP Measures disclosures.
9
Agriculture Product Support Growth and Cost Efficiencies Improve Absorption
FINANCIAL PERFORMANCE:PRODUCT SUPPORT EQUALS STABILITY
2024 Target
2024 Target 2024 Target
Q3 2019 Agriculture Transportation Industrial Q3 2020
6
$110
$123 $126
$145
$162 $159 $156 $161
$181
$148
$114 $126
$115
$77
2.38
2.07 1.96
1.78 1.67
1.75 1.78 1.77 1.62 1.65
1.78 1.89
2.31
2.78
0.0
0.5
1.0
1.5
2.0
2.5
3.0
0
25
50
75
100
125
150
175
200
Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020
Inve
ntor
y Tu
rnov
erRa
tio
Use
d Ag
ricul
ture
Inve
ntor
y$
Mill
ions
Agriculture Used Inventory
Used Inventory Used Inventory Turns
Inventory turnover is non-GAAP financial measure, calculated as trailing twelve-month equipment cost of sales divided by the quarterly average inventory for the most recent four quarters.Return on invested capital (“ROIC”) is a non-GAAP financial measure, calculated as trailing twelve months income before income tax excluding unrealized (gains) losses from foreign currency, plus finance costs less floorplan interest expense, divided by 4 quarter average total invested capital. Total invested capital is calculated as average net debt plus book value of equity.
10
Inventory Turns Support Improved ROIC Above Long-Term Objective
FINANCIAL PERFORMANCE:INVENTORY MANAGEMENT
Long-Term Inventory Turn Objective
1.78
2.69 2.78 2.78
2.45
2.10
2.50
3.50 3.50
0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
4.00
AgricultureUsed Turns
TransportationTotal Turns
IndustrialTotal Turns
Inve
ntor
y Tu
rns
Focus on Ag Inventory Management Drives Turn Ratio
FY 2019 Q3 2020 Target 2024
7.4%
12.0% 12.0%
13.7%
-1.3%
10.5%
-5.0%
0.0%
5.0%
10.0%
15.0%
20.0%
FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 Q3 2020 TTM
Disciplined Inventory Management Stabilizes ROIC
Disciplined Allocation of Capital
FINANCIAL PERFORMANCE:INVENTORY TURNS & ROIC
2024 Target 20%
11Inventory Turns is a non-GAAP financial measure, calculated as trailing twelve-month cost of goods sold (COGS), divided by average inventory. Agriculture inventory turns is based on used equipment inventory, Transportation and Industrial is based on combined new and used equipment inventory.ROIC is a non-GAAP measure, calculated as trailing twelve-month EBIT less floorplan interest, divided by average net debt (excluding floorplan debt) plus book value of equity.Please refer to our Forward-Looking Statements & Non-GAAP Measures disclosures.
12
TARGETING 50/50 THROUGH THE CYCLE
Top of CycleIncreased
WholegoodsRevenue
Bottom of CycleIncreased
Product SupportRevenue
Target Zone
50/50
10%
35%
65%
5%
30%
65%
22%
36%
62%
0%
30%
60%
2%
25%
60%
10%
31%
57%
0%
10%
20%
30%
40%
50%
60%
70%
Wholegoods Parts Service
More Product Support Provides Leading Profitability
Agriculture Transportation Industrial
80%62%
39%
20%38%
61%
Agriculture Transportation Industrial
Already Achieving 50/50 in Some Areas
Product Support
Wholegoods
50/50 is Consistency Across Cycles
2024 FINANCIAL AND OPERATIONAL TARGETS
ROIC
>20%
Product SupportGP Dollar CAGR
~10%
Absorption AcrossBusinesses
100-115%
13Please refer to our Forward-Looking Statements & Non-GAAP Measures disclosures
• Renewed management team and streamlined operations
• Accelerated technology adoption, enabling enhanced customer support
• Industry leading used equipment inventory turns
• Strong history of free cash flow• Balance sheet strength leads to
financial flexibility• Trading below book value
• $15.84/share at Q3 2020
WHY CERVUS
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APPENDIX
Partnership is vital to success – we want you on our team and we want to be on yours.Our Commitment of new investment dollars to advance our partners forward is:
CUSTOMERS Service excellence through investment in
innovation and process improvement
EMPLOYEES Employer of choice through investment
in training and development
OEMs Achieving our joint targets
SHAREHOLDERS Delivering TSR through performance and
capital allocation
OUR STRATEGIC FOCUS FOR PARTNERS
16
Our purpose is to perform for our team of partners.Our 5-year targets are based on high-performancein the following areas:
FINANCIAL PERFORMANCE Absorption Gross Margin ROIC Balance Sheet Strength
CUSTOMER EXPERIENCE OEM Customer Survey Scores
MARKET SHARE Growing Equipment Population
OPERATIONAL Parts and Service Optimization
OUR STRATEGIC FOCUS FOR PERFORMANCE
17
Progression towards our “50/50 Sales and Support” revenue goal drives our focus on growing the profitable and predictable Product Support part of our business.
ORGANIC GROWTH Service Solutions Beyond Brick and Mortar New Product Support Offerings Expand Rentals, Training, Racking Solutions
INDUSTRY CONSOLIDATION Expand Geographic and Industry Footprint
ACQUISITIONS Continued diversification in equipment
product support
OUR STRATEGIC FOCUS FOR PROGRESSION
18
Mix and MarginAGRICULTURE
Overall Pre-Tax Adjusted Return on Sales (1)
Q3 2020 YTD 3.5%High Performance 3.5-5.0%
WholeGoods Parts Service
Gross Margin by Revenue Type
80%Percentage of total
revenue represented by Whole Goods sales
Whole GoodsRevenue(2)
20%Product Support
Revenue(2)Percentage of total revenue
represented by Parts, Services and Rental sales
(1) Pre-Tax Adjusted Return on Sales is a non-GAAP measure and defined as net income before tax adjusted for unrealized foreign exchange gains and losses and government wage subsidies, divided by total revenue.
(2) Revenue is for the nine months ended Q3 2020.
0-10% 30-35% 60-65%
19
Mix and MarginTRANSPORTATION
62%Percentage of total
revenue represented by Whole Goods sales
Whole GoodsRevenue(2)
38%Product Support
Revenue(2)Percentage of total revenue
represented by Parts, Services and Rental sales
WholeGoods Parts Service
Gross Margin by Revenue Type
(1) Pre-Tax Adjusted Return on Sales is a non-GAAP measure and defined as net income before tax adjusted for unrealized foreign exchange gains and losses and government wage subsidies, divided by total revenue.
(2) Revenue is for the nine months ended Q3 2020.
Overall Pre-Tax Adjusted Return on Sales (1)
Q3 2020 YTD 1.4%High Performance 2.5-3.0%
2-5% 25-30% 60-65%
20
Mix and MarginINDUSTRIAL
39%Percentage of total
revenue represented by Whole Goods sales
Whole GoodsRevenue(2)
61%Product Support
Revenue(2)Percentage of total revenue
represented by Parts, Services and Rental sales
WholeGoods Parts Service
Gross Margin by Revenue Type
(1) Pre-Tax Adjusted Return on Sales is a non-GAAP measure and defined as net income before tax adjusted for unrealized foreign exchange gains and losses and government wage subsidies, divided by total revenue.
(2) Revenue is for the nine months ended Q3 2020.
Overall Pre-Tax Adjusted Return on Sales (1)
Q3 2020 YTD 3.5% High Performance 4.0-5.0%
10-22% 31-36% 57-62%
21
Cervus EquipmentForward-Looking StatementsCervus SnapshotLEADING INTERNATIONAL DIVERSIFIED�EQUIPMENT SOLUTIONS PROVIDERBEST POSITIONED DEALERSHIP IN OUR SECTORWHAT MAKES A SUCCESSFUL DEALERSHIPTHE CERVUS STRATEGYBusiness Objectives – Achieving 50/50Financial Performance:�Product Support Equals StabilityFinancial Performance:�Inventory ManagementFinancial Performance:�INVENTORY TURNS & ROICTargeting 50/50 Through the Cycle2024 FINANCIAL AND OPERATIONAL TARGETSWhy CervusSlide Number 15Our Strategic Focus For PartnersOur Strategic Focus For PerformanceOur Strategic Focus For ProgressionAGRICULTURETRANSPORTATIONIndustrial