FORWARD LOOKING INFORMATION. - PowerPoint PPT Presentation
FORWARD LOOKING INFORMATIONThis 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" 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 be acquired 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 and information 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 to various 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 of new 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 consult with a lawyer, accountant and other professionals in respect of contents hereof.2Aggregator of Equipment DealershipsThree Market Sectors: Agriculture, Commercial and IndustrialPowered by Trusted and Recognized BrandsExperienced Management TeamProven Growth Strategy Solid Sustainable Financial Performance
THE UNMET NEEDCERVUS SOLUTIONOutgoing owners of independent dealerships seeking divestiture at a fair value; and to an experienced, reputable operator.Succession strategy with a proven dealership integration and operation model.4We align with global brands and manufacturersOur strong relationship with the OEMs is one of the most important factors for our ongoing success and growthJohn Deere, Bobcat, Clark, Peterbilt, Sellick and JCB are leaders in their core products, and are experts in the technology and history involved in developing their productsWe work with our manufacturing partners using mutual objectives to deliver our customers valued quality products and services
OUR OEM RELATIONSHIP
COMMERCIAL & INDUSTRIAL6I'd combine the "commercial" and "industrial" into one category - "Commercial and Industrial". the few analysts I talked to consider Peterbilt to be industrial although, might be simplier to just combine it into the sector description we use for the MDAAgricultural equipment is required to plant and harvest crops to meet both food and alternative fuel needs. Market Drivers include:Global population to increase 23% by 2025Food production will need to increase by an estimated 50% by 2025 and double by 2050 to meet global needsDemand for energy continues to riseIncreased commodity prices and net farm incomes
John Deere is the dominant global brand for agricultural equipmentOpportunity to partner with local entrepreneurs and build John Deeres distribution network
THE STRENGTH OF AGRICULTURE
7Construction, commercial and industrial equipment supports numerous sectors including building construction and oil and gas. Market drivers include:Increasing activity in the oil and gas sectorA forecasted 19.4% increase in Alberta housing starts in 2012Forecasted import and export increases between 4.0 and 4.5% in 2012Powered by trusted and globally recognized brands:Bobcat, JCB, Clark, Nissan Forklift, Doosan, Sellick and Peterbilt
EXPANDING C&I SECTOR
OUR STORES ARE THE BUILDING BLOCK
Corporate Aftermarket Business Management Marketing Integrated SolutionsSTORE
Revenue Customers EmployeesLEADERSHIP
Dealer Principals Strategy Execution AccountabilitySHARED RESOURCE OFFICE
Accounting IT HR Operating Capital11
OPPORTUNITIES - PETERBILT
Operational and geographic diversificationNew product and service offeringsTransportation industry presence in Saskatchewan, a growing resource market Competitive advantage, with further consolidation opportunities
2011 Agriculture Gross Sales by Segment(for year ended December 31, 2011)2011 Construction & Industrial Gross Sales by Segment(for year ended December 31, 2011)2011 Percent of GrossSales by Division(for year ended December 31, 2011)13AGRICULTUREThe majority of our new leases and sales come with a trade-inUsed equipment is a major part of the agriculture businessLarge customers rotate their equipment frequentlyEquipment has a useful life of 25 years or greater
COMMERCIAL / INDUSTRIALUsed for more hours, owners keep equipment longerMost new equipment is purchased without a trade-inStrength of product support aftermarketStrong rental opportunities
16Cervus Equipment Corporation (TSX: CVL)
July 31, 2012Share Price:$19.34Outstanding Shares:14.7 millionMarket Cap: $285 millionQuarterly Dividend$0.185Yield3.8%Institutional ownership approximately 20 to 25%Approximately 65% of eligible employees participate in stock purchase planApproximately 36% of outstanding shares are owned by officers and senior managers
Employee ownership has been a key focus for us. Giving those that want to be the dealers of tomorrow a chance to not only run the business but also share in the success.Managements investment amounts to almost 100M, and 65% of eligible employees participateStrong reinvestment plan for managers bonuses, as well as the ESPP.
INVESTMENT HIGHLIGHTSEight year history of growth and profitabilityProven growth strategy having grown from 8 dealerships in 2003, to more than 50 dealerships todayContinued opportunities for acquisitions and organic growthFavourable exposure to robust Western Canadian marketDiversification of sectors with strong globally recognized brandsQuarterly dividend of $0.185 with potential for further growth
Over the years, we continue to focus on :Operational excellence, accountability through measuring what matters, Employee Customer OEM and Shareholder levels of satisfactionDiligence towards a strong integration process for acquisitions .\Which allows us to confidently seek out acquisitions that will keep us moving forward.