Cervus Equipment — Q2 2020 Earnings Presentation
13 slides from Cervus Equipment's earnings presentation, Aug 13, 2020
Slide 1: Cervus Equipment Q2 2020 Results
CERVUS EQUIPMENT Q2 2020 RESULTS August 13, 2020
Slide 2: Forward Looking Information
FORWARD LOOKING INFORMATION This presentation contains forward-looking statements within the meaning of applicable securities laws (“forward-looking statements”). These statements include, but are not limited to, statements about the Company’s objectives, strategies and initiatives, financial perfor
Slide 3: Non-GAAP Financial Measures
NON-GAAP FINANCIAL MEASURES This presentation contains certain financial measures that do not have any standardized meaning prescribed by IFRS. Therefore, these financial measures may not be comparable to similar measures presented by other issuers, and are defined and reconciled to their most direc
Slide 4: Cervus Q2 2020 Overview
Cervus Q2 2020 Results Q2 2020 OVERVIEW • Ag used equipment revenue up 51% • Combined Transportation and Industrial equipment revenue down 17% due to COVID-19 • Ag product support revenue up 14%, offset by combined Transportation and Industrial product support revenue down 17% • G&A expenses decreas
Slide 5: Balance Sheet Overview
Balance Sheet Overview Total Inventory • Overall inventory decreased $96 million 450 390 from Q2 2019, as the $117 million 400 350 319 294 decrease in Agriculture was partly 300 offset by a $21 million increase in $ Millions 250 200 Transportation 150 100 50 - • Net long-term debt at Q2 2020 is $nil
Slide 6: Adjusted Free Cash Flow
Adjusted Free Cash Flow (1) Strong Adjusted Free Cash Flow of $42 Million for the Trailing Twelve Months Ended June 30, 2020 Adjusted Free Cash Flow - TTM 45 42 40 39 38 38 35 30 $ Millions 25 21 20 15 10 5 0 2016 2017 2018 2019 Q2 2020 TTM (1) This is a non-GAAP financial measure. Adjusted Free Cas
Slide 7: Financial Covenants
Financial Covenants Financial Covenants Remain Healthy Financial Covenants Q2 2020 Q4 2019 Total Liabilities to Net Worth Ratio 2.51 2.64 Maximum 4.00 4.00 Fixed Charge Coverage Ratio 2.26 1.57 Minimum 1.10 1.10 Asset Coverage Ratio 11.37 6.24 Minimum 3.00 3.00 7
Slide 8: Q2 2020 Segment Overview
Q2 2020 Segment Overview Increased overall profitability was driven by the performance of our Agriculture segment, which was enabled by the focus of our restructured team, enhanced by the right equipment models and level of inventory for our market, implementation of new product support initiatives,
Slide 9: Used Agriculture Inventory
Inventory Turns – Surpassed Short-Term Target Sustainable Inventory Turn Agriculture Used Inventory Target $200 2.5 2.38 2.31 $181 $180 2.07 1.96 $162 $159 $156 $161 $160 2.0 $145 $148 1.78 1.89 $140 1.62 Used Agriculture Inventory $123 $126 1.75 1.78 1.77 $126 1.78 1.67 Inventory Turnover 1.65 $115
Slide 10: Industry Outlook: Agriculture
Industry Outlook Agriculture Canada • Headwinds encountered in 2019 (China’s ongoing trade embargo, reduced farm net cash income resulting from lower commodity prices and higher input costs) were compounded by rail disruptions and COVID-19 in 2020 • Customers remain cautious in managing their costs
Slide 11: Industry Outlook: Transportation and Industrial
Industry Outlook Transportation • Significant decrease in estimated 2020 industry class 8 truck sales by PACCAR • COVID-19 related disruptions in consumer activity and constraints in supply chain and global demand are expected to continue to negatively impact manufacturing industries in Ontario • An
Slide 12: Cervus Equipment Q2 2020 Q&A
CERVUS EQUIPMENT Q2 2020 Q&A August 13, 2020 12
Slide 13: facebook.com/cervusequipment
— facebook.com/cervusequipment twitter.com/cervusequipment linkedin.com/company/cervus-equipment aps) <b. instagram.com/cervusequipment CERVUS EQUIPMENT