creating pan-canadian leader in support services · 2020. 3. 26. · creating pan-canadian leader...
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March 26, 2020
Creating Pan-Canadian Leader in Support Services
FORWARD-LOOKING STATEMENTS In the interest of providing information regarding Horizon North, including management's assessment of Horizon North's future plans and operations, certain statements made and contained in these presentation materials (collectively, this "presentation") are "forward-looking statements", "forward looking information", or "financial outlook" within the meaning of applicable Canadian securities laws (collectively, "forward-looking statements"). Forward-looking statements are typically, but not always, identified by words such as "anticipate", "continue", "estimate", "expect", "forecast", "may", "will", "project", "could", "plan", "intend", "should", "believe", "outlook", "potential", "target", "seek", "budget", "predict", "might" and similar words suggesting future events or future performance. Statements regarding capital expenditures and future development plans, objectives and strategies are subject to all of the risks and uncertainties that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. All statements other than statements of historical fact may be forward-looking statements. The forward-looking statements contained in this presentation speak only as of the date of this presentation and are expressly qualified by this cautionary statement. The purpose of any financial outlook is to provide disclosure regarding Horizon North's reasonable expectations as to the results of the proposed business combination and may not be appropriate for other purposes. In this presentation, all amounts are in Canadian dollars, unless otherwise indicated. Any graphs, tables or other information in this presentation demonstrating the historical performance of Horizon North, Dexterra, Fairfax or of any other entity contained in this presentation are intended only to illustrate past performance and are not necessarily indicative of future performance of Horizon North, Dexterra, Fairfax or such entities. Specifically, this presentation contains forward-looking financial and operational information, including: information relating to the potential combination with Dexterra (including anticipated combined revenues, EBITDA, free cash flow, expected capital expenditures, proceeds from dispositions, net capital outlook and leverage ratios and anticipated synergies); expected timing of completion of the proposed transaction; projected organizational chart for the potential combined entity; information relating to potential growth and value creation opportunities of the potential combined entity; information relating to our business strategies following the proposed combination, plans and objectives; and anticipated growth strategies; sales opportunities in modular solutions; industry position; commodity pricing expectations; expectations regarding demand for the North American facilities management market; demand for beds, expected cash flow and related growth rates and stability; expectations regarding dividends paid on common shares and related growth subject to the timing of the COVID-19 pandemic recovery; anticipated shareholder returns; planned capital expenditures (including reductions to such expenditures) and plans for developing our assets and funding our capital expenditures in various geographic regions; and Horizon North and the proposed combined entity's business strategy for future growth. This information is based on current expectations and assumptions of Horizon North, Dexterra and Fairfax described herein in respect of certain projected financial information regarding Horizon North, Dexterra and the combined entity including, without limitation, the timing of receipt of required approvals for the transaction and the anticipated benefits of the transaction and the combined company, current and anticipated market and economic conditions, assumed industry trends, the financial and operational attributes of Horizon North and Dexterra as of the date hereof and the future performance of the combined entity following completion of the transaction. Horizon North believes the material factors, expectations and assumptions reflected in the forward-looking statements are reasonable at this time but no assurance can be given that these factors, expectations and assumptions will prove to be correct, including in respect of the COVID-19 pandemic and the current economic environment. Such forward-looking statements involve known and unknown risks and uncertainties that could materially affect future results. These risks include, but are not limited to, the risk that the proposed transaction does not proceed as planned or at all, if the proposed transaction does proceed that anticipated synergies do not materialize as planned or at all, general economic risks and uncertainties, including in light of the COVID-19 pandemic, future commodity prices, exchange rates, interest rates, geological risk, political risk, regulatory approval risk, demand for commodities, including oil and gas, transportation restrictions and risks associated with changes in tax and regulatory regimes. Additional risks and uncertainties in respect of Horizon North are described in Horizon North's Annual Information Form for the year ended December 31, 2019, as well as Horizon North's Management's Discussion and Analysis ("MD&A") for the year ended December 31, 2019 which are filed under Horizon North's profile on SEDAR at www.sedar.com. Due to the risks, uncertainties and assumptions inherent in forward-looking statements, prospective investors in Horizon North's securities should not place undue reliance on these forward-looking statements. Forward-looking statements contained in this document are made as of the date hereof and are subject to change. None of Horizon North, Dexterra or Fairfax assume any obligation to revise or update forward looking statements to reflect new circumstances, except as required by applicable securities laws. Information, including forward-looking statements, in this presentation regarding Dexterra and Fairfax has been provided and prepared by Dexterra and Fairfax. Horizon assumes no obligation to and will not update forward-looking statements or forecasts pertaining to Dexterra or Fairfax. This presentation contains certain non-GAAP financial measures, including EBITDA, EBITDA Margin Percentage, EV/2020E EBITDA, free cash flow conversion and Fairfax book value per share, that are not determined in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board. These measures as presented do not have any standardized meaning prescribed by IFRS and therefore may not be comparable with calculations of similar measures by other companies. Management believes that, in conjunction with results presented in accordance with IFRS, these non-GAAP financial measures assist in providing a more complete understanding of certain aspects of Horizon North, Dexterra or Fairfax's results of operations and financial performance. Investors are cautioned, however, that these measures should not be construed as an alternative to measures determined in accordance with IFRS as an indication of each entity's performance. Reference is made to Horizon North's publicly filed documents, including our most recently filed MD&A, for a discussion of certain of these measures. Forecast amounts for the non-GAAP financial measures disclosed here are also prepared on a non-IFRS basis. We do not provide reconciliations of such forward-looking measures to the most directly comparable financial measures calculated and presented in accordance with IFRS due to unknown variables and the uncertainty related to future results. These unknown variables may include unpredictable transactions of significant value which may be inherently difficult to determine, without unreasonable efforts. All pro forma financial information contained in this presentation is draft and is subject to and qualified by the pro forma financial statements to be included in the management information circular for the shareholder meeting to approve the transaction. 1
Combination Creates a Leader in Support Services Creates Pan-Canadian Support Services Platform with an Objective to Grow to Over $1 Billion of Revenue and $100 Million of EBITDA − Diversified portfolio of value-added services, end-markets and geographies − Provides scale, capabilities and access to talent to deliver on significant future growth opportunities
Highly Attractive Integrated Facilities Management Business − Recurring service model focused on recession resistant end-markets including aviation, defence and government − Underpinned by multi-year contracts with well-established, long-term client base
National Champion in Workforce Accommodation Solutions − Leading Canadian workforce accommodation provider with established platform across Western, Central and Northern Canada − Over 12,000 beds under management nationally with over 27,500 meals delivered daily1
Differentiated Modular Solutions Business with Established Presence in Key End-Markets − Well positioned to address significant market opportunity in high growth modular business − Opportunity to drive growth across complementary modular and facilities management platforms and combined relationships
Significant Value Creation Opportunities and Benefits of Combination − Attractive long-term growth profile supported by deep opportunity pipeline − Significant expected annual cost savings and cross-selling opportunities
Stronger Balance Sheet and Free Cash Flow Profile − Significant reduction in leverage due to Dexterra’s minimal net debt − Minimal long-term annual capital requirements for Dexterra of approximately $3 million − Dexterra expected to contribute significant free cash flow
2
1 As of March 9, 2020 (pre COVID-19 impact)
Transaction Summary
Consideration • Horizon North shareholders to own 51% and Fairfax Financial Holdings to own 49% of the combined entity
Dividend • Expected payment of an $0.08 annual dividend, payable quarterly, following the close of the transaction and post COVID-19 recovery
Leverage • Significant reduction in leverage due to Dexterra’s minimal net debt
Board
• 8 directors
• 4 from Horizon North
• 4 from Dexterra
• Chairman: Bill McFarland
• Includes 2 Co-CEOs
Management • John MacCuish – Co-Chief Executive Officer & President, Facilities Management
• Rod Graham – Co-Chief Executive Officer & President, Modular Solutions
• Mark Becker – President, Industrial Services
Approvals • 50% of Horizon North shareholders
• Regulatory
Timing • Expected to close in Q2 2020
Ownership • Fairfax Financial Holdings to own 49%
• A committed long-term ownership group with a track record of creating value in the public markets
3
4
Creating a Pan-Canadian Champion
Combined Operational Highlights • Over 6,800 employees operating across 11 provinces
and territories1 • Horizon North currently is primarily a Western
Canadian business and Dexterra has the majority of its business in Central / Eastern Canada
• Over 12,000 beds under management1
• Servicing more than 50 million sq. ft. across 140 facilities management clients1
• Modular backlog of $62 million with high probability sales opportunities of $298 million2
• Diversified platform with broad geographic and industry end-market exposure
Pro Forma Revenue Mix – 2019
Camps & Catering
45%
Modular Solutions
25%
Facilities Management
23%
Rentals & Logistics
7%
>$700 MM
Energy30%
Other17%
Commercial & Retail17%
Mining & Natural
Resources11%
Affordable Housing
11%
Aviation9% Defence
5%
>$700 MM
Combined Service Region
1 As of March 9, 2020 (pre COVID-19 impact) 2As of December 31, 2019 (pre COVID-19 impact)
Dexterra Overview
Key Financial Metrics 2019
Revenue ~$260 MM
EBITDA ~$17 MM
EBITDA Margin (%) ~6.3%
Revenue by Segment – 2019
Other25%
Aviation24%
Commercial & Retail
21%
Defence14%
Mining & Natural
Resources14%
Energy2%
~$260 MM
5
• Facilities Management (FM) Business – Deep client relationships reinforced by integrated FM capabilities – Focus on recession resistant end-markets including aviation, defence and government – Long-term contracts, national footprint and diverse client base reduces volatility – Near term opportunity pipeline in excess of $240 million in annual revenue1 and longer
term attractive future growth prospects
• Workforce Accommodation and Forestry (WAF) Business – Strong WAF reputation, capex light model, with an opportunity pipeline of $110 million1
• Overall – Attractive free cash flow generation supported by low capex requirements – Conversion of EBITDA to EBIT of 75% historically – Skilled management team with history of operating complex facilities management
business and WAF
Facilities Management
63%
Workforce Accom. & Forestry
37%
~$260 MM
Revenue by End-Market – 2019
Attractive, Stable Facilities Management business and strong Workforce Accommodation & Forestry platform focused in Central Canada
1 As of March 9, 2020 (pre COVID-19 impact)
$31 $17 $47
$0$25$50$75
$100$125$150
2019 Long-Term
Horizon North DexterraCombined EBITDA ($MM)1
$458
$261
$719
$0$200$400$600$800
$1,000$1,200
2019 Long-Term
Horizon North Dexterra
6
Attractive Combined Financial Profile Pan-Canadian support services platform with an objective to grow to over $1 billion of revenue and $100 million of EBITDA
1 Excludes transaction costs
Combined 2020E Calendar Year Capex Combined Revenue ($MM)
• Minimal sustaining capex required: ~$11 MM (reduced from ~$16 MM)
− Horizon North: ~$8 MM
− Dexterra: ~$3 MM
• In-progress Horizon North growth projects : ~$8 MM (reduced from ~$24 MM)
− Marriott Hotel and Fluor Relocatable Structures (combined ~$3.5 MM remaining)
• Combined 2020E capital outlook: ~$19 MM
• Expected proceeds from Horizon North dispositions in 2020: ~$8 MM
• Combined 2020E net capital outlook: ~$11 MM
• Significant reduction in leverage due to Dexterra’s minimal net debt and significant free cash flow generation
• Attractive total shareholder returns combining capital appreciation and dividends
Combined Leverage and Shareholder Returns
7
Significant Value Creation Opportunities
Combined Growth Opportunities Significant Expected Annual Cost Savings
SG&A
• Efficiencies in SG&A • Overhead consolidation
Operations
• Service / maintenance staff efficiencies • Adoption of best-in-class practices
Other
• Supply chain efficiencies • Reduced financial expenses
• Significant cross-selling opportunities across combined platform
– Integrated full cycle modular and facilities management offerings
– Industrial facilities management opportunities in energy sector
– Deploy underutilized camp assets in Dexterra platform
• Increased scale to pursue larger contracts and growth opportunities
• Opportunities for expansion of modular solutions business through combined relationships
• Extended geographic platform with potential to accelerate expansion strategy in Northern and Central Canada
Attractive Combined Business to Trade Towards FM Peers
Pro Forma Trading EV / 2020E EBITDA
Dexterra adds attractive, low capital intensity facilities management business
2019E to 2020E EBITDA Growth
20%
10%
7%
7%
6%
3%
(3%
)
11%
(4%
)
(5%
)
(20%)
(10%)
0%
10%
20%
30%
GDI
K-Br
o
HCGS IS
S
Sode
xo
Aram
ark
ABM
Blk.
Dmnd
Cive
o
Targ
et
Facilities Management Workforce Accommodations
7% 1%
8
Source: Public disclosure and FactSet consensus as at March 6, 2020 (pre COVID-19 impact) Note: Free cash flow conversion defined as (EBITDA – Gross Capex) / EBITDA
15.8
x
12.0
x
11.4
x
10.0
x
9.8x
8.7x
6.7x
6.0x
5.7x
5.5x
0.0x
5.0x
10.0x
15.0x
20.0x
HCG
S
K-Br
o
GDI
ABM
Aram
ark
Sode
xo ISS
Cive
o
Targ
et
Blk.
Dmnd
Facilities Management Workforce Accommodations
10.6x 5.7x
• Combined company compares favourably with FM peers
– Industry and geographic diversification
– Attractive growth profile for FM and Modular Solutions segments
– Stability of the facilities management business
– Lower capital and enhanced free cash flow profile
– Attractive balance sheet to support growth
Free Cash Flow Conversion80% 88% 96% 75% 68% 66% 84% 26% 81% 90%
Fairfax is The Right Partner for the Company
• Long-term oriented investor with a shared vision and common values
• Track record of building and supporting leading Canadian and global companies
• Established history of greater than 15% annual book value per share growth
• Network of relationships and opportunities for collaboration with other Fairfax investee companies
• Fairfax is supportive of the growth strategy for the combined company
• Fairfax gained the support of Horizon North’s largest shareholder Polar Asset Management Partners
Track Record of Shareholder Value Creation
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10
Summary of Transaction Benefits
Compelling Strategic Rationale
• Combines leading complementary support services businesses with multiple paths for growth
• Creates Pan-Canadian platform with diverse industry end-market exposure
Significant Value Creation
Opportunities
• Attractive long-term growth profile supported by deep opportunity pipeline
• Significant expected annual cost savings and cross-selling opportunities
Enhanced Financial Flexibility
and Shareholder Returns
• Significant reduction in leverage due to Dexterra’s minimal net debt
• Plans to pay and grow the dividend rate
• Significant free cash flow potential provides flexibility to grow and return excess capital to shareholders, and/or invest in the business
Strong Leadership & Governance
• Combined management team and board have strong backgrounds to support the combined company’s strategy
• Long-term supportive shareholder with track record of creating value in the public markets
Appendix Proposed Management Team and Board of Directors Appendix I
Proposed Management Team
John MacCuish Co-CEO and President, Facilities
Management
• President, CEO and Director of Dexterra since inception
• Previously held executive roles at Carillion Canada, Compass Group Canada and Sodexo Canada
Scott Matson CFO
• Senior Vice President and Chief Financial Officer of Horizon North since 2015
• Has been with Horizon North since its public launch in 2006 as the Corporation’s first Controller, Operations Finance
Rod Graham Co-CEO and President, Modular Solutions
• President, CEO and Director of Horizon North since 2014
• Previously served as a Director of Horizon from 2007, and Chairman from May 2012 to January 2014
• Previously President and CEO of ZCL Composites; has served in varying capacities on multiple public and private company boards
Mark Becker President, Industrial Services
• President, Industrial Services of Horizon North since 2018
• Previously held executive and advisory roles at Husky and Suncor
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Proposed Board of Directors
Bill McFarland Chairman
• Chairman of Dexterra since July 2019 • Board of Directors and Audit Committee Chair Fairfax Financial Holdings Limited • Previously Chief Executive Officer and Chief Inclusion Officer of PwC Canada (2011 – 2018)
Kevin Nabholz Vice Chairman
• Chairman of Horizon North; director of Horizon North since May 2012 • Over 30 years of experience in the oil sands industry; previously Executive Vice President, Major Projects at Suncor Energy
Russell Newmark • Director of Horizon North since June 2006 • CEO of E.Gruben’s Transport Ltd. Since 1990
Mary Garden
• Director of Horizon North since May 2016 • 30 years of executive leadership in business including operations and marketing management, advisory consulting, coaching and university
teaching • Executive level positions with PwC, Delta Hotels, PKF, Holiday Inn, Radisson Hotels and Keg Restaurants
Simon Landy • Director of Dexterra • Former President of Outland Camps, which was acquired by Carillon in 2015
David Johnston
• Director of Dexterra • 28th Governor General of Canada from 2010 until 2017 • Prior President and Vice-Chancellor of the University of Waterloo • Began law career as an assistant professor at Queen’s University in 1966
Rod Graham • President, CEO and Director of Horizon North since 2014 • Previously served as a Director of Horizon from 2007, and Chairman from May 2012 to January 2014 • Previously President and CEO of ZCL Composites; has served in varying capacities on multiple public and private company boards
John MacCuish • President, CEO and Director of Dexterra • 17+ years of experience in facilities and industrial services • Previously held executive roles at Carillion Canada, Compass Group Canada and Sodexo Canada
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Appendix Modular Solutions Supporting Information Appendix II
• Backlog of $62 million (excluding Marriott Hotel)1
• High probability sales opportunities of $298 million1
Modular Solutions Update & Strategic Priorities
Where We Operate
• Leverage and grow recent NRB acquisition
• Develop broad Pan-Canadian geographic platform
• Expand backlog to drive economies of scale across manufacturing facilities and increase stability of revenue / earnings
• Diversify customer base across commercial, hospitality and multi-use end-markets
Strategic Priorities
Differentiated Modular Solutions business with established presence in key end-markets
Markets Currently Served Modular Solutions Locations
Kamloops, BC Calgary, AB
Grimsby, ON
15
Q4 2019 Update
1 As of December 31, 2019 (pre COVID-19 impact)
Modular Solutions Alignment with Dexterra
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Revenue Mix – 20191
Western Canada
76%
Eastern Canada
24%
~$180 MM
Affordable Housing
43%
Commercial34%Other
23%
~$180 MM
Pan-Canadian Offering
• Better regional representation for sales and operations
• Better access to talent / ideas
Cross-Selling Opportunities
• Opportunity to drive growth across complementary modular and facilities management platforms and combined relationships
• Life of asset offering – build, monitor, maintain
Government Offering
• Federal, Provincial, Municipal connections (three down, three deep approach)
• Indigenous relationships
Fairfax Relationships
• Network of relationships and opportunities for collaboration with other Fairfax investee companies and broader network
Branding Reboot • Right opportunity to differentiate brand
1 Includes NRB effective April 1, 2019
Appendix Dexterra Supporting Information Appendix III
Integrated Solutions
• Integrated combination of self-performed soft services and hard services utilized under one management provider
• Increased efficiencies and alignment with client strategy relative to single-service and subcontracted models
Soft Services
• Solutions for people and organizations
• Optimize usability of assets and supporting operations of organizations that occupy them
• Enhancing customer experience for tenants, guests and facility users
Hard Services
• Solutions for space and infrastructure
• Ensuring quality of structure, components, fabric and system, efficient operation and integrity of fittings, finishing fixtures and grounds
What is Facilities Management?
Creating value by maintaining and enhancing the integrity, operation and utilization of built environments
Soft Services
Customer Care Materials & Logistics
Food Services Help Desk
Housekeeping & Environmental
Services
Security & Parking Management
Hard Services
Asset Management Grounds Maintenance
Plant Operations & Maintenance Facility Cleaning
Building Systems Energy Management
Fabric Maintenance &
Repair
Integrated Solutions
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North American Facilities Management Market
• North America is the largest regional outsourced FM market in the world at US$225 billion (est. 2019)
• Projected to experience stable growth through to 2022 and beyond
• US represents 87% of market
• 55% of total market is outsourced, 18% - 20% under an integrated FM model
• Public & Institutional clients represent the largest segment at nearly 54%, followed by commercial and industrial (22% each)
• Market is highly fragmented with large number of regional and international players from single service providers through to service aggregators and integrated firms
Trends
• Integrated outsourcing models are fastest growing outsourcing type
• “Hard services” market, though smaller, is growing faster than “soft services” market
• Increased focus on technology and digital transformation, energy and environmental performance, and occupant health and well being
N.A. Outsourced Facilities Management Market (US$ Billions)1
$200
$250
$300
$350
$400
2020E 2021E 2022E
1 Source: GlobalFM – 2018 Market Report, Technovia – Facility Management Services Market in North America 2018-2022
Dexterra Overview & Opportunity Outlook
Facilities Management
• Full spectrum of FM activities including solutions for space & infrastructure and solutions for people & organizations
• Emphasis on self-delivery in major FM spend categories and fully integrated solutions
Workforce Accommodations &
Forestry Services (“WAF”)
• Full range of workforce housing solutions including project management, structure supply, installation and logistics, and catering and camp operations across Canada
• Service provider not owner of assets
• Canada’s largest tree planting organization, also provides thinning, slash-pile burning, and type-2 firefighters
Attractive Facilities Management and Workforce Accommodations business supported by deep opportunity pipeline
Service Lines Overview
• Opportunity pipeline in excess of $350 million1
• 32 FM bids in progress with total value $183 million1
• FM pipeline of bids 2020 – 2022 with potential annual revenue $700 million1
• Exceeding success rate goal of 40% over past year
• Capex light
• Strong positive free cash flow
20
1 As of March 9, 2020 (pre COVID-19 impact)
Appendix Fairfax Overview Appendix IV
Portfolio Segments
Travel Thomas Cook India – leading and largest travel operator in India.
Restaurants Third largest restaurant group in Canada with Recipe & The McEwan Group.
Technology FairVentures Investments: Encircle, DOZR, TeamSnap, Dream Payments, The Sky Guys and other investments Blackberry & Quess.
Media Boat Rocker Media, Blue Ant Media, Rouge Media & Zoomer Media.
Retail Canadian retailers Sporting Life, Kitchen Stuff Plus, William Ashley, Toys ‘R’ Us and Golf Town and Peak Achievements Athletics (Bauer, Easton, Cascade & Maverik).
Other AGT Foods, Dexterra, Davos Brands, Arctic Gateway & Seaspan.
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Fairfax Financial
• Fairfax Financial Holdings Ltd. is a holding company which, through its subsidiaries, is engaged in property and casualty insurance and reinsurance and the associated investment management
• Corporate objective is to achieve a high rate of return on invested capital and build long term shareholder value
• Founded in Toronto in 1985 by Prem Watsa, who is the current Chairman & CEO
• Listed on the Toronto Stock Exchange (TSX: FFH)
• Market Capitalization: over $15 Billion CAD1
Insurance & Reinsurance Global (re)insurance companies with a full range of P&C products. US$17.5 Billion in Gross Premiums Written in 2019.
Investment Management Hamblin Watsa Investment Counsel, Fairfax India & Fairfax Africa. US$39 Billion AUM (at Dec. 31st 2019).
1 As of March 9, 2020 (pre COVID-19 impact)
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Fairfax Guiding Principles Objectives • We expect to compound our mark-to-market book value per share over the long term by 15% annually by running Fairfax and its subsidiaries for the long-term benefit of customers, employees,
shareholders and the communities where we operate – at the expense of short term profits if necessary. • Our focus is long term growth in book value per share and not quarterly earnings. We plan to grow through internal means as well as through friendly acquisitions. • We always want to be soundly financed. • We provide complete disclosure annually to our shareholders.
Structure • Our companies are decentralized and run by the presidents except for performance evaluation, succession planning, acquisitions, financing and investments, which are done by or with Fairfax.
Investing will always be conducted based on a long-term value-oriented philosophy. Cooperation among companies is encouraged to the benefit of Fairfax in total. • Complete and open communication between Fairfax and subsidiaries is an essential requirement at Fairfax. • Share ownership and large incentives are encouraged across the Group. • Fairfax will always be a very small holding company and not an operating company.
Values • Honesty and integrity are essential in all our relationships and will never be compromised. • We are results oriented – not political. • We are team players – no “egos”. A confrontational style is not appropriate. • We value loyalty – to Fairfax and our colleagues. • We are hard working but not at the expense of our families. • We always look at opportunities but emphasize downside protection and look for ways to minimize loss of capital. • We are entrepreneurial. We encourage calculated risk taking. It is all right to fail but we should learn from our mistakes. • We will never bet the company on any project or acquisition. • We believe in having fun - at work!
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Fairfax Value Creation – 33 Years
432
28
$0
$100
$200
$300
$400
$500
$600
1985 1989 1993 1997 2001 2005 2009 2013 2017
Book ValueFairfax share price (USD)S&P 500 index
Fairfax book value per share: Fairfax share price (USD):
S&P 500 Index:
Dividends Reinvested
19.5% 18.3% 10.3%
1
18.7% 17.2%
7.8%
33 Year Compound Annual Growth Rate
1 Except for Fairfax book value per share which is the compound annual growth rate including cumulative dividends paid as of December 31, 2018
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Investments
Investment Thesis • Decentralized organizational structure where operating Presidents make decisions. • Proper partners are key. • Manage for free cash flow. • Protective of brand and brand loyalty.
Investment Funding • Investments are made using the Fairfax balance sheet. Separate funds are not raised which gives the company the ability to take the long-term view.
Investment Types • Portfolio of publicly traded stocks and bonds. • Controlling interests in public companies: Fairfax Africa, Fairfax India, Cara Restaurants. • Private equity type investments: infrastructure, retail, hard goods, media and advertising. • Debt/equity: growth financing through debt with equity upside via warrants. • Tech: insurance related, digital payments, unmanned aerial vehicle.
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Fairfax Non-Insurance Brands