INVESTOR PRESENTATION August 2019 NFI:TSX
Who is NFI? Bus Design & Manufacture Part Fabrication Parts and Service North America’s largest bus and North America’s largest heavy-duty Captive fiberglass reinforced plastic motor coach parts distributor public transit bus manufacturer fabricator for MCI, New Flyer and ADL and the leader in Zero-Emission Bus (ZEB) transit UK’s leading bus parts distributor Captive parts fabricator for New Flyer, KMG North American market leader in and aftermarket service support ARBOC and NFI Parts. Plans to motor coaches for both Public and network fabricate for MCI and ADL beyond Private operators 2020 U.K.’s largest bus and motor coach Supports eMobility projects from manufacturer with leading share in start to finish Hong Kong and New Zealand and a growing global presence. North America’s first innovation North America’s disruptive low-floor lab dedicated to the exploration cutaway and medium-duty transit and advancement of bus and bus leader coach technology 2
Why Invest In NFI? Track Record Our Differentiators • Trusted business partner with over 300 years of combined bus • Market leading positions in US, Canada, UK, Hong Kong and and motor coach design and manufacturing experience New Zealand with strong portfolios in Singapore, Malaysia and Mexico • 5 year Q2 2019 LTM Revenue CAGR of 13.1% and Adj. EBITDA CAGR of 21.5% • Growing presence in Switzerland and Germany (gateway into continental Europe) Peer Leading (1) 11.6% Q2 2019 LTM Adj. EBITDA margin • • ~80% of revenue driven by public (i.e. government funded) • History of sustainable dividends: 13.3% annual growth in annual customers dividend in 2019 with 51% Q2 2019 LTM payout ratio • Vertically integrated North American fabrication processes Multi-year North American backlog (2) of 9,997 EUs ($4.8B) • • Proven propulsion agnostic bus platforms: clean diesel, natural gas, hybrid and zero-emission (trolley, battery and fuel-cell) • Recently acquired ADL (2014 – 2018 revenue CAGR of 10.5% ) • Track record of innovation: electric trolleys, low-floor transit • Prudent capital management focused on investing in business buses, CNG propulsion, battery-electric, low-entry motor coach, operations, strategic acquisitions and returning cash to Vehicle Innovation Center, Infrastructure Solutions, Double-Deck shareholders through Dividends and NCIB buses, etc. (1) Public company peer group includes: REV Group Inc., Spartan Motors Inc., Blue Bird Corporation, Oshkosh Corporation, Thor Industries Inc., Winnebago Industries Inc. and Navistar International Corp. (2) Excludes ADL North American backlog All figures are in U.S. dollars unless otherwise noted 3 See Appendix for Forward Looking Statements and Financial Terms, Definitions and Conditions
Proven Strategic Growth and Diversification • Proven LEAN operations track record • Demonstrated margin expansion • Strategic part fabrication capability Acquired US OEM of low-floor cutaway and medium-duty buses • Accretive acquisitions Acquired UK market leader and • Proven ability to integrate global leader on Double Deckers Acquired assets of US $ 3,207 Fiberglass supplier KMG Opened strategic Part Acquired US manufacturer of HD $739 Fabrication facility in KY Acquired transit buses & parts distributor FRP Supplier $2,519 $2,382 $2,274 Acquired Orion (transit bus parts business) from Daimler Acquired North America’s LTM leading Coach manufacturer Pro forma ADL (2) $1,539 Global bus body manufacturer $1,451 equity investment in NFI NFI converted from Acquired US part $1,199 IDS to Common Share fabricator in 2010 $984 $926 $865 $328 $318 $315 $289 $35 $151 $107 $97 $95 $80 $61 (3) 2010 2011 2012 2013 2014 2015 2016 2017 2018 Q2 2019 LTM (1) Revenue ($M) Adj. EBITDA ($M) 1) See footnote on slide 3 and “Non-IFRS measures” under forward looking statements at the end of this presentation 2) Pro-forma combined business for the period July 2, 2018 to June 30, 2019 all ADL information related to the periods before the Acquisition Date are based on audited financial statements of ADL provided to NFI, which were prepared on the basis of UK GAAP. NFI has not independently verified such statements. ADL’s reported results above have been conformed to IFRS. 3) Only Q1 and Q2 2019 figures included within Q2 2019 LTM reflect the adoption of IFRS 16 4
Diversified Revenue with Global Upside ~80% revenue from Public customers (1) ~20% revenue from Private customers (1) Q2 2019 LTM Revenue by Segment Q2 2019 LTM Revenue by Product Motor Aftermarket Manufacturing Coaches $370M $2,148M $530M Transit Buses $1,580M Q2 2019 LTM Revenue by Region (2) Medium Duty and Low-Floor Cutaway $38M 85% 13% 2% US Canada UK and Europe APAC >1% (1) ADL revenue only included for the period of May 28 to June 30, 2019. ADL tends to service private customers in the UK and Hong Kong markets, while servicing public customers in North America, Singapore and New Zealand. On a pro-forma basis including ADL pre-acquisition figures for the Q2 2019 LTM period the public private revenue split would be approx. 70% / 30% (2) ADL revenue only included for the period of May 28 to June 30, 2019 5
Deliveries (EUs) by Product Type Motor Coach (1) Medium Duty & Low-Floor Cutaway (1) Heavy Duty Transit Bus (1) (New Coach Only) 4,095 2,903 2,781 2,729 2,550 1,062 1,140 1,037 938 919 502 399 425 27 2016 2017 2018 2019 Q2 2019 2016 2017 2018 2019 Q2 2019 2016 2017 2018 2019 Q2 2019 LTM Guidance LTM Guidance LTM Guidance Primarily UK UK, APAC, EUR, LATAM Canada/USA Canada/USA Canada/USA Canada, USA 1) 2016 to 2018 figures do not include ADL deliveries. ADL deliveries only included for the period of May 28 to June 30, 2019 within the Q2 2019 LTM figures. ADL delivered 2,533 vehicles on a UK GAAP basis in 2018. 6
NFI Target Market Sizes Canada and U.S. Transit Market (1) Canada and U.S. Motor Coach Market (2) 7,000 7,000 6,504 6,000 6,336 6,000 6,236 6,032 5,933 5,816 5,795 5,000 5,388 5,373 5,347 5,000 5,284 5,212 5,154 5,109 5,128 5,055 5,009 5,010 4,723 4,000 4,333 4,000 4,047 3,000 3,000 3,001 2,819 2,485 2,470 2,000 2,000 2,385 2,357 2,324 2,305 2,274 2,092 2,048 1,918 1,852 1,825 1,756 1,783 1,648 1,581 1,510 1,479 1,000 1,000 1,341 1,184 - - UK Bus and Coach Market (3) 7,000 Other Markets 6,000 4,511 4,361 Est. Annual Deliveries (4) 4,323 4,232 3,993 4,009 5,000 3,811 3,833 3,685 Canada and U.S. Cutaway and Medium Duty 17,000 3,440 3,391 3,226 3,213 4,000 South America 30,000 3,000 Europe (excl. UK) 30,000 2,000 Asia Pacific (excl. China) 25,000 1,000 - 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 (3) Source: Society of Motor Manufacturers and Traders reported data. Some historical data may include (1) Source: Management Estimates and data reported to Metro Magazine mini-buses, a segment in which ADL does not participate 7 (2) Source: American Bus Association reported data in combination with Management Estimates (4) Source: Management Estimates
North American Backlog of Firm Orders and Options Book-to-Bill (New Firm Orders plus Options Converted / Deliveries) (1) 5,000 160% 140% 4,000 9,997 EU 89% ~2.4x 120% 100% 3,000 80% Total Backlog at 30 June 19 Q2-19 LTM Total Backlog EUs to 2,000 60% (Firm Orders and Options) (1) Book to Bill ratio (1) Annual Production (1) 40% 1,000 20% - 0% 2014 2015 2016 2017 2018 Q2 019 LTM LTM New Orders (EUs) LTM Deliveries (EUs) LTM Order Intake / Deliveries Option History, Conversion and Current Status (EUs) (1) Total Backlog Firm and Option EUs (1) Q2 2019 LTM Conversion was 70% ARBOC Public backlog added in Q4-17 2,500 90% 81% 79% 12,000 73% Options = 6,691 EUs MCI Public backlog 71% 80% added in Q4-15 2,000 10,000 70% 54% 60% 8,000 1,500 50% 6,000 40% 1,000 30% 4,000 Firm = 3,306 EUs 20% 500 2,000 10% - 0% 0 2014 2015 2016 2017 2018 2019 2020 2021 2022 Options expired Options exercised Current option expiry Annual conversion rate Firm Option (1) Data does not include ADL orders, deliveries, firm or option backlog, or option conversions 8
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