NFI:TSX INVESTOR PRESENTATION March 2019 New Flyer’s Xcelsior H2 Fuel-Cell Electric Heavy-Duty bus
Leader in Transit Buses, Motor Coach & Aftermarket FY2018 Equivalent Units (EUs) Deliveries FY2018 Revenue by Product 1,030 $584 Motor coach Motor coach Heavy-duty transit bus 4,313 EU $2,519M* $1,502 $42 502 2,781 Low-floor cutaway and medium duty bus $377 Low-floor cutaway and medium duty bus $15 Aftermarket parts Heavy-duty transit bus Fiberglass reinforced polymer All figures are in U.S. dollars unless otherwise noted See Appendix for Forward Looking Statements and Financial Terms, Definitions and Conditions 2
Strategically • Proven LEAN operations track record Acquired US OEM of low-floor • Demonstrated margin expansion cutaway and medium-duty buses • Accretive acquisitions • Exceptional ability to integrate Acquired assets of US Fiberglass supplier • Strategic part fabrication Acquired US manufacturer of HD transit buses & parts distributor Acquired Can/US FRP Supplier $2,519 $2,382 $2,274 Acquired Orion (transit bus parts business) from Daimler Acquired North America’s leading manufacturer of motor coach & parts/service Global bus body manufacturer $1,539 equity investment in NFI $1,451 Acquired US part NFI converted from $1,199 fabricator in 2010 IDS to Common Share $984 $926 $865 $318 $315 $289 $151 $107 $97 $95 $80 $61 2010 2011 2012 2013 2014 2015 2016 2017 2018 Revenue ($M) Adj. EBITDA ($M) 3
Why Invest In NFI? North American leader in heavy-duty transit, motor coach, low-floor cutaway and aftermarket parts Trusted business partner for over 87 years delivering and standing behind reliable products. Focused on total cost of ownership Five year revenue compound annual growth rate of 16.0% driven by accretive acquisitions, organic growth and vertical integration Leading Adjusted EBITDA margin within its public company peer group (1) Peer leading dividend yield with history of growing dividends Vertically integrated fabrication processes (where NFI owns the drawings) to control Cost-Time-Quality Propulsion agnostic on proven common platforms: clean diesel, natural gas, hybrid and zero-emission (trolley, battery and fuel-cell) Solid backlog with multi-year visibility Track record of innovation – electric trolleys, low-floor transit buses, CNG propulsion, battery-electric, low-entry motor coach, Vehicle Innovation Center, Infrastructure Solutions Providing leading solutions to move groups of people safely, efficiently, responsibly, and in style (1) Public company peer group includes: REV Group Inc., Spartan Motors Inc., Blue Bird Corporation, Grande West Transportation Group Inc., Oshkosh Corporation, Thor Industries Inc., Winnebago Industries Inc. 4
Financial Performance Adjusted EBITDA and Adjusted EBITDA Margin by Segment Revenue by Segment 2014 - 2018 2014 - 2018 13.4% 12.7% 12.5% $2,519 $318 $2,382 $315 $2,274 $377 9.8% $369 $72 $74 $383 $289 7.4% $1,539 $76 $1,451 $322 $319 $151 $2,142 $2,013 $1,891 $107 $246 $61 $242 $181 $50 $1,217 $1,132 $90 $57 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 Manufacturing Aftermarket Adj. EBITDA Margin Manufacturing Aftermarket 5
Heavy Duty Transit and Motor Coach Markets HD Transit Bus Market – EUs delivered and New Flyer Market Share* Motor Coach Market – Units Delivered in Can/US and MCI Share* 6,504 7,000 6,236 7,000 6,336 74% 6,032 5,933 5,816 69% 5,795 5,373 5,347 5,388 5,284 6,000 6,000 62% 63% 5,212 5,154 62% 5,055 5,009 5,109 5,128 63% 5,010 60% 57% 56% 4,723 5,000 5,000 51% 52% 4,333 4,047 50% 56% 46% 43% 45% 44% 42% 4,000 4,000 3,001 37% 39% 48% 2,819 38% 44%44%43%43% 42%41% 2,385 2,324 2,470 2,305 2,357 3,000 3,000 38% 2,092 2,274 2,048 37%36%37%35% 37% 37% 1,918 1,852 34%35% 1,825 1,783 1,756 1,648 32% 1,581 1,510 1,479 30% 1,341 2,000 1,184 2,000 26% 25% 20% 1,000 1,000 - - Urban Municipal Metropolitan Employee Line Haul/Fixed Route Tour & Charter Limo Public Transit 200 operators 900+operators 20 operators Shuttle 27% 41% 6% 19% 39% 33% 28% 3% New Flyer’s Core Markets * Sourced from New Flyer databases and Management estimates 6 ** Sourced from MCI database and Management estimates
North American Transit Leader HD Transit Bus Market Share – 2018 Deliveries Public Bid Universe & Active Opportunities (EUs)* 25,000 20,000 20% 4% 15,000 4% 10,000 6,504 EU 43% 5,000 29% - Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Bids in Process Bids Operator Estimated active North America Transit Bus Fleet* Submitted Forecasted 5 year buy** EUs 670 2,061 20,694 54% 31% 12% 3% Others Orion Parts and NABI acquired by NFI in 2013 80,000 BUSES IN SERVICE * Bid universe is primarily applicable to New Flyer, but MCI also sells to public transit agencies that would be included in totals above ** Management estimate of future expected industry procurement in the next five years based on discussions directly with individual U.S. and Canadian transit authorities ^ Sourced from APTA Public Transportation Factbook 2016 * Sourced from New Flyer database and Management estimates 7
The Motor Coach Leader Motor Coach Market Share – 2018 Deliveries Motor Coach 2018 Market Deliveries By Segment Limo 11% 30% Tour/Charter 2% 35% Public/Transit 19% 2,305 Units 2,305 Units 24% 45% MCI Share increased Employee by 2% in 2018 Shuttle 9% Line Haul / Negligible Deliveries to date Fixed Route 26% Spain US Active North American Motor Coach Fleet 51% 24% 19% 6% 55,000 UNITS * Source: MCI Database and Management estimates 8
Innovator in Low-Floor Cutaway & Medium-Duty Buses North American Cutaway Market (2018 ~16,000 units)* North American Cutaway, Medium-Duty and Trolley Annual Demand ~16,000 Units* 9,100 Overall Cutaway Market Low-Floor Cutaway Market 16,000 EU 5% 20% 30% 5,175 Equess targeting ~670 Units growth in 4% ARBOC opportunity this 64% to gain share with 2% market customer transition 75% Disruption opportunity for to low-floor cutaway 1,270 ARBOC 300 Vehicle High-floor with lift High-floor without lift Small Cutaway Medium Cutaway Medium Duty Transit Trolley Type Bus Life 4 year 5 to 7 year 7 to 10 year 7 years Low-floor cutaway Low-floor – other ARBOC Spirit of Spirt of Freedom Spirt of Liberty Spirit of America Models Independence and Mobility and Equess Competition Champion, StarCraft, Goshen, Vicinity, ADL, Hometown Trolley Ekhart Coach, Glaval El Dorado * Source: ARBOC Management estimates 9
Industry’s Most Comprehensive Parts Offering Largest parts and service provider in the industry, providing nearly $400 million in parts annually to major U.S. transit agencies Added value through unique offerings (Kits, Mid-life upgrade programs, Vendor Managed Inventory (VMI), KanBan, etc.) Secured six vendor managed inventory programs during 2018. Expected to provide positive benefit to NFI Parts business in 2019 and beyond. Continuing to pursue other opportunities across North America Expertise and direct access to over 250 bus and coach engineers, which is critical to cost-effective and timely parts procurement, quality and availability Website offering state of the art on-line sales and distribution features Best-in-class training and publications – MCI Academy accredited by the Automotive Service Excellence (ASE) & recipient of Grand National Excellence in Training Award from ASE Training Managers Council (ATMC) 10
Significant Backlog – Solid Foundation, Position of Strength Book-to-Bill (new firm plus option orders divided by deliveries 7,000 180% 87% 10,833 EU ~2.4x 160% 6,000 140% 5,000 120% Q4-18 LTM Total Backlog at Dec. 31, 2018 4,000 Total Backlog EUs to 100% 80% Book to Bill ratio 3,000 (Firm Orders and Options) Annual Production 60% 2,000 40% 1,000 20% - 0% 2014 2015 2016 2017 2018 LTM New Orders (EUs) LTM Deliveries (EUs) LTM Order Intake / Deliveries Total Backlog Firm and Option EUs Option History, Conversion and Current Status (EUs) ARBOC Public backlog added in Q4-17 2,500 81% Firm = 3,649 EUs Options = 7,184 EUs 79% 12,000 MCI Public backlog 73% 71% added in Q4-15 2,000 10,000 54% 8,000 1,500 6,000 1,000 4,000 500 2,000 0 - 2014 2015 2016 2017 2018 2019 2020 2021 2022 Options expired Options exercised Current option expiry Annual conversion rate Firm Option 11
Strong Balance Sheet and Cash Flow Generation FY2018 Adjusted EBITDA to Free Cash Flow Reconciliation ($M) Free Cash Flow and Dividends (C$M) $216.3 $210.5 49.6% $206.9 42.9% 36.8% 31.2% $108.3 25.0% $90.3 $76.1 $65.5 Total Leverage Ratio^ vs Credit Covenant $54.0 4.0 4.0 $33.8 3.75 3.75 $32.5 3.25 NFI Target 2.91 leverage 2.0x – 2.5x 2014 2015 2016 2017 2018 2.09 1.94 1.84 1.65 Free Cash Flow Dividends Payout Ratio 2014 2015 2016 2017 2018 Credit Covenant Total Leverage 12 ^Under NFI Senior Credit Agreement, Total Leverage Ratio did not include Convertible Debentures as debt.
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