Nfi Group Inc. · TSX:NFI
Nfi — Q1 2024 Earnings Presentation
37 slides from Nfi's earnings presentation, May 3, 2024
Slide 1: NFI Group Inc. 2024 Q1 Results
NFI Group Inc. 2024 Q1 Results May 2, 2024
Slide 2: Cautionary Statement
Cautionary Statement Certain statements in this presentation are “forward looking statements,” which reflect the expectations of management regarding the Company's future growth, results of operations, performance and business prospects and opportunities. These forward-looking statements are made as
Slide 3: Key Terms
Key Terms Buses manufactured by New Flyer and One equivalent unit (or “EU”) Alexander Dennis' single and double deck represents one production “slot”, being buses are classified as "transit buses". one 30-foot, 35-foot, 40-foot, 45-foot ARBOC manufactures body on-chassis or heavy-duty transit bus, o
Slide 4: We Move People
NFI Group is a global independent bus and motor coach solution provider that is leading the evolution to zero-emission mobility. We are purpose driven and exist to build vehicles that move the world's most precious cargo. We Move People NFI is the market and technology leader in major markets with o
Slide 5: NFI's Mobility Solutions
NFI’s Mobility Solutions Workforce Development & Training Parts, Publications & Service Buses & Coaches Connected Vehicles & Diagnostics Infrastructure Solutions Financing 5
Slide 6: Our Values and Our Stakeholders Drive Our Decisions
Our Values and Our Stakeholders Drive Our Decisions Safety Quality Integrity The health and wellbeing We strive for We act with honesty, of our team members excellence in our transparency, and integrity, and the safety of our products, services, treating each other with respect products are our top
Slide 7: Leader in Zero-Emission Transportation
Leader in Zero-Emission Transportation 180M+ 3,804 $11.7B Electric service miles ZEB EUs delivered since Value of total backlog1 driven 2015 (14,783 EUs) 52% 18% 39% of North American of 2024 Q1 deliveries were of total backlog1 is ZEB EUs Public Bid Universe is ZEB EUs (201 EUs) (5,795 EUs) ZEBs 15
Slide 8: First Quarter 2024 Results
First Quarter 2024 Results
Slide 9: 2024 Q1 Financial Summary
2024 Q1 Financial Summary Significant 26,760 EUs in North 117% +189% +55% 49% Book-to-Bill2 for Increase in new Increase in new Option Demand Growth American Total LTM 2024 Q1 orders (2024 Q1 orders (LTM 2024 Q1 conversion rate Bid Universe vs. 2023 Q1) vs. LTM 2023 Q1) for 2024 Q1 Financial +38% 10
Slide 10: Increasing Production Rates yet managing Working Capital
Increasing Production Rates yet managing Working Capital Total NFI Inventory US$M (Raw Materials, WIP and Finished Goods $M) vs Quarterly Vehicle Line Entries 1,637 1,547 1,528 1,456 1,444 1,238 1,207 1,080 1,053 1,054 990 1,017 929 962 819 813 858 832 796 589 714 $80 $84 $77 $103 $74 $59 $71 $97 $1
Slide 11: 2024 Q1: Backlog and Deliveries
2024 Q1: Backlog and Deliveries Backlog1 – Firm and Option Backlog1 – Year Options Expiry Backlog1 – By Product Type Firm Options 14,783 Backlog1: 2024 Q1 EUs Q1 2024 Option Conversion Rate = 49% 10,071 10,586 9,186 9,803 9,556 9,190 5,161 4,714 5,574 4,610 4,693 Motor Coach 4% Heavy-Duty 4,576 4,91
Slide 12: Quarterly Gross Margins
Quarterly Gross Margins NFI Segment Quarterly Gross Margins (includes Depreciation and Amortization) 1 30.0% 30.4% 30.4% 30.0% 30.3% 31.9% 31.9% 31.3% 31.5% 32.1% 30.1% 27.5% 28.5% 29.5% 26.9% 30.0% 28.6% 30.2% 26.3% 25.5% Aftermarket GM% 22.5% Manufacturing GM% 6.6% 13.8% 12.0% 12.8% 3.7% 8.7% 8.2%
Slide 13: Quarterly Adjusted EBITDA
Quarterly Adjusted EBITDA NFI Segment Quarterly Adjusted EBITDA1 $M $60 $54 Manufacturing Aftermarket $45 $35 $36 $38 $40 $32 $30 $30 $30 $25 $26 $25 $21 $23 $21 $23 $22 $23 $17 $17 $18 $20 $12 $11 $2 $0 ($2) ($8) -$20 ($16) ($14) ($23) ($32) ($31) -$40 ($37) ($40) ($42) -$60 2020 Q1 2020 Q2 2020 Q3
Slide 14: Quarterly Free Cash Flow: 2020 Q1 to 2024 Q1
Quarterly Free Cash Flow: 2020 Q1 to 2024 Q1 NFI Free Cash Flow and Free Cash Flow Plus the Change in Working Capital by Quarter (2020 Q1 – 2024 Q1) $M Free Cash Flow $121 Free Cash Flow with Change in Working Capital $79 $77 $36 $27 $29 $15 $22 $14 $13 $15 $12 $13 $10 $3 ($12) ($19) ($24) ($21) ($3
Slide 15: Q1 2024 Net Loss and Adjusted Net Loss
Q1 2024 Net Loss and Adjusted Net Loss Net Loss ($M) Adjusted Net Loss ($M)1 2023 Q1 ($46.0) ($0.60) per share 2023 Q1 ($37.5) ($0.49) per share 2024 Q1 ($9.4) ($0.08) per share 2024 Q1 ($15.6) ($0.13) per share LTM Q1 2023 ($294.5) ($3.81) per share LTM Q1 2023 ($157.1) ($2.03) per share LTM Q1 202
Slide 16: Strong Demand Environment
Strong Demand Environment Leading the ZEvolution”
Slide 17: Strong Award Activity in 2024 Q1
Strong Award Activity in 2024 Q1 5,421 EU 9,669 EU 4,248 EU New Awards New Awards in New Awards LTM 2024 Q1 2024 Q1 2023 Q2-2023 Q4 + 365 EU Bid Award Pending to NFI at end of 2024 Q1 17
Slide 18: Record Public Market Bid Universe
Record Public Market Bid Universe Canada and U.S. Public Market Bid Universe Avg. timeline from bid release to production = 12 to 18 months Bids in Process Bids Submitted 5 Year Forecast 35,000 30,000 25,000 20,000 15,000 10,000 5,000 - 2018 2018 2018 2018 2019 2019 2019 2019 2020 2020 2020 2020 202
Slide 19: Poised for Recovery
Poised for Recovery Leading the ZEvolution”
Slide 20: 2024 Q1 Market Updates
2024 Q1 Market Updates Government Funding Announcements $1.1B 2024 Low or No Emission (Low -No) Grant Program Announced – NFI was named partner on over $200M of Low-No grants in 2023 $390M Grants for Buses and Bus Facilities Program £143M for purchase of 955 zero-emission buses through the ZEBRA pro
Slide 21: Reiterate Forward Guidance and Targets
Reiterate Forward Guidance and Targets Revenue ($M) and Units Delivered (EUs) Adjusted EBITDA1 ($M) and Adjusted EBITDA as % of Revenue $400M annualized 4,313 6,186 4,371 3,783 3,039 4,001 ~5,000 12.9% 10.4% 6.5% 7.0% (2.8%) 2.6% run rate by 2025 Q4 ~$4,000 >$350 $3,600 $326 $331 $3,172 $280 $2,519
Slide 22: Leverage Expectations and Debt Maturities
Leverage Expectations and Debt Maturities Total Leverage 2024 Q1 Actual and Debt Maturities 2025 – 2028 ($M) – total capacity 2024 Q3 – 2025 Q4 Covenants 7.8x $861 <6.x <4.75x <4.75x <4.25x <4.25x <3.75x $250 $180 $0 $0 2024 Q1 2024 Q3 2024 Q4 2025 Q1 2025 Q2 2025 Q3 2025 Q4 2024 2025 2026 2027 2028
Slide 23: Fiscal 2024 Seasonality and Margin Enhancement
Fiscal 2024 Seasonality and Margin Enhancement Adjusted EBITDA Expectations Half Year 2024 ($M) Directional Gross Margin (excl. D&A) per EU Manufacturing $ $182 Actuals Estimated ~$156 ~$98 $34,566 ~$84 $15,834 $34 $4,630 2024 H1 2024 H2 2022 Q1 2023 Q1 2024 Q1 2024 Q2 2024 H2 2025 Actual Guidance A
Slide 24: Average Backlog Price Continues to Increase
Average Backlog Price Continues to Increase Increasing transit and coach sale prices driven by increased number of ZEBs in backlog; expected to drive higher $$/EU contribution Average Sales Price per EU of NFI Backlog $831.7 $793.4 $721.1 $731.1 $707.3 $692.0 $690.8 $665.0 $638.5 $635.5 $635.4 $622.
Slide 25: Summary: Why Invest in NFI
Summary: Why Invest in NFI With 450 years of combined bus and coach experience across its portfolio companies, NFI has a proven track record of innovation, customized vehicle manufacturing expertise, a diversified product offering and strong aftermarket support and service. As market leader in share
Slide 26: Appendix
Appendix Leading the ZEvolution’
Slide 27: Non-IFRS Reconciliation: 2024 Q1
Non-IFRS Reconciliation: 2024 Q1 Reconciliation of IFRS to non-IFRS As of March 31, 2024 In '000 First Quarter Net Sales $ 722,749 Net Loss $ (9,414) % of net sales -1.3% Adjustment, Gross Restructuring and Other Corporate Initiatives $ 1,515 Derivative related $ (6,461) Foreign exchange loss/gain $
Slide 28: Non-IFRS Reconciliation: 2023 Q1
Non-IFRS Reconciliation: 2023 Q1 Reconciliation of IFRS to non-IFRS As of April 2, 2023 In '000 First Quarter Net Sales $ 525,134 Net Loss $ (45,964) % of net sales -8.8% Adjustment, Gross Restructuring and Other Corporate Initiatives $ 1,838 Derivative related $ 4,787 Foreign exchange loss/gain $ (
Slide 29: Quarterly Backlog: 2019 Q1 to 2024 Q1
Quarterly Backlog: 2019 Q1 to 2024 Q1 NFI Quarterly Backlog1 in EUs (2019 Q1 – 2024 Q1) Firm Option 9,190 7,281 5,574 6,518 6,497 5,604 5,161 4,714 4,693 7,011 5,308 4,610 6,691 5,220 4,851 4,352 5,264 5,279 4,646 4,757 4,813 4,910 5,089 4,863 5,012 5,593 4,313 4,224 4,082 4,400 4,057 4,366 4,153 4,
Slide 30: Book-to-Bill Recovery Continues Above 100%
Book-to-Bill Recovery Continues Above 100% Book-to-Bill1 and Option Conversion1 (2014 – 2023, + LTM 2024 Q1) 2018-2019: Declines driven by ZEB order timing/trials 133.9% 128.2% Bid volume driving order increase 2020-2021 FAST Act expiry and impact of the pandemic 115.1% 117.0% 111.4% 113.0% 105.6% B
Slide 31: Transition to ZE Accelerating
Transition to ZE Accelerating Increasing demand for electric vehicles (battery- and fuel cell-electric) in NFI’s core markets, driven by government funding and the drive to zero-emission 2024 Q1: 2024 Q1: 18% of total deliveries 39% of total backlog1 ZEBs as % Annual Deliveries were ZEB EUs ZEB as %
Slide 32: Half Year Adjusted EBITDA: 2019 to 2023
Half Year Adjusted EBITDA: 2019 to 2023 NFI Adjusted EBITDA1 Results by Half Year (2019 – 2023) $M Adjusted EBITDA (excl. subsidies) Wage Subsidies/Grants $200 $180.8 COVID-19 and Global Supply Disruption - - - > $150 $141.4 $125.9 Government subsidies ended or Idled majority of $27.0 $106.7 no long
Slide 33: North American Market Updates
North American Market Updates U.S. Federal FTA Funding ($M)1 Dedicated Canadian Federal Government Transit Funding2 $100B+ investment in U.S. public transit through the Forecasted CAGR C$17.6B Green Recovery Funding Infrastructure Investment and Jobs Act (2023-2026): 2% $22,290 C$14.9B Transit Fundi
Slide 34: 2024 Q1: Income Statement, Cash Flow, Liquidity
2024 Q1: Income Statement, Cash Flow, Liquidity 2024 Q1 Performance 2024 Q1 Free Cash Flow 1 & Liquidity1 2024 Q1 2023 Q1 Free Cash Flow1 ($M) Sales $722.7M $525.1M 2024 Q1 2023 Q1 4.7% 1.4% Adjusted EBITDA1 $33.9 $7.4 ROS ROS Interest Expense ($33.6) ($25.9) $33.9 Current Income Tax ($5.0) ($0.9) A
Slide 35: Forward-Looking Statements Notes to Readers
Forward-Looking Statements Certain statements in this presentation are “forward-looking statements”, which reflect the expectations of management regarding the Company’s future growth, financial performance, and liquidity and objectives and the Company’s strategic initiatives, plans, business prospe
Slide 36: Key Financial Definitions
Key Financial Definitions Non-IFRS Measures – see NON-IFRS AND OTHER FINANCIAL MEASURES section of the MD&A Dated May 2, 2024 Adjusted EBITDANG: Earnings before interest, income tax, depreciation and amortization after adjusting for the effects of certain non-recurring, non-operating, and items occu
Slide 37: Slide 37