Slide 1: 2023 Q1 Financial Results
2023 Q1 Financial Results May 4, 2023 1
Slide 2: Today's speakers
Today’s speakers Paul Soubry Pipasu Soni Stephen King President & Chief Financial Vice President Chief Executive Officer Strategy and Officer Investor Relations 2 2
Slide 3: 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 4: Key terms
Key terms Buses manufactured by New Flyer and ADL's One equivalent unit (or “EU”) single and double deck buses are classified represents one production “slot”, being as "transit buses". ARBOC manufactures one 30-foot, 35-foot, 40-foot, 45-foot body on-chassis or “cutaway” and "medium- heavy-duty tra
Slide 5: Who is NFI?
Who is NFI? Market and technology leader in each of our major markets. NFI is a global independent bus and motor coach solution provider that is leading the evolution to zero-emission mobility. 5 5
Slide 6: NFI's mobility solutions
NFI’s mobility Workforce Development & Training solutions Parts, Publications & Service Buses & Coaches Connected Vehicles & Diagnostics Infrastructure Solutions Financing 6 6
Slide 7: Our values + stakeholders drive our decisions
Our values + stakeholders drive our decisions Safety Quality Integrity The health and We strive for We act with honesty, wellbeing of our team excellence in our transparency, and integrity, members and the safety products, services, treating each other with respect of our products are our and all th
Slide 8: Leader in zero-emission transportation
Leader in zero-emission transportation 115M+ 166 21% Electric service miles ZEB EUs delivered in of total 2023 Q1 deliveries driven 2023 Q1 were ZEB EUs 52% 2,891 130+ of NA Public Bid ZEB EUs delivered since Cities have NFI ZEBs in Universe is ZEBs 2015 service or on order 36% 3,661 6 of total back
Slide 9: 2023 Q1 results
= So c=} 2 $ Leading the
Slide 10: 2023 Q1 financial summary
2023 Q1 financial summary Quarterly Strong ZEB Significant Stage Set for Performance Performance Demand Growth Recovery Manufacturing segment deliveries 21% of 2023 Q1 deliveries were North American public bid Heavy-duty production schedule up 20%, revenue up 18%, and ZEB EUs universe up 18% year-ov
Slide 11: Significant supply chain improvements in 2023
Significant supply chain improvements in 2023 NFI Group Consolidated High and Moderate Risk Suppliers (2020 Q4 to 2023 Q1) Note: 7 High Risk Suppliers in NFI top 750 2023 Update Supplier performance continues to improve, and critical disruptions 92 90 92 experienced in 2022 are being effectively mit
Slide 12: Supply chain challenges impacting production and WIP
Supply chain challenges impacting production and WIP Total NFI Quarterly Vehicle Line Entries and WIP Inventory (2019–2023 Q1) 1,637 $500 WIP $M 1,547 1,528 $450 1,456 1,444 $400 1,238 $350 1,080 1,053 929 990 $300 796 819 813 858 832 $250 714 589 $200 $150 $100 $50 $0 2019 Q1 2019 Q2 2019 Q3 2019 Q
Slide 13: Proactive response to supply chain disruptions
Proactive response to supply chain disruptions Secured and continue to pursue price adjustments wherever possible Ongoing proactive Lowered new vehicle production rates to match with supply actions. Numerous actions executed Brought on alternative sources of supply and connected and ongoing to comba
Slide 14: Backlog and deliveries as of 2023 Q1
Backlog and deliveries as of 2023 Q1 Backlog – Firm and Option Backlog – Timing Backlog – By Product Does not yet include 425 EUs of “awards pending” LTM 2023 Q1 Option Conversion Rate = 21% to NFI Firm Options Backlog: 2023 Q1 EUs 9,674 10,071 8,908 8,505 9,186 5,308 5,161 4,851 4,352 4,610 Motor C
Slide 15: 2023 Q1: Income Statement, Cash Flow, Liquidity
2023 Q1: Income Statement, Cash Flow, Liquidity 2023 Q1 Performance 2023 Q1 Free Cash Flow & Liquidity 2023 Q1 2022 Q1 Free Cash Flow ($M) Sales $524.4M $459.3M 2023 Q1 2022 Q1 $7.4 (3.7%) Adjusted ROS Adjusted EBITDA1 $7.4 ($16.7) 1.4% ($25.9) ($16.3) EBITDA ROS Interest Expense ($M)1 ($16.7) Curre
Slide 16: Quarterly gross margins: 2019 Q1 to 2023 Q1
Quarterly gross margins: 2019 Q1 to 2023 Q1 NFI Segment Quarterly Gross Margins including Depreciation and Amortization (2019 Q1 – 2023 Q1) 1 Manufacturing Aftermarket 30.0% 30.4% 30.4% 30.0% 30.3% 31.9% 31.9% 30.0% 30.2% 27.5% 28.5% 29.5% 28.6% 26.3% 26.9% 25.5% 22.5% 13.8% 12.0% 12.8% 9.7% 11.2% 8
Slide 17: Net Earnings and Adjusted Net Earnings
Net Earnings and Adjusted Net Earnings Net Earnings (Loss) ($M) Adjusted Net Earnings (Loss) ($M)1 2022 Q1 ($27.8) ($0.36) per share 2022 Q1 ($40.6) ($0.53) per share 2023 Q1 ($46.0) ($0.60) per share 2023 Q1 ($37.5) ($0.49) per share 2022 Q1 LTM ($49.3) ($0.66) per share 2022 Q1 LTM ($58.8) ($0.81)
Slide 18: Capital and credit agreement updates
Capital and credit agreement updates 18
Slide 19: Capital allocation priorities
Capital allocation priorities Debt Management Focus on Working Invest in Highest Cash Flow & Leverage Capital Return Projects Generation Reduction Opportunities Targeting completion of amended WIP levels are elevated, with Internal investments in operations, Evaluating other capital markets multi-ye
Slide 20: Credit facility timeline
Credit facility timeline: Dec 2022 - Jun 2023 Waiver of Total Leverage Ratio and Interest Coverage Ratio Minimum Adjusted EBITDA covenant in place (March to covenants. Net Debt to June). Cumulative calculation Capitalization and $25M Minimum based on the period starting Liquidity covenants in place
Slide 21: Strong demand environment
Strong demand environment 21
Slide 22: Strong public market Bid Universe continues
Strong public market Bid Universe continues Canada and U.S. Public Market Bid Universe 2,833 EUs 8,233 EUs Bids in Process Bids Submitted Avg. timeline from bid release to production = 12 to 18 months 20,103 EUs +99% Bids in Process Bids Submitted 5 Year Forecast Five-Year Procurement Outlook Active
Slide 23: Strong award activity in 2023 Q1
Strong award activity in 2023 Q1 4,379 EUs 1,873 EUs 6,252 EUs New Awards New Awards New Awards in 2022 Q2-Q4 2023 Q1 LTM 2023 Q1 Select Customer Wins (ZEB Orders) in 2023 Q1 23 23
Slide 24: Book-to-Bill recovery continues above 100%
Book-to-Bill recovery continues above 100% Book-to-Bill and Option Conversion (2014 – 2023 Q1) 2018 & 2019 - Declines driven by ZEB order timing/trials 133.9% 128.2% 2020 & 2021 FAST Act expiry and impact of the pandemic 131.3% Bid volume driving order increase 115.1% 111.4% 105.6% Book-to-Bill expe
Slide 25: Record government funding in all major markets
Record government funding in all major markets $100B+ Through the five-year Infrastructure Investment and Jobs Act (IIJA). $34B+ Through the Green Recovery Funding, Transit Funding Program and Canadian Infrastructure Bank. £7B To overhaul and level up major local transport outside of London. 25 25
Slide 26: Poised for recovery
Poised for recovery Leading the ZEvolution’
Slide 27: Poised for recovery: forward guidance and targets
Poised for recovery: forward guidance and targets Revenue ($M) Adjusted EBITDA1 ($M) ~$4,000 ~$400 $3,600 $326 $331 $3,172 $300 $2,519 $2,800 $2,419 $2,344 $158 $164 $2,054 $60 $250 $3,200 $2,500 $30 ($59) 2018 2019 2020 2021 2022 2023E 2024E 2025E 2018 2019 2020 2021 2022 2023E 2024E 2025E Capex ($
Slide 28: Transition to ZE accelerating
Transition to ZE accelerating Increasing demand for electric vehicles (battery and fuel-cell) in NFI’s core markets, driven by government funding and the drive to zero-emission 2023 Q1: 21% of total deliveries ZEBs as % Annual Deliveries were ZEB EUs ZEB as % of Backlog 50% High end of guidance 50%
Slide 29: 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; will drive higher $/EU contribution NFI Backlog Average Sales Price per EU (2020 Q1 to 2023 Q1) $707.3 $650.1 $622.8 $604.1 $607.6 $607.1 $595.8 $597.0 $638.5 $635.5 $
Slide 30: Summary: Why invest in NFI
Summary: Why invest in NFI Market leader with Key competitive advantages. Poised for financial recovery, with unprecedented demand. previous history of outperformance. NFI holds market leadership positions in North Leader in core markets with full suite of mobility Poised for recovery with strong ba
Slide 31: Appendix
Appendix Leading the ZEvolution’
Slide 32: Financial highlights: 2023 Q1
Financial highlights: 2023 Q1 $M Q1 (except EU a nd EPS) 2023 2022 Change Deliveries (EUs) 792 660 20.0% Revenue $524.4 $459.3 14.2% Gross Profit $36.2 $18.0 101.0% Gross Profit % 6.9% 3.9% 7603bps Adjusted EBITDA $7.4 ($16.7) 144.3% Adjusted EBITDA Margin % 1.4% -3.7% 13784bps Earnings from operati
Slide 33: Non-IFRS reconciliation: 2023
Non-IFRS reconciliation: 2023 Reconciliation of IFRS to non-IFRS As of April 2, 2023 First In '000 Quarter Net Sales $ 524,411 Net Earnings $ (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 34: Non-IFRS reconciliation: 2022
Non-IFRS reconciliation: 2022 Reconciliation of IFRS to non-IFRS As of January 1, 2023 Second Third Fourth In '000 First Quarter Quarter Quarter Quarter Full Year Net Sales $ 459,330 $ 397,952 $ 514,047 $ 682,604 $ 2,053,933 Net Earnings $ (27,795) $ (56,435) $ (42,483) $ (149,444) $ (276,157) % of
Slide 35: Quarterly Adjusted EBITDA: 2019 Q1 to 2023 Q1
Quarterly Adjusted EBITDA: 2019 Q1 to 2023 Q1 NFI Segment Quarterly Adjusted EBITDA1 (2019 Q1 – 2023 Q1) $M $100 Manufacturing Aftermarket $86 $80 $62 $62 $60 $54 $47 $45 $40 $35 $36 $26 $30 $22 $23 $25 $25 $23 $22 $23 $18 $18 $21 $17 $21 $18 $16 $17 $20 $12 $2 $0 ($8) -$20 ($23) -$40 ($32) ($31) ($
Slide 36: Quarterly Free Cash Flow: 2019 Q1 to 2023 Q1
Quarterly Free Cash Flow: 2019 Q1 to 2023 Q1 NFI Free Cash Flow Results by Quarter (2019 Q1 – 2023 Q1) $M $49 $41 $38 $32 $29 $27 $14 $15 $15 $12 ($19) ($22) ($29) ($43) ($40) ($49) ($58) 2019 Q1 2019 Q2 2019 Q3 2019 Q4 2020 Q1 2020 Q2 2020 Q3 2020 Q4 2021 Q1 2021 Q2 2021 Q3 2021 Q4 2022 Q1 2022 Q2
Slide 37: Quarterly Backlog: 2019 Q1 to 2023 Q1
Quarterly Backlog: 2019 Q1 to 2023 Q1 NFI Quarterly Backlog1 in EUs (2019 Q1 – 2023 Q1) Firm Option 7,281 6,518 6,497 5,604 5,161 7,011 5,308 4,610 6,691 4,851 4,352 5,220 5,279 4,813 5,264 4,646 4,757 4,313 4,400 4,366 4,576 4,910 3,576 4,224 4,082 3,662 3,635 4,057 4,153 3,306 3,240 3,307 3,522 3,
Slide 38: Half Year Adjusted EBITDA: 2019 to 2022
Half Year Adjusted EBITDA: 2019 to 2022 NFI Adjusted EBITDA1 Results by Half Year (2019 – 2022) $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 no Idled majority of $27.0 $106.7 long
Slide 39: Forward-looking statements
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 40: Key financial definitions
Key financial definitions Non-IFRS Measures – see NON-IFRS AND OTHER FINANCIAL MEASURES section of the MD&A Dated May 3, 2023 Adjusted EBITDA: Earnings before interest, income taxes, depreciation and amortization after adjusting for the effects of certain non-recurring and/or non-operations related
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