Nfi Group Inc. · TSX:NFI
Nfi — Q2 2023 Earnings Presentation
39 slides from Nfi's earnings presentation, Aug 16, 2023
Slide 1: 2023 Q2 Financial Results
2023 Q2 Financial Results August 16, 2023 1
Slide 2: Today's Speakers
Today’s Speakers Paul Soubry Pipasu Soni Stephen King President & Chief Chief Financial Vice President, Executive Officer Officer Strategy and 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 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 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 120M+ 232 25% Electric service miles ZEB EUs delivered in of total 2023 Q2 deliveries driven 2023 Q2 were ZEB EUs 53% 3,123 140+ of NA Public Bid ZEB EUs delivered since Cities have NFI ZEBs in Universe is ZEBs 2015 service or on order 36% 3,491 6 of total back
Slide 9: Refinancing Plan Update
Refinancing Plan Update Leading the ZEvolution’
Slide 10: Refinancing Plan Update
Refinancing Plan Update On May 10, 2023, announced a Comprehensive Refinancing Plan that includes: Refinancing Plan Expected Gross Proceeds Credit approval of key terms and an extension of its main credit facilities Shares (North America and UK) to April 2026, including suspension of debt to $M Issu
Slide 11: 2023 Q2 Results
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Slide 12: 2023 Q2 Financial Summary
2023 Q2 Financial Summary Significant +120% 125% +170% +33% North American Book-to-bill Bids submitted in Active bids increase Demand Growth bid universe the quarter (YoY) (YoY) (YoY) Financial +66% +84% +159% +33% Record Aftermarket Improvements Increase in new Manufacturing Overall Adjusted Afterm
Slide 13: Significant Supply Chain Improvements in 2023
Significant Supply Chain Improvements in 2023 NFI Group Consolidated High and Moderate Risk Suppliers (2020 Q4 – July 2023) 9 High Risk Suppliers in NFI top 750 2023 Update 92 Supplier delivery performance continues to improve Moderate risk supplier continue to improve on-time delivery; continuing 7
Slide 14: Supply Chain Challenges have Impacted Production & WIP
Supply Chain Challenges have Impacted Production & WIP Total NFI Quarterly Vehicle Line Entries and WIP Inventory (2019 Q1 – 2023 Q2) $500 1,637 WIP $M 1,547 1,528 $450 1,456 1,444 $400 1,238 $350 1,080 1,053 990 962 $300 929 819 813 858 832 796 $250 714 589 $200 $150 $100 $50 $0 2019 Q1 2019 Q2 201
Slide 15: Backlog and Deliveries as of 2023 Q2
Backlog and Deliveries as of 2023 Q2 Backlog – Firm and Option Backlog – Timing Backlog – By Product Does not yet include 719 EUs of “awards pending” to NFI LTM 2023 Q2 Option Conversion Rate = 25% Firm Options Backlog: 2023 Q2 EUs 9,674 10,071 9,803 8,505 9,186 Motor Coach 5,308 5,161 4,714 4,352 4
Slide 16: Quarterly Gross Margins: 2019 Q1 to 2023 Q2
Quarterly Gross Margins: 2019 Q1 to 2023 Q2 NFI Segment Quarterly Gross Margins including Depreciation and Amortization (2019 Q1 – 2023 Q2) 1 Manufacturing Aftermarket 30.0% 30.4% 30.4% 29.5% 30.0% 30.3% 31.9% 31.9% 30.0% 28.6% 30.2% 31.3% 27.5% 28.5% 26.3% 26.9% 25.5% 22.5% 13.8% 12.0% 12.8% 9.7% 1
Slide 17: 2023 Q2: Income Statement, Cash Flow, Liquidity
2023 Q2: Income Statement, Cash Flow, Liquidity 2023 Q2 Performance 2023 Q2 Free Cash Flow & Liquidity 2023 Q2 2022 Q2 Free Cash Flow ($M) Sales $659.6M $398.0M 2023 Q2 2022 Q2 1.8% (5.2%) Adjusted EBITDA1 $12.2 ($20.6) ROS ROS Interest Expense ($30.1) ($18.6) $12.2 Current Income Tax $0.1 $2.8 Adju
Slide 18: Net Earnings and Adjusted Net Earnings
Net Earnings and Adjusted Net Earnings Net Earnings (Loss) ($M) Adjusted Net Earnings (Loss) ($M)1 2022 Q2 ($56.0) ($0.73) per share 2022 Q2 ($48.3) ($0.64) per share 2023 Q2 ($48.1) ($0.62) per share 2023 Q2 ($35.2) ($0.46) per share 2022 Q2 LTM ($107.9) ($1.44) per share 2022 Q2 LTM ($115.7) ($1.6
Slide 19: Strong Demand Environment
Strong Demand Environment 19
Slide 20: Record Public Market Bid Universe
Record Public Market Bid Universe Canada and U.S. Public Market Bid Universe Avg. timeline from bid release to production = 12 to 18 months Bids in Process Bids Submitted 5 Year Forecast 35,000 30,000 25,000 20,000 15,000 10,000 5,000 - 2018 Q1 2018 Q2 2018 Q3 2018 Q4 2019 Q1 2019 Q2 2019 Q3 2019 Q4
Slide 21: Strong Award and Delivery Activity in 2023 Q2
Strong Award and Delivery Activity in 2023 Q2 4,904 EUs 917 EUs 5,821 EUs New Awards New Awards New Awards in 2022 Q3-2023 Q1 2023 Q2 LTM 2023 Q2 719 EUs in Bid Award Pending at quarter-end Select Customer Wins MCI delivered its first battery-electric KMG celebrated its 90th birthday with the (ZEB a
Slide 22: Book-to-Bill Recovery Continues Above 100%
Book-to-Bill Recovery Continues Above 100% Book-to-Bill and Option Conversion (2014 – 2023 Q2) 2018-2019: Declines driven by ZEB order timing/trials 133.9% 128.2% Bid volume driving order increase 2020-2021 FAST Act expiry and impact of the pandemic 124.5% 115.1% 111.4% 105.6% Book-to-Bill expected
Slide 23: Poised for Recovery
Poised for Recovery Leading the ZEvolution’
Slide 24: Strong Government Funding Environment
Strong Government Funding Environment U.S. Federal FTA Funding ($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% $21,930 $22,290 C$14.
Slide 25: Poised for Recovery: Forward Guidance and Targets
Poised for Recovery: Forward Guidance and Targets Revenue ($M) and Units Delivered (EUs) Adjusted EBITDA1 ($M) 4,313 6,186 4,371 3,789 3,039 ~$4,000 ~$400 $3,600 $326 $331 $3,172 $300 $2,800 $2,519 $2,419 $2,344 $158 $164 $2,054 $60 $250 $3,200 $2,600 $40 ($59) 2018 2019 2020 2021 2022 2023E 2024E 2
Slide 26: 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 2023 Q2: 25% of total deliveries ZEBs as % Annual Deliveries were ZEB EUs ZEB as % of Backlog 50% High end of gui
Slide 27: 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 Q2 – 2023 Q2) $707.3 $721.1 $650.1 $622.8 $604.1 $607.6 $607.1 $638.5 $595.8 $597.0 $6
Slide 28: 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 29: Appendix
Appendix Leading the ZEvolution’
Slide 30: Financial Highlights: 2023 Q2 & YTD
Financial Highlights: 2023 Q2 & YTD $M Q2 YTD (except EU and EPS) 2023 2022 Change 2023 2022 Change Deliveries (EUs) 931 562 65.7% 1,723 1,222 41.0% Revenue $659.6 $398.0 65.7% $1,184.0 $857.3 38.1% Gross Profit $47.9 $2.4 1916.5% $84.1 $20.4 312.3% Gross Profit % 7.3% 0.6% 111675bps 7.1% 2.4% 19853
Slide 31: Non-IFRS Reconciliation: 2023
Non-IFRS Reconciliation: 2023 Reconciliation of IFRS to non-IFRS As of July 2, 2023 Second In '000 First Quarter Quarter Full Year Net Sales $ 524,411 $ 659,569 $ 1,183,980 Net Earnings $ (45,964) $ (48,101) $ (94,065) % of net sales -8.8% -7.3% -7.9% Adjustment, Gross Restructuring and Other Corpor
Slide 32: 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) $ (56,009) $ (42,483) $ (149,444) $ (275,731) % of
Slide 33: Quarterly Adjusted EBITDA: 2019 Q1 to 2023 Q2
Quarterly Adjusted EBITDA: 2019 Q1 to 2023 Q2 NFI Segment Quarterly Adjusted EBITDA1 (2019 Q1 – 2023 Q2) $M $100 Manufacturing Aftermarket $86 $80 $62 $62 $60 $54 $47 $45 $40 $35 $36 $26 $30 $30 $22 $23 $21 $25 $25 $23 $22 $23 $18 $18 $21 $17 $18 $16 $17 $20 $12 $2 $0 ($8) -$20 ($16) ($23) -$40 ($32
Slide 34: Quarterly Free Cash Flow: 2019 Q1 to 2023 Q2
Quarterly Free Cash Flow: 2019 Q1 to 2023 Q2 NFI Free Cash Flow Results by Quarter (2019 Q1 – 2023 Q2) $M $49 $41 $38 $32 $29 $27 $14 $15 $15 $12 ($19) ($22) ($29) ($31) ($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 20
Slide 35: Quarterly Backlog: 2019 Q1 to 2023 Q2
Quarterly Backlog: 2019 Q1 to 2023 Q2 NFI Quarterly Backlog1 in EUs (2019 Q1 – 2023 Q2) Firm Option 7,281 6,518 6,497 5,604 5,161 4,714 7,011 5,308 4,610 6,691 4,851 4,352 5,220 5,279 4,813 5,264 4,646 4,757 4,576 4,910 5,089 4,313 4,224 4,082 4,400 4,057 4,366 4,153 3,576 3,306 3,662 3,240 3,307 3,
Slide 36: Half Year Adjusted EBITDA: 2019 to H1 2023
Half Year Adjusted EBITDA: 2019 to H1 2023 NFI Adjusted EBITDA1 Results by Half Year (2019 – H1 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 no Idled majority of $27.0 $106.
Slide 37: 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 38: 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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