Greenbrier Companies, Inc. (the) · NYSE:GBX
Greenbrier Companies, Inc. (the) — Investor Day (April 2023)
121 slides from Greenbrier Companies, Inc. (the)'s investor day presentation, Apr 12, 2023
Slide 1: Fiscal Q2 Summary & Introduction
Exhibit 99.1 Fiscal Q2 Summary & Introduction Justin Roberts VP Corporate Finance & Treasurer
Slide 2: Forward Looking Statements & Non-GAAP Financial Measures
Forward Looking Statements & Non-GAAP Financial Measures This presentation and the accompanying oral presentation contain forward-looking statements, including statements that are not purely statements of historical fact. The Greenbrier Companies, Inc. (the “Company,” “we,” “us” or “our”) uses words
Slide 3: Income Statement Highlights
Income Statement Highlights (1) (1) Revenue ($ millions) Adjusted EBITDA ($ millions) Adjusted Diluted EPS $1,122.0 $0.99 $97.9 $950.7 $88.8 $793.5 $766.5 $682.8 $0.60 $51.7 $48.6 $48.7 $0.38 $0.09 $0.05 2Q22 3Q22 4Q22 1Q23 2Q23 2Q22 3Q22 4Q22 1Q23 2Q23 2Q22 3Q22 4Q22 1Q23 2Q23 Strong adjusted EBITD
Slide 4: Key Operational Metrics
Key Operational Metrics (1) (1) Backlog Deliveries Syndicated Deliveries 2,200 32,100 7,600 30,900 29,500 28,300 25,900 5,800 5,200 1,400 4,800 4,800 1,300 800 300 2Q22 3Q22 4Q22 1Q23 2Q23 2Q22 3Q22 4Q22 1Q23 2Q23 2Q22 3Q22 4Q22 1Q23 2Q23 Record quarter for deliveries at 7,600 units and orders of 4,
Slide 5: Balance Sheet & Cash Flow Trends
Balance Sheet & Cash Flow Trends Net Capex & Invest. in (2) Operating Cash Flow Net Funded Debt (1) Unconsolidated Affiliates $178.0 $127.9 $1,349 $159.1 $1,278 $1,077 $62.2 $1,044 $937 $43.7 $43.0 $561 ($23.6) $716.7 ($108.1) $(106.3) 2Q22 3Q22 4Q22 1Q23 2Q23 ($255.5) Leasing Non-Recourse Greenbrie
Slide 6: Agenda
Agenda 9:00 Introduction – Justin Roberts, VP Corporate Finance & Treasurer 9:10 Strategic Overview – Lorie Tekorius, CEO & President 9:35 North American Manufacturing – Bill Krueger, President, Greenbrier Manufacturing Operations 9:50 European Manufacturing – William Glenn, Chair of The Management
Slide 7: Management at Investor Day
Management at Investor Day Adrian Downes Brian Conn Laurie Dornan Lorie Tekorius Bill Krueger William Glenn Brian Comstock Sr. Managing Director SVP, Chief Human CEO & President President, Greenbrier SVP, Chief EVP, Chief Chair of the Management Structured Financial Resources Officer Manufacturing F
Slide 8: Evolving an Established Industry Leader
Evolving an Established Industry Leader Lorie Tekorius Chief Executive Officer & President
Slide 9: A brief overview of what you will hear from us today
A brief overview of what you will hear from us today 2 3 1 Improve margins in our Maintain leadership Build a stream of core manufacturing role in markets with recurring revenue to business strong secular growth reduce cyclicality drivers Our goal is to leverage our market-leading position and focus
Slide 10: An Established Industry Leader / Distinctive Footprint / Continuing Evolution
An Established Industry Leader Distinctive Footprint & Operating Model The Continuing Evolution of Greenbrier
Slide 11: The Greenbrier Companies is a leading railcar manufacturer and lessor
The Greenbrier Companies is a leading railcar manufacturer and lessor Annual railcar Railcars in lease ~33,000 ~12,300 production capacity fleet Revenue visibility Strong financially Recurring revenue available $3.1bn backlog ~$815mn 35% growth liquidity 11 Note: Figures as of February 28, 2023
Slide 12: Greenbrier has a leading position in each of its geographic end markets
Greenbrier has a leading position in each of its geographic end markets North American Backlog Share of Brazilian Production European Wagon Building Capacity 8% 12% 4% 22% 21% 5% 4% 3% 99% 93% 33% 7+ Small 26% 54% 30% 77% 76% builders, Top 5, excl. 30% GBX, 46% 50% 49% 45% 34% Greenbrier, 24% 2019 2
Slide 13: We have grown and diversified our business through disciplined execution
We have grown and diversified our business through disciplined execution Legacy Today Outcome Limited product portfolio Complete product portfolio Significant growth and Manufacturing with production capacity in with flexible capacity in improved profitability Canada & Oregon Mexico & Arkansas Top 5
Slide 14: We have significantly increased our addressable market through M&A and JVs
We have significantly increased our addressable market through M&A and JVs Greenbrier Addressable Market August 2016 October 2016 May 2017 19.5% stake in Amsted- Formation of Increased stake to 60% stake Maxion Hortolandia Greenbrier ASTRA Rail in Greenbrier-Maxion (rebranded Greenbrier- Maxion) +40
Slide 15: Our manufacturing capabilities have expanded dramatically over the last decade
Our manufacturing capabilities have expanded dramatically over the last decade NA Industry Legacy Today Backlog Conventional Covered Hoppers 26,079 Specialty Conventional Tank Cars 14,207 Specialty Box Cars Railcar Portfolio 8,234 Gondolas 5,916 Flat Cars 4,715 Open-Top Hoppers 547 Hopper Car Outlet
Slide 16: ARI sold mainly to operating lessors & leased much of its production to shippers
ARI sold mainly to operating lessors & leased much of its production to shippers 16
Slide 17: We are an established railcar lessor with scalable presence
We are an established railcar lessor with scalable presence and potential for significant growth FOUNDATION OF A PREMIER RAILCAR LESSOR 17
Slide 18: An Established Industry Leader / Distinctive Footprint / Continuing Evolution
An Established Industry Leader Distinctive Footprint & Operating Model The Continuing Evolution of Greenbrier
Slide 19: An industry leader on three continents with a strategic operational footprint
An industry leader on three continents with a strategic operational footprint ✓ Scaled in our end markets ✓ Close to our customers ✓ Aligned with trend towards onshoring 19
Slide 20: Delivering value to our customers throughout railcar life cycle
Delivering value to our customers throughout railcar life cycle Produce virtually all Greenbrier has a fleet of (1) types of railcars for the ~12,300 railcars in North American, North America, covering Railcar Railcar European and Brazilian numerous car types Manufacturing Leasing markets. which ser
Slide 21: We are driven by our values and commitments we have made to our stakeholders
We are driven by our values and commitments we have made to our stakeholders 2022 ESG Report highlights: • Advances ESG strategy which is built on a five- pillar foundation based on 2021’s materiality assessment • Focuses on pillars of Safety & Quality, People, Environmental Sustainability, Governan
Slide 22: We strive to be the standard setter in the freight transportation industry
We strive to be the standard setter in the freight transportation industry 22
Slide 23: Force multipliers shaping our business
Force multipliers shaping our business LEASE CAPITAL AFTERMARKET PRODUCT HUMAN CAPITAL POLICY ORIGINATION MARKETS SERVICE INNOVATION MANAGEMENT ADVOCACY One of the Access to Long track record Highly skilled Engaged Broad largest lease premier asset- of delivering workforce at advocate to aftermarket
Slide 24: Greenbrier's superior lease origination capability is a key enabler
Greenbrier’s superior lease origination capability is a key enabler to our business Manufacturing Order Breakdown 24% 25% 33% 34% 41% 60% 76% 75% 67% 66% 59% 40% 2018 2019 2020 2021 2022 2023 Direct Sales Leased Railcars 24
Slide 25: Since FY18, we have syndicated +18,500 railcars
Since FY18, we have syndicated +18,500 railcars and generated over $2.2 billion in proceeds Syndication Revenue ($ millions) Syndication Benefits • Allows for continuous and enhanced commercial engagement with the rail market’s customer base $617 $580 • Extends the relationship between end user $51
Slide 26: Maintenance services network provides strategic services to railcar owners
Maintenance services network provides strategic services to railcar owners 20 Production Facilities 491,000 maintenance hours annually 310,000 wheelsets and 90,000 axles annually 42,000 parts/units annually 26
Slide 27: Leveraging our expertise for railcar refurbishments & sustainable conversions
Leveraging our expertise for railcar refurbishments & sustainable conversions Promotes conservation and production efficiency Environmentally friendly and reduces waste Cost-savings for owners looking to diversify and optimize their fleets Covered Hopper Auto Carrier Tank Car 27
Slide 28: Long track record of manufacturing innovation to meet our customers' needs
Long track record of manufacturing innovation to meet our customers’ needs 28
Slide 29: Robust engineering presence supports global manufacturing footprint
Robust engineering presence supports global manufacturing footprint Europe North America South America 51 engineers 47 engineers 20 engineers Global Industry Oversight Representation on 35+ industry committees governing railroad and rail 586 yrs. of experience 663 yrs. of experience 261 yrs. of expe
Slide 30: Greenbrier's Human Capital Management integrates with our broader objectives
Greenbrier’s Human Capital Management integrates with our broader objectives Safety Incident 1.09 Rate 100% DART Rate .95 Employee Resource Groups 72% 95% Participation Rate of DEI Training at U.S. Employee Engagement Production Sites Survey Completion Rate 7 30 * Source: Association of American Rai
Slide 31: Policy advocacy to protect & promote growth of freight rail
Policy advocacy to protect & promote model growth of freight rail Regulatory Agencies, Trade Associations & Coalitions Congress & The Administration ▪ Engage Congress on vital legislative and AAR Interchange Agreement are the “rules of the railroad.” Both executive actions impacting rail: regulator
Slide 32: An Established Industry Leader / Distinctive Footprint / Continuing Evolution
An Established Industry Leader Distinctive Footprint & Operating Model The Continuing Evolution of Greenbrier
Slide 33: Our Vision
Our Vision At Greenbrier, we deliver customer value through an integrated portfolio of freight rail transportation products and related services that provide shareholders superior returns across economic cycles. 33
Slide 34: Strategic Initiatives
Strategic Initiatives Balanced Continued Growth of approach to manufacturing recurring capital excellence revenue 1 2 3 allocation 34
Slide 35: Clear steps are being taken to improve manufacturing margins
Clear steps are being taken to improve manufacturing margins in North America and Europe Action North America Europe Capacity rationalization Cost optimization Additional manufacturing efficiencies Leverage purchasing economics Streamline & simplify product range Systems upgrades Transfer best pract
Slide 36: We are focused on growth in segments that drive aggregate gross margins
We are focused on growth in segments that drive aggregate gross margins Contribution of non-Manufacturing Activities to Consolidated Margin 6.3% 4.4% 4.3% 4.0% 3.9% 3.2% 2018 2019 2020 2021 2022 LTM 2/28/23 36
Slide 37: Expansion of recurring revenue from North American leasing operations
Expansion of recurring revenue from North American leasing operations Annual Investment in Lease Fleet We are growing our strategic $300M annually investment in Greenbrier’s lease $100M $100M $100M $100M $100M fleet from $200 to $300 million annually over the next five years. $200M $200M $200M $200M
Slide 38: Achieving strategic goals through lease fleet investment
Achieving strategic goals through lease fleet investment Strategic Goal Investment in Lease Fleet Drive volume to our business units Increase through cycle earnings stability Maximize tax benefits to enhance liquidity Invest in long-lived assets with strong residual values 38
Slide 39: Disciplined approach to capital allocation
Disciplined approach to capital allocation • Preserve strong liquidity position Maintain Strong • Structure debt facilities to align with 1 Balance Sheet business • Investing in our long-term lease fleet to Drive Through Cycle increase recurring revenue and smooth 2 Earnings cyclicality • Continued
Slide 40: Presenting our long-term targets
Presenting our long-term targets 40
Slide 41: Key takeaways
Key takeaways Optimize our industrial footprint for efficiency and margin enhancement, while addressing the needs 1 of our customers. Expand our leasing & services market share to drive recurring revenues, increase margin and reduce the 2 impact of manufacturing cyclicality. Maintain our manufacturi
Slide 42: Pursuing Excellence in North America
Pursuing Excellence in North America Bill Krueger President, Greenbrier Manufacturing Operations
Slide 43: Leading Position & Supportive Backdrop / Managing Production Capacity / Optimizing Production
Leading Position & Supportive Backdrop Effectively Managing Production Capacity Optimizing Production to Enhance Profitability
Slide 44: Greenbrier has maintained a significant share of North American new railcar orders
Greenbrier has maintained a significant share of North American new railcar orders North American New Railcar Orders 9% 11% 12% 13% 13% 17% 2% 21% 22% 24% 25% 7% 5% 6% 32% 9% 5% 5% 4% 3% 5% 3% 38% 27% 45% 60% 41% 49% 43% 37% 35% 33% 34% 5% 7% 7% 15% 16% 7% 13% 47% 45% 38% 32% 29% 29% 28% 24% 22% 21%
Slide 45: Consolidation has shifted the competitive landscape and reduced capacity
Consolidation has shifted the competitive landscape and reduced capacity Backlog Market Share 19 Active Production Plants in 2000 11 Active Production Plans Today 8% 8% 5% 4% 7% 25% 54% 18% 10% 12% 34% 15% 2022 2000 45 GBX ARI NSC Thrall TRN UTLX Other RAIL
Slide 46: Greenbrier has a leadership position across all major product types
Greenbrier has a leadership position across all major product types Description GBX RAIL TRN NSC UTLX Auto Rack Boxcar Refrigerated Flatcar Covered Hopper Gondola Intermodal Open-Top Hopper Tank Car 46 Primary Position Secondary Position
Slide 47: Diverse manufacturing capabilities are vital as our customer requirements change
Diverse manufacturing capabilities are vital as our customer requirements change North American Railcar Deliveries 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Tank Cars Covered Hoppers Gondolas Boxcars Flat Cars Open-Top Hoppers 47 Source: ARCI
Slide 48: Greenbrier North American manufacturing has transformed over the last decade
Greenbrier North American manufacturing has transformed over the last decade ~10+ Years Ago Now Outcomes Expanding into hoppers Reducing production costs High-quality, premium and tanks from intermodal in a rapidly changing supply product that is cost Focus and forest product railcars chain environm
Slide 49: Long track record of manufacturing innovation to meet our customers' needs
Long track record of manufacturing innovation to meet our customers’ needs Solving customer problems is in Greenbrier’s DNA Tsunami Double-stack Tank Car of Hatch™ Intermodal the Future & Tsunami Well (DOT 117) Gate™ Multi-Max™ & Virtual Sample High-Strength Multi-Max Railcar™ Steel Plus™ Gondola™ 4
Slide 50: Railcar demand is expected to approximate replacement demand
Railcar demand is expected to approximate replacement demand over the next several years North American Railcar Deliveries 49,465 42,500 40,950 40,735 40,575 36,750 33,417 29,280 2020 2021 2022 2023F 2024F 2025F 2026F 2027F Tanks Covered Hoppers Other Conversions 50 Source: FTR, RSI, GBX Marketing F
Slide 51: Railcars in storage has decreased by +25% in the last two years
Railcars in storage has decreased by +25% in the last two years, and 114k cars have been scrapped Railcars in Storage Scrapped Railcars 400,000 7,000 6,500 6,000 350,000 5,500 5,000 300,000 4,500 4,000 3,500 250,000 3,000 2,500 200,000 2,000 51 Source: AAR
Slide 52: Leading Position & Supportive Backdrop / Managing Production Capacity / Optimizing Production
Leading Position & Supportive Backdrop Effectively Managing Production Capacity Optimizing Production to Enhance Profitability
Slide 53: Railcar backlog has historically provided strong visibility into capacity requirements
Railcar backlog has historically provided strong visibility into capacity requirements Greenbrier New Railcar Backlog $5.0 $160 $4.5 $160 $4.7 $4.0 $160 $3.5 $159 $3.5 $3.0 $3.3 $3.3 $3.2 $3.1 $2.5 $159 $2.8 $2.8 $2.7 $2.0 $2.4 $159 $1.5 $159 $1.5 $1.0 $1.2 $159 $0.5 $0.0 $158 2012 2013 2014 2015 20
Slide 54: Manufacturing capacity was rapidly downsized as COVID-19 impacted demand
Manufacturing capacity was rapidly downsized as the COVID-19 pandemic impacted market demand Over the course of 6 months, we dramatically Greenbrier Railcar Deliveries downsized our manufacturing capacity ✓ Reduced headcount by over 6,500 employees, or 23,400 ~40%, in FY2020 21,700 ✓ Slowed producti
Slide 55: We have ramped up capacity significantly since 2021
We have ramped up capacity significantly since 2021 as demand has recovered We increased capacity by +80% over 18 months in Greenbrier Railcar Deliveries 2021 and 2022 ✓ Safely increased headcount by nearly 5,400 23,400 employees, or by ~108% 19,900 ✓ Restarted 13 production lines across six facilit
Slide 56: Leading Position & Supportive Backdrop / Managing Production Capacity / Optimizing Production
Leading Position & Supportive Backdrop Effectively Managing Production Capacity Optimizing Production to Enhance Profitability
Slide 57: We are focused on expanding through cycle margins
We are focused on expanding through cycle margins Strategic Priorities Capacity Rationalization Cost Optimization Efficiencies 57
Slide 58: Capacity rationalization creates $15 - $20 million in annual savings
Capacity rationalization creates $15 - $20 million in annual savings on an ongoing basis We are taking steps to optimize our manufacturing footprint. Ongoing annual savings of $15 - • Production footprint and capacity optimization $20 million for more stable demand environment • Will evaluate additi
Slide 59: Cost optimization leverages vertical integration gained through ARI acquisition
Cost optimization leverage the vertical integration gained through the ARI acquisition We are leveraging our vertical integration... Optimizations create $50 - $55 • Making vs buying components will save million of annual costs and help us control our supply chains savings • Initially focused in Mex
Slide 60: Illustrative insourcing example
Illustrative insourcing example 60
Slide 61: Taking additional actions to further enhance manufacturing efficiency
Taking additional actions to further enhance manufacturing efficiency Tactic Time Horizon Progress Benchmarking of plant labor <1 year efficiencies Implement system-wide best 3 years practices Railcar design optimization 4 years Product engineering to reduce 5 years material usage / weight 61
Slide 62: Key takeaways
Key takeaways Market Large, but Focused on 1 2 3 leadership nimble execution Well-positioned to maximize Experienced management team Plan to improve profitability production efficiency during that can execute production regardless of demand period of stable demand changes rapidly and effectively env
Slide 63: The European Opportunity
The European Opportunity William Glenn Chair of The Management Board, Greenbrier Astra Rail B.V.
Slide 64: Key differences between European and North American rail freight
Key differences between European and North American rail freight Rail Freight Market USA Europe* Rail Freight Deregulated 1988 Completed 2016 Rail share of freight 40% 19% Primary power source Diesel Electric Primary Traffic Freight Passenger Track Ownership Private Government – open access Regulati
Slide 65: Deregulation drives competition & consolidation
Deregulation drives competition & consolidation Impact of Deregulation Operating Lessors in Europe ▪ Open access allows efficient, low-cost private operators to compete with high-cost state incumbents Others (10+ players), 15% ▪ Incumbents lose market share and incur TOUAX, 5% huge financial losses.
Slide 66: Climate initiatives and aging fleet to drive fleet growth
Climate initiatives and aging fleet to drive fleet growth The Green Deal European Fleet Age vs NA ▪ Goal: become the first climate neutral 1.600.000 678.000 continent by 2050 100% ▪ € 1 Trillion program over 10 years > 30 years 22% 38% ▪ EU Shift2Rail Program 20 - 30 years 21% ▪ Double modal share o
Slide 67: Climate initiatives create significant tailwind for freight demand
Climate initiatives create significant tailwind for freight demand Growth in Rail Freight Transport Estimated Annual Freight Wagon Demand (billion t-km) (# of wagons) 22.000 Estimated 2023 deliveries 10.000 12.000 Replacement Growth Total Demand Demand 67 Source: SCI, Company Estimates
Slide 68: Greenbrier is a leading player in Europe
Greenbrier is a leading player in Europe GBX Europe Competitive Position ▪ #2 Builder in Europe ▪ 25-30% estimated market share ▪ Estimate market share of top 5 builders is 70% ▪ Broad Product Portfolio ▪ Portfolio includes all key wagon types ▪ Market leading position in major specialty markets ▪ B
Slide 69: Upside from operational improvement & leasing
Upside from operational improvement & leasing Margin Expansion from Operational Improvements Leverage Leasing Distribution Channel ▪ Streamline manufacturing footprint▪ Replicate successful NA syndication model − Produce more wagons in less facilities ▪ Leasing distribution channel improves manufact
Slide 70: Growth potential for Greenbrier in Europe
Growth potential for Greenbrier in Europe European market set for growth 1 • Fully deregulated market improves rail competitiveness • Replacement demand from ageing fleet • Growth in modal share driven by EU climate policy objectives Competitively positioned with strong fundamentals 2 • Operating at
Slide 71: Growth in Less Cyclical, Higher Margin Segments
Growth in Less Cyclical, Higher Margin Segments Brian Comstock Chief Commercial & Leasing Officer
Slide 72: Unlocking value in Greenbrier's business model
Unlocking value in Greenbrier’s business model Strong building blocks for growth Smoothing performance across the cycle
Slide 73: Delivering value to our customers throughout railcar life cycle
Delivering value to our customers throughout railcar life cycle Railcar Railcar Manufacturing Leasing Maintenance Railcar Services Management 73
Slide 74: An illustrative example of how we act as a complete solutions provider
An illustrative example of how we act as a complete solutions provider to our customers Wheels & Incremental Benefits Parts + Syndication of railcars to Maintenance Services customer + Management Services Purchase of secondary market + railcars from customer Manufacturing Adds revenue Large-scale ra
Slide 75: Our Management Services business delivers comprehensive service to lessor customers
Our Management Services business delivers comprehensive service to lessor customers (1) ~450,000 assets currently under management Customers include railroads, industrial shippers, investors, operating lessors Keep asset within repair & maintenance rules and fit for service Manages railcar Manages t
Slide 76: Strategically located aftermarket service network serves a broad range of customers
Strategically located aftermarket service network serves a broad range of customers Key customers served: Greenbrier, Trinity Rail, Wells Fargo Rail, CIT, SMBC, Union Tank, GATX Corporation, Martin Marietta, Canadian, Port Terminal, Standard Steel, Mountaineer, TSI, Santee Cooper, Rocky Mountain, Pr
Slide 77: Leasing is integral to the ongoing success of our business
Leasing is integral to the ongoing success of our business Maintain & Originate Manufacture Hold Syndicate Manage Strong origination Greenbrier Railcars reside on Railcars aggregated Long term capabilities and Manufacturing the balance sheet, and sold to 3rd management fees disciplined builds railca
Slide 78: Strong lease origination capabilities & disciplined approach to underwriting
Strong lease origination capabilities & disciplined approach to underwriting Counterparty Considerations Expected Outcomes ✓ Consistent high utilization rate Longstanding customer ✓ Diversification across lessees Investment grade credits ✓ Appropriate concentrations Clean payment history ✓ Low bankr
Slide 79: Lease fleet development is based on internal manufacturing & external asset sourcing
Lease fleet development is based on internal manufacturing & external asset sourcing Counterparty Considerations Expected Outcomes ✓ Consistent high utilization rate GBX manufactured equipment ✓ Lease rate stability Other reputable manufacturers ✓ Diversification across car types High demand cars ✓
Slide 80: Syndication drives liquidity and supports our broader capital allocation strategy
Syndication drives liquidity and supports our broader capital allocation strategy Activities Impacts Syndication activity generates liquidity, premium returns and fee $2.2 billion in proceeds generated since FY18 income Accessing more efficient third- Helps to do more business with individual (1) cu
Slide 81: Syndication drives liquidity in support of our broader capital allocation strategy
Syndication drives liquidity in support of our broader capital allocation strategy Railcars Syndicated Syndication Revenue ($ millions) $617 $580 4,800 4,600 $511 4,200 3,175 $367 2,550 $253 $193 1,500 2018 2019 2020 2021 2022 LTM 2018 2019 2020 2021 2022 LTM 2/28/23 2/28/23 81
Slide 82: Leasing supports baseline manufacturing capacity & fills gaps in production
Leasing supports baseline manufacturing capacity & fills gaps in production North American Manufacturing Orders by Quarter Leasing strategy launched Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2020 2021 2022 2023 Direct Sale Lease Avg. Quarterly Total 82
Slide 83: Our leasing strategy has changed significantly to capture greater market share
Our leasing strategy has changed significantly to capture a greater share of the market opportunity Greenbrier’s leasing strategy was revised in April 2021, enhancing our prior “asset-light” model ✓ Recurring earnings and cashflows ✓ Reduces exposure to new railcar delivery cycle ✓ Purchase new rail
Slide 84: Our business strategy aligns with the evolving nature of railcar ownership
Our business strategy aligns well with the evolving nature of railcar ownership 25% 16% 47% 57% 19% 17% 9% 10% (2012) (2022) (2012) (2022) (2012) (2022) (2012) (2022) RAILROADS LESSORS SHIPPERS TTX POOL • Overall ownership continues • Shift from RR and shipper- • Shipper ownership share • Overall ma
Slide 85: Unlocking value in Greenbrier's business model
Unlocking value in Greenbrier’s business model Strong building blocks for growth Smoothing performance across the cycle
Slide 86: Strong foundation is in place for the next stage of Greenbrier's evolution
Strong foundation is in place for the next stage (1) of Greenbrier’s evolution Lease Types 12,300 4.1 Yrs railcars avg. remaining term 1% 22% ~$1.0Bn 122 net book value # of customers 76% 8.5 Yrs 98.7% avg. railcar age fleet utilization (LTM) Full service Net lease Offlease 86 (1) As of February 28,
Slide 87: A high-quality portfolio of railcars with diversification across car types and commodities
A high-quality portfolio of railcars with diversification across car types and commodities (1) (1) Lease Fleet Railcars by Age Lease Fleet Railcar Types OTH/Gondola, 7.8k 12% Tank, 25% 12,300 Box/Flat/Auto, railcars 26% 1.5k 1.3k 0.6k 0.5k 0.3k 0.2k Covered Hopper, 0.1k 37% 0-5 6-10 11-15 16-20 21-2
Slide 88: Staggered lease terms balance upside potential while mitigating cyclicality
Staggered lease terms balance upside potential while mitigating impact of cyclicality (1) Lease Expirations by Fiscal Year 2,800 2,600 1,500 1,200 1,200 1,000 900 800 200 100 2023 2024 2025 2026 2027 2028 2029 2030+ MTM Off Lease 88 (1) As of February 28, 2023
Slide 89: Traditional, non-recourse financing has been obtained to align with leased assets
Traditional, non-recourse financing has been obtained to better align with leased assets Leasing Fleet Debt & Leverage Variety of financing options being utilized for lease fleet growth, including: Non-recourse warehouse Leasing ABS notes Non-recourse debt Fleet Leverage ✓ $350 million leased railca
Slide 90: Utilization has increased and stabilized as the leased fleet begins to achieve scale
Utilization has increased and stabilized as the leased fleet begins to achieve scale Lease Fleet Utilization 99% 98% 98% 98% 98% 97% 97% 97% Leasing strategy launched 95% 95% 94% 94% 93% 93% 92% 90% 90% 89% 1Q 19 2Q 19 3Q 19 4Q 19 1Q 20 2Q 20 3Q 20 4Q 20 1Q 21 2Q 21 3Q 21 4Q 21 1Q 22 2Q 22 3Q 22 4Q
Slide 91: Leasing & Management Services achieving consistently improving financial performance
Leasing & Management Services achieving consistently improving financial performance Segment Margin Segment Margin % 69% 68% $123 66% $105 55% $92 $86 31% $49 2019 2020 2021 2022 LTM 2/28/23 2019 2020 2021 2022 LTM 2/28/23 91
Slide 92: Recurring revenue has grown by ~35%
Recurring revenue has grown by ~35% (1) (2) Owned Fleet Managed Fleet Recurring Revenue ($Mn) ~ 450,000 12,300 $113 390,000 9,400 $83 2019 Current 2019 Current 2019 LTM 2/28/2023 (1) As of February 28, 2023 92 (2) As of March 31, 2023
Slide 93: Unlocking value in Greenbrier's business model
Unlocking value in Greenbrier’s business model Strong building blocks for growth Smoothing performance across the cycle
Slide 94: We have established a holistic plan to optimize our Leasing & Services businesses
We have established a holistic plan to optimize our Leasing & Services businesses Action Expected Outcome Increase in recurring revenue smoothes consolidated Expanded commitment Lease Fleet performance across the cycle Increased overhead absorption, improved system-wide Enhanced integration Capacity
Slide 95: Strategically committed to increasing a profitable, durable revenue stream
Strategically committed to increasing a profitable, durable revenue stream Increasing net • Drives manufacturing volume Annual Margin investment in • Drives repair / management volume $15 - 20M owned fleet to: • Expanded market share • Strengthens customer >$300M / year relations for the next 5 • Re
Slide 96: Diverse, flexible funding with minimal covenants to ensure through-cycle liquidity
Diverse, flexible funding with minimal covenants to ensure consistent through-cycle liquidity • Low cost of capital results in attractive lease rates for customers Pricing and desired economics for Greenbrier • ABS: Low fixed rate capital, longer maturities, secondary market liquidity Non-recourse •
Slide 97: Actions we have undertaken to improve performance of maintenance services
Actions we have undertaken to improve performance of maintenance services Maintenance Services Margin % ✓ Rationalizing network capacity to eliminate underperformers 9% ✓ Standardizing operating processes 7% ✓ Investing in training and workforce 7% development 6% 5% ✓ Investing in locations to minim
Slide 98: We are building a significant stream of recurring revenue through leasing & management
We are building a significant stream of recurring revenue through leasing & management Indicative growth in recurring revenue from leasing & management services ($ millions) $260 $113 Impact of $99 $83 $82 targeted $74 $73 investment 2018 2019 2020 2021 2022 LTM 2/28/2023 Target 98
Slide 99: Strong growth drivers & internal synergies to execute our strategy
Strong growth drivers & internal synergies to execute our strategy Opportunity Customers Lease Fleet Synergies Utilization Significant opportunity Origination of leases Greenbrier will Consistently strong Unlocking revenue to grow services and access to continue to invest in leased fleet utilization
Slide 100: Disciplined Growth & Margin Expansion
Disciplined Growth & Margin Expansion Adrian Downes Chief Financial Officer
Slide 101: Performance Highlights / Disciplined Capital Allocation / Recapping Our Targets
Performance Highlights Disciplined Capital Allocation Recapping Our Targets
Slide 102: Consistently strong revenue generation, with revenues returning to pre-pandemic levels
Consistently strong revenue generation, with revenues returning to pre-pandemic levels Consolidated Revenue ($ millions) $3,633 $3,034 $2,978 $2,792 $1,748 2019 2020 2021 2022 LTM 2/28/23 Consolidated Revenue 10-year Average 102
Slide 103: Historical gross margin dollars highlight potential for significant cash flow generation
Historical gross margin dollars highlight potential for significant cash flow generation Consolidated Margin ($ millions) $390 $366 $353 $306 $232 2019 2020 2021 2022 LTM 2/28/2023 Consolidated Margin 10-year Average 103
Slide 104: Proven history of growing EBITDA through cycles
Proven history of growing EBITDA through cycles; current trough is 3.1x prior trough average Adjusted EBITDA ($ millions) 3.1x higher than $474 ’09 – ’10 trough $434 average EBITDA $317 $318 $310 $291 $284 $254 $231 $163 $161 $145 $129 $112 $113 $103 $90 $76 $64 2005 2006 2007 2008 2009 2010 2011 20
Slide 105: Performance Highlights / Disciplined Capital Allocation / Recapping Our Targets
Performance Highlights Disciplined Capital Allocation Recapping Our Targets
Slide 106: Key elements of our disciplined, well-defined capital allocation policy
Key elements of our disciplined, well-defined capital allocation policy 1 2 3 Maintain a Strong Drive Through Return Capital to Balance Sheet Cycle Earnings Shareholders • Maintain strong • Grow leasing fleet • 36 consecutive liquidity position through investment quarters of dividends • Have capacit
Slide 107: Strong liquidity position is foundational
Strong liquidity position is foundational Total Liquidity ($ millions) $920 $835 $816 $86 $690 $188 $641 $147 $436 $477 $311 $834 $214 $647 $543 $380 $330 $263 2019 2020 2021 2022 11/30/22 2/28/23 Cash Borrowing Availability 107
Slide 108: Leasing drives liquidity in support of our broader capital allocation strategy
Leasing drives liquidity in support of our broader capital allocation strategy Fleet Proceeds & Syndication Liquidity ($ millions) ✓ Syndication creates the opportunity to hold originated railcars in our fleet $703 $680 $666 or sell them to support liquidity ✓ Regular rebalancing and $448 $404 optim
Slide 109: No near-term debt maturities & ~95% of debt is fixed
No near-term debt maturities & ~95% of debt is fixed at an average rate of 3.6% $374 $313 $219 $206 $66 $48 2023 2024 2025 2026 2027 2028 2029 2024 Convert. Note Leasing Warehouse GBX Term Loan Leasing Term Loan 2028 Convert. Note ABS Notes 109
Slide 110: Corporate recourse debt will be materially reduced over the next several years
Corporate recourse debt will be materially reduced over the next several years Recourse vs. Non-Recourse Debt ($ millions) Net Funded Debt to Adjusted EBITDA 4.4x 4.4x $1,000 $976 $941 $941 3.8x $717 $671 $587 2.0x 1.8x $347 1.0x $217 $209 2019 2020 2021 2022 2/28/2023 2019 2020 2021 2022 LTM Target
Slide 111: Increasing our investment in our lease fleet to deliver through cycle performance
Increasing our investment in our lease fleet to deliver through cycle performance Annual Investment in Lease Fleet ($ millions) $300M annually $100M $100M $100M $100M $100M $200M $200M $200M $200M $200M $170M $90M 2021 2022 2023F 2024F 2025F 2026F 2027F Net Investment Prior Commitment Incremental Co
Slide 112: Committed to returning value through dividends & share repurchases
Committed to returning value through dividends & share repurchases Dividends by Year ($ millions) ✓ Over $247 million paid in dividends since 2014 ✓ Dividend has grown by 80% $35.8 $35.8 $35.6 $35.2 since 2014 $33.2 ✓ Committed to regularly growing the dividend $29.9 ✓ $17 million purchased in Q2 un
Slide 113: Performance Highlights / Disciplined Capital Allocation / Recapping Our Targets
Performance Highlights Disciplined Capital Allocation Recapping Our Targets
Slide 114: Growth in recurring revenue in higher margin segment
Growth in recurring revenue in higher margin segment Indicative Growth in Recurring Revenue from Leasing & Management Services ($ millions) $260 $113 Impact of $103 $99 $83 targeted $75 $73 investment 2018 2019 2020 2021 2022 LTM 2/28/23 Target 114
Slide 115: We have already identified margin dollars with other plans underway
We have already identified between $65 – 75 million of margin dollars with other plans underway Action North America Europe Capacity rationalization Cost optimization Additional manufacturing efficiencies Leverage purchasing economics Streamline & simplify product range Systems upgrades Transfer bes
Slide 116: Summarizing our long-term targets
Summarizing our long-term targets 116
Slide 117: Key takeaways
Key takeaways Well positioned to generate strong cash flow to deleverage the Balance Sheet and invest in the 1 business Management team focused on improving operating performance from existing footprint 2 Capital allocation policy that will generate robust returns for shareholders 3 117
Slide 118: Appendix
APPENDIX SLIDES AMG rrr w = FT} i iy J ( | WO | Hi ial Ae
Slide 119: Annual Adjusted EBITDA Reconciliation
Annual Adjusted EBITDA Reconciliation Reconciliation of Net Earnings (loss) to Adjusted EBITDA (In millions) Year Ending August 31, LTM 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2/28/2023 $29.8 $39.0 $18.5 $14.2 ($57.9) $8.3 $8.4 $61.2 ($5.4) $149.8 $2
Slide 120: Quarterly Adjusted EBITDA Reconciliation
Quarterly Adjusted EBITDA Reconciliation Supplemental Disclosure Reconciliation of Net Earnings (Loss) to Adjusted EBITDA (In millions, unaudited) Quarter Ending Feb. 28, May 31, Aug. 31, Nov. 30, Feb. 28, 2022 2022 2022 2022 2023 Net earnings (loss) $11.2 $7.6 $29.4 ($17.3) $36.8 Interest and forei
Slide 121: Quarterly Adjusted Diluted EPS Reconciliation
Quarterly Adjusted Diluted EPS Reconciliation Supplemental Disclosure Reconciliation of Net Earnings (Loss) Attributable to Greenbrier to Adjusted Net Earnings (In millions, except per share amounts, unaudited) Quarter Ending Feb. 28, May 31, Aug. 31, Nov. 30, Feb. 28, 2022 2022 2022 2022 2023 Net e