Nfi Group Inc. · TSX:NFI
Nfi — Q2 2024 Earnings Presentation
35 slides from Nfi's earnings presentation, Aug 1, 2024
Slide 1: NFI Group Inc. Second Quarter 2024 Results
NFI Group Inc. Second Quarter 2024 Results July 31, 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 buses represents one production “slot”, being are classified as "transit buses". ARBOC one 30-foot, 35-foot, 40-foot, 45-foot manufactures body on-chassis or “cutaway” and heavy-duty
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 195M+ 4,088 $11.8B Electric service miles ZEB EUs delivered since Value of total backlog1 driven 2015 (14,605 EUs) 53% 23% 41% of North American of 2024 Q2 deliveries were of total backlog1 is ZEB EUs Public Bid Universe is ZEB EUs (284 EUs) (6,001 EUs) ZEBs 15
Slide 8: Second Quarter 2024 Results
Second Quarter 2024 Results Leading the ZEvolution”
Slide 9: 2024 Q2 Financial Summary
2024 Q2 Financial Summary Significant 28,177 EUs in North 107% +21% +69% 52% Book-to-Bill2 for Increase in new Increase in new Option Demand Growth American Total LTM 2024 Q2 orders (2024 Q2 orders (LTM 2024 Q2 conversion rate Bid Universe vs. 2023 Q2) vs. LTM 2023 Q2) for 2024 Q2 Financial +29% 12%
Slide 10: Increasing Production Rates yet managing Working Capital
Increasing Production Rates yet managing Working Capital Total NFI Inventory US$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 1,234 1,080 1,053 1,054 990 1,017 929 962 819 813 858 832 796 589 714 $80 $84 $77 $103 $71 $74 $59
Slide 11: 2024 Q2: Backlog and Deliveries
2024 Q2: Backlog and Deliveries Backlog1 – Firm and Option Backlog1 – Year Options Expiry Backlog1 – By Product Type Firm Options 14,783 14,605 Backlog1: 2024 Q2 EUs Q2 2024 Option Conversion Rate = 52% 10,071 10,586 9,803 9,556 9,190 9,235 5,161 4,714 4,693 5,574 Motor Coach 4% Heavy-Duty 4,910 5,0
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% 28.5% 26.3% 25.5% Aftermarket GM% 22.5% Manufacturing GM% 6.6% 8.0% 13.8% 12.0% 12.8% 8.7
Slide 13: Quarterly Adjusted EBITDA
Quarterly Adjusted EBITDA NFI Segment Quarterly Adjusted EBITDA1 $M $54 Manufacturing Aftermarket $45 $36 $38 $32 $34 $35 $30 $30 $30 $25 $26 $25 $23 $21 $23 $22 $23 $17 $17 $18 $12 $11 $2 ($2) ($8) ($16) ($14) ($23) ($32) ($31) ($37) ($40) ($42) 2020 Q2 2020 Q3 2020 Q4 2021 Q1 2021 Q2 2021 Q3 2021
Slide 14: Q2 2024 Net Earnings (Loss) and Adjusted Net Earnings (Loss)
Q2 2024 Net Earnings (Loss) and Adjusted Net Earnings (Loss) Net Earnings (Loss) ($M) Adjusted Net Earnings (Loss) ($M)1 2023 Q2 ($48.1) ($0.62) per share 2023 Q2 ($35.2) ($0.46) per share 2024 Q2 $2.5 $0.02 per share 2024 Q2 $3.1 $0.03 per share LTM Q2 2023 ($286.6) ($3.71) per share LTM Q2 2023 ($
Slide 15: Quarterly Free Cash Flow: 2020 Q1 to 2024 Q2
Quarterly Free Cash Flow: 2020 Q1 to 2024 Q2 NFI Free Cash Flow and Free Cash Flow Plus the Change in Working Capital by Quarter (2020 Q1 – 2024 Q2) $M Free Cash Flow $121 Free Cash Flow with Change in Working Capital $79 $77 $36 $27 $29 $15 $22 $13 $15 $12 $13 $10 $3 $1 ($19) ($12) ($21) ($24) ($21
Slide 16: Liquidity and Debt Maturities
Liquidity and Debt Maturities Debt Maturities 2025 – 2028 ($M) – total capacity Total Liquidity ($M)1 $188.2 $178.7 $861 $169.8 $166.4 $81.5 $250 $180 $0 $0 2024 2025 2026 2027 2028 2023 Q2 2023 Q3 2023 Q4 2024 Q1 2024 Q2 Senior Secured Convertible Second Lien Senior Unsecured Debentures Export Deve
Slide 17: Poised for Recovery
Poised for Recovery Leading the ZEvolution”
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: 2024 Q2 Market Updates
2024 Q2 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, expect even stronger showing in 2024 C$30B Canadian Public Transit Fund – largest public transit investment in Canad
Slide 20: Reiterate Forward Guidance and Targets
Reiterate Forward Guidance and Targets Revenue ($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 $2,519
Slide 21: Fiscal 2024 Seasonality and Margin Enhancement
Fiscal 2024 Seasonality and Margin Enhancement Adjusted EBITDA1 Expectations Half Year 2024 ($M) Directional Gross Margin (excl. D&A) per EU Manufacturing $ $187 Actuals Estimated $58,535 ~$147 $34,566 $93 $22,716 ($25,345) 2024 H1 2024 H2 2022 Q2 2023 Q2 2024 Q1 2024 Q2 2024 H2 2025 Actual Guidance
Slide 22: 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 $844.3 $831.7 $793.4 $721.1 $731.1 $707.3 $708.0 $692.0 $690.8 $665.0 $638.5 $635.
Slide 23: 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 24: Appendix
Appendix Leading the ZEvolution’
Slide 25: Non-IFRS Reconciliation: 2024 Q2
Non-IFRS Reconciliation: 2024 Q2 Reconciliation of IFRS to non-IFRS As of June 30, 2024 In '000 First Quarter Second Quarter Full Year Net Sales $ 722,749 $ 851,233 $ 1,573,982 Net NetLoss earnings (loss)1 $ (9,414) $ 2,547 $ (6,867) % of net sales -1.3% 0.3% -0.4% Adjustment, Gross Restructuring an
Slide 26: Non-IFRS Reconciliation: 2023 Q2
Non-IFRS Reconciliation: 2023 Q2 Reconciliation of IFRS to non-IFRS As of July 3, 2023 In '000 First Quarter Second Quarter Full Year Net Sales $ 524,411 $ 659,569 $ 1,183,980 Net Loss $ (45,964) $ (48,101) $ (94,065) % of net sales -8.8% -7.3% -7.9% Adjustment, Gross Restructuring and Other Corpora
Slide 27: Quarterly Backlog: 2019 Q1 to 2024 Q4
Quarterly Backlog: 2019 Q1 to 2024 Q4 NFI Quarterly Backlog1 in EUs (2019 Q1 – 2024 Q2) Firm Option 9,190 9,235 7,281 6,518 6,497 5,604 5,161 4,714 4,693 5,574 7,011 5,308 4,610 6,691 5,220 4,851 4,352 5,264 5,279 4,646 4,757 4,813 5,593 5,370 4,400 3,662 4,366 4,153 4,576 4,910 5,089 4,863 5,012 3,
Slide 28: Book-to-Bill Recovery Continues Above 100%
Book-to-Bill Recovery Continues Above 100% Book-to-Bill1 and Option Conversion1 (2014 – 2023, + LTM 2024 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 115.1% 113.0% 111.4% 105.6% 107.0% B
Slide 29: 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 Q2: 23% of total deliveries ZEBs as % Annual Deliveries were ZEB EUs ZEB as % of Backlog1 50% High end of gu
Slide 30: Half Year Adjusted EBITDA: 2019 to 2024
Half Year Adjusted EBITDA: 2019 to 2024 NFI Adjusted EBITDA1 Results by Half Year (2019 – 2024) $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 longer eligible Idled majority of $
Slide 31: 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$14.9B Transit Fundi
Slide 32: 2024 Q2: Income Statement, Cash Flow, Liquidity
2024 Q2: Income Statement, Cash Flow, Liquidity 2024 Q2 Performance 2024 Q2 Free Cash Flow 1 & Liquidity1 2024 Q2 2023 Q2 Free Cash Flow1 ($M) Sales $851.2M $660.3M 2024 Q2 2023 Q2 7.0% 1.8% Adjusted EBITDA1 $59.4 $12.2 ROS ROS Interest Expense ($29.6) ($30.1) $59.4 Current Income Tax ($12.2) $0.1 A
Slide 33: 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 34: 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 35: Leading the ZEvolution