Nfi Group Inc. · TSX:NFI
Nfi — Q3 2023 Earnings Presentation
40 slides from Nfi's earnings presentation, Nov 8, 2023
Slide 1: 2023 Q3 Financial Results
2023 Q3 Financial Results November 8, 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 140M+ 238 23% Electric service miles ZEB EUs delivered in of 2023 Q3 deliveries were driven 2023 Q3 ZEB EUs 52% 3,361 150+ of NA Public Bid ZEB EUs delivered since Cities have NFI ZEBs in Universe is ZEBs 2015 service or on order 36% 3,456 6 of total backlog1 i
Slide 9: 2023 Q3 Results
= So c=} 2 $ Leading the
Slide 10: 2023 Q3 Financial Summary
2023 Q3 Financial Summary Significant Record North American 122% +114% +93% +47% Book-to-Bill2 for Increase in total Increase in orders Increase in orders Demand Growth Total Bid LTM 2023 Q3 orders (YoY) for ARBOC for MCI vehicles Universe vehicles (YoY) (YoY) Financial +38% +43% 7% +184% ($39.9)M N
Slide 11: Significant Supply Chain Improvements in 2023
Significant Supply Chain Improvements in 2023 NFI Group Consolidated High and Moderate Risk Suppliers (Q4 2020 – Q3 2023) 2023 Update Note: 7 High Risk Suppliers in NFI top 750 Supplier performance has seen some challenges as production rates increase 92 At-risk suppliers continue be mitigated throu
Slide 12: Supply Chain Impacts On Production & WIP Improving
Supply Chain Impacts On Production & WIP Improving Supply improvements Total NFI Quarterly Vehicle Line Entries and Work-in-process (WIP) supporting recovery of production and lowering Inventory (2019 Q1 – 2023 Q3) of WIP $469 $500 1,637 $445 WIP $M $439 1,547 1,528 $412 $450 1,456 1,444 $385 $400 1
Slide 13: 2023 Q3: Backlog and Deliveries
2023 Q3: Backlog and Deliveries Backlog1 – Firm and Option Backlog1 – Timing Backlog1 – By Product Does not include 1,834 LTM 2023 Q3 Option Conversion Rate = 25% EUs of “awards Firm Options pending” to NFI Backlog1: 2023 Q3 EUs 10,071 9,803 9,556 8,505 9,186 Motor Coach 5,161 4,714 4,693 4,352 4,61
Slide 14: Quarterly Gross Margins: 2019 Q1 to 2023 Q3
Quarterly Gross Margins: 2019 Q1 to 2023 Q3 NFI Segment Quarterly Gross Margins including Depreciation and Amortization (2019 Q1 – 2023 Q3) 1 Manufacturing Aftermarket 30.0% 30.4% 30.4% 29.5% 30.0% 30.3% 31.9% 31.9% 30.0% 28.6% 30.2% 31.3% 31.5% 27.5% 28.5% 26.3% 26.9% 25.5% 22.5% 13.8% 12.0% 12.8%
Slide 15: 2023 Q3: Income Statement, Cash Flow, Liquidity
2023 Q3: Income Statement, Cash Flow, Liquidity 2023 Q3 Performance 2023 Q3 Free Cash Flow 1 & Liquidity1 2023 Q3 2022 Q3 Free Cash Flow1 ($M) Sales $709.6M $514.0M 2023 Q3 2022 Q3 1.6% (2.6%) Adjusted EBITDA1 $11.2 ($13.3) ROS ROS Interest Expense ($36.4) ($18.8) Current Income Tax ($3.0) ($7.2) Ad
Slide 16: 2023 Q3: Net Earnings and Adjusted Net Earnings
2023 Q3: Net Earnings and Adjusted Net Earnings Net Earnings (Loss) ($M) Adjusted Net Earnings (Loss) ($M)1 2022 Q3 ($40.2) ($0.53) per share 2022 Q3 ($45.6) ($0.60) per share 2023 Q3 ($39.9) ($0.42) per share 2023 Q3 ($38.3) ($0.41) per share 2022 Q3 LTM ($132.7) ($1.74) per share 2022 Q3 LTM ($150
Slide 17: Strong Demand Environment
Strong Demand Environment 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 Q1 2018 Q2 2018 Q3 2018 Q4 2019 Q1 2019 Q2 2019 Q3 2019 Q4
Slide 19: Strong Award and Delivery Activity in 2023 Q3
Strong Award and Delivery Activity in 2023 Q3 5,368 EUs 969 EUs 6,337 EUs New Awards New Awards New Awards in 2022 Q4-2023 Q2 2023 Q3 LTM 2023 Q3 + 1,834 EUs in Bid Award Pending at end of 2023 Q3 Select customer wins announced in 2023 Q3: Houston’s Metropolitan Transit Authority ordered up to 210 h
Slide 20: Book-to-Bill Recovery Continues Above 100%
Book-to-Bill Recovery Continues Above 100% Book-to-Bill1 and Option Conversion1 (2014 – 2023 Q3) 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 122.0% 115.1% 111.4% 105.6% Book-to-Bill1 expect
Slide 21: Developments in North America
Developments in North America NFI announced a battery pack supply agreement with American Battery Solutions to increase resiliency of NFI’s North American battery supply chain Alexander Dennis appointed Big Rig Manufacturing as its contract manufacturing partner to meet increased interest in the Env
Slide 22: Alexander Dennis New EV Platform (UK and Ireland)
Alexander Dennis New EV Platform (UK and Ireland) Alexander Dennis launched its next generation of battery-electric buses for the UK and Ireland, unveiling the new Enviro100EV midibus and Enviro400EV double-deck bus. The new buses have been designed fully in house in coordination with leading partne
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% $22,290 C$14.9B Trans
Slide 25: New Funding: Low-No and ZEBRA 2
New Funding: Low-No and ZEBRA 2 NFI delivers strongest FTA Low-No and Buses Alexander Dennis hosted the UK government and Bus Facilities grant performance ever, as announcement of a new £129M funding program, named partner on more than $207M in grants ZEBRA 2 New Flyer named partner of choice in ove
Slide 26: Poised for Recovery: Forward Guidance and Targets
Poised for Recovery: Forward Guidance and Targets Revenue ($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 $65 $250 $2,700 $3,200 $45 ($59) 2018 2019 2020 2021 2022 2023E 2024E 2
Slide 27: 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 Q3: 23% of total deliveries ZEBs as % Annual Deliveries were ZEB EUs ZEB as % of Backlog1 50% High end of gu
Slide 28: 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 Q3 – 2023 Q3) $721.1 $731.1 $707.3 $638.5 $622.8 $665.0 $604.1 $607.6 $607.1 $650.1 $5
Slide 29: 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 30: Appendix
Appendix Leading the ZEvolution’
Slide 31: Financial Highlights: 2023 Q3 & YTD
Financial Highlights: 2023 Q3 & YTD $M Q3 YTD (except EU and EPS) 2023 2022 Change 2023 2022 Change Deliveries (EUs) 1,051 783 34.2% 2,774 2,005 38.4% Revenue $709.6 $514.0 38.1% $1,893.6 $1,371.3 38.1% Gross Profit $49.7 $6.8 630.8% $133.8 $27.2 391.9% Gross Profit % 7.0% 1.3% 42935bps 7.1% 2.0% 25
Slide 32: Non-IFRS Reconciliation: 2023
Non-IFRS Reconciliation: 2023 Reconciliation of IFRS to non-IFRS As of October 1, 2023 First Second Third In '000 Quarter Quarter Quarter Full Year Net Sales $ 524,411 $ 659,569 $ 709,620 $ 1,893,600 Net Earnings $ (45,808) $ (48,101) $ (39,926) $ (133,835) % of net sales -8.7% -7.3% -5.6% -7.1% Adj
Slide 33: 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) $ (40,167) $ (149,444) $ (273,415) % of
Slide 34: Quarterly Adjusted EBITDA: 2019 Q1 to 2023 Q3
Quarterly Adjusted EBITDA: 2019 Q1 to 2023 Q3 NFI Segment Quarterly Adjusted EBITDA1 (2019 Q1 – 2023 Q3) $M $100 Manufacturing Aftermarket $86 $80 $62 $62 $60 $54 $47 $45 $40 $35 $36 $30 $30 $32 $23 $21 $25 $26 $25 $23 $23 $22 $21 $22 $18 $16 $18 $17 $17 $18 $20 $12 $2 $0 ($8) -$20 ($16) ($14) ($23)
Slide 35: Quarterly Free Cash Flow: 2019 Q1 to 2023 Q3
Quarterly Free Cash Flow: 2019 Q1 to 2023 Q3 NFI Free Cash Flow Results by Quarter (2019 Q1 – 2023 Q3) $M $49 $41 $38 $32 $29 $27 $14 $15 $15 $12 ($19) ($22) ($29) ($31) ($43) ($40) ($43) ($49) ($56) 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
Slide 36: Quarterly Backlog: 2019 Q1 to 2023 Q3
Quarterly Backlog: 2019 Q1 to 2023 Q3 NFI Quarterly Backlog1 in EUs (2019 Q1 – 2023 Q3) Firm Option 7,281 6,518 6,497 5,604 5,161 4,714 4,693 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 4,863 4,313 4,224 4,082 4,400 4,057 4,366 4,153 3,576 3,306 3,662 3,
Slide 37: 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 38: 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 39: 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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