NFI Group Inc. · TSX:NFI
NFI — Q3 2020 Earnings Presentation
22 slides from NFI's earnings presentation, Nov 11, 2020
Slide 1: Investor Update Q3 2020 Results
Investor Update Q3 2020 Results NOVEMBER 11, 2020
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: NA market leader in Heavy-Duty Transit Buses and Infrastructure Solutions
NA market leader in Heavy-Duty Transit Buses and Infrastructure Solutions NFI is a leading global independent bus and motor coach manufacturer providing a UK market leader in Bus and Coach. World leader in Double Deck Buses comprehensive suite of mass transportation solutions. OUR VISION NA market l
Slide 4: Our History Built the Foundation for Our Future
OUR HISTORY BUILT THE FOUNDATION FOR OUR FUTURE NA Transit Market Consolidation Diversification and Vertical Integration 2010 - 2014 2015 – 2019(1) REVENUE ($M) $3,172 10.1% CAGR 19.8% CAGR $1,451 $1,539 $984 2010 - 2014 2015 - 2019 ADJ EBITDA ($M) $331 2.4% CAGR 21.7% CAGR $151 $97 $107 7.4% 9.8% 9
Slide 5: A Leader in Bus and Coach Technology
A LEADER IN BUS AND COACH TECHNOLOGY Advanced Driver Zero-Emission Buses Assistance Systems and (ADAS) and Infrastructure Solutions Autonomous Buses Telematics Propulsion Agnostic and on Proven Platforms Connected Vehicles • • Clean Diesel Natural Gas • Diesel-electric Hybrid • Zero-emission Electri
Slide 6: Q3-20 Executive Summary
Q3-20 EXECUTIVE SUMMARY Continued focus on health and safety of employees, supplier partners and customers. Restarted all NFI manufacturing and part fabrication facilities. Adjusted production rates accordingly and delivered Q3-20 performance as projected. Reiterate full year 2020 guidance of $1
Slide 7: Backlog and Q3-20 New Vehicle Deliveries
BACKLOG AND Q3-20 NEW VEHICLE DELIVERIES BACKLOG – FIRM AND OPTION BACKLOG – TIMING BACKLOG – BY PRODUCT Medium- Firm Options Duty and Low-Floor 12,157 Cutaway 10,833 10,742 4% 8,882 7,971 7,184 6,518 5,220 Motor Coach 16% 4,186 3,649 4,224 3,662 Q3 ‘20 YTD Option Conversion Rate = 42% HD Transit 81
Slide 8: Income Statement and Balance Sheet
INCOME STATEMENT AND BALANCE SHEET Q3 Performance Q3 Cash Flow & Liquidity Q3’19 Q3’20 CASH FLOW ($MM) Sales $725M $664M Q3 ‘19 Q3 ‘20 ADJ Adjusted EBITDA $76.9 $60.9 EBITDA $77 10.6% $61 9.2% Interest Expense ($14.4) ($17.4) ROS ROS Current Income Tax ($7.1) ($8.4) Cash Capital Expenditures plus Le
Slide 9: Net Earnings and Adjusted Net Earnings
NET EARNINGS AND ADJUSTED NET EARNINGS Net Earnings ($M) Adjusted Net Earnings ($M) Q3 '19¹ ($1) ($0.02) per share Q3 '19 $13 $0.22 per share Q3 '20¹ ($25) ($0.40) per share Q3 '20 $6 $0.09 per share LTM Q3 '19 $66 $1.08 per share LTM Q3 '19 $116 $1.87 per share LTM Q3 '20 ($132) ($2.11) per share L
Slide 10: NFI Forward Update
NFI FORWARD UPDATE Timing for 2020-2023 Benefits $67 $60 All NFI Forward $47 Initiatives At or In Year Above Target In Year ~$7M ~$13M Cumulative $18 In Year ~$29M Cash Flow on ($M) Track for $10M+ 2020 2021 2022 2023 Creates significant Adj. EBITDA drop- through with volume recovery All Project Pla
Slide 11: Positive Long-Term North American Transit Demand
POSITIVE LONG-TERM NORTH AMERICAN TRANSIT DEMAND Canada/US Public Market Bid Universe 35,000 Bids in Process Bids Submitted 5 Year Forecast 30,000 25,000 19,280 EUs Five Year Procurement Outlook 20,000 compiled from Customer Fleet replacements plans 15,000 10,000 4,294 EUs +27% Bids Submitted 1,927
Slide 12: Government Support for Transit Remains High
GOVERNMENT SUPPORT FOR TRANSIT REMAINS HIGH Bus & Infrastructure funding for major NFI markets • $25B in CARES Act transit funding • In February 2020, UK • Canada Infrastructure Bank announced in April 2020. government launched Growth Plan announced in • FAST Act extended for one-year September 2020
Slide 13: Private Markets Under the Most Pressure
PRIVATE MARKETS UNDER THE MOST PRESSURE Canada and U.S. Motor Coach Market(3) COVID-19 Impact on Coach Market • H1 2020 down 57% from H1 2019 • Q2 2020 lowest deliveries in recent history with only 59 EUs (502 EUs in Q2 2019) 2,470 2,385 2,357 2,324 2,305 2,274 • >80% of coach operator employees are
Slide 14: Financial Outlook and Summary
FINANCIAL OUTLOOK AND SUMMARY • 2020 Adjusted EBITDA Guidance of $145 million to $155 million. • Suggests Q4-20 Adjusted EBITDA of $52.3 million to $62.3 million. • Property Plant and Equipment of $25 million in 2020, primarily maintenance. • View 2021 as a transition year, with potential for improv
Slide 15: Investment Thesis
INVESTMENT THESIS • Over 450 years of combined bus and coach design and manufacturing expertise. • Exclusively focused on Bus & Coach with leading positions in all markets and ~70% of revenue driven by public customers. • Market technology leader with a track record of innovation offering all propul
Slide 16: Virtual Investor Day
VIRTUAL INVESTOR DAY Monday, January 11, 2021 from 8:30 – 11:30am ET Transition to Zero-Emission Buses Infrastructure Solutions Telematics and Connected Vehicles Driving the evolution to Zero Advanced Driver Assistance Systems Emission Buses. and Autonomous Buses New Electric Vehicle Models 16
Slide 17: Appendix
APPENDIX 17
Slide 18: Appendix - Key Definitions
APPENDIX - KEY DEFINITIONS • Adjusted EBITDA: Earnings before interest, income taxes, depreciation and amortization after adjusting for the effects of certain non-recurring and/or non- operations related items that do not reflect the current ongoing cash operations of the Company. These adjustments
Slide 19: Appendix - Financial Highlights
APPENDIX - FINANCIAL HIGHLIGHTS $M Q3 YTD (except EU and EPS) 2020 2019 Change 2020 2019 Change Deliveries (EUs) 1,317 1,392 5.4% 3.141 3470 9.48% Revenue $663.9 $725.3 8.5% $1,707.7 $1,975.7 13.6% Gross Profit $46.7 $124.8 62.5% $113.1 $189.4 40.3% Gross Profit % 7.0% 17.2% 1020bps 6.6% 9.6% 300bps
Slide 20: Appendix - Non-IFRS Reconciliation (2020 YTD)
APPENDIX - NON-IFRS RECONCILIATION (2020 YTD) Reconciliation of IFRS to non-IFRS As of September 27 2020 First Second Third In '000 Quarter Quarter Quarter Q3 YTD Net Sales $ 710,384 $ 333,334 $ 663,922 $ 1,707,640 Net Earnings $ (67,239) $ (74,049) $ (24,913) $ (166,201) % of net sales -9.5% -22.2%
Slide 21: Appendix - Non-IFRS Reconciliation (2019)
APPENDIX - NON-IFRS RECONCILIATION (2019) Reconciliation of IFRS to non-IFRS Year Ending December 29, 2019 First Second Third Fourth Full In '000 Quarter Quarter Quarter Quarter Year Net Sales $ 566,995 $ 683,353 $ 725,347 $ 917,741 $ 2,893,436 Net Earnings $ 16,149 $ 8,507 $ (1,085) $ 34,127 $ 57,6
Slide 22: Appendix - Forward Looking Statements
APPENDIX - FORWARD LOOKING STATEMENTS Certain statements in this presentation are “forward-looking statements”, which reflect the expectations of management regarding the Company's future growth, liquidity, results of operations, performance and business prospects, plans and opportunities. The words