Nfi Group Inc. · TSX:NFI
Nfi — Scotiabank Transportation & Industrials Conference 2021
33 slides from Nfi's conference presentation, Nov 16, 2021
Slide 1: Investor Presentation
Investor Presentation Scotiabank Transportation & Industrials Conference November 16, 2021
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 ADL's single and double deck buses are classified as "transit buses". ARBOC manufactures body on- chassis or “cutaway” and "medium-duty" buses that service transit, paratransit, and shuttle applications. Collectively, transit buses, medium- duty buses
Slide 4: NFI is a leading global independent bus and motor coach solution provider
NFI is a leading global independent bus and motor coach solution provider leading the evolution to zero-emission mobility. Market and technology leader in each of our major markets 4 4
Slide 5: We Exist To Move People
We Exist To Move People VISION: To enable the future of mobility with innovative and sustainable solutions. MISSION: To design and deliver exceptional transportation solutions that are safe, accessible, efficient and reliable. WE PLEDGE to be customer focused WE MUST EARN the trust of those we serve
Slide 6: From bus manufacturer to solutions provider
From bus manufacturer to solutions provider Infrastructure Buses and Connected Vehicles Aftermarket, Solutions Coaches and Diagnostics Warranty & Service 6
Slide 7: ZEB key statistics
50+ million Electric service miles since 20151 1,701 ZEBs delivered since 20152 50+ 450+ years of 153 electric bus ZEBs delivered in 2021 Q3 (20% of total); 330 YTD 2021 years of bus experience 80+ and coach experience Cities with an NFI ZEB in service or on order 1,696 105k ZEBs in backlog (21% of
Slide 8: Industry's widest range of ZEBs already exist
Industry’s widest range of ZEB’s already exist 30- & 35-foot Medium-Duty Single-Deck Low-Floor Electric Battery-Electric 35-foot Battery-Electric Double-Deck Battery-Electric 40-foot Battery-Electric Double-Deck 40-foot Fuel Cell-Electric Fuel Cell- Electric 60-foot Motor Coach Battery-Electric Batt
Slide 9: NFI is pioneering automated bus technology
NFI is pioneering automated bus technology New Flyer Xcelsior AV™ ADL’s Automated Double Deck North America’s first SAE Level 4 (SAE J3016) Automated Heavy- UK’s first Automated Heavy-Duty Transit Bus; pilot project with Duty Transit Bus leading customer Stagecoach for depot applications Launched Ja
Slide 10: Strengthening the balance sheet through C$400 Million bought deal financing
Strengthening the balance sheet through C$400 Million bought deal financing • Completed C$400M bought deal financing on Nov 15, 2021, comprised of: • C$150M in equity (6.1M shares at C$24.55 per share), and • C$250M in debt (5.0% convertible senior unsecured debentures with 35% premium to the C$24.5
Slide 11: 2021 Q3 summary
2021 Q3 summary • Seeing market recovery, with Active Bids up 11% from 2020 Q3; highest number of EUs in bids submitted, 6,307 EUs, since 2017 Q2 • NFI’s ZEBs are operating or on order in 15 of the top 25 transit agencies in North America and with 10 of the top 15 transit operators in the UK • Unfor
Slide 12: Rapid escalation in supply chain disruption
Rapid escalation in supply chain disruption Situation NFI Financial Assessment Response Implications • Lowered line entries to avoid • Revenue guidance lowered to • Rapid escalation in supply build-up of excess work-in- $2.3 billion - $2.5 billion and challenges during 2021 Q3 process inventory Adju
Slide 13: NFI view on market recovery
NFI view on market recovery PHASE 3 Production Recovery PHASE 2 • 2021 and 2022 Public Transit PHASE 1 Project Awards awards result in increased production Initial Recovery and • North American Awards Bid Activity Growth released, government funding • NA Private Markets at 75% structures and policie
Slide 14: Continued public transit funding and financing for ZEBs
Continued public transit funding and financing for ZEBs $17.6B Green Recovery Funding £5.0B transit and cycling program $14.9B Transit Funding Program £90M SULEBS Rounds 1 and 2 $1.5B Canadian Infrastructure Bank Replacement of 4,000 buses Replacement of 5,000 buses C$34B $107B £5.1B $107B Bipartisa
Slide 15: Public market Bid Universe showing signs of recovery
Public market Bid Universe showing signs of recovery Canada and U.S. Public Market Bid Universe 594 EUs Bids in Process Avg. timeline from bid release to production = 12 to 18 months Bids in Process Bids Submitted 5 Year Forecast 6,307 EUs Bids Submitted 35,000 30,000 19,954 EUs Five-Year Procuremen
Slide 16: NFI Forward update
NFI Forward update Timing for 2020-2023 Benefits Cumulative $10.0 ($M) $8.6 $6.8 All NFI Forward $60 $67 Initiatives $1.0 $47 At or Above Targets $17 In Year ~$30M In Year ~$13M In Year ~$7M 2020A 2021E 2022E 2023E Cash Flow on Track for Adjusted EBITDA Free Cash Flow (FCF) $10M+ Continued NFI Forwa
Slide 17: Positioned for growth and margin enhancement
Positioned for growth and margin enhancement Recovery, NFI Forward, and Leading the ZEvolution 2020 – 2025 REVENUE ($M) $3,900 to $4,100 $2,896 $2,300 to $2,500 $2,419 13%+ CAGR (2021-2025) 2019 2020 2021 2025 Guidance Target ADJ EBITDA ($M)(1) $400 to $450 $322 $165 to $195 $158 20%+ CAGR (2021-202
Slide 18: Longer-term financial targets for 2025
Longer-term financial targets for 2025 Revenue • Driven by market recovery in NA Bus and Coach and UK transit $3.9 billion to $4.1 billion ZEBs expected to make up approximately • Continued growth of ARBOC in cutaway and medium-duty 40% of manufacturing revenue markets • ADL’s international expansio
Slide 19: Capital allocation priorities
Capital allocation priorities 1 DEBT MANAGEMENT & LEVERAGE REDUCTION INVEST IN HIGHEST RETURN PROJECTS: EPS expansion comes from funding 2 highest ROIC projects 3 DIVIDENDS: Provide dividends to shareholders, as we have since 2005 ACQUISITIONS: Continue to acquire companies that provide diversificat
Slide 20: NFI investment thesis
NFI investment thesis Market dynamics position bus and coach transition to EV; NFI is the industry’s leader with the deepest customer relationships and in prime position to capitalize Culture and on the zero-emission evolution (ZEvolutionTM) history of innovation Unprecedented government support
Slide 21: Appendices
NFI Leading the ZEvolution. 2
Slide 22: NFI's zero-emission journey started in 1969
NFI’s zero-emission journey started in 1969… 1994 2005 2012 2015 2018 First First Diesel First battery- Launched NF Launched NF Compressed Hybrid with BAE electric bus Connect Infrastructure Natural Gas and first Gas SolutionsTM (CNG) bus Engine Hybrid 1969 1998 2010 2014 2017 2019 First North First
Slide 23: ...and continues in 2021
…and continues in 2021 New Flyer Xcelsior CHARGE AVTM Battery Recycling Pilot North America’s first SAE Level 4 Successful launch of battery ADL H2.0 MCI D45 CRT LE CHARGE automated heavy-duty transit bus; recycling pilot with Li-Cycle Next-generation hydrogen fuel-cell Next-generation hydrogen fuel
Slide 24: Core markets annual deliveries
Core markets annual deliveries North American Heavy-Duty Transit1 North American Motor Coach (public and private)2 NFI’s 2020 Market Share: 43% NFI’s 2020 Market Share: 74% 6,717 2,470 6,504 6,336 2,357 2,305 2,274 6,032 5,933 5,795 2,053 5,373 5,284 5,154 5,128 5,109 1,918 5,055 5,017 5,010 1,852 1
Slide 25: 2021 Q3: backlog and new vehicle deliveries
2021 Q3: backlog and new vehicle deliveries Backlog – Firm & Option Backlog – Timing Backlog – By Product1 LTM 2021 Q3 Option Conversion Rate = 52% Medium- Firm Options Duty and Low-Floor Cutaway 6% 8,882 8,586 8,168 8,103 5,220 Motor 5,279 4,646 4,757 Coach 10% 3,662 3,307 3,522 3,346 Heavy-Duty Tr
Slide 26: 2021 Q3: Income Statement and Balance Sheet
2021 Q3: Income Statement and Balance Sheet 2021 Q3 Performance 2021 Q3 Cash Flow & Liquidity 2020 Q3 2021 Q3 Cash Flow ($M) Sales $663.9M $492.0M 2020 Q3 2021 Q3 $60.9 Adjusted EBITDA $60.9 $31.3 Adjusted Interest Expense ($17.3) ($17.1) EBITDA1 $31.3 9.2% 6.4% Current Income Tax ($8.4) $8.2 ROS RO
Slide 27: 2021 Q3: Net Earnings and Adjusted Net Earnings
2021 Q3: Net Earnings and Adjusted Net Earnings Net Earnings (Loss) ($M) Adjusted Net Earnings (Loss) ($M)1 2020 Q3 ($25) ($0.40) per share 2020 Q3 $6 $0.09 per share 2021 Q3 ($15) ($0.22) per share 2021 Q3 ($11) ($0.16) per share LTM 2020 Q3 ($132) ($2.11) per share LTM 2020 Q3 ($21) ($0.34) per sh
Slide 28: Updated 2021 guidance reaffirmed
Updated 2021 guidance reaffirmed Revenue • Deliveries impacted by pandemic-related supply chain $2.3 billion to $2.5 billion challenges • Growth driven by market recovery in North American Bus and ZEBs expected to be approximately 20% of 2021 Coach and UK transit manufacturing revenue • ADL’s intern
Slide 29: Appendix: Non-IFRS Reconciliation (2021)
Appendix: Non-IFRS Reconciliation (2021) Reconciliation of IFRS to non-IFRS As of September 26 2021 Second Third In '000 First Quarter Quarter Quarter Full Year Net Sales $ 574,119 $ 582,794 $ 492,038 $ 1,648,951 Net Earnings $ 7,033 $ 2,587 $ (15,415) $ (5,793) % of net sales 1.2% 0.4% -3.1% -0.4%
Slide 30: Appendix: Non-IFRS Reconciliation (2020)
Appendix: Non-IFRS Reconciliation (2020) Reconciliation of IFRS to non-IFRS As of December 27 2020 Second Third In '000 First Quarter Quarter Quarter Forth Quarter Full Year Net Sales $ 710,384 $ 333,334 $ 663,934 $ 711,523 $ 2,419,175 Net Earnings $ (67,239) $ (74,050) $ (24,912) $ 8,465 $ (157,736
Slide 31: Forward-Looking Statements Non-IFRS Measures
Forward-Looking Statements Certain statements in this presentation are “forward-looking statements”, which reflect the current expectations of management regarding the Company's future growth, financial performance and financial position and the Company’s strategic initiatives, plans, business prosp
Slide 32: Appendix: Key Financial Definitions
Appendix: Key Financial 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 adj
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NFI Group — Scotiabank Transportation & Industrials Conference 2021 on 6ix