NFI Group Inc. · TSX:NFI
NFI — Q2 2020 Earnings Presentation
22 slides from NFI's earnings presentation, Aug 6, 2020
Slide 1: Q2 2020 Earnings Presentation
Q2 2020 Earnings Presentation AUGUST 6, 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: A Difficult Q2-20: Executive Summary
A DIFFICULT Q2-20: EXECUTIVE SUMMARY Dramatic impact from Significant actions taken Launched NFI Forward COVID-19 Pandemic • Immediate reduction of cost • Implementation of strategic • Topline revenue down 50% due base (variable and admin) to plan initiatives approved pre- to idled production help m
Slide 4: COVID-19 Market Update
COVID-19 MARKET UPDATE • North American public markets have seen mixed results – limited Manufacturing cancellations, deferrals of production from 2020 to 2021, while some options expired • New public transit orders have been minimal since March 2020, yet active bids remain high and five-year total
Slide 5: Q2 New Deliveries & Total Backlog
Q2 NEW DELIVERIES & TOTAL BACKLOG HEAVY-DUTY TRANSIT MOTOR COACH MEDIUM-DUTY / LOW-FLOOR CUTAWAY Q2-20 EUs Delivered 839 241 95 73 420 50% 52 -23% YOY YOY -78% YOY Q2 '19 Q2 '20 Q2 '19 Q2 '20 Q2 '19 Q2 '20 TOTAL BACKLOG: FIRM & OPTION BACKLOG TIMING BACKLOG BY PRODUCT Options by year of expiry Mediu
Slide 6: Income Statement and Balance Sheet
INCOME STATEMENT AND BALANCE SHEET Q2 Performance Q2 Cash Flow & Liquidity CASH FLOW ($MM) Sales $683M $333M Q2 ‘19 Q2 ‘20 $81 (7.3%) ADJ ROS Adjusted EBITDA $81.1 ($24.2) 11.9% Interest Expense ($12.1) ($14.8) EBITDA ROS $(24) Current Income Tax ($13.8) $4.5 Cash Capital Expenditures plus Lease ($1
Slide 7: Net Earnings and Adjusted Net Earnings
NET EARNINGS AND ADJUSTED NET EARNINGS NET EARNINGS ($M) ADJUSTED NET EARNINGS ($M) Q2 '19¹ $9 $0.14 per share Q2 '19 $26 $0.42 per share Q2 '20¹ -$74 ($1.08) per share Q2 '20 -$61 ($0.97) per share LTM Q2 '19 $105 $1.69 per share LTM Q2 '19 $137 $1.94 per share LTM Q2 '20 -$108 ($2.81) per share LT
Slide 8: NFI Forward: Transformation to an Integrated Operating Company
NFI FORWARD: TRANSFORMATION TO AN INTEGRATED OPERATING COMPANY “NFI Forward” launched, a transformative group-wide program to reduce business units, consolidate facilities, remove overhead costs and create a more efficient, integrated company. STRATEGIC IMPERATIVES KEY INITIATIVES Growth Fewer busin
Slide 9: New Organizational Structure
NEW ORGANIZATIONAL STRUCTURE Business Transformation Office. Leader = Ian Smart Bus & Coach Segment Aftermarket Parts Segment North America International International North America Parts Bus & Coach Bus & Coach ADL Parts New Flyer + MCI ADL NFI Parts 2 3 a Fabrication ADP ADI North America ARBOC AD
Slide 10: NFI Forward Financial Impact by End of 2022
NFI FORWARD FINANCIAL IMPACT BY END OF 2022 ~$75M Total ~$10M Leases, Banking Processes Cash Flow Cash Flow International Over $2B in Material Spend Sourcing ~$20M EBITDA Plant and Distribution Center Manufacturing 20 ~$20M 8-10% Reductions in NA and UK Overhead EBITDA Reduction Functional Transform
Slide 11: Transit Ridership Starting to Recover
TRANSIT RIDERSHIP STARTING TO RECOVER MOOVIT TRANSIT APP USAGE DECLINE(1) APPLE MOBILITY TRENDS(2) APRIL 13 VS JULY 13 JANUARY TO JULY 2020 140% -55% Miami -74% 120% 100% -55% Los Angeles -71% 80% 60% -51% NYC -75% 40% -60% 20% Chicago -71% 0% -69% San Francisco -78% 13-Jul Canada United Kingdom Uni
Slide 12: Government Support for Transit Remains High
GOVERNMENT SUPPORT FOR TRANSIT REMAINS HIGH Bus infrastructure funding for major NFI markets • $25 billion in CARES Act • 2019 Liberal platform • In February 2020, UK transit funding announced in included plan to enable government launched April 2020 procurement of 5,000 National Bus Strategy with •
Slide 13: Total Public Bid Universe Remains at Record Highs
TOTAL PUBLIC BID UNIVERSE REMAINS AT RECORD HIGHS CANADA AND US PUBLIC BID UNIVERSE 35,000 Bids in Process Bids Submitted 5 Year Forecast 29,438 EUs +18% 30,000 Total Bid Universe Year-over-Year Total Bid Universe 25,000 20,000 22,089 EUs Five Year Procurement Outlook compiled from Customer Fleet 15
Slide 14: NFI Will Lead Transition to Zero Emission Future
NFI WILL LEAD TRANSITION TO ZERO EMISSION FUTURE Select NFI ZEB Customers 17% 26% North American Active Of Total Bid Universe EUs Bids are ZEBS are ZEBs ZEBs as a % of NFI’s Backlog Global Long-Term EV and eBus Adoption(3) Q2 2020 9.7% 100% 80% 60% Q2 2019 4.0% 40% 20% Q2 2018 4.0% 0% 2014 2018 2022
Slide 15: Private Markets Under Pressure
PRIVATE MARKETS UNDER PRESSURE Canada and U.S. Transit Market(4) COVID-19 Impact on NA HD Transit Market • Lower deliveries as nearly all players idled or closed 6,753 6,504 6,336 6,236 6,032 5,933 facilities during the quarter 5,795 5,388 5,373 5,284 5,212 5,154 5,128 5,109 5,055 5,009 5,010 4,723
Slide 16: Summary
SUMMARY 2020 will be Challenged, but NFI remains well Positioned for Recovery • Market uncertainty exists today, but focused on optimizing NFI for margin expansion as markets recover Production • In Q2-20, management made conscious decision to idle facilities for Recovery 2 months to protect employe
Slide 17: Appendix
APPENDIX 17
Slide 18: Appendix - Financial Highlights
APPENDIX - FINANCIAL HIGHLIGHTS $ MM (except EU and EPS) Q2 ‘20 Q2 ‘19 Change Deliveries (EUs) 545 1,175 53.6% Revenue $333.3 683.4 51.2% Gross Profit ($17.4) $98.8 117% Gross Margin % (5.2%) 14.5% 1970bps Adjusted EBITDA ($24.2) $56.1 143% Adjusted EBITDA Margin % (7.3%) 8.2% 1550bps Earnings from
Slide 19: 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 20: Appendix - Non-IFRS Reconciliation (2020 YTD)
APPENDIX - NON-IFRS RECONCILIATION (2020 YTD) Reconciliation of IFRS to non-IFRS As of June 28 2020 Second In '000 First Quarter Quarter Q2 YTD Net Sales $ 710,384 $ 333,334 $ 1,043,718 Net Earnings $ (67,239) $ (74,050) $ (141,289) % of net sales -9.5% -22.2% -13.5% Adjustment, Gross Restructuring
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