Slide 1: Q4 and Fiscal 2019 Results
Q4 and Fiscal 2019 Results MARCH 12, 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: Financial Performance – IFRS 16 Impact
FINANCIAL PERFORMANCE – IFRS 16 IMPACT Effective December 31, 2018, the Company adopted IFRS 16, the accounting standard which specifies how to recognize, present and disclose leases. This standard provides a single lessee accounting model, requiring lessees to recognize assets and liabilities for a
Slide 4: Executive Summary: Record Quarterly Performance
EXECUTIVE SUMMARY • Record 1,845 EUs delivered in 2019 Q4 RECORD QUARTERLY • Record 2019 Q4 revenue of $918M • 2019 Q4 Adjusted EBITDA of $104M PERFORMANCE • 2019 Q4 Free Cash Flow of $49M • WIP lowered to $263M at end of 2019 Q4 OPERATIONS • Total Leverage Ratio lowered to 3.24x STABILIZED • KMG pa
Slide 5: Record Deliveries in 2019
RECORD DELIVERIES IN 2019(1) Heavy-Duty Transit Motor Coach Medium-Duty / (“HD Transit”) Low-Floor Cutaway (“MD LF”) 1,347 389 Q4 ‘19 679 341 +98% YOY +14% 106 109 YOY +3% YOY Q4 '18 Q4 '19 Q4 '18 Q4 '19 Q4 '18 Q4 '19 3,931 2,781 1,030 1,036 FY ‘19 502 +41% 348 YOY 0% YOY -31% YOY FY '18 FY '19 FY '
Slide 6: Financial Performance
FINANCIAL PERFORMANCE Q4 ’19(1) FY ’19(1) Highlights Revenue ($M) Revenue ($M) Revenue $2,893 $2,519 • Growth driven by ADL acquisition $918 • Lower deliveries in legacy Heavy-Duty $662 +15% Transit, Motor Coach and Medium-Duty / YOY +39% Low-Floor Cutaway product lines impacted YOY by KMG challenge
Slide 7: Manufacturing Segment
MANUFACTURING SEGMENT Q4 ’19(1) Highlights Quarter 4: Revenue ($M) Adj. EBITDA ($M) • Increase in Q4 EBITDA from higher quarterly deliveries from all $801 product lines and the addition of ADL $577 $73 $86 • Q4 Canada and U.S. total active and full Bid Universe continued +39% to show strength: YOY 1
Slide 8: Aftermarket Segment
AFTERMARKET SEGMENT Q4 ’19(1) Highlights Revenue ($M) Adj. EBITDA ($M) $117 Quarter 4: $86 $17 $18 • Increase in Q4 aftermarket Adjusted EBITDA of $1.1M or +37% 6% driven by volume increases from ADL and improved YOY 20.2% 15.7% Margin(2) Margin(2) margins from product mix offset by added SG&A costs
Slide 9: Net Earnings and Adjusted Net Earnings
NET EARNINGS AND ADJUSTED NET EARNINGS Net Earnings ($M) Adjusted Net Earnings ($M) Quarter 4: • Net earnings decrease driven by adjustments for ADL purchase Q4 '18¹ $43 $0.69 per share Q4 '18¹ $45 $0.72 per share accounting, higher interest and income taxes Q4 '19¹ Q4 '19¹ $34 $0.55 per share $31 $
Slide 10: Balance Sheet
BALANCE SHEET Total Leverage Current covenant of 4.25x following significant acquisition – decreases to 3.75x in May 2020 3.75x 3.43x 3.24x 2.9x NCIB CAD $100M Target 2.56x 2.0x – 2.5x 2.21x 2.28x 18-24 months 2.08x 2.09x post ADL 1.94x 1.9x 1.89x 1.97x acquisition 1.84x 1.67x 1.47x 1.52x 1.55x 1.36
Slide 11: Cash Flow
CASH FLOW Free Cash Flow, Cash Capex and ROIC CASH FLOW ($MM) 15.8% 2018 2019 14.3% 13.7% Adjusted EBITDA $315.4 $322.2 12.3% $165.2 $161.2 $159.7 $160.4 Interest Expense ($23.5) ($50.5) Current Income Tax ($56.3) ($61.3) 9.7% Cash Capital Expenditures plus Lease ($76.1) ($50.2) Proceeds from dispos
Slide 12: Balanced Revenue Portfolio Post-ADL
BALANCED REVENUE PORTFOLIO By Customer(2) By Geography By Product Category HD Transit Public APAC Pro-Forma(1) Buses Fiscal 2019 4% POST-ADL 70% 64% Motor Coach UK and 20% Europe 15% Medium- Private Duty/Low 30% North America 81% -Floor Aftermarket Cutaway 14% 2% HD Transit Buses Fiscal 2018 Public
Slide 13: Solid Backlog (EUs)
SOLID BACKLOG (EUS)(1) BACKLOG – FIRM AND OPTION BACKLOG – TIMING BACKLOG – BY PRODUCT Firm Options 12,157 10,833 10,742 Medium- Duty and Low-Floor Cutaway 4% 7,971 7,184 6,518 Motor Coach 13% HD Transit 4,186 3,649 4,224 83% 2017 2018 2019 Options by year of expiry (1) ADL backlog added in Q2 2019.
Slide 14: FY 2020 Guidance
FY 2020 GUIDANCE ADJUSTED EBITDA • Impact of COVID-19 - given that it is nearly impossible to forecast the potential financial impact on NFI, the Company has not included any adjustment related to it in the 2020 guidance or other information Financial Guidance Full Year 2020(1) contained therein • E
Slide 15: NFI Group Summary
NFI GROUP SUMMARY • Strong finish to 2019 – WIP under control and record deliveries achieved • ADL continues to meet expectations with potential upside in 2020 • KMG stabilized – expected to be profitable in 2020 with future upside to run-rate • Seasonality is now more pronounced, Q2 and Q4 stronges
Slide 16: Appendix
APPENDIX 16
Slide 17: Appendix - Financial Highlights
APPENDIX - FINANCIAL HIGHLIGHTS $ MM Fourth Quarter Full Year (except EU and EPS) 2019 2018 Change 2019 2018 Change Deliveries (EUs) 1,845 1,126 64% 5,315 4,313 23% Revenue 917.7 662.0 37% 2,893 2,519 15% Gross Profit 138.0 118.3 17% 413.5 454.2 9% Gross Margin % 15.0% 17.9% 290bps 14.3% 18.0% 370bp
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 i
Slide 19: 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 20: Appendix - Non-IFRS Reconciliation (2018)
APPENDIX - NON-IFRS RECONCILIATION (2018) Reconciliation of IFRS to non-IFRS Year Ending December 30, 2018 First Second Third Fourth Full In '000 Quarter Quarter Quarter Quarter Year Net Sales $ 578,634 $ 673,025 $ 605,342 $ 662,020 $ 2,519,021 Net Earnings $ 30,356 $ 49,740 $ 37,031 $ 42,815 $ 159,
Slide 21: 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, results of operations, performance and business prospects and opportunities. The words “believes”, “anti