Slide 1: NFI Group Inc. Q4 and Fiscal 2023 Results
NFI Group Inc. Q4 and Fiscal 2023 Results February 29, 2024 1
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 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 4: We Move People
We Move People NFI is a global independent bus and motor coach solution provider that is leading the evolution to zero-emission mobility. NFI is the market and technology leader in major markets with over 100,000 vehicles in service throughout 12 countries 4 4
Slide 5: NFI's Mobility Solutions
NFI’s Mobility Solutions Workforce Development & Training Parts, Publications & Service Buses & Coaches Connected Vehicles & Diagnostics Infrastructure Solutions Financing 5 5
Slide 6: Our Values and Our Stakeholders Drive Our Decisions
Our Values and Our Stakeholders Drive Our Decisions Safety Quality Integrity The health and wellbeing We strive for We act with honesty, of our team members excellence in our transparency, and integrity, and the safety of our products, services, treating each other with respect products are our top
Slide 7: Leader in Zero-Emission Transportation
Leader in Zero-Emission Transportation 17 150M+ 3,603 NFI zero-emission bus Electric service miles ZEB EUs delivered since and coach models driven 2015 offered 150+ 22% 52% Cities with NFI ZEBs in of 2023 deliveries were of North American Public Bid service or on order ZEB EUs (878 EUs) Universe is
Slide 8: Continued Commitment to Sustainability
Continued Commitment to Sustainability In 2023, NFI established a Sustainability Council, consisting of Company leaders with direct Board oversight Also built ESG-related targets into the Company’s executive compensation program NFI’s ESG and sustainability related accomplishments for 2023 are detai
Slide 9: CFO Transition
CFO Transition Brian Dewsnup has been appointed Executive Vice President and CFO, effective March 1, 2024 Brian joined NFI through its 2013 acquisition of North American Bus Industries (NABI); served as NABI’s CFO and after its acquisition, as its Vice President and General Manager Subsequently held
Slide 10: 2023 Q4 and FY Results
2023 Q4 and FY Results Leading the ZEvolution’
Slide 11: 2023 Q4 Financial Summary
2023 Q4 Financial Summary Significant 30,830 EUs in North 113% -8% +143% 41% Book-to-Bill2 for Decrease in new Increase in new Option conversion Demand Growth American Total Fiscal 2023 orders (YoY) orders from 2023 rate for Fiscal Bid Universe Q3 2023 Financial +15% 11% +642% ($2.3)M Net Loss, 0.8%
Slide 12: Significant Supply Chain Improvements in 2023
Significant Supply Chain Improvements in 2023 NFI Group Consolidated High and Moderate Risk Suppliers (2020 Q4 – 2023 Q4) Note: 6 High Risk Suppliers in NFI top 750 2023 Q4 Update Very limited supply disruptions; however, supplier 92 delivery performance remains below target as many suppliers contin
Slide 13: Supply Chain Impacts On Production & WIP Improving
Supply Chain Impacts On Production & WIP Improving Total NFI Inventory (Raw Materials, WIP and Finished Goods - $M) and Quarterly Vehicle Line Entries (2019 Q1 – 2023 Q4) 1,637 1,547 1,528 1,456 1,444 1,238 1,080 1,053 1,054 990 1,017 929 962 819 813 858 832 796 589 714 $80 $84 $77 $103 $74 $59 $71
Slide 14: 2023 Q4: Backlog and Deliveries
2023 Q4: Backlog and Deliveries Backlog1 – Firm and Option Backlog1 – Year Options Expiry Backlog1 – By Product Type Does not Firm Options include 3,832 EUs of “awards Backlog1: 2023 Q4 EUs pending” to NFI Fiscal 2023 Option Conversion Rate = 41% 10,071 10,586 9,186 9,803 9,556 5,161 4,714 4,693 5,5
Slide 15: Quarterly Gross Margins
Quarterly Gross Margins NFI Segment Quarterly Gross Margins (includes Depreciation and Amortization) 1 30.0% 30.4% 30.4% 30.0% 30.3% 31.9% 31.9% 31.3% 31.5% 32.1% 27.5% 28.5% 29.5% 26.9% 30.0% 28.6% 30.2% 26.3% 25.5% Aftermarket GM% 22.5% Manufacturing GM% 13.8% 12.0% 6.6% 12.8% 8.7% 8.2% 9.7% 11.2%
Slide 16: Quarterly Adjusted EBITDA
Quarterly Adjusted EBITDA NFI Segment Quarterly Adjusted EBITDA1 $M $100 Manufacturing Aftermarket $86 $80 $62 $62 $60 $54 $47 $45 $40 $35 $36 $30 $30 $32 $30 $23 $21$25 $26 $25 $23 $23 $22 $21 $22 $18 $16 $18 $17 $17 $18 $20 $12 $11 $2 $0 ($8) -$20 ($16) ($14) ($23) -$40 ($32) ($31) ($40) ($37) ($4
Slide 17: Quarterly Free Cash Flow: 2019 Q1 to 2023 Q4
Quarterly Free Cash Flow: 2019 Q1 to 2023 Q4 NFI Free Cash Flow and Free Cash Flow Plus the Change in Working Capital by Quarter (2019 Q1 – 2023 Q3) $M Free Cash Flow $134 $121 Free Cash Flow with Change in Working Capital $79 $77 $49 $41 $38 $36 $32 $27 $29 $15 $22 $14 $13 $15 $12 $13 $10 $3 ($23)
Slide 18: 2023 Q4: Income Statement, Cash Flow, Liquidity
2023 Q4: Income Statement, Cash Flow, Liquidity 2023 Q4 Performance 2023 Q4 Free Cash Flow 1 & Liquidity1 2023 Q4 2022 Q4 Free Cash Flow1 ($M) Sales $791.6M $689.4M 2023 Q4 2022 Q4 4.9% (1.0%) Adjusted EBITDA1 $38.5 ($7.1) ROS ROS Interest Expense ($31.9) ($24.2) Current Income Tax $15.9 $21.6 Adjus
Slide 19: Fiscal 2023 Net Earnings and Adjusted Net Earnings
Fiscal 2023 Net Earnings and Adjusted Net Earnings Net Earnings (Loss) ($M) Adjusted Net Earnings (Loss) ($M)1 2022 Q4 ($152.4) ($1.98) per share 2022 Q4 ($25.7) ($0.33) per share 2023 Q4 ($2.3) ($0.02) per share 2023 Q4 ($5.9) ($0.05) per share Fiscal 2022 ($276.4) ($3.58) per share Fiscal 2022 ($1
Slide 20: Strong Demand Environment
Strong Demand Environment 20
Slide 21: Record Public Market Bid Universe
Record Public Market Bid Universe Canada and U.S. Public Market Bid Universe Avg. timeline from bid release to production = 12 to 18 months Bids in Process Bids Submitted 5 Year Forecast 35,000 30,000 25,000 20,000 15,000 10,000 5,000 - 2018 2018 2018 2018 2019 2019 2019 2019 2020 2020 2020 2020 202
Slide 22: Strong Award Activity in 2023
Strong Award Activity in 2023 6,121 EU 3,760 EU 2,361 EU New Awards in New Awards New Awards Fiscal 2023 2023 Q1-2023 Q3 2023 Q4 + 3,832 EU Bid Award Pending to NFI at end of 2023 22 22
Slide 23: Poised for Recovery
Poised for Recovery Leading the ZEvolution’
Slide 24: Strong Government Funding continues
Strong Government Funding continues U.S. Federal FTA Funding ($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$14.9B Transit
Slide 25: Competitive Changes in North America Transit
Competitive Changes in North America Transit Market Deliveries in 2019 Estimated Market Capacity in 2025 Canada only U.S. only 6,717 43% 57% 50% EUs U.S. only 50% Nova Bus exiting U.S. market in 2025, Proterra assets purchased by Phoenix Motorcars following Chapter 11, ENC closing business in 2024,
Slide 26: Recommended changes to U.S.-funded bus manufacturing has led to FTA guidance
Recommended changes to U.S.-funded bus manufacturing has led to FTA guidance 1. Allow for price adjustments to existing contracts 2. Allow for progress payments 3. Inclusion of price indices for firm price contracts APTA Task Force presented to White House Roundtable in February 2024, focused on str
Slide 27: Poised for Recovery: Forward Guidance and Targets
Poised for Recovery: Forward Guidance and Targets Revenue ($M) and Units Delivered (EUs) Adjusted EBITDA1 ($M) and Adjusted EBITDA as % of Revenue $400M annualized 4,313 6,186 4,371 3,783 3,039 4,001 ~5,000 12.9% 10.4% 6.5% 7.0% (2.8%) 2.6% run rate by 2025 Q4 ~$4,000 >$350 $3,600 $326 $331 $3,172 $
Slide 28: Fiscal 2024 Seasonality
Fiscal 2024 Seasonality Adjusted EBITDA Expectations Half Year 2024 Legacy inflation-impacted contracts timing and anticipated North American Transit quarter-over- quarter contribution margin improvement $180 30% ~$160 ~$100 12% 9% ~$80 3% 2024 H1 2024 H2 2023 Q4 2024 Q1 2024 Q2 - 2024 Q4 Legacy as
Slide 29: 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 Average Sales Price per EU of NFI Backlog $793.4 $731.1 $707.3 $721.1 $638.5 $692.0 $622.8 $635.5 $604.1 $607.6 $607.1 $665.0 $595.
Slide 30: 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 31: Appendix
Appendix Leading the ZEvolution’
Slide 32: Non-IFRS Reconciliation: 2023
Non-IFRS Reconciliation: 2023 Reconciliation of IFRS to non-IFRS As of December 31, 2023 First Second Third Fourth In '000 Quarter Quarter Quarter Quarter Full Year Net Sales $ 524,411 $ 659,569 $ 709,620 $ 791,631 $ 2,685,231 Net Earnings $ (45,808) $ (48,101) $ (39,926) $ (2,329) $ (136,164) % of
Slide 33: Non-IFRS Reconciliation: 2022
Non-IFRS Reconciliation: 2022 Reconciliation of IFRS to non-IFRS As of January 1, 2023 First Second Third Fourth In '000 Quarter Quarter Quarter Quarter Full Year Net Sales $ 459,330 $ 397,952 $ 514,047 $ 689,353 $ 2,060,682 Net Earnings $ (27,795) $ (56,009) $ (40,167) $ (152,405) $ (276,376) % of
Slide 34: Quarterly Backlog: 2019 Q1 to 2023 Q4
Quarterly Backlog: 2019 Q1 to 2023 Q4 NFI Quarterly Backlog1 in EUs (2019 Q1 – 2023 Q4) Firm Option 7,281 5,574 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 5,012 4,313 4,224 4,082 4,400 4,057 4,366 4,153 3,576 3,
Slide 35: Book-to-Bill Recovery Continues Above 100%
Book-to-Bill Recovery Continues Above 100% Book-to-Bill1 and Option Conversion1 (2014 – 2023) 2018-2019: Declines driven by ZEB order timing/trials 133.9% Bid volume driving order increase 128.2% 2020-2021 FAST Act expiry and impact of the pandemic 115.1% 113.0% 111.4% 105.6% Book-to-Bill1 anticipat
Slide 36: 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 Q4: 19% of total deliveries ZEBs as % Annual Deliveries were ZEB EUs ZEB as % of Backlog1 50% High end of gu
Slide 37: Half Year Adjusted EBITDA: 2019 to 2023
Half Year Adjusted EBITDA: 2019 to 2023 NFI Adjusted EBITDA1 Results by Half Year (2019 – 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 Idled majority of $27.0 $106.7 no long
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 February 29, 2024 Adjusted EBITDA: Earnings before interest, income taxes, depreciation and amortization after adjusting for the effects of certain non-recurring and/or non-operations re
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