MARCH 30, 2020 Investor Presentation AltaCorp Capital
WHO IS NFI? Part Fabrication Bus Design and Manufacture Aftermarket and Service North America’s most Carfair Composites is a leader in Founded in 1930, the North comprehensive parts fiber-reinforced plastic (FRP) American Leader in Heavy-Duty organization, providing design and composites Transit buses parts, technical technology publications, training, and support for its OEM Started in 1941 in Winnipeg, NFI’s dedicated internal parts - product lines North America’s largest fabrication facility launched in manufacturer of Motor Coaches 2017 in Shepherdsville, KY UK’s leading bus parts distributor and aftermarket service Tracing its roots to 1892 with the support network Dennis, Alexander and Plaxton companies, ADL is a global manufacturer of double deck Supports eMobility and single deck buses and projects from start to motor coaches headquartered in finish Larbert, Scotland Founded in 2008 in Middlebury, Indiana ARBOC is a leader in low- floor cutaway and medium-duty shuttles 2
OUR MISSION OUR VISION To design and deliver To enable the future of exceptional transportation mobility with innovative solutions that are safe, and sustainable solutions accessible, efficient and reliable
PROVEN STRATEGIC GROWTH AND DIVERSIFICATION • Proven LEAN operations track record • Demonstrated margin expansion Acquired US OEM of low-floor cutaway and medium-duty buses • Strategic part fabrication capability • Accretive acquisitions • Acquired assets of US Proven ability to integrate Fiberglass supplier Acquired UK market leader and global leader on Double Deckers $3,172 Acquired US manufacturer of HD transit buses & parts distributor Acquired $279 FRP Supplier Acquired North America’s $2,519 leading Coach manufacturer $2,382 $2,274 Acquired Orion (transit bus parts business) from Daimler Pro forma Global bus body manufacturer ADL (2) equity investment in NFI $1,539 $1,451 Acquired US part NFI converted from $1,199 fabricator in 2010 IDS to Common Share $984 $926 $865 $331 $318 $315 $289 $9 $151 $107 $97 $95 $80 $61 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Revenue ($M) Adj. EBITDA ($M) See “Non - IFRS measures” on Slide 16 and Forward Looking Statements on Side 17 1) 2) Pro-forma combined business for the period December 31, 2018 to December 29, 2019. ADL information related to the periods before the Acquisition Date are based on audited financial statements of ADL provided to NFI, which were prepared on the basis of UK GAAP. NFI has not independently verified such statements. ADL’s reported results above have been conformed to IFRS. 4 3) 2019 figures reflect the adoption of IFRS 16
A DIVERSE GLOBAL BUSINESS MODEL 2019 Pro-Forma Revenue By Product (1) By Region (1) By Customer (1) Transit Buses 64% Public 70% APAC North America 4% 81% Motor UK and Europe Coaches 15% Private 20% 30% Medium Aftermarket Duty and 14% Low-Floor Cutaway 2% (1) Pro-forma combined business for the period December 31, 2018 to December 29, 2019. ADL information related to the periods before the Acquisition Date are based on audited financial statements of ADL provided to NFI, which were prepared on the basis of UK GAAP. NFI has not independently verified such statements. ADL’s reported results above have been conformed to IFRS. 5
A GLOBAL BUS BUSINESS Canada 3 manufacturing facilities 6 parts and service facilities United Kingdom 4 manufacturing facilities 3 parts and service facilities China Zuhai - 3 rd party manufacturing Germany USA Hong Kong – APAC Head Office 1 parts and service facility 6 manufacturing facilities 15 parts and service facilities Singapore 1 parts and service facility Mexico Malaysia 1 parts and service facility 3 rd party manufacturing Latin America Strategic Partnership with New Zealand 1 parts and service facility 6
NFI TARGET MARKETS Canada and U.S. Motor Coach Market (2) Canada and U.S. Transit Market (1) 6,753 2,470 6,504 2,385 6,336 2,357 6,236 2,324 2,305 2,274 6,032 5,933 5,795 2,092 2,048 2,053 5,388 5,373 5,284 5,212 5,154 1,918 5,109 5,128 5,055 5,009 5,010 1,852 1,825 1,783 4,723 1,756 1,648 4,333 1,581 4,047 1,510 1,479 1,341 1,184 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 UK Bus and Coach Market (3) Canada and US Bid Universe (4) 3,532 30,000 Bids in Process Bids Submitted 5 Year Forecast 3,220 3,025 25,000 2,956 2,731 2,734 2,571 2,544 2,536 20,000 2,485 2,284 2,017 15,000 1,799 10,000 5,000 - Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 (1) Source: Management Estimates and data reported to Metro Magazine (3) Source: Society of Motor Manufacturers and Traders reported data combined with Management Estimates 7 (2) Source: American Bus Association reported data in combination with Management Estimates (4) Source: Management Estimates and Discussions with Transit Agencies
BACKLOG IS A POSITION OF STRENGTH Book-to-Bill (New Firm Orders plus Options Converted / Deliveries) (1) 85% 10,742 EUs 6,000 160% Q4 2019 LTM Total Backlog at Dec. 29, 2019 140% 5,000 Book to Bill ratio (1) (Firm Orders and Options) (1) 120% 4,000 100% 3,000 80% 4,694 EUs 27,648 EUs 60% 2,000 40% 1,000 20% Total Bid Universe (1) Active Bids at Dec. 29, 2019 - 0% (Bids in Process and Submitted) (1) 2014 2015 2016 2017 2018 2019 LTM New Orders (EUs) LTM Deliveries (EUs) LTM Order Intake / Deliveries Total Backlog (Firm and Option EUs) (1) Option History, Conversion and Current Status (EUs) (1) ARBOC Public backlog ADL added in Q4-17 backlog added in Q2-19 MCI Public backlog 12,000 added in Q4-15 2,500 10,000 81% 79% 75% 73% 71% 2,000 8,000 1,500 6,000 1,000 4,000 500 2,000 0 0 2015 2016 2017 2018 2019 2020 2021 2022 2023 Options Expired Options Exercised Firm Option Option by Year of Expiry Annual Conversion Rate (1) Data includes ADL from the period of June 30, 2019 onwards 8
HISTORIC FINANCIAL PERFORMANCE Revenue by Segment Adjusted EBITDA and % Margin 2015 – 2019 (1) 2015 – 2019 (1)(2) $2,893 $417 $2,519 $2,382 13.4% $2,274 $377 12.7% 12.5% $369 $383 11.1% $322 9.8% $318 $315 $1,539 $75 $289 $72 $74 $322 $2,476 $76 $2,142 $2,013 $1,891 $151 $256 $246 $1,217 $61 $242 $181 $90 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 Manufacturing Aftermarket Total Manufacturing Aftermarket Adj. EBITDA % 1) 2019 figures reflect the adoption of IFRS 16. ADL figures only included from the period of May 28, 2019 onwards in 2019 results 2) Management changed presentation of segmented reporting by separating unallocated costs and corporate SG&A from Manufacturing and Aftermarket as such the totals for 2019 will not tie 9
STRONG FREE CASH FLOW GENERATION Free Cash Flow, Cash Capital Expenditures and ROIC 2015 – 2019 (1) CASH FLOW ($MM) 15.8% 14.3% 13.7% 2018 2019 (1) 12.3% $165.2 $161.2 $159.7 $160.4 Adjusted EBITDA $315.4 $322.2 9.7% Interest Expense ($23.5) ($50.5) Current Income Tax ($56.3) ($61.3) Cash Capital Expenditures plus Lease ($76.1) ($50.2) Proceeds from disposition of property $0.2 $0.2 $76.1 Other - - $59.1 $56.9 $50.2 Free Cash Flow (USD) $159.7 $160.4 FX Rate 1.3183 1.3180 $27.9 Free Cash Flow (CAD) $210.5 $211.4 $10.5 Dividends (CAD) $90.3 $105.5 2015 2016 2017 2018 2019 Payout Ratio 43% 50% FCF Cash PPE ROIC 1) 2019 figures reflect the adoption of IFRS 16. ADL figures only included from the period of May 28, 2019 onwards in 2019 results 10
IMPACT OF COVID-19 ON THE BUSINESS Transit Supply Chain Deliveries Production Private Coach Parts and Production staff Potential for Service Potential idled due to health Significant inspection and disruption from Continues under and safety slowdown in customer government business as usual concerns and to private coach as acceptance delays mandated process – private allow for customers vehicles due to travel shutdowns and coach parts sales production are idled, restrictions and shelter-in-place likely to be coordination especially in tour shelter-in-place rulings. impacted and charter space rulings. Impact is a Tier 1 and Tier 2 timing issue, rather suppliers may be than market impacted concern 11
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