Q4 and Fiscal 2019 Results MARCH 12, 2020 CAUTIONARY STATEMENT - PowerPoint PPT Presentation

Q4 and Fiscal 2019 Results MARCH 12, 2020

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 of the date of this presentation and NFI assumes no obligation to update or revise them to reflect new events or circumstances, except as required by applicable securities laws. See the Appendix to this presentation for more details about the forward looking statements. In addition, certain financial measures used in this presentation are not recognized earnings measures and do not have standardized meanings prescribed by International Financial Reporting Standards (“IFRS”) . Therefore, they may not be comparable to similar measures presented by other issuers. See the Appendix to this presentation and the Company’s related Management Discussion & Analysis (“MD&A”) for more information and detailed reconciliation to the applicable IFRS measures. All figures in U.S. dollars unless otherwise noted. 2

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 all major leases. On FY 2019 FY 2018 Impact of IFRS 16 Q4 2019 Q4 2019 Q4 2018 FY 2019 (excluding transition, the Company has elected to use the following practical expedients and policies: Transition (excluding IFRS 16) (in millions except EPS) IFRS 16) • To utilize the modified retrospective approach to adopting the standard, accordingly comparative information for 2018 has not been restated IFRS Measures • Gross Margin $138.0 $139.0 $118.3 $413.5 $415.5 $454.2 To utilize the definition of a lease under International Accounting Standard 17 to identify contracts that are, or contain, leases Net earnings $34.1 $35.8 $42.8 $57.7 $62.0 $160.0 • Net earnings per Share $0.55 $0.57 $0.69 $0.93 $1.00 $2.56 To exclude the recognition of the right-of-use asset and lease liability for leases with a term of twelve months or less Non-IFRS Measures • Adjusted EBITDA To exclude the recognition of the right-of-use asset and lease liability for leases and of $103.9 $100.0 $79.9 $322.2 $308.0 $315.4 low-value assets Adjusted Net Earnings $30.9 $32.5 $44.8 $101.7 $106.0 $167.6 • Adjusted Net earnings To value the right-of-use asset as equal to the lease liability, adjusting for related amounts $0.49 $0.52 $0.72 $1.65 $1.71 $2.69 per Share prepaid or accrued The impact of the adoption of IFRS 16 primarily impacts NFI’s Gross Margin, Adjusted EBITDA, net earnings and Adjusted Net Earnings, and the associated per common share (“Share”) amounts and several balance sheet accounts as reported in the Financial Statements and MD&A. Summary details are provided in the table (detailed segment information is provided within the MD&A). IFRS 16 Transition Impacted Several Financial Metrics and Year-over-Year Comparatives 3

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 parts fabrication facility stabilized and delivering parts. Shifts to profitability in 2020 • Mid-teens revenue growth expected POSITIVE OUTLOOK • Adjusted EBITDA range of $320 million to $350 million (does not reflect any potential impact from COVID-19) FOR 2020* • Planned Capex between $45M to $55M • Free Cash Flow conversion expected at 45% - 50% of Adjusted EBITDA • Q1 slightly down , with growth in Q2, Q3 and Q4. Q4 strongest period Strong 2019 Q4, excess WIP reduced and Projecting Positive Momentum in 2020 * The guidance ranges provided are for selected Fiscal 2020 consolidated financial metrics. These ranges take into consideration our current outlook and our Fiscal 2019 results and are based on assumptions detailed on page 14. The purpose of the financial guidance is to assist investors, shareholders and others in understanding certain financial metrics relating to expected Fiscal 2020 financial results for evaluating the performance of our business. The information may not be appropriate for other purposes. Information about our guidance, including the various assumptions underlying it, is forward looking and should be read in conjunction with the section “Forward - looking Statements” in the Appendix and the related disclosure in the MD&A and information about various econom ic competitive and regulatory assumptions, factors and risks that may cause actual future financial and operating results to dif fer from management’s current expectations. Note that potential impact of COVID-19 (also known as Coronavirus) is not included in guidance ranges provided above. COVID-19 has not had a materia l impact on NFI’s operations as of March 12, 2020. 4

RECORD DELIVERIES IN 2019 (1) Medium-Duty / Heavy-Duty Transit Motor Coach Low-Floor Cutaway (“HD Transit”) (“MD LF”) 1,347 389 Q4 ‘19 341 679 +98% 109 106 +14% YOY YOY +3% YOY Q4 '18 Q4 '19 Q4 '18 Q4 '19 Q4 '18 Q4 '19 3,931 2,781 1,036 1,030 FY ‘19 502 348 +41% YOY 0% YOY -31% YOY FY '18 FY' 19 FY '18 FY '19 FY '18 FY '19 (1) All deliveries reported as equivalent units or EUs (see definition in the appendix on page 20) Record Full Year Transit Deliveries With Solid Coach and Medium-Duty/Low-Floor Cutaway Performance in the Fourth Quarter of 2019 5

FINANCIAL PERFORMANCE FY ’19 (1) Highlights Q4 ’19 (1) Revenue ($M) Revenue ($M) Revenue $2,893 • Growth driven by ADL acquisition $2,519 $918 • Lower deliveries in legacy Heavy-Duty $662 +15% Transit, Motor Coach and Medium-Duty / YOY Low-Floor Cutaway product lines impacted +39% by KMG challenges and new model YOY learning curves • Legacy Aftermarket volumes down due to FY '18 FY '19 Q4 '18 Q4 '19 lower public activity EBITDA ($M) EBITDA ($M) $322 Adjusted EBITDA $104 $315 • Growth driven by ADL acquisition $80 11.1% • 12.5% Negative productivity impact from KMG Margin (2) 11.3% 12.1% Margin (2) challenges and associated impact on New Margin (2) Margin (2) Flyer production plus new model learning curve Q4 '18 Q4 '19 FY '18 FY '19 (1) Fiscal 2019 figures are not adjusted for impact of IFRS 16 – see slide 4 for details (2) Adjusted EBITDA margin calculated as Adjusted EBITDA divided by revenue Benefit of May 28 th ADL Acquisition was Offset by Production and Supply Challenges 6

MANUFACTURING SEGMENT Q4 ’19 (1) Highlights Quarter 4: Revenue ($M) Adj. EBITDA ($M) • Increase in Q4 EBITDA from higher quarterly deliveries from all product lines and the addition of ADL $801 $577 $86 • Q4 Canada and U.S. total active and full Bid Universe continued $73 to show strength: +39% 12.6% 10.7% YOY • Active bids up by 1,963 EUs vs. 2018 Q4 (72% increase) Margin (2) Margin (2) • Total Bid Universe up 4,223 EUs (18% increase) Q4 '18 Q4 '19 Q4 '18 Q4 '19 Full Year: FY ’19 (1) • Full year EBITDA increases from ADL and higher heavy-duty transit vehicles deliveries offset by impact from: Revenue ($M) Adj. EBITDA ($M) • Learning curve from new model launches at New Flyer and MCI $2,476 $2,142 • KMG ramp-up, loss position and negative impact on New Flyer $256 $276 manufacturing operations, +16% • product mix, and margin pressure within coach 12.9% 10.3% YOY Margin (2) Margin (2) • lower cutaway and medium-duty deliveries FY '18 FY '19 FY '18 FY '19 • Total backlog of 10,742 EUs (4,224 EU firm, 6,518 EU option) (1) Fiscal 2019 figures are not adjusted for impact of IFRS 16 – see slide 4 for details valued at $5.2 billion (2) Adjusted EBITDA margin calculated as Adjusted EBITDA divided by revenue Learning Curve and KMG Impact on Manufacturing plus Competitive Coach Environment Impacted 2019 7

AFTERMARKET SEGMENT Q4 ’19 (1) Highlights Revenue ($M) Adj. EBITDA ($M) Quarter 4: $117 $86 $18 • $17 Increase in Q4 aftermarket Adjusted EBITDA of $1.1M or 6% driven by volume increases from ADL and improved +37% 20.2% 15.7% YOY margins from product mix offset by added SG&A costs from Margin (2) Margin (2) ADL Q4 '18 Q4' 19 Q4 '18 Q4 '19 FY ’19 (1) Revenue ($M) Adj. EBITDA ($M) Full Year: $417 • $377 Full year Adjusted EBITDA driven by volume increases from $75 ADL offset by increased SG&A costs from addition of ADL $74 +11% 19.5% 17.9% YOY Margin (2) Margin (2) FY '18 FY '19 FY '18 FY '19 (1) Fiscal 2019 figures are not adjusted for impact of IFRS 16 – see slide 4 for details (2) Adjusted EBITDA margin calculated as Adjusted EBITDA divided by revenue ADL Driving Aftermarket EBITDA Gains, with Margin Profile Change From addition of ADL SG&A 8