REV GROUP, INC. September Investor Presentation N Y S E : R E V G September 2018
Cautionary Statements & Non GAAP Measures Disclaimers Note Regarding Non-GAAP Measures REV Group reports its financial results in accordance with U.S. generally accepted accounting principles (“GAAP”). However, m anagement believes that the evaluation of REV Group’s ongoing operating results may be enhanced by a presentation of Adjusted EBITDA and Adjuste d Net Income, which are non-GAAP financial measures. Adjusted EBITDA represents net income before interest expense, income taxes, depreciation and amortization as adjusted for certain non-recurring, one-time and other adjustments which REV Group believes are not indicative of its underlying operating performance. Adjusted Net Income represents net income, as adjusted for certain items described below that we believe are not indicative of our ongoing operating performance. REV Group believes that the use of Adjusted EBITDA and Adjusted Net Income provides additional meaningful methods of evaluating certain aspects of its operating performance from period to period on a basis that may not be otherwise apparent under GAAP when used in addition to, and not in lieu of, GAAP measures. See the Appendix to this presentation (and our other filings with the SEC) for reconciliations of Adjusted EBITDA and Adjusted Net Income to the most closely comparable financial measures calculated in accordance with GAAP. Cautionary Statement About Forward-Looking Statements This presentation contains statements that REV Group believes to be “forward - looking statements” within the meaning of the Priva te Securities Litigation Reform Act of 1995. These forward-looking statements can generally be identified by the use of forward-looking terminology, including the terms “believes,” “estimates,” “anticipates,” “expects,” “strives,” “goal,” “seeks,” “projects,” “intends,” “forecasts,” “plans,” “may,” “will” or “should” or, in each case, their negative or other variations or comparable terminology. They appear in a number of places th roughout this presentation and include statements regarding REV Group’s intentions, beliefs, goals or current expectations concerning, amon g other things, its results of operations, financial condition, liquidity, prospects, growth, strategies and the industries in which we operate, inc luding REV Group’s outlook for the full-year fiscal 2018. REV Group’s forward -looking statements are subject to risks and uncertainties, including those highlighted under “Risk Factors” and “Cautionary Note Regarding on Forward - Looking Statements” in REV Group’s public filings with the SEC an d the other risk factors described from time to time in subsequent quarterly or annual reports on Forms 10-Q or 10-K, which may cause actual results to differ materially from those projected or implied by the forward-looking statement. Forward-looking statements are based on current expectations and assumptions and currently available data and are neither predictions nor guarantees of future events or performance. You should not place undue reliance on forward-looking statements, which only speak as of the date of this presentation. REV Group does not undertake to update or revise any forward-looking statements after they are made, whether as a result of new information, future events, or otherwise, expect as required by applicable law. 2
Investment Highlights 1 A Market Leader with Iconic Brands and One of the Largest Installed Base of Vehicles Serves Attractive, Diverse & Growing End-Markets with Strong Macro Tailwinds & 2 Demand Drivers Multiple Growth & Synergy Levers to Drive Earnings Growth and a Long-Term Goal of 3 10% EBITDA Margin Opportunity to Leverage Proven Track Record of Successful Acquisitions to Realize 4 Incremental Upside from M&A 5 Unique and Attractive Financial Profile Experienced & Aligned Management Team 6 3
COMPANY OVERVIEW
REV HAS A DIVERSE PORTFOLIO OF VEHICLES, EACH DISTINCTLY POSITIONED TO TARGET SPECIFIC CUSTOMER REQUIREMENTS & PRICE POINTS One of the Industry’s Broadest Product Portfolios of Specialty Vehicles FIRE + EMERGENCY P U M P E R / TA N K E R A M B U L A N C E T Y P E I A M B U L A N C E T Y P E I I I A E R I E L F I R E T R U C K A I R C R A F T R E S C U L E A M B U L A N C E T Y P E I I W I T H L A D D E R F I R E F I G H T E R COMMERCIAL S H U T T L E B U S T E R M I N A L T R U C K S S W E E P E RS M O B I L I T Y VA N T Y P E A S C H O O L M OTO R C OA C H T R A N S I T B U S B U S E S RECREATION C L A S S A D I E S E L S U P E R C C L A S S B C L A S S C TRUCK CAMPERS TRAVEL TRAILERS C L A S S A G A S O L I N E 5
REV is a Consolidator Disrupting the Specialty Vehicle Industry REV IS POISED TO CAPITALIZE ON MOMENTUM TO CONTINUE REDEFINING THE SPECIALTY VEHICLE INDUSTRY • Unique size and scale amongst specialty vehicle manufacturers • As a multi-line producer, offers unique cross-selling and cost synergy opportunities • Differentiated business model versus competitors • 14 acquisitions completed since 2006 ASV IS FORMED $ 1 . 2 B I L L I O N I N S A L E S 1 $ 1 . 9 B I L L I O N I N S A L E S 2 TIM SULLIVAN BECOMES ASV CEO 1 9 6 0 s ASV RENAMED S E V E R A L B R A N D S F O U N D E D T H E I R AND REBRANDED S P E C A I LT Y V E H I C L E S E G M E N T S A N D REV GROUP D AT E B A C K M O R E T H A N 5 0 Y E A R S 2016 2012 2015 2017 2018 2006 2008 2014 2010 AIP PORTFOLIO COMPANIES Acquisitions Milestones ¹ Represents FY 2013 2 Represents FY 2016 6
REV at aGlance – Net Sales FISCAL 2018 YTD Q3 NET SALES BY SEGMENT FISCAL 2017 FULL YEAR NET SALES BY SEGMENT Commercial Commercial 29% Fire & Fire & 33% Emergency Emergency 41% 44% Recreation Recreation 27% 26% $2.3B 2017 SALES $1.7B YTD Q3 2018 SALES $163M 2017 ADJ. EBITDA $104M YTD Q3 2018 ADJ. EBITDA 7
1 REV Sales at a Glance – Sales Mix SALES BY VEHICLE TYPE SALES BY CUSTOMER TYPE SALS BY CHANNEL Industrial / Commercial, Ambulance Private RV 12% Direct 23% Contractor, 29% 10% 27% Government, 50% Fire Dealer Specialty Apparatus Consumer, 28% 73% 6% 21% Transit Bus 7% Type A Commercial Bus School Bus 8% 6% Represents full year Fiscal 2017 ended October 31, 2017 1 8
OVER 5 MILLION SQUARE FEET OF NATIONAL MANUFACTURING, SALES, & SERVICE FACILITIES PROVIDE REV WITH A COMPETITIVE ADVANTAGE A Leading Plant and Service Network 21 Domestic Manufacturing Locations 4 Ambulance Plants 5 Fire Plants 7 REV Technical Centers for Fire & Emergency 6 RV Plants 4 Parts Warehouse 4 Bus Plants 14 After Market Parts and Service Locations 3 REV Technical Centers ("RTC") for RVs 2 Specialty Plants 1 REV Corp. Office Additional International Plants: Sorocaba, Brazil; Wuhu, China (JV) 9
REPLACEMENT DEMAND FOR THE AGING FLEET OF REV ’S PRODUCTS REPRESENTS A REVENUE GROWTH OPPORTUNITY Large Installed Base Drives Recurring Replacement Sales REPLACEMENT VALUE OF AVERAGE LIFE CYCLE INCREMENTAL IMPACT WHY CUSTOMERS CHOOSE REV ’S INSTALLED BASE & SELLING PRICE OF ACQUISITIONS SINCE IPO REV FOR REPLACEMENT • PUMPER TRUCKS: 10 -12 YEARS Repeat purchase to match ($160K-$650K) in-service fleets FIRE AERIAL FIRETRUCKS: 20 -30 YEARS ($475K-$1.2MM) • Brand loyalty and reputation for value, quality, and AMBULANCE: 5-7 YEARS AMBULANCE ($65K-$350K) reliability ~$36 BILLION SHUT TLE BUS: 5 -10 YEARS • Long-standing customer ($40K-$190K) R E P L A C E M E N T relationships VA LU E O F R E V ’ S TRANSIT BUS: 12 YEARS BUS I N - S E RV I C E ($100K-$500K) F L E E T 1 LU X U R Y B U S E S SCHOOL BUS: 8-10 YEARS • ($35K-$55K) Broad, customizable vehicle platform SPECIALTY VEHICLES: 5 -7 YEARS SPECIALTY ($25K-$165K) • Superior product quality and safety RECREATION VEHICLES: 8 -15 YEARS RV ($65K-$600K) • Network of aftermarket C L A S S B R V S parts and service centers Source: Management estimate Note: Replacement sales opportunity is calculated as the average number of annual units sold multiplied by the average useful life multiplied by the average selling price. ¹ Does not include the replacement value of the fleets from the 2017 and 2018 acquisitions. 10
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