STRATEGIC ACQUISITION OF ALEXANDER DENNIS Alexander Dennis is a - PowerPoint PPT Presentation

STRATEGIC ACQUISITION OF ALEXANDER DENNIS Alexander Dennis is a Scotland headquartered global leader of lightweight single and double deck buses and motor coaches May 28, 2019

Company Overview Business Description  ADL is a leading global manufacturer of double deck and single deck buses and motor coaches.  Headquartered in Larbert, Scotland with international offices in Hong Kong, Singapore, Malaysia, New Zealand, Europe, Canada, the United States and Mexico.  More than 120 years of British engineering heritage.  In 1995 Mayflower Corporation bought Scottish bus-maker Walter Alexander (founded 1924) and in 1998 English bus-maker Dennis Group (founded 1895). Mayflower joined Henlys Group in a JV rolling Alexander, Dennis and Henlys' Plaxton (founded 1907) into one company called TransBus International. The JV was not successful and Mayflower collapsed in 2004.  Alexander Dennis was incorporated in 2004 as a private consortium to buy a major portion of the collapsed Mayflower Corporation. Henlys' Plaxton was taken over by management and operated under the ownership of Plaxton Holdings until 2007 when it was bought by Alexander Dennis. Propulsion expertise includes Clean Diesel, CNG, Hybrid and Battery-Electric. ADL is the UK electric bus leader (on BYD  chassis) with international electric models launching in 2019  ADL provides aftermarket services in all of its markets including parts, maintenance and servicing Key ADL Statistics Key ADL Financials (£ mm) (1) 2017 2018 Growth 2,587 Number of employees 2,345 2,533 (3% EV) 8.0% Units Sold Buses in Service 31,600 £576 £631 9.5% Revenue Assembly Facilities Scotland (3), England (1), US (1), Canada (1) Adjusted EBITDA / % Margin £40 / 7% £44 / 7% 10.0% Service and Parts England (3), New Zealand (1), Singapore (1), Malaysia Free Cashflow (2) £6.6 £18.1 175% (1), Canada (1), USA (1) Distribution locations 1. All financial information regarding ADL contained in this presentation has been derived from ADL’s financial statements which are prepared in accordance with UK Generally Accepted Accounting Principles (“GAAP”). NFI prepares its financial statements in accordance with International Financial Reporting Standards (“IFRS”). UK GAAP differs in certain material respects from IFRS. Adjusted EBITDA is a non-IFRS and non-UK GAAP measure. See “Non-IFRS measures” under cautionary statements at the end of this press release. 1

Transaction Highlights  £320 million (US$405 million), transaction value funded through a combination of cash and shares – Transaction signed and closed on day of announcement (no regulatory approvals) – ADL’s primary shareholders and ADL’s CEO and CFO have elected to receive in aggregate 1.47 million NFI shares (approx. 10% of the transaction value) issued at $31.94 per share TRANSACTION – Equating to 2% of NFI shares outstanding following completion of the transaction HIGHLIGHTS  ADL management team to remain in place and will continue executing its growth strategy  Purchase price multiple of approximately 7.3x 2018 (for the 12 months ended Dec 30, 2018) Adjusted EBITDA (1)  Immediately accretive to earnings per share and free cash flow per share (1) (before potential synergies)  The cash consideration paid pursuant to the transaction was financed with a new US$300 mm credit facility with the remainder funded from NFI’s existing syndicated credit facility – New credit facility has substantially the same terms as NFI’s existing syndicated credit facility FINANCING NFI pro forma total debt to estimated combined Adjusted EBITDA (1) of approximately 2.9x as at December 30, 2018 AND PRO  FORMA  Significant deleveraging is expected over the next 18 months (to within target leverage of 2.0x to 2.5x total debt / Adjusted EBITDA) LEVERAGE similar to the MCI transaction  NFI maintains dividend policy presently at $1.70 per share annually, paid quarterly 1. See footnote on slide 1 and “Non-IFRS measures” under cautionary statements at the end of this presentation. 2. British pounds have been converted to US dollars using an exchange rate of £1.00=US$1.2663; 2018 actual figures have been converted at an exchange rate of £1.00=US$1.3355. 2

Strategic Acquisition Rationale  ADL is the #1 UK bus manufacturer and #1 global producer of double-decker buses with a well established international presence MARKET LEADERSHIP - Significant installed base in UK, Hong Kong, Canada, USA and New Zealand INTERNATIONAL  Growing North America business which augments NFI’s product breadth and customer reach DIVERSIFICATION  Successful track record of accessing and growing in new markets globally - Recent success in Continental Europe (Poland, Switzerland and Germany) provides a platform for further expansion into Western Europe A PLATORM FOR - Operating model in Mexico to be utilized to investigate additional growth GROWTH  ADL revenue split: Bus = 84% of total sales, Motor coach = 5%, and Parts/Service = 11%  Adds its class leading, internationally proven line-up of single-deck and double-deck buses ENHANCES NFI  Sharing of best practices, and the optimization of existing partnerships internationally PRODUCT PORTFOLIO  Enhances NFI’s technical competencies on lightweight chassis / bodies UK’s market leading electric bus business with significant product know-how and first mover advantage  ADL operates flexible assembly model (both internal and 3 rd party) with deep manufacturing and engineering talent  COST EFFECTIVE PLATFORM  Operates successfully in very competitive environments with cost competitive buses assembled in the UK primarily for the UK, in the US and Canada for domestic markets and even more cost competitive in foreign markets with local sourcing and 3 rd party assembly Immediately accretive to earnings per share and free cash flow (1)(2) per share (before synergies)  FINANCIALLY  Rapid deleveraging to NFI’s target range of 2.0x to 2.5x total debt to Adjusted EBITDA is expected over the next 18 months (1) COMPELLING  Significant acquisition whilst maintaining NFI dividend policy  Potential to capture revenue and cost synergies from the sharing of best practices and a combined market approach in North America Strong cultural alignment between NFI and ADL with longstanding relationships and mutual respect  STRONG - Share similar cultures and values, especially towards quality, technology, innovation and customer experience CULTURAL FIT WITH - Clear alignment on management strategy, market outlook, and EV adoption expectations COMMITMENT TO SAFETY AND  ADL commitment to sustainable mobility and completely aligned with NFI ENVIRONMENT  ADL management to remain in place and to drive performance and international growth 1. See footnote on slide 1 and “Non-IFRS measures” under cautionary statements at the end of this presentation. 3

ADL is well aligned with NFI’s Strategy NFI MISSION: To move people with leading transportation solutions that are safe, accessible, efficient, and reliable. NFI VISION: To enable the future of mobility with innovative and sustainable solutions. NFI STRATEGY: 1. Offer global operators the best buses, services and value in the industry  Migrate from selling buses to providing solutions…that deliver best value & support for life  Provide complete offering: Bus (“Workhorse of the Fleet”) supported by Parts & Service  Lead market innovation with diverse propulsion offering on proven bus platforms  Increased focus on Aftermarket Parts and Services (such as telematics, infrastructure, etc.) 2. Operate as a world class OEM using LEAN Principles (OpEx) & Quality Roadmap  Be recognized as an Employer of Choice  Excel in supply chain, strategic sourcing and appropriate in-sourcing  Continuous pursuit of eliminating waste and cost reduction to improve competitiveness  Excel at customer support, response and follow-up  Operate as a responsible, sustainable and environmentally conscious business 3. Perform while seeking Growth and Diversification into New Markets  Deliver attractive returns to shareholders through capital appreciation and dividends  Operate with a prudent capital structure preserving flexibility to invest and grow the business  Seek to diversify: Product (type of bus) and/or Market (Public vs. Private) and/or Geography (North America vs. International) Market leadership, world class operations and prudent growth into new markets 4