NFI Group Inc. · TSX:NFI
NFI — Investor Day (January 2021)
151 slides from NFI's investor day presentation, Jan 11, 2021
Slide 1: Virtual Investor Relations Day
JANUARY 11, 2021 Virtual Investor Relations Day
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: Welcome & Housekeeping
JANUARY 11, 2021 Welcome & Housekeeping STEPHEN KING Group Director, Treasury, Corporate Development & Investor Relations NFI Group
Slide 4: Investor Day 2021 Agenda
1. Welcome 2. ESG at NFI 3. CEO Commentary INVESTOR DAY 2021 4. NFI Forward Update 5. Panel with Public Transit Mobility Experts and AGENDA Customers 6. NFI is Leading the ZEvolution 7. NFI Market & Business Updates 8. NFI Financial Guidance & Outlook 9. NFI Board Perspective 10. Conclusion
Slide 5: ESG at NFI
JANUARY 11, 2021 ESG at NFI JANICE HARPER EVP, People & Culture NFI Group
Slide 6: Our Why - We Move People
OUR WHY - WE MOVE PEOPLE Our Vision To enable the future of mobility with innovative and sustainable solutions. Our Mission To design and deliver exceptional transportation solutions that are safe, accessible, efficient and reliable. With 8,000 team members operating from 50 facilities across 10 cou
Slide 7: Core Principles Shape What We Do
CORE PRINCIPLES SHAPE WHAT WE DO 1 We pledge to be customer focused We must earn the trust of those we serve and 2 those they serve 3 We foster smart leadership 4 We believe in sustainability 5 We value honest, hard work and teamwork 7
Slide 8: The Power of a Bus
THE POWER OF A BUS • Americans took 4.66 billion bus trips in 20191; UK passengers took 4.6 billion bus journeys from Apr 2019-Mar 20202; and Canadians took 1.89 billion bus trips in 20193 • One bus removes 40 cars from the road Transit mode Cost Time to deliver LRT $3B - $6B >5 years 100 Transit Bu
Slide 9: Cleaner Air – Cleaner Planet
CLEANER AIR – CLEANER PLANET Every ZEB eliminates 3,380,000 lbs of CO2 over a 12-year life, the equivalent of 28 cars per year Annual Tailpipe Emissions1 (CO2, lbs) 281,667 229,167 196,167 163,167 - 15 Yr Old Diesel Current Diesel CNG Hybrid NFI ZEBs 1 Source: GREET Model Fleet Footprint Calculator
Slide 10: Transformative Products
TRANSFORMATIVE PRODUCTS 49,700 $11.7 jobs billion Created from Offset to annual every $1 billion car operating invested1 costs1 +24% 10x Safer per mile to Home values travel by public near public transit than transportation2 automobiles3 1 APTA’s Economic Impact of Public Transportation Investment 2
Slide 11: Robust Governance Program
ROBUST GOVERNANCE PROGRAM Enhanced ESG 33% disclosure and 70% Independent Board Female policy Directors development 300+ 100% of Robust Whistleblower Years of Directors Policy and Fraud Combined own shares Framework Hotline Experience Dedicated Average Highest ISS Ranking for Audit, HR and Director
Slide 12: Board of Directors
BOARD OF DIRECTORS I I I Hon. Brian Tobin Colin Robertson Phyllis Cochran Larry Edwards Paul Soubry (Ontario) (United Kingdom) (South Carolina) (Oklahoma) (Manitoba) Board Chair, Vice Chair Audit Committee Chair HRCG Committee Chair; President & CEO HRCG Committee member Member since 2020 Member sin
Slide 13: People, Diversity and Empowerment
PEOPLE, DIVERSITY AND EMPOWERMENT Overall Favorable Engagement Index Comparison Representation of Self-Identified Disadvantaged Status in 78% 82% Our Workforce 2016 2018 NFI Group Representation of Women Representation of Veterans in in Our Workforce 38% Our Workforce 19.60% 20% Women in middle Wome
Slide 14: Safety Drives Everything We Do
SAFETY DRIVES EVERYTHING WE DO NFI Group (all companies) OSHA Rate1 NFI Group (all companies) Lost Time Rate2 OSHA and Lost Time Rates declined by 90% and 96% respectively since 2000 1 OSHA Rate = Occupational Safety & Health Association Recordable Incident Rate, calculated as (# of OSHA Recordable
Slide 15: Safe Return to Work Protocol
SAFE RETURN TO WORK PROTOCOL • COVID-19 has had a significant impact on Social Distancing our company and team PPE Required by and All Staff Re-Engineered • Across NFI, idled the majority of our facilities Processes for nearly 2 months (Mar-May 2020), while resulted in nearly 8,000 people on tempora
Slide 16: Community Benefits Framework
COMMUNITY BENEFITS FRAMEWORK • Hours of classroom training and • Recruitment status (including hiring, programs attended onboarding, and training individuals) • Identification of pre-apprenticeship and • Achievement of established diversity apprenticeship commitments goals • Implementation of work p
Slide 17: Environmental Footprint
ENVIRONMENTAL FOOTPRINT NFI Greenhouse Gas Emission (US Ton)1 % Reduction 38% 39% 38% 38% 38% 37% 1 Company estimates. 17
Slide 18: Our ESG Journey
OUR ESG JOURNEY Continue to evaluate and consider implementing additional voluntary disclosure framework(s) 3rd ESG report Launched National 2021+ Community Benefits MAY 2021 Framework 2021 MAR 2020 Inaugural CDP participation MAY 2020 MAY 2019 2nd ESG report 1st ESG report 18
Slide 19: Strategic Priorities
STRATEGIC PRIORITIES • Launching CDP Reporting • Continue to evaluate and consider implementing additional voluntary disclosure framework(s) (UN, SASB, GRI, etc.) • Continued rollout of CBF in other locations • Improving representation targets • Driving safety performance Better Workplace Better Pro
Slide 20: CEO Commentary
JANUARY 11, 2021 CEO Commentary PAUL SOUBRY President & Chief Executive Officer NFI Group
Slide 21: Creating NFI Group
CREATING NFI GROUP Chapter 1: Rationalize North America Transit NF conversion from es IDS to Common Share $984 $926 $97 $80 — — 2010 2011 $865 $61 2012 (WABI trond (i Marcopolo $1,451 | — 2014 mw Revenue ($M) $1,199 ; cad — 2013 $2,274 $1,539 $289 $151 — 2015 2016 = Adj. EBITDA ($M) Chapter 2: Diver
Slide 22: Strategic Imperatives
STRATEGIC IMPERATIVES Growth Cost Optimization Innovation & Technology Adoption Customer & Employee Satisfaction 22
Slide 23: Market Leaders & Innovators
MARKET LEADERS & INNOVATORS 41% Market Share #1 Manufacturer 7,000 - 8,000 in NA Transit of ZEBs in Annual Production NA and UK Capacity 46% Market Share Broadest ZEB in NA Coach Offering Propulsion battery-electric, Agnostic hydrogen fuel-cell, 72% Market Share electric trolleys in UK Transit $400M
Slide 24: NFI Forward Update
JANUARY 11, 2021 NFI Forward Update IAN SMART EVP, Business Transformation NFI Group
Slide 25: NFI Forward
NFI FORWARD NFI Forward Financial Goals NFI Forward Key Initiatives 1 Centralization and standardization 1. Reduce 2019 Run Rate SG&A and OH by 8-10% ($65M annual adj EBITDA 2 North America Bus and Coach Combination impact) 3 Canada/US Aftermarket Consolidation 2. Generate additional $10M Free Cash
Slide 26: Centralize and Standardize
CENTRALIZE AND STANDARDIZE Impact: Consistent, lean business service delivery. Pre-NFI Forward End State • De-centralized Finance & Accounting • Centralized Finance & Accounting Teams functions, including A/P, A/R, and Treasury for A/P, A/R and Treasury • Business Unit (BU) specific sourcing, • One
Slide 27: Combine New Flyer and MCI
COMBINE NEW FLYER AND MCI Impact: Process harmonization and related SG&A and OH savings captured Pre-NFI Forward End State Consolidated, Harmonized Business Unit Executive, HR, Finance, Supply, Sales, Engineering Executive, HR, Finance, Supply, Sales, Engineering Executive HR Finance Supply Sales HR
Slide 28: Combine NFI and ADI Parts in NA
COMBINE NFI AND ADI PARTS IN NA Impact: Reduced Footprint, SG&A and Inventory Pre-NFI Forward End State • 22 parts Inventory stocking locations • Reduced inventory, stocking locations and • NFI Parts and ADL North America Parts footprint stand alone businesses • All NFI Group brands supported by NFI
Slide 29: Optimize UK Footprint and Costs
OPTIMIZE UK FOOTPRINT AND COSTS Impact: Right-sizing facilities and overhead; significant reduction in SG&A and OH Pre-NFI Forward End State Guilford manufacturing site decommissioned; workforce reduction ~600. 29
Slide 30: NA Facility Optimization
NA FACILITY OPTIMIZATION Impact: Facility optimization; reduced footprint creating efficiency gains and SG&A and WIP reduction Pre-NFI Forward End State • Number of locations optimized for production, capacity and demand • Rationalization of all fiberglass manufacturing facilities into Carfair locat
Slide 31: Sourcing Savings
SOURCING SAVINGS Impact: Material cost reduction driven by eBus acceleration and sourcing strategy Pre-NFI Forward End State • 2019 NFI Group Material spend of $2B • Cross-Business Unit collaboration to ($1.5B in 2020) represents 70% of our optimize product costs costs, BUs source individually • Ded
Slide 32: NFI Forward Overview
NFI FORWARD OVERVIEW NFI-wide transformative program to combine business units, consolidate facilities, remove overhead costs, and create a more efficient, integrated company. In Year ~$5 Annual Run rate $65M Adjusted EBITDA and $10M Free Cash Flow by 2023. *From 2019 levels. 32
Slide 33: Panel with Public Transit Mobility Experts & Customers
JANUARY 11, 2021 Panel with Public Transit Mobility MODERATOR JENNIFER MCNEILL Experts & Customers VP, Sales & Marketing
Slide 34: Panelists
PAUL SKOUTELAS DR. JOSIPA PETRUNIC DAVID BROWN DANNY ILIOIU President & CEO President & CEO Group Chief Executive Zero-Emissions Fleet Strategic Planning Manager
Slide 35: Introduction to the Panel
JANUARY 11, 2021 Introduction to the KATHERINE WINTER Corporate Director NFI Group VP & GM, Autonomous Transportation & Infrastructure Division, Intel Corporation
Slide 36: Paul Soubry, President & CEO
JANUARY 11, 2021 PAUL SOUBRY President & Chief Executive Officer NFI Group
Slide 37: Investor Day | January 11, 2021
Investor Day | January 11, 2021
Slide 38: Buses: Transition to Zero Emission
BUSES ✓ Clean City Initiatives are projected ✓ Political Will and Funding to lead the ✓ Charging Standards vehicle transition ✓ Cost of Ownership to Zero Emission ✓ Industry Demand 38
Slide 39: Carbon-Free and Clean City Commitments
Carbon-Free and Clean City commitments are being established and implemented globally Resulting in Political Will for ZEB’s gaining momentum “President-Elect Biden Wants Zero-Emission Public Transit for Cities With 100,000+ People” 1 “15 States follow California’s lead and agree that transit agencie
Slide 40: ZEB Adoption Projected to Outpace Cars/Trucks
ZEB adoption projected to outpace Cars/Trucks EV Share of Global Vehicle Fleet by Segment1 80% 60% 40% 20% 0% 2020 2024 2028 2032 2036 2040 Two-Wheelers Passenger Vehicles Light Commercial 1 Bloomberg New Energy Finance Outlook 2020 40
Slide 41: Charging Standards Were Established
Charging standards were established Industry collaboration including Initial drive for standards from the California commercial and passenger vehicles led to Air Resources Board (CARB) and development of IEC 61851 standards for collaboration of numerous passenger and vehicle charging in 2017 commerc
Slide 42: Battery Prices Have Decreased 80% Since 2014
Global Battery prices have decreased 80% since 2014 Bloomberg NEF 2020 Cumulative Decline in Battery Cell and Battery Pack Prices – Real 2020 $/kWh1 0% -10% -20% -30% -40% -50% -60% -70% -80% -78% -90% -83% 2014 2015 2016 2017 2018 2019 2020 Cell Pack • Total Cost of Ownership of ZEB’s will approach
Slide 43: Operator Demand for ZEB Now Gaining Traction
Operator demand for ZEB now gaining traction “Commitment to 100% zero- “From 2025 onwards committed to “Low-Carbon Fleet Strategy to convert emissions by 2040” acquiring 100% electric vehicles” all buses to zero-emission by 2050” “Committed to a 100% zero- “Committed to 100% ZEB by 2040” “Bus action
Slide 44: What Paces the Transition to ZEBs?
So, what paces the transition to ZEBs? Existing Fleet Integration • Range and route planning • Typically operate buses • Charging strategy for 12–18 years • Significant and reliable • 1-for-1 replacement energy source Funding Training • New technology adoption • Current funding models • Operator tra
Slide 45: Numerous Factors Impact ZEB Selection
Numerous factors impact ZEB selection Load Factors Battery Capacity NFI ZEB Offering • Battery-electric Weather Battery Age • Fuel Cell Electric • Trolley Electric Operator Decision Route Topography Variables Distances NFI Charging Offering Operator Parasitic Load Experience • Depot Charging • On-Ro
Slide 46: Leading Electric Bus Mobility
450+ 105K+ 100+ Years of bus & Buses in Cities have coach service NFI buses in expertise globally service Leading ✓ Broadest offering of zero-emission buses Electric ✓ Leading manufacturer of zero-emission Bus buses in North America Mobility ✓ Largest EV fleet in the United Kingdom ✓ Largest ZEB cap
Slide 47: Structures Designed for Life
Structures designed for life. • Standard approach to weight distribution to optimize passenger capacity • Common shell production within NFI facilities • Batteries located where engines and CNG tanks are placed • Carbon or Stainless-Steel structures • Common approach to maintenance and field service
Slide 48: Markets Require Highly Spec'd Buses
Our markets require highly spec’d buses to meet individual and local requirements Need to last for 12 to 20 Customized to meet local requirements years Operate between 16 to 20 hours/day Significant water ingress testing Weigh from 35,000 lbs to 45,000 Driven in a variety of topographies lbs Need to
Slide 49: NFI's Zero-Emission Journey Started in 1969
NFI’s Zero-Emission Journey started in 1969 2020 2005 Roll out of 1994 MCI eCoach First Diesel 2018 and First Hybrid with 2012 2015 development Compressed BAE and first Launched NF of ARBOC Natural Gas Gas Engine First battery- Launched NF Infrastructure electric bus Hybrid electric bus Connect Solu
Slide 50: From Selling Buses to Providing Solutions
From selling buses to providing Solutions Infrastructure Buses and Connected Vehicles Aftermarket, Solutions Coaches and Diagnostics Warranty & Service 50
Slide 51: The VIC: The Industry's Innovation Center
“The VIC”: The Industry’s Innovation Center 2017 2,000+ 200+ 450 Launch Visitors Agencies/Operators Attendees for 2020 Virtual Sessions 51
Slide 52: The Only ZEB Collaboration Center of Its Kind
The only ZEB Collaboration Center of its kind 24 8 3 3 1 Displays Interactive Activities Observation Decks Charger Types Simulator 52
Slide 53: Industry's Widest Range of ZEBs
Industry’s Widest Range of ZEB’s already exist 24- & 35-foot eEquess ADL Single-Deck Electric 35-foot Long Range & Rapid Charge 40-foot ADL Double-Deck Long Range & Electric Rapid Charge 40-foot Fuel-Cell Electric Motor Coach J4500e 60-foot Long Range & Rapid Charge 60-foot Motor Coach Fuel-Cell Ele
Slide 54: NA's Broadest Offering of Low/No Emission Buses
NA’s Broadest Offering of Low/No Emission Buses Battery-Electric Fuel-Cell Electric Electric Trolley Diesel Electric Hybrid CNG Clean Diesel 25’, 30’, 25’, 30’, 25’, 30’, 30’, 35’, 30’, 35’, 30’, 35’, Lengths 35’, 40’, 60’ 35’, 40’, 35’, 40’, 40’ 40’ 40’, Double Articulated, 60’ Artic 60’ Artic Deck
Slide 55: UK's Broadest Offering of Low/No Emission Buses
UK’s Broadest Offering of Low/No Emission Buses Battery-Electric Fuel-Cell Electric Zero-Emission capable Hybrid Diesel Electric Hybrid Clean Diesel CNG 25’, 30’, 25’, 30’, 25’, 30’, 40’ and 35’ and 35’ and Lengths 35’, 40’, 35’, 40’ 35’ and Double 40’ 40’ and and Double Deck Double Double Deck Deck
Slide 56: North America's Largest ZEB Production Capacity
North America’s Largest ZEB Production Capacity 80 units 4,200 units Weekly Capacity Annual Capacity 9 1 ZEB Capable Facilities Dedicated New Product Development Facility 5,000+ 3,000,000+ Team Members Production Sq. Ft. 56
Slide 57: The UK's Largest ZEB Production Capacity
The UK’s Largest ZEB Production Capacity 80 units 4,000 units Weekly Capacity Annual Capacity 4 1 ZEB Capable Facilities Dedicated New Product Development Facility Single and Double Deck Production Capabilities 57
Slide 58: >90% of Current Suppliers Are the Same for ZEB
>90% of NFI's current suppliers are the same for ZEB Sophisticated supply chain with the complexity of Buy America 58
Slide 59: Partnerships with Leading Suppliers
NFI has Partnerships with Leading Suppliers Electric Charging & Propulsion Telematics ▪ Commercial vehicle partners focused on heavy-duty use 59
Slide 60: New Flyer Manufactures Its Own Battery Packs
New Flyer manufactures its own battery packs Cell Sourcing Battery Battery Pack Connect 360 Relationships Module Manufacturing Installation of Installation Battery Pack and Testing Continuous battery market research and testing 60
Slide 61: NFI Chooses to Remain Cell Agnostic
NFI chooses to remain cell agnostic Financial Implications Performance Implications • Significant R&D investment ✓ Range: Cell capacity to achieve required to match current desired range technology ✓ Cycle life to last 12-15 years in transit applications • 80% decline in battery cost/kwh ✓ Charge ra
Slide 62: ZEBs in Service Across NA Cities
NFI’s ZEBs are in service across NA cities… BC PE AB SK MB QC NB ON NS WA ME MT ND VT MN NH MA OR NY RI ID WI SD MI CT WY PA NJ IA DE NV NE MD IL IN OH WV UT VA DC CA CO KS MO KY NC TN OK SC AZ NM AR GA AL MS TX LA FL 62
Slide 63: ZEBs Throughout the UK and New Zealand
…and throughout the UK and New Zealand Glasgow Edinburgh Auckland Tauranga Manchester Liverpool Nottingham Birmingham Coventry Christchurch Cambridge London Salisbury Guildford 63
Slide 64: Most Comprehensive Support Network
Industry’s most comprehensive support network 24 Parts Stocking Locations across NFI 300+ Field and Technical Service Employees 5 24/7 Customer Service Support Call Centers 64
Slide 65: Real Time Telematics and OTA Software Updates
Real time telematics and OTA software updates ▪ Monitoring both the Electric System and the Bus 65
Slide 66: Safe, Reliable, Smart Charging & Mobility Solutions
Providing safe, reliable, smart and sustainable charging & mobility solutions • Introduced in 2019 to support NFI North American Electric Bus Deployments • Provides a cohesive transition of bus fleets to zero-emission bus technology • Focuses on energy management optimization, as well as infrastruct
Slide 67: New Flyer Battery Recycling Pilot Project
New Flyer Battery Recycling “Pilot” Project Targeting recycling Process Recovers of 3,200 lbs of 95% of all lithium-ion lithium-ion batteries battery materials Closed loop battery Patented Li-Cycle resource recovery technology outputs service produces high-purity battery minimal solid waste, chemica
Slide 68: Reality Is: Transition Is an Evolution
Reality is … ✓ Useful life of existing fleet transitioning to ✓ Local Politics and Funding ZEB’s in the ✓ Operator Experience US, Canada and UK is inevitable, ✓ Vehicle Customization but ✓ Charging Strategy Selection it’s an evolution. ✓ Energy Demand and Sourcing 68
Slide 69: Time to Move to 100% ZEB Fleets
It will take time to move to 100% ZEB fleets given current fleet status and adoption rates Global Bus Fleets and Numbers of ZEBs 2.7 2.5 % 60% % UK Canada 37k / 1k ZEB 16k / <1k ZEB China 0.7 693k / 420k ZEB 2.0 Europe % % US 861k / 6k ZEB 62k / <2k ZEB 0.3 0.2 Africa % % 350k / <1k 1.6 ZEB % Latin
Slide 70: US Transit Bus Fleet by Propulsion and Age
The current US transit bus fleet is primarily Diesel and CNG and under 10 years old Fleet by Propulsion Type Fleet by Vehicle Age 35% CNG 31% 18% Hybrid 23% 17% Battery + Fuel 11% Cell Diesel 2% 62% 0-5 years 6-10 11 -15 >16 years Years years Source: APTA and Management Estimates 70
Slide 71: UK Vehicles by Emission Standard
Less than 25% of the vehicles on the road in the UK are Euro 6 / Hybrid / Zero-Emission* Mainly utilised for Public bus services school runs etc. Zero Emissions Euro 6 180 Vehicles (2017 – Present) Euro 5 ~8,500 Vehicles (2015 – Present) Euro 4 ~11,500 Euro 3 Vehicles (base, cumulative) ~7,500 Vehic
Slide 72: Sources and Uses of Funding: U.S.
Buckets & Colours of money fund bus procurements Uses (Colours) of Funding: U.S. Sources (Buckets) of Funding: U.S. Capital Operations and Fuel and Energy Purchases Maintenance Purchases Federal 80% State 100 100 20% City % % ▪ UK is more reliant on private operator farebox revenues, but incentives
Slide 73: Energy Demands of More ZEBs
Let’s not forget: as more ZEB’s are deployed, immense demands are required for energy Overnight charging of 600 ZEB’s could require peak demand of 45 MW, the equivalent of nearly 30,000 homes Source: Management Estimates 73
Slide 74: Projected Market Adoption Rates of ZEBs
Projected Market adoption rates of ZEBs 1 North American Heavy-Duty Transit UK Transit 45.0% 37.0% 30.0% 20.0% 21.2% 15.0% 7.9% 10.6% 6.5% 5.0% 2019 2020 2021E 2022E 2023E 2019 2020 2021E 2022E 2023E North American Coach North American Cutaway 8.0% 4.0% 5.0% 4.0% 1.0% 1.5% 0.0% 1.0% 1.0% 2.0% 2019 2
Slide 75: Autonomous Buses
Autonomous buses exist, but adoption will be measured is HERE 75
Slide 76: Imagine the Possibilities of Autonomous Buses
Imagine the possibilities of autonomous buses Pedestrian and vehicle safety Driverless depots and parking and data collection Photo Sources: Government of Quebec, and Science XTM 76
Slide 77: New Flyer Xcelsior AV
New Flyer Xcelsior AV™ North America’s first SAE Level 4 (SAE J3016) Automated Heavy-Duty Transit Bus 77
Slide 78: ADL Automated Bus
ADL Automated Bus Joint project with Stagecoach to pilot UK depot automated vehicle 78
Slide 79: Summary: Leading the ZEvolution
✓ Market dynamics position bus and coach transition to EV ✓ NFI was built through decades of investment, innovation and product development ✓ NFI is the industry’s leader and in prime position to capitalize on the zero-emission evolution (ZEvolutionTM) ✓ NFI has the most manufacturing capacity, larg
Slide 80: Leading the ZEvolution
Slide 81: Market & Business Updates
JANUARY 11, 2021 Market & Business Updates
Slide 82: Business Unit Presenters
CHRIS STODDART DOUG MINIX PAUL DAVIES BRIAN DEWSNUP President General Manager President & Managing President Director
Slide 83: Leading the ZEvolution
Leading the ZEvolution: —-> i [eat
Slide 84: Business Highlights: Transit
BUSINESS HIGHLIGHTS: TRANSIT North American Market Leader in both Heavy-Duty Transit & Coach Manufacturing 1930 2015 founded acquired MCI 5,000+ 3,000,000+ sq ft team members* production space* 4,200 EUs ~2,800 Vehicles annual production produced in Last capacity** 12 Months** 300+ 60,000+ annual cu
Slide 85: 2020: Challenges & Opportunities
2020: CHALLENGES & OPPORTUNITIES COVID-19 • 87% decline in private motorcoach deliveries Business Impacts • No cancellations of public transit contracts, but significant delay in multi-year procurements, and reduction in order sizes • COVID-19 Protocols successfully deployed in all facilities and te
Slide 86: Market Update: NA Bus and Coach
MARKET UPDATE: NA BUS AND COACH 8000 6501 6640 6505 6700 Public Transit: 6062 Transit Bus1 6000 Heavy Duty 4000 5,550 5,800 5,010 5,128 5,533 5,795 6,336 6,504 6,717 5,320 5,239 5,390 41% Market 2000 0 Share (2019) 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 est. est. est. est. est.
Slide 87: Funding Insights
NFL FUNDING INSIGHTS Emergency Relief Funding Recovery Outlook $2.2 Trillion CARES Act * $25B Public Transit $900B COVID Relief Bill * $14B Public Transit * $2B Private Coach Operators $13B FY2021 FTAAppropriations + $1.176B Bus and Bus Infrastructure + $1.994B Capital Investment Grant + $1B BUILD G
Slide 88: 2020: Zero-Emission by the #'s
2020: ZERO-EMISSION BY THE #’S 194 units 714% increase delivered to in year-over-year 17 cities infrastructure revenue 85% win rate 12 FTA 2020 for units (known LoNo Grants w/New procurements) Flyer named as partner 1st D45CRTe LE COVID Market Disruption battery-electric coach is Accelerating the Ra
Slide 89: ZEB Programs Across NA
ZEB PROGRAMS ACROSS NA BC PE AB SK MB QC NB ON NS WA ME MT ND VT MN NH MA OR NY RI ID WI SD MI CT WY PA NJ IA DE NV NE MD IL IN OH WV UT VA DC CA CO KS MO KY NC TN OK SC AZ NM AR GA AL MS TX LA FL 89
Slide 90: Product Portfolio: ZEBs
PRODUCT PORTFOLIO: ZEBS New Flyer’s zero-emission battery-electric transit New Flyer’s zero-emission hydrogen fuel cell- bus; long range & rapid charge configurations. electric transit bus 35-foot 40-foot 40-foot 60-foot 60-foot 300+ units in service 28 units in service across North America across N
Slide 91: Providing Confidence in Your Battery-Electric Bus Fleet
Providing confidence in your battery- electric bus fleet • Performance analytics dashboard for Xcelsior CHARGE™ battery-electric buses • Additional range capability with improved driver performance, reduced operating cost, and maximum fleet utilization • Decision-making information to optimize charg
Slide 92: Safe, Reliable, Smart Charging and Mobility Solutions
Providing safe, reliable, smart, and sustainable charging and mobility solutions • Introduced by New Flyer in Jan 2019 • Supports mobility projects start-to-finish • Focuses on energy management optimization, as well as infrastructure planning/development • Provides a cohesive transition of bus flee
Slide 93: Evolution to Zero-Emission
EVOLUTION TO ZERO-EMISSION North American Annual Bus Deliveries (EUs)1 New Flyer / MCI Annual Deliveries (EUs)1 100% 100% 90% 90% 80% 80% 70% 70% 60% 60% 50% 50% 40% 40% 30% 27% 27% 20% 21% 30% 20% 15% 11% 20% 7% 8% 10% 6% 7% 1% 4% 10% 0% 2019 2020 2021 2022 2023 0% 2017 2018 2019 2020 2021 2022 202
Slide 94: Key Technologies
KEY TECHNOLOGIES Enhanced Energy Storage System Electrical Architecture Next Generation Advancements Batteries Next Generation Power Electronics Next Generation Fuel Cell Technology Level 0: Level 1: Level 2: Level 3: Level 4: Level 5: No Driver Partial Conditional High Full Automation Assistance Au
Slide 95: Product Pipeline: Xcelsior AV
PRODUCT PIPELINE: LAUNCHING 2021 Xcelsior AVTM North America’s First SAE Level 4 Automated Heavy-Duty Transit Bus 95
Slide 96: Product Pipeline: Xcelsior CHARGE NG
PRODUCT PIPELINE: LAUNCHING 2021 Xcelsior CHARGE NGTM New Flyer’s next generation battery- electric heavy duty transit bus 96
Slide 97: Product Pipeline: MCI D45 CRTe LE CHARGE
PRODUCT PIPELINE: LAUNCHING 2021 MCI D45 CRTe LE CHARGETM MCI’s Low-Entry Battery-Electric Commuter Coach 97
Slide 98: Product Pipeline: MCI J4500e CHARGE
PRODUCT PIPELINE: LAUNCHING 2021 MCI J4500e CHARGETM MCI’s Battery-Electric Motorcoach 98
Slide 99: North America's Largest Zero-Emission Bus Capacity
EVOLUTION TO ZERO-EMISSION North America’s largest zero-emission bus capacity Capital Vehicle Investment Technicians Vehicle Monitoring Infrastructure Aftermarket in all Trained and Innovation Facilities for And Solutions Parts Center Pivot Ready for ZEB Telematics Ramped Up Inventory to Digital Rol
Slide 100: Strategic Priorities
STRATEGIC PRIORITIES Execute on combination of New Flyer and MCI to a single cohesive operating business Launch, Xcelsior AV, Xcelsior CHARGE NG, D45CRTe LE, J4500e & NFI products through the VIC Grow Infrastructure Solutions to support charging infrastructure for all NFI battery-electric vehicles O
Slide 101: ARBOC: Leading the ZEvolution
ARBOC _ Leading the ZEvolution:
Slide 102: Business Highlights
BUSINESS HIGHLIGHTS NA Leader in Low-Floor Cutaway Buses; disruptor in high-floor centric industry; growing Medium-Duty Shuttle offering 2008 130+ founded team members Middlebury, IN 114,000+ sq ft headquarters production space 4,000+ Vehicles 414 Vehicles produced to-date produced in last 12 months
Slide 103: 2020: Challenges & Opportunities
2020: CHALLENGES & OPPORTUNITIES COVID-19 • Started 2020 on-pace to meet/exceed AOP Impacts • April: operations idled and no shipments • End of May: ramped back up to full production • Higher than normal absenteeism peaked in November 2020 • Some supply chain interruptions and delays; seeking altern
Slide 104: Market Update & Recovery
MARKET UPDATE & RECOVERY Cutaway/Medium-Duty Low-Floor Market1 ARBOC 2019 Market Share: ~75% 1,200 1,000 900 825 800 800 725 700 696 677 675 650 548 514 478 446 2021F 2022F 2023F 2024F 2025F 2015 2016 2017 2018 2019 2020 Bus Range - Worst Case/ Best Case 12021-25 based on industry estimates 104
Slide 105: Evolution to Zero-Emission
EVOLUTION TO ZERO-EMISSION ARBOC Forecasted ZEB Volumes 1 45 • Q2 2021 launch of battery-electric medium-duty Equess Charge • Q2 2022 targeted launch of electric cutaway • Medium-duty electric sales expected to move faster than electric cutaway sales • ARBOC expects to outpace the 17 North American
Slide 106: Product Portfolio
PRODUCT PORTFOLIO Equess Low-Floor, purpose-built medium Up to 33 passengers duty shuttle/transit bus; including up to 6 monocoque design; wheelchair ARBOC chassis passengers Mobility Low-Floor, fully accessible Up to 21 seated and w/kneeling suspension; up to 6 (Ford) or 8 GM or Ford cutaway chassi
Slide 107: ARBOC's Zero-Emission Battery-Electric Bus
EVOLUTION TO ZERO-EMISSION ARBOC’s Zero-Emission Battery-Electric Bus Available in 30- & 35-foot (shown); 27-foot models also planned • Built on Equess platform with range up to 200+ miles; extended range possible • Utilizes New Flyer Xcelsior CHARGETM technology • Altoona testing planned for Q2 202
Slide 108: E-Cutaway Strategy
E-CUTAWAY STRATEGY • Targeting 2022 for e-Cutaway launch • Program kick-off Q1 2021 • Focusing on Ford E450 platform • 100% all-electric powered • 250-mile range; fast charge options • Following up with H2/electric hybrid version • Consistent low floor features and capabilities • Buy America complia
Slide 109: Strategic Priorities
STRATEGIC PRIORITIES Increase share of medium-duty market Double cutaway vehicle deliveries utilizing variation reduction program Apply New Flyer OPEX and LEAN manufacturing expertise Electrification of medium-duty and low- floor cutaway products Increased collaboration with ADL North America operat
Slide 110: Alexander Dennis: Leading the ZEvolution
Leading the ~ - volution.”
Slide 111: Business Highlights
BUSINESS HIGHLIGHTS Defining the future of global transport 1895 1,800+ founded team members 25,000+ 10 passengers countries w/ADL carried daily vehicles ~80 units 31,000+ weekly vehicles in production service capacity 7 ~70% facilities UK market share 111
Slide 112: 2020: Challenges & Opportunities
2020: CHALLENGES & OPPORTUNITIES COVID-19 • All areas of business challenged by COVID, particularly in the UK Impacts • Bus ridership dropped to 20% of pre-COVID levels at lowest point • Short-term financial appetite of our customers has decreased Opportunities • Cut UK cost base by 25%; ~$35M annua
Slide 113: Market Update & Recovery
MARKET UPDATE & RECOVERY UK Bus Market1 ADL 2019 Market Share: ~72% 2,600 2,200 2,956 2,000 2,734 2,731 1,800 2,536 2,485 2,017 1,799 1,600 1,500 1,400 1,275 1,200 2019 2013 2014 2015 2016 2017 2018 2020F 2021F 2022F 2023F 2024F Bus Range - Worst Case/ Best Case 1 New registrations in United Kingdom
Slide 114: Evolution to Zero-Emission
EVOLUTION TO ZERO-EMISSION ADL Forecasted ZEB Volumes 1 UK and Int’l ~50% of UK are ZEB 860 UK and Int’l ~30% of deliveries 590 436 UK only ~1% of 222 deliveries 82 83 28 2017 2018 2019 2020 2021F 2022F 2023F 1 Company estimates. 114
Slide 115: Our ZEB Roadmap
OUR ZEB ROADMAP UK & Europe International 2016 UK SD UK DD APAC SD NA DD to Today Evolution of Battery Technology in our Products 2016 2019 Gen 1 Gen 3 2017/18 R&D Started Gen 2 Gen 4 115
Slide 116: The Leader in ZEBs in the UK and New Zealand
THE LEADER IN ZEBS IN THE UK AND NEW ZEALAND United Kingdom New Zealand Glasgow Edinburgh Auckland Tauranga Manchester Liverpool Christchurch Nottingham Birmingham Coventry Cambridge London Salisbury Guildford 116
Slide 117: Partnership with BYD
PARTNERSHIP WITH BYD • Since 2016, ADL and BYD have worked in partnership to develop market-leading ZEB solutions for the UK market • Highly successful, with over 500 ZEBs already in service or on order • Single deck launched in 2017 • Double deck launched in 2019 • NZ single deck launched in 2018 •
Slide 118: Our ZEB Roadmap
OUR ZEB ROADMAP UK & Europe International 2016 to Today UK SD UK DD APAC SD NA DD 2021+ UK Hydrogen European DD APAC DD 118
Slide 119: Funding Insights: UK Government
FUNDING INSIGHTS: UK GOVERNMENT “…£5 billion on buses, cycling and walking, as announced by the Prime Minister in February” “…will bring 4,000 [ZEBs] onto our roads…12% of the local operator bus fleet in England” “…will invest £120M next year…at least 4,000 more British built ZEBs.” London: Transpor
Slide 120: Funding Insights: Customers
FUNDING INSIGHTS: CUSTOMERS “…committing to operate a zero-emission fleet in First Bus by 2035, and do not plan to purchase any new diesel buses after December 2022” “Ambition that our UK bus fleet will be zero emission from 2030, we will not buy another diesel bus for our UK operations” “Delivering
Slide 121: Funding Insights: International
FUNDING INSIGHTS: INTERNATIONAL New Zealand Government Commitment “…only zero emissions buses be purchased by 2025 and will target decarbonising the public transport bus fleet by 2035. We will support regional councils with this through a $50 million fund over four years.” – Jacinda Ardern, Prime Mi
Slide 122: Int'l Case Study: BVG, Berlin
INT’L CASE STUDY: BVG, BERLIN • Framework contract for up to 430 Enviro500, signed in October 2018 • Unique design for specific market requirements—prototypes now delivered to customer • Opportunity to deliver green buses to Berlin and other European markets • Flagship contract secured; opens door t
Slide 123: Int'l Case Study: NTA, Ireland
INT’L CASE STUDY: NTA, IRELAND • Ireland is effectively a new international market for ADL • Framework agreement for the delivery of up to 600 hybrid double decks; order for first 280 placed • Upcoming EV tender for single and double decks for up to 800 buses • Growth opportunity in Ireland with a m
Slide 124: Strategic Priorities
STRATEGIC PRIORITIES Be the undisputed leader in the UK, Hong Kong and New Zealand Capitalize on the Green Recovery Grow our international business through existing and new markets Lead the ZEvolution through this transition in cooperation with the rest of NFI Group Deliver a third of our sales as Z
Slide 125: NFI Parts: Leading the ZEvolution
nfiparts Leading the ZEvolution: a - er *
Slide 126: Business Highlights
BUSINESS HIGHLIGHTS NA’s most comprehensive parts organization, providing parts, technical publications, training, and support for its OEM product lines and other manufacturers. 90+ ~350 years of experience team members 5,000+ 75,000+ customers served combined fleet annually support provided 700,000
Slide 127: Parts Business Combination History
PARTS BUSINESS COMBINATION HISTORY ARBOC & NFI NFI Parts Parts Formed Combination 2016 2017 2018 2019 2020 2021 Alexander New Flyer & MCI & NFI Parts Dennis & NFI NABI Integration Combination Parts Combination NFI Parts supports all NFI Group OEM brands in North America 127
Slide 128: 2020: Challenges & Opportunities
2020: CHALLENGES & OPPORTUNITIES COVID-19 • Public market operated at ~90% of normal activity Impacts • Private market operated at ~30% of normal activity • Product supply was not an issue; with a few rare exceptions, fill rates were consistent with historical experience • Warehouses operated every
Slide 129: Public Market
PUBLIC MARKET 470 95,000 Customers Annual Orders 42,500 75% Pallet Vehicles Shipments 129
Slide 130: Market Update: Public Business
MARKET UPDATE: PUBLIC BUSINESS 90% - 100% 80% - 100% 100%+ 0-6 Months 6-12 Months 12+ Months Customers are utilizing $14B in the recently Business should short-term federal passed relief bill recover with moderate funding from 1st should sustain fleets growth based on COVID relief bill to while ride
Slide 131: Private Market
PRIVATE MARKET 3,000 110,000 Customers Annual Orders 22,500 75% Parcel Vehicles Shipments 131
Slide 132: Market Update: Private Business
MARKET UPDATE: PRIVATE BUSINESS 30% - 40% 50% - 60% 80% - 100% 0-6 Months 6-12 Months 12+ Months Idled vehicles Vaccines and pent-up Business should continues to depress demand for events recover with vehicle utilization should increase moderate growth and vehicle utilization some industry Vaccine r
Slide 133: Programs
PROGRAMS Vehicle Retrofits Drivers’ Barriers COVID-19 Programs Programs typically represent 3-5% of revenue 133
Slide 134: Market Update: Programs
MARKET UPDATE: PROGRAMS 180% 130% - 110% 100% 0-6 Months 6-12 Months 12+ Months Business continues to Some normalization as Return to normal be much higher than backlog of products industry levels with normal as vehicles are reduces back to sporadic major retrofitted for COVID- normal levels project
Slide 135: Delivery Models
DELIVERY MODELS Vendor Parts Flexible parts delivery models Managed Contracts tailored specifically to Inventory customer needs: • Public transit agencies Annual Price Parts Kits • Operating companies Lists supporting public entities • Large private operators • Medium/small private Cutaway operators
Slide 136: Evolution to Zero-Emission
EVOLUTION TO ZERO-EMISSION All markets are actively planning long-term transition to zero-emission A portion of NFI Parts sales are components for internal combustion engines Batteries, traction motors, etc. are more reliable components than their mechanical counterparts Support for early ZEBs requi
Slide 137: Added Services
ADDED SERVICES Award winning training programs including transition from internal combustion engines to eBus models Publications including operators, maintenance and parts manuals Accident services including parts identification, assessment and repair services in the NFI Group network Technical supp
Slide 138: Strategic Partnerships
STRATEGIC PARTNERSHIPS Supply Partnerships • Exclusive or favorable parts distribution contracts/agreements • Main source of North American parts support driven by OEM relationships and critical mass of installed fleets in the marketplace Private Branding: • In-house developed alternate or ‘value’ O
Slide 139: Strategic Priorities
STRATEGIC PRIORITIES Expand All Makes strategy and private label offering to compete for value customers Complete NFI Forward integration and footprint rationalization projects Transition from pure parts supplier to solutions providers for ZEBs with increased engineering Explore service model for eB
Slide 140: Financial Guidance & Outlook
JANUARY 11, 2021 Financial Guidance & Outlook PIPASU SONI EVP Finance & CFO NFI Group
Slide 141: 2020: A Year in Review
2020: A YEAR IN REVIEW • Strong start to the year, with all indications pointing to a record year in Strong performance and meeting adjusted EBITDA guidance provided ($320M- Start $350M) • Idled most facilities for more than two months • Furloughed ~8,200 people. Spent ~$45M on COVID related expense
Slide 142: 2020 Accomplishments: Finance & IT
2020 ACCOMPLISHMENTS: FINANCE & IT • Moved to shared services model (accounting, treasury, payables, etc.) • FP&A discipline established and functioning well • Common chart of accounts established across company • Multiple finance system implementations completed or in-process: • Oracle EPM (Enterpr
Slide 143: Dec 2020 Credit Agreement Highlights
DEC 2020 CREDIT AGREEMENT HIGHLIGHTS NA Facility • Led by Bank of Nova Scotia (BNS) • Joint Bookrunners: BNS, BMO Capital Markets, National Bank Financial • Revolver Syndicate: Canadian Imperial Bank of Commerce; Bank of America*; Wells Fargo Bank, N.A.*; Toronto Dominion Bank; HSBC Bank*; MUFG Bank
Slide 144: 2021 Focus & Guidance
2021 FOCUS & GUIDANCE 2021 Focus 2021 Guidance • Enhanced focus on both EBITDA • Revenue ~$2.8 to $2.9B generation and cash flow (working • Adj EBITDA $220 to $240M capital) improvement • Maintain current Dividend Policy • Continue standardization journey to • Capex of $50M (including NFI Forward) O
Slide 145: 2025 Targets
2025 TARGETS Revenue • Driven by market recovery in NA Bus and $3.9 billion to $4.1 billion Coach and UK transit ZEBs expected to make up 35% - 40% • Continued growth of ARBOC in cutaway and of manufacturing revenue medium-duty markets • ADL’s international expansion in Europe and APAC Adjusted EBIT
Slide 146: Capital Allocation Priorities
CAPITAL ALLOCATION PRIORITIES 1 DEBT MANAGEMENT & LEVERAGE REDUCTION INVEST IN HIGHEST RETURN PROJECTS: EPS expansion comes from funding 2 highest ROIC projects 3 DIVIDENDS: Provide dividends to shareholders, as we have since 2005 ACQUISITIONS: Continue to acquire companies that provide diversificat
Slide 147: Board Perspective
JANUARY 11, 2021 Board Perspective HON. BRIAN V. TOBIN, P.C., O.C. Chair of the Board NFI Group
Slide 148: Conclusion
JANUARY 11, 2021 Conclusion STEPHEN KING Group Director, Treasury, Corporate Development & Investor Relations NFI Group
Slide 149: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS Certain statements in this presentation are “forward looking statements”, which reflect the current expectations of management regarding the Company's future growth, financial performance and results of operations and the Company’s strategic initiatives, plans, business pr
Slide 150: Non-IFRS Measures
NON-IFRS MEASURES References to “Adjusted EBITDA” are to earnings before interest, income taxes, depreciation and amortization after adjusting for the effects of certain non-recurring and/or non-operations related items that do not reflect the current ongoing cash operations of the Company as descri
Slide 151: ARBOC, Plaxton, Carfair
ARBOC ml PLAXTON CARFAIR