-
0
NFI:TSX Investor UpdateNorth America’s #1 Bus OEM & Parts
Distributor
March 22, 2018Forward Looking Statements and Non-GAAP Measures
are defined in APPENDIX B.
-
1
Company Profile & Performance Highlights
Fiscal 2017 Performance:Revenue: US $2.38B
Adjusted EBITDA: US $318.0M
Return on Sales: 13.4%
Net Debt: US $603M
Total Leverage: 1.84X
ROIC: 15.8%
FCF: US $161.2M
Payout Ratio: 36.8%
Fully Diluted Market Cap: ~$C 3.7B (3)
Common Share (TSX:NFI) (4)Shares Outstanding: 62.9M
60-day average Daily Volume: ~275K
Dividend = C$1.30/Share(1), Yield: ~2.2%(3)
TSR(2): ‘17 = 35% (3) ‘16 = 47% ‘15 =115%
(1) Effective May 10, 2017 the Dividend increased by 37.5% to
C$1.30 per share annually. Paid quarterly.(2) Total Shareholder’s
Return (“TSR”) is calculated by the growth in capital assuming
dividends are reinvested each time paid.(3) Calculated using
closing TSX market price as at March 21, 2018(4) NFI is included in
S&P/TSX: Composite Index, Equal Weight Industrials Index and
Composite Shareholder Yield Index
Q4-17 Production Backlog:2018 Production Target: 4,350 EU
Firm Orders: 4,186 EU = $2.1B
Options: 7,971 EU = $3.9B
Book-to-Bill Ratio: 152% LTM
NFI Group
Market Leader: o Founded in 1930, the #1 Bus OEM and Parts
supplier in North America: o ~5,000 employees (>50% in US). 32
facilities. Installed base of ~70K vehicleso Buy America and
Canadian Content compliant.o Market Innovation and Technology
leader
Broadest Product offering with Greenest Propulsion Options:o
Positioning: High Quality. “Workhorse” lowest TCO. Great service
and parts support. o Propulsion agnostic from clean diesel,
diesel-electric hybrid, natural gas and zero-
emission (electric trolley, battery-electric and fuel
cell-electric) on common platforms
Solid Runway and Orderbook:o 2017 deliveries = 3,828 EUs. 2018
Guidance = 4,350 EUso $6B Backlog: 4,156 firm orders and 7,971
options (EUs) ) with ~80% conversion rateo Public Customer
Book-to-Bill ratio consistently >100% for last 14 Quarters
Proven Track Record: o Changed Capital Structure in 2012. LEAN
implementation. o Last 8 years: ROS from 5% to >13%. ROIC from
6% to >15%. Market Cap from
C$0.5B to C$3.7B. Five year TSR 892% (assuming all dividends
reinvested)o Diversification through M&A (7) since 2010: HD
Transit + Parts + Coach + Cutawayo Business Unit structure with
operating Presidents.
Financial Flexibility:o US $2.38B Revenue with 90% in US$. $370M
spare parts businesso Flexible cost base. Appropriate level of Make
vs Buyo Strong and predictable FCF. Leverage
-
2
950.5
153.4
--
100.0
200.0
300.0
400.0
500.0
600.0
700.0
800.0
900.0
1000.0
Aug-12 Aug-13 Aug-14 Aug-15 Aug-16 Aug-17
Total
Retur
nTotal Shareholder Return
S&P/TSX Composite Index
TSR includes capital appreciation and dividends paid. Calculated
using closing TSX market price as at March 21, 2018
Acquired North America’s leading manufacturer of motor coach
& parts/service
Acquired US manufacturer of HD transit buses & parts
distributor
Acquired Orion (transit bus parts business) from Daimler
Global bus body manufacturer equity investment in NFI
Acquired Can/US FRP Supplier
Acquired US part fabricator in 2010
NFI converted from IDS to Common Share
NFI Group
Acquired assets of US FRP Supplier
Source: FactSet, Company filings
Acquired US OEM of low-floor cutaway and medium-duty buses
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3
NFI Differentiators:
1. Offer a full range of Bus Products as the industry’s best
buses, parts and service. “Workhorses”
2. Trusted business partner for over 85 years delivering and
standing behind reliable products. Focus on Total Cost of
Ownership.
3. Vertically Integratedfabricarion where NFI owns the drawings
to control Cost-Time-Quality.
4. Propulsion Agnostic on proven common platforms: Clean Diesel,
Natural Gas, Hybrid, Electric (trolley, battery and fuel-cell)
5. Exceptional Spare Parts, Publication and Training
offering.
Core Competencies:
1. Focus on People and Culture. Continuous pursuit to be an
Employer of Choice.
2. We know LEAN: Deployed operational excellence principles and
a Quality Roadmap.
3. Exceptional ability to integrate complex technology and
perform rapid and continuous change engineering, sourcing and
production.
4. Ability to Plan, Manage and Control large scale projects and
business transformations.
5. Ability to perform due diligence, Acquisitionsand successful
integration.
NFI Group Providing leading solutions to move groups of people
safely, efficiently, responsibly, and in style.
Optimize, Defend, Diversify & Grow
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4
Proven Leadership with extensive Industry Experience
Wayne Joseph President, Transit Bus
Joined New Flyer in 2008 as VP Operations and then assumed
responsibility as EVP Transit Bus. Prior held executive positions
in bus manufacturing for over forty years with NABI, Blue Bird and
Flxible, and then at BAE Systems.
Holds a Bachelor of Science in Business Administration and an
Accounting Degree and is Certified in Production and Inventory
Management (CPIM).
Ian SmartPresident, Motor Coach
Joined New Flyer in 2011 as EVP Aftermarket and prior held
various executive positions at Standard Aero for 15 years - one of
the world’s largest independent aviation service companies.
Lead the project to privatize and conduct LEAN implementation at
a United States Air Force Base.
Holds a Bachelor of Science in Industrial Engineering.
Brian Dewsnup President, Aftermarket Parts
Forrmely NABI’s CFO since 2006 (which NFI acquired in 2013), and
then VP Business Development of New Flyer. Led the acquisition of
MCI and became VP & GM Aftermarket. Prior served as Controller
of Johns Manville's-Waterville operations, and held various
capacities at Ford Motor and Visteon.
Holds a Bachelor's in Mechanical Engineering, Masters in
Mechanical Engineering, and an MBA in Finance.
Paul SoubryPresident & CEO, NFI Group
Joined New Flyer in 2009 as President and CEO after 24 years
with Standard Aero. Holds a Bachelor of Commerce, attended Exec Ed
at Harvard Business School and the Institute of Corporate
Directors.
In 2003, was named a recipient of ‘Canada’s Top 40 under 40’
award, inducted into the CME Manufacturing Hall of Fame in 2014,
and recognized as Canada’s 2016 CEO of the Year by the Financial
Post.
David WhiteEVP Supply, NFI Group
Joined New Flyer in 1998 as Corporate Controller, and became
Vice President Supply Management in 2002. Prior worked for Deloitte
as a Chartered Accountant. Holds a Bachelor of Commerce in Finance
and obtained Chartered Accountant designation.
Glenn AshamCFO, NFI Group
Joined New Flyer in 1992. Obtained chartered accountant
designation and holds a Bachelor of Commerce. Prior worked with
Deloitte providing client services in the areas of accounting,
auditing, taxation and management consulting
Colin Pewarchuk, General Counsel, NFI Group
Joined New Flyer in 2006. Prior practiced law with Aikins,
Macauley and Thorvaldson and was a Banking Officer with Royal Bank
of Canada. Holds a Bachelor of Commerce in Finance and a Bachelor
of Laws.
Janice HarperEVP HR, NFI Group
Joined New Flyer in 1998. Holds a Diploma in Creative
Communications, a Certificate in Human Resources, is a Charterer
Professional in Human Resources (CPHR), a HR Compensation Committee
management designation and a BA in Communications.
NFI Group
Wayne JosephPresident
Transit Bus
Paul SoubryPresident & CEO
NFI Group
Brian DewsnupPresident
Aftermarket Parts
Parts BusinessOEM Business
Ian SmartPresident
Motor Coach
David WhiteEVP Supply NFI Group
Glenn AshamEVP & CFONFI Group
Janice HarperEVP HR
NFI Group
Colin PewarchukEVP General Council
NFI Group
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5
Manufacturing, Fabrication and Service Footprint
`
FL
AL
TX
CA
NDMN
IL IN OH
KY
WV
PA
NY
NJ
SK MBON
QCAB
Renton, WANFI Service Center
Ontario, CANFI Completion & Service Center
Crookston, MNNFI Bus Completion
St Cloud, MNNFI Bus Manufacture
Fiberglass Fabrication
Anniston, ALNFI Bus Manufacture
Parts FabricationFiberglass Fabrication
Elkhart, INTCB Part Fabrication
Arnprior, ONNFI Service Center
NFI - Winnipeg, MBParts Fabrication
Fiberglass FabricationBus Shell Assembly
New Product Development
MCI - Winnipeg, MBParts Fabrication, MCI D Model Shell
Assembly
Complete J Model manufactureNew Product Development
Fiberglass FabricationMontreal, PQ
MCI Service Center
Blackwood, NJMCI Service Center
Winter Garden, FLMCI Service Center
Dallas, TXMCI Service Center
Los Alamitos, CAMCI Service Center
Pembina, NDMCI D Model Completion Center
Des Plaines, ILMCI Service Center
Jamestown, NYPart Fabrication/Assembly
+
Hayward, CAMCI Service Center
NFI Group
WA
Wausaukee & Gillet, WIFiberglass Fabrication
WI
Middlebury, IN
Shepherdsville, KYNew Part Fabrication
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6
1,492 1,8
62
1,767
1,190
1,479
1,514
1,022
753
1,050
1,292
1,056
1,012
811
633
592
686
821
802
856
942
1,071
2,485 2
,990
2,824
2,381
2,330
2,048
1,475
1,343 1,
752 2,0
99
1,852
1,820
1,584
1,208 1,5
43
1,566 1,7
73 1,926 2,
311
2,416
2,470
60%62%63%
50%
63%
74%69%
56%60%62%
57%56%51%52%
38%44%
46%42%
37%
39%43%
0%
10%
20%
30%
40%
50%
60%
70%
80%
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
-
5,000
10,000
15,000
20,000
25,00012
-Jan-
09
12-Ja
n-10
12-Ja
n-11
12-Ja
n-12
12-Ja
n-13
12-Ja
n-14
12-Ja
n-15
12-Ja
n-16
12-Ja
n-17
Annual Deliveries and Market Demand
HD Transit Bus Market - EUs delivered in Can/US Motor Coach
Market - Delivered in Can/US
Public Bid Universe & Active Opportunities (EUs)NFI LTM New
Bus/Coach Deliveries (EUs)
442 441386 387
490 489
577635
554 582621
680
572 594625
689
829
912
777
993
892
991
877
1068
1,7851,7951,7391,6561,7041,7521,943
2,1912,2552,3482,3922,437
2,4552,4672,4712,480
2,737
3,0553,207
3,5113,574 3,6533,7533,828
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
200
300
400
500
600
700
800
900
1,000
1,100
1,200
NFI Group
Bids submitted by NFI and awaiting awardby customer
Operator RFPs issued with proposals in development
Forecasted buys for next 5 yrs
Source: New Flyer Database & Management Estimates
4797
5347 5
816 62
36
5388
5009
4723
5212
4333
4047
5065 52
84
6032
5933
5154
5109
5010
5128 5
533
5795
6336
935
1050
1500
1864
2051
1272
1731
1871
1585
1422
2115
2164
2258
2025
1814
1656
1868
2437
2457
2569
2735
19.5%19.6%
25.8%29.9%
38.1%
25.4%
36.7%35.9%36.6%35.1%
41.8%41.0%37.4%
34.1%35.2%32.4%37.3%
47.5%44.4%44.3%43.2%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
100.0%
0
1000
2000
3000
4000
5000
6000
7000
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7
#1 Market Share in Transit Bus
Heavy-Duty: Xcelsior®
Launch in 2009 based on >20 years experience with low floor
transit buses. Primary targets are metropolitan & urban
fleets
Offered in 35’, 40’, and 60’ lengths and with the industry’s
widest range of propulsion options: clean diesel, diesel-electric
hybrid, natural gas, and zero-emission (electric trolley,
battery-electric and fuel cell).
Active Canada/US HD Transit Bus Coach Fleet ~85,000
Average Age of the HD Transit Fleet: US = 7.8 years, Canada =
7.3 yearsSource: APTA Public Transportation Factbook 2016
Orion Parts and NABI acquired by NFI in 2013
20%
43%
28%
6%
3%
HD Transit Bus Share (2017 market is ~6,300 units)
Montreal and New YorkOwned by Volvo Truck & Bus
CaliforniaOwned by REV Group
CaliforniaPrivately Owned by
Henry Crown and Company
Source: New Flyer Database & Management Estimates
http://www.google.com/url?sa=i&rct=j&q=proterra+logo&source=images&cd=&cad=rja&docid=YXnbJ93eYdYHVM&tbnid=t06pyMI_hRpYoM:&ved=0CAUQjRw&url=http://www.cavs.msstate.edu/projects/ecocar2/?page_id=25&ei=QLMKUaG7B8HJiwL1soH4BA&bvm=bv.41642243,d.cGE&psig=AFQjCNFj908_hbHdR-hKocMfBFnxRfjcBA&ust=1359742139786226http://www.google.com/url?sa=i&rct=j&q=byd+logo&source=images&cd=&cad=rja&docid=U9ipbkYndHLJ4M&tbnid=lmJ6-KliRqgCUM:&ved=0CAUQjRw&url=http://www.carlogos.org/Car-Logos/BYD-logo-wallpaper-BYD-car-company-china.html&ei=9IeGUYzXH-GuiQKq84GQDA&bvm=bv.45960087,d.cGE&psig=AFQjCNFGsKsCeTyzKO_6mb4iM0QXiR2a8g&ust=1367857502370079http://www.enconline.com/caindex.cfm
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8
MetropolitanFleets
17 operators39% of installed fleet
Urban Fleets
200 operators45% of installed fleet
MunicipalFleets
900+ Operators16% of installed
fleet
Transit Bus Market Segments in Canada and US
Source: New Flyer Database & Management Estimates
Transit Market Segments and primary targets
24 of the 25 largest Transit Agencies operate NF supported
transit buses
Market entrants focusing only on battery-electric buses:
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9
27%
43%
23%
7%
#1 Market Share in Motor Coaches
50% 1% 26% 23%
New Coach – Private New Coach – Public Pre-Owned Coach
Targets the mid-range to luxury segments J Model #1 selling
coach in NA private market
Targets the mid-range segment “Buy America” compliant D Model is
the #1 selling coach of all time in NA
Trade-in option to support new coach sales (~350 annually)
Coaches are refurbished at NFI/MCI service centers and various
3rd parties
Active Canada/US Motor Coach Fleet ~55,500 units
Average Age of the Motor Coach Fleet: US and Canada = 9
yearsSource: ABA Motor Coach Census, published February 2016
MCI Share increased by 4% in 2017
J Model D Model
Motor Coach Share: 2017 market ~2,500 units
Belgium & MacedoniaPrivately owned
Quebec and New York
TurkeyOwned by Sabanchi Group
Spain US
Mexico
Owned by Volvo Truck & Bus
Negligible Deliveries to date
Source: New Flyer Database & Management Estimates
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10
Motor Coach Market in Canada and US
Market Segments and primary targets
Transit
12% of installed fleet
Fixed Route/Line Haul
34% of installed fleet
Tour & Charter
52% of installed fleet
Conversion
2% of installed fleet
Public Private Private Private
Source: MCI Database & Management Estimates
Private Market Segment Definitions
http://en.wikipedia.org/wiki/File:Temsa_logo.pnghttp://setra-coaches.com/
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11
ARBOC acquired by NFI December 1, 2017
Source: New Flyer Database & Management Estimates
• ARBOC Specialty Vehicles LLC was acquired by NFI for $95M or
~10X ARBOC’s 2017 adjEBITDA. ARBOC has Industry leading EBITDA
margins and favorable commercial terms
• A pioneer in low-floor cutaway bus technology, ARBOC holds
numerous patents and is the industry leader in the development and
manufacture of low floor buses 21-35 feet in length for transit,
paratransit and shuttle applications.
• Founded in 2008, ARBOC has sold >2,500 buses. 2017
deliveries ~360 buses and 2018 forecasted ~500 buses (40% increase,
of which 320 are firm orders). Located in Middlebury, IN, ARBOC is
Buy America compliant.
• Market leader of the low-floor cutaway segment with
approximately 70% market share.ARBOC recently launched a medium
duty bus built on their own chassis design. The bus has received
tremendous market response, with initial orders in hand, and is
currently undergoing testing to ten year standards at the FTA
sanctioned Altoona test track.
(1) Current Low floor cutaway market estimated at approx. 550
units(2) Competitors offering low floor cutaways
Opportunity for NFI:
• Growth potential for both Cutaways and Medium Duty buses•
Located in the US. Buy American Compliant• A maturing business with
proven bus models. Advanced,
disruptive and patented low-floor technology.• Bus types &
models complimentary to NF and MCI• NFI has retained ARBOC
Management team• Low cost operations with very attractive bus price
points• Synergy potential with NFI (not yet fully qualified)
• Sales leverage with some Customer overlap• Potential for
strategic sourcing and part fabrication• Spare parts business
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12
#1 in Low Floor Cutaway Buses
ARBOC Low Floor Bus Models
NA Low Floor Cutaway Bus Share(2017 market ~550 units)
NA Cutaway Bus Market (2017 market ~15,000 units)
High Floor w/ Lift
High Floor w/o Lift
Low Floor Other
Low Floor Cutaway
29%64%
5%2%
• Launched in 2010• 24’, 27’ and 29’
Lengths
• Launched in 2008• 23’, 26’ and 28’
Lengths
• Launched in 2016• 29’, 32’, and 35’
Lengths
• Launched in 2014• 29’ and 34’ Lengths
• Launched in 2016• 21’ and 23’ Lengths
IndependenceFreedomMobility EquessLiberty
ARBOC
Champion *
Glaval *67%
21%
12%
* As reported by vendor
High Floor Cutaway
Low Floor Cutaway
Source: ARBOC Management Estimates
Chart1
Sheet1
Column1
NOVABus19%
New Flyer45%
Gillig30%
ElDorado5%
1%
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13
Clean Diesel Natural Gas Electric Trolley Hybrid Electric
Battery Electric/Fuel Cell
Xcelsior35’, 40’, 60’
D Model 40’, 45’*
J Model 45’ with 35’ in development MCI eCoachin Development
Low- Floor Cutaway
Medium Duty Transit
Environmental Leadership with Propulsion OptionsNFI Group
New Flyer Leadership in Zero Emissions Buses (ZEB) NF has
delivered >6,900 transit buses powered by electric motors
(including hybrids, trolleys, battery-electric and fuel
cell-electric). New Flyer launched a next generation Xcelsior
CHARGE transit bus and continues to lead the US/Can ZEB market with
47% of the
2017 ZEB awards, and 30% of ZEB deliveries. Active ZEB Bid
Universe at the end of 2017 was ~10% of the total Bid Universe.
Battery-electric J Model motor coach currently in development at
MCI Source: New Flyer Database & Management Estimates
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14
Investing for Growth and Margin Enhancement
Vehicle Innovation Centre
New D Model CRT with Vestibule
35’ Model J & eCoach Prototypes
SF Bay Area Service Center
Battery-Electric Xcelsior
NFI Group
IT Harmonizationat MCI and Parts
FRP Fabrication Acquisitions
Telematics
Web Store
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15
Industry’s most comprehensive Parts Offering+
Widest bus and motor coach product inventory, industry leading
distribution network with shortest delivery times.
Added value through unique offerings (Kits, Mid-life upgrade
programs, Vendor Managed Inventory, KanBan, etc).
New MCI website offering state of the art on-line sales and
distribution features.
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16
548 641707 712
1,078 1,1896.2%
8.6%
8.5% 12.2%
14.3%15.8%
0%2%4%6%8%
10%12%14%16%18%
0
200
400
600
800
1000
1200
1400
2012 2013 2014 2015 2016 2017
Millio
ns
Average Invested Capital for the period Return on Invested
Capital
746984
1,132 1,217
1,8652,013
119
215319
322
409369
0
400
800
1,2 00
1,6 00
2,0 00
2,4 00
201 2 201 3 201 4 201 5 201 6 201 7
Bus Aftermarket
41 64 5790
208246
2031 50
61
81
72
0
50
100
150
200
250
300
350
2012 2013 2014 2015 2016 2017
Bus Aftermarket
ROIC = Net operating profit after taxAverage invested capital
for the period
Financial Performance
Sales ($M US) Adjusted EBITDA ($M US)
Return on Invested Capital
+
61
95 107
151
289
1,199
1,4511,539
2,274
Quarterly Adjusted EBITDA ($M US)
3182,350
865
16 16 14 14 15 1824
37
20 27 2635
3139 36
45
68
80
64
7771
85
71
91
75 71 63 61 59 61 7195 99
108110107119131141
151
188
229257
289292297304
318
0
50
100
150
200
250
300
350
2012 2013 2014 2015 2016 20170
20
40
60
80
100
120
Adjusted EBITDA LTM Adjusted EBITDA
NFI Group
Chart1
20122012
20132013
20142014
20152015
20162016
0.1582017
Return on Invested Capital
Average Invested Capital for the period
0.062
547638000
0.086
641482000
0.085
706608000
0.122
711957000
0.143
1078440000
1189149000
Sheet1
2011201220132014201520162017
ROIC9.3%6.2%8.6%8.5%12.2%14.3%15.8%
Invested
Capital502966000.054763800064148200070660800071195700010784400001189149000
Sheet2
Chart1
20122012
20132013
20142014
20152015
20162016
20172017
Bus
Aftermarket
746
119
984
215
1132
319
1217
322
1865
409
2013
369
Sheet1
20102011201220132014201520162017
Bus8788007469841132121718652013
Parts106116119215319322409369
Chart1
20122012
20132013
20142014
20152015
20162016
20172017
Bus
Aftermarket
41.2
19.6
64
31
57
50
90
61
208
81
246
72
Sheet1
20102011201220132014201520162017
Bus735741645790208246
Parts2424203150618172
Sheet2
-
17
Operating Performance
Adjusted EBITDA per new EU delivered ($000 US) Aftermarket
EBITDA Margin %
23.125.6 24.9 26.3
20.221.6
27.5
43.0
14.0
23.920.2
34.1
25.8
37.734.6
45.3
56.0
65.5
57.459.8 56.5
66.9
62.4
69.9
$0
$10
$20
$30
$40
$50
$60
$70
$80
18.3%
17.1%
15.4%
14.8%14.7%14.6%14.6%
14.0%
16.3%
16.2%16.0%
14.2%
18.6%18.8%
20.5%
18.6%
20.6%20.6%20.9%
20.3%
21.8%
20.0%
18.6%
17.3%
12%
14%
16%
18%
20%
22%
NFI Group
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18
Book-to-Bill Ratio, Backlog and Option Conversion
Public Customer Book-to-Bill consistently >100% for last 14
Quarters
Total Backlog (Firm and Option EUs)
US Customer deferred Order was removed from backlog in 2013
following 5 years of inaction.
Firm
= 4
,186
EU
sO
ptio
ns =
7,9
71EU
s
0
2,000
4,000
6,000
8,000
10,000
12,000
Firm Deferred Order Firm Option Deferred Order Option
Option History and Current Status (EUs)
Conversion rate % is calculated as, Options exercised / (Options
expired + Options exercised)
35%
54%
73%79% 81%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
-
500
1,000
1,500
2,000
2,500
3,000
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Options expired Options exercised Current option expiry
Conversion rate
MCI Public backlog added in Q4-15
0%
50%
100%
150%
200%
250%
300%
-
1,000
2,000
3,000
4,000
5,000
6,000
7,000
2009 2010 2011 2012 2013 2014 2015 2016 2017
Order Intake vs Deliveries
LTM New Orders (EUs) LTM Deliveries (EUs) LTM Order Intake /
Deliveries
NFI Group
-
19
Cash Flow Performance
Free Cash Flow and Dividends (C $M)Fiscal 2017 Adjusted EBITDA
to Free Cash Flow ($M)
318.0
19.3
81.1
52.8 4.1 0.5
161.2
45.7 206.9
-
50
100
150
200
250
300
350
+
Free Cash Flow and Dividends ($US)
0.610.87
1.18
1.95
3.643.31
0.810.21 0.48
0.97
2.10
3.06
$0.00
$0.50
$1.00
$1.50
$2.00
$2.50
$3.00
$3.50
$4.00
2012 2013 2014 2015 2016 2017
Free Cash Flow per share (C$) Earnings per share (US$)
Free Cash Flow and Net Earnings ($/share)
27.145.1
65.5
108.3
216.3 206.9
33.1 30.7 32.5 33.854.0
76.1
0.0
50.0
100.0
150.0
200.0
250.0
2012 2013 2014 2015 2016 2017
Free Cash Flow Dividends
27.143.4
59.1
83.4
165.2 161.2
33.1 29.6 29.3 26.341.1
59.5
45%46%
55% 55% 57%51%
0%
10%
20%
30%
40%
50%
60%
70%
80%
$0
$50
$100
$150
$200
2012 2013 2014 2015 2016 2017
Free Cash Flow ("FCF") Dividends Declared FCF as a % of Adjusted
EBITDA
NFI Group
Chart1
20122011
20132012
20142013
20152014
20162015
20172016
Free Cash Flow
Dividends
27.1
33.1
45.1
30.7
65.5
32.5
108.3
33.8
216.3
54
206.9
76.1
Sheet1
20102011201220132014201520162017
Free Cash Flow30.17.827.145.165.5108.3216.3206.9
Dividends19.226.033.130.732.533.854.076.1
Sheet2
-
20
Strong Balance Sheet with low Leverageas at Dec 31-17
*Under NFI Senior Credit Agreement, Total Leverage Ratio did not
include Convertible Debentures as debt.
Total Debt ($US M) = $603M (Senior Debt + Revolver Drawn + Bank
indebtedness)
Total Leverage Ratio* vs Credit Covenant
+NFI Group
Senior Secured Debt$482M
Revolver Drawn*$111M
Undrawn Revolver$222M
Undrawn Accordian**$75M
0 100 200 300 400 500 600 700 800 900 1000
Bank indebtedness $10M
2.963.63
3.07
3.80 3.51 3.48
2.11 2.52
1.67 1.65
2.91
1.94 1.67 1.52 1.55 1.84
5.75 5.75 5.75 5.75
4.75 4.75 5.25
3.25 3.25 3.25
4.00 4.00 3.75 3.75 3.75 3.75
-
1.0
2.0
3.0
4.0
5.0
6.0
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
17-Q1 17-Q2 17-Q3 17-Q4
Total Leverage
* Includes $9M drawn against Letters of Credit ** Use of
Accordion facility requires Lender Approval
-
21
Capital Allocation Policy+
Invest in current business and growth
Maintain Balance Sheet flexibility
Return capital to Shareholders
“Growth includes both Organic and M&A”
• Invest in LEAN manufacturing to improve quality & cost
effectiveness
• Invest in vertical integration of critical supply
• Four acquisitions completed from 2010 to 2015. Seeking
additional M&A (Tuck-in and Growth).
“Prudent use of Leverage”
• Provide liquidity for fluctuating working capital
requirements
• Seek normal operations between 2-2.5X leverage
• Add leverage to fund accretive acquisitions capable of
reducing leverage through earnings
“Common Share Dividend”
• Sustainable distributions. • Paid consistently since 2005 IPO•
Paid quarterly.
Foundation of Capital Allocation Policy is built on a strong
balance sheet and an operating model providing consistent and
predictable cash flow
$0.585$0.62 $0.70
$0.95
$1.30
0%
20%
40%
60%
80%
100%
120%
140%
160%Annual dividend rate (C$)
Dividend Payout Ratio
NFI Group
-
22
GLOBAL BUS MARKET ~420K/YR CANADA/US BUS MARKET ~56K/YR
Bus Market Segments
APPENDIX A
2016 Data
-
23
FORWARD LOOKING STATEMENTS
This investor presentation contains forward-looking statements
relating to expected future events, including the integration of
the acquired business into New Flyer’s existing business and
expected synergies, thediversification and growth of the combined
bus, motor coach and aftermarket parts businesses. Although the
forward-looking statements contained in this investor presentation
are based upon what managementbelieves to be reasonable
assumptions, investors cannot be assured that actual results will
be consistent with these forward-looking statements, and the
differences may be material. Actual results may differmaterially
from management expectations as reflected in such forward-looking
statements for a variety of reasons, including risks related the
ability to implement the operational changes necessary to achieve
theintended synergies, acquisitions, joint ventures and other
strategic relationships with third parties (including liabilities
relating thereto), the covenants contained in the Company’s new
senior credit facilities couldimpact the ability of the Company to
fund dividends, market and general economic conditions and economic
conditions of and funding availability for customers to purchase
buses and to purchase parts or services,customers may not exercise
options to purchase additional buses, the ability of customers to
suspend or terminate contracts for convenience and the other risks
and uncertainties discussed in the materials filed withthe Canadian
securities regulatory authorities and available on SEDAR at
www.sedar.com. Due to the potential impact of these factors, the
Company disclaims any intention or obligation to update or revise
anyforward-looking statements, whether as a result of new
information, future events or otherwise, unless required by
applicable law.
FINANCIAL TERMS, DEFINITIONS AND CONDITIONS
References to “Adjusted EBITDA” are to net earnings after
adjusting for interest, income taxes, depreciation and
amortization, gains or losses on disposal of property, plant and
equipment and unrealized foreignexchange losses or gains on
non-current monetary items the effects of certain non-recurring
and/or non-operations related items that have impacted the business
and are not expected to recur, including non-recurring costs
relating to business acquisitions, product rationalization costs,
impairment loss on equipment and intangible assets, equity settled
stock-based compensation, gain on bargain purchase of
subsidiarycompany, fair value adjustment to MCI’s inventory and
deferred revenue, proportion of the total return swap realized,
loss on derecognition of long-term debt and costs associated with
assessing strategic andcorporate initiatives. Return on Invested
Capital “ROIC” is calculated by dividing Net Operating Profit After
Tax by Average Invested Capital for the period. References to “Net
Operating Profit After Tax” are toAdjusted EBITDA less depreciation
of plant and equipment and income taxes. References to “Invested
Capital” are to shareholders’ equity plus long-term debt,
obligations under finance leases, other long-termliabilities,
convertible debentures and derivative financial instrument
liabilities less cash.
Management believes Adjusted EBITDA, ROIC and Free Cash Flow (as
defined below) are useful measures in evaluating the performance of
the Company. “Free Cash Flow” means net cash generated byoperating
activities adjusted for changes in non-cash working capital items,
interest paid, interest expense, income taxes paid, current income
tax expense, effect of foreign currency rate on cash, defined
benefitfunding, non-recurring transitional costs relating to
business acquisitions, costs associated with assessing strategic
and corporate initiatives, product rationalization costs, defined
benefit expense, cash capitalexpenditures, fair value adjustment to
MCI’s inventory and deferred revenue, proceeds from disposition of
property, plant and equipment, gain received on total return swap
settlement, proportion of the total returnswap realized and
principal payments on capital leases. However, Adjusted EBITDA,
ROIC and Free Cash Flow are not recognized earnings measures and do
not have standardized meanings prescribed by IFRS.Readers of this
presentation are cautioned that Adjusted EBITDA and ROIC should not
be construed as an alternative to net earnings or loss determined
in accordance with IFRS as an indicator of New Flyer'sperformance,
and Free Cash Flow should not be construed as an alternative to
cash flows from operating, investing and financing activities
determined in accordance with IFRS as a measure of liquidity and
cashflows. A reconciliation of net earnings and cash flow to
Adjusted EBITDA, based on the Financial Statements, has been
presented In Management’s Discussion and Analysis of Financial
Condition under the heading“Reconciliation of Net Earnings to
Adjusted EBITDA” and “Reconciliation of Cash Flow to Adjusted
EBITDA”, respectively. A reconciliation of Free Cash Flow to cash
flows from operations is provided under theheading “Summary of Free
Cash Flow”.
New Flyer’s method of calculating Adjusted EBITDA, ROIC and Free
Cash Flow may differ materially from the methods used by other
issuers and, accordingly, may not be comparable to similarly titled
measuresused by other issuers. Dividends paid from Free Cash Flow
are not assured, and the actual amount of dividends received by
holders of Shares will depend on, among other things, the Company's
financialperformance, debt covenants and obligations, working
capital requirements and future capital requirements, all of which
are susceptible to a number of risks, as described in New Flyer’s
public filings available onSEDAR at www.sedar.com.
All figures are in U.S. dollars unless otherwise noted.
FORWARD LOOKING STATEMENTS, FINANCIAL TERMS, DEFINITIONS AND
CONDITIONS
+APPENDIX B
http://www.sedar.com/http://www.sedar.com/
Slide Number 1Company Profile & Performance HighlightsTotal
Shareholder ReturnSlide Number 4Proven Leadership with extensive
Industry ExperienceManufacturing, Fabrication and Service
FootprintAnnual Deliveries and Market Demand#1 Market Share in
Transit BusSlide Number 9#1 Market Share in Motor CoachesMotor
Coach Market in Canada and US�ARBOC acquired by NFI December 1,
2017#1 in Low Floor Cutaway BusesSlide Number 14Investing for
Growth and Margin EnhancementIndustry’s most comprehensive Parts
OfferingSlide Number 17Slide Number 18Book-to-Bill Ratio, Backlog
and Option ConversionSlide Number 20Strong Balance Sheet with low
Leverage�as at Dec 31-17Capital Allocation PolicySlide Number
23FORWARD LOOKING STATEMENTS, �FINANCIAL TERMS, DEFINITIONS AND
CONDITIONS
