REV GROUP, INC. S e p te m b e r I nv e s t o r P re s e nt a t i o n N Y S E : R E V G September 2018

Transcription

1 REV GROUP, INC. September Investor Presentation N Y S E : R E V G September 2018

2 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, management believes that the evaluation of REV Group s ongoing operating results may be enhanced by a presentation of Adjusted EBITDA and Adjusted 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 Private Securities Litigation Reform Act of 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 throughout this presentation and include statements regarding REV Group s intentions, beliefs, goals or current expectations concerning, among other things, its results of operations, financial condition, liquidity, prospects, growth, strategies and the industries in which we operate, including REV Group s outlook for the full-year fiscal 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 and 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

3 Investment Highlights 1 A Market Leader with Iconic Brands and One of the Largest Installed Base of Vehicles 2 3 Serves Attractive, Diverse & Growing End-Markets with Strong Macro Tailwinds & Demand Drivers Multiple Growth & Synergy Levers to Drive Earnings Growth and a Long-Term Goal of 10% EBITDA Margin 4 Opportunity to Leverage Proven Track Record of Successful Acquisitions to Realize Incremental Upside from M&A 5 Unique and Attractive Financial Profile 6 Experienced & Aligned Management Team 3

4 COMPANY OVERVIEW

5 R E V H A S A D I V E R S E P O R T F O L I O O F V E H I C L E S, E A C H D I S T I N C T LY P O S I T I O N E D T O TA R G E T S P E C I F I C C U S T O M E R R E Q U I R E M E N T S & P R I C E P O I N T S One of the Industry s Broadest Product Portfolios of Specialty Vehicles F I RE + EMERGENCY P U M P E R / TA N K E R A E R I E L F I R E T R U C K W I T H L A D D E R A I R C R A F T R E S C U L E F I R E F I G H T 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 A M B U L A N C E T Y P E I I I CO M M E RCIAL T Y P E A S C H O O L B U S E S T R A N S I T B U S M O T O R C O A C H 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 R S M O B I L I T Y V A N R E C R E AT I O N C L A S S A D I E S E L C L A S S A G A S O L I N E C L A S S B C L A S S C S U P E R C TRUCK CAMPERS TRAVEL TRAILERS 5

6 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 A SV 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 T I M S U L L I VA N B E C O M E S A S V C E O 1960s 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 S P E C A I L T Y V E H I C L E S E G M E N T S A N D D AT E B A C K M O R E T H A N 5 0 Y E A R S A S V R E N A M E D A N D R E B R A N D E D R E V G R O U P A I P P O RT F O L I O C O M PA N I E S Acquisitions Milestones ¹ Represents FY Represents FY

7 REV at a Glance Net Sales FISCAL 2018 YTD Q3 NET SALES BY SEGMENT FISCAL 2017 FULL YEAR NET SALES BY SEGMENT Commercial 33% Fire & Emergency 41% Commercial 29% Fire & Emergency 44% Recreation 26% Recreation 27% $1.7B YTD Q SALES $104M YTD Q ADJ. EBITDA $2.3B 2017 SALES $163M 2017 ADJ. EBITDA 7

8 REV Sales at a Glance Sales Mix 1 SALES BY VEHICLE TYPE SALES BY CUSTOMER TYPE SALS BY CHANNEL RV 29% Specialty 6% Ambulance 23% Fire Apparatus 21% Industrial / Commercial, Private 12% Contractor, 10% Consumer, 28% Government, 50% Direct 27% Dealer 73% Transit Bus 7% Commercial Bus 8% Type A School Bus 6% 1 Represents full year Fiscal 2017 ended October 31,

9 O V E R 5 M I L L I O N S Q U A R E F E E T O F N AT I O N A L M A N U FA C T U R I N G, S A L E S, & S E R V I C E FA C I L I T I E S P R O V I D E R E V W I T H A C O M P E T I T I V E A D VA N TA G E 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 3 REV Technical Centers ("RTC") for RVs 2 Specialty Plants 14 After Market Parts and Service Locations 1 REV Corp. Office Additional International Plants: Sorocaba, Brazil; Wuhu, China (JV) 9

10 R E P L A C E M E N T D E M A N D F O R T H E A G I N G F L E E T O F R E V S P R O D U C T S R E P R E S E N T S A R E V E N U E G R O W T H O P P O R T U N I T Y Large Installed Base Drives Recurring Replacement Sales R E P L A C E M E N T VA L U E O F R E V S I N S TA L L E D B A S E AV E R A G E L I F E C YC L E & S E L L I N G P R I C E I N C R E M E N TA L I M PA C T O F A C Q U I S I T I O N S S I N C E I P O W H Y C U S TO M E R S C H O O S E R E V F O R R E P L A C E M E N T FIRE P U M P E R T R U C K S : Y E A R S ( $ K - $ K ) A E R I A L F I R E T R U C K S : Y E A R S ( $ K - $ 1. 2 M M ) Repeat purchase to match in-service fleets ~$36 AMBULANCE A M B U L A N C E : 5-7 Y E A R S ( $ 6 5 K - $ K ) Brand loyalty and reputation for value, quality, and reliability BILLION R E P L A C E M E N T V A L U E O F R E V S IN- S E R V I C E F L E E T 1 BUS S H U T T L E B U S : Y E A R S ( $ 4 0 K - $ K ) T R A N S I T B U S : 1 2 Y E A R S ( $ K - $ K ) S C H O O L B U S : Y E A R S ( $ 3 5 K - $ 5 5 K ) L U X U R Y B U S E S Long-standing customer relationships Broad, customizable vehicle platform SPECIALTY S P E C I A LT Y V E H I C L E S : 5-7 Y E A R S ( $ 2 5 K - $ K ) Superior product quality and safety RV R E C R E AT I O N V E H I C L E S : Y E A R S ( $ 6 5 K - $ K ) C L A S S B R V S Network of aftermarket 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

11 R E V S E N D - M A R K E T S H AV E P O S I T I V E TA I LW I N D S A C R O S S E A C H S E G M E N T A S U N I T S A L E S C O N T I N U E T O T R E N D T O W A R D P R E - R E C E S S I O N L E V E L S Growing End-Markets Benefit from Incremental Pent-Up Demand K E Y FAC T S & C O M M E N TA RY E N D - M A R K E T G R OW T H F I R E + E M E R G E N C Y Aging population and urbanization drives demand 6,000 5,000 F I R E A P PA R AT U S U N I T S A L E S 7,000 6,000 A M B U L A N C E U N I T S A L E S Fire and Ambulance demand rising since ,000 3,000 5,000 4,000 Pent-up demand for fire apparatus & ambulances since 2008 recession 2,000 1,000 3,000 2,000 1,000 44% of Net Sales '06 '09 '12 '15 '16 '17 '06 '09 '12 '15 '16 '17 Pre-Recession Average 3 Pre-Recession Average 3 C O M M E R C I A L Urbanization increasing demand for buses Outsourcing of transportation services S H U T T L E B U S U N I T S A L E S ( s ) U. S. S C H O O L B U S S A L E S ( s ) Growth expected to continue Unit Sales Below 2006 peak Legislated replacement requirements 29% of Net Sales R E C R E AT I O N 27% of Net Sales 2 Poised for long-term growth with industry recovery Increasing participation rates demonstrate longterm trend toward RV ownership M O T O R I Z E D R V U N I T S A L E S ( s ) C L A S S A M O T O R I Z E D R V U N I T S A L E S ( s ) Class A sales below pre-recession average Pre-Rec. Avg Pre-Rec. Avg Pre-Recession Average 1 Pre-Recession Average 1 Source: FAMA, NTEA AMD, RVIA, Mid-Size Bus Manufacturers Association ( MSBMA ), Management Estimate ¹ Pre-recession average reflects the average from 1989 to Percentage of FY2017 net sales. 3 Pre-recession average reflects the average from 2001 to

12 R E V B E L I E V E S T H E A F T E R M A R K E T PA R T S O P P O R T U N I T Y F O R I T S V E H I C L E S I N S E R V I C E I S ~ $ M I L L I O N A N N U A L LY Multiple Growth Levers Large Aftermarket Parts Growth Opportunity R E V A F T E R M A R K E T OPPORTUNITY & C A PA B I L I T I ES R E V M A R K E T S H A R E O F ~ $ M I L L I O N PA R T S O P P O R T U N I T Y ~$800 MILLION ANNUAL VALUE OF REV AFTERMARKET PARTS OPPORTUNITY 14 A F T E R M A R K E T A N D PA R T S FA C I L I T I E S ~240,000 U N I T I N S TA L L E D B A S E ~$27 MILLION I N V E S T M E N T I N F Y C U R R E N T M A R K E T S H A R E 1 REV 10% U P S I D E O P P O R T U N I T Y Expand market share in high margin aftermarket parts and service Dedicated management team to oversee aftermarket business executing comprehensive aftermarket strategy Invested in building out capabilities including 4 dedicated parts warehouses and 1 third party warehouse ONLINE T E C H N O L O G Y P L AT F O R M Centralizing aftermarket parts and services business to broaden market coverage Established a web-based platform to provide customers with real time data on parts availability R E V A N N O U N C E D T H E S T A R T O F A N E W C O L L A B O R A T I V E C O N N E C T I O N W I T H F O R D M O T O R C O M P A N Y D E A L E R S F O R P A R T S I N S E P T E M B E R A N D T H E S T A R T O F A N E W S E R V I C E P A R T N E R S H I P W I T H R Y D E R S Y S T E M I N M A Y Establishing new partnerships to enhance capabilities and availability of parts in efficient manner ¹ Market share management estimate based on FY2017 results. 12

13 R O A D M A P T O D R I V E E B I T D A G R O W T H O V E R T H E L O N G - T E R M W I T H A D D I T I O N A L U P S I D E T H R O U G H M & A, F U T H E R E N D M A R K E T R E C O V E R Y, A N D E N T R Y I N T O N E W A D J A C E N T M A R K E T S E G M E N T S Multiple Adj. EBITDA Growth Levers ~ 6 % A D J. E B I T D A M A R G I N ~ 7 % A D J. E B I T D A M A R G I N $163 A B C D E F G ~ 1 0 % A D J. E B I T D A M A R G I N $ A D J. E B I T D A A D J. E B I T D A C O S T & E F F I C I E N C Y A F T E R M A R K E T G R O W T H M A R K E T S H A R E G R O W T H N E W P R O D U C T A N D I N I T I A T I V E S C O N S E R V A T I V E M A R K E T G R O W T H L O N G - T E R M E B I T D A M A R G I N T A R G E T M & A U P S I D E M A R K E T R E C O V E R Y U P S I D E E B I T D A W I T H U P S I D E O P P O R T U N I T Y A C O S T & E F F I C I E N C Y B A F T E R M A R K E T G R O W T H M A R K E T S H A R E G R O W T H C D N E W P R O D U C T S & I N I TAT I V E S Continued manufacturing optimization Cost of quality/warranty reduction Procurement optimization ~$800mm annual sales opportunity ~$36 billion installed base Higher margin opportunity Providing customers parts access and availability Continue broadening dealer coverage Entrance into previously underaddressed end-markets Leveraging current market positions for growth Ambulance remounts Continued product innovation expands addressable market ~ 13 new products to be launched in Fiscal 2018 E M a r ke t G ro w t h F M & A G A d d i t i o n a l M a r k e t R e c o v e r y F&E: Municipal spending & pent up demand Commercial: Urbanization, aging population, municipal spending Recreation: Continued growth via market and through product diversification Highly fragmented market Large number of bolt-on opportunities with significant synergy Potential for transformative M&A over the long-term I N C R E M E N T A L U P S I D E Some end-markets are still below historical averages Additional upside if end-markets continue to recover to pre-recession levels I N C R E M E N T A L U P S I D E Note: These targets are forward-looking, are subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond the control of the Company and its management, and are based upon assumptions with respect to future decisions, which are subject to change. Actual results may vary and these variations may be material. For discussion of some of the important factors that could cause these variations, please consult the "Risk Factors" section of the Company s Form 10-K and any subsequent 10-Q(s). Nothing in this presentation should be regarded as a representation by any person that these goals will be achieved and the Company undertakes no duty to update its goals. 13

14 FINANCIAL OVERVIEW

15 REV s Sales Growth Sales Growth and Upside Opportunity ($ millions) $3,000 Revenue $2,500 $2,268 $2,405 $2,500 $2,400 Upper end Lower end $2,000 $1,721 $1,735 $1,926 $1,500 $1,000 $500 $ TTM Q Outlook 15

16 REV s Earnings Growth Adj. EBITDA Growth and Upside Opportunity Adjusted EBITDA 1 $163 $163 $170 $160 Upper end Lower end $123 $62 $ TTM Q Outlook Margin (%) 3.6% 5.2% 6.4% 7.2% 6.8% 1 See appendix of this presentation for a reconciliation of Adj. EBITDA to Net Income. 2 TTM sales is proforma for acquisitions. Note: Refer to the company s form S-1 dated January 17, 2017 for reconciliations of GAAP to Non-GAAP metrics for fiscal years Refer to the company s form 8-K filed on December 19, 2017 for reconciliations of GAAP to Non-GAAP metrics for fiscal year

17 Balance Sheet Strength & Liquidity Focus to improve conversion of working capital to cash Existing debt reduced with excess cash Earnings growth drives increased liquidity Capacity to pursue opportunistic acquisitions 1 1 Net Debt Net Working Capital % Sales Total Net Leverage $ in millions $ % 24.4% 3.4x $212 $208 $245 $268 $ % 16.7% 18.8% 20.0% 2.3x 1.9x 1.6x 1.2x 2.7x Q Q Q Q Q Q Pro forma for acquisitions Note: Net Debt equals total debt less cash and cash equivalents; Net working capital equals A/R + Inventory A/P; Total leverage is calculated as Net Debt divided by Adjusted EBITDA and TTM Adjust EBITDA for quarter purposes. 17

18 Seasonality of Sales and Adj. EBITDA 1 Trend Quarterly Sales and Adj. EBITDA Fiscal Adj. EBITDA $70 $60 $50 $40 $30 $20 $10 Sales $800 $700 $600 $500 $400 $300 $200 $100 $0 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 $0 Quarterly Sales Quarterly Adj. EBITDA 1 See appendix of this presentation for a reconciliation of Adj. EBITDA to Net Income. 18

19 AT T R A C T I V E C H A R A C T E R I S T I C S I N C L U D I N G VA R I A B L E C O S T S T R U C T U R E A N D B A L A N C E S H E E T F L E X I B I L I T Y Unique and Attractive Financial Profile VA R I A B L E C O S T S T R U C T U R E A D J U S T E D E B I T D A 1 L O N G - T E R M TA R G E T S ~85% of costs of goods sold are variable C O G S B R E A K D O W N Focus on achieving ~10% long-term EBITDA margin target Scaled and synergistic platform leveraging procurement, engineering, distribution, and support functions across businesses M A N U F A C T U R I N G O V E R H E A D L A B O R C H A S S I S O T H E R C O G S M A T E R I A L S ( E X. C H A S S I S ) 8 5 % O F C O G S A R E VA R I A B L E F L E X I B L E B A L A N C E S H E E T Cash and equivalents of $14.7 million with approximately $119 million available under our existing credit facilities as of July 31, 2018 Net Leverage 2.7x at the end of Q3 Fiscal 2018 due to seasonal working capital and share repurchase activity. Leverage expected to approximate 2.0x by the end of Q4 Fiscal L O N G - T E R M < 2.0x EBITDA L E V E R A G E T A R G E T V I S I B L E A N D R E C U R R I N G R E V E N U E R E C R E AT I O N Primarily replacement nature of demand and, in many products, backlog provides revenue visibility Growth potential in recurring parts sales with highly attractive margins $750 $500 $250 $607 $581 Backlog $420 $255 $250 $116 Source: Company management. Note: Some targets are forward-looking, are subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond the control of the Company and its management, and are based upon assumptions with respect to future decisions, which are subject to change. Actual results may vary and these variations may be material. For discussion of some of the important factors that could cause these variations, please consult the "Risk Factors" section of the Company s Form 10-K and any subsequent 10-Q(s). Nothing in this presentation should be regarded as a representation by any person that these goals will be achieved and the Company undertakes no duty to update its goals. $- F&E Commercial RV Q3 FY18 Q3 FY17 19

20 Third Quarter Fiscal 2018 Summary Third quarter results positively impacted by the following items: - Increased School Bus sales activity - Strength of Class B, high-end Class C and Towables end markets along with improving profitability - Impact of price increases and cost reductions implemented at the end of second quarter Third quarter results negatively impacted by the following items: - Chassis availability challenges continued - Other materials shortages due to timing of chassis deliveries and extended supplier lead times - Delayed timing of Class A RV new product introductions - Underperformance of certain product lines, including specialty and parts Adjusted EBITDA margin of 8.0% increased compared to prior year period, due to previously implemented price increases and cost reduction efforts yielding positive results Net Income increased 20.4% year-over-year to $18.3 million, driven by benefit of tax reform Backlog of $1.3 billion vs. $1.1 billion at the start of the year, and $952 million in the prior year period Revised fiscal year 2018 guidance range to reflect year-to-date performance, as well as expectations for continued chassis and material availability challenges in the fourth quarter Repurchased approximately $41 million of REVG stock during the third quarter; board subsequently increased the share repurchase authorization $50 million, bringing total available authorization to approximately $55 million 20

21 Consolidated 3Q FY2018 Results T H I R D Q UA R T E R R E S U LT S R E F L EC T P E R S I S T E N C E O F N EA R T E R M S U P P LY - C H A I N I S S U E S A N D D OW N S T R EA M I M PA C T S Net Sales growth of 0.4% includes benefit from Lance acquisition but was negatively impacted by delayed shipments as a result of chassis availability and other material shortages, as well as lower Class A RV unit volumes $ $ Net Sales Adjusted EBITDA 1 $ 50 $47.6 $45.5 $ $ $ % 12.0 % Adjusted Net Income 1 of $24.7 million, an increase of 12.8%, includes the benefits of recent tax reform and lower restructuring costs compared to the prior year period $ $ $ $ 30 $ % 8.0 % 10.0 % 8.0 % 6.0 % Adjusted EBITDA 1 of $47.6 million was $2.1 million better compared to prior year period $ $ $ % 2.0 % Adjusted EBITDA margin of 8.0% increased compared to prior year period, as cost reductions and pricing actions helped preserve margins in the quarter $ 0.0 3Q FY2017 Net Sales ($mm) 3Q FY2018 $ 0 3Q FY2017 Adj. EBITDA ($mm) Margin 3Q FY % ¹ For a reconciliation of net income (loss) to Adjusted Net Income and Adjusted EBITDA, see the Appendix to this presentation. 21

22 Consolidated YTD FY2018 Results R E S U LT S R E F L EC T P O S I T I V E END - M A R K E T D E M A N D W I T H M A R G I N S I M PAC T E D BY S U P P LY C H A I N I N E F F I C I E N C I E S Net sales increased by 8.7% or $137.5 million, as a result of increased net sales across all three operating segments and the benefit of acquisitions $ 1,800 Net Sales Adjusted EBITDA 1 $ 1,721 $104.1 $104.3 $ 1, % 12.0 % Adjusted Net Income 1 was $51.0 million, an increase of $4.3 million or 9.2% over the first nine months of fiscal year 2017 $ 1,200 $ % 8.0 % Adjusted EBITDA 1 of $104.3 million increased by $0.2 million or 0.2%, from $104.1 in the first nine months of fiscal year 2017 $ 600 $ % 6.1 % 6.0 % 4.0 % Total backlog as of July 31, 2018 of $1.3 billion increased 34.1% compared to the third quarter 2017 $ 0 9 months FY months FY2018 $ months FY months FY % 0.0 % Net Sales ($mm) Adj. EBITDA ($mm) Margin ¹ For a reconciliation of net income (loss) to Adjusted Net Income and Adjusted EBITDA, see the Appendix to this presentation. 22

23 Third Quarter Adjusted EBITDA Bridge 100% -8% -8% +3% 88% Chassis supply issues - impact of lower sales of ambulance, shuttle bus and Class B RV units due to chassis availability Material shortages - impact of lengthening material lead times & impact of material shortages Other improvements increased volumes and profitability of RV businesses and lower corporate expenses Total of approximately 570 vehicle shipments deferred out of the third quarter due to chassis and other material shortages 23

24 Full Year Updated EBITDA Estimated Guidance Bridge (mid-point of guidance ranges) $ in millions Chassis availability - impact of lower sales of ambulance, shuttle bus and Class B RV units due to chassis availability Material shortages - impact of lengthening material lead times & material shortages Parts volume lower sales volume for REV Parts Other improvements higher volumes and profitability of RV businesses and lower corporate expenses Chassis and material shortages represent approximately $120 million in deferred revenue for the F&E and Commercial segments 24

25 $ in millions Capital Allocation Summary $80.0 $75.7M $70.0 $60.0 $50.0 $52.7M $40.0 $30.0 $20.0 $10.0 $16.0M $9.2M $19.5M $0.0 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 CAPEX *M&A Dividend Share Repurchase Capital expenditures between $35 - $40 million for FY 2018 with $31.9 million spent through the first nine months of fiscal 2018 on new products, machinery, facilities, parts business infrastructure and software Two acquisitions completed in LTM (last twelve months), along with two joint ventures Consistent dividend payer since IPO with additional return of capital via share repurchase which continued aggressively in the third quarter of fiscal 2018 Continue to manage investment of capital to maximize growth and shareholder return *M&A total includes JV activity 25

26 Full Year Fiscal 2018 Guidance Update Current Guidance 1 Prior Year (Actual) Top-line growth of ~10% Net Sales: $2.4 billion to $2.5 billion Net Sales: $2.3 billion Long-term target continues to be >10% EBITDA margins Net Income: $57.9 million to $69.0 million Adjusted EBITDA: $160 million to $170 million Net Income: $31.4 million Adjusted EBITDA: $162.5 million Adjusted Net Income: $80.7 million to $88.8 million Adjusted Net Income: $75.9 million 1 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 and 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. 26

27 Third Quarter Conclusion Chassis and material shortages impact Q3 shipments by approximately 570 vehicles through the end of the third quarter we expect these issues will be resolved in fiscal 2019 Lead times on chassis and other materials doubled from historical timeframes since mid-june and we expect will not return to normalcy until next calendar year Discrete issues with certain product lines are being addressed We were able to largely mitigate cost increases with pricing and cost reduction actions in the quarter and we expect this will continue to improve in the fourth quarter and into next year We believe next year is setting up well with visibility in sales volumes for a few key businesses that negatively impacted our current year results such as transit buses and school buses Cost reduction initiatives implemented in Q2 are benefiting the second half of fiscal 2018 and will increase in benefit for fiscal 2019 due to the full year impact We believe pricing actions put in place over Q3 will build momentum for profitability to offset cost increases in fiscal 2019, in addition to the expected full year run rate from cost reduction initiatives 27

28 APPENDIX

29 Reconciliation of 3Q Net Income (Loss) to Adj. EBITDA by Segment Three Months Ended July 31, 2018 Fire & Emergency Commercial Recreation Corporate & Other Total Net Income (loss) $ 21.0 $ 9.3 $ 13.8 $ (25.8) $ 18.3 Depreciation & amortization Interest expense, net Provision for income taxes EBITDA (13.8) 40.6 Sponsor expenses Restructuring costs Stock-based compensation expense Non-cash purchase accounting Legal matters Initial public company costs Deferred purchase price payment Adjusted EBITDA $ 25.3 $ 11.8 $ 17.9 $ (7.4) $ 47.6 Three Months Ended July 29, 2017 Fire & Emergency Commercial Recreation Corporate & Other Total Net Income (loss) $ 21.9 $ 8.9 $ 7.5 $ (23.1) $ 15.2 Depreciation & amortization Interest expense, net Provision for income taxes EBITDA (9.8) 40.4 Transaction expenses Sponsor expenses Restructuring costs Stock-based compensation expense Non-cash purchase accounting Adjusted EBITDA $ 29.0 $ 12.9 $ 11.7 $ (8.1) $

30 Reconciliation of YTD Net Income (Loss) to Adj. EBITDA by Segment Nine Months Ended July 31, 2018 Fire & Emergency Commercial Recreation Corporate & Other Total Net Income (loss) $ 49.0 $ 15.5 $ 26.0 $ (55.4) $ 35.1 Depreciation & amortization Interest expense, net Benefit for income taxes (7.2) (7.2) EBITDA (44.4) 80.1 Restructuring costs Transaction expenses Stock-based compensation expense Non-cash purchase accounting expense Sponsor expenses Legal matters Initial public company costs Deferred purchase price payment Adjusted EBITDA $ 65.5 $ 25.7 $ 38.7 $ (25.6) $ Nine Months Ended July 29, 2017 Fire & Emergency Commercial Recreation Corporate & Other Total Net Income (loss) $ 54.5 $ 25.5 $ 11.5 $ (82.8) $ 8.7 Depreciation & amortization Interest expense, net Provision for income taxes Loss on early extinguishment of debt EBITDA (52.8) 68.2 Transaction expenses Sponsor expenses Restructuring costs Stock-based compensation expense Non-cash purchase accounting Adjusted EBITDA $ 70.2 $ 35.6 $ 21.8 $ (23.5) $

31 Reconciliation of YTD FY18 Net Income to Adj. Net Income REV GROUP, INC. ADJUSTED NET INCOME (Unaudited; dollars in millions) Three Months Ended Nine Months Ended July 31, 2018 July 29, 2017 July 31, 2018 July 29, 2017 Net income $ 18.3 $ 15.2 $ 35.1 $ 8.7 Amortization of Intangible Assets Restructuring Costs Transaction Expenses Stock-based Compensation Expense Non-cash Purchase Accounting Expense Loss on Early Extinguishment of Debt Sponsor Expenses Legal Matters Initial Public Company Costs Deferred Purchase Price Payment Impact of Tax Rate Change (2.1) - (12.5) - Income Tax Effect of Adjustments (3.1) (3.5) (9.5) (20.2) Adjusted net income $ 24.7 $ 21.9 $ 51.0 $

32 Adjusted EBITDA Outlook Reconciliation REV GROUP, INC. ADJUSTED EBITDA OUTLOOK RECONCILIATION (Dollars in millions) Fiscal Year 2018 Low High Net Income $ 57.9 $ 69.0 Depreciation and Amortization Interest Expense, net Income Tax Expense EBITDA Restructuring Costs Transaction Expenses Stock-based Compensation Expense Non-cash Purchase Accounting Expense Legal Matters Initial Public Company Costs Sponsor Expenses Deferred Purchase Price Payout Adjusted EBITDA $ $

33 Adjusted Net Income Outlook Reconciliation REV GROUP, INC. ADJUSTED NET INCOME OUTLOOK RECONCILIATION (Dollars in millions) Fiscal Year 2018 Low High Net Income $ 57.9 $ 69.0 Amortization of Intangible Assets Restructuring Costs Transaction Expenses Stock-based Compensation Expense Non-cash Purchase Accounting Expense Legal Matters Initial Public Company Costs Sponsor Expenses Deferred Purchase Price Payout One-time Benefit of U.S. Tax Reform (12.0) (12.0) Income Tax Effect of Adjustments (11.8) (10.7) Adjusted Net Income $ 80.7 $

34 Fire & Emergency 3Q FY2018 Results M A R K E T L EA D E R S H I P A N D B ACKLO G E X P EC T E D TO D R I V E Y EA R - OV E R - Y EA R G R OW T H I N 4 Q A N D T H E I N TO N E X T Y EA R Net Sales Adjusted EBITDA 1 Net Sales declined 8.9% due to continued chassis supply disruptions resulting in lower shipments of ambulances, as well as the timing of certain fire truck deliveries $ $ $262.1 $ $ 30.0 $29.0 $ % 16.0 % 14.0 % 12.0 % Adjusted EBITDA 1 decreased by 12.8% due to lower ambulance volumes, partially offset by favorable SG&A expenses F&E backlog at the end of the third quarter was up 2.7% to $606.5 million, as compared to the end of fiscal year 2017 $ $ 20.0 $ % 10.6 % 10.0 % 8.0 % 6.0 % 4.0 % 2.0 % $ 0.0 3Q FY2017 3Q FY2018 $ 0.0 3Q FY2017 3Q FY % Net Sales ($mm) Adj. EBITDA ($mm) Margin ¹ For a reconciliation of net income (loss) to Adjusted Net Income and Adjusted EBITDA, see the Appendix to this presentation. 34

35 Commercial 3Q FY2018 Results P R O F I TA B I L I T Y I M P R OV E D S EQ U E N T I A L LY; D O U B L E - D I G I T G R OW T H I N B ACKLO G P O S I T I O N S THE SEG M E N T W E L L F O R Q 4 A N D A S T R O N G E R F I S C A L Net Sales Adjusted EBITDA 1 $ 200 $ % Net Sales increased 2.1% over prior year period driven by an increase in shuttle bus, school bus, mobility van, and terminal truck units Commercial Adjusted EBITDA 1 declined 8.5% year-over-year due to projected lower volume of certain higher margin products Commercial backlog of $420.0 million at the end of the third quarter increased 14.6% compared to the end of fiscal year 2017 $ 100 $154.4 $157.6 $ 10.0 $ % $ % 16.0 % 14.0 % 12.0 % 10.0 % 8.0 % 6.0 % 4.0 % 2.0 % $ 0 3Q FY2017 3Q FY2018 $ 0.0 3Q FY2017 3Q FY % Net Sales ($mm) Adj. EBITDA ($mm) Margin ¹ For a reconciliation of net income (loss) to Adjusted Net Income and Adjusted EBITDA, see the Appendix to this presentation. 35

36 Recreation 3Q FY2018 Results S T R O N G A D J U S T E D EBITDA G R OW T H D R I V E N BY ACQUISITION AND CONTINUED I M P R OV E M E N T I N P R O F I TA B I L I T Y O F O U R OT H E R RV B U S I N E S S E S Net Sales grew 10.9% to $197.3 million, with strong performance from the recently acquired Lance Towables RV business, and increased net sales across most of the brand line-up Class A unit volume decreased compared to prior year due to a strategic reduction in the number of different models produced and the delayed timing of new model introductions Adjusted EBITDA 1 grew 53.0%, driven by the Lance acquisition and increased profitability of certain RV businesses $ 200 $ 100 $177.9 Net Sales Adjusted EBITDA 1 $197.3 $ 20 $ 10 $ % $ % 18.0 % 16.0 % 14.0 % 12.0 % 10.0 % 8.0 % 6.0 % 4.0 % Excluding acquisitions, Adjusted EBITDA grew 7.3% year-over-year 2.0 % Segment backlog was up 72.3% to $249.5 million, as compared to the end of fiscal year 2017 $ 0 3Q FY2017 Net Sales ($mm) 3Q FY2018 $ 0 3Q FY2017 Adj. EBITDA ($mm) 3Q FY2018 Margin 0.0 % ¹ For a reconciliation of net income (loss) to Adjusted Net Income and Adjusted EBITDA, see the Appendix to this presentation. 36

37 REV GROUP, INC