MOVING THE WORLD AT WORK Oshkosh Corporation (NYSE:OSK) Stifel - - PowerPoint PPT Presentation

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MOVING THE WORLD AT WORK Oshkosh Corporation (NYSE:OSK) Stifel - - PowerPoint PPT Presentation

MOVING THE WORLD AT WORK Oshkosh Corporation (NYSE:OSK) Stifel 2015 Industrials Conference June 16, 2015 Forward-Looking Statements This presentation contains statements that the Company believes to be forward-looking statements within


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MOVING THE WORLD AT WORK Oshkosh Corporation

(NYSE:OSK)

Stifel 2015 Industrials Conference June 16, 2015

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MOVING THE WORLD AT WORK

Forward-Looking Statements

2 June 16, 2015 Oshkosh Corporation Investor Presentation

This presentation contains statements that the Company believes to be “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact, including, without limitation, statements regarding the Company’s future financial position, business strategy, targets, projected sales, costs, earnings, capital expenditures, debt levels and cash flows, and plans and objectives of management for future operations, are forward-looking statements. When used in this press release, words such as “may,” “will,” “expect,” “target,” “intend,” “estimate,” “anticipate,” “believe,” “should,” “project” or “plan” or the negative thereof or variations thereon or similar terminology are generally intended to identify forward-looking statements. These forward- looking statements are not guarantees of future performance and are subject to risks, uncertainties, assumptions and other factors, some of which are beyond the Company’s control, which could cause actual results to differ materially from those expressed or implied by such forward-looking statements. These factors include the cyclical nature of the Company’s access equipment, commercial and fire & emergency markets, which are particularly impacted by the strength of U.S. and European economies; the strength of the U.S. dollar and its impact on Company exports, translation of foreign sales and purchased materials; the expected level and timing of DoD and international defense customer procurement of products and services and funding thereof; risks related to reductions in government expenditures in light

  • f U.S. defense budget pressures, sequestration and an uncertain DoD tactical wheeled vehicle strategy, including the Company’s ability to

successfully manage the cost reductions required as a result of lower customer orders in the defense segment; the Company’s ability to win a U.S. Joint Light Tactical Vehicle production contract award and international defense contract awards; the Company’s ability to increase prices to raise margins or offset higher input costs; increasing commodity and other raw material costs, particularly in a sustained economic recovery; risks related to facilities expansion, consolidation and alignment, including the amounts of related costs and charges and that anticipated cost savings may not be achieved; global economic uncertainty, which could lead to additional impairment charges related to many of the Company’s intangible assets and/or a slower recovery in the Company’s cyclical businesses than Company or equity market expectations; projected adoption rates of work at height machinery in emerging markets; risks related to the collectability of receivables, particularly for those businesses with exposure to construction markets; the cost of any warranty campaigns related to the Company’s products; risks related to production or shipment delays arising from quality or production issues; risks associated with international

  • perations and sales, including compliance with the Foreign Corrupt Practices Act; the Company’s ability to comply with complex laws and

regulations applicable to U.S. government contractors; the impact of severe weather or natural disasters that may affect the Company, its suppliers or its customers; cybersecurity risks and costs of defending against, mitigating and responding to a data security breach; and risks related to the Company’s ability to successfully execute on its strategic road map and meet its long-term financial goals. Additional information concerning these and other factors is contained in the Company’s filings with the Securities and Exchange Commission, including the Form 8-K filed April 28, 2015. All forward-looking statements speak only as of April 28, 2015 except as specifically updated

  • herein. The Company assumes no obligation, and disclaims any obligation, to update information contained in this presentation. Investors

should be aware that the Company may not update such information until the Company’s next quarterly earnings conference call, if at all.

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MOVING THE WORLD AT WORK

Oshkosh Corporation

  • Leading provider of specialty

vehicles

– Moving the World at Work

  • Nearly 100 years in business;

incorporated in 1917

  • Serial innovator of game changing

new products

  • Market Capitalization(1): $4.2 billion
  • FY14 Revenue: $6.8 billion
  • Focused on delivering value to

customers and shareholders

3 (1) As of May 26, 2015

Access Equipment Defense Fire & Emergency Commercial

June 16, 2015 Oshkosh Corporation Investor Presentation

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MOVING THE WORLD AT WORK

Oshkosh Corporation Profile – FY14

Source: Oshkosh Corporation 2014 Annual Report

4 Oshkosh Corporation Investor Presentation June 16, 2015

51% 25% 11% 13%

Revenue by Segment

Access Equipment Defense Fire & Emergency Commercial 77% 5% 10% 8%

Revenue by Geography

United States Other NA EAME Rest of World

  • Non-Defense Segment Revenues and

Operating Income Both Grew in FY14

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MOVING THE WORLD AT WORK

  • Expect Solid Performance in FY15

– Strong customer sentiment – Updating full year adjusted EPS* estimate range to $3.75 to $4.00

  • Positive Outlook Beyond FY15

– Additional market recovery opportunities in non-defense segments – Significant upside opportunities in defense – MOVE to deliver margin expansion and growth

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A Positive Outlook for OSK

June 16, 2015 Oshkosh Corporation Investor Presentation

* Non-GAAP results. See Appendix for reconciliation to GAAP results.

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MOVING THE WORLD AT WORK

Basis for Positive Outlook

6 June 16, 2015 Oshkosh Corporation Investor Presentation

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MOVING THE WORLD AT WORK

MOVE Strategy Driving Performance

  • Focuses on drivers that

create highest shareholder value

  • Supports higher margin

targets across non- Defense businesses over the cycle

7 June 16, 2015 Oshkosh Corporation Investor Presentation

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MOVING THE WORLD AT WORK

Access Equipment –

The Market Leader

  • MOVE delivered in FY14

– Exciting new products – Strong incremental margins – Record revenues, operating income and operating income margin

  • Expect continued growth in FY15

– Moderate growth in North America and Europe – Mixed outlook in other regions

  • Strong new product launches

during the year

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Reaching Out – Rising to Every Challenge

June 16, 2015 Oshkosh Corporation Investor Presentation

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MOVING THE WORLD AT WORK

Slow U.S. Construction Recovery is Continuing

9 Source: U.S. Census Bureau, May 19, 2015 Source: U.S. Census Bureau, June 1, 2015

U.S. Housing Starts - Current Annual Forecasts (millions) Date 2014 2015 2016 Global Insight May-15 1.00 1.08 1.30 Moody's - Slower Recovery May-15 1.00 1.11 1.42 Portland Cement Association Apr-15 1.00 1.18 1.34 Average Analyst Estimate 1.00 1.12 1.35 U.S. Nonresidential Construction (yr/yr Growth) - Current Analyst Estimates Date 2014 2015 2016 Portland Cement Association Apr-15 8.2% 8.8% 8.3% FMI Source Mar-15 6.0% 8.0% 7.0% Global Insight Mar-15 2.8% 2.2% 3.6% Moody's – Slower Recovery May-15 6.9% 3.6% 5.2% Construction Market Data Mar-15 3.9% 8.2% 8.6% Dodge Data & Analytics Mar-15 13.5% 10.9% 13.0% Average Analyst Estimate 6.9% 7.0% 7.6% Thousands $ Millions

U.S. Non-Residential Spending Housing Starts

June 16, 2015 Oshkosh Corporation Investor Presentation 400 500 600 700 800 900 1,000 1,100 1,200 Jan‐2010 Jul‐2010 Jan‐2011 Jul‐2011 Jan‐2012 Jul‐2012 Jan‐2013 Jul‐2013 Jan‐2014 Jul‐2014 Jan‐2015 450,000 500,000 550,000 600,000 650,000 Jan‐2010 Jul‐2010 Jan‐2011 Jul‐2011 Jan‐2012 Jul‐2012 Jan‐2013 Jul‐2013 Jan‐2014 Jul‐2014 Jan‐2015

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Operating Income Margin Expansion Remains a Priority

  • Expect biggest impact from optimize cost and

value innovation initiatives still to come

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10.0% 12.0% 14.0% 16.0% 18.0% 20.0% FY14 FY15E Target

(Operating Income Margin %)

16% 17% ~ 14.5% 14.3%

ACCESS EQUIPMENT

June 16, 2015 Oshkosh Corporation Investor Presentation

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MOVING THE WORLD AT WORK

Defense –

Reduced Cost Structure with Upside Opportunities

  • Believe FY15 will be trough year for

both revenues and operating income

  • Submitted proposal for JLTV program

in February – Expect decision on winning bidder in August or September 2015

  • Canada MSVS program award

decision expected in June 2015

  • Continuing pursuit of sales of

thousands of M-ATVs – International – Reset opportunities in U.S.

  • Generally favorable FY16 budget

funding requests for our programs

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Mission Proven – World-Class Performance

June 16, 2015 Oshkosh Corporation Investor Presentation

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MOVING THE WORLD AT WORK

Fire & Emergency –

Operational Improvements Leading to Bright Future

  • Continuing to execute operational

efficiency roadmap − More work to be done

  • Positive response to recent new

product launches – Enforcer and Saber chassis – Revolutionary Ascendant™ two axle aerial ladder vehicle

  • Modest market growth expected

in North America in FY15 – Recently announced 3% price increase

  • Additional international success

− ARFF orders in Asia, Australia and Latin America

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Recently Launched New Products Driving Customer Interest

June 16, 2015 Oshkosh Corporation Investor Presentation

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Operating Income Margin Expansion Remains a Priority

  • Margin expansion behind schedule, but improvement

roadmap is solid

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0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% FY14 FY15E Target

(Operating Income Margin %)

10%+ ~ 4.25% 3.5%

FIRE & EMERGENCY

June 16, 2015 Oshkosh Corporation Investor Presentation

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MOVING THE WORLD AT WORK

Commercial –

Progress Continues

  • Solid North American concrete mixer

market recovery over last several years − Driven by slowly improving housing market − Strong U.S. dollar creating some drag for multinational concrete mixer customers

  • RCV market expected to grow in FY15

– Grew modestly in FY14

  • Split-bin and automated RCV models

generating incremental demand

  • MOVE investments continue

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North American Market Leader Split Body Rear Loaders

June 16, 2015 Oshkosh Corporation Investor Presentation

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MOVING THE WORLD AT WORK

Operating Income Margin Expansion Remains a Priority

  • Optimize cost initiatives continue
  • Absorption benefits accelerate in market recovery

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0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% FY14 FY15E Target

(Operating Income Margin %)

10%+ ~ 6.5% 6.2%

COMMERCIAL

June 16, 2015 Oshkosh Corporation Investor Presentation

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MOVING THE WORLD AT WORK

Driving to FY15 MOVE Targets and Beyond

16 June 16, 2015 Oshkosh Corporation Investor Presentation

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What to Expect from Oshkosh in FY15?

  • Deliver MOVE strategy

– Margin improvement in all non- defense segments – Launch game changing new products – Compete vigorously for business around the world

  • Target defense contract awards
  • Maintain strong customer focus
  • Increase industry leading quality

to higher level

  • Drive shareholder value

17 June 16, 2015 Oshkosh Corporation Investor Presentation

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And Beyond FY15?

Continued improvement

  • Execute effectively to deliver

positive near-term outlook

  • Continue operating income margin

expansion

– Target 16 – 17% at Access Equipment – Initially target 10% at other segments

  • Prudent capital allocation

– Target annual dividend increases – Begin building cash; deploy with crocodile patience

  • Sustain talent and process

improvement to outperform with Oshkosh Operating System

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7.0% 7.5% ~ 8.0% 10.0%+

0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0%

2013 2014 2015E Target

OSK Consolidated Adjusted Operating Income Margin *

* Non-GAAP results. See Appendix for reconciliation to GAAP results.

June 16, 2015 Oshkosh Corporation Investor Presentation

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MOVING THE WORLD AT WORK

For information contact:

Patrick N. Davidson Vice President, Investor Relations (920) 966-5939 pdavidson@oshkoshcorp.com

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Jeffrey D. Watt Director, Investor Relations (920) 233-9406 jwatt@oshkoshcorp.com

June 16, 2015 Oshkosh Corporation Investor Presentation 19

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MOVING THE WORLD AT WORK

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Appendix: Commonly Used Acronyms

ARFF Aircraft Rescue and Firefighting MECV Modernized Expanded Capability Vehicle AWP Aerial Work Platform MRAP Mine Resistant Ambush Protected CapEx Capital Expenditures MSVS Medium Support Vehicle System (Canada) CNG Compressed Natural Gas NOL Net Operating Loss DGE Diesel Gallon Equivalent NPD New Product Development DoD Department of Defense NRC National Rental Company EAME Europe, Africa & Middle East OH Overhead EMD Engineering & Manufacturing Development OI Operating Income EPS Diluted Earnings Per Share OOS Oshkosh Operating System FHTV Family of Heavy Tactical Vehicles OPEB Other Post-Employment Benefits FMS Foreign Military Sales PLS Palletized Load System FMTV Family of Medium Tactical Vehicles PUC Pierce Ultimate Configuration GAAP U.S. Generally Accepted Accounting Principles R&D Research & Development HEMTT Heavy Expanded Mobility Tactical Truck RCV Refuse Collection Vehicle HET Heavy Equipment Transporter RFP Request for Proposal HMMWV High Mobility Multi-Purpose Wheeled Vehicle ROW Rest of World IRC Independent Rental Company SMP Standard Military Pattern (Canadian MSVS) IT Information Technology TACOM Tank-automotive and Armaments Command JLTV Joint Light Tactical Vehicle TDP Technical Data Package JPO Joint Program Office TPV Tactical Protector Vehicle JROC Joint Requirements Oversight Council TWV Tactical Wheeled Vehicle JUONS Joint Urgent Operational Needs Statement UCA Undefinitized Contract Action L-ATV Light Combat Tactical All-Terrain Vehicle UIK Underbody Improvement Kit (for M-ATV) LVSR Logistic Vehicle System Replacement UK United Kingdom M-ATV MRAP All-Terrain Vehicle ZR Zero Radius June 16, 2015 Oshkosh Corporation Investor Presentation

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MOVING THE WORLD AT WORK

June 16, 2015 Oshkosh Corporation Investor Presentation 21

Appendix: Non-GAAP to GAAP Reconciliation

  • The table below presents a reconciliation of the Company’s presented non-GAAP measures to the most directly

comparable GAAP measures (in millions, except per share amounts):

Low High Adjusted earnings per share - diluted (non-GAAP) 3.75 $ 4.00 $ OPEB curtailment gain, net of tax 0.03 0.03 Debt extinguishment costs, net of tax (0.12) (0.12) Earnings per share - diluted (GAAP) 3.66 $ 3.91 $ Fiscal 2015 Expectations

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MOVING THE WORLD AT WORK

June 16, 2015 Oshkosh Corporation Investor Presentation 22

Appendix: Non-GAAP to GAAP Reconciliation

  • The table below presents a reconciliation of the Company’s presented non-GAAP measures to the most directly

comparable GAAP measures:

2013 2014 2015E Consolidated operating income margins (non-GAAP) 7.0% 7.5% 8.0% Union contract ratification costs

  • 0.1%
  • Pension curtailment and settlement loss
  • 0.1%
  • OPEB curtailment gain
  • 0.2%
  • Tender offer and proxy contest costs
  • 0.2%
  • Impairment charge
  • 0.1%
  • Contract pricing adjustment for OPEB costs
  • 0.2%
  • Consolidated operating income margins (GAAP)

6.6% 7.4% 8.0% Fiscal Year Ended September 30,