Oshkosh Oshkosh Corporation Corporation Investor Presentation - - PowerPoint PPT Presentation

oshkosh oshkosh corporation corporation
SMART_READER_LITE
LIVE PREVIEW

Oshkosh Oshkosh Corporation Corporation Investor Presentation - - PowerPoint PPT Presentation

Oshkosh Oshkosh Corporation Corporation Investor Presentation Investor Presentation September 2013 September 2013 OSK Investor Slides September 2013 Forward-Looking Statements This presentation contains statements that the Company


slide-1
SLIDE 1

Oshkosh Oshkosh Corporation Corporation

Investor Presentation Investor Presentation

September 2013 September 2013

OSK Investor Slides September 2013

slide-2
SLIDE 2

Forward-Looking Statements

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, , g g p y p , gy, g , p j , , 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 presentation, words such as “may,” “will,” “expect,” “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

state e ts ese acto s c ude t e cyc ca atu e o t e Co pa y s access equ p e t, co e c a a d e & e e ge cy markets, especially in the current environment where there are conflicting signs regarding the global economic outlook and the ability of the U.S. government to resolve budgetary and debt issues; the expected level and timing of the DoD procurement of products and services and funding thereof; risks related to reductions in government expenditures in light of 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 the significant projected decrease in sales levels in the defense segment; 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 consolidation and and other raw material costs, particularly in a sustained economic recovery; risks related to facilities consolidation and alignment, including the amounts of related costs and charges and that anticipated cost savings may not be achieved; the duration of the ongoing global economic weakness, 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; 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 operations and sales, including foreign currency fluctuations and compliance with the Foreign Corrupt Practices Act; the Company’s ability to comply with complex laws and fluctuations and compliance with the Foreign Corrupt Practices Act; the Company s ability to comply with complex laws and regulations applicable to U.S. government contractors; 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 July 30, 2013. All forward-looking statements speak only as of July 30, 2013. The Company assumes no obligation, and disclaims any

  • bligation, 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

OSK Investor Slides September 2013

such information until the Company s next quarterly earnings conference call, if at all.

2

slide-3
SLIDE 3

Oshkosh Corporation – (NYSE: OSK)

Q3 YTD Performance FY13 FY12 % Change Revenue $5 94B $6 09B (2 5%) Revenue $5.94B $6.09B (2.5%)

Solid non-defense growth largely offset anticipated defense decline

Adjusted EPS (1) $3.23 $1.66 94.6%

St th d it l d f Strong growth despite lower defense revenue

Free Cash Flow (1) $216M $38M 468.0%

Consistent generator of strong FCF

  • Four Strong Segments
  • Employees (2): ~12,000
  • Market Cap (2): $3.9B
  • Incorporated in 1917

OSK Investor Slides September 2013

(1) Non-GAAP results. See Appendix for reconciliation to GAAP results. (2) As of August 30, 2013.

3

slide-4
SLIDE 4

MOVE – The Right Strategy

Summary of Primary Opportunities – FY12 to FY15 FY15 Targets FY15 Targets Initiative Initiative

  • Focuses on drivers that create

highest shareholder value g

  • Expected to drive higher

incremental margins across non- Defense businesses over cycle

OSK Investor Slides September 2013

(1) Expected benefits of market recovery captured in financial estimates vs. September 2012 Analyst Day estimate of FY12. Does not include benefits of other MOVE initiatives. (2) Net of investment costs and compared with consolidated FY11 operating income margins. (3) Compared with FY12.

4

slide-5
SLIDE 5

Poised to Deliver Results

Expect to overcome effects of defense downturn

Industry Leading Brands Industry Leading Brands (1)

(1)

Access Equipment #1 Global # G Fire Apparatus #1 Global Airport Products #1 Global Defense TWV (2) #1 Global Concrete Mixers #1 Americas Refuse Collection #1 Americas

(1) Based on Company estimates.

  • MOVE strategy expected to deliver higher margins throughout cycle
  • Strong Q3 FY13 revenue and income performance

(2) Oshkosh Defense is the leading supplier of heavy and medium tactical wheeled vehicles for the U.S. Armed Services.

g p

  • Oshkosh processes and team support execution of MOVE

– Powered by Oshkosh Operating System

OSK Investor Slides September 2013 * Non-GAAP results. See Appendix for reconciliation to GAAP results.

5

slide-6
SLIDE 6

The Access Equipment Advantage g

Global Leader in Access Equipment Global Market Presence Industry Leading Innovation Flexible Manufacturing and Supply Innovation Superior P d t R Full Spectrum Parts Service pp y Chain Product Range Parts, Service, and Support

OSK Investor Slides September 2013

JLG is positioned for sustained industry leading performance

6

slide-7
SLIDE 7

North American Rental Companies

Refreshing Their Fleets, Increasing Market Penetration

Total Construction Spending (Y-O-Y % Change) NA Rental Equipment Access - Fleet Age (AWP and TMH)

60

10 20

(% Change)

45 50 55

(Age in Months)

‐10 10

C NA Rental Equipment Company CapEx

Source: IHS Global data/projections, August, 2013 Source: Rouse Rental Report. Calendar year-end data for 2009-12

40 2009 2010 2011 2012

Age (months)

‐20 2006 2007 2008 2009 2010 2011 2012 2013E 2014E 2015E United States Canada

NA Rental Equipment Company Fleet Utilization NA Rental Equipment Company CapEx (Y-O-Y % Change)

zation) e)

60 90 120 150 65 70 75

(% Time Utiliz (% Chang

‐90 ‐60 ‐30 30 2004 2005 2006 2007 2008 2009 2010 2011 2012 50 55 60 Q ' 1 Q ' 1 Q ' 1 Q ' 1 Q ' 1 1 Q ' 1 1 Q ' 1 1 Q ' 1 1 Q ' 1 2 Q ' 1 2 Q ' 1 2 Q ' 1 2 Q ' 1 3 Q ' 1 3 OSK Investor Slides September 2013

Based on International Rental News/Dan Kaplan sample of medium to large NA rental equipment companies (United Rental, RSC, H&E, HERC). Based on International Rental News/Dan Kaplan sample of medium to large NA rental equipment companies (United Rental, RSC, HERC, Ameco, Neff).

2004 2005 2006 2007 2008 2009 2010 2011 2012

CapEx 7

1 Q 2 Q 3 Q 4 Q 1 Q 2 Q 3 Q 4 Q 1 Q 2 Q 3 Q 4 Q 1 Q 2 Q

  • Ind. Avg.
slide-8
SLIDE 8

Positive North America Leading Indicators

AWP – Articulating Boom 51.7

Average Age (in months) Recent Used Equipment Value Trends (OLV)

39.7% 43.2%

35.0 40.0 45.0

OLV (% of Cost)

AWP – Scissor Lifts 54.8

Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May June July

O

38.4% 44.0%

35.0 40.0 45.0 Jul ug ep Oct

  • v

ec an eb ar Apr ay ne uly

OLV (% of Cost)

S R A t S i A t 2013

AWP – Telescopic Boom 55.3

J Au Se O No De Ja Fe M A Ma Jun Ju

30.9% 31.7%

30.0 32.5 35.0 Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May June July

OLV (% of Cost)

Source: Rouse Asset Services, August 2013.

U.S. Housing Starts Seasonally Adjusted Rate 2013 2012 Change July 896 000 741 000 +20 9% July 896,000 741,000 +20.9%

Source: U.S. Census Bureau, August 2013.

OSK Investor Slides September 2013

8

slide-9
SLIDE 9

The Oshkosh Defense Advantage g

Defense Engineering & Product Development Service, Lifecycle Sustainment Scalable Manufacturing & Operations Vehicle Fleet Modernization Vertical Integration of Specialized Components Defense Program Management

D f i d t ti th t l th

OSK Investor Slides September 2013

Defense industry expertise that leverages the full capabilities of Oshkosh Corporation

9

slide-10
SLIDE 10

L-ATV

The Oshkosh JLTV Solution

  • The future of light tactical vehicles
  • JLTV EMD contract award

– 22 prototypes for evaluation – Reliability, Availability and Maintainability (RAM) testing begins late 2013 testing begins late 2013 – Decision expected early 2015

  • Oshkosh JLTV solution

– Oshkosh TAK-4i intelligent independent suspension system – Latest automotive technologies Ad anced cre protection s stem – Advanced crew protection system

  • Low rate initial production

expected in 2016 for contract winner

OSK Investor Slides September 2013

10

slide-11
SLIDE 11

The Fire & Emergency Advantage g

Innovation #1 B d

  • at o

Leader #1 Brands Premier Distribution and Service Unrivaled Product Performance

OSK Investor Slides September 2013

Leading global provider of specialty vehicles that serve, protect and save lives

11

slide-12
SLIDE 12

Domestic Fire Market Drivers Stabilizing g

  • Housing prices recovering, property taxes growing

Recent Headlines

HOUSING PRICES & LOCAL PROPERTY TAXES

New Home Sales Hit Five- Year High, Prices Soar

  • Reuters, July 24, 2013

Construction Spending in U.S. Rises, Led By Residential Projects

  • Bloomberg July 1 2013

Bloomberg, July 1, 2013

Apocalypse, Not Now, for Municipal Bonds

B ’ A il 23 2013

  • Barron’s, April 23, 2013

OSK Investor Slides September 2013

12

slide-13
SLIDE 13

The Commercial Advantage g

Broadest Product Line Best in Class Aftermarket Service and Support

Refuse collection vehicle product line

Direct Distribution, Customer Intimacy Innovation and New Product Development Scalable, Flexible Manufacturing & O ti Access to Technology, Alternative Fuels

Integrated factory

& Operations Fuels Leadership

OSK Investor Slides September 2013

Alternative fuel technology

Street Smart, Street Tough

13

slide-14
SLIDE 14

Construction: Substantial Opportunity with Modest Recovery

Housing Starts and Mixer Shipments (1959-2012)

U.S. Housing Starts Forecast

8,000 10,000 12,000 2,000 2,500

M

000s)

1 6 1.8 2.0 2.2 2.4 in millions)

4,000 6,000 500 1,000 1,500

Mixer Units Shippe

Housing Starts (0

0.8 1.0 1.2 1.4 1.6 sing Starts (units

2,000 500

ed Housing Starts Mixer Units Shipped

0.6 2012 2013E 2014E 2015E 2016E Hous

Moodys Portland Cement Association Global Insight Average Analyst Estimate

  • U.S. housing starts assumed by OSK**: 0.8 million in FY13; 1.2 million in FY14; and

1.4 million in FY15

  • July 2013 U S housing starts* at 896 000

OSK Investor Slides September 2013

July 2013 U.S. housing starts at 896,000

14 Sources: Housing Starts - U.S. Census Bureau. Mixer Shipments - Truck Mixer Manufacturers Bureau; U.S. and Canada.

slide-15
SLIDE 15

MOVE at Work in Q3*

  • Q3 EPS of $1.67

– Nearly double Q3 FY12

OSK Fiscal Q3 Performance

y – Access equipment and defense segments led the way

  • MOVE initiatives gaining

les

ns)

E

$2,204 $2,160 $1.67 $1.25 $1.50 $1.75 $2.00 $1 500 $2,000 $2,500

MOVE initiatives gaining momentum

  • Benefited from positive

market conditions in North America

Net Sa

(million

EPS

$0.84 $0.50 $0.75 $1.00 $1.25 $500 $1,000 $1,500

America

  • Repurchased 1.1 million

shares

– 5.4 million shares YTD

$0.00 $0.25 $0 FY13 FY12 Net Sales EPS

  • Increased FY13 adjusted

EPS** estimate range

– $3.60 to $3.70

OSK Investor Slides September 2013

15 * Continuing operations only. * * FY13 expectations exclude certain non-GAAP adjustments (see Appendix).

slide-16
SLIDE 16

Recent Performance

Access Equipment

  • Continue to benefit from replacement demand in

North America North America

  • Global conditions remain mixed

Defense

  • Strong operations execution; effectively managing

recent downsizing

  • Continuing to pursue international business

Fire & Emergency

  • Municipal demand improving, federal demand

remains low

  • Benefitting from international sales

Commercial

  • Concrete mixer deliveries and orders remain strong

OSK Investor Slides September 2013

  • Concrete mixer deliveries and orders remain strong
  • Continuing to invest in MOVE

16

slide-17
SLIDE 17

Higher Expectations for FY13*

  • Revenue range of $7.6 billion to $7.7 billion
  • Adjusted operating income range of $515 million to $525 million
  • Adjusted EPS from continuing operations range of $3.60 to $3.70

Segment Information Measure Measure Access Access Equipment Equipment Defense Defense Fire & Fire & Emergency Emergency Commercial Commercial

Sales (billions) ~$3.1 ~$3.1 Nearly $0.8 $0.72 - $0.75 Operating 12 0%-12 25% ~7 5% 2 0%-2 5% 4 5%-5 0%

Additional Expectations

  • Adjusted corporate expenses ~$145 million

Income Margin 12.0%-12.25% 7.5% 2.0%-2.5% 4.5%-5.0%

Comments on Fourth Quarter

  • Expect lowest quarter EPS of the

j (higher share-based compensation and IT investments vs. FY12)

  • Tax rate of ~29.5%
  • CapEx of ~$45 million

year due to seasonality and defense sales decline.

OSK Investor Slides September 2013

17

  • Free cash flow ~$275-$300 million
  • Average full year share count** of 88.8 million

* FY13 expectations reflect certain non-GAAP adjustments (see Appendix). ** Excludes impact of any additional share repurchases in Q4.

slide-18
SLIDE 18

Committed to Shareholders

  • Aggressively driving to achieve MOVE targets

– Earnings per share of $4.00 to $4.50 in 2015

  • Attacking product, process and overhead

costs

  • Applying disciplined capital allocation strategy
  • Applying disciplined capital allocation strategy
  • Will sustain active shareholder outreach
  • Deploying Oshkosh Operating System globally

Deploying Oshkosh Operating System globally to sustain lean culture and drive results

OSK Investor Slides September 2013

18

slide-19
SLIDE 19

For more For more information information contact: contact:

Patrick N. Davidson Vice President, Investor Relations (920) 966-5939 ( ) pdavidson@oshkoshcorp.com Jeffrey D. Watt Director, Investor Relations (920) 233-9406 (920) 233-9406 jwatt@oshkoshcorp.com

OSK Investor Slides September 2013

slide-20
SLIDE 20

(Dollars in millions)

Appendix: Q3 Access Equipment

Third Quarter

(Dollars in millions)

Comments

Net Sales $941.5 $814.6 % Ch 15 6% 40 4% 2013 2012

  • Sales impacted by:

 Higher volume in North America  Price realization

% Change 15.6% 40.4% Operating Income $154 5 $88 2

 Price realization  Higher aftermarket volume  Lower volume in Australia

  • Margins impacted by:

Operating Income $154.5 $88.2 % Change 75.1% 199.7% % Margin 16.4% 10.8%

 Price realization  Product and process cost reduction  Product mix

  • Backlog down 15% vs.

prior year to $621 million

 Mostly due to lower military backlog

OSK Investor Slides September 2013

bac og

20

slide-21
SLIDE 21

Appendix: Q3 Defense

(Dollars in millions)

  • Sales impacted by:

Comments Third Quarter

( )

2013 2012

 Lower U.S. DoD volume  International truck shipments

Net Sales $879.6 $958.5 % Change (8.2)% (13.4)%

  • Margins impacted by:

 Higher international sales mix

Operating Income $85.8 $40.2 % Change 113 8% (64 3)%

 Finalization of UCA pricing  Operational efficiencies

B kl d 42% % Change 113.8% (64.3)% % Margin 9.8% 4.2%

  • Backlog down 42% vs.

prior year to $1.9 billion

OSK Investor Slides September 2013

21

slide-22
SLIDE 22

(Dollars in millions)

Appendix: Q3 Fire & Emergency

Third Quarter*

( )

2013 Sales impacted by:

Comments

Net Sales $204.3 $229.6 % Change (11.0)% 10.1% 2013 2012

  • Sales impacted by:

 Lower unit volumes

  • Margins impacted by:

L b ti

g ( ) Operating Income $6 5 $8 1

 Lower absorption  Price realization

  • Backlog* essentially flat

with prior year at $503 Income $6.5 $8.1 % Change (18.8)% (39.6)% % Margin 3.2% 3.5% with prior year at $503 million

OSK Investor Slides September 2013

22

* Continuing operations only.

slide-23
SLIDE 23

Appendix: Q3 Commercial

(Dollars in millions)

  • Sales impacted by:

Comments Third Quarter

( )

2013 2012

+ Higher concrete mixer sales + Higher content units

Net Sales $194.7 $176.2 % Change 10.5% 11.2%

 Lower RCV sales

  • Margins impacted by:

 Restructuring related t

Operating Income $10.0 $12.1 % Change (17.8)% 224.3%

costs

  • Backlog up 13% vs. prior

year to $167 million % Margin 5.1% 6.9%

OSK Investor Slides September 2013

23

slide-24
SLIDE 24

Appendix: Commonly Used Acronyms y

ARFF Aircraft Rescue and Firefighting M-ATV MRAP All-Terrain Vehicle AWP Aerial Work Platform MECV Modernized Expanded Capability Vehicle CapEx Capital Expenditures MRAP Mine Resistant Ambush Protected CNG Compressed Natural Gas MSVS Medium Support Vehicle System (Canada) DoD Department of Defense NPD New Product Development EAME Europe, Africa & Middle East NOL Net Operating Loss EMD Engineering & Manufacturing Development OI Operating Income EPS Diluted Earnings Per Share PLS Palletized Load System FHTV Family of Heavy Tactical Vehicles PUC Pierce Ultimate Configuration FMS Foreign Military Sales R&D Research & Development FMTV Family of Medium Tactical Vehicles RCV Refuse Collection Vehicle HEMTT Heavy Expanded Mobility Tactical Truck RFP Request for Proposal HET Heavy Equipment Transporter ROW Rest of World HMMWV High Mobility Multi-Purpose Wheeled Vehicle 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 TFFT Tactical Fire Fighting Truck JROC Joint Requirements Oversight Council TPV Tactical Protector Vehicle JUONS Joint Urgent Operational Needs Statement TWV Tactical Wheeled Vehicle

OSK Investor Slides September 2013

24

L-ATV Light Combat Tactical All-Terrain Vehicle UCA Undefinitized Contract Action LVSR Logistic Vehicle System Replacement UIK Underbody Improvement Kit (for M-ATV)

slide-25
SLIDE 25

Appendix: Non-GAAP to GAAP Reconciliation eco c at o

  • 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):

Fiscal 2013 Expectations p Corporate Non-GAAP operating expenses (145.0) $ Tender offer and proxy contest costs (16.3) GAAP operating expenses (161.3) $ Low High Consolidated Non-GAAP operating income 515.0 $ 525.0 $ Tender offer and proxy contest costs (16.3) (16.3)

Fiscal 2013 Expectations

GAAP operating income 498.7 $ 508.7 $ Non-GAAP earnings per share attributable to Oshkosh Corporation from continuing operations-diluted 3.60 $ 3.70 $ Tender offer and proxy contest costs, net of tax (0.11) (0.11) GAAP earnings per share attributable to Oshkosh Corporation from continuing operations-diluted 3.49 $ 3.59 $ Net cash flows provided by operating activities 335.0 $ 360.0 $ Additions to property, plant and equipment (45.0) (45.0)

OSK Investor Slides September 2013

25

Additions to equipment held for rental (19.0) (19.0) Proceeds from sale of equipment held for rental 4.0 4.0 Free cash flow 275.0 $ 300.0 $

slide-26
SLIDE 26

Appendix: Non-GAAP to GAAP Reconciliation (Cont’d) eco c at o (Co t d)

  • 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):

2013 2012 Non-GAAP earnings per share attributable to Oshkosh Corporation from continuing operations-diluted 3.23 $ 1.66 $ Nine Months Ended June 30, Tender offer and proxy contest costs, net of tax (0.11) (0.05) Discrete tax benefits

  • 0.15

GAAP earnings per share attributable to Oshkosh Corporation from continuing operations-diluted 3.12 $ 1.76 $ 2013 2012 Nine Months Ended June 30, Net cash flows provided by operating activities 247.5 $ 74.3 $ Additions to property, plant and equipment (25.2) (33.9) Additions to equipment held for rental (13.1) (5.9) Proceeds from sale of equipment held for rental 6.9 3.2 Free cash flow 216.1 $ 37.7 $

OSK Investor Slides September 2013

26