september 2013 investor presentation 9-10-13€¦ · source: rouse asset services, august 2013....

Oshkosh Oshkosh CorporationCorporation

Investor PresentationInvestor Presentation

September 2013September 2013

OSK Investor Slides September 2013

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, withoutlimitation, 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, areforward-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 cymarkets, 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 commodityand other raw material costs particularly in a sustained economic recovery; risks related to facilities consolidation andand 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 delaysarising 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 andfluctuations 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 itsstrategic 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 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


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

2

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 fStrong 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


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

3

MOVE – The Right StrategySummary of Primary Opportunities – FY12 to FY15

FY15 TargetsFY15 TargetsInitiativeInitiative

• Focuses on drivers that create highest shareholder valueg

• Expected to drive higher incremental margins across non-Defense businesses over cycle


(1) Expected benefits of market recovery captured in financial estimates vs. September 2012 Analyst Day estimate of FY12. Does notinclude benefits of other MOVE initiatives.

(2) Net of investment costs and compared with consolidated FY11 operating income margins.(3) Compared with FY12.

4

Poised to Deliver ResultsExpect to overcome effects of defense downturn

Industry Leading Brands Industry Leading Brands (1)(1)

Access Equipment #1 Global

# GFire 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


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

5

The Access Equipment Advantageg

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 yChain

Product RangeParts, Service, and Support


JLG is positioned for sustained industry leading performance

6

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

(% C

hang

e)

45

50

55

(Age

in M

onth

s)

‐10

0

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

402009 2010 2011 2012

Age (months)

‐202006 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)

zatio

n)

e) 6090

120

150

65

70

75

(% T

ime

Util

iz

(% C

hang

‐90

‐60

‐30

0

30

2004 2005 2006 2007 2008 2009 2010 2011 2012

50

55

60

Q'10Q'

10Q'

10Q'

10Q'

11Q'

11Q'

11Q'

11Q'

12Q'

12Q'

12Q'

12Q'

13Q'

13


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

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

Ind. Avg.

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

(% o

f Cos

t)

AWP – Scissor Lifts 54.8

Jul

Aug

Sep Oct

Nov

Dec Jan

Feb

Mar Apr

May

June JulyO

38.4%

44.0%

35.0

40.0

45.0

Jul

ug ep Oct ov ec an eb ar

Apr ay ne ulyO

LV (%

of C

ost)

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 JulyO

LV (%

of C

ost)

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.


The Oshkosh Defense Advantageg

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


Defense industry expertise that leverages thefull capabilities of Oshkosh Corporation

9

L-ATVThe 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 2013testing begins late 2013

– Decision expected early 2015• Oshkosh JLTV solution

– Oshkosh TAK-4i intelligent independent suspension system

– Latest automotive technologiesAd anced cre protection s stem– Advanced crew protection system

• Low rate initial production expected in 2016 for contract winner


The Fire & Emergency Advantageg

Innovation#1 B d o at oLeader#1 Brands

PremierDistribution and Service

Unrivaled Product

Performance


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

11

Domestic Fire Market Drivers Stabilizing g• Housing prices recovering, property taxes growing

Recent HeadlinesHOUSING 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 2013Bloomberg, July 1, 2013

Apocalypse, Not Now, for Municipal Bonds

B ’ A il 23 2013- Barron’s, April 23, 2013


The CommercialAdvantage 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

& OperationsFuels Leadership


Alternative fuel technology

Street Smart, Street Tough13

Construction: SubstantialOpportunity 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

M000s

)

1 6

1.8

2.0

2.2

2.4

in m

illio

ns)

4,000

6,000

500

1,000

1,500

Mixer U

nits Shippe

Hou

sing

Sta

rts

(0

0.8

1.0

1.2

1.4

1.6

sing

Sta

rts

(uni

ts

0

2,000

0

500

ed Housing Starts Mixer Units Shipped

0.62012 2013E 2014E 2015E 2016EH

ous

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


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.

MOVE at Work in Q3*

• Q3 EPS of $1.67– Nearly double Q3 FY12

OSK Fiscal Q3 Performancey

– 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

(mill

ion

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

$0FY13 FY12

Net Sales EPS

• Increased FY13 adjusted EPS** estimate range– $3.60 to $3.70


* Continuing operations only.

* * FY13 expectations exclude certain non-GAAP adjustments (see Appendix).

Recent PerformanceAccess Equipment• Continue to benefit from replacement demand in

North AmericaNorth America• Global conditions remain mixedDefense• Strong operations execution; effectively managing

recent downsizing• Continuing to pursue international businessFire & Emergency• Municipal demand improving, federal demand

remains low• Benefitting from international salesCommercial• Concrete mixer deliveries and orders remain strong


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

16

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 $3.70Segment Information

MeasureMeasure Access Access EquipmentEquipment DefenseDefenseFire & Fire &

EmergencyEmergency CommercialCommercial

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.


• 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.

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


For more For more information information contact: contact: Patrick N. DavidsonVice President, Investor Relations(920) 966-5939( )[email protected]

Jeffrey D. WattDirector, Investor Relations(920) 233-9406(920) [email protected]


(Dollars in millions)

Appendix: Q3 Access Equipment

Third Quarter


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


bac og

20

Appendix: Q3 Defense(Dollars in millions)

• Sales impacted by:

CommentsThird 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 mixOperating Income $85.8 $40.2

% Change 113 8% (64 3)% Finalization of UCA

pricing

Operational efficienciesB 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


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 ( )

OperatingIncome $6 5 $8 1

Lower absorption Price realization

• Backlog* essentially flat with prior year at $503Income $6.5 $8.1

% Change (18.8)% (39.6)%% Margin 3.2% 3.5%

with prior year at $503 million


* Continuing operations only.

Appendix: Q3 Commercial(Dollars in millions)

• Sales impacted by:

CommentsThird 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%


Appendix: Commonly UsedAcronymsyARFF 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


L-ATV Light Combat Tactical All-Terrain Vehicle UCA Undefinitized Contract Action

LVSR Logistic Vehicle System Replacement UIK Underbody Improvement Kit (for M-ATV)

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 ExpectationspCorporateNon-GAAP operating expenses (145.0)$ Tender offer and proxy contest costs (16.3) GAAP operating expenses (161.3)$

Low HighConsolidatedNon-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)


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$

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 2012Non-GAAP earnings per share attributable to Oshkosh Corporation from continuing operations-diluted 3.23$ 1.66$

Nine Months EndedJune 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 EndedJune 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 3.2Free cash flow 216.1$ 37.7$


september 2013 investor presentation 9-10-13€¦ · source: rouse asset services, august 2013....

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