Federal Signal Corporation · NYSE:FSS
Federal Signal — Investor Presentation (March 2022)
29 slides from Federal Signal's investor presentation, Mar 22, 2022
Slide 1: Disciplined Growth Investor Presentation March 2022
Disciplined Growth Investor Presentation March 2022
Slide 2: Forward-looking statements and non-GAAP disclaimer
This presentation contains unaudited financial information and forward-looking statements. Statements that are not historical are forward-looking statements and may contain words such as “may”, “will” ,“believe”, “expect”, “anticipate”, “intend”, “plan”, “project”, “estimate”, and “objective” or sim
Slide 3: Federal Signal at a Glance
Federal Signal at a Glance • Founded in 1901, joined NYSE in 1969 (“FSS”) • Diversified industrial manufacturer of specialized vehicles for maintenance and infrastructure markets such as street sweepers, sewer cleaners, vacuum/hydro-excavators (“safe- digging trucks”), industrial vacuum loaders, wat
Slide 4: Why Federal Signal?
Why Federal Signal? 4 Composition of Businesses • Clearly-defined strategy, with two groups – ESG and SSG – each of which have strong growth potential through a combination of organic initiatives and M&A End Market Exposures • Typical annual revenue mix of ~50% publicly-funded / ~50% industrial • Pu
Slide 5: Two Attractive Platforms
Serves the needs of municipalities and industrial verticals for audible and visual safety and security notification devices and systems Two Attractive Platforms 5 *TTM 12/31/21 net sales Environmental Solutions Group (ESG) Safety and Security Systems Group (SSG) $1.0 B* $209 M* Serves publicly-funde
Slide 6: Environmental Solutions Group (ESG)
6 Environmental Solutions Group (ESG) Have established a platform serving maintenance and infrastructure markets to provide customers with a comprehensive suite of products and services Rental/Aftermarket Distribution Brands End Markets and Channels Street sweeping Publicly- funded Dealer Sewer clea
Slide 7: Safety and Security Systems Group (SSG)
Safety and Security Systems Group (SSG) 7 Serves the needs of government and industrial verticals for audible and visual safety and security notification devices Public Safety and Security Signaling Systems Brands Lights and siren products for Police, Fire and Heavy Duty (HD) end markets Audible and
Slide 8: Macro Factors Driving Demand
Macro Factors Driving Demand Infrastructure Bill • $550 billion of government spending over five years to fund improvements to the nation’s transportation, water, electric power and digital infrastructure • Federal Signal’s equipment sales and rentals of materials hauling, road- marking, street swee
Slide 9: Macro Factors Driving Demand
Macro Factors Driving Demand Source: National Association of Realtors, Freddie Mac, Research and Markets, U.S. Census Bureau, FMI Forecast U.S. Housing - A Mountain To Climb • As of December 2021, the number of single-family housing units still under construction increased to the highest level in al
Slide 10: Key Strategic Initiatives
Key Strategic Initiatives 10 Supported By Ar ea s o f Fo cu s Safe Digging Aftermarket Parts and Services Specialty Vehicles for Diverse End-Markets Audible and Visual Warning Devices Flexible Manufacturing & “ETI” Culture New Product Development Technology as an Enabler Disciplined M&A
Slide 11: Strategic Initiative – Safe Digging
Strategic Initiative– Safe Digging 11 Federal Signal is well positioned to establish a leading position in an emerging application for vacuum-excavation technology; increased regulation expected to accelerate growth What is it? • Vacuum excavation or “Safe Digging” involves the use of pressurized ai
Slide 12: Completed Three Acquisitions in 2021
Completed Three Acquisitions in 2021 12 OSW Equipment (February 2021) • OSW is a leading manufacturer of dump truck bodies and custom upfitter of truck equipment and trailers. The acquisition also includes the operations of OSW’s wholly owned subsidiaries Northend Truck Equipment and Western Truck B
Slide 13: Net Sales and Full Year 2021 Highlights
13 Net Sales Full Year 2021 Highlights2: • Net sales of $1.21B, up $82M, or 7% • Operating income of $130.7M • Adjusted EBITDA* of $180.5M • Adjusted EBITDA margin* of 14.9% • GAAP EPS of $1.63, up $0.07, or 4% • Adjusted EPS* of $1.75, up $0.08, or 5% • Orders of $1.54B, up $492 M or 47% • Record b
Slide 14: Strong Financial Position Supports Long-Term Capital Allocation
Strong Financial Position Supports Priority-Driven Long-Term Capital Allocation 14 Capex 26% Acquisitions 51% Dividends 15% Share Repurchase 8% Cash Deployment (2019-21)1 1) Chart depicts cumulative use of cash for each category, relative to the total cash used on all four activities, for the period
Slide 15: Positioned for Long-Term Growth
Positioned for Long-Term Growth 15 Long-Term Organic Revenue Growth Value-Added Acquisitions (Couple of % points > GDP) ESG: 15-18% SSG: 15-18% Consolidated: 12-16% High Single Digit Revenue Growth EBITDA Margin Targets: Cash Conversion: ~100% of net income ROIC > Cost of Capital With continued focu
Slide 16: 2022 Outlook
2022 Outlook Adjusted EPS* ranging from $1.76 to $2.00 16 Revenue of $1.35 B to $1.45 B, including full-year contribution from 2021 acquisitions; represents YoY growth of 11% - 20% vs. $1.21 B in 2021 Double-digit improvement in pre-tax earnings Depreciation and amortization expense of ~$60 M
Slide 17: Appendix
Appendix 17 I. Segments Overview II. Eighty-Twenty Improvement Culture III. New Product Development IV. Non-GAAP Measures V. Executive Compensation VI. Investor Information
Slide 18: Appendix I: ESG Products
Appendix I: ESG Products ELGiré GUZZIER VACTOR QTRUVAC
Slide 19: Appendix I: ESG Products (continued)
19 Appendix I: ESG Products (continued)
Slide 20: Appendix I: ESG - Market Influencers & Where We Play
Appendix I: ESG - Market Influencers & Where We Play 20 2021 End Markets by Users Many ESG products support essential services that are focused on cleaning COVID relief stimulus includes $350 B for state, local and territorial governments; package targets maintenance of essential infrastructure,
Slide 21: Appendix I: SSG Products
Appendix I: SSG Products _ P fi FEDERAL SIGNAL rt a Safety and Security Systems Public Safety Systems FEDERAL SIGNAL Safety and Security Systems Heavy Duty FEDERAL SIGNAL Safety and Security Systems Signaling FEDERAL SIGNAL Safety and Security Systems Systems fi FEDERAL SIGNAL VAMA Safety and Securi
Slide 22: Appendix I: SSG - Market Influencers & Where We Play
Appendix I: SSG - Market Influencers & Where We Play 22 Publicly-funded Industrial Utility Oil and Gas Other 2021 End Markets by Users Increased national focus on issues of public safety and law enforcement, and rising public expectations for transparency and accountability driving demand for safe
Slide 23: Appendix II: Eighty-Twenty Improvement (ETI) Culture
Appendix II: Eighty–Twenty Improvement (“ETI”) Culture 23 Pricing Strategy • Parts pricing strategy • Effective “options” pricing Material Cost Reduction • Waste reduction • SKU rationalization • Savings through volume aggregation • Sourcing optimization Working Capital Optimization • Derived benefi
Slide 24: Appendix III: New Product Development
Appendix III: New Product Development 24 Safety and Security Systems Group (SSG) • Automatic License Plate Recognition (ALPR) Systems • CommanderOne Direct Messaging (SMS/Phone) • Smart Police Vehicle Systems • Next-Generation PAGA • Global Series Signaling Devices • Allegiant® Police Light Bar • Pa
Slide 25: Appendix IV: Non-GAAP Measures (Adjusted EPS)
Appendix IV: Non-GAAP Measures (Adjusted EPS) 25 Adjusted income from continuing operations and earnings per share (“EPS”) The Company believes that modifying its 2021 and 2020 income from continuing operations and diluted EPS provides additional measures which are representative of the Company’s un
Slide 26: Appendix IV: Non-GAAP Measures (Adjusted EBITDA)
Appendix IV: Non-GAAP Measures (Adjusted EBITDA) 26 (a) Excludes purchase accounting effects reflected in depreciation and amortization of $0.4 M, $0.5 M, $0.6 M, $0.4 M and $0.4 M for 2017, 2018, 2019, 2020 and 2021, respectively. (b) Adjustment to exclude recognition of a deferred gain associated
Slide 27: Appendix V: Executive Compensation Aligned with Long-term Objectives
Appendix V: Executive Compensation Aligned with Long-term Objectives 27 One Year Three Years Ten Years • The Company continues to focus on executing against a number of key long-term objectives, which include (i) creating disciplined growth, (ii) improving manufacturing efficiencies and costs; (iii)
Slide 28: Appendix VI: Investor Information
28 Appendix VI: Investor Information Stock Ticker: NYSE:FSS Company website: federalsignal.com/investors HEADQUARTERS 1415 West 22nd Street, Suite 1100 Oak Brook, IL 60523 INVESTOR RELATIONS CONTACTS 630-954-2000 Ian Hudson SVP & Chief Financial Officer IHudson@federalsignal.com
Slide 29: Federal Signal - Moves. Cleans. Protects.
[2 FEDERAL SIGNAL Moves. Cleans. Protects.