Federal Signal Corporation · NYSE:FSS
Federal Signal — Investor Presentation (August 2015)
27 slides from Federal Signal's investor presentation, Aug 11, 2015
Slide 1: Disciplined Growth Investor Presentation August 2015
Disciplined Growth Investor Presentation August 2015
Slide 2: Safe Harbor Statement
Safe Harbor Statement 2 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,
Slide 3: Our Mission, Values and Numbers
Our Mission Providing products and services to protect people and our planet 3 Our Values We operate with the highest principles and deliver results through - Customer focus - Innovation - Continuous improvement - Teamwork and investing in our people Our Numbers $936 M revenue, $110 M operating in
Slide 4: Experienced Management Team
Experienced Management Team Dennis Martin President and Chief Executive Officer President and Chief Executive Officer since October 2010 Previously served as Chairman, President and CEO of General Binding Corporation 35+ years operational and leadership experience, primarily at Illinois Tool W
Slide 5: Federal Signal Businesses
$564 M $241 M $131 M 5 Federal Signal Businesses Environmental Solutions (ESG) Vactor vacuum trucks, sewer cleaners, and hydro-excavators Elgin street sweepers Jetstream waterblasters FS Solutions rental centers, parts and service Fire Rescue (FRG) Bronto Skylift high-reach aerial platform
Slide 6: Federal Signal Businesses: Geography, Market Share and Customers
Environmental Solutions (ESG) 82% 18% Sales by Geography U.S. Non-U.S. 59% 41% Sales by Geography U.S. Non-U.S. 12% 88% Sales by Geography U.S. Non-U.S. Fire Rescue (FRG) Safety and Security Systems (SSG) Federal Signal Businesses Market Share: ≈30-50% U.S. Market Share: ≈30% U.S. Market Share: ≈50%
Slide 7: Compelling Value Proposition
Compelling Value Proposition Leading positions in niche governmental and industrial markets Valuable brands, high quality products and well-established distribution Improving municipal spend and top North American dealer network Growing higher-margin industrial markets Security solutions a
Slide 8: Solid Execution, Strong Underlying Performance
Solid Execution, Strong Underlying Performance Improving Operating Margins Solid Growth Targeting 12% Company Margin Strong Balance Sheet and Cash Flow Business Segment FY 2012 Operating Margin FY 2013 Operating Margin FY 2014 Operating Margin Q2 TTM 2015 Operating Margin ESG 9.8% 12.3% 15.3% 17.2%
Slide 9: Our Priorities
Our Priorities Driving growth by investing in the highest impact opportunities • Vactor (hydro-excavation, vacuum loading and sewer cleaning) • Jetstream (waterblasting) • Integrated Systems (communication safety and warning systems) Disciplined M&A • Desire to add at least $250 M from acquisiti
Slide 10: Innovating for Growth
Innovating for Growth Environmental Solutions (ESG) Safety and Security Systems (SSG) Targeted global expansion in higher- margin industrial markets Developed the Global Signaling line of internationally certified products for rugged industrial applications requiring ATEX or IECEx certification
Slide 11: Acquisition Strategy – Stay Close to the Core
Acquisition Strategy – Stay Close to the Core • Complementary product/services offerings that better meet customer requirements 11 • Channel access for FSC products to new or extended markets • Complementary offerings for new or underserved geographies Geographies Products Channels and end markets •
Slide 12: Shareholder Value Creation
Shareholder Value Creation Create Disciplined Growth Organic & Acquisitions Diversify Customer Base Leverage Invested Capital Improve Manufacturing Efficiencies and Costs Operating margin targets Grow revenue faster than GDP Grow EPS at an average % rate in low to mid teens Increase industrial reven
Slide 13: Priority Driven Capital Allocation
Priority Driven Capital Allocation Organic projects leverage existing assets, generally require limited cash investment Innovation R&D efforts target new and updated products Generally, already funded within operating results, cash flow and normal capital expenditures Desire to add at least
Slide 14: Upward Trending Earnings
Upward Trending Earnings 14 Adjusted Earnings Per Share * * To facilitate comparisons to 2015, adjusted earnings for 2014 are $0.93 per share, which is computed after excluding the benefit from a release of valuation allowance against foreign deferred tax assets and a tax benefit associated with cha
Slide 15: Protecting People and Our Planet
Protecting People and Our Planet 15
Slide 16: Appendix
Appendix • Consolidated Historical Performance • Adjusted EPS • Total Debt to Adjusted EBITDA • Estimated Global Sales • Company Products (Pictured) • Investor Information 16
Slide 17: Appendix 1: Consolidated Historical Financial Performance
Appendix 1: Consolidated Historical Financial Performance* ($ in millions) 2012 2013 2014 1H 2015 Net sales $ 803.2 $ 851.3 $ 918.5 $ 452.4 % Growth, Year over Year 16.6% 6.0% 7.9% 4.0% Cost of sales 613.4 646.2 685.2 327.5 Gross profit $ 189.8 $ 205.1 $ 233.3 $ 124.9 % Margin 23.6% 24.1% 25.4% 27.6
Slide 18: Appendix 2: Adjusted Earnings per Share
Appendix 2: Adjusted Earnings per Share* * The adjusted financial measures presented above are unaudited and are not in accordance with U.S. generally accepted accounting principles (“GAAP”). The non-GAAP financial information presented herein should be considered supplemental to, and not a substitu
Slide 19: Appendix 3: Total Debt to Adjusted EBITDA
Appendix 3: Total Debt to Adjusted EBITDA The Company uses the ratio of total debt to adjusted EBITDA as one measure of its long-term financial stability. The ratio of debt to adjusted EBITDA is a non-GAAP measure that represents total debt divided by the trailing 12-month total of income from conti
Slide 20: Appendix 4: Estimated Global Sales
Appendix 4: Estimated Global Sales 64% 17% 17% 2% Sales of domestic subsidiaries within U.S (in US $) Sales of domestic subsidiaries outside of U.S (in US $)* Sales of non-U.S. subsidiaries outside of U.S (in local currency) ** Sales of non-U.S. subsidiaries to U.S (in US $) Estimated trailing 12 mo
Slide 21: Environmental Solutions Group Products
Environmental Solutions Group Products 21
Slide 22: Safety and Security Systems Group Products
Safety and Security Systems Group Products 22
Slide 23: Safety and Security Global Systems Products
Safety and Security Global Systems Products SmartMsg Enabled Systems Enterprise Integrated Command Solution Sensors/Detectors Cameras Networked PAGASYS Rack Control Modules/Nodes Control Modules/Nodes Control Modules/Nodes 23
Slide 24: Fire Rescue Group Products
Fire Rescue Group Products 24
Slide 25: Investor Information
Investor Information Stock Ticker NYSE: FSS Website www.federalsignal.com/investors Headquarters 1415 W. 22nd Street, Suite 1100 Oak Brook, IL 60523 Investor Relations Contacts: Telephone: 630-954-2000 Brian Cooper BCooper@federalsignal.com SVP, Chief Financial Officer Svetlana Vinokur SVinokur@fede
Slide 26: Federal Signal
FEDERAL SIGNAL Protecti
Slide 27: Protecting people and our planet
Protecting people and our planet f: FEDERAL SIGNAL ~.::"= = =f ee = ~ -- é a 3