Federal Signal Corporation · NYSE:FSS
Federal Signal — Investor Presentation (November 2018)
29 slides from Federal Signal's investor presentation, Nov 7, 2018
Slide 1: Disciplined Growth Investor Presentation November 2018
Disciplined Growth Investor Presentation November 2018
Slide 2: Safe Harbor Statement
Safe Harbor Statement 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: Federal Signal at a Glance
Federal Signal at a Glance • Founded in 1901, joined NYSE in 1969 (“FSS”) • Diversified industrial manufacturer of specialized environmental cleaning vehicles such as street sweepers, sewer cleaners, hydro excavators, dump bodies and trailers; as well as safety and security products including audibl
Slide 4: An Experienced Leadership Team
An Experienced Leadership Team Jennifer Sherman Mark D. Weber President and Chief Executive Officer Senior Vice President and Chief Operating Officer ▪ ▪ Appointed January, 2016 Appointed January, 2018 ▪ ▪ Previously Chief Operating Officer, Chief Administrative Previously served as President and Ch
Slide 5: Two Attractive Platforms
Two Attractive Platforms Environmental Solutions Safety and Security Systems Group $838 M* Group Segment (ESG) (SSG) Serves municipal, industrial, Serves the needs of and utility markets for $220 M* municipalities and industrial surface and sub-surface verticals for audible and cleaning, safe-diggin
Slide 6: Environmental Solutions Group (ESG)
Environmental Solutions Group (ESG) Have successfully established a platform serving maintenance and infrastructure markets in order to provide customers with a comprehensive suite of products and services ESG TBEI Street Sewer Safe Industrial Materials Hauling Application sweeping cleaning digging
Slide 7: Safety and Security Systems Group (SSG)
Safety and Security Systems Group (SSG) Serves the needs of government and industrial verticals for audible and visual safety and security notification devices Public Safety and Security Signaling Systems Application Lights and siren products for Police, Fire and Audible and visual Warning Systems H
Slide 8: Key Strategic Initiatives
Key Strategic Initiatives Specialty Vehicles for Aftermarket Parts and Audible and Visual Safe Digging Diverse Focus Services Warning Devices Areas of of Areas End-Markets Supported By Flexible New Product Technology as an Manufacturing & Disciplined M&A Development Enabler “ETI” 8
Slide 9: Strategic Initiative – Safe Digging
Strategic Initiative – Safe Digging Federal Signal is well positioned to establish a leading position in an emerging application for hydro-excavation technology; increased regulation will accelerate growth What is it? Why is it Attractive? Why Federal Signal? • Vacuum excavation or “Safe Digging” in
Slide 10: Strategic Initiative – Aftermarket Parts & Services
Strategic Initiative – Aftermarket Parts & Services Optimizing platform to transform Federal Signal’s aftermarket business into an industry leader of parts and services to the infrastructure maintenance and material hauling markets • Unified platform to serve municipal and Rentals Strategic Objectiv
Slide 11: Strategic Initiative – Audible & Visual Warning Devices
Strategic Initiative – Audible & Visual Warning Devices SSG businesses focused on optimizing their existing channels and expanding product offerings Optimize Channel Product Portfolio Expansion Smart Products • Pricing / Promotion Strategy • “Allegiant” – low cost lightbar to • CommanderOne – moneti
Slide 12: Eighty–Twenty Improvement (ETI)
Eighty–Twenty Improvement (“ETI”) Culture Manufacturing Efficiency Material Cost Reduction • Lean manufacturing focus • Waste reduction • Throughput flexibility • SKU rationalization • Labor pool management • Savings through volume aggregation • Flexible manufacturing model • Sourcing optimization •
Slide 13: New Product Development (NPD)
New Product Development (“NPD”) Customer Focused Process • Complete change in approach to innovation, starting in 2013 • Current innovation organization has had a number of successes, including the record-breaking launch of the ParaDIGm vacuum excavator • Most successful new product launch in over a
Slide 14: Profitable Growth Execution and Strong Balance Sheet
Profitable Growth Execution and Strong Balance Sheet Revenue Adjusted EBITDA Margins (Consolidated) Q3 2018 Highlights: • Outstanding third quarter results with significant increases in both sales and income • Net sales of $269M, up $21M, or 8%, from last year • Operating income of $30.4M, up $8.1M,
Slide 15: Disciplined M&A
Disciplined M&A Target companies that accelerate our current strategic initiatives or provide a platform for growth in adjacent markets or new geographies • Niche market leader (product, geography, end-market) • Sustainable competitive advantage • Deep domain expertise (technology, application, manu
Slide 16: Priority Driven Long-Term Capital Allocation
Priority Driven Long-Term Capital Allocation • Organic projects leverage existing assets, generally require limited cash investment Reinvest in the • Innovation R&D efforts target new and updated products Cash Deployment Business • Generally, already funded within operating results, cash flow and no
Slide 17: Raising 2018 Outlook
Raising 2018 Outlook Raising adjusted EPS* outlook range to a new range of $1.33 to $1.36, from a range of $1.26 to $1.32 Represents increase of 56% - 60% over 2017 $0.85 FY17: Actual FY18 Guidance: Feb 2018 $1.10 $1.20 FY18 Guidance: Nov 2018 $1.33 $1.36 * Adjusted EPS is a non-GAAP measure, which
Slide 18: Positioned for Long-Term Growth
Positioned for Long-Term Growth ▪ Two platforms poised for profitable growth ▪ Attractive mix of municipal and industrial end markets ▪ Revitalized new product development initiative ▪ Active M&A pipeline ▪ Strong cash flow and healthy financial position 2010 - 2015 2016 - 2017 2018 and beyond • Imp
Slide 19: Appendix
Appendix I. Segments Overview II. Adjusted EBITDA Margins III. Executive Compensation IV. Investor Information 19
Slide 20: Appendix I: ESG Products
Appendix I: ESG Products 20
Slide 21: Appendix I: TBEI Products
Appendix I: TBEI Products Products Class 6 – 8 Standard Dump Bodies OxBodies Class 6 – 8 Custom Dump Bodies J-Craft Dump & Transfer Trailers Travis Trailers Class 3 – 5 Standard Dump Bodies & Hoists Rugby Manufacturing Class 3 – 8 Custom Dump Bodies & Hoists Crysteel Class 3 – 8 Custom Dump Bodies &
Slide 22: Appendix I: ESG + TBEI - Market Influencers & Where We Play
Appendix I: ESG + TBEI - Market Influencers & Where We Play Market Dynamics Pro forma (ESG with TBEI) ▪ Economic recovery supports state and local funding for sweepers and sewer cleaners 2017 Sales by Geography ▪ Funding for sewer cleaners through water tax revenues adds further stability 20% ▪ Reco
Slide 23: Appendix I: SSG Products
Appendix I: SSG Products FEDERAL SIGNAL Safety and Security Systems Public Safety Systems FEDI SIGNAL Safety and Security Systems Integr FEDERAL SIGNAL VAMA
Slide 24: Appendix I: SSG - Market Influencers & Where We Play
Appendix I: SSG - Market Influencers & Where We Play Market Dynamics 2017 Sales by Geography ▪ Increased national focus on issues of public safety and law enforcement, and rising public expectations for transparency and accountability 34% driving demand for safety and security products 66% ▪ Recover
Slide 25: Appendix II: Adjusted EBITDA Margins
Appendix II: Adjusted EBITDA Margins The Company uses adjusted EBITDA and the ratio of adjusted EBITDA to net sales (“adjusted EBITDA margin”), at both the consolidated and segment level, as additional measures which are representative of its underlying performance and to improve the comparability o
Slide 26: Appendix III: Executive Compensation Aligned with Long-term Objectives
Appendix III: Executive Compensation Aligned with Long-term Objectives • The Company continues to focus on executing against a number of key long-term objectives, which include the following: ▪ Creating disciplined growth ▪ Improving manufacturing efficiencies and costs ▪ Leveraging invested capital
Slide 27: Appendix IV: Investor Information
Appendix IV: 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 Svetlana Vinokur SVP & Chief Financial Officer VP, Treasurer and Corporate Deve
Slide 28: Federal Signal – Protecting people and our planet
fe FEDERAL SIGNAL Protecting people and our planet
Slide 29: Federal Signal – Protecting people and our planet
FEDERAL SIGNAL Protecting people and our planet a os
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