Federal Signal Corporation · NYSE:FSS
Federal Signal — Investor Presentation (December 2014)
23 slides from Federal Signal's investor presentation, Dec 2, 2014
Slide 1: Disciplined Growth Investor Presentation
Disciplined Growth Investor Presentation December 2014
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: Agenda
Agenda • Management • Company overview • Investment case • Performance trends • Growth strategy • Segments and products • Corporate focus, goals and initiatives • Financial results and outlook 3
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
Slide 5: Federal Signal Overview
Federal Signal Overview • Founded in 1901, joined NYSE in 1969 (“FSS”) • Safety, security and environmental products and services that protect people and our planet Environmental Solutions Group (ESG) Safety & Security Systems Group (SSG) Fire Rescue Group (FRG) • Restructured for growth and p
Slide 6: Investment Case
Investment Case • Leading positions in niche governmental and industrial markets • Valuable brands, high quality products, well-established distribution • Flexible manufacturing capacity to leverage profits • Favorable market dynamics Improving municipal spend Growing higher-margin industrial ma
Slide 7: Performance Levers and Progress
Performance Levers and Progress • 2010: Introduced 80/20 and continuous improvement focus Prioritized customers and suppliers Tackled proactive pricing improvements Streamlined product offerings Streamlined management structure Drove lean manufacturing efficiencies • 2012: Major reposition
Slide 8: Key Financial Trends
Key Financial Trends 8 Margins improving and targeted higher… … complemented by growth and declining leverage. 2.7% 4.8% 6.6% 8.4% 9.6% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 2010 2011 2012 2013 TTM Q3 2014 Op era tin g M arg in To tal FS C C on tin uin g O pe rat ion s 633 689 803 851 874 0 200 400 600 800
Slide 9: Growth Strategy
Growth Strategy 9 Geographic Expansion • Jetstream and Industrial Systems in the Asia Pacific and Middle East • Export markets from U.S. • Bronto in North America New Markets for Existing Products • Waterblasting • Hydro-excavation • Security systems New Product Development and Acquisitions • Innova
Slide 10: Growth Markets and Opportunities
Growth Markets and Opportunities • Developing growth product areas Vactor (hydro-excavation, vacuum loading and sewer cleaning) Jetstream (waterblasting) Global Systems (integrated communication safety systems) These predominantly industrial areas aggregate to ≈50% of total revenue* • Growth o
Slide 11: Federal Signal Segments
11 Federal Signal Segments Environmental Solutions (ESG) Products Geographic Mix Q3 TTM 2014 Revenue Elgin street sweepers Vactor truck-mounted sewer cleaners, hydro-excavators and industrial vacuum trucks Jetstream waterblasters FS Depot and FS Solutions – parts and service deliveries and r
Slide 12: Environmental Solutions Group
Environmental Solutions Group 12
Slide 13: Safety and Security Group
Safety and Security Group 13
Slide 14: Safety and Security Global Systems
Safety and Security Global Systems 14 SmartMsg Enabled Systems Enterprise Integrated Command Solution Sensors/Detectors Cameras Networked PAGASYS Rack Control Modules/Nodes Control Modules/Nodes Control Modules/Nodes
Slide 15: Fire Rescue Group
Fire Rescue Group _eponto . SKYLIFT
Slide 16: Focus and Long-Term Goals
Focus and Long-Term Goals 16 Create Disciplined Growth Organic and Acquisitions Diversify Customer Base Leverage Invested Capital Improve Manufacturing Efficiencies and Costs Operating margin targets Grow revenues faster than GNP, Low to mid teens % EPS growth Consolidated ‒ 12% ESG ‒ 11-13% SSG ‒ 1
Slide 17: Specific Initiatives
Optimize ERP System Organic and M&A growth in industrial markets Freight cost savings Jetstream expansion Bronto U.S. industrial opportunities Flexible ESG manufacturing Up-fitting police cars New Navigator “Fire” light bar Specific Initiatives 17 New innovation teams and focus New line at Vactor Ne
Slide 18: Consolidated Historical Financial Performance
Consolidated Historical Financial Performance 18 ($ in millions) 2011 2012 2013 YTD Q3 2014 Net sales $ 688.7 $ 803.2 $ 851.3 $ 654.1 % Growth 8.8% 16.6% 6.0% Cost of sales 533.3 613.4 646.2 490.0 Gross profit $ 155.4 $ 189.8 $ 205.1 $ 164.1 % Margin 22.6% 23.6% 24.1% 25.1% Operating expenses 122.2
Slide 19: EPS Trends and Outlook
EPS Trends and Outlook 19 Adjusted Earnings Per Share * * To facilitate comparisons to 2014, adjusted earnings for 2013 are $0.67 per share, which is computed by excluding special tax items, the impacts of restructuring and debt settlement charges and applying a 32% income tax rate. Our effective bo
Slide 20: Capital Allocation Priorities
Capital Allocation Priorities • Cash flow potential is improved 2013 free cash flow of $68 M* At 0.7 times adjusted EBITDA, debt is already low • Funding of internal growth opportunities Projects leverage existing businesses and generally require limited cash investment Already largely funde
Slide 21: Building Equity in Our Brands
Building Equity in Our Brands 21
Slide 22: Appendix 1: Adjusted Earnings per Share
Appendix 1: Adjusted Earnings per Share * 22 * 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 subs
Slide 23: Federal Signal - Protecting people and our planet
[ie FEDERAL SIGNAL Protecting people and our planet
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