51 slides from Oshkosh Corporation (holding Company)'s proxy contest presentation, Nov 5, 2012
Slide 1: Oshkosh Corporation Investor Slides November 2012
Oshkosh Corporation Investor Slides November 2012 Charles L. Szews Chief Executive Officer David M. Sagehorn Executive Vice President and Chief Financial Officer Patrick N. Davidson Vice President, Investor Relations
Slide 2: Forward-Looking Statements
Forward-Looking Statements These slides includes forward-looking statements. To the extent this presentation constitutes proxy solicitation material to which the Private Securities Litigation Reform Act of 1995 (the “PSLRA”) applies, the Company believes such statements to be “forward looking” withi
Slide 3: Important Information for Investors and Shareholders
IMPORTANT INFORMATION FOR INVESTORS AND SHAREHOLDERS This communication does not constitute an offer to buy or solicitation of an offer to sell any securities. In response to the tender offer for the shares of the Company commenced by IEP Vehicles Sub LLC and Icahn Enterprises Holdings L.P., the Com
Slide 4: Framing the Opportunity
Framing the Opportunity
Slide 5: Moving the World at Work
Moving the World at Work Our vehicles move people and materials at work Most protect people or property Many lift people or property All do so safely and efficiently Often share common customers/distribution channels JLG, Jerr-Dan, IMT, McNeilus and Pierce sell into rental channel Every segment sell
Slide 6: Poised to Deliver Results
Poised to Deliver Results MOVE strategy expected to deliver higher margins throughout cycle Market recovery, from deep cycle, has commenced Is expected to overcome defense downturn Oshkosh processes and team support execution of MOVE FY12 FY15E Industry Leading Brands (1) Access Equipment #1 Global
Slide 7: MOVE – The Right Strategy
MOVE – The Right Strategy Focuses on drivers that create highest shareholder value Recognizes constraints of markets, balance sheet and business valuations Expected to drive higher incremental margins across non-Defense businesses over cycle 7 OSK November Investor Slides November 2012
Slide 8: Market Recovery Overcomes Defense Downturn
Market Recovery Overcomes Defense Downturn Key North American markets in slow recovery Old fleets need to be renewed Construction recovery expected to strengthen in FY13 and beyond Mining, infrastructure and economic development aiding key Oshkosh markets in Latin America, Australia, Middle East & A
Slide 9: Leveraging a Common Structure: Oshkosh Operating System
Leveraging a Common Structure: Oshkosh Operating System Customer-centric application of lean principles Sets guiding principles for relationships with customers Improves processes needed to deliver key elements of MOVE Supports drive to improve cash flow Implementation gaining momentum Company-wide
Slide 10: Focused Board and Management Team
Focused Board and Management Team Successfully navigated through unprecedented economic conditions Diverse & complementary backgrounds Continually developing/acquiring talent Incentive compensation objectives strongly aligned with shareholder interests Acting decisively for shareholders 10 OSK Novem
Slide 11: MOVE Delivered in FY12
MOVE Delivered in FY 12 11 Oshkosh Corporation Full Year Revenue $8.18B Adjusted Operating Income* $402M Adjusted Operating Income Margin* 4.9% Adjusted EPS* $2.27 Total Debt $955M Net Debt (Total debt less cash) $414M Achieved Adjusted EPS* of $2.27 September 14 Analyst Day estimate range: $2.05 -
Slide 12: MOVE Highlights
MOVE Highlights
Slide 13: Market Recovery and Growth
Market Recovery and Growth 13 ~$220M Opportunity (FY12-FY15) FY11 FY15E FY12 ~10% CAGR (FY12-FY15) FY11 FY15E FY12 (2) Non-Defense Operating Income (1) ($ in Millions) (1) Reflects estimated benefits of market recovery captured in financial estimates. Does not include benefits of other MOVE initiati
Slide 14: Optimizing Cost Initiatives Progressing
Optimizing Cost Initiatives Progressing Expect annualized 62 bps impact for FY13 from actions implemented in FY12 Announced conversion of salaried defined benefit pension plans to defined contribution plans effective January 1, 2013 Reduces cash flow and expense volatility Significantly reduced supp
Slide 15: Value Innovation
Value Innovation Driving ~$350 million incremental annual revenue by FY15 (1) Disciplined, resourced execution of multi-generational product and technology plans in all segments Integrated project teams charged with improving product launch processes and adherence to project KPIs Customer First focu
Slide 16: Emerging Market Expansion
Emerging Market Expansion > 25% of revenues by FY15 (30% by FY16) Expanding sales, service and manufacturing operations Forward deploying business development professionals for Defense Developing products for global markets Leveraging international facilities across segments 16 FY11 FY15E FY12 ~10%-
Slide 17: Signs of Recovery
Signs of Recovery
Slide 18: The Access Equipment Advantage
The Access Equipment Advantage 18 JLG is positioned for sustained industry leading performance OSK November Investor Slides November 2012
Slide 19: North American Rental Companies Are Refreshing Their Fleets
North American Rental Companies are Refreshing Their Fleets, Increasing Market Penetration 19 Total Construction Spending (Y-O-Y % Change) NA Rental Equipment Access - Fleet Age (AWP and TMH) NA Rental Equipment Company Fleet Utilization NA Rental Equipment Company CapEx (Y-O-Y % Change) Source: IHS
Slide 20: North America – Strong Rental and Market Conditions
North America – Strong Rental and Market Conditions, Sustained Growth Cycle Favorable construction spending outlook Rental industry robust Fleet age 55+ months (near peak) Utilization near 70% (trending up) Strong CapEx plans Rental penetration continues upward trajectory Energy projects, industrial
Slide 21: EAME – Some Bright Spots Despite Economic Uncertainty
EAME – Some Bright Spots Despite Economic Uncertainty Nordics, Benelux and Germany Russia (infrastructure), South Africa (mining) and Middle East (energy and infrastructure) Relative stability in agriculture Economic uncertainty in Southern Europe 21 6%-8% CAGR (FY12-FY15) FY15E AWP volume ~50% of p
Slide 22: Latin America – Brazil Remains Attractive
Latin America – Brazil Remains Attractive, Construction Strengthening Throughout Major projects with over $500 billion in investment expected in Brazil Rental concept strengthening Product adoption increasing in Mexico, Chile and Panama Inconsistent supply of capital 22 15%-20% CAGR (FY12-FY15) Dema
Slide 23: The Oshkosh Defense Advantage
The Oshkosh Defense Advantage 24 Defense industry expertise that leverages the full capabilities of Oshkosh Corporation OSK November Investor Slides November 2012
Slide 24: Adapting to the Domestic Defense Spending Downturn
Adapting to the Domestic Defense Spending Downturn 25 Current Operations Profile New Vehicle Production Aftermarket & Modernization Tech & Product Development Future Operations Profile New Vehicle Production Aftermarket & Modernization Tech & Product Development HEAVY, MEDIUM & MRAP VEHICLES MEDIUM,
Slide 25: The Oshkosh JLTV Solution
L-ATV The Oshkosh JLTV Solution The future of light tactical vehicles JLTV EMD contract award 22 prototypes Testing and evaluation Oshkosh JLTV solution Oshkosh TAK-4i intelligent independent suspension system Latest automotive technologies Advanced crew protection system 26 Unprecedented levels of
Slide 26: The Fire & Emergency Advantage
The Fire & Emergency Advantage 27 Innovation Leader Premier Distribution and Service Unrivaled Product Performance #1 Brands Leading global provider of specialty vehicles that serve, protect and save lives OSK November Investor Slides November 2012
Slide 27: Poised for Success in Challenging U.S. Market
Poised for Success in Challenging U.S. Market Lower federal funding expected to impact FY13 Expect modest municipal recovery beginning in FY14 Improving cost structure Exiting under-performing businesses Rightsizing Targeting market share growth of core products Custom pumpers Aerials 28 Expect U.S.
Slide 28: International Market Growth Opportunities
International Market Growth Opportunities Expect continued growth in developing countries Investing in safety and security Expanding infrastructure World air traffic projected to continue growing Middle East and Asia Pacific expected to increase 8%-10% per year Driving increased demand for Oshkosh A
Slide 29: The Commercial Advantage: Street Smart, Street Tough
The Commercial Advantage: Street Smart, Street Tough 30 Integrated factory Refuse collection vehicle product line Alternative fuel technology OSK November Investor Slides November 2012
Slide 30: U.S. Mixer Market Unit Growth Analysis
U.S. Mixer Market Unit Growth Analysis Housing starts assumptions: 0.8 million in FY13; 1.2 million in FY14; and 1.4 million in FY15 Concrete mixer parts demand was up 20% in FY12 and up >100% from the recessionary low Wallboard loader demand recovery recently started September housing starts up 15%
Slide 31: Significant Opportunity with Modest RCV Recovery
Significant Opportunity with Modest RCV Recovery RCV market expected to be driven by: Population growth – CAGR 1% Market recovery / fleet age – CAGR 1% Construction and demolition – CAGR 1% 32 Realistic projections based on historical data ~3% CAGR (FY12-FY15) OSK November Investor Slides November 2
Slide 32: Financial Outlook
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Slide 33: Expectations for FY13
Expectations for FY13* 34 Additional expectations Corporate expenses up ~10% (higher IT investment) Tax rate of ~33% CapEx of ~$70 million Free cash flow $75 - $100 million Share count of ~91.5 million Segment information Measure Access Equipment Defense Fire & Emergency* Commercial Sales (billions)
Slide 34: Disciplined Capital Allocation Framework
Disciplined Capital Allocation Framework Continually review capital structure Apply free cash flow to uses that we believe provide highest returns Expect to opportunistically use free cash flow to return capital to shareholders or for acquisitions 35 Return capital to shareholders Re-invest in core
Slide 35: Poised to Deliver Results
Poised to Deliver Results MOVE strategy expected to deliver higher margins throughout cycle Market recovery, from deep cycle, has commenced Is expected to overcome defense downturn Oshkosh processes and team support execution of MOVE 36 FY12 FY15E Industry Leading Brands (1) Access Equipment #1 Glob
Slide 36: Appendix
Appendix
Slide 37: Access Equipment Sales Outlook
Access Equipment Sales Outlook(1) Cost pass throughs of emission standards changes, Caterpillar telehandler volume, emerging market penetration and pricing expected to lift sales beyond $3.2 billion prior peak Sales growth expected to accelerate in FY14, and particularly in FY15, as fleet expansion
Slide 38: Access Equipment Operating Income Margin Outlook
Access Equipment Operating Income Margin Outlook Steady margin improvement expected over next three years Operating income margin in the last cycle peaked at 11.3% Operating income margins reduced by ~ $50 million of annual intangible amortization 39 * Unaudited non-GAAP results as of October 26, 20
Slide 39: Access Equipment Operating Income Margin Drivers
Access Equipment Operating Income Margin Drivers MOVE impact expected to accelerate in FY14 and FY15 as FY12 and FY13 investments provide returns Numerous “O” initiatives already providing benefits 40 * Unaudited non-GAAP results as of October 26, 2012. See Appendix for reconciliation to GAAP result
Slide 40: Baseline Defense Revenue
Baseline Defense Revenue 41 JLTV EMD GMV 1.1 HMMWV Upgrades Int’l M-ATV MSVS P-19R, and More Family of Heavy Tactical Vehicles (FHTV) M-ATV Family of Medium Tactical Vehicles (FMTV) Medium Tactical Vehicle Replacement (MTVR) Logistics Vehicle System Replacement (LVSR) Vehicle Support, Aftermarket an
Slide 41: Defense Sales Outlook
Baseline sales in FY15E, assuming no contract wins, decline to $800 million Target sales for FY15E is $1.5 billion based on initiatives to drive global and aftermarket sales Defense Sales Outlook 42 (1) Baseline assumed in Oshkosh’s EPS outlook $1.5 $0.8 (Sales in Billions) $4.4 $3.9 $3.3 - $3.4 $2.
Slide 42: Defense Operating Income Margin Outlook
Defense Operating Income Margin Outlook Company will adjust cost structure as needed to remain profitable New contract wins present upside to Baseline * Unaudited non-GAAP results as of October 26, 2012. See Appendix for reconciliation to GAAP results.
Slide 43: Fire & Emergency Sales Outlook
Fire & Emergency Sales Outlook Includes actual sales of Medtec ambulance business (Company is exiting this business in 1H FY13) of $29 million in FY11, $40 million in FY12 and estimated sales of $15 million in 1H FY13 Expect domestic fire apparatus to bottom in FY13E then begin slow recovery Solid a
Slide 44: Fire & Emergency Operating Income Margin Outlook
Fire & Emergency Operating Income Margin Outlook Exit of under performing businesses moderately lifts margins in FY13; when exit complete, Company will seek to accelerate margin improvement Operating income margin expected to recover to mid-single digits in FY14 45 * Unaudited non-GAAP results as of
Slide 45: Fire & Emergency Operating Income Margin Drivers
Fire & Emergency Operating Income Margin Drivers 46 (1) Margins impacted by emerging market investments Over time, Company will seek to accelerate margin recovery targets despite soft domestic markets * Unaudited non-GAAP results as of October 26, 2012. See Appendix for reconciliation to GAAP result
Slide 46: Commercial Sales Outlook
Commercial Sales Outlook(1) Housing recovery expected to drive strong concrete mixer demand by FY15 > 40% concrete mixer FY12 - FY15E sales CAGR Modest refuse collection vehicle growth outlook 47 $498 $670 $725 – $750 ~$1,250 > 20% CAGR (FY12-FY15) (1) Sales to external customers
Slide 47: Commercial Operating Income Margin Outlook
Commercial Operating Income Margin Outlook Margin improvement expected to accelerate in FY14 and FY15 as concrete mixer volumes recover 48 * Unaudited non-GAAP results as of October 26, 2012. See Appendix for reconciliation to GAAP results.
Slide 48: Commercial Operating Income Margin Drivers
Commercial Operating Income Margin Drivers Reasonable market recovery assumptions drive significant fixed cost absorption benefits Growth in Americas outside U.S. is included in “M” initiatives driver Segment continues to evaluate emerging market initiatives outside of the Americas 49 * Unaudited no
Slide 49: Non-GAAP to GAAP Reconciliation
Non-GAAP to GAAP Reconciliation The table below presents a reconciliation of the Company’s presented unaudited non-GAAP measures as of October 26, 2012 to the most directly comparable GAAP measures (in millions, except per share amounts): 50 2012 2011 2012 2011 Consolidated Access equipment segment
Slide 50: Appendix: Commonly Used Acronyms
Appendix: Commonly Used Acronyms 51 ARFF Aircraft Rescue and Firefighting M-ATV MRAP All-Terrain Vehicle AWP Aerial Work Platform MECV Modernized Expanded Capability Vehicle CNG Compressed Natural Gas MRAP Mine Resistant Ambush Protected DoD Department of Defense MSVS Medium Support Vehicle System (
Slide 51: For more information contact
For more information contact: Patrick N. Davidson Vice President, Investor Relations 920 966-5939 pdavidson@oshkoshcorp.com Tina Schmiedel Director, Investor Relations 920 233-9235 tschmiedel@oshkoshcorp.com