Winnebago Industries, Inc. · NYSE:WGO
Winnebago Industries — Investor Day (November 2017)
120 slides from Winnebago Industries's investor day presentation, Nov 2, 2017
Slide 1: Winnebago Industries Investor Day 2017
WINNEBAGO INDUSTRIES INVESTOR DAY 2017 NOVEMBER 2, 2017
Slide 2: Welcome & Agenda
WELCOME & AGENDA 2 INVESTOR DAY 2017
Slide 3: Agenda
AGENDA Ashis Winnebago Brian 8:00-8:05 a.m. Welcome & Agenda 10:35-11:05 a.m. Bhattacharya Motorhomes Update Hazelton 8:05-8:20 a.m. Chairman’s Remarks Bob Chiusano 11:05-11:20 a.m. Q&A Ashis 8:20-8:35 a.m. Outdoor/RV Overview 11:20-12:15 p.m. Lunch and RV Tours Bhattacharya Michael Operations & 8:3
Slide 4: Leadership
LEADERSHIP Bob Chiusano Michael Happe Ashis Bhattacharya Don Clark Scott Degnan Scott Folkers Chairman of the Board President and CEO VP Strategic Planning VP, Winnebago Industries, VP/GM Winnebago VP General Counsel and Development President, Grand Design RV Towables and Secretary Brian Hazelton Br
Slide 5: Forward Looking Statements
FORWARD LOOKING STATEMENTS This presentation may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that forward-looking statements are inherently uncertain. A number of factors could cause actual results to differ m
Slide 6: Chairman's Remarks
CHAIRMAN’S REMARKS 6 INVESTOR DAY 2017
Slide 7: Bob Chiusano
BOB CHIUSANO CHAIRMAN OF THE BOARD Last Position § Independent Board Member Background § Member of Winnebago Industries Board since 2008 § Chairman of the Board since 2016 § Chief Operating Officer, Commercial Systems, Rockwell Collins § 39 years management experience § MBA, University of Iowa § BS
Slide 8: Backdrop
BACKDROP § #1 brand in the RV industry § Outside CEO search with significant untapped potential § Weathered financial crisis § Board and executive leadership (Revenue drop from $1B to team evolution – high- $200M) performance environment 8 INVESTOR DAY 2017
Slide 9: Outdoor/RV Overview
OUTDOOR/RV OVERVIEW 9 INVESTOR DAY 2017
Slide 10: Ashis Bhattacharya
ASHIS BHATTACHARYA VP STRATEGIC PLANNING AND DEVELOPMENT Last Position § VP Strategic Marketing, Honeywell Background § 30 years global strategy, acquisitions, and marketing experience § Moog, Motorola Solutions, Bain & Co § MBA, INSEAD, Fontainebleau § PGDM, Indian Institute of Management, Calcutta
Slide 11: RVs and Classes
RVs AND CLASSES MOTORHOME PRODUCT OVERVIEW TOWABLE PRODUCT OVERVIEW Class A Class C Class B Fifth Wheel Travel Trailer § Built on a heavy § Built on a § Built by adding § Constructed with § Towed by means truck chassis medium truck taller roof and a raised forward of a hitch § Diesel and Gas chassis
Slide 12: Total RV Wholesale Market
TOTAL RV WHOLESALE MARKET NORTH AMERICA SHIPMENTS (UNITS ‘000s) 479.7 491.2 430.7 384.4 390.5 374.2 370.1 356.8 353.5 321.2 311 320.8 321.1 292.7 300.1 285.8 254.5 256.8 252.3 237 242.3 165.6 1997 1998 1999 2000 2010 2001 2002 2003 2004 2005 2006 2007 2008 2009 2011 2012 2013 2014 2015 2016 2017E 20
Slide 13: Motorhome RV Wholesale Market
MOTORHOME RV WHOLESALE MARKET NORTH AMERICA SHIPMENTS (UNITS ‘000s) 71.5 71.7 63.5 62 61.9 61 60.4 61.4 60.2 55.1 55.8 55.4 54.7 49.2 47.3 44 38.4 28.4 28.2 25.2 24.8 13.2 1997 1998 1999 2000 2010 2001 2002 2003 2004 2005 2006 2007 2008 2009 2011 2012 2013 2014 2015 2016 2017E 2018E ________________
Slide 14: Towable RV Wholesale Market
TOWABLE RV WHOLESALE MARKET NORTH AMERICA SHIPMENTS (UNITS ‘000s) 419.5 429.3 376 334.5 326.9 323 312.8 298.3 298.1 282.7 249.6 250.6 258.9 257.6 229.1 239.1 227.5 207.6 208.6 217.1 199.5 152.4 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017E
Slide 15: RV Industry Economic Indicators (2017)
RV INDUSTRY ECONOMIC INDICATORS (2017) GOOD CAUTION TROUBLE Interest Rates New Private Housing Starts Fuel Prices Fuel Availability Consumer Sentiment Wholesale & Retail Credit Wages & Employment Cars & Light Truck Sales Dealer Inventories Consumer Debt ____________________ Sources: RVIA data and re
Slide 16: The Call of the Outdoors Remains Strong
THE CALL OF THE OUTDOORS REMAINS STRONG Significant Outdoor 48.6% of Americans reported participating in at least one outdoor activity in 2016 Activity § Most popular activities: running, fishing, hiking, bicycling, camping Participation $887 billion spent on outdoor activities in 2016 High Interest
Slide 17: Camping Participation Continues to Increase
CAMPING PARTICIPATION CONTINUES TO INCREASE Household Camping Frequency Camping Trends in 2016 and Beyond Camp 3+ Times/Year 12% 31% Plan to camp more Say gas prices will allow Camp 2 Times/Year more camping Non-Campers 39% 14% Camp 1 Time/Year 5% 58% Plan to visit National Parks Millennials plan to
Slide 18: Favorable Demographic Trends
FAVORABLE DEMOGRAPHIC TRENDS By Age By Ethnicity All 8% 9% 6% 38% 34% 21% 7% 74% Campers New 44% 28% 17% 11% 61% 12% 13% 14% Campers More Millennials are camping More ethnic groups are camping Millennial Gen X Boomer Mature Caucasian/ African Hispanic/ Asian/ Other White American/ Latino Pacific ___
Slide 19: Key Takeaways
KEY TAKEAWAYS 19 INVESTOR DAY 2017
Slide 20: CEO Update
CEO UPDATE 20 INVESTOR DAY 2017
Slide 21: Michael Happe
MICHAEL HAPPE PRESIDENT AND CEO Last Position § Group Vice President, The Toro Company Background § 20+ years management experience § Strong track record of growing the businesses § MBA, Carlson School, University of Minnesota § BS Journalism, University of Kansas Focus § Vision § Enterprise strateg
Slide 22: Winnebago Industries Overview
WINNEBAGO INDUSTRIES OVERVIEW + $685.20 $861.90 Junction City, OR Charles City, IA Lake Mills, IA Waverly, IA Motorized ($M) Forest City, IA Eden Prairie, MN Towables ($M) Middlebury, IN (2) 22 INVESTOR DAY 2017
Slide 23: The Winnebago Story
THE WINNEBAGO STORY Iconic outdoor Balanced Improving Significant Upgraded lifestyle brand portfolio of balance sheet growth talent with synonymous motorhomes runway focus on a with RV and towables new vision category 23 INVESTOR DAY 2017
Slide 24: The Journey
THE JOURNEY $160 10% $1,547.1 $125.1 $120 $945.2 $976.5 $975.2 $803.2 $80 5% $63.9 $65.7 $59.4 $44.5 $40 $0 0% 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 Motorized Towables Other Operating Income ($M) Operating Income % NET REVENUES ($M) OPERATING INCOME 24 INVESTOR DAY 2017
Slide 25: Our North Star
OUR NORTH STAR Our Our Our Purpose Vision Mission We help our customers We help our customers explore the outdoor lifestyle, enabling extraordinary experiences as We will be the trusted leader We will be the trusted leader in outdoor lifestyle solutions by providing unmatched innovation, To create l
Slide 26: Strategic Priorities
STRATEGIC PRIORITIES 3 Elevate Excellence 2 in Operations 4 Drive Higher Levels of Safety, Strengthen and Expand Leverage Innovation Quality, and Productivity Core RV Business and Digital Engagement Re-energize Motorhome; Invest Create Connected Customer in Towable Growth Advocacy 1 5 Build a High-
Slide 27: Strategic Priorities: Build a High-Performance Culture
STRATEGIC PRIORITIES Build a High-Performance Culture 1 Create Unique Blend of Leadership, Accountability and Giving 27 INVESTOR DAY 2017
Slide 28: Strategic Priorities: Strengthen and Expand Core RV Business
STRATEGIC PRIORITIES Strengthen and Expand Core RV Business 2 Re-energize Motorhome; Invest in Towable Growth 28 INVESTOR DAY 2017
Slide 29: Strategic Priorities: Elevate Excellence in Operations
STRATEGIC PRIORITIES Elevate Excellence in Operations 3 Drive Higher Levels of Safety, Quality, and Productivity 29 INVESTOR DAY 2017
Slide 30: Strategic Priorities: Leverage Innovation and Digital Engagement
STRATEGIC PRIORITIES Leverage Innovation and Digital Engagement 4 Create Connected Customer Advocacy 30 INVESTOR DAY 2017
Slide 31: Strategic Priorities: Expand to New, Profitable Markets
STRATEGIC PRIORITIES Expand to New, Profitable Markets 5 Investigate Diversification – Inside and Outside of RVs 31 INVESTOR DAY 2017
Slide 32: Impact of Grand Design
IMPACT OF GRAND DESIGN Completion of acquisition creates winning multi-brand platform. STRATEGIC FINANCIAL CULTURAL Broader, more balanced portfolio Significantly enhanced Establish critical relationships with runway for growth financial profile between Winnebago and Grand Design team members Combin
Slide 33: GDRV/Winnebago Combination
GDRV/WINNEBAGO COMBINATION BENEFITS OF BEING PART OF WINNEBAGO 33 INVESTOR DAY 2017
Slide 34: Key Messages
KEY MESSAGES We have our own In January 2016, unique combination of We are building a Thanks in large part to Winnebago Industries well-known brands, a was a company that solid foundation a transformational balance sheet that can around strategy, acquisition, needed a fresh be leveraged for the stru
Slide 35: Stacy Bogart
STACY BOGART VP GENERAL COUNSEL AND CORPORATE SECRETARY Last Position § Senior VP, General Counsel and Compliance Officer, Polaris Industries Inc. Background § 26+ years legal experience § Liberty Diversified, Toro, Honeywell, Gray Plant & Mooty § JD with Distinction, University of Iowa Law School §
Slide 36: Q&A
WINNEBAGOZ INVESTOR DAY 2017 36
Slide 37: Break
WINNEBAGOZ INVESTOR DAY 2017 37
Slide 38: Grand Design RV Update
GRAND DESIGN RV UPDATE 38 INVESTOR DAY 2017
Slide 39: Don Clark
DON CLARK VP, WINNEBAGO INDUSTRIES, PRESIDENT, GRAND DESIGN RV Last Position § Owner/Management Group Member, Keystone RV § President, Dutchmen RV Background § 35 years RV industry experience § Business Degree, Bethel College § Honorary Doctorate, Bethel College Focus § Recruiting talent and buildin
Slide 40: About Grand Design RV
ABOUT GRAND DESIGN RV 40 INVESTOR DAY 2017
Slide 41: GDRV Timeline
GDRV TIMELINE 40,000th unit shipped 10,000th unit shipped Grand Design 1,000th unit Founded shipped 2012 2013 2014 2015 2016 2017 INTRODUCED: INTRODUCED: INTRODUCED: Solitude Imagine Reflection 150 Momentum Series Reflection ____________________ Years refer to calendar years. 41 INVESTOR DAY 2017
Slide 42: Grand Design RV Lineup
GRAND DESIGN RV LINEUP FIFTH WHEEL TRAVEL TRAILER § Luxury Extended § Luxury Toy Hauler § Mid-Profile Fifth § Destination Travel § Lightweight Stay Fifth Wheels Fifth Wheels Wheels Trailers Travel Trailers § Target Market: § Target Market: § Target Market: § Target Market: § Target Market: Late Gen
Slide 43: Key Strategies
KEY STRATEGIES 43 INVESTOR DAY 2017
Slide 44: Key Strategies
KEY STRATEGIES § We listen to our customers and dealers and § One dealer per market respond quickly § Each dealer sells entire product line § Nimble and quick to adapt to customers’ § No cloning other brands fast-changing preferences § No internet dealers § Track record of introducing innovative, fa
Slide 45: Key Strategies
KEY STRATEGIES § Initiated industry-leading 100% pre-delivery § Digital customer engagement through inspection (PDI) process in towable market social media § Loyal customer communities and groups Step 3: § Customer meet-up events (e.g. rallies) Step 1: Step 2: PRE-DELIVERY PRODUCTION FINAL FINISH IN
Slide 46: Key Strategies
KEY STRATEGIES § Community with strong work ethic § Large employee base in Northern Indiana with RV know-how § Attracted all-star team of employees within the industry 46 INVESTOR DAY 2017
Slide 47: The Path Forward
THE PATH FORWARD 47 INVESTOR DAY 2017
Slide 48: Winnebago Towables Update
WINNEBAGO TOWABLES UPDATE 48 INVESTOR DAY 2017
Slide 49: Scott Degnan
SCOTT DEGNAN VP/GM WINNEBAGO TOWABLES Last Position § VP Sales & Product Management, Winnebago Industries Background § VP Sales, Fleetwood RV § 30 years RV industry experience § BA Business, San Jose State University Focus § Develop a winning culture § Grow the Winnebago brand § Increase profitabili
Slide 50: Winnebago Towables Lineup
WINNEBAGO TOWABLES LINEUP TRAVEL TRAILER FIFTH WHEEL Minnie Drop Micro Minnie Minnie Minnie Plus Minnie Plus Travel Trailer Fifth Wheel § 6.5’-wide teardrop § 7’-wide § 8’-wide small § 8’-wide large and § Lower weight ½ trailers lightweight slideout trailers multiple slideout ton truck towable § Tar
Slide 51: Who We Are
WHO WE ARE 51 INVESTOR DAY 2017
Slide 52: Key Strategies
KEY STRATEGIES 52 INVESTOR DAY 2017
Slide 53: Key Strategies
KEY STRATEGIES § Streamline product portfolio § Focus on full-line dealers § Build a brand identity — Minnie § One dealer per market § Focus on most successful segments § Field-based sales reps (closer to the market) § Platform approach to designing products § Eliminate dealers not aligned with our
Slide 54: Key Strategies
KEY STRATEGIES § Hire skilled managers from both inside and § Connectivity outside RV industry § Added Dealer Council § Re-align sales team § Greatly reduced finished goods inventory § Focus on safety and quality § Standardized product features/options § Formal sales structure/Regional Sales § Reduc
Slide 55: The Path Forward
THE PATH FORWARD SIGNIFICANT SALES ENERGIZED NEW RE-ENERGIZED RUNWAY FOR MOMENTUM DEALER BASE PRODUCTS TEAM GROWTH 55 INVESTOR DAY 2017
Slide 56: Winnebago Motorhomes Update
WINNEBAGO MOTORHOMES UPDATE 56 INVESTOR DAY 2017
Slide 57: Brian Hazelton
BRIAN HAZELTON VP/GM WINNEBAGO MOTORHOMES Last Position § CEO, Schwing America Inc. Background § 25 years management experience § Schwing, Terex, Detroit Diesel § BA Finance, Miami University Focus § Turn around and growth of strong brands § Voice-of-customer product and organizational development §
Slide 58: Winnebago Motorhomes Lineup
WINNEBAGO MOTORHOMES LINEUP CLASS B CLASS C CLASS A GAS CLASS A DIESEL Travato View Vista Grand Tour § Selected models: § Selected models: § Selected models: § Selected models: Travato, Era, Revel View/Navion, Minnie Vista, Sunstar Forza, Grand Tour § MSRP: $102-$155K Winnie/Spirit § MSRP: $116-209K
Slide 59: Motorhomes Overview
MOTORHOMES OVERVIEW $ STRONGEST 54% INDUSTRY-LEADING QUALITY & SKILLED & EXPERIENCED BRAND WGO REVENUE SERVICE SAFETY WORKFORCE AWARENESS IN INDUSTRY 59 INVESTOR DAY 2017
Slide 60: Point of Departure
POINT OF DEPARTURE MARKET SHARE LIMITED OPERATIONS STATIC ENTRY-LEVEL COMPLEXITY PRODUCTS DEALER CHANNEL LACK OF PRODUCT NOT OPTIMIZED OWNERSHIP & DEVELOPMENT URGENCY TOO SLOW IN ORGANIZATION 60 INVESTOR DAY 2017
Slide 61: Key Strategies
KEY STRATEGIES 61 INVESTOR DAY 2017
Slide 62: Key Strategies
KEY STRATEGIES § Strong new products launched at Open § Build better products to re-engage House 2017 – Horizon, Intent, and Revel stronger dealers § Consistent velocity of products, floorplans, § Become more important to existing and technology to continue dealer base § Implementation of faster, da
Slide 63: Key Strategies
KEY STRATEGIES § New product-centric organizational § Agile, customer-interactive new product structure in place development process § Bring in experienced leaders from the § Implementation of multi-generational outside with significant transferable skills product plan § Identify high-potential team
Slide 64: Key Strategies
KEY STRATEGIES § Continue to work on product quality § Highlight legendary brand attributes § Increase the use of technology to improve § Enhance digital customer engagement and overall customer experience social media presence § Facebook Live/virtual product launch § Expand online product and servi
Slide 65: The Path Forward: Process Improvement
THE PATH FORWARD PROCESS IMPROVEMENT 65 INVESTOR DAY 2017
Slide 66: Q&A
: 2 a See ss WINNEBAGO INVESTOR DAY 2017 66
Slide 67: Lunch and RV Tours
LUNCH AND RV TOURS 67 INVESTOR DAY 2017
Slide 68: Operations & Manufacturing
OPERATIONS & MANUFACTURING 68 INVESTOR DAY 2017
Slide 69: Chris West
CHRIS WEST VP OPERATIONS Last Position § VP, Operations & Supply Chain, Joy Global Background § 27 years manufacturing experience § AGCO, NORDAM Private Jet Interiors § MBA, Baker University § BS Industrial Operations Management, Northeastern State University Focus § People § Process § Culture 69 IN
Slide 70: Operational Footprint
OPERATIONAL FOOTPRINT 3.3 million square feet under roof on 650 acres 3,300 manufacturing employees Operating factories in 3 states, 7 campuses Diesel Motorhome MFG Class A, B, C Motorhome MFG Towables MFG Vertically integrated in North Junction City, Oregon North Iowa Region Middlebury, IN Iowa Mot
Slide 71: Capacity Expansion Projects
CAPACITY EXPANSION PROJECTS Grand Design 40% capacity expansion approved, use scale to reduce backlog Winnebago Towables $12M capacity expansion approved, execute to plan Winnebago Motorhomes Ramp up west coast diesel production, redeploy freed-up North Iowa capacity 71 INVESTOR DAY 2017
Slide 72: Operations Strategy
OPERATIONS STRATEGY ELEVATE EXCELLENCE IN OPERATIONS: Safe | Fast | Efficient | Flexible | Capable 72 INVESTOR DAY 2017
Slide 73: Performance to Date
PERFORMANCE TO DATE CASES OF PROGRESS: WINNEBAGO MOTORHOMES ENTERPRISE ____________________ Estimated savings over past 12 months INVESTOR DAY 2017 73
Slide 74: The Path Forward
THE PATH FORWARD 74 INVESTOR DAY 2017
Slide 75: Digital Transformation
DIGITAL TRANSFORMATION 75 INVESTOR DAY 2017
Slide 76: Jeff Kubacki
JEFF KUBACKI VP AND CHIEF INFORMATION OFFICER Last Position § VP & CIO, Westinghouse Electric Background § 35 years global technology experience § ATK, Kroll, Ecolab § MBA, University of South Florida § Bachelor of Technology, Computer Science, Rochester Institute of Technology Focus § Digital Trans
Slide 77: Team Vision and Point of Departure
TEAM VISION AND POINT OF DEPARTURE CIO view of high-performing IT teams Point of departure § Lead digital transformation for the enterprise § Support from Board and CEO to use IT for competitive advantage § Enable business strategies § ERP project progress not on plan § Create competitive advantage
Slide 78: Key Accomplishments
KEY ACCOMPLISHMENTS TURNAROUND UPGRADED UPGRADED ERP IT LEADERSHIP ORGANIZATIONAL PROJECT TEAM CAPABILITIES CREATED CYBER SECURITY ADOPTED LEADING IT ALIGNED IT AND BUSINESS ROADMAP FRAMEWORK OBJECTIVES 78 INVESTOR DAY 2017
Slide 79: ERP Roadmap and Objectives
ERP ROADMAP AND OBJECTIVES BUSINESS DEALER & CUSTOMER BUSINESS INTELLIGENCE EXPERIENCE OPERATIONS $38M TOTAL COST FY18-$6M CAP & $4M EXP 79 INVESTOR DAY 2017
Slide 80: Digital Transformation Vision
DIGITAL TRANSFORMATION VISION Engage our customers Empower our employees § Extreme personalization § Business intelligence § Social media management § Machine learning § Customer sentiment § Personalized collaboration § Customer service management Transform our products Optimize our operations § Con
Slide 81: Business Development
BUSINESS DEVELOPMENT 81 INVESTOR DAY 2017
Slide 82: Strategic Priorities
STRATEGIC PRIORITIES Growth mandate — 5 Expand to New, Profitable Markets Diversification is a priority 82 INVESTOR DAY 2017
Slide 83: Business Development Framework
BUSINESS DEVELOPMENT FRAMEWORK PURSUING OPPORTUNITIES TO FUEL GROWTH 83 INVESTOR DAY 2017
Slide 84: Recent Acquisition History
WINNEBAGO INDUSTRIES ? RECENT ACQUISITION HISTORY Grand Motorhomes Design Motorhomes Towables Towables Motorhomes 84 INVESTOR DAY 2017
Slide 85: Types of M&A Opportunities
TYPES OF M&A OPPORTUNITIES What opportunities are we willing to explore? § Superior return on investment GROWTH § Gain scale § Consolidation of the RV industry EXPANSION TRANSFORMATIVE § Round out product offerings § Gain access to new markets § Consolidation § Portfolio refocus § Adjacent products
Slide 86: Growth Adjacency Framework
GROWTH ADJACENCY FRAMEWORK ____________________ Sources: Recreation Vehicle Industry Association; Outdoor Industry Association; Industry news clips; Winnebago analysis 86 INVESTOR DAY 2017
Slide 87: Business Development Process/Recent Activity
BUSINESS DEVELOPMENT PROCESS/RECENT ACTIVITY Strategy Relationship Opportunity Development Development Evaluation 87 INVESTOR DAY 2017
Slide 88: CFO Update
CFO UPDATE 88 INVESTOR DAY 2017
Slide 89: Bryan Hughes
BRYAN HUGHES VP AND CFO Last Position § SVP & Corporate Controller, Ecolab Background § 25 years financial management experience § MBA, Ross School, University of Michigan § Accounting, Finance, Planning, Business Strategy Focus § Talent/team development § Financial discipline with strong tie to bus
Slide 90: Why I Joined Winnebago Industries
WHY I JOINED WINNEBAGO INDUSTRIES 90 INVESTOR DAY 2017
Slide 91: Financial Performance
FINANCIAL PERFORMANCE $2.32 $1,547.1 $1.64 $1.68 $1.54 $1.52 $1.13 $945.2 $976.5 $975.2 $803.2 $0.35 $0.41 $604.4 $581.7 $0.10 $496.4 $449.5 $211.5 ($2.71) 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 REVENUE ($M) EARNINGS PER SHARE ($) 91 INVES
Slide 92: Total Shareholder Returns
TOTAL SHAREHOLDER RETURNS 10-year total shareholder return S&P 500 Winnebago 150 Total Shareholder Returns 110% WGO S&P 500 100 88% 1-year 64 22 50 3-year 131 39 0 5-year 308 102 -50 10-year 88 110 -100 Oct-07 Jan-08 Apr-08 Jul-08 Oct-08 Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11
Slide 93: One Year Returns
S&P 600 Small Cap ONE YEAR RETURNS 15% Winnebago’s stock has meaningfully outperformed the S&P 400 and 600 indices over the past year. 85% One year stock price returns S&P 400 Mid Cap Index S&P 600 Small Cap Index Winnebago < 60% appreciation 70% 60% 64% 50% S&P 400 Mid Cap 40% 30% 23% 20% 19% 9% 10
Slide 94: Cost Structure
COST STRUCTURE * ____________________ All figures are expressed as a ratio to sales and are for the full financial year 2017 *This is a non-GAAP measure. Please refer to the Appendix of this presentation for important disclosures. 94 INVESTOR DAY 2017
Slide 95: Return on Invested Capital (ROIC)
RETURN ON INVESTED CAPITAL (ROIC) 21.5% 20.0% 15.6% 4.7% 4.6% 4.2% 2015 2016 2017 4.8X 4.6X ROIC (%) 3.4X 2015 2016 2017 2015 2016 2017 RETURN ON SALES (%) = NET INCOME REVENUE ASSET TURNS = INVESTED REVENUE CAPITAL 95 INVESTOR DAY 2017
Slide 96: Cash Flow to Fuel Growth
CASH FLOW TO FUEL GROWTH $83.1 $31.2 $28.6 $28.2 $12.8 $4.8 $5.8 ($2.1) ($12.2) ($18.1) 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 FREE CASH FLOW ($M)* ____________________ *This is a non-GAAP measure. Please refer to the Appendix of this presentation for important disclosures. 96 INVESTOR DA
Slide 97: Capital Allocation
CAPITAL ALLOCATION A strong balance Ensure that Optimize Return excess sheet to execute liquidity is the capital cash to growth strategies adequate structure shareholders n Strong cash flow to fund n Current liquidity is lower n Pay down debt to achieve n Prioritize growth growth opportunities than
Slide 98: Capital Spending
CAPITAL SPENDING 2.5% 1.6% 1.7% 1.1% 0.9% 0.6% 0.6% 0.4% 0.4% 0.4% 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 CAPITAL EXPENDITURE % OF REVENUE 98 INVESTOR DAY 2017
Slide 99: Investments
INVESTMENTS Investing for GROWTH in 2018! 99 INVESTOR DAY 2017
Slide 100: Recent Acquisition History
WINNEBAGO INDUSTRIES ? RECENT ACQUISITION HISTORY Grand Motorhomes Design Motorhomes Towables Towables Motorhomes 100 INVESTOR DAY 2017
Slide 101: Debt
DEBT $274.5 GRAND DESIGN ACQUISITION $9.1 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 DEBT ($M) 101 INVESTOR DAY 2017
Slide 102: Debt Leverage Ratio
DEBT LEVERAGE RATIO 3.0 1.8 1.5 1.2 0 0.9 2017 ON-GOING (TARGET) Net Debt to EBITDA 102 INVESTOR DAY 2017
Slide 103: Dividends
DIVIDENDS 25% 25% 50% 23.8% 2016 +++ 2017 23.6% 2015 38.4% 2016 21.6% 2015 20.5% 2016 34.1% 2015 17.3% 2017 15.2% 2017 30% 15% 15% AS A % OF FCF* LESS PAYOUT RATIO AS A % OF CASH FROM OPERATIONS (AS A % OF NET INCOME) DEBT PAYMENTS ____________________ *This is a non-GAAP measure. Please refer to th
Slide 104: Share Repurchase
SHARE REPURCHASE $70M Share Repurchase Authorization Prior authorization for History: approved, as announced during our $60M was approved December 19, 2007 We are optimistic about Q4 2017 Earnings our investment Release opportunities over the long term, and our We will utilize We will consistently a
Slide 105: Steve Stuber
STEVE STUBER DIRECTOR OF FP&A and IR Last Position § Finance Director, North American Retail Analytics, General Mills Background § 27 years Accounting and Finance experience § Roles: Plant Controller (2), Financial Operations (multiple), International § MBA, Kellogg School of Management, Northwester
Slide 106: CEO Closing
CEO CLOSING 106 INVESTOR DAY 2017
Slide 107: Strong Starting Point
STRONG STARTING POINT § WGO Board is engaged and supportive of the leadership team. § We are optimistic about short-term cycle sustainment, and we are excited about longer-term secular demand around outdoor lifestyle. § We have a stronger “compass” in terms of strategic vision and priorities. § Our
Slide 108: Case for Change
CASE FOR CHANGE § Remake ELT and evolve organizational design Setting a § Establish a MSP presence to build upon § Make the Quarters to begin funding change Vision The Case for Change § Engage key employees to craft new Winnebago vision Staging the § Cascade vision through new communication protocol
Slide 109: Teams Focused on Executing Strategy
TEAMS FOCUSED ON EXECUTING STRATEGY BUSINESS UNITS SUPPORT FUNCTIONS BUSINESS DEVELOPMENT Capable leaders and Focused on adding value Actively framing focused teams to the businesses possibilities § Grand Design RV: Take to § Unleashing a superior § Strategic, financial, and next level experience fo
Slide 110: FY2020 Goals
FY2020 GOALS CULTURE & PARTICIPATION 110 INVESTOR DAY 2017
Slide 111: FY2020 Goals: Market Share
FY2020 GOALS: MARKET SHARE 10+% 3% Unit Market Share of North 2016 FY2020 American market 10+% at the end of FY2020 from 3% at the UNIT MARKET SHARE end of FY2016. 111 INVESTOR DAY 2017
Slide 112: FY2020 Goals: Operating Income
FY2020 GOALS: OPERATING INCOME 10% 8.1% Operating Income 10% at the 2016 FY2020 end of FY2020. OPERATING INCOME 112 INVESTOR DAY 2017
Slide 113: FY2020 Goals: New Business
FY2020 GOALS: NEW BUSINESS 10% of FY2020 Revenue will come from RV segments or businesses we aren’t in today. 113 INVESTOR DAY 2017
Slide 114: FY2020 Goals: Culture & Participation
FY2020 GOALS: CULTURE & PARTICIPATION Every employee will be asked to engage in an activity related to one of the CULTURE & following every year: PARTICIPATION § Safety § Productivity § Quality § Giving 114 INVESTOR DAY 2017
Slide 115: Q&A
” WINNEBAGOZ INVESTOR DAY 2017
Slide 116: Future Investor Events
FUTURE INVESTOR EVENTS November 29, 2017 RVIA National RV Trade Show Louisville, Kentucky December 12, 2017 Annual Shareholder Meeting Forest City, Iowa December 15, 2017 FY2018 Q1 Conference Call 116 INVESTOR DAY 2017
Slide 117: Thank You
THANK YOU Thank you for attending the Winnebago Industries Investor Day. An archive of the presentation will be available on our website at investor.wgo.net. Steve Stuber Sam Jefson Director of FP&A and IR Public Relations Specialist 952-828-8461 641-585-6803 srstuber@winnebagoind.com sjefson@winneb
Slide 118: WinnebagoInd.com
WinnebagoInd.com 118
Slide 119: Appendix: Non-GAAP Reconciliation
APPENDIX Non-GAAP Reconciliation We have provided the following non-GAAP financial measures, which are not calculated or presented in accordance with GAAP, as information supplemental and in addition to the financial measures presented in accordance with GAAP. Such non-GAAP financial measures should
Slide 120: Appendix Continued
APPENDIX CONTINUED The following table reconciles net cash provided by operating activities to free cash flow for fiscal 2008-2017; in $’s. 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Net cash provided by operating activities $(14.4) $8.3 $33.0 $(10.1) $0.1 $10.2 $23.2 $45.2 $52.7 $97.1 Purcha