ISI Conference March 8, 2011s2.q4cdn.com/024929968/files/doc_presentations/OSK_ISI_030811.pdf ·...
Transcript of ISI Conference March 8, 2011s2.q4cdn.com/024929968/files/doc_presentations/OSK_ISI_030811.pdf ·...
ISI ConferenceMarch 8, 2011
Wilson JonesExecutive Vice President and President, Access Equipment
Pat DavidsonVice President, Investor Relations
ISI CONFERENCE MARCH 2011
Forward Looking Statements and Discontinued Operations
2
This presentation contains statements that the Company believes to be “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact, including, without limitation, statements regarding the Company’s future financial position, business strategy, targets, projected sales, costs, earnings, capital expenditures, debt levels and cash flows, and plans and objectives of management for future operations, are forward-looking statements. When used in this presentation, words such as “may,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “believe,” “should,” “project” or “plan” or the negative thereof or variations thereon or similar terminology are generally intended to identify forward-looking statements. These forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties, assumptions and other factors, some of which are beyond the Company’s control, which could cause actual results to differ materially from those expressed or implied by such forward-looking statements. These factors include the impact on revenues and margins of the decrease in M-ATV production rates; the cyclical nature of the Company’s access equipment, commercial and fire & emergency markets, especially during periods of global economic weakness and tight credit markets; the Company’s ability to produce vehicles under the FMTV contract at targeted margins; the duration of the ongoing global economic weakness, which could lead to additional impairment charges related to many of the Company’s intangible assets and/or a slower recovery in the Company’s cyclical businesses than equity market expectations; the expected level and timing of DoD procurement of products and services and funding thereof, especially in an environment when the U.S. government is operating under a Continuing Resolution budget action; risks related to reductions in government expenditures in light of U.S. defense budget pressures and an uncertain DoD tactical wheeled vehicle strategy; the potential for the U.S. government to competitively bid the Company’s Army and Marine Corps contracts; the consequences of financial leverage, which could limit the Company’s ability to pursue various opportunities; the potential for commodity and other raw material costs to rise sharply, particularly in a future economic recovery; risks related to costs and charges as a result of facilities consolidation and alignment, including that anticipated cost savings may not be achieved; risks related to the collectability of receivables, particularly for those businesses with exposure to construction markets; the cost of any warranty campaigns related to the Company’s products; risks related to production delays arising from supplier quality or production issues; risks associated with international operations and sales, including foreign currency fluctuations and compliance with the Foreign Corrupt Practices Act; risks related to work stoppages and other labor matters: the potential for disruptions or cost overruns in the Company’s global enterprise system implementation; the potential for increased costs relating to compliance with changes in laws and regulations; and risks related to disruptions in the Company’s distribution networks. Additional information concerning these and other factors is contained in the Company’s filings with the Securities and Exchange Commission, including the Form 8-K filed January 28, 2011. The Company disclaims any obligation to update such forward-looking statements.
All operating results included in this presentation reflect results from continuing operations only.
Agenda
I. Who We Are
II. Growth Drivers
III. Business Units
IV. Takeaways
3 ISI CONFERENCE MARCH 2011
Oshkosh Corporation at a Glance
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Who We Are
Growth Drivers
Business Units
Takeaways
DEFENSE FIRE & EMERGENCY COMMERCIALACCESS EQUIPMENT
ISI CONFERENCE MARCH 2011
A Portfolio of Market Leaders
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GLOBAL RANK
NORTH AMERICA RANKAccess Equipment #1
Fire Apparatus #1
Airport Products #1
Heavy Defense Trucks #1(Army & Marines)
Concrete Mixers / Batch Plants #1
Refuse Collection Vehicles #1
Medium Defense Trucks #1(Army starts 2011 & Marines)
Who We Are
Growth Drivers
Business Units
Takeaways
ISI CONFERENCE MARCH 2011
ISI CONFERENCE MARCH 2011
FY10: Strong Performance
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De-levered balance sheet with debt to EBITDA ratio under 2 to 1
Strong cash flow and operating income
Track record of investing in innovation
History of strong shareholder value creation
Outstanding performance in FY10 on virtually every measure
vs. FY09
Sales $9.8B 87.4%
Operating Income* $1.4B 574%
Operating Income Margin 14.4% 10.4%
EPS* $8.94
Debt Reduction $736M
• Income from continuing operations; excludes after-tax non-cash charges for goodwill and other long-lived asset impairments. See Appendix.
Who We Are
Growth Drivers
Business Units
Takeaways
ISI CONFERENCE MARCH 2011
Revenue Growth
7
960
2
4
8
$12B
6
10
97 98 00 02 05 07 0999 01 03 04 06 08 10
FISCAL YEAR
SALE
S (b
illion
s)
Who We Are
Growth Drivers
Business Units
Takeaways
ISI CONFERENCE MARCH 2011
Cash Generation
8
0
Sales
150
300
600
$900
450
750
FRE
E C
AS
H F
LOW
(m
illion
s)
YEAR
Strong track record of free cash flow
0
2
4
8
$12B
6
10
SALE
S (b
illion
s)
96 97 98 00 02 05 07 0999 01 03 04 06 08 10
Free Cash Flow
Who We Are
Growth Drivers
Business Units
Takeaways
Free Cash Flow is a non-GAAP number – See Appendix
ISI CONFERENCE MARCH 2011
OSK Greatly Outperforms Benchmarks
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Mid 400S&P 500OSK0
800
1,600%
400
1,200
Ret
urn
(%)
Shareholder return from Sept 30, 1996 to Sept 30, 2010
Who We Are
Growth Drivers
Business Units
Takeaways
DOW
Source: Thomson Financial
ISI CONFERENCE MARCH 201110
Completed delivery of original 8,079 M-ATVs– Received orders for M-ATV variants and bolt-on protection kits
FMTV ramping up– Program-to-date ~$2.4 billion in contracts– Includes deliveries for FY12-FY13; expect more than
original bid quantity
Access equipment orders from external customers doubled in Q1 FY11 vs. Q1 FY10
– North America and emerging markets driving increase
Disappointing results at fire & emergency and commercial segments
– Challenging market conditions continue– Implementing additional cost reductions
Maintaining commitment to new product development
Recent Operating HighlightsWho We Are
Growth Drivers
Business Units
Takeaways
ISI CONFERENCE MARCH 2011
Agenda
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I. Who We Are
II. Growth Drivers
III. Business Units
IV. Takeaways
ISI CONFERENCE MARCH 2011
ISI CONFERENCE MARCH 2011
Growth Drivers
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New Program Opportunities
Going Global
Improved Operations and
Lower Costs
Non-Defense Markets
Recovering
Who We Are
Growth Drivers
Business Units
Takeaways
ISI CONFERENCE MARCH 2011
Fiscal 2011: A Strong Transition Year
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Who We Are
Growth Drivers
Business Units
Takeaways
Solid defense performanceYoY, excluding M-ATV
Non-defense businesses transitioning to growth
Continued debt reduction, stronger balance sheet
Preparing for return to acquisitions
ISI CONFERENCE MARCH 2011
2011 Focus Areas: Positioning the Company for Growth
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Optimizing Operations
Global Expansion Driven by
BRICsMarket
Leading Innovations
Investing in People and Systems
Customer Engagement
Who We Are
Growth Drivers
Business Units
Takeaways
ISI CONFERENCE MARCH 2011
Agenda
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I. Who We Are
II. Growth Drivers
III. Business Units
IV. Takeaways
ISI CONFERENCE MARCH 2011
ISI CONFERENCE MARCH 2011
Industry’s Strongest Vehicle Line Up
Leading provider of military tactical wheeled vehicles to U.S. Department of Defense
Driving technological innovations
Strong field service provider with support in theater
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Who We Are
Growth Drivers
Business Units
Takeaways
DEFENSE
ISI CONFERENCE MARCH 2011
Defense Outlook
Lack of FY11 DoD budget may impact timing of fiscal 2011 sales
FY12 budget request levels a mixed bag– FMTV– FHTV
Visibility into 2015
Competing for broad array of contracts
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DEFENSEWho We Are
Growth Drivers
Business Units
Takeaways
ISI CONFERENCE MARCH 2011
Many Defense Opportunities
Additional M-ATV variants/orders
International opportunities
Additional FMTV orders
Bridge contract for FHTV
Humvee and other recap
Technology insertion/ block modifications
MRAP sustainment
Remanufacturing
JLTV
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DEFENSEWho We Are
Growth Drivers
Business Units
Takeaways
ISI CONFERENCE MARCH 2011
The Global Leader
World’s top supplier of access equipment
Strong technology and quality
Extensive service network
Intensified focus on operations
– New factory in China– Lean efforts accelerating
Building out global distribution
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ACCESS EQUIPMENTWho We Are
Growth Drivers
Business Units
Takeaways
ISI CONFERENCE MARCH 2011
Industry Data Strengthening
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ACCESS EQUIPMENT
Encouraging Market Indicators: Aging fleets and rising values
Source: Rouse Asset Services, January 2011.
AWP – Articulating Boom 54.2
AWP – Scissor Lifts 52.9
AWP – Telescopic Boom 57.6
+6.6%6 months
+2.8%6 months
+6.2%6 months
Average Age(in months)
Used Equipment Values(OLV)
Who We Are
Growth Drivers
Business Units
Takeaways
ISI CONFERENCE MARCH 2011
Premium Industry Brands
Global leader in firefighting & emergency vehicles
Innovative products and features
Robust new product pipeline
Growing international profile
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FIRE & EMERGENCYWho We Are
Growth Drivers
Business Units
Takeaways
ISI CONFERENCE MARCH 2011
Market Gains, Global Opportunities
Substantial global opportunities
– International airport growth
– Desire for technology in emerging markets
– Recovering broadcast demand
U.S. fire truck market sales at historically low levels
Pierce gaining share despite weak municipal spending
– 30% of sales to new customers
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FIRE & EMERGENCYWho We Are
Growth Drivers
Business Units
Takeaways
ISI CONFERENCE MARCH 2011
Industry Leader: Improving Customer Productivity
Concrete placement, refuse collection and service vehicles
Proven efficiency, uptime, reliability, durability and ease of service
Extensive sales and service networks
Leader in green solutions
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COMMERCIALWho We Are
Growth Drivers
Business Units
Takeaways
ISI CONFERENCE MARCH 2011
Domestic mixer replacement at unsustainably low levels
Expanding international markets
Growing sales of green, energy efficient solutions
U.S. Industry Mixer Sales
0
2,000
4,000
8,000
10,000
6,000
FISCAL YEAR
TOTA
L U
NIT
S
96 97 98 00 02 05 07 0999 01 03 04 06 08 10
U.S. Recovery and Emerging Markets Driving Growth
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COMMERCIALWho We Are
Growth Drivers
Business Units
Takeaways
Source: TMMB –Truck Mixer Manufacturers Bureau
ISI CONFERENCE MARCH 2011
Agenda
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I. Who We Are
II. Growth Drivers
III. Business Units
IV. Takeaways
ISI CONFERENCE MARCH 2011
ISI CONFERENCE MARCH 2011
Clear Performance Goals…
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>15% ROIC
>10% annual organic sales growth
Who We Are
Growth Drivers
Business Units
Takeaways
>15% EPS
growth>10% consolidated
operating income margin
…and Record of Achievement
ISI CONFERENCE MARCH 2011
OSK: Reasons to Invest
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Leader in KeyMarkets
Strong Cash Generation and Balance Sheet
Growth Drivers
Generally #1 share
Industry innovator
Strong distribution networks
Proven history of generating cash
Improved balance sheet, strong credit metrics
Preparing for return to acquisitions
Non-defense recovery
Broad defense opportunities
Global growth
Optimize operations
Who We Are
Growth Drivers
Business Units
Takeaways
For information contact:
Patrick DavidsonVice President, Investor Relations
920 966-5939
Tina SchmiedelDirector, Investor Relations
920 233-9235
ISI CONFERENCE MARCH 201129
Appendix: Non-GAAP Financial Measures
The table below presents reconciliations of the Company’s presented non-GAAP measures to the most directly comparable GAAP measures (in millions, except per share amounts) for the year ended September 30:
2010 2009
Non-GAAP operating income 1,419.7$ 210.7$ Intangible asset impairment charges (25.6) (1,190.2) GAAP operating income (loss) 1,394.1$ (979.5)$
Non-GAAP income (loss) from continuing operations, net of tax 813.1$ -$ Intangible asset impairment charges (25.6) (1,190.2) Income tax benefit associated with intangible asset impairment charges 5.4 23.2 GAAP income (loss) from continuing operations, net of tax 792.9$ (1,167.0)$
Non-GAAP income (loss) per share from continuing operations 8.94$ -$ Intangible asset impairment charges per share, net of tax (0.22) (15.26) GAAP income (loss) per share from continuing operations 8.72$ (15.26)$
ISI CONFERENCE MARCH 201130
Appendix: Non-GAAP Financial Measures
The table below presents reconciliations of the Company’s presented non-GAAP measures to the most directly comparable GAAP measures for the year ended September 30:
Free Cash Flow
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010Net cash provided (used) by operating activities (16.2)$ 65.8$ 79.9$ 39.0$ 49.7$ (8.4)$ 264.0$ 105.3$ 134.9$ 212.3$ 177.4$ 406.0$ 390.4$ 898.9$ 619.7$ Additions to property, plant and equipment (1) (5.4) (6.3) (8.5) (18.0) (22.7) (18.5) (15.6) (24.7) (29.9) (43.2) (56.0) (83.0) (75.8) (46.2) (83.2) Dividends paid (4.4) (4.2) (4.2) (4.2) (5.4) (5.7) (5.8) (6.4) (9.1) (16.0) (27.1) (29.6) (29.8) (14.9) -
(26.0)$ 55.3$ 67.2$ 16.8$ 21.6$ (32.6)$ 242.6$ 74.2$ 95.9$ 153.1$ 94.3$ 293.4$ 284.8$ 837.8$ 536.5$
(1) Excludes equipment held for rental