oshkosh Goldman_110508


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oshkosh Goldman_110508

  1. 1. Goldman Sachs Conference November 6, 2008 Built strong. Building for the future. Robert G. Bohn Chairman and Chief Executive Officer David M. Sagehorn Executive Vice President and Chief Financial Officer
  2. 2. Forward Looking Statements Our remarks that follow, including answers to your questions and these slides, include statements that we believe are “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 consequences of financial leverage associated with the JLG acquisition, especially given recent turmoil in the credit markets, the level of the Company’s borrowing costs and the Company’s ability to maintain compliance with financial covenants in its credit agreement; the cyclical nature of the Company’s access equipment, commercial and fire & emergency markets, especially during a global economic downturn and credit crisis; the Company’s ability to offset higher steel and raw material costs through other cost decreases or product selling price increases; the expected level and timing of U.S. Department of Defense procurement of products and services and funding thereof; risks related to reductions in government expenditures and the uncertainty of government contracts; risks associated with international operations and sales, including foreign currency fluctuations; the Company’s ability to turn around its Geesink business; risks related to the collectibility of access equipment receivables; and the potential for increased costs relating to compliance with changes in laws and regulations. Additional information concerning these and other factors and assumptions is contained in our filings with the SEC, including our Form 8-K filed November 3, 2008. Except as set forth in such Form 8-K, we disclaim any obligation to update such forward-looking statements. Built strong. Building for the future. 2
  3. 3. Oshkosh At A Glance Global leader in specialty vehicles 4 business segments, each over $1B in sales: – Access Equipment – Defense – Fire & Emergency – Commercial Broad product lines with leading market positions that generate significant free cash flow Growing international revenues and operations base Built strong. Building for the future. 3
  4. 4. Oshkosh Fiscal 2008 Highlights Sales increased 13.2% to $7.1 billion OSK Full Year Performance (millions) – International sales were $2.1 billion, or 30% of total sales $8,000 $800.0 $7,138 – Market share gains and record $7,000 $700.0 Operating Income $6,307 orders at Pierce and domestic $6,000 $600.0 Net Sales $596.3 refuse $582.0* $5,000 $500.0 $4,000 $400.0 $3,427 Operating income decreased $3,000 $300.0 $325.9 1.5% to $582 million* $2,000 $200.0 $1,000 $100.0 EPS decreased 5.9% to $3.37* $0 $0.0 2006 2007 2008 $283 million of debt reduction Net Sales Operating Income Cost reductions of $100 million in annual savings * Figures exclude non-cash charges for asset impairment of $175.2 million or $2.31/share Built strong. Building for the future. 4
  5. 5. Recent Highlights Multiple defense contract awards – Multi-year FHTV contract – MTVR reducible-height armor kits – UK Light Equipment Transporter (LET2) for 2010 – preferred bidder Significant opportunities in domestic refuse collection vehicles – Growth from customers ordering units to reduce fleet age – CNG-powered units starting to gain momentum Market share gains at Pierce and airport products Strengthening leadership Built strong. Building for the future. 5
  6. 6. Current State Conditions Market volatility and credit crisis make it very difficult to project fiscal 2009 Defense, fire and domestic refuse backlogs partially mitigate difficulties Better positioned to address challenging conditions – Improved cost structure; eliminated an expected $100 million of annual costs – Lowered debt and inventories – Actively sourcing in low-cost countries – Re-energizing operations with Global Manufacturing Services executive Moving forward with plan seeking to avoid or delay credit agreement amendment in fiscal 2009 – Action plans to drive $500 million or more in debt reduction – Will assess ability to achieve plan quarterly Continuing to invest in limited strategic global and new product development initiatives Built strong. Building for the future. 6
  7. 7. Access Equipment Key Markets: – Residential and non-residential construction, general industrial and military Challenges: – Soft construction markets, economic weakness in particularly North America and Europe – Higher finished goods inventories Our Actions: – Reducing cost structure: headcount, supply chain and expenses – Responsible inventory reduction Outlook for 2009: – N. America - lower – Europe - lower – ROW - higher Built strong. Building for the future. 7
  8. 8. Defense Key Markets: – Vehicles; mostly U.S with some international – Parts & service; domestic and in-theater Challenges: – Reset & recapitalization of equipment – Win new business – Margin pressure Our Actions: – Expansion into armored vehicle sales – International bids Outlook for 2009: – Growth in vehicles and parts & service • Recent FHTV contract renewal • MTVR reducible-height armor kit order • UK LET2 Built strong. Building for the future. 8
  9. 9. Fire & Emergency Key Markets: – Municipal (North America), airport (global), general industrial, mobile broadcast and mobile medical (global), towing and recovery Challenges: – Reduced tax receipts expected to lead to soft municipal spending environment – Economic weakness in North America and Europe Our Actions: – New products and stronger distribution leading to share gains – Lower cost structure, selected investments in growth opportunities Outlook for 2009: – Growth in fire apparatus and airport vehicles – Declines in most other markets Built strong. Building for the future. 9
  10. 10. Commercial Key Markets: – Residential and non-residential construction, refuse collection, mining, and general industrial Challenges: – Soft construction markets – Economic weakness in North America and Europe Our Actions: – Lowered cost structure; completed restructuring in Europe – New products (CNG-powered vehicles) leading to share gains & growth outlook – Expanding concrete products to more international markets Outlook for 2009: – Continued weakness in concrete mixer and batch plant markets – Strong refuse collection vehicle backlog – Improved results at Geesink Norba Built strong. Building for the future. 10
  11. 11. Oshkosh Financing Update $202 million debt reduction in Q4 – In compliance with financial covenants at Sept. 30, 2008 Driving plan seeking to avoid or delay credit agreement amendment in fiscal 2009 that requires: – Delivering earnings at higher end of estimate range – Achieving $500 million or more in debt reduction Tightly managing spending – Further reductions likely if demand softens Continuing actions to reduce working capital – Strong focus on inventory reduction – Negotiating European receivables sales program Limiting capital expenditures to $60 million Sufficient liquidity, even if amendment is necessary Built strong. Building for the future. 11
  12. 12. Oshkosh in Summary… Global market conditions are volatile and difficult to project, but Oshkosh is moving forward with: – Powerful leading brands – Prudent investments in key global markets – Value-driven sourcing – Lower cost structure to mitigate weak market conditions – Manufacturing excellence initiatives – Cash generation to deliver debt reduction The Oshkosh team is Built Strong and … …committed to Building for the Future Built strong. Building for the future. 12
  13. 13. Why Invest in Oshkosh? Business model Leader in key Strong operating team supports success markets Swift & decisive in Strong near-term outlook #1 or #2 player response to weakness for defense, refuse and fire Innovation leader Strong track record in Long-term growth Service second to none variety of conditions expected for access equip. Realistic & conservative Technology advantages Built strong. Building for the future. 13