MOVING THE WORLD AT WORK Oshkosh Corporation (NYSE:OSK) Jefferies - PowerPoint PPT Presentation

MOVING THE WORLD AT WORK Oshkosh Corporation (NYSE:OSK) Jefferies 2015 Global Industrials Conference August 12, 2015

Forward-Looking Statements 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 cyclical nature of the Company’s access equipment, commercial and fire & emergency markets, which are particularly impacted by the strength of U.S. and European economies; the Company’s estimates of access equipment demand; the strength of the U.S. dollar and its impact on Company exports, translation of foreign sales and purchased materials; the expected level and timing of DoD and international defense customer procurement of products and services and funding thereof; risks related to reductions in government expenditures in light of U.S. defense budget pressures, sequestration and an uncertain DoD tactical wheeled vehicle strategy, including the Company’s ability to successfully manage the cost reductions required as a result of lower customer orders in the defense segment; the Company’s ability to win a U.S. Joint Light Tactical Vehicle production contract award and finalize international contracts for a significant quantity of M-ATVs, with sales beginning in fiscal 2016; the Company’s ability to increase prices to raise margins or offset higher input costs; increasing commodity and other raw material costs, particularly in a sustained economic recovery; risks related to facilities expansion, consolidation and alignment, including the amounts of related costs and charges and that anticipated cost savings may not be achieved; global economic uncertainty, 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 Company or equity market expectations; projected adoption rates of work at height machinery in emerging markets; the impact of severe weather or natural disasters that may affect the Company, its suppliers or its customers; 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 or shipment delays arising from quality or production issues; risks associated with international operations and sales, including compliance with the Foreign Corrupt Practices Act; the Company’s ability to comply with complex laws and regulations applicable to U.S. government contractors; cybersecurity risks and costs of defending against, mitigating and responding to a data security breach; and risks related to the Company’s ability to successfully execute on its strategic road map and meet its long-term financial goals. 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 July 30, 2015. All forward-looking statements speak only as of July 30, 2015. The Company assumes no obligation, and disclaims any obligation, to update information contained in this presentation. Investors should be aware that the Company may not update such information until the Company’s next quarterly earnings conference call, if at all. MOVING THE WORLD AT WORK Oshkosh Corporation Investor Presentation August 12, 2015 2

Oshkosh Corporation Access Equipment Defense Fire & Emergency Commercial  Market Capitalization (1) :  $2.9 billion  Leading provider of specialty vehicles  FY14 Revenue: $6.8 billion – Moving the World at Work  Focused on delivering value to  Nearly 100 years in business; customers and shareholders incorporated in 1917  Serial innovator of game changing new products (1) As of July 31, 2015 MOVING THE WORLD AT WORK Oshkosh Corporation Investor Presentation August 12, 2015 3

MOVE Strategy Driving Performance…  Focuses on drivers that create highest shareholder value  Supports higher margin targets across non- defense businesses over the cycle MOVING THE WORLD AT WORK …And Beyond FY15 Oshkosh Corporation Investor Presentation August 12, 2015 4

Recent Performance Some Success, Some Near-Term Challenges  Access equipment demand  Inflection point in defense softened beginning in Q3 earnings in Q4 – Actively managing costs and – Re-starting FHTV production inventory levels – Backlog up 38% at June 30; first  Increased sales, operating income increase since Q4 FY11 and backlog in Q3 at Fire &  International contracts expected Emergency and Commercial to drive return to growth in FY16 segments and FY17 MOVING THE WORLD AT WORK Oshkosh Corporation Investor Presentation August 12, 2015 5

Expectations for FY15**  Revenues of ~ $6.1 billion  Adjusted operating income* of $400 million to $425 million  Adjusted EPS* of $3.00 to $3.25 Segment information Access Fire & Measure Defense Commercial Equipment Emergency Sales ~ $3.4 ~ $0.9 ~ $0.8 ~ $1.0 (billions) Operating Slightly Above ~ 12.8% ~ 4.25% ~ 6.5% Income Margin Break Even Additional expectations Q4 Commentary Corporate expenses of $125 - $130 million   EPS lower than prior year as a result of lower  Tax rate of ~ 32% expected access equipment sales and operating income CapEx of ~ $150 million   Cash usage* ~ $150 million  Assumes share count of ~ 79.5 million MOVING THE WORLD AT WORK * Non-GAAP results. See Appendix for reconciliation to GAAP results. ** As of July 30, 2015. Oshkosh Corporation Investor Presentation August 12, 2015 6

Continuing to MOVE Forward Overcoming Short-Term Challenges Expectations:  Solid EPS growth in FY16 and FY17  Defense returning to meaningful growth – From trough earnings in FY15  Continued recovery in commercial and fire & emergency segments  Overcome mid-cycle dip in access equipment demand in FY15/FY16 – Partially mitigate impact with cost reduction  Resuming meaningful share repurchases – Initially repurchase 2.9 million shares (current authorization) MOVING THE WORLD AT WORK Oshkosh Corporation Investor Presentation August 12, 2015 7

Basis for Outlook MOVING THE WORLD AT WORK Oshkosh Corporation Investor Presentation August 12, 2015 8

Access Equipment – The Market Leader Reaching Out – Rising to Every Challenge  Believe longer-term fundamental  MOVE is delivering business drivers remain intact − Margin improvement remains a top opportunity – Improving residential and non- residential construction − New products driving customer demand – Replacement demand in Europe − Product adoption continues globally – Product adoption in developing markets − Market recovery element  Expect 5 – 10% sales decline in FY16 continues to lag MOVING THE WORLD AT WORK Oshkosh Corporation Investor Presentation August 12, 2015 9

Slow U.S. Construction Recovery is Continuing Housing Starts U.S. Non-Residential Spending Thousands $ Millions 1,300 700,000 1,200 650,000 1,100 1,000 600,000 900 800 550,000 700 600 500,000 500 400 450,000 Jan ‐ 2010 Jul ‐ 2010 Jan ‐ 2011 Jul ‐ 2011 Jan ‐ 2012 Jul ‐ 2012 Jan ‐ 2013 Jul ‐ 2013 Jan ‐ 2014 Jul ‐ 2014 Jan ‐ 2015 Jan ‐ 2010 Jul ‐ 2010 Jan ‐ 2011 Jul ‐ 2011 Jan ‐ 2012 Jul ‐ 2012 Jan ‐ 2013 Jul ‐ 2013 Jan ‐ 2014 Jul ‐ 2014 Jan ‐ 2015 Source: U.S. Census Bureau, July 17, 2015 Source: U.S. Census Bureau, August 3, 2015 U.S. Nonresidential Construction (yr/yr Growth) - Current Analyst Estimates U.S. Housing Starts - Current Annual Forecasts (millions ) Date 2015 2016 2017 Date 2015 2016 2017 Portland Cement Association Apr-15 8.8% 8.3% 6.3% Global Insight May-15 1.08 1.30 1.45 FMI Source Jun-15 8.0% 6.0% 5.0% Moody's - Slower Recovery Jul-15 1.04 1.20 1.64 Global Insight Jun-15 1.8% 4.0% 2.8% Moody's – Slower Recovery Jul-15 5.3% 6.2% 7.9% Portland Cement Association Apr-15 1.18 1.34 1.53 Construction Market Data Aug-15 10.4% 7.8% N/A Average Analyst Estimate 1.10 1.28 1.54 Dodge Data & Analytics Aug-15 11.6% 12.8% N/A Average Analyst Estimate 7.7% 7.5% 5.5% MOVING THE WORLD AT WORK Oshkosh Corporation Investor Presentation August 12, 2015 10