The Manitowoc Company STIFEL CONFERENCE, NEW YORK: JUNE 13, 2016
Safe Harbor Statement Any statements contained in this presentation that are not historical facts are forwardlooking statements. These statements are based on the current expectations of the management of the company, only speak as of the date on which they are made, and are subject to uncertainty and changes in circumstances. We undertake no obligation to update or revise forward-looking statements, whether as a result of new information, future events, or otherwise. Forward-looking statements include, without limitation, statements typically containing words such as intends, expects, anticipates, targets, estimates, and words of similar import. By their nature, forwardlooking statements are not guarantees of future performance or results and involve risks and uncertainties because they relate to events and depend on circumstances that will occur in the future. There are a number of factors that could cause actual results and developments to differ materially from those expressed or implied by such forward-looking statements. These factors include, but are not limited to, those relating to revenue growth of the company, future market strength of the company s business segments and products, market acceptance of existing products and new product introductions and technology, economic conditions, successful acquisitions, manufacturing and facility utilization efficiencies, risks relating to actions of activist shareholders, and other factors listed in the company s preliminary offering circular with respect to the notes, dated May 5, 2016. Any forwardlooking statements in this presentation are intended to qualify for the safe harbor from liability under the Private Securities Litigation Reform Act of 1995. 2
Agenda Manitowoc Transformation of Company Execution of Plan Future Growth Opportunities Building Something Real 3
Agenda Manitowoc Transformation of Company Execution of Plan Future Growth Opportunities Building Something Real 4
Investment Highlights Leading $1.9B Global Crane Manufacturer with Well-Known Brands Broad Product / Services Portfolio With Innovative New Products Diversified Geographic, End Market, and End Customer Exposure Unique After Market Support Drives Recurring Revenue Focus on Operational Strategies & Cost Saving Initiatives New, Operationally-Focused Team Driving Results Early stages of transformation to a high quality, higher margin crane company compared to peers 5
Manitowoc: Leading Global Crane Company Rough-Terrain Cranes High-Capacity Lattice Boom Crawlers Top-Slewing / Self-Erecting Tower Cranes All-Terrain Cranes Strong Market Positions with Leading Brands in each Major Crane Segment Boom Trucks 6
Manitowoc: Previously Announced Guidance 2016 Q1 Actual 2016 Full Year Guidance Revenue $427M Approximately flat Operating Margins 1 2.2% Approximately 4% Capital Expenditures $11M Approximately $45-50 million Depreciation and Amortization $13M Approximately $48-59 million Highlights Separation from Foodservice completed March 2016 Energy headwinds offset by modest recovery in residential/commercial Restructuring actions to position for 2017 Lean principles being institutionalized 1 Excludes amortization expense. 7
Building Something Real Manitowoc Transformation of Company Execution of Plan Future Growth Opportunities 8
Transformation: The Conditions are Right Stand-alone Crane Company Foodservice spin-off complete Right-sizing for new company structure Re-Capitalized Balance Sheet Sufficient liquidity Working capital focus New Management Team Demonstrated record of turnarounds Lean acceleration to drive margin improvement Cyclical Down-Turn Increasing manufacturing flexibility to manage through the cycle 9
Transformation: The Time is Right Boom Trucks/Industrials/Rough-Terrains All-Terrain and Truck-Mounted 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 Towers 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 Crawlers 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 ~ 8-9 year cycle (1) BRIM includes Boom Trucks, Rough-Terrain Cranes, Industrial Cranes and military applications. Rough-Terrain and Industrial Cranes are included in the Mobile Telescopic Cranes Product category. (2) AT/TM includes All-Terrain and Truck-Mounted Cranes, which fall under the Mobile Telescopic Cranes product category. (3) Crawlers include Lattice Boom Cranes. 10
Transformation: Vision for New Manitowoc Customers 1. Margin Expansion Velocity Innovation 2. Growth 3. Innovation Shareholders Employees 4. Velocity 11
Transformation: Strategic Initiatives Margin Expansion Optimize Global Capacity Increase Manufacturing Agility Improve Productivity Reduce Material Cost Growth Renew Focus on Quality & Reliability Strengthen Channel Management Increase Market Share Innovation Accelerate New Product Development Focus on ROIC for Our Customers Leverage Advanced Manufacturing Technologies Velocity Implement The Manitowoc Way Re-invigorate the Company Culture Strengthen Balance Sheet by Better Working Capital Mgmt. 12
Building Something Real Manitowoc Transformation of Company Execution of Plan Future Growth Opportunities 13
Execution: Margin Improvement Headcount reductions Plant rationalizations Increase manufacturing flexibility Material cost reduction Productivity Right-sizing the business to match new company structure, current market environment, and future expectations 14
Execution: Growth Improved quality & reliability Strengthen dealer engagement Sales excellence & training Improving competitive position to re-gain market share 15
Execution: Innovation Implement product development process Leverage advanced design techniques Invest in World-Class manufacturing disciplines Standardization of components Enhancing user productivity to generate greater ROI for customers 16
Execution: Velocity Build a continuous improvement-based culture Invest in productivity Reduce Working Capital Optimize back-office Better serving all of our stakeholders 17
Building Something Real Manitowoc Transformation of Company Execution of Plan Future Growth Opportunities 18
Future Growth Opportunities Customer Engagement Innovation External Growth Manufacturing Technology People Development Utilize Balance Sheet Increasing ROIC for All Stakeholders 19
Conclusion Leading $1.9B Global Crane Manufacturer with Well-Known Brands Broad Product / Services Portfolio With Innovative New Products Diversified Geographic, End Market, and End Customer Exposure Unique After Market Support Drives Recurring Revenue Focus on Operational Strategies & Cost Saving Initiatives New, Operationally-Focused Team Driving Results Early stages of transformation to a high quality, higher margin crane company compared to peers 20
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Appendix: Additional Materials and Financials
Manitowoc: Large Installed Base Extensive installed base across diverse geographies provides recurring service and replacement parts revenue opportunities Category Leading Brands Active Installed Base 1 Average Fleet Replacement 2 Mobile Telescopic Cranes ~55,000 7-9 years Tower Cranes ~50,000 3 Self-Erecting: 6-8 years Top-Slewing: 10-12 years Lattice-Boom Cranes ~9,000 9-12 years Boom Trucks ~27,000 7-9 years Total: ~140,000 1 Reflects management approximation of the active installed base based on internally available data. 2 Reflects management approximation of the average fleet replacement based on available data and feedback from the customers. 3 Includes top-slewing and self-erecting tower cranes. 23
Diversified by Region, End Market and Product Balanced Sales Footprint and Customer Segments We Serve 2015 2015 Geographic Exposure End Market Exposure 1 2015 Overall Customer Mix 2 2016 Q1 Revenue by Product 3 EMEA 36% Americas 52% Residential 5% Infrastructure 17% Industrial / Petrochemical 35% Other 4% Gov't 0.2% Rental 17% Contractor 13% Crane Care 18% APAC 12% Commercial 25% Power / Utilities 18% Dealer 66% Crane Products 82% Key Brands 1 Includes new equipment sales only. 2 Represents 2015 gross sales. Includes new equipment sales only. Government sales do not reflect our recent $192 million contract with the U.S. Army which will impact revenue over the next several years. 3 Crane Products includes new equipment sales only. 24
Recent Performance (US$ in millions) Quarterly Performance Commentary $427 Q1 2016 revenue was up 5% to $427mm versus $407mm in Q1 2015 Revenue Revenue $407 Increase driven by continued strength in tower cranes as a result of improving residential and commercial construction trends, as well as new product introductions Strength in crawler cranes driven by accelerating shipments of our VPC technology partially offset the decline in mobile hydraulic cranes Currency and low oil prices producing headwinds for mobile crane demand, particularly in the U.S. Q1 2015 Q1 2016 Costs Operating Earnings 1 $(7) $10 Q1 2015 Q1 2016 Operating earnings for Q1 2016 were $10mm compared to a loss of $7mm in Q1 2015 Produced a Q1 2016 operating margin of 2.2% compared to (1.8)% for Q1 2015 Q1 2016 margin improvement comes from increased sales and actions to right-size the business Backlog totaled $502mm as of 3/31/16 Depreciation and amortization for Q1 2016 were $12mm and $1mm respectively Capital expenditures were $11mm for Q1 2016 Diluted EPS of $(0.04) and $(0.21) for Q1 2016 and Q1 2015, respectively 1 Excludes amortization expense. 25
Historical Revenue and EBITDA (US$ in millions) Cranes generates significant revenue and EBITDA during cyclical upturns During industry downturns, predictable replacement demand and differentiated product offerings support demand Restructuring initiatives in progress Revenue EBITDA & Margin $1,708 $2,135 $2,427 $2,506 $2,305 $1,862 $300 $250 $200 $150 $149 $172 $214 $266 $210 30.0% 25.0% 20.0% 15.0% $100 8.7% 8.1% 8.8% 10.6% 9.1% $110 5.9% 10.0% $50 5.0% 2010 2011 2012 2013 2014 2015 $- 2010 2011 2012 2013 2014 2015 0.0% Revenue EBITDA % Margin Note: Revenue and EBITDA from 2010 2015 represent historical Cranes segment results. EBITDA is calculated as Operating Earnings from Continuing Operations plus Depreciation and excludes corporate allocations. 26
Historical Capital Needs & Cash Flow (US$ in millions) Moderate capital intensity and working capital requirements allow earnings to largely flow to cash flow Working capital needs decrease when revenue declines, providing a strong cash flow offset during industry downturns $140 Free cash flow¹ generation through the cycle Capex & % of Sales 30.0% Free Cash Flow 1 & % Conversion $120 $100 25.0% 500 450 20.0% 400 300.0 250.0 $80 $60 $40 $20 $- $69 $52 $53 $57 $52 $21 1.2% 2.4% 2.2% 2.8% 2.5% 2.8% 2010 2011 2012 2013 2014 2015 350 15.0% 300 250 10.0% 200 150 5.0% 100 50 0.0% 0 $196 $161 $152 $129 $120 86.2% $58 69.7% 75.4% 73.9% 72.7% 52.9% 2010 2011 2012 2013 2014 2015 200.0 150.0 100.0 50.0% 0.0% Capex % of Sales FCF % Conversion Note: Capex and Unlevered Free Cash Flow represent historical Cranes segment results. EBITDA calculated as Operating Earnings from Continuing Operations plus Depreciation and excludes corporate allocations. 1 Free Cash Flow defined as EBITDA less Capex. 27
EBITDA and Free Cash Flow Reconciliation (US$ in millions) 2010 2011 2012 2013 2014 2015 Earnings (Loss) from Operations 1 $ 94 $ 119 $ 171 $ 219 $ 164 $ 64 Depreciation 55 53 44 47 46 47 EBITDA $ 149 $ 172 $ 214 $ 266 $ 210 $ 110 Capital Expenditures (21) (52) (53) (69) (57) (52) Free Cash Flow $ 129 $ 120 $ 161 $ 196 $ 152 $ 58 1 Cranes segment data; excludes amortization expense, allocation of corporate costs, asset impairment expense, restructuring expense, and other (expense) income. 28
March 31, 2016 Trailing Twelve Month Adjusted EBITDA Reconciliation (US$ in millions) Net loss $ (132.1) Loss from discontinued operations (115.9) Depreciation and amortization 68.1 Interest expense and amortization of deferred financing fees 85.9 Costs due to early extinguishment of debt 72.2 Restructuring expense 14.4 Income taxes 91.4 Pension and post-retirement 14.7 Stock-based compensation 6.9 Other 17.4 Adjusted EBITDA $ 123.0 29
Global Footprint Manufacturing footprint and extensive sales and customer service reach to serve both mature and emerging markets Key Statistics 12 manufacturing sites in 8 countries Approximately 40 regional sales and support offices across 20 countries ~5,300 employees across North America, Latin America, Western Europe, the Middle East, Asia, and Australia Sales / Distribution Representation Sales / Service Facility Manufacturing Facility 30
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