Post on 12-Feb-2017
INVESTOR PRESENTATION AUGUST 2016
This presentation contains 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 materially from these statements. These factors are contained in the Company’s filings with the Securities and Exchange Commission over the last 12 months, copies of which are available from the SEC or from the Company upon request.
FORWARD LOOKING STATEMENTS
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• Large market size and opportunity—Motorhomes $6.8B*, Towables $9.7B*• Solid demand— WGO retail registrations for Motorhomes and Towables up
9.1% and 25.3%, respectively, YOY on a rolling 12 month basis at May 30, 2016**
• Iconic brand synonymous with motorhomes• Favorable economic and demographic backdrop• Executive team reorganized to facilitate growth and profitability• Healthy balance sheet—no debt, $137 million cash, equivalents and
receivables***• Quarterly cash dividends—$0.10/share • Infrastructure and continuous improvement opportunities allow for greater
volume, providing leverage to margins and earnings* RVIA 2015 Industry Profile (Retail Value)
** Internally reported*** At May 28, 2016
INVESTMENT HIGHLIGHTS
3
INDUSTRY UPDATE
Economic Impact of RV Industry in North America
RVIA 2016 Industry Data
2,797Number of
RV Businesses
3,001Number of
RV Dealerships
$5.7 BillionTaxes
Paid by RV
Industry
$7.9 BillionDirect
Wages from RV Industry
155,608Direct Jobs
$27 BillionTotal Direct Economic
Output
$49.7 BillionOverall Industry Impact
RV S MOVE AMERICA
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STRONG CONSUMER CONFIDENCE HISTORICALLY LOW INTEREST RATES
Unites States Consumer Confidence IndexAs Of 7-28-16
Interest Rate Swaps - USD - 10 Year - Rate ValueAs Of 7-28-16
FAVORABLE ECONOMIC BACKDROP
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LOW FUEL PRICES WEALTH EFFECT/IMPROVING STOCK MARKET
Unites States Gasoline Monthly Price - Dollars per GallonAs Of 7-28-16
NYSE Composite Index ValueAs Of 7-28-16
U.S. POPULATION AGED 65+ EXPECTED TO GROW 69% FROM 2012 TO 2030 NEARLY HALF OF WINNEBAGO’S OWNERS ARE 60+ YEARS OLD**
Population 65+ by Age: 2010-2050Source: U.S. Bureau of the Census
FAVORABLE DEMOGRAPHIC BACKDROP
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• Camping is a solid target market– Leisure travel and camping continue to be popular*– Only 22% of the 29 million North American households that camp are RV campers
• Increasingly diverse potential customer base– Hispanic, African American, Asian and other ethnicities grew from 13% in 2012 to 23% in 2015– Younger campers (25-34 age) grew from 18% in 2012 to 23% in 2015– Generation X and Millennials seek more active outdoor experiences – Growth in use at sporting events and tournaments, craft shows, and collegiate sports activities
for alumni and fans* Kampgrounds of America (KOA) 2015 North American Camping
Report
20092010201120122013201420150
50100150200250300350400
Towables All Motorhomes
TOTAL SHIPMENTS TO RETAILERS BY CATEGORY
In T
hous
ands
of U
nits
AVERAGE SELLING PRICE
Motorhome~$128,000
Towable~$29,000
INDUSTRY DYNAMICS
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RECREATION VEHICLE INDUSTRY ASSOCIATION (RVIA) FORECAST MAY 2016
• Calendar 2016 wholesale shipments for all RV categories should increase 5.9% over calendar year 2015.*Source: RVIA 2015 Industry Profile
COMPANY UPDATE
HISTORICAL T IMELINE
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Incorporated in Iowa.Entered Towable
Market.
1958 1961Adopted Current
Legal Name
1966 First
Motorhome. IPO
1970 1977 100,000th Unit
Produced
Fortune 500 Debut
2000Purchased
Charles City, IA Facility
20052010
2011 2013 2015
Listed On NYSE
1986
Acquired SunnybrookRV in Middlebury, IN View/Navion
Launch
Re-entered Towable Market
Leased Lake Mills, IA Facility; Travato
Introduced
Purchased Waverly, IA Facility and Former Country Coach
Facilitiesin Junction City, OR
• Manufacturer of high-quality motorhomes, travel trailers and fifth wheels with facilities in Iowa, Indiana and Oregon• Non-union workforce of approximately 3,000 employees • Strong, growing North American dealer network• Strong Brand Equity
o American icon—synonymous with motorhomeso Prevalent use in TV and movieso Recognized by Statistical Surveys, Inc. as top selling motorhome brand every
year since 1974o Quality craftsmanship, smart design, functionalityo Connection and support of RV communityo Best in class aftermarket sales and service supporto Constant innovation of new products and floorplans
INDUSTRY LEADER S INCE 1958
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• Strongest brand in the industry • Diversified line of innovative motorhome and towables product using same strong
flagship brand• Commitment to industry-leading product quality and structural integrity• Key vertical integration value streams allow Winnebago to control quality and
material flow effectively• Excellent relationships with dealers, lenders, suppliers and consumers• Financial strength (solid balance sheet) allows investment in business, ability to
honor warranty / repurchase agreements, and sustain cyclical downturn• Thousands of employees who have spent their career dedicated to the RV
industry and to making the best products possible
COMPETITIVE ADVANTAGES
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*Suggested base retail price
Class B$90,910 - $124,100*• Travato• Era
Class C$70,567 - $125,574*• Minnie
Winnie/Spirit• Fuse• Trend• Aspect/Cambria• View/Navion
Class A Gas$93,545 - $202,433*• Vista/Sunstar• Vista LX/Sunstar
LX• Sightseer/
Sunova• Adventurer/ Suncruiser
Class A Diesel$133,420 - $467,670*• Via• Forza• Journey/Meridian• Tour/Ellipse• Grand
Tour/Ellipse Ultra
MOTORHOME L INEUP
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Travel Trailers$15,798 – $42,616*• Micro Minnie• Winnie Drop• Minnie• Instinct• Ultralite• Spyder Toy
Hauler
Fifth Wheels $34,793 - $74,305*• Voyage• Latitude• Destination• Scorpion Toy Hauler
*Suggested base retail price
TOWABLE L INEUP
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TOWABLE OPPORTUNITIES
13
2011 2012 2013 2014 2015 2015 thru Q3
2016 thru Q3
$16.7
$56.8 $54.7 $58.1
$71.7
$48.9
$62.8
Revenue Growth
In Millions
33.8% CAGR
1% 5% 10% 20%
$88.0
$440.0
$880.0
$1,760.0
Net Revenue at Various Market Shares*
Current WGO Towable Market
Share
Emphasis on WGO Brand Began
In Millions
• Significant growth opportunity available
• Continue to leverage premium brand– Growth and profit accelerated
when emphasized• Expand distribution points• Differentiated customer experience• Exploring non-organic growth
*Assumes $8.8 Billion Market
Provides incremental growth and diversification
Winnebago Fuse
Built on new Ford Transit chassis, offers fuel efficient diesel
engine
Instinct Luxury travel trailer
with upscale amenities
Winnie DropRetro tear drop trailer with modern amenities
INNOVATIVE NEW PRODUCTS
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Winnebago VistaNew floorplans at entry price
points
WINNEBAGO MARKET SHARE
15
Thor Industries Forest River Grand Design Gulfstream Coach Winnebago Other
51%36%
3% 2% 1% 5%
*Percent as reported by Statistical Surveys, Inc. for North America for Rolling 12 Months (June 2015-May 2016)
Thor Industries Forest River Winnebago REV Group Tiffin Newmar Other
34%25%
19%
7% 6% 4% 5%
Mot
orize
d M
arke
t Sh
are*
Tow
able
Mar
ket
Shar
e*
2009 2010 2011 2012 2013 2014 2015 2015 thru Q3
2016 thru Q3*
$(1.16)
$0.35 $0.41 $0.25
$1.14
$1.64 $1.53
$1.09 $1.20
EPS*
FINANCIAL PERFORMANCE
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2009 2010 2011 2012 2013 2014 2015 2015 thru Q3
2016 thru Q3*
$211.5
$449.5 $496.4 $581.7
$803.2
$945.2 $976.5
$725.5 $712.0
Consolidated Net Revenue
2009 2010 2011 2012 2013 2014 2015 2015 thru Q3
2016 thru Q3*
-14.5%
5.8%8.0% 7.5%
10.5% 11.0% 10.7% 10.6% 11.4%
Gross Margin
*Excludes impact of tax valuation allowances
2009 2010 2011 2012 2013 2014 2015 2015 thru Q3
2016 thru Q3*
-28.1%
0.1%2.3% 1.6%
5.5% 6.8% 6.1% 5.9% 6.6%
Operating Margin
2009 2010 2011 2012 2013 2014 2015
-24.4%
1.5%3.4% 2.5%
6.1% 7.2% 6.5%
EBITDA %
FINANCIAL PERFORMANCE
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2009 2010 2011 2012 2013 2014 2015
-30.0%
4.6% 5.1%
17.1%
10.7%13.5% 11.4%
ROA
2009 2010 2011 2012 2013 2014 2015
-59.2%
10.8% 11.5%
35.5%
20.3% 24.8% 19.9%
ROE
2009 2010 2011 2012 2013 2014 2015
-41.9%
8.4% 10.7%
31.9%
19.0%24.0%
20.0%
ROIC
PLANNING THE JOURNEY
THE ROADMAP TO SUCCESS
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• Market & Financial Feedback• Independent Assessments
Setting a Vision
• New Corporate Vision• Updated Values
• Refreshed Leadership & Org. Design• Define Future MSP Value• Modernize/Align Employee Incentives
• Normalize Major Initiatives (ERP, Oregon & Sourcing• Fuel Towables Growth• Seed Strategic Competencies & Partnership• Brand Revitalization
• Create 3-5 Year Strategy• Identify Target NBD Segments
Case for
Change
LRP + NBD
2017 Bridge
Staging the
Organ-ization
2020 Initiative
• Multi-Year Employee Drive Initiative• Market and Financial BHAGs
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Our PurposeWe help our customers explore the outdoor lifestyle, enabling extraordinary experiences as
they travel, live, work and play.
Our VisionWe will be the trusted leader
in outdoor lifestyle solutions by providing unmatched innovation,
quality and service in the industries we engage.
Our MissionTo create lifetime advocatesthrough a relentless focus on
delivering an unsurpassed customer experience.
Our ValuesCustomer-Centric Results Driven Innovative Quality-Focused Collaborative
Trusted
Guiding PrinciplesWe respect our roots and legacy of success; we do not rest on them. We work to understand our customers’ unmet needs and develop solutions and an experience that creates lifelong advocates. Our employees are driven and caring. We strive to develop the best talent possible and enable a culture of servant leadership. We embrace thoughtful change in order to compete effectively and deliver market leadership as well as superior profitability.
We will work strategically with our channel partners to help them succeed and exceed our mutual end-customers’ expectations. We will continue to build respected brands that will be among our greatest assets. In every part of our company, we relentlessly pursue continuous improvement and enhanced productivity, driving out waste and creating ongoing and meaningful differentiation.
WINNEBAGO INDUSTRIES VIS ION
REFRESHED LEADERSHIP TEAM
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• Executive Leadership Team– 50% of CEO Direct Reports Ultimately New to Winnebago Industries– Stronger Business Unit Approach to Strategy and Execution
• Executive Officer (Former WGO Motorhome Executive) Now Leading Towables Business Unit
• New, Dedicated Leader of the Motorhome Business– Matrixed Shared Services Support & Oversight Leads to Extended Best
Practices Across WGO– Increased Leadership Competencies Around Lean and Business Development– True Enterprise Mindset and Accountability
VP – General Counsel VP - CFO VP -
Towables VP - CIO VP – Corp Strat & Dev VP – Ops & CI VP -
MotorizedVP – HR &
Admin
ERP Optimization
Business Intelligence
Digital Infrastructure
Connected Experience
Strategic Culture
NBD Capabilities
Brand Revitalization
Differentiation
CI Transformation
Untrap Capacity
Future State Footprint
Enterprise Leverage
Focused Leadership
NPD Vitality
Dealer Trust
Ownership Experience
Exec Officer Champion
NPD Vitality
Leverage MH Strengths
Plan for Growth
President & CEO
Existing Talent
New Talent
Repositioned Talent
• ERP system will empower timely and effective business decisions and increase productivity
• Strategic sourcing initiative will identify material short-term COGS savings and establish long-term procurement discipline
• New manufacturing and service facility in Oregon will create more streamlined assembly process for Class A diesel product line and free up significant capacity in Iowa facility for increased motorized production of Class A gas and C categories
• Reshaped executive leadership team structure will effectively blend current and new ideas, while creating stronger organizational design for success
• New Minneapolis / Saint Paul office provides base to recruit additional intellectual capital, access key partner relationships, engage customers / BOD differently, and broaden network of possible allies and engagement of best practices
• Major assessments around Brand Health and Operational Health conducted to identify key and multiple business improvement opportunities
• Utilized outside firm to assist Board of Directors in internal engagement assessment and define experience / skills inventory to aid in future evolution
TO DAY ’ S I N V E S T M E N T S F O R TO M O R R OW ’ S G R O W T H
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FUTURE STRATEGIC PRIORITIES
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Build a Performance Culture
Revitalize & Leverage Our Iconic Brand
Streamline & Strengthen the Core
Expand Within / To New Markets
Elevate Excellence in Operations
Create Connected Customer Advocacy
1. Drive Profitable Organic Growth
2. Deliver Consistent and Increasing Dividends
3. Smart Acquisitions
4. Share Buyback
CAPITAL ALLOCATION PRIORITIES
23
* RVIA 2015 Industry Profile (Retail Value)** Internally reported*** At May 28, 2016
INVESTMENT HIGHLIGHTS
24
• Large market size and opportunity—Motorhomes $6.8B*, Towables $9.7B*• Solid demand— WGO retail registrations for Motorhomes and Towables up
9.1% and 25.3%, respectively, YOY on a rolling 12 month basis at May 30, 2016**
• Iconic brand synonymous with motorhomes• Favorable economic and demographic backdrop• Executive team reorganized to facilitate growth and profitability• Healthy balance sheet—no debt, $137 million cash, equivalents and
receivables***• Quarterly cash dividends—$0.10/share • Infrastructure and continuous improvement opportunities allow for greater
volume, providing leverage to margins and earnings
MOVING FORWARD