2012 msa investor presentation - scene7

Because every life has a purpose…

© MSA 2012

2012 Investor Presentation2012 Investor Presentation


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Safe HarborExcept for historical information, certain matters discussed in this document may be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements, including without limitation all projections and anticipated levels of future performance, involve risks, uncertainties and other factors that may cause our actual results to differ materially from those discussed herein. Actual results can be affected by any number of factors, many of which are outside of management’s control. Among the factors that could cause such differences are spending patterns of government agencies, competitive pressures, product liability claims, the success of new product introductions, currency exchange rate fluctuations, the identification and successful integration of acquisitions and the risks of doing business in foreign countries. These risks, uncertainties and other factors are detailed from time to time in our filings with the United States Securities and Exchange Commission ("SEC"). You are strongly urged to review all such filings for a more detailed discussion of such risks and uncertainties. MSA’s SEC filings are readily obtainable at no charge at www.sec.gov, as well as on a number of other commercial web sites.


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Agenda

Introductions

MSA Today

The MSA Growth Strategy

Financial Highlights

Q&A


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MSA at a Glance

Only publicly traded safety company in the world

Founded in 1914 as supplier of safety equipment for coal miners

Today a global manufacturer of safety products and instruments serving a wide variety of end markets that includes: ● Oil and gas● Fire service● Mining● Construction● Utilities● Manufacturing

Headquarters: Cranberry Township, PA

Manufacturing: 11 locations, 8 countries

Employees: Approx. 5,300

NYSE: MSA

52-Week Range: $30.55 -$44.34

Market Cap: $1.4 billion

Shares Outstanding: 36.9 million


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Experienced Leadership

40President – MSA North AmericaJoseph Bigler

Name Position Years with MSA

William Lambert President and Chief Executive Officer 31

Dennis Zeitler Chief Financial Officer 35

Kerry Bove President – MSA International 32

Ronald Herring President – MSA Europe 29


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2011 Financial Summary

+80%$1.91E.P.S.

+200 bps6%Net Income

+300 bps11%Operating Margin

‐100 bps29%Operating Expenses

+200 bps40%Gross Profit

+ 20%$1.2 billionSales


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MSA’s Growth Strategy

1. Grow the Five Core Product Groups

2. Focus on Emerging Markets

3. Achieve Operational Excellence


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Grow the Core Products

2011 MSA Sales by Product Groups

Industrial Head Protection

10%

Supplied Air Respirators

18%

Fall Protection4%

Other Products39%

Portable Gas Detection

11%

Fixed Gas and Flame Detection

18%


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Head Protection

Leading provider of Hard Hats

Leading provider of Fire Helmets

Introducing Hard Hat Accessories

Developing Hard Hat Sales in Europe

Gaining Market Share

2011 Sales up 14%


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Self-Contained Breathing Apparatus

Global Leader in SCBA

Gaining market share

2011 Sales up 8%

NFPA Standard changes December 2012

Fire Fighter Location to be introduced Q3 2012

New platform SCBA in Q4 2013


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Fixed Gas and Flame Detection

Leader in Fixed Detection

Purchased General Monitors in 2010

Cross Branding Products

Integration going very well

2011 Sales up 12%


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Portable Gas Detection

Global Leader in Portable Gas Detection

Lowest Total Cost of Ownership

2011 Sales Up 14%

Higher R&D Investment

Portable and Fixed Gas and Flame Detection = 31% of Sales


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Fall Protection

One of the largest segments of the Safety Products Market

MSA is No. 4

Production moved to Mexico and China

R&D moved to China

Large opportunity for MSA growth


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Emerging Markets

2011 MSA Sales by Region

Easterm Europe2%

Middle East and India2%

Mexico and Canada7%

Africa7%

Western Europe20%

Asia & Pacific Rim11%

South America10%

United States41%


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Emerging Markets

Latin America, Africa, Middle East, Russia, Eastern Europe, Southeast Asia, China, Poland

New Affiliates: Russia, Colombia, Zambia

New Products: Low-Cost SCBA, Cap Lamp, GM Products and Hard Hat Accessories

More Sales and Marketing Investment

Emerging Markets grew +24% in 2011


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Operational Excellence

Five factories closed

Headquarters closed

New factories in Mexico and China

Expanded factory in Brazil

No new factory space needed


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Operational Excellence

New strategic pricing team established in 2011

Global sourcing efforts in progress

Global logistics opportunities: Western Europe and global freight

Improved demand planning in progress to improve deliveries and reduce inventories

Control operating expense growth (less than sales growth)


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Strategic Goals

Grow Sales of Core Products

Invest in Emerging Markets Sales Growth

Capture the Value of the MSA Brand

Reduce Manufacturing Costs

Control Sales, General and Administrative Expenses

Improve Operating Margins 1% per year, from 11% in 2011, to 15% in 2015


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Financial Highlights

Pro Forma Income Statement(Excludes FX and Restructuring Costs)

($ Millions) 2008 2009 2010 2011 Q3'12

Sales 1,134 910 977 1,173 875

EBITDA 160 110 109 163 13714% 12% 11% 14% 16%

EBIT 132 83 79 130 11312% 9% 8% 11% 13%

Net Income 77 50 47 77 717% 6% 5% 7% 8%

EPS - Basic 2.18 1.40 1.32 2.13 1.98


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Balance Sheet (9/30/2012)

($ Millions) 9/30/2012 ($ Millions) 9/30/2012

Cash and Equivalents $74 Notes Payable $1

Other Current Assets 411 Other Current Liabilities 181

Total Current Assets 485 Total Current Liabilities 182

Long-term Debt 304

PP&E, net 147 Pensions and Other Benefits 126

Prepaid Pension Cost 60 Other Noncurrent Liabilities 45

Goodwill 257 Total Liabilities 657

Other Noncurrent Assets 199 Total Shareholders' Equity 491

TOTAL ASSETS $1,148 TOTAL LIABILITIES AND EQUITY $1,148

Assets Liabilities and Equity


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Pro Forma Cash Flow

($ Millions) 2008 2009 2010 2011 Q3'12

Net Income 77 50 47 77 72

Depreciation and Amortization 28 27 29 33 24

Working Capital & Other (29) 71 (30) (2) (3)

Cash Flow 76 148 46 108 93

Capital Expenditures (44) (26) (25) (30) (25)

FREE CASH FLOW 32 122 21 78 68

Dividends/share 0.94 0.96 0.99 1.03 0.82


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Conclusion

Market leader and most trusted brand in safety

Long-term presence in emerging markets

Well balanced and diversified products, markets and geographies

A proven product innovator

Growth strategy with 15% Operating Margin goal

Strong dividend growth for over 50 years

The only publicly traded safety company


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Questions

2012 msa investor presentation - scene7

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