Jefferies Global Industrials Conference 2026

Sep 10, 2026

Slides

Summary

Access outlook turned more positive, with growth expected through 2027; postal and defense contract transitions support margin gains through 2028. Fire-truck investments target higher output, while refuse demand is expected to clear within 12–18 months.

You always find the right Steve. All right, let's move on. Good morning. For those who weren't in the last session, I'm Stephen Volkmann, Jefferies Industrial analyst. Very pleased to welcome Oshkosh to the dais. We are going to do a fireside chat. Would love to have participation from the field. If you guys are so inspired, we'll give you an opportunity to ask some questions as well. I will kick it off. First, very pleased to welcome two folks from Oshkosh here. Matt Field is the CFO, Pat Davidson handles investor relations. Let's dive in and talk about some of the recent Oshkosh trends, shall we? Great. Thanks for having us. Thank you for coming. Let's talk about, maybe just get this out of the way. We are on a webcast. I actually didn't do this yesterday. At the end of the meeting, the company person admonished me and then provided an update. Would you like to provide any updates on how things have gone in the third quarter? We are just here to talk about the overall business, so no updates on the quarter. Very good. Happy to answer questions. Yep. I just want to give you the opportunity. That's great. Let's dive in then. The Access business seems like it's turning and starting to drive some upside for you. Just talk about what you're seeing in Access and where you think we are in the cycle. Yeah. As you know, we spoke earlier in the year and some of the investors in the room I've spoken to multiple times this year. When the year started on Access, really, I was thinking it was going to be flat to maybe even down. A lot of us were seeing data that was saying it might be negative year-on-year. Our call initially for the year was a flat outlook. As we progressed through the year, we certainly saw some of those early signs of strength flowing through, whether that's, I'd say early in the year, we saw strength in dirt outside our sectors that were early indications. We've seen that now flow into higher CapEx announcements from the rental companies. Certainly I've switched on to the more positive outlook. For those who don't know me, I'm always on the conservative side of things and maybe on the negative to pessimistic side of things. That's been a change in our outlook for the Access segment. We think that's going to be more positive than we were earlier in the year. We do see that growth continuing to 2027, despite the fact that we probably won't get an interest rate cut this year. Originally, our outlook was assuming we'd get an interest rate cut, and that might broaden out on non-residential at this point. We see non-residential quite strong based off mega projects driven through a lot of the NRCs, and we think that outlook will continue into 2027. What are you seeing from sort of large national accounts versus more regional or local type customers? Certainly, we've seen a product mix relative to past years of products going into NRCs, so these mega projects clearly are flowing through the national rentals. The IRC is really supporting some of that in supporting roles. If we get a broader build-out of non-residential, whether that's local shopping malls or multi-residential units or some of the other stuff that had been stronger in past years, then I think I would be confident to see even more sustaining, broader boom in the long term. Boom. Favorable outlook. Right. I thought that was a pun, a boom pun. I am not that good. The one question I get from investors around this is, there is a question about whether some of the strength that we are seeing in aerials might be folks trying to get ahead of price increases for 2027. Does that ring true at all with you? It is not something I am aware of. That is not saying it is not happening. I am not in the exact negotiations. There certainly are discussions on long-term prospects and outlooks. But whether that is getting ahead of pricing, I would Does it make sense to think that pricing will be up meaningfully in 2027? Well, certainly we've got a number of cost pressures this year that we've been managing. We're doing a lot of that through cost reductions. But then as we've talked throughout the year, talking about price with continued cost pressures, we'll continue to aggressively go after costs, but we might have conversations about price, too. As you see, a lot of raw materials moving. Oil obviously hit $100 yesterday, so understanding how we manage all those will flow through to price potentially for what we can't mitigate. Okay. Let's just talk about the product a little bit. What's going on in terms of innovation in aerials, and how does that play through in terms of demand generation? Yeah, there's a number of areas of innovation. We talk about it as Pat's got the slide up here, Airport of the Future, neighborhood of the future, job site of the future. There's a number of areas where we think robotics can play a strong role with artificial intelligence and autonomy. At CES, we had a welding demonstrator, which you see on the screen there. But even more so, things like connected technology, ClearSky connectivity, which all our products have, which allow our equipment to talk to each other and be activated. We see a future whereby we're actually potentially selling services to the end customer, where we turn on and off machines or activate employees. But also it's innovation on the hardware side. So one of the big growth channels for the whole sector, not just us, but we participate in it as well, is micro-sized scissors, so smaller, narrower scissors that operate inside the maintenance of data centers. That's been a real growth area for the overall industry. Lastly, I would say there's product innovations like we had at CONEXPO. Conexpo CONEXPO, with a two-piece boom, which allows us to build a lighter boom casing, which allows us to carry a heavier weight in the basket. Both hardware innovation, but also software and technology innovation. Okay, good. Just maybe the last one on Access. Your largest competitor seems to be going through some potential ownership changes. Is anything that you are seeing with respect to that in the market? No, they have always been a strong number two. I think they continue to operate in the market as such. Okay, great. Let us move to Defense. I bet you did not see that coming. No. So- Transport division with defense. Transport division with defense. Maybe just to refresh the group here, where are we on the postal contract in terms of deliveries and how far through the process and what are the next steps? For those who aren't familiar, we build the Next Generation Delivery Vehicle. You can see it on the slide here. It replaces what we all know and love, which is officially called the LLV, Long Life Vehicle, and has certainly lived up to that nomenclature with the last one built in the mid-1990s. The Postal Service is upgrading its fleet to a modern, safe vehicle where a postal delivery carrier can actually stand in the back and deliver packages. Whereas the original truck was designed for delivering mail and catalogs primarily. It has modern safety features. I know they're radical to everyone in the room, like air conditioning, airbags, and ABS. But those are not in the existing vehicle. Really excited to provide this vehicle to postal carriers across the U.S. We've got more than 35 million miles driven on it, and so you're seeing them more regularly in neighborhoods now, which is really exciting because even with investors, and we meet with a lot of investors throughout the year, they even get excited when they see them and they tell us at conferences and tell us stories about how they run to the postal carriers and ask them all sorts of questions. And how, quote, "It's as if we gave them talking points." Which we don't, just for the record, nor do we have them painted or stenciled on the side of the truck. But they are a spectacular vehicle. We are a ramp in production. We've had, I think, we did our 5,000th early this year. I don't know exactly what number we're on now, but delivered thousands of them to the U.S. Postal Service. Really pleased with how they are performing in the wild, so to say. Production is going well. Not without its challenges, I have to say. Any manufacturing ramp-up is a learning event, so as we increase pace, we learn more, but it is going well. Good. I think I have sent Pat a couple of photos from the wild as well. That is great. So- None in my neighborhood yet. They are getting out there a little bit. They are. You mentioned sort of a few challenges here and there, as that is pretty normal with these big ramps. Where are we in the challenges? Are those behind us, or we are still- We have gotten through most of them. We are still working through. Whenever you have this much automation in parts of the plants, it is still tweaking robots to make sure they are doing the right thing at the right time. We have put in mitigation efforts to support the ramp-up in the production. I am confident we will get there. And we are pleased with the quality off the line and how we are managing that. It is just now a matter of dialing it in. Okay. I think we're due for a follow-on order at some point coming up, which may actually trigger a margin improvement. Can you talk about that? Yeah. The way government contracting work, this contract is for 165,000 units. We have an order for 51,500. That's kind of the first set of orders. As we get additional orders, we then kind of account for that across the whole contract due to government accounting. As you get deeper into the contract, you start seeing the broader margin expansion that we expect for the whole contract. As we get orders, you'll see improved margin. We're expecting our first order this year. That's really driven by supply chain needs, making sure our suppliers understand their needs for the next production and having certainty. You don't want your supplier to get a phone call from one of the big three or somebody else saying, "Hey, we want you to use your capacity for X, Y, and Z." Then we're kind of stuck in the future. Making sure we're managing the supply chain with the customer is really important. We'll expect to get on a cadence of orders with one expected this year. That'd probably be fourth quarter? That is our estimation. I do not know exactly when or the magnitude of it, but our anticipation at this point, just given fiscal years and so forth, my guess is Q4. Okay. There seems to be some change in governance at the Postal Service as well. Most of that, I think, is aimed at voting rather than vehicles. Is there any risk that that upends any of this? I obviously cannot guarantee an order timing. But the need for vehicles is very clear. The existing vehicle, I kind of talked about it earlier, but the Postal Service right now is spending $5,000-$10,000 per vehicle per year in maintenance costs. I think both the economics and the safety and reliability of the new vehicle are quite apparent. Okay, good. Let us switch to actual defense now. Just remind us a couple of your larger contracts. I think you have seen some turnover there on the contracts, which has helped margins a little bit. Let us talk through that. Yeah. As you can see, I got to look over the screen there. All right. The two major contracts we have are the heavies and mediums. The heavy is what's on the upper left. The medium is the lower left, as you see the slide there. In terms of the heavies, we signed a new contract in 2024. As a reminder to those who do not follow us super closely, when we hit an inflationary period, we were under fixed price contracts as most government contractors, if not all of them were. The margin shrunk in 2022, 2023. Those contracts stick around for a while. We signed the new contract for heavies in 2024. We received orders under that. We started building those trucks in late 2025. You have a wind down of building under old trucks and a gradual increase of building under new trucks. It is not binary like if you are building, let us say, automotive vehicles where you stop production, you start production. How it shows up in the financials is more gradual. But we do start seeing that margin improvement from the heavies this year. We then signed a contract for the mediums in 2025 with new pricing, and we start building those late this year. Certainly going into 2027, we see primarily building under the new contracts. That is one of the drivers behind our 2028 guidance, where we show this segment going to a 10% margin overall by 2028, whereas last year was about 3.7, I think was the number, a little bit less than 4. That is one of the largest drivers. It is not just growing the postal delivery vehicles, which we just spoke about, but it is also building under these new contracts. Okay. As you get toward that margin target, it sounds like most of the drivers are these contract changes across postal and defense. Is there anything you need to do internally to hit that target? Just build the trucks. Yeah. Okay. Yeah. Fair enough. Before we leave, I would be remiss because I just love the pictures, without pointing out the ROGUE-Fires, which is just in the middle there. We talked about the technologies in Access and the job site of the future. One of the exciting technologies that we have is autonomy and building autonomous capable products. Actually the middle one there is ROGUE-Fires. It is a Marine Corps contract we got another award for this year. A fully autonomous JLTV platform, which can carry multiple payloads. As we think about the future in this segment, autonomy plays a big role, and we want to be that platform of choice, whether that is as you see there in ROGUE-Fires or the vehicle above that, which is the PLS, Palletized Load System A2, which is autonomous-ready. So really being that platform of choice, whether that is that or other products, is one of our key missions. Okay. Actually, I was going to go there as well, because I think you had a recent visit from our, what are we supposed to call him now? Department of War Secretary. Department of War Secretary. There was some discussions around potentially restarting the JLTV line. Talk about that. Yeah. We were really excited to welcome Secretary Hegseth to our assembly operations two weeks ago, I want to say. Yeah. It was really great to have him on site and see our production capacity and capabilities. I know you visited our plant. The plant that builds these vehicles also builds our S-Series concrete mixer, which is in our vocational segment. So a real commercial and defense application in that plant. He also had the chance to drive the M-ATV, which is what he was in in Afghanistan, but also drive our JLTV, which you can see in the lower left. Yes. Sorry. I might have rights and left messed up here, but I am not paid for right and left. I am paid for the numbers. The JLTV, which we built for many, many years successfully, performs spectacularly. Nobody has ever driven it or ridden in it. It is a far step above other vehicles in that space. But the Marine Corps has asked for a request for information earlier this year to support their needs, and we did respond to that. We've also invested ahead of that so that we can go from a warm line, which is not building JLTVs, to servicing a Marine Corps order in 10 months. We were explaining that on the trip as well, but it was great to host him. How can investors handicap the potential for something like this? Go to Polymarket. No, I don't know. I joke. I don't support any of that, but I don't know, honestly. I would say, follow the news. We build a fantastic JLTV product and we're happy to serve if we can. But handicapping it, I don't have any advice on that. I'm not a bettor gambler or I don't even do fantasy football. All right. Fair enough. Okay. So maybe the last bucket of things to chat about product-wise would be vocational. And there you've been doing some work to improve throughput. Just bring us up to speed on what you're doing and where you are with that. Absolutely. In the vocational segment, our largest operation is Pierce Fire Trucks. It is the number one fire truck brand in the U.S. It is over 100 years old. Fire trucks, for those who do not know the fire truck industry, everyone loves a fire truck. That is the one thing I have learned in this role. It was not surprising to me because I loved fire trucks before I joined Oshkosh. I am a runner, and I was running through New York yesterday, and it is just shocking to me when fire trucks come out of a fire department here, people stop and take videos of FDNY driving through the streets, just to show the power of the service that fire departments provide, and the trucks they use are a visualization of that. The sales director of Pierce joked with me once, and I used this joke repeatedly, so those who I see later in the day, I apologize because you will hear it again, that if you have seen one fire truck, you have seen one fire truck. They are that unique and customized. Now we have an array of less customized vehicles, but for the most part, what we specialize in and what people ask for is a highly customized fire truck. What that means is the manufacturing processes were established decades ago, and really without the industry largely expanding, they have stayed the same. What we were originally focused on was using high flow manufacturing processes and breaking bottlenecks in our facilities and investing $150 million to increase production throughput. That was based off work we have done at McNeilus, which is our refuse brand. You can see a picture there in the upper left. Yep, got that right this time. Taking those principles into fire trucks, which is great, and it makes sense, and you can model it all out, and we have done that, and I can see how we are going to improve our production throughput by 25%-30%, which is what we talked about at our Investor Day in 2025 and the journey we are on. What we did not fully understand is the flow of material, in particular, fabricated parts. If you look at that beautiful fire truck on the right, all that metal that you can see there, all those boxes, there are storage units, all those doors, those are all fabricated in-house, as is all the shiny metal. If you have a step that is 1 foot, that is great, but some steps might be 1.2 feet or 1.3. All of those are bent and cut and welded in-house. Making sure the flow of those parts internal to the plant are working effectively as you speed up the plant. That is really where we are focused now. The processes, as we relocated them or broken bottlenecks, those are looking good. Now we are really focused on making sure the flow of parts can support the same line speed. That was the learning we had in the second quarter, was just we need to really look at how do parts go within the plant, throughout the plant. Is it becoming a little bit less custom then? Is that the process or is it just- No. We would certainly be happy. We have a Build My Pierce program, which takes it down from whatever, 2 million options to 10,000 or something. That certainly could increase throughput, but if a fire truck wants a fully customized truck, we are still going to build it because the exacting standards of each fire department is different. Some need tight turning radiuses, some don't. Some need more onboard water, some need less. It really varies truck by truck. Our job is to create a flexible assembly line that can manage that complexity in an efficient way. The great thing about the investment and why I have been so comfortable with it, because I have gotten this question a lot over the last year is, well, you have got a backlog now that is three, four years. What happens when that normalizes? What happens if the industry starts to slow a little bit? What is great about the process we are putting in is it is a very flexible line. When we need extra capacity, you can run it faster. When you don't, you can run it super efficient. It is not just throwing bricks and mortar up. It is really redesigning how fire trucks have been built for the first time in probably 50 years. What are lead times now, and where do you want them to be? Lead times are still extended. If I was taking a custom fire truck order today, it would be probably 2029 or so. That is too long. It really needs to be 12 to 18 months. That is what we are working towards, is building more fire trucks faster, with the quality and customization that our customers want. Okay. I think you are on track to increase production 10% this year. Is that still right? Yeah. That is our goal this year is by the end of the year, we would increase production 10%. Last year, we got a 10% increase in the second half of last year relative to the prior year. We are targeting 10% by the end of this year, with the goal of getting 25%-30%. How do you expect the margins to step up then, as you go through this process? You saw that in the second quarter. It's taken a little bit of a dip as we've invested in the facilities, as we've had some more assets in place, labor and otherwise, to build fire trucks during the transition. Over time, we expect us to be solidly in that 16%-18% margin range that we guided for 2028 for the segment. Okay. Then maybe lastly, not leastly, refuse, maybe the one end market that hasn't been sort of showing growth recently. Talk to us about sort of where we are in the cycle for refuse and how that plays out. Yeah. Really excited with our McNeilus brand, which is our go-to-market brand for refuse trucks. You can see our Volterra there on the upper left. Thank you. This one actually faces me. I should be able to do this without looking, but anyway. The Volterra is a fully electric vehicle designed around the driver with, as you can see in the picture, optimized visibility, but also ergonomics and the ability to step into it. We're really excited about innovations we launched in that sector around refuse identification, adding technology that makes the vehicle safer and more productive. So really excited about that end market, but it is in a slower state this year. We saw it come off a strong demand last year. The indications we have is that the end market, which is municipalities, I guess the end market really is us. We generate garbage, but the people who contract the services are the municipalities, are really taking a pause on ordering or signing new contracts, given inflation, given uncertainty around tariffs. So without new long-term contracts in place, the waste haulers are pausing some of their purchases of trucks, which then affects us. So I think we'll be through it in the near future. I don't know if that's late this year. I don't know if it's next year. But the reality is the flow of the process, the creation of refuse and recycling hasn't changed at all. So the age of the fleets are still aged, and so at some point, that flow and industry needs to come back. But it's down, call it 20%-30% this year relative to last year. So I think it'll come back at some point. I just don't have exact timing on that. It's hard to find data on that cycle from our perspective as external folks. Where do you think we are in that cycle? Do we normally have more than a year of downturn? It's a great question. I've looked for the same data and I haven't found it either, so I'm glad to see I'm not alone. All indications are it shouldn't be an extended one because, again, the drivers of the pause in demand are uncertainty around the tariff environment and some of the 2027 model year engine upgrades, some of the EPA certifications and so forth. We're going to get through those. Certainly, the tariff environment appears to be stable-ish. I think we should see a clearing of this probably in the next 12 to 18 months. Okay, good. All right. That's a good round the horn on the businesses. Maybe we'll take a moment. Anybody would like to ask a question here? All right. I can keep going then. Sure. You started to talk a little bit about technology and your tech stack and how you are sharing that amongst businesses. I think maybe it might make sense to delve in a little deeper there. Yeah. How do you share that amongst the businesses and what are the attach rates? What are the responses you are seeing from customers? Technology is one of the most exciting parts about this business. One of the things I love about commercial vehicles and the end markets we serve is that you do not really need to guess what customers want. You sit with them, and they will tell you what their pain points are. They can tell you, "Hey, I want my side loader to be five seconds faster, because then I can pick up X more cans per day." They will tell you their pain points about airport rescue firefighting. You can see a little bubble there with our ARFF truck. The electrification solves, because if you have an electric ARFF, it actually manages your pump, so you can pump and drive at the same time without having to manage the engine and the revs for that. We see a lot of opportunity with technology, and we have shared that to date on multiple fronts. Electrification is one of those examples. We have an electric fire truck that is a combination electric diesel. We have the same on the ARFF truck, the airport firefighting truck. We have an electric refuse truck that I spoke about earlier. Electrification is one of those skills that crosses vehicles. In fact, at Eurosatory, we had an electric JLTV, which we have had as a demonstrator and took to Europe. That electrification is one of those channels. Autonomy and robotics is another one that I am personally really excited about. We already have a JetDock, so we build jet bridges here in the U.S. primarily. We have autonomous JetDock, which is somebody standing much like you are at a podium, who has to handle a couple switches to get the jet bridge to the plane. JetDock 2.0 could allow that jet bridge to be monitored remotely and go straight to the plane. The ability not to sit on a plane and hear, "I'm sorry, we're waiting for somebody to man the jet bridge," is something near and dear to my heart, and I'm sure everybody who listens to this call. Bringing technology onto the tarmac, we think is a fantastic opportunity. That's either autonomous technologies with jet bridges, but also as you see on this picture, there's videos we've shown called Airport of the Future. Bringing robots onto the tarmac, because I didn't fully appreciate that when there's lightning, you can't have people out guiding planes in and helping park the planes. But you can have robots. What we've done is we've taken some of the defense technologies we have and identified applications in. Do you have? Yeah. Okay, good. Airport of the Future has that robot, in fact, there in the picture. Identified use cases on the tarmac, where you can take that robotic technology, sensing technology, and then bring it into jobs in the airport. This example here you can see on the screen is perimeter detection, because sometimes deer cross a fence or other things cross fences that shouldn't, and the airport needs to know that. There's also things like, there's a person who puts those, they're called chocks, those triangles that go in front of and behind the wheels. They have to put those in place. You could have a robot do that. Really excited to see that robotic technology go from, in this case, defense to airport, but also we invested in a robotics company, Nextera Robotics, for job sites, and we acquired technologies called Canvas, which does a drywall sanding robot. Yeah. It's a tough job. But it's great for robots. Bringing robotics to the job site, bringing it to the airport neighborhood is one of the things that really excites me. Okay, good. One more chance from the field here. We do have one. Hold on one second for the mic. Thank you. On price, cost, and Access segment next year, I would be really curious to hear your thoughts on kind of the most important considerations there for you being successful in that. Do you see any challenge in the way you are going after price with the NRCs versus IRCs? Is there typically a bifurcation in your ability to price between those two very important channels? I am curious if there are negotiations, that sort of thing, involved with the NRCs. Just kind of your degree of confidence going into next year. Thank you. Sure. Price cost is important for any company, especially in an inflationary environment or an environment where you are managing things like tariffs or raw material prices. Not unique to us. The first thing any company has a responsibility to do is do whatever they can to offset the cost impact. It depends on the driver of that cost impact. We talked earlier in this year a lot about managing tariffs, and that would be both through optimizing sourcing, how do you import parts, those various things. Footprint actions. So where you build, what you build. That is not just unique to the U.S., by the way. We localized boom lifts into our Hinowa facility, which we had been importing from our Chinese plant probably two years ago. Making sure first and foremost, you are addressing costs. Tariff engineering, tariff management is one. Sourcing. Negotiation is another one. Aggressive negotiation on cost and make sure you are buying at best cost, and that can be through scale across the company, and that could be through just understanding the best cost of design. Redesign. Making sure your designs are efficient is also your responsibility as a company. Production efficiency and kind of SG&A. Making sure you are efficient on your cost side first before you talk about pricing. Then you do need to talk about pricing for what you cannot offset. Obviously, that does differ. There are different prices at volume, as anyone knows who shops at Costco. You pay a lower price per item at Costco than probably anywhere else. I would hypothesize that might not be true on everything, but certainly, when you take home bulk cans of coffee, you tend to get a discount. That is true in our industry as well. We have those discussions ongoing. They are regular discussions. Nothing to talk specifically about 2027 on that, but it is something we work through to get price cost neutral by year-end this year. Then, we will talk about 2027 at the appropriate time. Have you launched that Costco BoomLift product yet? Not yet, no. It takes up a lot of floor space at Costco, so I think we did have to sell it the old sign. They do sell cars, though. Yeah. Anyway, let's not go down that rabbit hole. 1 minute and 30 seconds left. Should we talk about capital allocation quickly? Yeah. That's great. Priorities, plans. Thanks for that, Pat. Our capital allocation we shared at Investor Day in June 2025, very focused on, first and foremost, maintaining an investment-grade balance sheet. That's important for capital companies like ours that invest. Maintaining investment-grade balance sheet first and foremost, and then investing in our core business. You heard about a lot of those opportunities today, whether that's investing in fire truck manufacturing, whether that's investing in robotics and technology. But investing in ourselves is the single best return we have on our capital. Additional capital, we're committed to a steady increase in dividends. We've increased our dividend for, I think now 12 straight years by 10 percentage or more. Having a steady growth in dividend is important to our shareholders. It's important to us. We then look at the remaining capital. We're always looking at what companies might be a good role in our portfolio or technologies. We're evaluating our own portfolio as well, as well as we're looking at where our share price is and what our multiples are to determine the next best use of capital. We've participated in share buybacks throughout this year and last year as we think that's a good use of our capital for our shareholders. We've also looked at acquisitions. Some of those have come to fruition, like in 2023 when we acquired AeroTech or our acquisition of Hinowa, which allowed us to localize boom lifts. That's kind of what we look at as the last part of our capital allocation. All right. But investing in our core business, as we talked about, buying ahead to support JLTV and other things, that remains our best use of capital. Super. All right. That is right on time. Thank you guys so much. Appreciate the insight.