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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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© MSA 2012
Financial Overview
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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
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