Polaris Inc. · NYSE:PII
Polaris — Polaris Industries — Investor Presentation (March 2010)
28 slides from Polaris's investor presentation, Mar 4, 2010
Slide 1: Investor Presentation March 2010
Investor Presentation March 2010
Slide 2: Strong Business Foundation: Polaris at a glance
United States International Canada 1371.1 304.2 289 2007 2008 2009 2006 1780 1948 1566 Strong Business Foundation By Product - 2009 By Geography - 2009 Off-Road Vehicles (ORV) 65% On-Road Vehicles 3% Snowmobiles 12% Parts Garments & Accessories 20% Snowmobiles ORVs Parts Garmants & Accessories Victo
Slide 3: Strong Market Share in Most Categories
Strong Business Foundation Strong Market Share in Most Categories (N.A.) 2009 Data, Snowmobile is season-ending March 31, 2009 Side-by-Sides data is estimated.
Slide 4: Strong Business Foundation: Customer Base
Strong Business Foundation Customer Base Large utility and commercial customer base provides balance and stability Typical Utility Customer Side-by-Side Market Off-Road Vehicles On-Road Vehicles Customer Usage Patterns
Slide 5: Full Year 2009 Financial Metrics
Full Year 2009 Financial Metrics Solid Results Despite Sales Decline 2009 Actual Var to '08 Sales $1,566 -20% Net Income $101.0 -14% Gross Profit % 25.1% +220 bpts Op Profit % 10.5% +110 bpts Net Income % 6.5% +50 bpts Cash Flow % to Net Income 191% +41% pts Shareholder Return 60% +98% pts Successes
Slide 6: Polaris 5-Year Strategic Objectives
2009 Actual 2014 Goal Snowmobiles 2004 Guidance 2004 Guidance 1.773 3 1 1043 1043 52 52 North 45.9 46.9 45 2009 Actual 2014 Goal Snowmobiles 2004 Guidance 2004 Guidance 1.773 3 1 1043 1043 52 52 North 45.9 46.9 45 Polaris 5-Year Strategic Objectives Best in Powersports PLUS 5-8% organic growth Growt
Slide 7: Off-Road Vehicle Division
2008 2009 2010 SXS 270 257 234 ATV 540 390 335 Best in Powersports Plus Off-Road Vehicle Division 2008 2009 2010 SXS 710 606 603 ATV 596 416 396 40 Polaris Sales ($000's) N.A. Off-Road Vehicle Industry $1,306 - -22% $1,021 Flat to up slightly - -25% - -10 to -15% projection SXS ATV Robby Gordon Edit
Slide 8: On-Road Division - Victory Motorcycles
Best in Powersports Plus On-Road Division - Victory Motorcycles 2010 Objectives: Create demand in North America - grow market share Realign cost structure Expand Globally Improve profitability guidance Down 40% to 50% Sales N.A. Cruiser and Touring Market - -10% to - -15% Q1 2009 Q2 2009 Q3 2009 Q4
Slide 9: Product Innovation - Competitive Advantage
Best in Powersports Plus Product Innovation - Competitive Advantage Over 34 new models introduced in 2009, including . . . Side-by-Sides More Power - RANGER 800 XP; 500 H.0.; 6X6; Crew New Category - Midsize RANGER 400; RANGER EV (Electric) RANGER RZR 4 (4-seat RZR) ATVs Sportsman XP chassis expande
Slide 10: Dealer Health
Best in Powersports Plus Dealer Health Polaris has among the best, most loyal dealer relationships Lost 3% of dealers in 2009 North American Dealer Count U.S. Dealer repossessions are stable: Q4 2008 20 dealers Q1 2009 13 dealers Q2 2009 12 dealers Q3 2009 9 dealers Q4 2009 12 dealers Receivable Bal
Slide 11: Growth Through Adjacencies: Military / Bobcat / LEV
Growth Through Adjacencies Military / Bobcat / LEV 2008 2009 2010 SXS 24 37 44 3 2010 2011 2012 SXS 17 35 40 Expected Sales Trends from Bobcat Alliance expectations 2008 2009 2010 Snow 31 24 27 1.5 Military Strong growth continued Expanded Margins Expanded customer base Expand product line in 2010 g
Slide 12: Growth Through Adjacencies: Acquisitions
Growth Through Adjacencies Acquisitions Acquisitions will help fuel future profitable growth for Polaris Recent Acquisition - Swissauto Powersports Idea Verify Market Qualify Market Funnel Process Business Development Process Gate 1 Gate 2 Gate 3 Companies Identify Cultivate Watch Negotiate Integrat
Slide 13: Global Market Leadership: International Division
Global Market Leadership International Division 2008 2009 2010 SXS 304.2 252.4 280 15 Polaris International Sales ($000's) $304.2 - -17% $252.4 Up 10% to 15% Growth guidance 2010 Objectives Grow sales Further Strengthen Core EMEA business Develop new markets - China, Brazil Expand Victory Global dis
Slide 14: Operations as a Competitive Advantage: Quality, Cost & Speed
Operations as a Competitive Advantage Quality, Cost & Speed 2007 2008 2009 2010 SXS 0.221 0.229 0.251 0.257 0.004 Cost - Gross Profit Margin Expansion Up to +100 bpts Guidance 22.1% 22.9% 25.1% New product development cycle time reduced again in 2009 Product Cost reduction through value engineering
Slide 15: New Dealer Sales Process - MVP
Operations as a Competitive Advantage New Dealer Sales Process - N.A. MVP (Max Velocity Program) 50% of ORV volume in North America using MVP Bi-Weekly Inventory Planning DEALERS Help dealers manage inventory Increase speed to market Reduces waste and risk Drives market share Reduce supply, Wait out
Slide 16: Strong Financial Performance
Strong Financial Performance * *A reconciliation of the Company's calculation of cash flow provided to the most directly comparable cash flow measure, as required by Regulation G, appears in the appendix of this presentation. Return on Shareholders' Equity* * From continuing operations Return on Ass
Slide 17: What to Expect in 2010
What to Expect in 2010 Conservative outlook for powersports industry Double digit declines in NA & EMEA, better in BRIC Increased focus on growth International expansion gains traction Military, Bobcat, LEV drive adjacency growth Acquisition activity is expected to increase Victory progress accelera
Slide 18: 2010 Full Year Guidance
2010 Full Year Guidance Product Line Sales - Off-Road Vehicles Approximately flat to up slightly - Snowmobiles Down slightly to Up slightly - On-Road Vehicles Up over 50% - PG&A Similar to overall company growth Total Company Sales Up +1% to +3% Gross Margins Up to 100 bpts improvement Operating exp
Slide 19: First Quarter 2010 Guidance
First Quarter 2010 Guidance Total Company Sales (in millions) Diluted EPS (in millions) 2009 2010 Sales 312 312 10 $312.0 Up 1% to 3% Actual Guidance 2009 2010 Sales 0.26 0.43 0.06 $0.26 $0.45 to $0.47 Up 73% to 81% Actual Guidance Industry retail sales demand trends are expected to decline again in
Slide 20: Thank you. Q & A
Polaris Industries Inc. Thank you. Q & A
Slide 21: Appendices
Appendices North American Retail Sales Trends Gross Margin Percentage Trends Balance Sheet and Liquidity Profile Financial Services Income Inventory Trends Management Team Safe Harbor Statement & Regulation G Reconciliation
Slide 22: North American Retail Sales
North American Retail Sales Polaris N.A. retail sales performed better than expectations Side-by-side and Victory retail sales increased significantly in Q4 2010 Polaris retail sales projected to remain slightly negative Expect to once again outperform the industry 0% (percentage change from prior y
Slide 23: Gross Profit Margin Percentage Trends
Gross Profit Margin Percentage Trends Flexible variable cost structure and cost reduction momentum drives gross margin expansion
Slide 24: Balance Sheet and Liquidity Profile
Balance Sheet and Liquidity Profile $ In millions (except per share data) 2009 Fav (Unfav) 2008 2010 Guidance Total Debt - ending $200.0 ^ $200.0 Net Debt - ending (debt less cash balances) $59.8 $113.1 Improving again Credit Facility (expires December 2011) $450.0 - $450 Average debt outstanding $2
Slide 25: Financial Services Income
Financial Services Income 2009 wholesale credit income from PA joint venture = $13.7 million, up 3% 2009 retail credit income $1.1 million, down 81%, but now stabilized Retail credit approval rates and penetration rates stabilized 2008 2009 2010 Retail Financing 5.703 1.2 1.2 Wholesale Credit 13.224
Slide 26: Operational Excellence Results - Inventories
Operational Excellence Results - - Inventories 2006 2007 2008 2009 SXS 127093 114416 108829 82863 2006 2007 2008 2009 SXS 230533 218342 222312 179315 Dealer inventory improved 24% from 2008 Lowest level since 1999 We desire further reductions in Core ATVs and motorcycles MVP Dealers realizing lower
Slide 27: Management and Recent Events
Devoted to the company and to the category Management Recent Events Scott Wine CEO Joined Sept. 1, 2008 Bennett Morgan President & COO 22+ years at Polaris Michael Malone V.P. Finance & CFO 25+ years at Polaris Created ORV Structure: ATVs and Side-by-Sides combined Created On-Road Division: Victory
Slide 28: Safe Harbor Statement & Regulation G Reconciliation
Appendix Our presentation and responses to your questions may contain certain statements which may be considered forward looking for the purposes of the Private Securities Litigation Reform Act of 1995. We caution you that actual results could differ materially from those projected in a forward look
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