Polaris Inc. · NYSE:PII
Polaris — Polaris Industries — Q4 2011 Earnings Presentation
26 slides from Polaris's earnings presentation, Jan 25, 2012
Slide 1: Fourth Quarter & Full Year 2011 Earnings Results
LLL Fourth Quarter & Full Year 2011 Earnings Results January 25, 2012
Slide 2: Safe Harbor
Safe Harbor "Me ddd ddd ddd ceeded Except for historical information contained herein, the matters set forth in this document, including butnot limited to management's expectations regarding 2012 sales, shipments, net income, cash flow, and manufacturing realignmenttransition costs and savings, are
Slide 3: Scott Wine, CEO
LLL LLL Scott Wine CEO Fourth Quarter & Full Year 2011 Earnings Results January 25, 2012
Slide 4: Q4 2011 Sales and Net Income
Q4 2011 Sales and Net Income "LM ddd ddd ddd deeded Up 26% 782.0 618.4 Zo Q42010 Q42011 Q42010 Q42011 Record 4* Quarter Sales and Net Income Execution improved to offset tougher comparables ORV Sales remained strong +18%; On-Road & Snow up >60% Earnings per Share up 15% to record $0.90 Gross Profit
Slide 5: Sales and Net Income
Full Year 2011 Sales and Net Income "LM ddd ddd ddd deeded FY 2010 FY 2011 FY 2010 FY 2011 Record Sales, Net Income & EPS Revenue increases across all product lines and geographic regions EPS of $3.20, up 50% over 2010 North American retail sales up 14% on strong market share gains Strong Balance Sh
Slide 6: 2011 Financial Metrics
2011 Financial Metrics "Me ddd ddd ddd deeded 2011 Actual METRIC (millions) Narlancestondl Sales $2,657 +33% Gross Profit % 27.9% +130 bps Operating Income $349.9 +59% Operating Income % 13.2% +210 bps Net Income $227.6 +55% Net Income % 8.6% +120 bps Operating Cash Flow $302.5 +2% Shareholder Retur
Slide 7: Strategic Progress Continues
Strategic Progress Continues "LM ddd ddd ddd ceeded Bestin Powersports PLUS 5-8% organic growth Growth Through Adjacencies $200 - 500M growth Global MarketLeadership >25% of Polaris revenue Operational Excellence >200 bps operating margin improvement Strong Financial Performance Sustainable, profita
Slide 8: Full Year 2012 Guidance
Full Year 2012 Guidance "LM ddd ddd ddd deeded Up 14% to 19% Eos 3.65 to $3.80 $2,800 to $2,875 : : $2,657 s $3.20 2011 Actual 2012 Guidance 2011 Actual 2012 Guidance Retail sales growth and market share gains continue to outpace industry Growth investment continues; will be adapted to market condit
Slide 9: Bennett Morgan, President & COO
LLL Bennett Morgan President & COO Fourth Quarter & Full Year 2011 Earnings Results January 25, 2012
Slide 10: N.A. Dealer Inventory & Retail Sales
N.A. Dealer Inventory & Retail Sales ULL THLULLLLALULLALLALLLOLULLLL XLLOLLLLULOOLLLLLLUOLLLLL MOLLOY OOOO ih ———— a on 2006 Actual ae ee —- 2007 Actual “2008 Actual —@ 2009 Actual a a peeceivia —® 2011 Actual Units Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Q4N.A. retail sales up 11%, FY 2011
Slide 11: Off-Road Vehicle Division
Off-Road Vehicle Division ULLAL LLL LLL seen Up mid- 418% $1,822.3 $465.8 $394.5 av av Av ‘SXS aS ‘SXS Q42010 =. Q42011 FY 2011 FY 2012 Guidance Q4 and Full Year 2011 #1 in ORV - Gained significant share in SxS and ATVs Polaris ATV retail sales grew in 2011; 1*time since (04 Polaris SxS retail sales
Slide 12: Adjacencies
Adjacencies ULLAL LLL LLL Q4 2011 sales up over 30%, 2011 sales up Bobcat retail sales strong in 2011 100% over # New co-developed work vehicle in final Strong order backlog for 2012 stages of development Infrastructure in place to support growth Polaris Sales Polaris Sales oe | & 1 FY 2010 FY 2011_
Slide 13: Snowmobile Division
Snowmobile Division ULLAL LLL LLL +48% Down single +63% $280.0 digits % $169.2 $104.1 J J 42010 = 42011 FY 2011 FY 2012 guidance Q4 and Full Year 2011 2012 Objectives MY ‘12 sleds well received Quality remains #1 focus area N.A. Q4 Industry retail sales grew low single digits Build on clear#2 market
Slide 14: On-Road Division
On-Road Division Pe tan ULLAL LLL MLL SC Up 30% to 40% +69% Up low- +79% Up mid- soog 5249 oe single digits ingle digits a a | | | MY "12 Victory HARD-BALL 42010 42011 FY 2011 FY 2012 FY 2011 FY 2012 3 a @ guidance Expectations New MY "43 Victory Judge Motorcycles - Q4 and Full Year 2011 Motorcycles
Slide 15: On-Road Division— Small Vehicles
On-Road Division— Small Vehicles UML LLL LLL Marketleaderin the N.A. electric people mover Market leaderin fast growing European commercial segment electric vehicles segment Successfully moved production to lowa Completed headquarters transition to Minneapolis Added 35 new dealers in 2H 2011 Expectt
Slide 16: PG&A
PG&A UML LLL LLL LLL Grow slightly eventos tne faster than overall 413% 419% company $112.4 $408.2 $99.2 0 FY2011 FY 2012 guidance Q4 and Full Year 2011 2012 Objectives 200+ new accessory products introduced Grow our most profitable margin business SxS growth up 41% from 2010 Continue to innovate wi
Slide 17: International
International p+ SPecAnis ULLAL LLL LLL LLL _—_ +43% Low double ME / Africa 10% +30% OVE Snow 16% $1311 sa2a, _ diaits% nett Meet $91.9 America 7% PGRA d | Asia 3% T% AusINZ 13% On-Road Vehicles | Th 242010 42011 FY2011 FY2012 guidance Q4 and Full Year 2011 2012 Objectives ORVs, On-Road & Snowmobile
Slide 18: Operational Excellence
Operational Excellence — j Q4 & Full Year 2011 Margins 7+ PSCAnisS: [MULL LLL LLL 27.7% 27.9% 40.8% 0.0% 0.9% +130 bps Hi -160 bps ~ —_7 yg 8.6% bs eet 26.6% TAN cy “yg Gross Operating Otter None Income FY 2010 isan Boars? Bering Towa FY 2011 942010 42011 FY 2010 FY 2011 Boone Gner Full year 2011 gr
Slide 19: Mike Malone, V.P. Finance & CFO
LLL Mike Malone V.P. Finance & CFO Fourth Quarter 2011 Earnings Results January 25, 2012
Slide 20: 2012 Full Year Guidance
2012 Full Year Guidance [MLL LLL LLL Product Line Sales - Off-Road Vehicles - Snowmobiles - On-Road Vehicles - PG&A - International Total Company Sales Gross Margins Operating expenses Income Taxes Net Income EPS, Diluted Share Count Up mid-single digits % Down single digits % Up 30% - 40% Slightly
Slide 21: Gross Profit Margin Percentage Trends
Gross Profit Margin Percentage Trends "Me ddd ddd ddd deeded Prior Period 27.7% 26.6% 27.9% Production volume adjustments Product costreduction efforts Commodity costs Pe €&® Currency rates €D aL Higherselling prices : a 5 a Product mix at Manufacturing realignment, net ss | + | &» Ye Ye Currentperi
Slide 22: Manufacturing Realignment
Manufacturing Realignment p+ PStAriS "Me ddd ddd ddd deeded $35- $36 ee $28 $32 $30+ $15 $12 -$15 aw a Fy =~ a ‘Actual Actual Guidance Toles Total ‘Actual Actual Guidance Toe Total realized anticpated annualized = a ee Production and shipments began in Q2 2011 - Shipped over 22,000 SxS units to date
Slide 23: Balance Sheet and Liquidity Profile
Balance Sheet and Liquidity Profile "Me ddd ddd ddd deeded Cash $325.3 ($68.6) | Increase from 2011 Long Term Debt $100.0 $100.0 | Unchanged Credit Facility $350.0 | ($100.0) | Renewed to 2016 Factory Inventory $298.0 ($62.1) | Decrease from 2011 by year-end Capital Expenditures $84.5 ($28.8) | Simi
Slide 24: Scott Wine, CEO
LLL LLL Scott Wine CEO Fourth Quarter & Full Year 2011 Earnings Results January 25, 2012
Slide 25: Summary
Summary "LM ddd ddd ddd deeded Policy and debt concerns drive continued uncertainty EMEA business will overcome weakness to grow modestly Asia Pacific/Latin America positioned to accelerate growth Currency and commodity markets expected to remain volatile M&A remains active; opportunities tempered b
Slide 26: Safe Harbor
Fourth Quarter & Full Year 2011 Earnings Results January 25, 2012 Safe Harbor Safe Harbor Except for historical information contained herein, the matters set forth in this document, including but not limited to management’s expectations regarding 2012 sales, shipments, net income, cash flow, and man