Polaris Inc. · NYSE:PII
Polaris — Polaris Industries — Q3 2014 Earnings Presentation
27 slides from Polaris's earnings presentation, Oct 22, 2014
Slide 1: Third Quarter 2014 Earnings Results
Third Quarter 2014 Earnings Results October 22, 2014 POLARIS INDUSTRIES INC.Relentless MAKING OUR POWERFUL POTFOLIO EVEN STRONGER
Slide 2: Forward-looking statements disclaimer
Except for historical information contained herein, the matters set forth in this document, including but not limited to management’s expectations regarding 2014 and 2015 sales, shipments, margins, netincome and cash flow, the trend toward producing more of the Company’s own engines for its vehicles
Slide 3: Scott W. Wine, Chairman & CEO
Scott W. Wine Chairman & CEO Third Quarter 2014 Earnings Results October 22, 2014 POLARIS INDUSTRIES INC.
Slide 4: Q3 2014 Sales and Net Income
$116.9 $140.8 Q3 2013 Q3 2014 Q3 2014 Sales and Net Income Record 3rd quarter sales and net income* Motorcycles up 28%; PG&A up 24%; ORV sales increased 17%; Snowmobiles up 13% International up 9%; APLA up 40%; EMEA up 1% N.A. retail sales increased 12%; ORV, motorcycles & snowmobiles up strong Earn
Slide 5: Full Year 2014 Guidance
Full Year 2014 Guidance Record sales and earnings projected for 2014 North American retail sales growth and market share gains continue Industry trends expected to remain unchanged for balance of 2014 Improving operational and commercial execution drives profitable growth 5 Q3-2014 $3,777 2013 Actua
Slide 6: Polaris Strategic Objectives Vision & Strategy
Polaris Strategic Objectives Vision & Strategy VISION STRATEGY Fuel the passion of riders, workers and outdoor enthusiasts around the world by delivering innovative, high quality vehicles, products, services and experiences that enrich their lives. Polaris will be a highly profitable, customer centr
Slide 7: Evolving Leadership Team to Meet Demands of an $8 Billion Enterprise
Evolving Leadership Team to Meet Demands of an $8 Billion Enterprise 7 Organizational Changes Q3-2014 MATT HOMAN President of Global Adjacent Markets (July 2014) Small Vehicles Commercial Defense M&A for Adjacent Markets 12+ years with Polaris, most recently V.P. of EMEA SURESH KRISHNA V.P. of EMEA
Slide 8: Bennett Morgan, President & COO
Bennett Morgan President & COO Third Quarter 2014 Earnings Results October 22, 2014 POLARIS INDUSTRIES INC.
Slide 9: N.A. Retail Sales & Dealer Inventory – Q3 2014
Q3 2013 Q3 2014 3% Existing Models 9% New models/ categories 3% New Dealers 15% Total Increase Polaris Q3 2014 Industry Q3 2014 N.A. Retail Sales & Dealer Inventory – Q3 2014 Dealer Inventory Adequate – Some 2015 High-demand Models Limited N.A. Dealer Inventory N.A. Powersports Retail Sales Best in
Slide 10: Model Year 2015 Product Introductions
18 NEW Off-Road Vehicles 5 NEW Motorcycles 10 Q3-2014 NEW Model Year 2015 Product Introductions Industry-Leading Products in All Categories PG&A Over 300 NEW MY’15 Accessories XP 1000 High Lifter Edition 900 TRAIL, 50” S 900, 60” 900 XC EDITION XP 4 1000 XP 1000 XP 1000 ACE 570 EXT X2 570 TOURING 57
Slide 11: Off-Road Vehicles: 30th Consecutive Quarter of Market Share Gains
Q3 2013 Q3 2014 Q3 2013 YTD Q3 2014 YTD Off-Road Vehicles N.A. Q3 Polaris ORV retail sales high single digits %; Industry mid-single digits % Polaris side-by-sides double digits %; ATVs slightly (excludes ACE) Both ATVs and side-by-sides grew share in Q3 Canadian ORV industry soft International ORV
Slide 12: Strengthening the RZR Brand Globally
Strengthening the RZR Brand Globally 12 Camp RZR – Brimstone, Tennessee 1st Camp RZR in Eastern United States for RZR customers 12,000+ attendees Over 600 demo rides 2 million social impressions Camp RZR Glamis #3 coming Halloween weekend in Southern California SEPTEMBER 19-21 Q3-2014 12
Slide 13: Motorcycles
Q3 2013 YTD Q3 2014 YTD Q3 2013 Q3 2014 Motorcycles Polaris N.A. motorcycle retail sales nearly 30% in Q3 Indian significantly - retail, share, and dealer expansion Victory retail sales mid-teens digits % - delayed shipments of MY’15 & tough comps Heavyweight Industry low-single digits % Indian Moto
Slide 14: Slingshot Motorcycles Unveiled
Motorcycles Unveiled July 2014 2 models: Base & Premium (SL) $19,999 - $23,999 MSRP (U.S.) 360 dealers signed & committed Shipping expected to begin in next 30 days Extremely high initial interest 1 billion media impressions in first 4 weeks Assembly in Spirit Lake, Iowa Adjacencies Q3-2014 14
Slide 15: Snowmobiles: Good Start Heading into Selling Season
Q3 2013 YTD Q3 2014 YTD Q3 2013 Q3 2014 Snowmobiles Polaris market share season-to-date with retail sales over 50% Early Industry retail sales strong season-to-date; over 30% Dealer inventories mid-teens % in preparation for upcoming selling season MY’15 800 Switchback Pro-S won “2015 Snowmobile of
Slide 16: PG&A: Strong Growth in Highest Margin Business
Q3 2013 YTD Q3 2014 YTD Q3 2013 Q3 2014 PG&A 16 Q3-2014 Strong Growth in Highest Margin Business PG&A Sales Best in Powersports PLUS $176.0 ($ millions) +24% $219.1 Record Q3 sales; 24% ORV sales 28%, Motorcycles 56%, Snowmobiles 8% All categories increased sales in Q3 Accessories 37%, Apparel 20%,
Slide 17: Defense & Commercial Gaining Traction
Defense / Commercial 17 Q3-2014 Q3 Defense revenue Timing of orders DAGOR officially launched at AUSA in October 2014 Initial orders received International Defense penetration growing MRZR in 21 countries Commercial revenue in Q3 as expected, due to prior year channel fill for BRUTUS National Accoun
Slide 18: Small Vehicles Performance
Q3 2013 YTD Q3 2014 YTD Q3 2013 Q3 2014 Small Vehicles 18 Q3-2014 Small Vehicles Performance Gaining Traction Small Vehicle Sales European markets remain weak Aixam Mega sales in Q3; Aixam market share notably, #1 share GEM sales in Q3; strong order bank Goupil sales in Q3; weak French economy impac
Slide 19: International Grew Despite Tough Economic Environment
Q3 2013 YTD Q3 2014 YTD Q3 2013 Q3 2014 International 19 Q3-2014 International Grew Despite Tough Economic Environment International Sales International sales 9% in Q3 ORV 18%; Motorcycles 80%; Small Vehicles 2%; PG&A 8% EMEA 1%; Latin America 48%; Asia Pacific 37% EMEA market share gains in ORV, mo
Slide 20: Operational Excellence: Gross Profit Margin
Q3 2013 Q3 2014 Q3 2013 YTD Q3 2014 YTD Operational Excellence 20 Q3-2014 Gross Profit Margin Pressure Driven by Currency Gross Profit Margin Gross Profit Margin in Q3 due primarily to currency pressures LEAN initiatives driving productivity gains RFM implementation for ATVs in process Factory inven
Slide 21: Mike Malone, V.P. Finance & CFO
Mike Malone V.P Finance & CFO Third Quarter 2014 Earnings Results October 22, 2014 POLARIS INDUSTRIES INC.
Slide 22: Improved Earnings Expectations: 2014 Full Year Guidance
Improved Earnings Expectations 2014 Full Year Guidance METRIC GUIDANCE Product line sales Off-Road Vehicles Up 13% to 14% Snowmobiles Up mid-single digits % Motorcycles Up 65% to 75% Small Vehicles Up 25% to 30% PG&A Up about 20% International Up low-teens % Total Company sales Up 17% to 18% Gross p
Slide 23: 2014 Gross Profit Margin Guidance
METRIC Actual Q3 2013 Actual Q3 2014 Guidance FY 2014 Prior period 29.5% 30.4% 29.7% Production volume adjustments Product cost reduction efforts Commodity costs Currency rates Higher selling prices Product mix New plant start-up costs Warranty costs Tooling amortization Sales promotional costs Cont
Slide 24: Balance Sheet and Liquidity Profile
Balance Sheet and Liquidity Profile $ In millions (except per share and rate data) YTD 2014 Fav / (UnFav) YTD 2013 2014 Full Year Guidance vs. 2013 Cash $169.0 ($218.8) Increase Debt / Capital lease obligations $228.0 ($120.8) Decrease Credit facility $350.0 Flat Unchanged Factory inventory $582.2 (
Slide 25: Scott W. Wine, Chairman & CEO
Scott W. Wine Chairman & CEO Third Quarter 2014 Earnings Results October 22, 2014 POLARIS INDUSTRIES INC.
Slide 26: Expect Another Record Performance in 2015
Notable Headwinds, but Expect Another Record Performance in 2015 2015 Initial Thoughts Global economies remain unpredictable U.S. regulatory and tax policies unlikely to improve – slow growth continues Powersports market trends should mirror 2014 – modest, inconsistent growth Polaris market share ga
Slide 27: Thank you Questions?
POLARIS Thank you Questions?