Polaris Inc. · NYSE:PII
Polaris — Polaris Industries — RBC Capital Markets' Consumer Conference 2003
28 slides from Polaris's conference presentation, Oct 1, 2003
Slide 1: RBC Capital Markets' Consumer Conference October 2, 2003
RBC Capital Markets' Consumer Conference October 2, 2003
Slide 2: Polaris at a glance
Polaris at a glance: Founded in 1954 Manufacturer of a diversified mix of high-quality, high-performance motorized products for recreational and utility use Manufacturing and distribution facilities located in Minnesota, Wisconsin, Iowa and South Dakota Highly productive non-union workforce - 3,500
Slide 3: Products (% of 2002 Sales) and Strengths/Opportunities
Products (% of 2002 Sales) Strengths/Opportunities Strong Business Foundation $938M business Growth opportunities going forward Maintain leadership position Generate cash Minimum investment Upside only $300-500MM long-term opportunity Superior product features Highest margin product ATV's 62% Snowmo
Slide 4: Sales 1992-2002: A Consistent Track Record
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 Forecast 371 512 805 1079 1157 1009 1153 1296 1393 1487.6 1521.3 1521.3 60.8 Ten Year CAGR: 15.0% A Consistent Track Record... Sales 1992-2002 3-5% range P O L A R I S I N D U S T R I E S I N C. 7
Slide 5: Earnings Per Share 1992-2002
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 Forecast 0.91 1.21 1.98 2.19 2.24 2.45 2.72 3.07 3.5 3.88 4.39 4.39 0.44 Ten Year CAGR: 17% Earnings Per Share 1992-2002 (diluted) $ 4.80 to $4.90 9-12% Increase 21 consecutive quarters of increased sales and earnings 21 consecutive years o
Slide 6: Cash Flow 1992-2002
Ten Year CAGR: 14% Cash Flow* 1992-2002 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 46 59 87 89 95 97 107 115 127 147 168 (Dollars in Millions) *Before Changes in Current Operating Items and Deferred Taxes P O L A R I S I N D U S T R I E S I N C. 11
Slide 7: Return on Shareholders Equity 1992-2002
Return on Shareholders Equity 1992-2002 Significantly Above Industry Average 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 0.31 0.41 0.43 0.42 0.45 0.4 0.44 0.47 0.44 0.41 0.4 P O L A R I S I N D U S T R I E S I N C. 13
Slide 8: Debt to Total Capital Ratio 1992-2002
Debt to Total Capital Ratio 1992-2002 Ample Credit Capacity 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 0 0 0 0.25 0.18 0.13 0.12 0.19 0.19 0.07 0.06 P O L A R I S I N D U S T R I E S I N C. 15
Slide 9: Dividends (per share)
Dividends (per share) 1996 1997 1998 1999 2000 2001 2002 2003 0.6 0.64 0.72 0.8 0.88 1 1.12 1.24 P O L A R I S I N D U S T R I E S I N C. 17
Slide 10: Share Repurchases
1996 1997 1998 1999 2000 2001 2002 YTD 6/30/03 East 0.5 1.5 1.1 1.5 1.2 1.1 1.2 0.9 Cumulatively to date have repurchased 9.0 million of 11.5 million authorized for a total of $358 million. Share Repurchases 1996 1997 1998 1999 2000 2001 2002 YTD 6/30/03 East 14 40 38 52 40 49 76 48 In Millions In M
Slide 11: Why Polaris? - Investment Appeals
Why Polaris? - Investment Appeals Superior financial track record 21 consecutive years of earnings per share growth 21 consecutive quarters of increasing sales and earnings Consistent generator of cash flow Strong balance sheet - debt to equity at 6% at year end 2002 High return on equity averaging
Slide 12: ATVs: Worldwide Industry Growth and Polaris Outlook
1998 1999 2000 2001 2002 520 650 775 861 939 Worldwide ATV Industry Growth Year 2002: 7% growth 1999 2000 2001 2002 YTD 6/30/03 2003 Guidance 734 827 827 938 479 985 94 In Millions Polaris ATV Outlook Waves of new product news - 80%+ new and more in development Product ride and handling leadership i
Slide 13: ATVs Product Innovation
u ATVs Product Innovation Predator RANGER TM (Taskmaster) ATP Sportsman 600 A T V s Like... MV (Military Version) 25 25
Slide 14: Victory Motorcycles: Industry Growth and Outlook
1998 1999 2000 2001 2002 Cruisers 152 184 220 259 308 Touring 51.6 65.2 80.2 90 107 All Motorcycles 274 340 420 432 514 Motorcycle Industry Growth Year 2002 growth for cruisers and touring combined was 13% Victory Outlook Drive brand awareness "The Victory Challenge" rides Advertising, shows/events
Slide 15: Victory Vegas and Kingpin Market Segments
V I C T O R Y M O T O R C Y L E S The Victory Vegas and Kingpin participate in segments that are 54% of the premium cruiser and touring cruiser market 27% Classic Cruiser* 27% Custom Cruiser** 20% Touring Cruiser (Hard) 15% Touring Cruiser (Soft) 11% Low-Rider Cruiser Premium Cruiser Current Market
Slide 16: Snowmobiles: Industry Growth and Outlook
1998 1999 2000 2001 2002 2003 255.9 233 213 213 206 187 Worldwide Snowmobile Industry Growth Season-end March 31 Polaris Snowmobile Outlook Continue strong brand loyalty Remain #1 in quality Great team that knows the business Reduce dealer inventory Solid business - in great shape when it snows 1999
Slide 17: Snowmobiles: Engineering innovation is key
Engineering innovation is key 2003: Control dealer inventory, remain #1 in quality Continue to bring new product innovation to market SwitchBack RMK Pro X2 S N O W M O B I L E S 33
Slide 18: Personal Watercraft: Industry Growth and Outlook
1999 2000 2001 2002 YTD 6/30/03 2003 Guidance East 52 66 60 53 38 60 4 1999 2000 2001 2002 2003 (Estimate) 134 120 102 99 99 Worldwide PWC Industry Growth Legislative and regulatory concerns Polaris PWC Strengths/Outlook Successfully introduce new 4-stroke MSX Grow revenue / profits Continue to driv
Slide 19: Personal Watercraft: Polaris innovation continues
Polaris innovation continues MSX 140 2-Stroke 2003: Successfully introduce MSX platform, new four-stroke technology, improve quality P E R S O N A L W A T E R C R A F T 37 MSX 150 4-Stroke MSX 150 4-Stroke 2003 Polaris MSX 140 named "Watercraft of the Year" by Watercraft World"
Slide 20: Parts, Garments and Accessories Outlook
Polaris PG&A Outlook Accelerate product innovation Improve overall product and service quality Continue cost reductions Continue to train dealers on selling PG&A 3 Year CAGR: 15% 1999 2000 2001 2002 YTD 6/30/03 2003 Guidance East 158 180 209 203 103 213 24 Snowmobiles PWC ATVs PG&A Motorcycles 40 2
Slide 21: Personalizing "The Way Out" is increasing
Personalizing "The Way Out" is increasing Dealer Loyalty Program Targeted mailing Product knowledge Appropriate mix of PG&A inventory Point-of-purchase displays Star Card Web site P O L A R I S I N D U S T R I E S I N C.
Slide 22: Quality and Productivity are Key in a Slow Economy
Quality and Productivity are Key in a Slow Economic Environment Made significant strides in product quality in 2002 Plant defects down 42% Supplier defects down 29% Problems per vehicle produced down 16% (weighted average basis) Productivity continues to get better 9% reduction in Sportsman product
Slide 23: Financial Services - Growth Opportunity
Financial Services - Growth Opportunity Generated $14.6 million in income in 2002 High return on investment 23% in 2002 Portfolio losses are within industry norms Retail penetration rate continues to increase 34% at June 30, 2003; 23% in 2002, up from 17% in 2001 Credit worthiness has not been compr
Slide 24: Opportunity to Improve Distribution
Opportunity to Improve Distribution To grow the Company, we must help our dealers to improve Build dealer profitability Leverage Polaris' competitive advantages Assist dealer showroom expansion through Capital Assistance Program Utilize holdback program to reward better dealers. P O L A R I S I N D
Slide 25: Expectations for 2003
Expectations for 2003 Second Quarter 2003 results: Reported record sales and earnings 21st consecutive quarter of increasing sales and earnings EPS up 13 percent on 4 percent sales growth All business units grew sales except snowmobiles International operations grew 80 percent in the second quarter
Slide 26: In Summary - The Roadmap
In Summary - The Roadmap Keep driving innovation - deliver a higher percentage of great new products Maintain strong positions in ATVs and snowmobiles Continue to drive quality improvement as #1 internal objective Continue improvements in PWC and Victory business units Expand Financial Services and
Slide 27: Polaris Industries Inc. Disclosure Statement
1995 Private Securities Reform Act Polaris Industries Inc. Disclosure Statement Our presentation and responses to your questions may contain certain statements which may be considered forward looking for the purposes of the Private Securities Reform Act of 1995. We caution you that actual results co
Slide 28: Thank You - Q&A
. €> Pe .anis The Way Out. Thank You Q&A
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