Slide 1: Earnings Conference Call Q3 2021
Earnings Conference Call Q3 2021
Slide 2: Forward-Looking Statements
Brunswick Corporation - Earnings Release Forward-Looking Statements Certain statements in this presentation are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on current expectations, estimates, and projections abou
Slide 3: Use of Non-GAAP Financial Information and Constant Currency Reporting
Brunswick Corporation – Earnings Release Use of Non-GAAP Financial Information and Constant Currency Reporting In this presentation, Brunswick uses certain non-GAAP financial measures, which are numerical measures of a registrant’s historical or future financial performance, financial position or ca
Slide 4: Business Overview
BUSINESS OVERVIEW Dave Foulkes – CEO |4 ©2021 Brunswick Co. Confidential and all rights reserved.
Slide 5: Q3 2021 in Review
Brunswick Corporation – Q3 2021 in Review Outstanding Performance Across the Company Record Q3 results: Top-line growth across U.S. marine retail unit Updated guidance: all businesses: demand is strong but • Adjusted EPS of $2.07 1 • Adjusted EPS of ~$8.15 (up 15%) • Significant Mercury market suppl
Slide 6: Recognized for Excellence
Brunswick Corporation – Earnings Release Recognized for Excellence AWARDS RECEIVED AWA R D N O M I N AT I O N S |6 ©2021 Brunswick Co. Confidential and all rights reserved.
Slide 7: Through Freedom, Brunswick is Leading the Way in Inclusive Boating
Brunswick Corporation – Earnings Release Through Freedom, Brunswick is Leading the Way in Inclusive Boating + DIVERSITY + WOMEN 15% of members are ethnically diverse, 35% of members are women, an an increase of 480 bps since 2019 increase of 130 bps since 2019 |7 ©2021 Brunswick Co. Confidential and
Slide 8: Ripl Community Survey on Boat Usage
Brunswick Corporation – Earnings Release Ripl Community Survey on Boat Usage Most boaters who have adopted more work week boating expect to continue this trend next season: 60% 44% HAVE FIT BOATING INTO 21% HAVE WORKED WORKED REMOTELY at least partially their work week this season from their boat I
Slide 9: Each Segment Contributed to Outstanding Q3 Performance
Brunswick Corporation – Earnings Release Each Segment Contributed to Outstanding Q3 Performance PROPULSION PAR T S & B O AT S & B U S I N E S S ACCESSORIES A C C E L E R AT I O N • Retail market share gains • Strong sales growth across all • Full-year 2021 unit production continue – 310 bps U.S. sha
Slide 10: Q3 Sales Growth Rates By Region
Brunswick Corporation – Earnings Release Q3 Sales Growth Rates By Region1 International sales up 17 percent on a Q3 2021 BC SALES constant currency GROWTH VS. basis, excluding acquisitions FY REGION Q3 2020 Q3 2019 2020 MIX All segments United States 14% 44% 69% experienced Europe 26% 46% 12% si
Slide 11: U.S. Powerboat Industry – Percentage Change in Retail Units
Brunswick Corporation – Earnings Release U.S. main U.S. Powerboat Industry – Percentage Change in Retail Units powerboat retail unit YTD 2021 vs YTD: YTD 2021 VS YTD FY FY CATEGORY 2020 2019 2020: -8% 2020 2019 2019: +3% Outboard Boats (8)% 4% 14% (3)% Brunswick brands’ Fiberglass SD/IB Boat
Slide 12: Pricing Actions and Inflation Impacts on Operating Margins
Brunswick Corporation – Earnings Release Pricing Actions and Inflation Impacts on Operating Margins 1.5% Operating Margin 1.0% Impact 0.5% 0.0% -0.5% 1H'21 2H'21 FY'21 Price Net of Inflation* 1H 2021 VS. 1H 2020 2H 2021 VS. 2H 2020 Model year (MY) 2021 pricing between 2 – 3% Annual increases in July
Slide 13: Financial Overview
FINANCIAL OVERVIEW Ryan Gwillim - CFO | 13 ©2021 Brunswick Co. Confidential and all rights reserved.
Slide 14: Overview of Third Quarter 2021
Brunswick Corporation – Earnings Release Overview of Third Quarter 2021 NET SALES ($m) OPERATING EARNINGS1 ($m) $1,427 $1,233 $203 $221 Other Operating +16% $977 +26% +49% +9% Metrics: $136 Operating leverage: 9.4% vs. 2020 18.9% vs. 2019 OPERATING M ARGIN1 % DILUTED EPS1 16.5% $2.07 $1.80 F
Slide 15: Overview of Year-to-Date 2021
Brunswick Corporation – Earnings Release Overview of Year-to-Date 2021 NET SALES ($m) OPERATING EARNINGS1 ($m) $731 $4,415 +69% Other Operating $3,192 $3,186 +39% $440 $433 Metrics: (0.2%) (2%) Operating leverage: 24.2% vs. 2020 23.8% vs. 2019 OPERATING M ARGIN1 % DILUTED EPS1 $6.82 16.5% +81%
Slide 16: Propulsion Segment – Q3 Performance
Brunswick Corporation – Earnings Release Propulsion Segment – Q3 Performance % CHANGE VS PRODUCT CATEGORY SALES ($M) 2020 2019 Outboard Engines $486.3 19% 59% Sterndrive Engines $52.8 34% 47% Controls, Rigging and Propellers $87.8 14% 57% Total $626.9 19% 58% OPERATING MARGIN OPERATING EARNINGS • Op
Slide 17: Parts & Accessories Segment – Q3 Performance
Brunswick Corporation – Earnings Release Parts & Accessories Segment – Q3 Performance1 % CHANGE VS PRODUCT CATEGORY SALES ($M) 2020 2019 Engine Parts and Accessories $149.5 5% 26% Distribution $215.7 5% 38% Advanced Systems Group $128.8 14% 32% Total $494.0 7% 32% OPERATING MARGIN OPERATING EARNINGS
Slide 18: Boat Segment – Q3 Performance
Brunswick Corporation – Earnings Release Boat Segment – Q3 Performance1 % CHANGE VS PRODUCT CATEGORY SALES ($M) 2020 2019 Aluminum Freshwater $167.5 35% 59% Recreational Fiberglass $135.9 22% 40% Saltwater Fishing $86.4 5% 29% Business Acceleration $15.6 39% 77% Total $401.52 22% 45% OPERATING MARGI
Slide 19: Pipeline Metrics
Brunswick Corporation – Earnings Release Pipeline Metrics UNITS IN PIPELINE ENDING WEEKS ON HAND (in thousands) 30 50 25 40 20 30 15 -27% 20 10 10 10.1 5 0 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2018 2019 2020 2021 2018 2019 2020 2021 Sold ~8,200 units at wholesale in Q3’21 Expect mid-teens WOH at end of 2021 (+
Slide 20: Updated 2021 Assumptions and Guidance
Updated 2021 Assumptions and Guidance* (reflects recently completed acquisitions) U.S. marine industry retail unit demand for the full year to improve from reported year-to-date levels, ending at close to flat versus 2020 Revenue of ~$5.8 billion Operating margin growth between 150 and 180 bps O
Slide 21: 2021 Outlook – P&L and Cash Flow Assumptions
Brunswick Corporation – Earnings Release 2021 Outlook – P&L and Cash Flow Assumptions CHANGE FROM PRIOR 2021 CONFERENCE CALL ESTIMATES ESTIMATE Working capital increase ~$105 - $120 million Higher Depreciation and amortization1 ~$140 million Unchanged Acquisition intangible 2 ~$40 million Higher amo
Slide 22: 2021 Outlook – Capital Strategy and Other Assumptions
Brunswick Corporation – Earnings Release 2021 Outlook – Capital Strategy and Other Assumptions CHANGE FROM PRIOR 2021 CONFERENCE CALL ESTIMATES ESTIMATE Debt retirement ~$125 million Higher Capital expenditures ~$270 - $300 million Unchanged Share repurchases ~$120 million Higher Quarterly dividends
Slide 23: Outlook
OUTLOOK Dave Foulkes – CEO | 23 ©2021 Brunswick Co. Confidential and all rights reserved.
Slide 24: Operating and Strategic Priorities
Brunswick Corporation – Earnings Release Operating and Strategic Priorities BOATS & PARTS & PROPULSION BUSINESS ENTERPRISE ACCESSORIES ACCELERATION • Continue global share • Optimize global operating • Focus on operational • Accelerate Brunswick-wide growth, especially in model and distribution exce
Slide 25: Execution of M&A Strategy and Strong Boat Show Results Provides Momentum
Brunswick Corporation – Earnings Release Execution of M&A Strategy and Strong Boat Show Results Provides Momentum Officially Closed on Acquired RELiON – global Acquired SemahTronix – Acquired Fanautic Club Navico provider of lithium batteries leader in wire harnessing and Connecticut territory RECOR
Slide 26: Appendix
Appendix | 26
Slide 27: 2021 Outlook – Segment Guidance
Brunswick Corporation – Earnings Release 2021 Outlook – Segment Guidance JULY 2021 UPDATED GUIDANCE GUIDANCE Propulsion Up 32+ percent Unchanged Parts & Accessories 1 Up 20+ percent Up 30+ percent Boat Up 30+ percent Unchanged Propulsion Up 140+ bps Up 180+ bps Parts & Accessories Up 40 to 60 bps Fl
Slide 28: GAAP to Non-GAAP Reconciliations – Q3
Brunswick Corporation – Earnings Release GAAP to Non-GAAP Reconciliations – Q3 Operating Earnings Diluted Earnings per Share (in millions, except per share data) Q3 2021 Q3 2020 Q3 2021 Q3 2020 GAAP $209.0 $192.6 $1.85 $1.71 Restructuring, exit and impairment charges — 1.8 — 0.02 Purchase accounting
Slide 29: GAAP to Non-GAAP Reconciliations - YTD
Brunswick Corporation – Earnings Release GAAP to Non-GAAP Reconciliations - YTD Operating Earnings Diluted Earnings per Share (in millions, except per share data) YTD 2021 YTD 2020 YTD 2021 YTD 2020 GAAP $691.1 $402.8 $6.28 $3.49 Restructuring, exit and impairment charges 0.7 4.3 0.01 0.03 Purchase
Slide 30: Q3 Net Sales increased by $194.1 million, or 15.7 percent
Brunswick Corporation – Earnings Release Q3 Net Sales increased by $194.1 million, or 15.7 percent Segments Q3 2021 Q3 2020 % Change Propulsion $626.9 $526.5 19.1% Parts & Accessories 494.0 459.9 7.4% Boat 401.5 328.1 22.4% Segment Eliminations (95.2) (81.4) Total $1,427.2 $1,233.1 15.7% Q3 2021 Con
Slide 31: YTD Net Sales increased by $1,228.8 million, or 38.6 percent
Brunswick Corporation – Earnings Release YTD Net Sales increased by $1,228.8 million, or 38.6 percent Segments YTD 2021 YTD 2020 % Change Propulsion $1,934.2 $1,370.5 41.1% Parts & Accessories 1,502.5 1,148.0 30.9% Boat 1,270.1 869.5 46.1% Segment Eliminations (291.6) (201.6) Total $4,415.2 $3,186.4
Slide 32: Q3 2021 vs. Q3 2020 Sales Growth Drivers
Brunswick Corporation – Earnings Release Q3 2021 vs. Q3 2020 Sales Growth Drivers Parts & Propulsion Accessories Boat Brunswick US - Organic 22% 4% 15% 14% International - Organic 10% 12% 46% 17% Total Organic 18% 6% 21% 15% Acquisitions - 1% 1% 0% Currency 1% 0% 0% 1% 2021 Net Sales - GAAP 19% 7% 2
Slide 33: YTD 2021 vs. YTD 2020 Sales Growth Drivers
Brunswick Corporation – Earnings Release YTD 2021 vs. YTD 2020 Sales Growth Drivers Parts & Propulsion Accessories Boat Brunswick US - Organic 45% 25% 40% 36% International - Organic 28% 36% 55% 35% Total Organic 38% 28% 44% 36% Acquisitions - 0% 0% 0% Currency 3% 3% 2% 3% 2021 Net Sales - GAAP 41%
Slide 34: Tax Provision
Brunswick Corporation – Earnings Release Tax Provision Q3 2021 Q3 2020 Estimated 2021 Effective Tax Rate - GAAP 21.2% 22.1% effective book tax Effective Tax Rate - As Adjusted 1 20.5% 22.7% rate, as adjusted, is expected to be approximately 21.5 percent based on tax guidance issued to date YTD 202
Slide 35: Free Cash Flow – YTD September
Brunswick Corporation – Earnings Release Free Cash Flow – YTD September (in millions) YTD 2021 YTD 2020 Net cash provided by operating activities from $475.1 $637.4 continuing operations Net cash (used for) provided by: Capital expenditures (180.2) (120.6) Proceeds from sale of property, plant, equi