Polaris Inc. · NYSE:PII
Polaris — Polaris Industries — Investor Day (July 2011)
146 slides from Polaris's investor day presentation, Jul 27, 2011
Slide 1: Analyst & Investor Meeting, July 27, 2011
July 27, 2011 July 27, 2011 Exhibit 99.1
Slide 2: Analyst & Investor Meeting Agenda
2 2 July 27, 2011 – Gaylord Opryland Resort – Nashville, TN Analyst & Investor Meeting Agenda Analyst & Investor Meeting Agenda 8:00 Opening Remarks Scott Wine 8:10 Strategy Overview Bennett Morgan 8:25 Off-Road Vehicles, Bobcat Matt Homan 8:55 Snowmobiles, PG&A, & Financial Services Scott Swenson 9
Slide 3: Safe Harbor
Private Securities Litigation Reform Act of 1995 Polaris Industries Inc. Disclosure Litigation Statement 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 2011 and longe
Slide 4: Scott Wine, CEO
W/L EEE DMT ES LLL LLL TT we > Ge WLLL LLL Scott Wine CEO Analyst & investor Meeting July 27, 2011
Slide 5: Exceptional Start to 2011
Exceptional Start to 2011 2011 1 st 2011 1 st st Half Financial Metrics Half Financial Metrics 2011 YTD Actual Var. to ‘10 Sales $1,145 +44% Net Income $96.0 +112% Gross Profit % 28.8% +260 bpts Op Profit % 12.8% +340 bpts Net Income % 8.4% +270 bpts EPS $2.71 +102% Shareholder Return 44% +17% pts J
Slide 6: 2011 Sales & EPS Projections Raised, Again
2011 Sales & EPS Projections Raised, Again Total Company Sales (in millions) Diluted EPS Full Year 2011 Guidance Full Year 2011 Guidance $1,991 Up 25% to 28% $2,490 to $2,540 2010 Actual 2011 Guidance $4.28 Up 39% to 41% $5.93 to $6.05 2010 Actual 2011 Guidance Retail sales growth continues to outpa
Slide 7: Consistent Strategy, Continued Execution
Consistent Strategy, Continued Execution Strategic Objectives Strategic Objectives $1.6 Billion $5.0 Billion Grow Sales $5 Billion by 2019 6.5% 10.0% Expand Net Income 10% of sales by 2019 Best in Powersports PLUS 5-8% organic growth to >$3B Growth through Adjacencies >$2B from acquisitions and new
Slide 8: Bennett Morgan, President & COO
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Slide 9: Industry is 34% Smaller Since 2008
Jul-2011 AM Making Growth Happen Making Growth Happen Industry is Industry is 34% Smaller 34% Smaller Since 2008 Since 2008 Industry has declined over the past 3 years 2008 vs. 2011 Global Industry Retail Sales (Units) 2008 – 2011 Sales Trends ATV ATV SxS SxS SNOW SNOW MOTOR MOTOR CYCLES CYCLES INDU
Slide 10: SxS & N.A. Driving; Newer Growth Initiatives Contributing
SxS & N.A. Driving; Newer Growth Initiatives Contributing Jul-2011 AM Making Growth Happen Making Growth Happen Growth by Geographic Region Growth by Business/Product Line In a declining industry… We Made Growth Happen! $500M of Growth!! 2008 – 2011 Sales Trends ATV ATV SxS SxS SNOW SNOW VICTORY VIC
Slide 11: Aggressive Investments in Our Future
Most of These Have Not Paid Back Yet! Jul-2011 AM Making Growth Happen Making Growth Happen Aggressive Investments in Our Future New Product Development New Product Development SxS, ATVs, Motorcycles, Snowmobiles, PGA SxS, ATVs, Motorcycles, Snowmobiles, PGA More Advertising More Advertising MVP MVP
Slide 12: Slow recovery remains most likely scenario
Slow recovery remains most likely scenario 2011-2012 N.A. Macroeconomic Outlook 2011-2012 N.A. Macroeconomic Outlook Global – emerging economies lead . . . Europe lags North American GDP 2.5 to 3.0 for 2011 – slightly better in 2012 Housing, unemployment remain problematic Consumer confidence modest
Slide 13: A Bigger, Stronger, more Profitable Business
A Bigger, Stronger, more Profitable Business…Still Hungry and Humble What’s Different From 1 Year Ago? What’s Different From 1 Year Ago? Market Cap has doubled to $4B with st Half Sales (+44%) and EPS (+102%) growth SxS business significantly larger on huge market share gains and continued momentum
Slide 14: Drive organic growth - every business grows share
Drive organic growth - every business grows share ORV innovation delivers sales and profit growth Victory grows revenue and profits rapidly Snow is clear #2 with operating profit growth Polaris powertrain penetration grows Best in Powersports PLUS Best in Powersports PLUS Jul-2011 AM
Slide 15: Polaris Retail Trends Remain Strong; Industry Stable
Polaris Retail Trends Remain Strong; Industry Stable Jul-2011 AM Best in Powersports PLUS Best in Powersports PLUS Powersports Highlights Industry on plan and stable at -1% in Q2 & YTD Polaris Q2 Retail: ORV up mid-teens; Victory +40% Polaris #1 Powersports OEM in 2010 & 1H 2011 RZR XP fastest turni
Slide 16: Polaris is #1 in N.A. Powersports
Polaris is #1 in N.A. Powersports Jul-2011 AM Best in Powersports PLUS Best in Powersports PLUS Includes Total Motorcycle Industry Consolidated N.A. Market Share (Units)
Slide 17: Growth Accelerating
Growth Accelerating Acquire or partner, then integrate profitable revenue Bobcat continues to grow revenue Expand Defense sales to >$50M with product innovation SwissAuto Technology applied outside powersports Jul-2011 AM Bobcat Military Growth Through Adjacencies Growth Through Adjacencies
Slide 18: Strategic Acquisitions will Expand On-Road Presence
Strategic Acquisitions will Expand On-Road Presence Jul-2011 AM Growth Through Adjacencies Growth Through Adjacencies Milestones: Closed acquisition June 2011 Hired GEM personnel Retained vast majority of GEM dealers Next Steps: Stabilize volume - Re-energize dealers Future Product Planning Spirit L
Slide 19: International Investment & Expansion Continuing
International Investment & Expansion Continuing Global Market Leadership Global Market Leadership Grow EMEA and expand #1 share leadership position China distribution & partnerships drive profitable sales Establish India business foundation & key partnership Continue rapid Victory growth Jul-2011 AM
Slide 20: Operations as a Competitive Advantage
Strong Start – Driving for Results in Future Growth Initiatives Operations as a Competitive Advantage Operations as a Competitive Advantage Drives up to 220 basis points gross margin gain in FY 2011 Quality, delivery and performance targets delivered throughout manufacturing realignment Quality impr
Slide 21: When We Expand Margins; Investors Will Reward Performance
6.0% 6.5% 7.4% 8.4% 27.7% When We Expand Margins; Investors Will Reward Performance Strong Financial Performance Strong Financial Performance $28.65 $43.63 $78.02 22.8% 27.3% 29.2% Q4-'08 Q1-'09 Q2-'09 Q3-'09 Q4-'09 Q1-'10 Q2-'10 Q3-'10 Q4-'10 Q1-'11 Q2-'11 Stock Price FY NI Margin Gross Margin $118
Slide 22: Strong Financial Performance
Strong Start – Driving for Results in Future Growth Initiatives June YTD % Change in Total Company Sales June YTD Sales Growth by Region Strong Financial Performance Strong Financial Performance 2011 Full Year Guidance Sales $2,490M to $2,540M (+25% to +28%) Net Income up 45% to 47% EPS of $5.93 to
Slide 23: Q & A
Jul-2011 AM Polaris Industries Inc. Polaris Industries Inc. Q & A Q & A Polaris Industries Inc. Analyst & Investor Meeting July 27, 2011
Slide 24: Matt Homan, VP Off-Road Vehicles
Matt Homan, VP Off-Road Vehicles July 27 th , 2011
Slide 25: Off-Road Vehicles Agenda
Off-Road Vehicles Agenda Industry and Competitive Update Off-Road Vehicle Plans and Results Bobcat Adjacency Update Off-Road Vehicles – The Future
Slide 26: ORV Business Breakdown
ORV Business Breakdown ATV SxS Military Bobcat RANGER #1 Priority; Sportsman Remains Significant #1 business for revenue and profits Large business with significant profits Incremental Growth Opportunity
Slide 27: Farming/Ranching, Rec/Trail usage
Farming/Ranching Rec/Trail Rec/Trail Primary Property Hunt Farm Usage Hunt Property Hunt Rec/Trail Property Incremental to Polaris 70% 80% 48% (Did not consider any other Polaris products) RANGER = Mostly Work; RZR = Mostly Play; Sportsman = Both fia
Slide 28: Off-Road Vehicle Industry Trends
ATV SxS Military Bobcat Off-Road Vehicle Industry Trends ATV Industry Remains Weak – SxS Solid Growth in 2010 and 2011 SxS ATV Industry Trends 5 Year CAGR = -20% Modest improvement in 2010/2011 forecasted SxS Industry Trends 5 Year CAGR +2% – Driven by weak 2009 Solid growth in 2010/2011 forecasted
Slide 29: Off-Road Market Share Summary
Off-Road Market Share Summary Polaris #1 in ORV; #1 in SxS; Closing in on #1 in ATV ORV SxS ATV Trend #1 #1 #2 #2 #7 #1 #3 #5 #3 #4 #2 #6 #5 #8 #4 #6 #6 #5 #7 #3 N/A #8 #4 N/A #9 N/A #7 2010 Powersports Research SxS Data 2011 YTD ATV Market Share Numbers
Slide 30: Off-Road Vehicles Growth Strategy
Off-Road Vehicles Growth Strategy Strong Plan – Working to Drive Results New Products Drive Incremental SxS Growth Big News – RZR XP, RZR Big Retail Drivers Improvements – RANGER Heat, Limited Editions More Incremental Opportunities – RANGER Diesel Crew Gain Profitable ATV Share – Protect Sportsman
Slide 31: RANGER Retail Results
Strong Retail Results – Positioned Well to Continue ORV RANGER Retail Results All RANGER segments growing Share growth has been very strong RANGER (no RZR) #1 in SxS by over 2X next closest competitor RANGER MY’12 product and marketing plan positioned well
Slide 32: RANGER MY'12 New Products
ATV SxS Military Bobcat RANGER MY’12 New Products Improvements and Incremental Opportunities Drive Growth RANGER = Top Customer Improvements Diesel Crew = Incremental Opportunity Limited Editions = Drive Retail Heat = Big Reduction Hills = HD Engine Braking Incremental Customer International/Militar
Slide 33: RZR Retail Results
2011 Ahead of Plan; Incremental New Plays Working ORV RZR Retail Results Strong incremental RZR growth as new segments launched Clear leader in recreation segment RZR (no RANGER) is #2 in SxS market share (behind RANGER)
Slide 34: RZR XP
ATV SxS Military Bobcat RZR MY’12 New Products RZR XP – Razor Sharp EXTREME Performance NEW! RZR XP Fastest Turning in ORV History Highly Incremental to RZR Line No Competitor Is Close More Limited Edition News for ‘12
Slide 35: RZR 800 and RZR 570
ATV SxS Military Bobcat RZR MY’12 New Product Trail Machines 2X – RZR 800 and NEW! RZR 570 NEW! RZR 570 Competitive Advantages of RZR Patented low CG, 50” width, travel & suspension New ProStar 570 Engine 45HP single-cylinder, high revving DOHC RZR XP efficient transmission Outperforms the Competito
Slide 36: Sportsman ATV Market Share Results
2011 Sportsman Ahead of Plan; Sportsman Strategy is Working ORV ATV Market Share Results Significant share gains across Sportsman segments Sportsman leads in both “value” and “premium” segments Sportsman 500HO and Sportsman 850XP
Slide 37: Sportsman MY'12 New Products
ATV SxS Military Bobcat Sportsman MY’12 New Products More Power and More Value for MY’12 NEW! MY’12 Sportsman 850H.0. NEW! MY’12 Sportsman 400, 500, 800 77HP – For the Same Money 20% More Acceleration #1 Customer Request 21% More Capacity New Kenda Tires #2 Customer Request
Slide 38: ORV Overall Results
ORV Overall Results RANGER – Consistent incremental growth RZR – Consistent incremental growth Sportsman – Consistent share growth Bobcat – Partnership is on-track
Slide 39: Bobcat Partnership Strategy
Bobcat Partnership Strategy Bobcat Partnership Strategy = Powerful Opportunity + Off-Road Vehicles Manufacturer Compact Construction Manufacturer
Slide 40: Bobcat Partnership Results
Bobcat Partnership Results Bobcat Delivering Results – Potential Remains Bobcat Retail – Gaining Momentum Bobcat Ship – Ahead of Plan Bobcat Co-Developed Products – On-Track
Slide 41: ORV Margin Expansion
ORV Margin Expansion ORV = Strong Margin Expansion Results Cost Down – Engineering and purchasing Pricing – Leveraged targeted opportunities (remain competitive) Monterrey – Impact just beginning
Slide 42: ORV 2011 Performance vs. Expectations
ORV 2011 Performance vs. Expectati (North America) 2011 Original 2011 Current Expectations Forecast 3-) PGLA ATV Industry Sales Remains VWeak Modestly Worse SxS Industry Sales Improves On Plan ORV Revenue Growth vs. 2010 Ahead of Plan Gross Profit Margins Expand Margins Ahead of Plan Competitive Pro
Slide 43: ORV Future Strategy Summary
ATV SxS Military Bobcat ORV Future Strategy Summary The Future Looks Bright for Off-Road Vehicles Incremental SxS Growth Profitable ATV Share Expand Margins Bobcat Partnership Strong RGR product plan Strong RZR product plan SxS market has upside Sportsman strong Still room to innovate Margin plan st
Slide 44: Ahead of plan summary
RANGER – Ahead of plan and poised to grow RZR – Ahead of plan and poised to grow Sportsman – Ahead of plan and poised to continue winning Bobcat – Ahead of plan with lots of opportunity
Slide 45: Snowmobiles, Parts, Garments & Accessories, Financial Services
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Slide 46: Video
7-27-10 VIDEO
Slide 47: Snowmobile Industry Overview
Snowmobile Industry Overview 7-27-11 Worldwide Industry Retail: Outlook for Industry: Industry will be up slightly in near term. Potential for modest continued growth with snow fall & economic recovery. Large installed base generates lucrative parts, garments & accessories business 95% repeat buyers
Slide 48: Snowmobile Industry Demographics
Snowmobile Industry Demographics Large, Stable and Active Base 7-27-11
Slide 49: State of Snowmobile Market
State of Snowmobile Market Snowfall Remains the Key for The Industry 7-27-11 Snowfall good to great last winter across North America. Polaris only OEM to gain market share. Dealer inventory levels lowest since 1997. Enthusiast base purchasing premium products. Ultimate segment growing fastest. Promo
Slide 50: Snowmobile Industry: 2010/2011 North America
Snowmobile Industry: 2010/2011 North America Growth in Mountains, Crossover & Utility 7-27-11 Industry By Segment Industry By Engine Size Industry By Engine Type Polaris Highlights Biggest retail % increase since 94/95 Dealer inventory lowest in 16 years 5 of top 6 selling models in the industry Ult
Slide 51: New Products: MY '12
New Products: MY ’12 30% of NA Orders; Big Share Growth Opportunity Selling Points 1) On Trail Performance: “Heart of a Rush” 2) Off Trail Capability: “Soul of a Crossover” 3) Consumer Built: Wind Protection, Seat, Storage 7-27-11 Adventure Selling Points 1) Performance without Compromise 2) Pro-Rid
Slide 52: Polaris
2 PGLARIS'
Slide 53: Snowmobile Quality
Snowmobile Quality Industry Leading Product Quality Remains Our #1 Goal 0 0 7-27-11 Reliability/Durability #1 key performance criteria for Polaris sled buyers Snowmobile quality has improved significantly! Net promoter scores (NPS) improved 15% to #2 in industry Warranty claim $ and problems per 100
Slide 54: Snowmobile Outlook
Snowmobile Outlook Product Innovation & Quality Keys to Success 7-27-11 2011 Calendar Year: MY ’12 product intro exceeded expectations, orders up > 30% Revenues expected to be up approximately 40% Snow check sales up over 70%. International retail up: Sweden/Norway solid year; Russia growing. Retail
Slide 55: Pure Polaris Overview
Pure Polaris Overview 7-27-11 COMPETITION: COMPETITION: Aftermarket: i.e.; Parts Unlimited, Tucker Rocky, Western Powersports, MotoVan, Indirects: Other OEM’s Service Parts, Accessories, Apparel & Financial Services 49,000 SKU’s, $344 Million in Sales in 2010 Highest Gross Margins Top Selling Commod
Slide 56: PG&A Strategic Trend
PG&A Strategic Trend – 2000s 40+% Operating Profit Margin 7-27-11 Decade of Growth and Margin Expansion 10 Year Average Growth Rates: Revenue: 7% (detailed below) Operating Profit: 12%
Slide 57: PG&A Revenue Mix
PG&A Revenue Mix 7-27-11 APPAREL 3% PARTS 50% ACCY 47% ORV 74% 2010 PRODUCT MIX BY GEOGRAPHY 2010 PRODUCT MIX BY PRODUCT LINE 2010 PRODUCT MIX BY BUSINESS Revenue Growth Drivers: SxS Accessories + Bobcat International Parts & Accessories SxS Parts Victory Accessories Acquisitions: Indian, GEM INT'L.
Slide 58: Marketing & Merchandising Win In The Dealership
Marketing & Merchandising Win In The Dealership 7-27-11 7-27-11 More resources on growth dealers In-dealership merchandisers Pure Retail Excellence Program Free fixtures & signage Drive salesperson effectiveness Easy to use dealer catalog "Go–To–Market" guides: New products, sales programs, retail t
Slide 59: PG&A Distribution
PG&A Distribution Timely, Accurate Shipments; Productivity Driven Operation Vermillion, SD distribution center 381K sq. feet; expanded in ‘08 State of the art facility Ship to 130 countries 3,000 dealers worldwide 7 Subsidiaries, 40 distributors 2 shifts,140 people Complete, fast, accurate shipments
Slide 60: Innovation Drives Sales
Innovation Drives Sales Industry-Leading Quality, Fit & Ease of Installation RANGER ® : 40 New Accessories Pro-Steel™ Cab Enclosure Crew Sport Roof Poly Flip-up Windshield Ranger SSV Overhead System RANGER RZR ® : 40 New Accessories Lock&Ride Tinted Roof Lock&Ride Half Windshield RZR 4 Aluminum Roof
Slide 61: Retail Financial Services
Retail Financial Services 7-27-11 Retail Credit/Other Services Income Approval Rates Credit Penetration Partner Status: (No Credit / Funding Risk) HSBC Revolving: Expires October 2013. NA credit card business is for sale. Sheffield Installment: Expires Feb. 2016. ORV focus. Profit sharing opportunit
Slide 62: Wholesale Credit to Dealers
Wholesale Credit to Dealers Competitive Advantage for Polaris and Dealers 7-27-11 $455 $498 $555 $710 $723 Q2 Q2 $6.1 $6.5 $12.6 $13.6 $13.2 $13.9 2011E Q2 YTD Q2 YTD Joint Venture Partnership with GE for Dealer Financing in U.S. – Polaris Acceptance Established in 1996. Stable relationship. Shared
Slide 63: Summary
Summary 7-27-11 Summary Snow Product key to share growth … 90% of line-up new MY ’10 – MY ‘12 Large, stable and active installed base Solid cash flow business that is growing again PG&A Proven ability to grow sales and margins Innovation drives growth. Industry leading integration with vehicles High
Slide 64: Driving Retail Growth With Dealers
Driving Retail Growth With Dealers Winning Product + Winning Support Programs + Dealer Network Partnership -1% +17% Retail Before Orlando 2010 (R12 ending June 2010) Retail Since Orlando 2010 (R12 ending June 2010) Strong Polaris / Victory Retail Sales Growth in North America
Slide 65: Network Brand Value Much Stronger
Network Brand Value Much Stronger Polaris Accelerated to Strong #2 Position within Powersports Strong Polaris / Victory Retail Sales Per N.A. Dealership (R12 ending March 2011)
Slide 66: Dealership Count Growth
Dealership Count Growth Leveraging Polaris Momentum & Business Model Advantage to Win Polaris / Victory Polaris / Victory N.A. Dealership Count Growth (1Q’2011 % chg vs. 1Q’2010)
Slide 67: Polaris N.A. Dealer Network Health
Polaris N.A. Dealer Network Health Polaris Positioned to Lead & Win • Polaris Retail Selling Margins RANGER , RZR, and Sportsman 500 HO Victory Cross and Highball RMK and RUSH snowmobiles PURE accessories • Dealer Inventory Levels Now in-line with retail sales trends For ATV, Victory, and Snowmobile
Slide 68: Polaris Roadmap
Polaris Roadmap Best in Powersports PLUS N.A. Powersports Distribution Leadership Industry Leading Dealer Retail Selling Practices Strong Dealership Count Positions Right Product, at Right Place, at Right Time 1. Lead Best Dealership Retail Selling Practices Strong dealership participation with V.I.
Slide 69: Best Dealership Retail Selling Practices
Best Dealership Retail Selling Practices Build Towards Industry Leading Retail Behaviors 1. Strong Dealership Participation with V.I.P. Program 2. Increase the Number of Retail Selling Tools Utilized by Each Dealership + pt. retail sales lift advantage Use more tools and sell more units units units
Slide 70: Stronger Dealership Count Position
Stronger Dealership Count Position Properly Penetrate Key Volume Markets 1Q 2011 Count Long Range Plan 1. Achieve Industry Market Segment Leadership Positions 2. With High Quality Dealership Partners SxS plus ATV Snowmobiles Motorcycles
Slide 71: Max Velocity Program
Max Velocity Program Right Product, at Right Place, at Right Time 1. Improve ORV Product Availability from Factory 2. Phased Roll-out of MVP Segment Stocking for Victory Motorcycles +9 pts +11 pts
Slide 72: On-Road Mission
On-Road Mission Actual Guidance $53M +60% to +65% Making Revenue Growth Happen Right Now $82M Actual
Slide 73: On-Road Mission
On-Road Mission Actual Guidance $53M +60% to +65% Pushing for More Growth to Deliver Our Aggressive Revenue Goal $82M Actual $700+M Long Range Plan
Slide 74: On-Road Roadmap
On-Road Roadmap 1. Develop Sizeable Heavyweight Motorcycle Business 2. Enter Segments Beyond Heavyweight Motorcycles 3. Create Global Brand and Distribution Presence 1. Penetrate Market Segments Poised for Growth 2. Pursue Leading Positions In Selected Growth Markets 3. Apply Polaris Vehicle Applica
Slide 75: Small Vehicle Business Development
Small Vehicle Business Development ************* ************ *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** ***
Slide 76: Small Vehicle Business Development
Small Vehicle Business Development $300+M $1M Long Range Plan 1. Penetrate Segments Poised for Growth People Mover (PM) Light Duty Hauler (LDH) 2. Pursue Leading Marketing Positions 3. Apply Polaris Product Innovation Business Development Strategy Revenue Goal
Slide 77: PM & LDH Market Overview
PM & LDH Market Overview Low Speed Vehicles Golf Cars Golf Cars Industrial Vehicles Utility Vehicles $1.6 Billion Global People Mover & Light Duty Hauler Market $0.6B $0.6B 100% People Movers (PM) Used Golf Cars Utility Shuttle Vehicles Light Duty Haulers (LDH) Used Golf Cars Golf Cars Low Speed Veh
Slide 78: PM & LDH Market Trends / Outlook
Growth Outlook Competitive Conduct Barriers to Entry Customer Behavior Overall Attractiveness Operating Margin PM & LDH Market Trends / Outlook LRP Outlook is Basis for Assessment Highly unattractive Highly attractive 5 - 10%, favorable ageing demographics 5 - 7% Fragmented, golf cars and purpose bu
Slide 79: PM & LDH Vehicle Landscape
PM & LDH Vehicle Landscape People Mover (PM) Light Duty Hauler (LDH)
Slide 80: PM & LDH Competitive Landscape
PM & LDH Competitive Landscape Attractive dealer distribution network presence Primary business = price sensitive fleet golf buyer Also sell into PM & LDH markets (with new and used fleet golf units) Extensive dealer distribution network presence Trusted brand choice amongst purchasing agents Limite
Slide 81: PM & LDH Customer Profile
PM & LDH Customer Profile End User Distribution People Mover (PM) Light Duty Hauler (LDH) Private Fleet B2B Dealers Government B2B Dealers Master Planned Community Consumers Golf Dealers
Slide 82: Global Electric Motorcars (GEM)
Global Electric Motorcars (GEM) Market leader in low speed vehicles Existing business operations Well-known electric vehicle brand In-field mobile service expertise Make-to-order assembly capability Non-union workforce GEM at a Glance By Market Segment Distribution Channel Mix Sales Revenue $34M $39
Slide 83: GEM Roadmap
GEM Roadmap Platform for Polaris Growth Drive Global Electric Motorcars Growth 1. Stronger and More Effective B2B Distribution Presence Globally 2. Effective Lead Management Marketing Process 3. Launch More Competitive Vehicle Offerings – grow share, enter new segments 4. Expand Profitable Mobile Se
Slide 84: Motorcycles
Motorcycles Motorcycles Steve Menneto, General Manager Steve Menneto, General Manager July 27, 2011 July 27, 2011
Slide 85: N.A. 1400+cc Industry
N.A. 1400+cc Industry N.A. 1400+cc Industry Touring Cruiser Industry Retail History Units Touring Cruiser 2011 Industry Retail N.A. 1400+ cc Industry slightly up – +2% YTD Touring growing at over 10% Cruiser Industry decline is moderating vs. last year
Slide 86: Driving a Healthy Retail/Inventory Balance
Driving a Healthy Retail/Inventory Balance N.A. Victory Performance N.A. Victory Performance +41% - 49%
Slide 87: Victory Growing Share In Difficult Market Conditions
Victory Growing Share In Difficult Market Conditions 2011 N.A. 1400+cc Competitive 2011 N.A. 1400+cc Competitive Summary Summary Rank Manufacturer Strategy Share Trend Harley Aspiration Brand Most Complete Product Line-up Huge Installed Owner Base Victory Modern American Styling #1 Owner Satisfactio
Slide 88: Brand Position
Brand Position Customer Price Place - Distribution Product Go To Market with Premium & Performance Brands Polaris Heavyweight Motorcycles Polaris Heavyweight Motorcycles American Heritage Premium Die-Hard Prestige Accessible Exclusive “Classic” Quality Premium Product Experience American Heritage Di
Slide 89: Indian Strategy
Indian Strategy Indian Strategy 1. Integrate Indian Operations into Spirit Lake 2. Improve Product Quality & Performance 3. Establish a Premium Global Distribution Network 4. Build a World Class Team
Slide 90: Victory Strategy
Victory Strategy Victory Strategy 1. Expand Victory Touring Business 2. Strengthen Victory Proposition With Core Customer 3. Lean Operations 4. International Sales Growth 5. Expand Global Distribution Presence
Slide 91: Industry Leading Performance, Comfort and Storage
Industry Leading Performance, Comfort and Storage CROSS COUNTRY TOUR CROSS COUNTRY TOUR US MSRP: $21,999 W/ABS US MSRP: $21,999 W/ABS
Slide 92: Victory Branding Video
Victory Branding Victory Branding Video
Slide 93: Strengthen Victory Proposition
Strengthen Victory Proposition Strengthen Victory Proposition Leverage Industry Leading Dealership & Product Satisfaction Cruisers – New Styling & More Value “More powerful than the Harley and able to leap small curbs in a single bound, the High-Ball serves notice that there is more than one America
Slide 94: Lean Operations
Lean Operations Lean Operations Improve Dealer Inventory Turns Units per Dealer down 17% … time to Improve Stocking Mix of Non-currents to Currents… healthy at 80% current Victory MVP Southeast Pilot Test & Adjust … rapid expansion Improve Victory Flexibility to Meet Customer Demands Move to Pull Ba
Slide 95: International Retail +59% 2011 YTD
International Retail +59% 2011 YTD Victory International Victory International
Slide 96: Growing N.A. & International Distribution
Growing N.A. & International Distribution Expand Global Distribution Expand Global Distribution 1H 2011 added 26 new dealers in North America
Slide 97: Q & A, Steve Menneto
Polaris Industries Inc. Polaris Industries Inc. Q & A Steve Menneto General Manager Motorcycles July 2011
Slide 98: Break
Jul-2011 AM Polaris Industries Inc. Polaris Industries Inc. Break Break Polaris Industries Inc. Analyst & Investor Meeting July 27, 2011
Slide 99: Dave Longren, Chief Technical Officer
Dave Longren Dave Longren V.P. – V.P. – Chief Technical Officer Chief Technical Officer
Slide 100: Military Business 2011 Highlights
Executing Our Plan July 27, 2011 Military Business Military Business 2011 Highlights Added +150 Years of Defense Leadership Experience In 1H Began Delivery of National Guard 5 YR $67M Contract Awarded Ranger EV R&D Contract Won Afghan National Police & Israeli Defense Contracts Delivered 1 st Unmann
Slide 101: Military Plan: Positioned For Growth
Positioned For Growth Military Plan Military Plan July 27, 2011 Leverage Full Line of Ultra Light Mission Support Vehicles Leverage RZR SW, MVXP, MVRS700, plus Sportsman & RANGERs Army, National Guard, Air Force, Special Forces, etc. New Products to Serve More Markets RANGER Diesel, Electric & Hybri
Slide 102: Market Leader
Market Leader • Emergency Response • Training Facility Support • Medical Evacuation • Search & Rescue • Counter Terrorism • Maintenance Support • Range Control • Border Patrol Support Tactical • Recon • Casualty Evacuation • Aviation Support • Police/Security Forces • Combat Engineers • Maintenance
Slide 103: Product Strategy
Product Strategy Product Strategy Low Cost Mobility Solutions Leverage Off-Road Vehicle Capabilities Innovation Utilize the Polaris Innovation Model Develop Unique Military Solutions and Vehicles as Required Unmanned vehicles Speed to Market Close Work With Soldiers, Understand Their Needs & Trade O
Slide 104: Department of Defense Unmanned Ground Vehicles budget
+P SLAP OULIED,RUEPELIPEAEDELLDPLONDICDS HEDEUDPLEELDELESP UIE HEDPPADDDEAORELDPEEOEEUOIEED- PEEEDELAIEOS BLOODED Department of Defense Unmanned Ground Vehicles. FY12 Presidents’ Budget Fyit FYt2 PYt3 PY44 PYIS FYi6 gw Research mProduction YLEEUL — SILEAILEEAELALOLUPDEAUITEASELL,.SYETAAPLESYELLASULE
Slide 105: Military Summary
Military Summary Military Summary Polaris #1 Ultra Light Military Vehicle Winning the competitive battle Developing key technologies 2011 Results on Plan for a Record Year Government budget is a concern Positioned Well for Emerging Requirements Strong Growth Opportunity July 27, 2011 Long Range Sale
Slide 106: Engineering
Engineering Engineering Dave Longren Dave Longren V.P. – V.P. – Chief Technical Officer Chief Technical Officer
Slide 107: Making Growth Happen - Engineering
Driving Growth Making Growth Happen - Making Growth Happen - Engineering Engineering 1. Develop the Most Compelling Products in the Industry Deliver the right product at the right time Open new and adjacent markets 2. Create Loyal Customers that Promote the Product & Brand Industry leading Net Promo
Slide 108: Reduction In Time to Market
+50 Percent Reduction In Time to Market Increased Market Share All Businesses The Right Product The Right Product Well Thought-out Product Plans Common Design & Architecture Plans Domestic & International Variants Development Processes Tailorable to Unique Product Needs Small Focused Teams Utilize E
Slide 109: New Growth Market/Customer Opportunities
New Growth Market/Customer Opportunities Disruptive Products Idea Screening Product Planning Investment Allocation +3,000 Employees Generating Ideas Business Strategy Growth Market Opportunities – Problem Identification Focus Group Research, Net Promoter Score Company-wide Product Planning Company-w
Slide 110: Engineering Speed To Market
Right Product at the Right Time Engineering Speed To Market Engineering Speed To Market World Class Development Staff & Process Internally Developed Design Tools & Models Analysis directly to production tooling Integrated tooling & part cost analysis Unique Product Segment Testing Capabilities Lean
Slide 111: Increased Consumer Satisfaction
Increased Consumer Satisfaction Most satisfied customers for our products Top Net Promoter Score 90+ Our consumers are recommending our products to friends and Family Consistent market share gains in all businesses Consumer Quality Consumer Quality World Class Net Promoter Scores (NPS) World Class N
Slide 112: Controlling Our Destiny: Powertrain
Controlling Our Destiny Powertrain Powertrain Heart of the vehicle Control Key Intellectual Property Common Architecture Designs Design for Manufacturability & Quality Cost $’s Per Horsepower Consumer Warranty Claims Number of Engine Families Down 35% Down 25% Down 65% July 27, 2011
Slide 113: Summary
Summary Summary Driving Growth In Emerging Military Markets Leveraging our proven innovation capability Advanced technology development & integrated vehicle designs Innovation Driving Sales And Market Share Gains Relentless Focus On Operational Excellence Speed to market Reduced costs Improved quali
Slide 114: Q & A, Dave Longren
Polaris Industries Inc. Polaris Industries Inc. Q & A Dave Longren VP - Chief Technical Officer July 27, 2011
Slide 115: Global Market Development
Global Market Development Global Market Development Mike Dougherty, Vice President Mike Dougherty, Vice President Analyst & Investor Meeting Analyst & Investor Meeting July 27, 2011 July 27, 2011
Slide 116: Global Market Leadership Overview
Global Market Leadership Overview Global Market Leadership Overview Polaris International Sales ($000 ’ s) $306 $252 Up 20% to 25% Growth 2011 Objectives Double Digit Sales Growth Further Strengthen Core EMEA business Develop new markets – BRIC focus Develop new partnerships – China / India Polaris
Slide 117: Global Footprint 2016
Global Footprint 2016 Regional HQs JV / Mfg / Eng Ops Subsidiaries Polaris International Locations Polaris International Locations
Slide 118: Solid Growth + New Market Development
Solid Growth + New Market Development Off-Road Vehicles International Division 2011 – International Division 2011 – June YTD June YTD Grow: +28% SxS & Victory Driving Growth. All Products & Regions Growing. EMEA : +23% North European Subs + Russia & UAE APac : +54% Aus +47%, China gaining momentum,
Slide 119: Making Growth Happen +28%
Making Growth Happen +28% International YTD 2011 Sales International YTD 2011 Sales Currency ORV PG&A Victory/ Snow 1 st Half 2011 $153 $11 $22 $3 $2 $195 Total Intl Total Intl % Change in Total International Sales Volume 12% Product mix and price 9% Currency 7% 28% Sales growth continues to outperf
Slide 120: EMEA Update - June YTD
Business +23% YTD. Maintain growth in 2H. EMEA Update – EMEA Update – June YTD June YTD HQ : Opened in March near Geneva. Fully operational. Foundation for future growth High Growth Markets: Mid East & Russia, Germany On Road. Snow Scandinavia Protect ORV Markets: France, Italy, UK & Finland. Remain
Slide 121: Making Growth Happen in Key Emerging Markets
Making Growth Happen in Key Emerging Markets New Market Development 2011 New Market Development 2011 Russia Growth: Strong Snow and ORV business. On path to be #1. China Development - 10 Dealers. Yichun Province Order. Building ORV Market Brazil Penetration – Building Foundation. Team in Place. SKD
Slide 122: Building ORV Market in China
Continue to Energize Media, and Customers; Opening More Stores Building ORV Market in China Building ORV Market in China Urumqi Riding Famous Racer Han Han Endorsement Yulin Store Opening Shanghai Riding Event
Slide 123: Diesel Power for 6!
Diesel Power for 6! NEW RANGER RANGER CREW DIESEL CREW DIESEL Diesel is #2 Ranger by volume in 2011 for Int’l 90% Peak Torque @ 1600 RPM 900 Diesel – 24HP Yanmar 55 AMP Alternator 40% More Range Key MY12 Int’l Products Key MY12 Int’l Products
Slide 124: The Revolution Continues! RZR XP INTL
The Revolution Continues! NEW! RZR XP 900 INTL All the features found on the RZR S & 4 Intl models E-Marked Maxxis Bighorns on Painted Aluminum Wheels Rear Differential Plus E-Marked LED Lights Electronic Power Steering Parking Brake Clicker Fox Shocks New Extreme Performance New Extreme Performance
Slide 125: Strengthen Core & Develop New Markets
Strengthen Core & Develop New Markets International 2H 2011 Plan International 2H 2011 Plan Growth Continues – Keep ORV Leadership Position – Gain More ORV Share w/ SxS – Expand Victory Distribution & Market Share – Enter Work SxS Segment with Diesel Strengthen European Business with HQ Opening Expa
Slide 126: SxS > ATV in 2012
SxS > ATV in 2012 Int’l Rev Trends by Product Line Int’l Rev Trends by Product Line
Slide 127: International Division Long Range Plan
$1B Revenue, Global Footprint, New Markets, On Road Polaris Int’l Sales ($Millions) International Division Long Range Plan International Division Long Range Plan Triple revenue to $1B+ Double core business with SxS focus & motorcycle expansion Significant new business: On road, emerging market produ
Slide 128: Grow - Strengthen Core - Develop New Markets
Grow - Strengthen Core – Develop New Markets Global Market Leadership Global Market Leadership 2011 YTD Progress… 2011 YTD Progress… Make Growth Happen >25% of Polaris Revenue 1H PII Int’l Rev ~ 15% 1H Int’l Growth = 28% FY Int’l Growth = 20-25% Strengthen Core ORV Business ORV Market Share Double S
Slide 129: Operational Excellence
Operational Excellence Operational Excellence A Pathway To World Class Performance A Pathway To World Class Performance Suresh Krishna Suresh Krishna VP – VP – Global Operations & Integration Global Operations & Integration July 27, 2011 July 27, 2011
Slide 130: Agenda
Agenda Agenda 1. NA Realignment 2. Manufacturing Excellence 3. Supply Chain Execution 4. Lean Deployment: Polaris Way 5. Acquisition Integration Analyst - July 2011
Slide 131: Manufacturing Realignment
Engines & Exhausts to Monterrey Tube Fab to ROS RZRs to Monterrey RANGERs to Monterrey Seats & Stampings to Supplier Project Management & Teamwork Drive Success Tube Fab to ROS < 6 Months Analyst - July 2011 Manufacturing Realignment Manufacturing Realignment Manufacturing Realignment
Slide 132: Roseau Transition
Huge Project Load With Many Transitions Installed Tube fab Target Investment in ROSEAU CENTER OF EXCELLENCE: $6M Emptied Line D and… Analyst – Jul-11 Roseau Transition Roseau Transition Roseau Transition Consolidate all ATV to Line A Move SxS from Line D to B
Slide 133: NA Realignment Update July 2011
Quality Solid Start – Significant Work Ahead (in millions) Monterrey Production Volume Analyst – Jul-11 NA Realignment Update July 2011 NA Realignment Update July 2011 Financials Freight Watch: escorts northbound loads, 100% effective to date Emergency Response Plan developed and implemented GPS tra
Slide 134: Monterrey Video
Analyst – Jul-11 Monterrey Video Monterrey Video
Slide 135: Manufacturing Productivity
July 14, 2010 Lean Implementation providing Strong Results Analyst – Jul-11 Manufacturing Productivity Manufacturing Productivity
Slide 136: Supply Chain Execution
July 14, 2010 Deep supplier relationships driving cost & quality improvements Analyst – Jul-11 Supply Chain Execution Supply Chain Execution
Slide 137: Japan: No disruption to Polaris parts supply
Fuji Japan: No disruption to Polaris parts supply Japan: No disruption to Polaris parts supply • Contacted all Tier 1 suppliers • Engaged tier 1s to identify parts availability from their Tier 2 & tier 3 suppliers • Daily calls to monitor parts availability at supplier’s factories • Monitored all sh
Slide 138: Commodities: Proactive Management
Commodities: Proactive Management Commodities: Proactive Management Cost Mitigation Strategies: • Financial Hedges • Forward Buys • Reverse Auctions • Supplier Umbrella Contracts • Long-term Agreements Analyst – Jul-11
Slide 139: 2011-2014 World-wide Procurement
NAFTA 61 63% Japan 11 5% Asia LCC 20 23% Europe 8 8% Direct OE & Aeon Purchases only – Tier I Country of Origin. S. America 0 1% 2011: LCC – 24% 2014: LCC – 28% 2011 - 2011 - 2014 World-wide Procurement 2014 World-wide Procurement Analyst – Jul-11
Slide 140: Inventory Reductions
At Stable Levels Inventory Reductions Inventory Reductions Analyst – Jul-11
Slide 141: Lean Development: Polaris Way
Driving Significant, Measurable Improvements to our Bottom Line! • Eliminate Waste • Improve Quality • Improve Lead- time/Delivery • Reduce Cost Analyst – Jul-11 Lean Development: Polaris Way Lean Development: Polaris Way
Slide 142: Video on Lean: Roseau Story
VIDEO ON LEAN: ROSEAU STORY VIDEO ON LEAN: ROSEAU STORY Analyst – Jul-11
Slide 143: PDP, NA Realignment, Lean, Acquisition Framework
PDP NA Realignment Proven Ingredients – New Recipe for Success Lean: Polaris Way Integrating Acquisitions: Polaris Integrating Acquisitions: Polaris Acquisition Framework (PAF) Acquisition Framework (PAF) Stage / Gate Process for Integrated Product Development & Validation. This process enables: Spe
Slide 144: Q & A
Jul-2011 AM Polaris Industries Inc. Polaris Industries Inc. Q & A Q & A Polaris Industries Inc. Analyst & Investor Meeting July 27, 2011
Slide 145: Closing Comments, Scott Wine, CEO
Jul-2011 AM Polaris Industries Inc. Polaris Industries Inc. Closing Comments Closing Comments Scott Wine, CEO Scott Wine, CEO Polaris Industries Inc. Analyst & Investor Meeting July 27, 2011
Slide 146: Q & A
Jul-2011 AM Polaris Industries Inc. Polaris Industries Inc. Q & A Q & A Polaris Industries Inc. Analyst & Investor Meeting July 27, 2011