Brunswick Corporation · NYSE:BC
Brunswick — Q1 2024 Earnings Presentation
28 slides from Brunswick's earnings presentation, Apr 25, 2024
Slide 1: Q1 2024 Earnings Conference Call
Q1 2024 Earnings Conference Call APRIL 25, 2024
Slide 2: Forward-Looking Statements
BRUNSW ICK 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 abo
Slide 3: Use of Non-GAAP Financial Information and Constant Currency Reporting
BRUNSW ICK 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 c
Slide 4: Business Overview – Dave Foulkes, CEO
BRUNSW ICK CORPORATION – EARNINGS RELEASE 01 Business Overview – Dave Foulkes, CEO ©2024 BRUNSW ICK CO. CONFIDENTIAL AND ALL RIGHTS RESERVED. 4
Slide 5: First Quarter Performance in line with Expectations
BRUNSW ICK CORPORATION – EARNINGS RELEASE $1.4B $1.35 +200bps First Quarter Mercury U.S. Outboard Net Sales Performance (-21.7% vs. 2023) Adjusted1 EPS (-47.5% vs. 2023) Market Share vs. 2023 in-line with Expectations Q1 2024 $64M $400M 36.1 Share Repurchases Debt Issuance (+160bps above 5-year trea
Slide 6: Segments continue to adapt with solid start to the year
BRUNSW ICK CORPORATION – EARNINGS RELEASE Segments continue to adapt with solid start to the year New Imagery - Alli Propulsion Engine Parts & Navico Group Boat1 Accessories • Gained 200bps U.S. outboard retail • Q1 2024 Products sales down • OEMs moderating orders to control • Q1 U.S. SSI main powe
Slide 7: External, Customer and Consumer Conditions
BRUNSW ICK CORPORATION – EARNINGS RELEASE External, Customer and Consumer Conditions Refresh Image External Landscape Dealer & Consumer OEM Environment Boat Shows Health • Stable US economic indicators with • Dealer sentiment generally • Marine OEMs continue to moderate • Boat show unit and revenue
Slide 8: Q1 2024 Revenue Mix & Growth Rates
BRUNSW ICK CORPORATION – EARNINGS RELEASE Geographical Revenue Mix Q1 2024 Canada, 5% Revenue Mix & 1 Europe, Growth Rates 15% Q1’24 global sales Revenue YoY declined 22 percent on a U.S. -23% constant currency basis, U.S., Asia Pacific, excluding acquisitions Europe -18% 67% 7% Canada -39% Asia Pac
Slide 9: U.S. Industry Retail and Pipeline Trends
BRUNSW ICK CORPORATION – EARNINGS RELEASE U.S. Industry Retail Q1 2024 U.S. Industry Retail U.S. Brunswick Pipeline Change vs. Q1’23 and Weeks On Hand and Pipeline Trends Ending Q1 2024 25 100 20 • U.S. pipeline ended the 75 Units in thousands quarter as expected at 36.1 Weeks on Hand 15 weeks on ha
Slide 10: Financial Overview – Ryan Gwillim, CFO
BRUNSW ICK CORPORATION – EARNINGS RELEASE 02 Financial Overview – Ryan Gwillim, CFO ©2024 BRUNSW ICK CO. CONFIDENTIAL AND ALL RIGHTS RESERVED. 10
Slide 11: Overview of First Quarter 2024 Adjusted Results
BRUNSW ICK CORPORATION – EARNINGS RELEASE Overview of First Quarter 2024 Adjusted Results Net Sales ($M) Operating Earnings1 ($M) $1,744 $262 • Brunswick delivered solid Q1 results consistent with $1,365 $142 initial expectations, despite (22%) (460) (46%) a continued cautious macro- bps economic en
Slide 12: Propulsion Segment – Q1'24 Performance
BRUNSW ICK CORPORATION – EARNINGS RELEASE 1 Propulsion Segment – Q1’24 Performance Market share gains continue despite planned lower wholesale engine shipments vs. Q1 2023 Q1’24 Net Sales Adjusted Operating Margin of % Change vs. Q1’23 $578.2 15.5% (23%) Down 460 bps vs. Q1’23 $450.5 (GAAP Operating
Slide 13: Engine P&A Segment – Q1'24 Performance
BRUNSW ICK CORPORATION – EARNINGS RELEASE 1 Engine P&A Segment – Q1’24 Performance Steady performance in line with expectations, with sequential improvement over Q4 2023 Q1’24 Net Sales % Change vs. Q1’23 Adjusted Operating Margin of 13.9% $262.4 Down 290 bps vs. Q1’23 (GAAP Operating Margin of 12.7
Slide 14: Navico Group Segment – Q1'24 Performance
BRUNSW ICK CORPORATION – EARNINGS RELEASE Navico Group Segment – Q1’24 Performance 1 As expected, softer Marine OEM demand driving lower wholesale orders; sales to RV market improving Adjusted Operating Margin of Q1’24 Navico Group Net Sales 7.2% Down 380 bps vs. Q1’23 (GAAP Operating Margin of -1.1
Slide 15: Boat Segment – Q1'24 Performance
BRUNSW ICK CORPORATION – EARNINGS RELEASE Boat Segment – Q1’24 Performance 1 Steady performance as anticipated, led by continued strength in premium Saltwater Fishing products Q1’24 Net Sales % Change vs. Q1’23 Adjusted Operating Margin of $425.7 7.4% Down 320 bps vs. Q1’23 (26%) (GAAP Operating Mar
Slide 16: 2024 Guidance
BRUNSW ICK CORPORATION – EARNINGS RELEASE 2024 Guidance1 Operating Revenue EPS Margin $6.0B to 12.0% to $7.00 to $6.2B 13.0% $8.00 No Change No Change No Change Free Cash Quarter 2 Quarter 2 Flow Revenue EPS $1.5B to $1.85 to $350M+ $1.6B $2.05 No Change 1EACH ON AN “AS ADJUSTED” BASIS WHERE APPLICA
Slide 17: 2024 Outlook – P&L and Cash Flow Assumptions
BRUNSW ICK CORPORATION – EARNINGS RELEASE 2024 Outlook – P&L and Cash Flow Assumptions Foreign Currency Quarterly Dividends Earnings Impact $0.42 Per Share Flat to down $15M Previously: $0.40 Per Share Previously: Flat to down slightly Effective Share Repurchases Tax Rate- As Adjusted1 ~22% ~$250M P
Slide 18: Wrap-Up – Dave Foulkes, CEO
BRUNSW ICK CORPORATION – EARNINGS RELEASE 03 Wrap-Up Dave Foulkes, CEO ©2024 BRUNSW ICK CO. CONFIDENTIAL AND ALL RIGHTS RESERVED. 18 ©2024 BRUNSW ICK CO. CONFIDENTIAL AND ALL RIGHTS RESERVED. 18
Slide 19: Enhancing and Expanding Our Industry-Leading Offerings
BRUNSW ICK CORPORATION – EARNINGS RELEASE Enhancing and Expanding Our Industry-Leading Offerings 25+ product launches across our businesses in Q1 2024 Avator 75e/110e New Tampa Location 365 Conquest Flite AIR Joystick Steering for NSX Ultrawide Eagle Crowne 250 Single-Engine Vessels
Slide 20: Exceptional Recognition Across the Organization
BRUNSW ICK CORPORATION – EARNINGS RELEASE Exceptional Recognition Across the Organization 2024 America’s Best 2024 Most Trustworthy CES Innovation Award Miami Boat Show Large Employers Company in America Innovation Awards • For the 6th consecutive year • For the 2nd consecutive year, • Mercury's Ava
Slide 21: Appendix
BRUNSW ICK CORPORATION – EARNINGS RELEASE Appendix ©2024 BRUNSW ICK CO. CONFIDENTIAL AND ALL RIGHTS RESERVED. 21
Slide 22: 2024 Outlook Segment Guide
BRUNSW ICK CORPORATION – EARNINGS RELEASE 2024 Outlook Segment Guide1 Propulsion Engine P&A Navico Group Boat Net Sales Guide2 ~$2.6B ~$1.2B ~$0.9B ~$1.8B No Change No Change No Change No Change Operating Margin ~16.0% ~20% Low Mid to High Guide Double Digit Percent Single Digit Percent No Change No
Slide 23: 2024 Outlook – Capital Strategy and Other Assumptions
BRUNSW ICK CORPORATION – EARNINGS RELEASE 2024 Outlook – Capital Strategy and Other Assumptions Average Diluted Capital Depreciation Shares Outstanding Expenditures Debt Retirement ~$225M ~68M ~$225M ~$50M No Change No Change No Change Previously: ~$100M Combined Equity Tariff Working Capital Net In
Slide 24: Net Sales – Q1 2024
BRUNSW ICK CORPORATION – EARNINGS RELEASE Net Sales – Q1 2024 Net Sales decreased by $378.6 million, or 22 percent Segments Q1 2024 Q1 2023 % Change Propulsion $578.2 $751.6 (23%) NET Engine Parts & Accessories Navico Group 262.4 210.9 288.6 277.3 (9%) (24%) SALES Boat 425.7 575.2 (26%) (in millions
Slide 25: GAAP to Non-GAAP Reconciliations – Q1 2024
BRUNSW ICK CORPORATION – EARNINGS RELEASE GAAP to Non-GAAP Reconciliations – Q1 2024 Operating Earnings Diluted Earnings per Share (in millions, except per share data) Q1 2024 Q1 2023 Q1 2024 Q1 2023 GAAP $110.6 $236.1 $1.00 $1.56 Restructuring, exit and impairment charges 13.5 9.5 0.15 0.10 Purchas
Slide 26: GAAP to Non-GAAP Reconciliations – Q1 2024
BRUNSW ICK CORPORATION – EARNINGS RELEASE GAAP to Non-GAAP Reconciliations – Q1 2024 Operating Expenses (in millions) Q1 2024 Q1 2023 Selling, general and administrative expense $203.7 $211.3 Research and development expense 45.8 48.7 Restructuring, exit and impairment charges1 9.9 8.3 GAAP operatin
Slide 27: Tax Rate
BRUNSW ICK CORPORATION – EARNINGS RELEASE Tax Rate Q1 2024 Q1 2023 Effective Tax Rate - GAAP 1 21.4% 46.8% 2 Effective Tax Rate - As Adjusted 21.6% 22.5% (1) DECREASE IN THE EFFECTIVE TAX RATE IS DUE TO THE DISCRETE INCOME TAX EXPENSE RECORDED IN CONNECTION WITH THE INTERCOMPANY SALE OF INTELLECTUAL
Slide 28: Free Cash Flow
BRUNSW ICK CORPORATION – EARNINGS RELEASE Free Cash Flow (in millions) Q1 2024 Q1 2023 Net cash provided by (used for) operating activities from continuing operations ($148.1) ($14.5) Net cash (used for) provided by: Capital expenditures (54.0) (93.5) Proceeds from sale of property, plant, equipment