Polaris Inc. · NYSE:PII
Polaris — Polaris Industries — Q3 2013 Earnings Presentation
25 slides from Polaris's earnings presentation, Oct 22, 2013
Slide 1: Third Quarter 2013 Earnings Results
Third Quarter 2013 Earnings Results October 22, 2013 POLARIS INDUSTRIES INC.
Slide 2: Safe Harbor
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 2013 and 2014 sales, shipments, margins, and net income and cash flow from both continuing and discontinued operations
Slide 3: Scott Wine, Chairman & CEO
Scott Wine Chairman & CEO Third Quarter 2013 Earnings Results October 22, 2013 POLARIS INDUSTRIES INC.
Slide 4: Q3 2013 Sales and Net Income
$94.3 $116.9 Q3 2012Q3 2013+24% Q3 2013 Sales and Net Income Q3 2013 Sales and Net Income Record 3rd quarter sales and net income from continuing operations ORV Sales remained strong up 23%, snowmobiles up 25% and PG&A up 37% International Sales up 38%, includes Aixam Mega acquisition sales EMEA reg
Slide 5: Indian Motorcycle Global Reveal
Indian Motorcycle Global Reveal Indian Motorcycle Global Reveal Production Distribution Strong Dealer, Consumer and Press Enthusiasm Strong Dealer, Consumer and Press Enthusiasm Indian Motorcycle Production ramping up in Spirit Lake Distribution on plan ~200 global locations by year-end 2013 Q3-2013
Slide 6: Full Year 2013 Guidance
Full Year 2013 Guidance Full Year 2013 Guidance North American Sales growth and market share gains ORV expected to be up 11% to 12%; PG&A expected to grow about 30% International Sales projected to increase about 25% including acquisitions EMEA growth driven by Aixam Mega Net Income from continuing
Slide 7: Polaris Strategic Objectives
2013Guidance20202013Guidance2020Grow Sales >$8 Billion by 2020 Q3 2013 Progress Polaris Strategic Objectives Polaris Strategic Objectives 7 Q3-2013 3-5 Year Objectives Best in Powersports PLUS 5-8% annual organic growth ORV & Motorcycles gained share again Largest MY’14 product launch Indian re-laun
Slide 8: Bennett Morgan, President & COO
Bennett Morgan President & COO Third Quarter 2013 Earnings Results October 22, 2013 POLARIS INDUSTRIES INC.
Slide 9: N.A. Retail and Dealer Inventory
N.A. Retail and Dealer Inventory N.A. Retail and Dealer Inventory Q3-2013 Polaris Sales Continue Strong; Healthy Polaris N.A. Retail Sales Continue Strong; Dealer Inventory Healthy Total Dealer Inventory Change* Year-Over-Year Dealer Inventory Best in Powersports Plus JANFEBMARAPRMAYJUNJULAUGSEPOCTN
Slide 10: Model Year 2014 New Product Introductions
Victory® Cross Country 8-Ball Cross Roads 8-Ball MY’14 Victory Factory Custom Paint Program Indian® Chief® Classic Chief® Vintage Chieftain® RANGER® CREW 900 570 EFI CREW 570 EFI RZR® XP 1000 XP 4 1000 (Oct. ’13) 800 XC Sportsman® 570 EFI ` Touring 570 EFI 850 LE’s Model Year 2014 New Product Introd
Slide 11: ORV on the Gas with Product News
SxS SxS ATV ATV FY 2012FY 2013GuidanceSxS SxS ATV ATV Q3 2012Q3 2013Industry Polaris Best in Powersports Plus Best in Powersports Plus Q3-2013 N.A. ORV Retail Sales Q3 2013 Polaris ORV Sales ($ in millions) ORV on the Gas with Product News ORV on the Gas with Product News Polaris retail up in Q3 Q3
Slide 12: Growth Through Adjacencies: Polaris Defense and Commercial
12 Q3-2013 Growth Through Adjacencies Growth Through Adjacencies Polaris Defense Exciting Opportunities for Future Exciting Opportunities for Future Growth Polaris Commercial Revenue up double digits % in Q3’13 Expect slower retail ramp due to customer purchase process Investing in additional market
Slide 13: Snowmobiles: Inventory in Good Shape
Q3 2012Q3 2013FY 2012FY 201313 Q3-2013 Expect retail and share growth again for season-ending March 2014, currently #2 Share down STD – peak retail selling season forthcoming Dealer inventory up 12% due to earlier MY’14 shipment timing MY’14 800 Switchback Pro-R 800 won Crossover Snowmobile of the Y
Slide 14: Q3 2013 N.A. Motorcycle Industry
Best in Powersports Plus Best in Powersports Plus Q3-2013 Q3 2013 N.A. Motorcycle Industry 1400cc+ Polaris Motorcycle Sales (in millions) Q3 2013 Two Exciting American Motorcycle Brands Polaris Q3 and YTD sales down modestly Dealer inventory up single digits – dealer adds, Indian Victory Q3 N.A. ret
Slide 15: Building a Successful Small Vehicle Business
Growth Through Adjacencies Growth Through Adjacencies Q3-2013 Polaris Small Vehicles Sales (in millions) Q3 2013 Building a Successful Small Vehicle Business Building a Successful Small Vehicle Business Aixam Mega integration on track Gained share in Q3 Goupil increased revenue in Q3 GEM sales down
Slide 16: PG&A Growth Accelerating
ORV 67% FY 2012FY 2013GuidanceBest in Powersports Plus Best in Powersports Plus Q3-2013 Polaris PG&A Sales ($ in millions) Q3 2013 PG&A Growth Accelerating PG&A Growth Accelerating Record Q3 sales; up 37% ORV sales up 28% Motorcycles up 56% - includes Klim in 2013 Snow up 70% - includes Klim in 2013
Slide 17: International Q3 Results
International Q3 Results International Q3 Results Q3-2013 2013 Objectives Gaining Share in Challenging Economic Environment Gaining Share in Challenging Economic Environment ORV 43% Small Vehicles 19% PG&A 17% Q3 2012Q3 2013FY 2012FY 2013GuidanceUp about 25%* +38% 139.4* +9% $460.6 $100.9 Europe 70%
Slide 18: Operational Excellence
Operational Excellence Operational Excellence Gross margins increased 90 bps in Q3 2013 Net income* margin solid 10.6% LEAN initiatives driving productivity gains; +6% in Q3 Factory inventory up 12% vs. Q3 2012 due to product mix and acquisitions Q3-2013 +90 bps 28.8% 29.5% +90 bps 30.4% Q3 2012Q3 2
Slide 19: Mike Malone, V.P. Finance & CFO
Mike Malone V.P Finance & CFO Third Quarter 2013 Earnings Results October 22, 2013 POLARIS INDUSTRIES INC.
Slide 20: 2013 Full Year Guidance
Continued Strong Financial Performance Continued Strong Financial Performance 2013 Full Year Guidance 2013 Full Year Guidance METRIC GUIDANCE Product Line Sales Off-Road Vehicles Up 11% to 12% Motorcycles Up 15% to 20% Small Vehicles Up over 150% Snowmobiles Up low single digits % PG&A Up about 30%
Slide 21: 2013 Gross Margin Guidance
2013 Gross Margin Guidance 2013 Gross Margin Guidance METRIC Actual Q3 2012 Actual Q3 2013 2013 Full Year Guidance Prior Period 28.3% 29.5% 28.8% Production volume adjustments Product cost reduction efforts Commodity costs Currency rates Higher selling prices Product mix Mfg. realignment projects, n
Slide 22: Balance Sheet & Liquidity Profile Remains Healthy
Balance Sheet & Liquidity Profile Remains Healthy Balance Sheet & Liquidity Profile Remains Healthy and Balance Sheet and Liquidity Profile $ In millions (except per share and rate data) YTD 2013 Fav / (UnFav) YTD 2012 2013 Full Year Guidance Cash $387.8 ($25.1) Decrease due to acquisition Debt $107
Slide 23: Scott Wine, Chairman & CEO
Scott Wine Chairman & CEO Third Quarter 2013 Earnings Results October 22, 2013 POLARIS INDUSTRIES INC.
Slide 24: Expect Another Record Performance in 2014
Expect Another Record Performance in 2014 Expect Another Record Performance in 2014 Initial Thoughts 2014 Initial Thoughts US & European economies begin showing signs of stabilizing Powersports markets will benefit modestly Political climate will remain unpredictable Competitive pressure ongoing – P
Slide 25: Thank you, Questions?
€> PoLaARis’ Thank you Questions?