Polaris Inc. · NYSE:PII
Polaris — Investor Day (March 2025)
49 slides from Polaris's investor day presentation, Mar 12, 2025
Slide 1: Capital Markets Day
CAPITAL MARKETS DAY March 12, 2025
Slide 2: Welcome
WELCOME 2025 CA PI TA L MARK ETS D AY 2
Slide 3: Agenda
AGENDA Polaris Capital Markets Day – March 12, 2025 TIME (MT) TOPIC PRESENTER 4:00 – 4:05 Welcome J.C. Weigelt, Vice President of Investor Relations 4:05 – 4:30 Strategy Overview Mike Speetzen, Chief Executive Officer 4:30 – 4:45 Operations Lean Journey Marc Suarez, Vice President of Off Road Operat
Slide 4: Safe Harbor & Non-GAAP Measures
Safe Harbor & Non-GAAP Measures Except for historical information contained herein, the matters set forth in this presentation are forward-looking statements that involve certain risks and uncertainties that could cause actual results to differ materially from those forward-looking statements. Poten
Slide 5: Strategy Overview
STRATEGY OVERVIEW 2025 CA PI TA L MARK ETS D AY 5
Slide 6: 2024: Navigating Market Headwinds
2024: Navigating Market Headwinds A Prolonged Downcycle in Powersports Off Road Industry Consumer uncertainty Four consecutive quarters of contraction Elevated promotional levels Dealer caution and inventory destocking On Road Industry Contraction in six of last seven quarters Financial distress at
Slide 7: Strength Through the Cycle
Strength Through the Cycle Evolved & simplified structure Unwavering support of dealers Sustained innovation investment Confidence in our mid-cycle financial targets PII CMD 3/12/25 7
Slide 8: Best Customer Experience: Delivered
Best Customer Experience: Delivered 1.1 Million Safety & Quality Improvements New Customers Since Pre-COVID Lowest in 10 Years Dealer Partnership Initial Warranty Claim Rate on Digital Experience MY25 Products Powersports Access 10%+ ORV Ridership Versus Pre-COVID* *Polaris ORV data for vehicles 1-3
Slide 9: Inspirational Brands: Delivered
Inspirational Brands: Delivered Authentic Partnerships Engaged Fans Exciting Activations Racing Leadership PII CMD 3/12/25 9
Slide 10: Rider-Driven Innovation: Delivered
Rider-Driven Innovation: Delivered Invented New Product Classes & Offerings Redefined Categories Listened to Customers to Deliver on Their Needs PII CMD 3/12/25 10
Slide 11: Agile & Efficient Operations: Delivered
Agile & Efficient Operations: Delivered Lean Manufacturing $200M+ Supply Chain Efficiency 2024 Structural Savings Post-Sales Surveillance 25% Design for Manufacturing Raw Materials Inventory Adds Confidence to Mid-cycle Adjusted EBITDA Margin Targets PII CMD 3/12/25 11
Slide 12: Powersports Market Outlook
Powersports Market Outlook Short-Term Market Dynamics Long-Term Trends • Consumer spending fatigue / elevated debt levels • Continued interest in outdoor categories • Higher interest rates for longer • Growing interest in rural living • Consumer sentiment wavering • Adoption of connected and digital
Slide 13: 2025 Focus: Stabilize & Execute
2025 Focus: Stabilize & Execute REFOCUS REINVENT REVOLUTIONIZE Challenging Macro Expanded Growth Recovery Environment Opportunities Now Next Future STABILIZE & EXECUTE TRANSFORM & SCALE DISRUPT & EXPAND Profits & Efficiencies Enable Re-Investment into the Business PII CMD 3/12/25 13
Slide 14: 2025 Focus: Stabilize & Execute
2025 Focus: Stabilize & Execute REFOCUS REINVENT REVOLUTIONIZE Continued Challenging Recovery Expanded Growth Opportunity Macro Environment Margin Drive Lean Through Strengthen Continuous Build, Design and Sell Expansion Process & Tools Improvement in Quality Processes Grow Long- Unwavering Enhanced
Slide 15: Next: Accelerate through Recovery
Next: Accelerate through Recovery REFOCUS Continued Challenging Macro REINVENT REVOLUTIONIZE Expanded Growth Opportunity Environment Recovery Margin Modern Tools & Sustained Quality End-to-End Lean Expansion AI Applications Delivery Grow Long- Deeper Dealer Deeper Customer Portfolio Next Gen Product
Slide 16: Future: New Frontiers for Growth
Future: New Frontiers for Growth REFOCUS REINVENT REVOLUTIONIZE Continued Challenging Macro Recovery Environment Expanded Growth Opportunity Margin World-Class Global Modern Tools & Non-Product Expansion Operations AI Applications Revenue Streams Grow Long- Optimized Dealer Expanding Access to New M
Slide 17: Winning with Dealers
Winning with Dealers 7,500 Dealer Techs Trained Investing in Front- and Back-end Dealer Operations 70+ Data-Driven Network Plan + Active Net Promoter Score Engagement in Buy/Sells Disciplined Inventory & Promotions Management #1 #1 Proactive Partnership & Tools to Drive Retail and Dealer Profitabili
Slide 18: Off Road
Off Road Off-Road Vehicles • Softness in Recreation mitigated by stable Utility sales 2024 Off Road (ORV) • Continued success within new categories Financial Highlights • Performance leadership demonstrated in racing dominance • Significant gains from lean focus 79% of Total Company Sales • Driving
Slide 19: On Road
On Road Indian • Highly desirable brand with loyal, growing customer community 2024 On Road Motorcycle Financial Highlights • Product performance showcased in racing wins • Steady share growth for 10+years; mid-size leading in key markets Add Pic 14% of Total Company Sales • Focused portfolio suppor
Slide 20: Marine
Marine • Significant product refreshes and continued innovation Bennington 2024 Marine • Strongest dealer network in the segment Financial Highlights • Expanding price points to attract new customers while protecting premium positioning 7% of Total Company Sales • Vertical integration within marine
Slide 21: PG&A By the Numbers
PG&A By the Numbers ~60% ~30% $1.7 Billion >80% Accessories Parts ~10% Global Revenue Vehicles Retail with Accessories Garments/ Apparel >$300 Million >100K >700 Inventory Polaris Engineered + Product Suppliers + Aftermarket Products Technology & Service Providers >2M FT2 6 Distribution + Mfg Capaci
Slide 22: Strength Through the Cycle
Strength Through the Cycle Focused Execution Margin Expansion Long-term Share Growth PII CMD 3/12/25 22
Slide 23: Operations Lean Journey
OPERATIONS LEAN JOURNEY 2025 CA PI TA L MARK ETS D AY 23
Slide 24: Key Focus Areas
Key Focus Areas Improving processes for complexity Streamlining Lean product launch Supply chain efficiency Implementation of Lean culture Focus on Agile and Efficient Operations PII CMD 3/12/25 24
Slide 25: 2024 Off Road Transformational Journey
2024 Off Road Transformational Journey 2024 Structural Cost Savings Treat our Operators Employee Skill as Most Valuable Align operations Development $30M in hourly labor productivity Asset Product Development Non-Negotiable Quality Culture Process rigor Improved Pilot area $20M in logistics optimiza
Slide 26: Transformational Journey Examples
Transformational Journey Examples Treat Our Operators as Most Non-Negotiable Quality True Lean Implementation Valuable Asset Culture Training Employee Skills Dedicated Pilot Build Areas Lean at the Plants Shift for static modular pilot build to fully Drastically eliminate waste & reduce variation to
Slide 27: Ways We Measure Progress
Ways We Measure Progress Safety Quality Delivery Cost Plant Variable 110 $700 40% Cost Down 100 $600 Reduction 15% Deployed $500 in OSHA World-Class 90 Rolled First Raw $400 Rate Performance 80 Pass Yield Inventory $300 70 25% $200 60 Down $100 50 $- 20 21 22 23 24 20 21 22 23 24 20 21 22 23 24 20 2
Slide 28: 2025 Transformational Journey
2025 Transformational Journey 2025 Targets Treat our Operators Continued higher like our most production efficiency Assembler centric culture Increase labor productivity Valuable Asset Employee Skill Non-Negotiable Continued focus on Rolled Culture of Quality Training First Pass Yield Improved cost
Slide 29: Evidence of Lean
Evidence of Lean Made progress on our goals in 2024 Results are real Building a Lean culture Teams aligned on 2025 priorities Confident We Can Emerge Stronger PII CMD 3/12/25 29
Slide 30: Financial Review
FINANCIAL REVIEW 2025 CA PI TA L MARK ETS D AY 30
Slide 31: Our Takeaways From 2024
Our Takeaways From 2024 Tough year all around, but we did the right things that will make Polaris stronger in the long run Protected dealers - Pulled inventory down in the channel Optimized cost structure for current and future state Continued improving processes Invested in innovation Near-Term Foc
Slide 32: Industry Context
Industry Context Industry expected to be ~8% lower than Pre-Covid averages: Utility growth with pressure in 1,151K Recreation, Snow, On Road & Marine 1,030K 939K 940K 932K 63K 872K ~860K ~50K 219K ~160K +23% -11% -9% -1% -6% -1% 658K ~655K 2017 - 2019 Avg 2020 2021 2022 2023 2024 2025 Estimate Off R
Slide 33: With Industry Challenged, Increased Focus on Dealer Health
With Industry Challenged, Increased Focus on Dealer Health Retail Ship Ending Dealer Inv 2022 2023 2024 Ship > Retail Retail > Ship Refill Channel Post-Covid and Recalibrate Channel Supply Chain Disruptions for Softer Macro Recalibrated Dealer Inventory in 2024 in Challenging Macro Environment PII C
Slide 34: What Happened in 2024: EBITDA Financial Impact
What Happened in 2024: EBITDA Financial Impact $1,021 Margin 11.4% $635 Retail 8% Continued US Margin Dollar Strength Lower & Higher Lower Incentive 8.9% Dealer Promotional Compensation Inventory Environment & & Cost Controls Recalibration Flooring, Partially Offset by Operational Efficiencies 2023
Slide 35: Shifting Gears to 2025 and Beyond
Shifting Gears to 2025 and Beyond PII CMD 3/12/25 35
Slide 36: Focusing on Margins
Focusing on Margins Agile & Efficient Operations key to Margin Expansion Focus areas include Operations, Platforming, Productivity and Lean Over time we are expecting a recovery in Volume PII CMD 3/12/25 36
Slide 37: Margin Improvement Drivers
Margin Improvement Drivers • A return to more normal volume levels Volume • Entering value tier segments Normalization • New innovation leads to market share gains • Platforming equates to higher incremental margins • Optimize plants with Lean • Minimal rework Lean Operations • Increase output wit
Slide 38: Adjusted EBITDA Growth
Adjusted* EBITDA Growth Adjusted EBITDA % Progression Margin Improvement Drivers 2024 Adj. EBITDA 8.9% Mid- Teens Volume Normalization ++++ Low- Lean (MFG Optimization/ ++++ Teens Modular Design) 8.9% Operating Expense Leverage +++ Net Pricing +++ Flooring Normalization ++ Tariffs ? 2024 Market Mid-
Slide 39: Cash Flow Generation and Balance Sheet
Cash Flow Generation and Balance Sheet 2025 Expectations For Cash ROIC ~$500M Projected Maintain 20%+ Aristocrat 25% Reduce ~$350M Status Healthier 22% Finished Continue Debt 18% Goods to Invest Leverage Inventory in 9% Business Cash Working Cash CapEx Free Dividend Debt From Capital From Cash Flow
Slide 40: Focused Capital Deployment Strategy
Focused Capital Deployment Strategy 1 Invest in Business • Tooling for innovative new products • Technology enablers • New or improved manufacturing capabilities 2 Maintain Dividend Aristocrat Status • 2025 marks the 30th straight year increasing the dividend 3 Debt Pay Down • Maintain investment gr
Slide 41: Tariff Impact and Potential Mitigation Efforts
Tariff Impact and Potential Mitigation Efforts • Situation remains extremely fluid • Additional Chinese tariffs add pressure Current Situation • ~100 days inventory at dealers and additional inventory at U.S. facility • Hedges and contractual terms limit price volatility for ~60% of our aluminum and
Slide 42: Our Focus
Our Focus Positioned for volume recovery Agile & efficient operations Expanding margins Improving cash generation capabilities Focused capital allocation strategy Growing Profit + Higher Cash Flow + Capital Allocation = Compounding Shareholder Returns PII CMD 3/12/25 42
Slide 43: Q&A
Capital Markets Day – March 12, 2025 Q&A TIME (MT) TOPIC PRESENTER 4:00 – 4:05 Welcome J.C. Weigelt, Vice President of Investor Relations 4:05 – 4:30 Strategy Overview Mike Speetzen, Chief Executive Officer 4:30 – 4:45 Operations Lean Journey Marc Suarez, Vice President of Off Road Operations 4:45 –
Slide 44: Appendix
Appendix • FY 2024 Financial Results • Non-GAAP Reconciliations – Total Company • Non-GAAP Reconciliations – Net Income to Adjusted EBITDA • Non-GAAP Reconciliations – Segments / Cash Flow • 2025 Guidance Adjustments PII CMD 3/12/25 44
Slide 45: Non-GAAP Reconciliations – Total Company
Non-GAAP Reconciliations – Total Company Reconciliation of GAAP "Reported" Results to Non-GAAP "Adjusted" Results (In Millions, Except Per Share Data; Unaudited) Three months ended December 31, Twelve months ended December 31, 2024 2023 2024 2023 Sales $ 1,755.4 $ 2,289.2 $ 7,175.4 $ 8,934.4 Restruc
Slide 46: Non-GAAP Reconciliations – Net Income to Adjusted EBITDA
Non-GAAP Reconciliations – Net Income to Adjusted EBITDA Reconciliation of Net Income to Adjusted EBITDA (In Millions, Unaudited) Three months ended December 31, Twelve months ended December 31, 2024 2023 2024 2023 Adjusted sales 1,754.7 2,289.2 7,174.7 8,934.4 Net income 10.8 103.3 111.2 502.7 Prov
Slide 47: Non-GAAP Reconciliations – Segments / Cash Flow
Non-GAAP Reconciliations – Segments / Cash Flow Reconciliation of GAAP Segment Gross Profit to Non-GAAP Reconciliation of GAAP Operating Cash Flow to Non-GAAP Segment Gross Profit Adjusted Free Cash Flow (In Millions, Unaudited) (In Millions, Unaudited) Three months ended December 31, Twelve months
Slide 48: Non-GAAP Reconciliations – Segments
Non-GAAP Reconciliations – Segments Reconciliation of GAAP Segment Sales to Non-GAAP Segment Sales (In Millions, Unaudited) Three months ended December 31, Twelve months ended December 31, 2024 2023 2024 2023 On Road segment sales 180.8 229.2 987.8 1,184.6 Restructuring (1) (0.7) — (0.7) — Adjusted
Slide 49: 2025 Guidance Adjustments
2025 Guidance Adjustments 2025 adjusted guidance excludes the pre-tax effect of restructuring costs of approximately $10 million, and approximately $20 million for class action litigation-related expenses. Intangible amortization of approximately $18 million related to all acquisitions has also been