Polaris Inc. · NYSE:PII
Polaris — Polaris Industries — Q4 2012 Earnings Presentation
28 slides from Polaris's earnings presentation, Jan 29, 2013
Slide 1: Results January 29, 2013
Results January 29, 2013 POLARIS INDUSTRIES INC.
Slide 2: Forward-looking statements
Except for historical information contained herein, the matters set forth in this document, including but not limited to management’s expectations regarding 2013 sales, shipments, margins, net income, cash flow, and manufacturing realignment project transition costs and savings, are forward-looking
Slide 3: Scott Wine, CEO - Fourth Quarter & Full Year 2012 Earnings Results
Scott Wine, CEO Fourth Quarter & Full Year 2012 Earnings Results January 29, 2013 POLARIS INDUSTRIES INC.
Slide 4: Record Fourth Quarter Sales, Net Income & EPS
$63.9 $88.1 Q4 2011 Q4 2012 +38% Q4 2012 Sales and Net Income Record 4th Quarter Sales and Net Income ORV Sales remained strong +22%; On-Road up 36%; PG&A up 17% International Sales up 6% EMEA growth remained slow , Asia Pacific / Latin America +19% growth Earnings per Share up 38% to record $1.24 G
Slide 5: Consistently Outstanding Results: 2012 Financial Metrics
Consistently Outstanding Results 2012 Financial Metrics METRIC 2012 Actual (millions) Variance to 2011 Sales $3,210 +21% Gross Profit % 28.8% +90 bps Operating Income $478.4 +37% Operating Income % 14.9% +170 bps Net Income $312.3 $37% Net Income % 9.7% +110 bps EPS $4.40 38% Operating Cash Flow $41
Slide 6: FY 2013 Guidance: Sales and EPS
North American Retail Sales growth and market share gains expected to continue PG&A growth accelerating faster than overall company International Sales projected to increase slightly EMEA down slightly; APLA growth remains strong Net Income projected up 10% to 15% On-going margin improvement expecte
Slide 7: New European Manufacturing
New European Manufacturing Current Manufacturing Footprint European Facility 325,000 SF Weld, paint & assembly for ATV and SxS Expected to break ground in 1H of 2013; begin production 2H of 2014 Advantages / Justification North America plants capacity constrained Cost down opportunities; manufacturi
Slide 8: 3-5 Year Objectives
Best in Powersports PLUS 5-8% annual organic growth SxS remain clear #1 in market share ATVs #1 in N.A. market share – 1st time ever PG&A adds quality KLIM apparel line Growth through Adjacencies $1B - $2B from acquisitions and new markets Indian bike development solidly on plan Bobcat project on tr
Slide 9: Bennett Morgan, President & COO
Bennett Morgan President & COO Fourth Quarter & Full Year 2012 Earnings Results January 29, 2012 POLARIS INDUSTRIES INC.
Slide 10: N.A. Powersports Market Share and Retail Sales
10 Q4-2012 N.A. Powersports Market Share (units) N.A. Retail Sales by Quarter 13% 19% 15% 11% 17% 17% 10% 13% Q1-11 Q2-11 Q3-11 Q4-11 Q1-12 Q2-12 Q3-12 Q4-12 Snow ORV Victory TOTAL Polaris Q4 N.A. retail sales up 13%; Full Year up 14%, demand remains strong Continue to gain market share in every bus
Slide 11: N.A. Sales vs. Dealer Inventory
11 Q4-2012 N.A. Sales vs. Dealer Inventory Dealer Inventory Units 2006 2007 2008 2009 2010 2011 2012 LEAN initiatives improving delivery and inventory quality New Retail Flow Management (RFM) “pull” order process progressing well for motorcycles MVP order response and visibility enhancements for ORV
Slide 12: #1 in ORV - Expanding share in SxS and ATVs
12 Q4-2012 #1 in ORV - Expanding share in SxS and ATVs, again ATVs #1 in market share in North America; retail up high single digits % for Q4 and FY 2012 SxS retail up over 20% in Q4 and FY 2012 New RZR XP900 Jagged X sold out of initial allotment within 24 hours New MY’13 products selling briskly:
Slide 13: Defense and Commercial (Bobcat alliance)
13 Q4-2012 Q4 & FY 2012 challenging revenue year due to US budget environment; sales flattish vs. 2011 #1 in Ultra Light Military Vehicles Solid multi-year contracts in place TACOM $54 million National Guard $67 million SOCOM ATV $16 million Penetrating new markets in 2013: Armor & NPTs Full year 20
Slide 14: Snowmobiles
Polaris Industry Down <5% Down low single digits % Q4 2011 Q4 2012 FY 2012 FY 2013 Guidance 14 Q4-2012 Industry down <5% STD but month of December stronger due to improving snow conditions Snow N.A. market share up STD for Polaris 800 Pro RMK “Snowmobile of the Year” Dealer inventory remains elevate
Slide 15: Victory Motorcycles
2012 2013 Projection Up low single digits % Up slightly 15 Q4-2012 Victory N.A. retail increased in Q4, grew 10 times industry rate for FY 2012 Victory gained share again in 2012, clear #2 in heavyweight segment Gained share in cruisers, baggers and touring International unit retail sales up signifi
Slide 16: Indian Motorcycles Re-launch
16 Q4-2012 January 2013 MY’13 Indian Chief Vintage FE (Final Edition) December 2012 March 2013 Product Launch mid to late summer 2013 MY ‘14 Indian engine sound MY ‘14 completely new Indian engine to be unveiled MY 2014 Indian Motorcycles re-launched Indian experience truck iPhone/Android Indian Rid
Slide 17: Goupil and GEM
17 Q4-2012 Goupil Q4 Revenue up double digits percent; best order performance since Q4 2009 Added over 150 dealers in 2012 Expect 2013 revenue to grow double digits, again 2013 focus on growing B2B customers; cost reductions; quality 2012 revenue up double digits percent (proforma) Expect 2013 reven
Slide 18: Polaris PG&A Sales
FY 2012 FY 2013 Guidance 18 Q4-2012 Polaris PG&A Sales ($ in millions) 2013 Objectives Q4 and Full Year 2012 Record Q4 sales; up 17% vs. 2011; up 13% for FY 2012 2012 ORV growth up 24% vs. Q4 2011 On-Road up 8% vs. Q4 2011 International up 16% from Q4 2011 All categories and regions increased sales
Slide 19: Polaris Apparel Center of Excellence: KLIM Overview
Q4-2012 Polaris Apparel Center of Excellence KLIM Overview Market leader in design, development and distribution of premium technical riding gear for snowmobile, off-road and adventure touring motorcycles FY 2012 Sales approaching $30 million, primarily in N.A. (5-Yr CAGR over 20%) 850 dealers in U.
Slide 20: Global Market Leadership
Global Market Leadership 20 Q4-2012 Polaris Sales (in millions) 2013 Objectives Global Market Gaining Share in Challenging Economic Environment ORV 55% Snow 14% On-Road 14% PG&A 17% Grow share in EMEA on lower expected sales due to continued tough economic conditions Begin construction of new Europe
Slide 21: Gross and Net Income Margins
Gross margins increased 210 bps in Q4 2012 Higher volume, product cost reductions, pricing and manufacturing realignment savings Net income margin increased 160 bps to 9.8% for Q4 2012 Commodity and currency pressures stabilized Productivity continued to improve; +6% in 2012 Monterrey production and
Slide 22: Mike Malone, V.P. Finance & CFO
Mike Malone V.P. Finance & CFO Fourth Quarter & Full Year 2012 Earnings Results January 29, 2013 POLARIS INDUSTRIES INC.
Slide 23: 2013 Full Year Guidance
Continued Strong Financial Performance 2013 Full Year Guidance METRIC GUIDANCE Product Line Sales Off-Road Vehicles Up high single digits % On-Road Vehicles Up 25% to 35% Snowmobiles Down single digits % PG&A Up about 20% International Up slightly Total Company Sales Up 7% to 10% Gross Margins Expan
Slide 24: Gross Profit Margin Drivers
METRIC Actual Q4 2012 Actual Full Year 2012 Full Year Guidance 2013 Prior Period 26.1% 27.9% 28.8% Production volume adjustments Product cost reduction efforts Commodity costs Currency rates Higher selling prices Product mix Mfg. realignment projects, net Warranty costs Tooling amortization Sales pr
Slide 25: Financial Position Remains Healthy
Financial Position Remains Healthy Balance Sheet and Liquidity Profile $ In millions (except per share and interest rate data) Full Year 2012 Fav / (UnFav) 2011 2013 Full Year Guidance Cash $417.0 $91.7 Decrease if acquisitions completed Debt $107.2 $0.1 Unchanged Credit Facility $350.0 Flat Unchang
Slide 26: Scott Wine, CEO
Scott Wine, CEO Fourth Quarter & Full Year 2012 Earnings Results January 29, 2013 POLARIS INDUSTRIES INC.
Slide 27: Debt, Tax & Policy Decisions Inhibit Growth in U.S. & Europe
Debt, Tax & Policy Decisions Inhibit Growth in U.S. & Europe Global economies remain fragile; Powersports markets slightly better ORV Competition Increases: Polaris Stays on Offense / Expands Share 15 Years of Victory: Driving Growth, Strengthening the Brand Indian Resurgence: Beautiful Bikes, Iconi
Slide 28: Thank you - Q & A
28 Q4-2012 Thank you Q & A