Polaris Inc. · NYSE:PII
Polaris — Polaris Industries — Investor Presentation (November 2007)
23 slides from Polaris's investor presentation, Nov 5, 2007
Slide 1: Getting Back to Great
GETTING BACK T0
Slide 2: Getting Back to Great
GETTING BACK TO GREAT * Manufacturer of a diversified mix of high-quality, high-performance motorized products for recreational and utility use +» Founded in 1954 + Manufacturing and distribution facilities located in Minnesota, Wisconsin, lowa and South Dakota * Highly productive non-union workforc
Slide 3: Business Foundation
siness Foundation Products (% of 2006 Sales) GETTING BACK TO GREAT Strengths/Opportunities Among top 3 in market share in N.A. Growth opportunity in several segments including side-by-side and international Innovative products Leverage brand / grow market share Generate cash $300+ million long-term
Slide 4: Financial Performance
icial Performance GREAT Sales from Continuing Operations ee re wm ae a a aaa ase aa es ee ‘ . Return on Shareholders’ Equity from Continuing Cash Flow from Continuing Operatins® Operations 1997-2006 - Industry-Leading 202 aon 47% oy, Net Income Per Share from Continuing Operations 1997-21 997-2008 U
Slide 5: Consistent Financial Performance
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 East 14 40 38 52 40 49 76 73 67 132 308 West 38.6 34.6 31.6 North 46.9 45 43.9 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 0.32 0.36 0.4 0.44 0.5 0.56 0.62 0.92 1.12 1.24 1.36 West 34.6 31.6 North 45 43.9 1996 1997 1998 1999 2000 2001
Slide 6: Guidance
j Back to Great GETTING BACK TO Guidance GREAT Full Year 2007 + Full year 2007 earnings from continuing operations is expected to be in the range of $3.05 to $3.10 per diluted share, up 12% to 14% from the $2.72 in 2006. + Sales growth for full year 2007 is expected to be in a range of up 5% to 6% f
Slide 7: 2007 - Getting Back to Great
2007 - Getting Back to Great 2006 2007 2008/2009 Overview Tough Year Disappointing Getting back on track Anticipate good years Major Themes ATV inventory No KTM deal Snowmobiles and ATVs declining Cost pressures Stock buyback ATV inventory fixed Post KTM plan Operations more predictable Win in the c
Slide 8: Awesome Products...Customer Focused...Results Driven
2007 - Getting Back to Great Awesome Products...Customer Focused...Results Driven 1. Win in the Core Grow market share in snowmobiles and ATVs. Leverage PG&A and Financial Services to deliver superior total value. 2. Delivering Operational Excellence Industry-leading quality in every product line. >
Slide 9: ATV Business
GETTING BACK T0 r ATV Business GREAT ATV/Side-by-Side (SxS) Global Industry + $8+ Billion Global Vehicle Market + Polaris is Strongest in Most Profitable Segments * Top 3 Global Player + #1 American Brand Total Four Wheel Vehicle | = __ Market Growing Int'l & SxS Market Growth — Total Vehicles — NA
Slide 10: Improving Our ATV Business
2007: ATVs Will be More Competitive N.A. industry expected to decline high single digits Strong promotions throughout year More advertising support More competitive product in every class Dealer inventory at acceptable levels Correction of inventory levels completed by mid-year 2007 Modest market sh
Slide 11: The Future Looks Better
The Future Looks Better 2003 2004 2005 2006 2007 2008 Shipments Retail Dealer Inventory Shipments Start Growing Again! Inventory Healthy Level ATV 2008 = Positioned For Success More Competitive MY08 Product Line Stronger Brand-World's Toughest ATV Growing Military Business Units 1. Win in the Core..
Slide 12: Continued Recovery of Our Snow Business
Industry struggling due to lack of snowfall East of the Rockies. N.A. market down 7% in 06-07 season, Polaris lost some share Quality remains #1 focus. Seeing result in MY 2007. 600 SDI and 700 SDI have had very few issues. Response to field issues has improved significantly. MY 2008 products are so
Slide 13: Parts, Garments & Accessories and Financial Services
GETTING BACK T0 GREAT Parts Garments & Accessories + Highest margin product line (40+% gross margins) + Leveraging installed base $251 + Focused on hot new products 6% Victory — Victory Vision™ Pikviniel — RANGER RZR™ had 56 2% Personal Waterraft = Miltary Sales (Collars in Millions) PG&A Product Mi
Slide 14: Strengthen Our Lean Cost Competitive Edge
Striving for a "Toyota-like" level of operational excellence through three principles: Quality, Cost and Speed 2010 Goals: Quality Improve consumer satisfaction by 50% by 2010 Cost Reduce system-wide cost by over 20% by 2010 Speed Improve speed to the consumer by 50% by 2010 Currently realizing resu
Slide 15: Polaris Outlook for Industry Long-Term
Polaris Outlook for Industry Long-Term Continue solid growth in Touring Demographics favorable at least through 2010 Customers want unique designs - "Attention Getting" models like Victory Vision U.S. Motorcycle Market Top Three On-Highway Segments 1995-2006 Market Trends Demographics favorable Harl
Slide 16: Victory Motorcycles
GETTING BACK T0 GREAT 500 Million in our Growth Motorcycles + Entering the Luxury Touring segment with Victory Vision ‘opens up a large segment of the heavyweight a business for Victory — Fastest growing — Demographics favorable for Touring i ag, + Extensive market research — nO consumers and compet
Slide 17: RANGER Strategy
Build an Industry Leading Side-by-Side Vehicle Business Aggressively Expand RANGER(tm) in Utility Segment Enter and Lead Emerging Recreation Segment #1 Quality Side-By-Side Vehicle Strongest Side-By-Side Dealer Network Industry Leading Side-by-Side Vehicles RANGER(tm) Strategy 3. Grow $500 Million i
Slide 18: RANGER RZR
RANGER RZR™ Capitalizes on High Growth Market + Recreation Segment has grown from zero to 40K units in § years Brings Incremental Customers to RANGER Business + RANGER = Ag, Multi-Acre Homeowners, and Hunters + RANGER RZR = Big Bore Trail, SxS Sport, and Hunters Expands Polaris Coverage of Key Custo
Slide 19: International Growth
~market share growth enter into additional markets and countries expand product offerings C+ BEURRTS: GETTING BACK T0 GREAT International Revenue Mix PGA Victory 1% 16% ‘Snowmobile 15% ATY 68% Percent of 2006 Sales from Continuing Operations International Sales otars (intions) $233 $233 sat $90 “gna
Slide 20: Military Growth Opportunity
Growth Opportunity of $50-$75 Million by 2009 Weapons Mount Mission Utility Water Crossing Rugged Terrain Self Recovery Track Kit for Snow Military Increased investment in 2007 Enhanced product plan (gasoline and JP8 fueled vehicles specifically designed for military applications Leverage relationsh
Slide 21: Adjacent Markets
GETTING BACK T0 00 Million in our Growth GREAT Adjacent Markets Adjacent Market Growth Opportunities + Profitable Top Line Growth of Approximately $75 million by 2009 + Migrate Polaris into at least one Adjacent Market — Prefer New Customer Base — Prefer New Distribution Channel * Growth Will Come i
Slide 22: Summary 2007-2009
Summary 2007-2009 Compelling differentiated products...winning in core Lean enterprise...operational excellence system-wide Growing in innovation and new markets/customers Externally focused...customer driven Results driven Future Looks Good The Goals $2.2 billion in sales by 2009 $150 million in ne
Slide 23: Appendix
Appendix Our presentation and responses to your questions may contain certain statements which may be considered forward looking for the purposes of the Private Securities Litigation Reform Act of 1995. We caution you that actual results could differ materially from those projected in a forward look
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