Polaris Inc. · NYSE:PII
Polaris — Polaris Industries — Investor Presentation (September 2009)
40 slides from Polaris's investor presentation, Sep 1, 2009
Slide 1: Polaris Industries Inc. European Investor Presentation September 2009
Polaris Industries Inc. European Investor Presentation September 2009
Slide 2: Polaris At a Glance
Polaris At a Glance Founded in 1954 Manufacturer of a diversified mix of high-quality, high-performance motorized products for recreational and utility use Strong, Recognized Global Brand #1 in the world in market share for Off-Road Vehicles (ATV and SxS vehicles) Long track record of execution and
Slide 3: Polaris At a Glance: Sales by Product and Geography
United States International Canada 1371.1 304.2 273 2006 2007 2008 2006 1657 1780 1948 Polaris At a Glance By Product 2008 By Geography 2008 Off-Road Vehicles (ORV) 67% Victory Motorcycles 5% Snowmobile 10% Parts Garments & Accessories 18% Snowmobiles ORVs Parts Garmants & Accessories Victory 10 67
Slide 4: History and Evolution
History and Evolution Parts, Apparel & Accessories SNOWMOBILES The first Polaris snowmobile was made in 1956. ATVs Since 1985, Polaris has produced over 2 million ATVs. RANGER The first of many Polaris side-by-side off road vehicles was introduced in 1998. PWC Polaris manufactured Personal Watercraf
Slide 5: Consistent Financial Performance
IR - Sept. 2009 5 $1.64 $1.81 $1.99 $2.28 $2.58 $2.97 $3.15 $2.72 $3.10 $3.50 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Consistent Financial Performance $1,245 $1,327 $1,427 $1,468 $1,552 $1,773 $1,870 $1,657 $1,984 $1,780 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Dollars (
Slide 6: Industry-Leading Returns
IR - Sept. 2009 6 Industry-Leading Returns 15% 14% 15% 18% 18% 4% 11% 10% 13% 12% 7% 7% 7% 8% 7% 2004 2005 2006 2007 2008 38% 37% 41% 66% 76% 24% 25% 0% 22% 23% 19% 26% 18% 22% 30% 2004 2005 2006 2007 2008 Return on Shareholders’ Equity* 2004-2008 *From continuing operations Return on Assets* 2004-2
Slide 7: Total Return to Shareholders
IR - Sept. 2009 7 - -73% -70% - -60% -59% - -6% -6% -5% 7% 18% 59% BC ACAT WGO HOG S&P 500 Dow Jones PII Russell 2000 TTC DE - -40% - -31% - -27% -24% - -20% -20% -17% - -7% 4% 9% HOG DE ACAT BC Russell 2000 S&P 500 Dow Jones PII WGO TTC Trailing Twelve Months Total Return August 21, 2008 August 21,
Slide 8: Industry End-Market Breakdown
Industry End-Market Breakdown Groomed Trail / Touring Off-Trail / Aggressive Trail / Ditch Deep Powder / Mountain 0.86 0.17 0.34 0.12 Off-Road Vehicles Snowmobiles On-Road Vehicles Victory Motorcycles Recreation Enthusiuast Recreation Sport Multi Acre Home Owner Hunting Farmers/ Ranchers 0.29 0.25 0
Slide 9: Polaris Worldwide Locations
NORTH AMERICA: Medina, MN - Headquarters Roseau, MN - Manufacturing; R&D Wyoming, MN - R&D Osceola, WI - Manufacturing Spirit Lake, IA - Manufacturing Vermillion, SD - PG&A Distribution Winnipeg, Canada - Sales Approx. 1,600 independent dealerships Polaris Worldwide Locations INTERNATIONAL: Sales Su
Slide 10: Polaris Competitive Advantage
Polaris Competitive Advantage Diversified Product Portfolio Innovative Culture First to market with new features or new models Culture of continuous improvement Applications Engineering Ride and handling of Polaris vehicles considered key competitive advantage Close to the customer; engineer new fea
Slide 11: Polaris 5-Year Strategic Objectives
Polaris 5-Year Strategic Objectives Best in Powersports PLUS 5-8% organic growth Growth through Adjacencies $100 - 300M growth Global Market Leadership >25% of Polaris Revenue Operations is a Competitive Advantage Op Ex drives >200bpts Operating Margin improvement Strong Financial Performance Sustai
Slide 12: Why This Is Good
WHY THIS IS GOOD International New Geographies New Capabilities More Experiences Polaris A Global Powerhouse Product/ Process Leadership Stronger, more profitable dealers Financial strength to fund growth Polaris Powersports Leadership Organic Growth New Products New Technologies Operational Excelle
Slide 13: Business Development
Business Development New Customers New Channels New Geographies New Products & Technologies Innovative Culture Engineering Adaptability Operations Flexibility Corporate Speed Priorities International Growth Outside Powersports On Road Target Criteria Accretive Attractive ROIC Growth Accelerator Capa
Slide 14: Polaris Industries Inc. Product Overview
Polaris Industries Inc. Product Overview
Slide 15: Product Segment Overview
Product Segment Overview Off-Road Vehicles Snowmobiles Worldwide Market Size (Units) Polaris' Competitive Advantages Top Three Competitors 955,000 164,000 54 years of experience Strong brand recognition Industry-leading ride and handling BRP Arctic Cat Yamaha ATV 665,000 Side-by-Side 290,000 Hardest
Slide 16: Off-Road Vehicle Division Competitive Advantage
Off-Road Vehicle Division Competitive Advantage Market share leading position Hardest working; Smoothest riding Full Featured products Strong Brand Product innovation ORV 67% Utility Recreation Multi-passenger Side-by-Side Product Segments ATV Sport Sport Performance Utility 2-Passenger Full-size Mi
Slide 17: Off-Road Competitive Overview
OFF-ROAD COMPETITIVE OVERVIEW #5 N/A #9 Kubota #4 N/A #8 Deere N/A #7 #7 Can Am/BRP #6 #6 #6 Arctic Cat N/A #5 #5 Suzuki #3 #4 #4 Kawasaki #2 #2 #3 Yamaha N/A #1 #2 Honda #1 #2 #1 Polaris 2009 TREND 2008 SxS 2008 ATV 2008 TOTAL ORV 2008 U.S. Industry Sales POLARIS #1 VS. TOUGH COMPETITORS NORTH AMER
Slide 18: Polaris Side-by-Side Incrementality
POLARIS SIDE-BY-SIDE INCREMENTALITY Polaris RZR Polaris RANGER XP INDUSTRY 33% ATV Steal 23% Polaris Steal 13% Polaris Steal 87% Incremental 77% Incremental 67% Incremental POLARIS SXS HIGHLY INCREMENTAL 50% own an ATV 51% 1st time SxS 53% 1st time SxS
Slide 19: 4-Part Plan to Win in 2009 and Beyond
4-PART PLAN TO WIN IN 2009 AND BEYOND OFF-ROAD VEHICLES STRATEGY Leverage New Products to Gain Share Sportsman XP, NEW RANGER, Combined Marketing Continue to Drive Operational Excellence Cost: Engineering Driven, Purchasing Driven, Expense Driven Max Velocity Program: Expand MVP model to 50% of volu
Slide 20: Adjacent Markets - Military
ADJACENT MARKETS - MILITARY Leverage Full Line of Mission Support Vehicles MV700, MVRS700, plus Sportsman & RANGERs New Products To Serve More Markets RANGER 400 + RANGER EV + Future Bobcat Co-Developed Vehicles Expanding to other Government Agencies Department of Homeland Security, Department of In
Slide 21: Bobcat Alliance
Announced Q1 2009 #1 ORV manufacturer / #1 Compact construction manufacturer Technology sharing Co-development and supply of highly differentiated work vehicles New vehicles available mid-to-late 2010 Bobcat Alliance
Slide 22: Snowmobile Division Competitive Advantage
Competitive Advantage Strong Brand - #2 in Snowmobile market share in North America Legacy of Company - Snowmobiles 1st product offering Snowmobile Division Snow 10% Performance Crossover Deep Snow Tour Utility Youth (Millions) Off Road Vehicle Victory Snowmobile PG&A 0.67 0.05 0.1 0.18 Product Segm
Slide 23: On-Road Division
Low Emission Vehicles Motorcycles Cruisers Touring On-Road Division Product Segments New! Low Emission Vehicles Announced July 2009 Electric Vehicles designed for: Paved and hard packed surfaces Master planned communities Breeze(tm) Competitive Advantage - Victory The New American motorcycle Highest
Slide 24: Victory Motorcycles
2006 2007 2008 2009 2006 113 113 94 47 10 guidance 2005 2006 2007 2008 274 289 278 254 Victory Motorcycles (Millions) Penetrate Touring Segment Strengthen Victory Proposition with core customer Lean operations Expand Global distribution presence Victory 5% Off Road Vehicle Victory Snowmobile PG&A 0.
Slide 25: Expand Victory Global Distribution Presence
Expand Victory Global Distribution Presence United Kingdom Australia
Slide 26: Low Emission Vehicle Opportunity
Low Emission Vehicles Neig other Q2 2009 0.1 0.9 Neighborhood Vehicles People Transport Light Duty Government Commercial Stealth Hunters Multi-acre Homeowners New & growing customer base Expanding migration to warmer weather Growing demand for low emission vehicles Underserved Market - few purpose b
Slide 27: Parts, Garments & Accessories Division
IR - Sept. 2009 27 Parts, Garments & Accessories Division Highest margin business Innovation is key driver of success Over 200 new accessories in 2009 PG&A 18% (Millions) Sales ORV 67% Victory Other 6% 8% Snow 19% PG&A Sales by Product (2008) $270 $293 $344 2006 2007 2008 2009 guidance Down 13% to 1
Slide 28: International Division
France Australia / New Zeland UK Sweden / Norway Germany Spain Finland Russia Italy Portugal Japan Others 246900 153100 102500 161500 256400 107200 68700 29100 78300 30200 80500 483600 US Canada International 1371.1 304.2 273 International Division Est. Market Size for Polaris Products 2008 Market -
Slide 29: Global Market Strategy
2009 2012 Organic 200 350 Buy 250 2009 2012 Organic 262 500 Buy 500 Strengthen EMEA #1 ORVs OEM Structure Lean Logistics Local Development Grow Business 25% of Polaris Revenue New Market Development 3 Strategic Regions Brazil / China / India 3 Adjacent Segments On-Road / Light Work / Military 2009 2
Slide 30: Operational Excellence: What's the End Game Look Like?
2006 2007 2008 2009 East 21 23 28 28 West 5 North Most satisfied customers for our products Top Net Promoter Score 75+ Consistent market share gains in all businesses Expanding operating profit margins Continuous non value add waste reduction throughout value chain Most profitable dealers Simplicity
Slide 31: Operational Excellence Transforming Polaris' Business Model
Operational Excellence Transforming Polaris' Business Model Market Share 2 1/2 years of market share gains everywhere Dealer Inventory Down over 55,000 units in 3 years in N.A. Business Model MVP is working; expanding significantly in 2009 Quality Net Promoter Score (NPS) continues to improve; Cost
Slide 32: Balance Sheet and Liquidity Profile
Balance Sheet and Liquidity Profile $ In millions (except per share data) YTD June 2009 +- YTD June 2008 Full Year / Year End 2009 Guidance Total Debt - ending $250.0 -$11.0 Similar to 2008 Net Debt - ending (debt less cash balances) $220.0 -$19.1 Improved from 2008 Credit Facility (expires December
Slide 33: 2009 Full Year Guidance
2009 Full Year Guidance Product Line Sales Off-Road Vehicles Down 21% to 25% Snowmobiles Down 15% to 20% Victory Motorcycles Down 40% to 50% PG&A Down 13% to 17% Total Company Sales Down 20% to 25% Gross Margins Up to 130 bpts improvement Operating expenses Down significantly in dollars; up as a per
Slide 34: Summary
SUMMARY Polaris 5-Year Strategic Objectives Best in Powersports PLUS Growth through Adjacencies Global Market Leadership Operations is a Competitive Advantage Strong Financial Performance A Great Future for All Stakeholders
Slide 35: Thank you. Q & A
Polaris Industries Inc. Thank you. Q & A
Slide 36: Appendix: Disclosure and Regulation G Reconciliation
IR - Sept. 2009 36 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 projecte
Slide 37: Off-Road Vehicles: New for MY '10
WIN WITH BEST PRODUCT AND BEST VALUE Off-Road Vehicles: New for MY '10 Sportsman XP850 Touring/ 550 Touring Sportsman 550 X2 Ranger XP 800 Ranger Crew 800 Ranger 6x6 800 Ranger EV (Electric) Sportsman 800EFI Sportsman 500HO Touring Trail Boss Scrambler / Trial Blazer Ranger 400 All Youth 50s Lead Co
Slide 38: Snowmobiles: New for MY '10
600 Rush 600/Turbo LX Widetrak IQ Snowmobiles: New for MY '10
Slide 39: Victory Motorcycles: New for MY '10
Cross Country Cross Roads Expanded 8-Ball Line-up: Vegas, Hammer, Kingpin, Vision Victory Motorcycles: New for MY '10
Slide 40: Military: Polaris Defense Product Line
Military: Ultra light Tactical Vehicles MVRS 700 Crew 700 XP 6X6 HD RZR-SW MV 700 6X6 550/850 XP IQ LX Polaris Defense Product Line
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