Polaris Inc. · NYSE:PII

Polaris — Q4 2018 Earnings Presentation

26 slides from Polaris's earnings presentation, Jan 29, 2019

  1. Slide 1: Fourth Quarter & Full Year 2018 Earnings Results

    POLARIS INDUSTRIES INC. Fourth Quarter & Full Year 2018 Earnings Results January 29, 2019

  2. Slide 2: Safe Harbor & Non-GAAP Measures

    SAFE HARBOR & NON-GAAP MEASURES Except for historical information contained herein, the matters set forth in this news release, including management’s expectations regarding 2019 future sales, shipments, net income, and net income per share, operational initiatives, tariffs, currency fluctuations, i

  3. Slide 3: Scott W. Wine, Chairman & CEO

    POLARIS INDUSTRIES INC. Fourth Quarter & Full Year 2018 Earnings Results Scott W. Wine, Chairman & CEO January 29, 2019

  4. Slide 4: 2018 Summary

    2018 SUMMARY 4th Quarter 2018 Full Year 2018 Sales Net Income Sales Net Income GAAP $1.627 billion $91 million $6.079 billion $335 million 14% y/y 191% y/y 12% y/y 94% y/y Adjusted* $1.627 billion $113 million $6.083 billion $420 million 14% y/y 14% y/y 12% y/y 28% y/y (7.0% of sales; ) (6.9% of sal

  5. Slide 5: North American Powersports Retail Sales – Q4'18

    NORTH AMERICAN POWERSPORTS RETAIL SALES – Q4’18 Y/Y Retail % Change (units) POLARIS INDUSTRY TOTAL COMPANY*. . . . . . . . . . . . . . . 6% low-single digits % (estimated) Off-Road Vehicles . . . . . . . . . . . . . . . . . . . . low-single digits % low-single digits % (estimated) Side-by-Sides . .

  6. Slide 6: Fuel the passion customer centric, highly efficient growth company

    Fuel the passion customer centric, highly efficient growth company. enrich their lives. PII Earnings Q4-FY'18 PII1/29/19 Earnings 1/29/19 66

  7. Slide 7: 2018 Highlights

    2018 HIGHLIGHTS BEST IN POWERSPORTS PLUS ACCELERATING GLOBAL GROWTH Gained N.A. market share in ORV, motorcycles and Snow Polaris remains a Powersports leader in off-road vehicles Snowmobile market share STD is best in 15 years Strong growth driven by Indian motorcycles Side-by-side RFM launch succe

  8. Slide 8: Tariffs / Trade Update

    TARIFFS / TRADE UPATE Tariffs / Trade Costs Polaris Countermeasures ($ in millions) 232 Steel/Aluminum Pricing Implemented price increase in Q3 2018 on select PG&A/TAP items 301 List 1,2,3 ~$110 to ~$120 Wholegood price increases began Jan. 1, 2019 Retaliatory ~$80 to ~$90 Manufacturing ~$30 + = Acc

  9. Slide 9: Mike Speetzen, EVP–Finance & CFO

    POLARIS INDUSTRIES INC. Fourth Quarter & Full Year 2018 Earnings Results Mike Speetzen, EVP–Finance & CFO January 29, 2019

  10. Slide 10: Q4 & FY 2018 Financial Results

    Q4 & FY 2018 FINANCIAL RESULTS $ in millions, except EPS SALES NET INCOME EPS Q4’18 FY’18 Q4’18 FY’18 Q4’18 FY’18 YoY % Chg. GAAP 14% 12% 191% 94% 200% 95% $1,627 $6,079 $91 $335 $1.47 $5.24 12% 29% $6,083 $6.56 28% ADJUSTED* YoY % Chg. $420 14% 19% 14% $1,627 $1.83 $113 Q4 2018 FY 2018 Q4 2018 FY 2

  11. Slide 11: Q4 2018 Sales & Gross Profit Margins by Segment

    Q4 2018 SALES & GROSS PROFIT MARGINS BY SEGMENT $ in millions ORV / SNOWMOBILES MOTORCYCLES GLOBAL ADJACENT MARKETS (GAM) 7% 7% $1,060 $1,061 Commercial, PG&A Off-Road Snowmobiles Motorcycles PG&A Gov’t & Defense, SALES Vehicles 49% 17% 6% 3% & Aixam 2% 4% 4% 15% 13% $122 PG&A $87 $87 6% Indian Q4 2

  12. Slide 12: Supplemental Sales Data

    Q4 2018 SALES & GROSS PROFIT MARGINS BY SEGMENT con’t. $ in millions AFTERMARKET BOATS INTERNATIONAL ORV / Snow Motorcycles 5% 11% TransAmerican Other 3% 3% Adjacent Auto Parts Aftermarket SALES $212 Markets SUPPLEMENTAL SALES DATA 13% $217 5% 5%** 6% $145 Europe Latin America % 4% Asia Pacific Q4 2

  13. Slide 13: North American Dealer Inventory

    NORTH AMERICAN DEALER INVENTORY Q4 Total Polaris N.A. Dealer Inventory (in units) Q4 ORV Dealer Inventory +5% -4% ~Flat +1% +1% -6% +7% Q4 2017 ORV Snowmobiles Motorcycles Q4 2018 Q4 2016 Q4 2017 Q4 2018 Retail and Shipments in Alignment on a Trailing 24-month Basis Polaris Q4 2018 N.A. dealer inven

  14. Slide 14: 2019 Full Year Sales & EPS Guidance

    2019 FULL YEAR SALES & EPS GUIDANCE Full Year Total Company Adjusted* Sales Guidance Full Year Adjusted* EPS Guidance** ($ in millions) 11% to 13% 5% to 9% $6,750 to $6,900 $6.56 $6.00 to $6.25 $6,083 FY 2018 FY 2019 FY 2018 FY 2019 Sales Sales Guidance EPS EPS Guidance Powersports market expected u

  15. Slide 15: 2019 Full Year Adjusted Earnings Per Share Guidance

    2019 FULL YEAR ADJUSTED* EARNINGS PER SHARE GUIDANCE +9% to +11% 14% to 18% $0.60 to $0.75 $7.50 to $7.75 ~($1.00) +5% to +7% EARNINGS PER SHARE** $0.34 to $0.44 $6.56 Price ~($0.40) 5% to 9% Volume/Mix Assumes 10% tariff ~($0.10) $6.00 to $6.25 Boat rate FY 2019 for 301 - Acquisitions Margin levera

  16. Slide 16: Full Year 2019 Sales Guidance – Segments

    FULL YEAR 2019 SALES GUIDANCE – SEGMENTS $ in millions ORV/Snowmobiles Motorcycles Global Adjacent Markets Aftermarket Boats mid-single digits % mid-single $3,923 digits % $889 more than double ( mid-single mid-teens % digits % on a FY mid-single $546 digits % pro forma basis) $445 $280 FY 2018 FY 2

  17. Slide 17: Financial Position / Capital Deployment

    FINANCIAL POSITION / CAPITAL DEPLOYMENT Operating Cash Flow Capital Summary December 2018 ($ millions) ($ millions) Variance to Up Approx. Dec. 2018 Dec. 2017 20% to 30% $585 -18% Cash $ 161 +16% $477 Debt /Capital Lease Obligations $ 1,963 +115% Shareholders’ Equity $ 867 -7% Total Capital $ 2,830

  18. Slide 18: Scott W. Wine, Chairman & CEO

    POLARIS INDUSTRIES INC. Fourth Quarter & Full Year 2018 Earnings Results Scott W. Wine, Chairman & CEO January 29, 2019

  19. Slide 19: 2019 Business Outlook

    2019 Business Outlook Economic outlook stable at slower growth rates Powersports industry growth, driven by side-by-sides Polaris innovation drives outperformance Tariffs, currency and interest rates remain headwinds Polaris counter-measuring aggressively Supply chain initiative begins to yield savi

  20. Slide 20: Thank You – Questions?

    POLARIS INDUSTRIES INC. Fourth Quarter & Full Year 2018 Earnings Results Thank You QUESTIONS?

  21. Slide 21: Appendix

    APPENDIX GROSS PROFIT MARGIN - FULL YEAR 2018 & 2019 GUIDANCE NON-GAAP RECONCILIATIONS NON-GAAP RECONCILIATIONS - SEGMENTS 2019 GUIDANCE ADJUSTMENTS Q4-FY'18 PII Earnings 1/29/19 21

  22. Slide 22: Gross Profit Margin - Full Year 2018 & 2019 Guidance

    GROSS PROFIT MARGIN - FULL YEAR 2018 & 2019 GUIDANCE Full Year 2018 Gross Margin 2019 Adjusted* Gross Profit Margin Guidance** +80 to +110 25.9% 24.7% 25.1% 24.4% bps ~(140 bps) 25.1% 24.2% to ~(30 bps) 24.5% VIP Volume Price Logistics FY 2017 FY 2017 FY 2018 FY 2018 FY 2018 Growth/ Gross F/X FY 201

  23. Slide 23: Non-GAAP Reconciliations

    NON-GAAP RECONCILIATIONS Reconciliation of GAAP "Reported" Results to Non-GAAP "Adjusted" Results (In Thousands, Except Per Share Data; Unaudited) Three months ended December 31, Twelve months ended December 31, 2018 2017 2018 2017 Adjustments: Sales $ 1,627,120 $ 1,431,049 $ 6,078,540 $ 5,428,477 V

  24. Slide 24: Non-GAAP Reconciliations - Segments

    NON-GAAP RECONCILIATIONS - SEGMENTS In Thousands, Unaudited) Three months ended December 31, Twelve months ended December 31, (In Thoursands, Unaudited) Three months ended December 31, Twelve months ended December 31, 2018 2017 2018 2017 2018 2017 2018 2017 SEGMENT SALES SEGMENT GROSS PROFIT ORV/Sno

  25. Slide 25: 2019 Guidance Adjustments

    2019 GUIDANCE ADJUSTMENTS 2019 guidance excludes the pre-tax effect of acquisition integration costs of approximately $5 million to $10 million, supply chain transformation and network realignment costs of approximately $25 million to $30 million. Intangible amortization of approximately $40 million

  26. Slide 26: Polaris Industries Inc.

    POLARIS INDUSTRIES INC.

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