Polaris Inc. · NYSE:PII
Polaris — Polaris Industries — Corporate Update (March 2014)
29 slides from Polaris's corporate update, Mar 13, 2014
Slide 1: Analyst ORV Ride Event
Title: Dave Longren, V.P. Off-Road Vehicles March 13, 2014 Body: POLARIS INDUSTRIES INC. | ANALYST ORV RIDE EVENT
Slide 2: 2013 ORV At a Glance (Worldwide)
Produced by Factory Body: Sales by Region Other Placeholder: RANGER is largest ORV category with good continued growth RZR growth is increasing, strong response to RZR XP1000ORV Share 2.5+ times larger than the next competitor Worldwide SxS share #1, ATV share #1Strong N.A. market driving growth, In
Slide 3: ORV Customer Profiles
ORV Customer Profiles Body: Life Cycle Management Other Placeholder: 3 Consumer Profile Arrows indicate Trend Other Placeholder: Analyst 3/13/14 Age 54 43 53 Income $132k $120k $108k Male/Female 91%/9% 90%/10% 90%/10% 1st Time Owner 41% 38% 21% Primary Usage Farming/Ranching Hunt Property Rec/Trail
Slide 4: ORV NA Industry Overview
ORV NA Industry Overview ATV Industry Trends 2008-2013 CAGR -11% 2 year CAGR 1% Forecast low single digit increase in 2014 SxS Industry Trends 2008-2013 CAGR +6% 2 year CAGR 12% Forecast low double digit growth in 2014 Mid Single Digit CAGR 2010 to 2014 1999 2000 2001 2002 2003 2004 2005 2006 2007 2
Slide 5: 2013 ORV Share Results
2013 ORV Share Results Best overall share performance in Polaris history Continued share growth in ATV & SxS’s ATV industry leading; SxS estimated +40% share RANGER & RZR each share 2.5+ times the next largest competitor Significant production volume advantage ATV NA Market Share ORV NA Market Share
Slide 6: ORV Overall Results
ORV Overall Results 6 RANGER – Consistent incremental growth RZR – Consistent incremental growth Sportsman – Consistent share growth Military & Bobcat – Adjacent high growth ~100% GROWTH 2010-2014 (projection) 2010 2011 2012 2013 2014 Guidance Sales Up high single digits % Analyst 3/13/14
Slide 7: Dealer Inventory Market Category Trend
Dealer Inventory 7 Market Category Trend Total Box Count New Market Categories Drive Incremental Growth Q1 Q2 Q3 Q4 2010 2011 2012 2013 2010 2011 2012 2013 Inventory Units Per Category Retail Units Per Category New Consumer Use Categories 2011 2 2012 3 2013 4 Inventory added to support new retail ca
Slide 8: ORV Competitive Model Positioning
ORV NEW Competitive Model Positioning Value Category Premium Category Honda Rancher Foreman Pioneer Yamaha Viking Kawasaki Teryx 4 John Deere 825S4 XUV 855 D S4 XUV Arctic Cat Wildcat Trail Wildcat 4 Can Am Maverick 10 Product Families with multiple models in each family 9 Product Families with mult
Slide 9: ORV Product Advantage
ORV Product Advantage Breadth & Depth of Product Offering 9 #1 Market Share Industry Leading Products In Every Category Innovation Speed to Market Customer Focus
Slide 10: Industry Leading Products
Industry Leading Products MY’14 Strong New Product News Driving Retail 10 RANGER XP 900 DELUXE Scrambler XP 1000 Sportsman WV with Terrain Armor RZR XP1000 & XP1000 4 RANGER “Crew & 570” ATV/Sportsman 570 & EPS “Value & Capability” Sportsman ACE 32 HP Analyst 3/13/14
Slide 11: Consistent Award Winning Performance
Consistent Award Winning Performance 11 RZR RANGER Product Wins Across the Portfolio Manufacturer of the Year Sportsman Won due to UTV market dominance RANGER XP 900 DirtTrax Best Sport Utility SxS ATV.com Best Utility SxS Field & Stream Best of the Best American Hunter 2014 Vehicle of the year RANG
Slide 12: Strong PR Interest In New Products
Strong PR Interest In New Products 12 RZR XP 1000 3 million Impressions without wire service Covers on all major Powersports Magazines Big Hit in Maxim and Men’s Journal 300 million worldwide impressions Notable Coverage: Fox News, USA Today, New York Times, Wall Street Journal, CNN Money, Yahoo Fin
Slide 13: Attracting New Customers to Polaris SxS
Attracting New Customers to Polaris SxS Benefiting from Broad Portfolio RZR Family RANGER Family Dirt Bike Owners RV Owners Sand Rail Owners Outdoor Enthusiasts Social Riders Commercial Farmers Ranchers Multi-Acre Homeowners Small Truck Owners Hunters Analyst 3/13/14 13
Slide 14: Broad Customer Appeal With ACE
Broad Customer Appeal With ACE Comfortable, Confident, Fun NEW & EXISTING OFF-ROAD WOMEN OLDER RIDERS RIDERS AGE 16 & ABOVE Analyst 3/13/14 14
Slide 15: A Whole New Off-Road Experience
A Whole New Off-Road Experience Continuing to Innovate How People Experience the Off-Road 32HP, ProStar DOHC engine 48” Width Trail Capable Adjustable Bolstered Driver Bucket Seat Adjustable Tilt Steering Wheel 10.25” Ground Clearance Front Suspension: Struts w/ 8.2” Travel Rear Suspension: Dual A-A
Slide 16: RANGER Strong Retail Results, Positioned Well for Growth
All RANGER categories growing Share growth has been very strong RANGER (no RZR) #1 in SxS by over 2.5X next closest competitor MY14/14.5 RANGER product and marketing plan positioned well Retail Units RANGER Retail Strong Retail Results, Positioned Well for Growth 16 Consistent Growth 2010 2011 2012
Slide 17: 2014 RANGER & Sportsman Plan
Growth Brand Strengthen 2014 RANGER & Sportsman Plan 17 Product leadership Strong Product News Sportsman, ACE, RANGER… all categories PG&A Integration One voice to dealer & consumer Kit options key usage categories RANGER ProFit continues “Hardest Working Smoothest Riding” for Each Brand Improved un
Slide 18: Focus on Growth Opportunities
Focus on Growth Opportunities 18 Analyst 3/13/14 ATV Market Categories Utility SxS Market Drive RANGER Growth, Expand Sportsman Industry Leading Focus solutions to each market category Leverage new Deluxe model for the Rec categories Multiple usage capability appeals to all categories Sportsman ACE
Slide 19: Accessory Integration Drives Incremental Sales and Profits
Drives Incremental Sales, Profits & Customer Satisfaction Innovation Accessory Integration Easy Installation Drives $/Unit 19 Analyst 3/13/14
Slide 20: Sportsman 570 EFI & EPS
ProStar 570 EFI POWER 44 HP, +22% vs. 500 H.O. NEW steel Lock & Ride rear rack Narrowed seat new ergo’s 40% more watts for more charging 13% more fuel capacity EPS to the value market Key Features SPORTSMAN 570 EFI & EPS Best Selling ATV Just Got Better $6,499 US 20 Analyst 3/13/14
Slide 21: Broadest Line-up in Industry
Broadest Line-up in Industry Full Line-Up Provides Winning Results 500 2-Up Big-Bore 400 VALUE PREMIUM 21 Analyst 3/13/14
Slide 22: RZR Retail Growth, Clear Industry Leader
Strong incremental RZR growth as new categories launched Clear leader in all recreation categories RZR (no RANGER) is #2 in SxS market share (behind RANGER) Retail Units 2010 2011 2012 2013 2014 Projection Clear Industry Leader RZR Retail 22 Analyst 3/13/14
Slide 23: RZR Is The Leading Brand
RZR IS THE LEADING BRAND Revenue Growth Mid Double Digits, Margin Expansion INDUSTRY LEADER MOST PASSIONATE CUSTOMERS & Over 200,000 Owners World Class NPS >70 RZR Enables Social Adventure XP1K video success, Facebook fans +400,000, successful camp RZR execution TRAIL HIGHPERFORMANCE MULTIPASSENGER
Slide 24: Polaris Commercial Diverse Growth Pillars
Commercial Dealers Commercial Direct Commercial Partnerships Polaris Commercial Diverse Commercial Growth Pillars Focused Multi Channel Business Development Drive Better Results Diversified Commercial Business Dealer To B2B, Local, Small Orders OEM Direct B2B, National. Big Order Preferred Associati
Slide 25: Polaris Defense Strategy
Capture Influential Customer Credibility Polaris Defense Strategy – Credibility with Early Adapters 25 U.S. Special Operations Force (SOF) to Int’l Special Operations Units Full U.S. Services & Allied Services Follow MV850 under contract for US SOF; Int’l SOF – 1st sales to US Army in 2013 MRZR unde
Slide 26: Polaris Defense Family of Military Vehicles
Polaris Defense Family of Military Vehicles 2014 is Breakout Year for Family with U.S. & Int’l Services Tracked ATV – SOP 2015 Under contract & in testing HIPPO – SOP 2014 Under contract Rapid Fire Support System SOP 2015, in testing DAGOR – SOP 2014 Under contract & in testing MRZR4 MRZR2 MV850/Ter
Slide 27: DAGOR Platform
DAGOR Platform New class of Polaris vehicle purpose-built for high mobility Military applications Designed to offer improved off-road mobility for emerging threats Higher weight / higher payload platform for Polaris Defense family of Military vehicles Significant interest from U.S. and Allied Milita
Slide 28: Design for Value & Lean Operations Drives Margins
Design for Value & Lean Operations Drives Margins Margin Expansion +800 BASIS POINTS Since 2008 Cost down eng. product design, high re-use & leveraged purchase volume 2014 margins under near-term pressure product mix Pricing Optimized consumer value, targeted opportunities Expense Management Lean bu
Slide 29: ORV Future Strategy Summary
OVR Future Strategy Summary Significant SxS Growth Profitable ATV Growth Expand Margins Expand Military & Commercial Strong RANGER product plan Strong RZR product plan SxS market has upside Sportsman strong ACE just beginning Margin plan strong Recovering Market Monterrey Full Scale Production Ramp-