Polaris Inc. · NYSE:PII
Polaris — Polaris Industries — Investor Presentation (September 2009)
27 slides from Polaris's investor presentation, Sep 16, 2009
Slide 1: Polaris Industries Inc. Investor Presentation September 2009
Polaris Industries Inc. Investor Presentation September 2009
Slide 2: Strong Business Foundation
United States International Canada 1371.1 304.2 273 2006 2007 2008 2009 2006 1657 1780 1948 1780 Strong Business Foundation By Product 2008 By Geography 2008 Off-Road Vehicles (ORV) 67% Victory Motorcycles 5% Snowmobile 10% Parts Garments & Accessories 18% Snowmobiles ORVs Parts Garmants & Accessori
Slide 3: Update on 2009 Objectives
Update on 2009 Objectives Objectives Progress-To-Date through Q2 2009 Align Strategy and Structure Off-Road Vehicle Division On-Road Vehicle Division VP - Global New Market Development VP - Corporate Development VP - Operations (New) Attack Costs Workforce reductions - 460 Manufacturing/production c
Slide 4: 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 5: North American Retail Sales
North American Retail Sales 0% Polaris N.A. retail sales decreased in line with expectations Core ATV decline is greater than side-by-sides International retail sales decline similar to N.A. Appears we have reached the bottom.
Slide 6: Gross Profit Margin Percentage Trends
Gross Profit Margin Percentage Trends Flexible variable cost structure and timely execution drives gross margin expansion
Slide 7: Third Quarter 2009 Guidance
Third Quarter 2009 Guidance Weak Industry retail sales expected to continue in Q3 2009 Adjustments made to production for Victory MY 2010 Commodity cost/ expense reduction will continue to help offset weak demand Total Company Sales (in millions) Diluted EPS 2008 2009 Sales 580.3 404.7 75 $580.3 Dow
Slide 8: Balance Sheet and Liquidity Remain Healthy
Balance Sheet and Liquidity Remain Healthy $ 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 -$19.1 Improved from 2008 Credit Facility (expires D
Slide 9: Consistent Financial Performance
Consistent Financial Performance * *A reconciliation of the Company's calculation of cash flow provided to the most directly comparable cash flow measure, as required by Regulation G, appears in the appendix of this presentation. Before Changes in Current Operating Items and Deferred Taxes 1999 2000
Slide 10: Credit Arrangements
Polaris Credit Facility ($ in millions) Wholesale Credit ($ in millions) Retail Credit Credit Arrangements Ample Credit Capacity 8 banks in Credit Facility Effective rate = 0.79% Polaris Acceptance 50/50 joint venture with GE U.S. Dealer Financing 13 year joint venture (contract until 2012) Three Ye
Slide 11: North American Dealer Inventory Levels and Dealer Health
North American Dealer Inventory Levels Receivable Balance - U.S. Dealers ($ in millions) North American Dealer Count Dealer Health Down 8% from Q2 2008 Down 10% from Q1 2009 Victory ? 24% from Q2 2008 Expect further declines by 2009 year end Down 5% from Q2 2008 Down 12% from Q1 2009 Losses remain w
Slide 12: Research & Development / New Product Tooling
Research & Development / New Product Tooling New Product Development is key Over 25 new products introduced for MY '10 Objective: Best products and quality at the lowest cost Focused more on Value engineering RANGER 800 XP Trail Boss RANGER EV (Electric) Victory Cross Country RUSH Recent MY'10 Produ
Slide 13: Off-Road Vehicle Division Gaining Share
Off-Road Vehicle Division Gaining Share Share gains on both ATV & SxS year-to-date Driving Synergies Delivering significant synergies across ORV Delivering Margin Expansion On plan vs. margin expansion targets Leveraging Global Opportunities Gaining share in Europe YTD Positioned Well for 2010 & Bey
Slide 14: Strong Premium AND Value Lines for MY 2010
Strong Premium AND Value Lines for MY 2010 Off-Road Vehicles 2010 Product Strategy NEW! RANGER 800 & 500 H.O. NEW! RANGER CREW NEW! RANGER 6x6 NEW! RANGER EV NEW! Sportsman 550 X2 NEW! Sportsman 550 Touring NEW! Sportsman 850 Touring NEW! RANGER 400 Sportsman 500 H.O. is BACK NEW! Sportsman 500 Tour
Slide 15: Military
Military +42% +50% to 100% Full Year Guidance Polaris Military Sales Polaris Defense - Strong Growth Opportunity Military Targeted Market Size $3+ Billion Leverage Full Line of Mission Support Vehicles Expanding to other Government Agencies Grow Sales to US Foreign Military Allies
Slide 16: Bobcat Alliance
Bobcat Alliance Phase 1: (2H 2010) supply of highly differentiated work vehicles Phase 2: Market co-developed product through both dealer channels #1 Off-Road Vehicle Manufacturer #1 Compact Construction Manufacturer +
Slide 17: Snowmobile Division
Snowmobile Division #2 in market share Product focus on ride and handling Stable Installed base 2.5 million registered riders in 2008 RUSH named 2010 Snowmobile of the Year by SnowGoer magazine (Millions) 2006 2007 2008 2009 2006 157 179 205 164 15 Sales guidance Down 15% to 20% Polaris RUSH
Slide 18: On-Road Division Product Segments
Low Emission Vehicles Motorcycles Cruisers Touring On-Road Division Product Segments Low Emission Vehicles Announced July 2009 Electric Vehicles designed for: Paved and hard packed surfaces Master planned communities New and growing customer base Underserved market - few purpose built vehicles Breez
Slide 19: On-Road Division - Victory Motorcycles Opportunity
Opportunity On-Road Division - Victory Motorcycles MY 2010 Product Launch: Cross Country, Cross Roads, Value models (8-Ball) Streamlined line-up (89 model variations to 24) Improved value proposition - 5 year warranty / lower price points Dealer strength: lower dealer inventory levels (-24% vs. LY)
Slide 20: Victory Motorcycles International Expansion Plan
Victory Motorcycles International Expansion Plan Market Expansion Plan by Market 50,000 Unit Market Size Focused launch in 8 markets = 95% market coverage
Slide 21: Low Emission Vehicles
Low Emission Vehicles Neig other Q2 2009 0.1 0.9 Neighborhood Vehicles People Transport Light Duty Government Commercial Stealth Hunters Multi-acre Homeowners Driver & Passenger Seat belts Turn Signals Premium Wheels Adjustable Drivers Seat Low & High Beam Lights Comfort Ride Suspension Technology M
Slide 22: Parts, Garments & Accessories Division
Parts, Garments & Accessories Division Highest margin business Innovation is key driver of success - over 400 new accessories introduced in past two years Remains highest gross margin business - expect gross margin expansion in 2009 (Millions) Sales 2006 2007 2008 2009 2006 270 293 344 285 20 guidan
Slide 23: International Division
International Division Polaris Subsidiaries Sales 2006 2007 2008 2009 2006 233 258 304 243 31 guidance Down 10% to 20% (Millions) Europe ME/Africa Latin America Asia Aus/NZ East 0.73 0.07 0.07 0.01 0.12 ORV Victory Snow PGA East 0.76 0.04 0.03 0.17 Q2 2009 Revenue by Geography Q2 2009 Revenue by Bus
Slide 24: Operational Excellence: What's the End Game Look Like?
2006 2007 2008 2009 East 21 23 28 28 West 5 North Quality Top Net Promoter Score 75+ Cost Continuous reduction in non value add waste Simplicity and efficiency Speed Fastest product development cycle Fastest back end and dealer turns Aggressive re-investment into future growth Operational Excellence
Slide 25: 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 26: Thank you. Q & A
Polaris Industries Inc. Thank you. Q & A
Slide 27: 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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