Brunswick Corporation · NYSE:BC
Brunswick — Q3 2024 Earnings Presentation
32 slides from Brunswick's earnings presentation, Oct 24, 2024
Slide 1: Q3 2024 Earnings Conference Call
Q3 2024 Earnings Conference Call OCTOBER 24, 2024
Slide 2: Forward-Looking Statements
BRUNSW ICK CORPORATION – EARNINGS RELEASE Forward-Looking Statements Certain statements in this presentation are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on current expectations, estimates, and projections abo
Slide 3: Use of Non-GAAP Financial Information and Constant Currency Reporting
BRUNSW ICK CORPORATION – EARNINGS RELEASE Use of Non-GAAP Financial Information and Constant Currency Reporting In this presentation, Brunswick uses certain non-GAAP financial measures, which are numerical measures of a registrant’s historical or future financial performance, financial position or c
Slide 4: Business Overview – Dave Foulkes, CEO
BRUNSW ICK CORPORATION – EARNINGS RELEASE 01 Business Overview – Dave Foulkes, Update Image CEO ©2024 BRUNSW ICK CO. CONFIDENTIAL AND ALL RIGHTS RESERVED. 4
Slide 5: Third Quarter Performance in-line with Expectations Despite Challenging Marine Market
BRUNSW ICK CORPORATION – EARNINGS RELEASE Third Quarter Performance in- $1.3B $1.17 $42M line with Net Sales Adjusted1 EPS Q3 Free Cash Flow1 (-20% vs. 2023) (-52% vs. 2023) Expectations Despite Challenging Marine Market Q3 2024 ~70% $190M 10.7k of Q3 Adjusted Operating YTD Share Repurchases Q3 U.S.
Slide 6: Segments continue to show resiliency and adapt to market dynamics
BRUNSW ICK CORPORATION – EARNINGS RELEASE Segments continue to show resiliency and adapt to market dynamics Update Image Propulsion Engine Parts & Navico Group Boat1 Accessories • Strong Q3 U.S. outboard retail market • Record Q3 segment operating • Lower marine OEM production • Global internal reta
Slide 7: Navico Group Accelerating Pace of New Product Introductions
BRUNSW ICK CORPORATION – EARNINGS RELEASE Navico Group Accelerating Pace of New Product Introductions + + Pro Control + Latitude Evolve + Elite FS 10”/12” Fishfinders World’s most accessible Next generation electric Active Boat Stabilization Latitude electric seat fishfinder with live sonar steer tr
Slide 8: External, Customer and Consumer Conditions
BRUNSW ICK CORPORATION – EARNINGS RELEASE External, Customer and Consumer Conditions External Landscape Dealer Sentiment OEM Environment Consumer Health • Macro-economic environment • Overall sentiment and outlook • Marine OEMs continue to reduce • Boat purchase consideration stabilizing as U.S. inf
Slide 9: Hurricanes Helene and Milton
BRUNSW ICK CORPORATION – EARNINGS RELEASE Hurricanes Helene and Milton Helene made landfall September 26th as category 4 and Milton on October 9th as category 3 • Minor direct impact to Brunswick facilities • Production/distribution at some locations halted for ~ 3 days • Only 4 of the ~100 Florida
Slide 10: Q3 U.S. Industry Retail and Pipeline Trends
BRUNSW ICK CORPORATION – EARNINGS RELEASE Q3 U.S. Brunswick U.S. Industry Retail 2024 U.S. Industry Retail Boat Pipeline Metrics Change vs. ’23 and Pipeline Trends Premium Fiberglass Ending Q3 2024 1.5 50 Units in Thousands 40 1.0 • Brunswick Q3 U.S. outboard 30 WOH Q3 YTD Q3 YTD engine retail outpe
Slide 11: Financial Overview – Ryan Gwillim, CFO
BRUNSW ICK CORPORATION – EARNINGS RELEASE 02 Financial Overview – Ryan Gwillim, CFO ©2024 BRUNSW ICK CO. CONFIDENTIAL AND ALL RIGHTS RESERVED. 11
Slide 12: Overview of Third Quarter 2024 Adjusted Results
BRUNSW ICK CORPORATION – EARNINGS RELEASE Overview of Third Quarter 2024 Adjusted Results Net Sales ($M) Operating Earnings1 ($M) • Brunswick delivered Q3 $1,594 $230 results in line with $1,273 expectations despite $126 (460) continued challenging (20%) bps (45%) wholesale ordering patterns 2023 20
Slide 13: Overview of YTD 2024 Adjusted Results
BRUNSW ICK CORPORATION – EARNINGS RELEASE Overview of YTD 2024 Adjusted Results Net Sales ($M) Operating Earnings1 ($M) $727 $5,040 • YTD results remain resilient $4,082 in the face of challenging $448 (19%) economic conditions (38%) (460) bps • Gross margins holding steady at approximately 27% 2023
Slide 14: Propulsion Segment – Q3'24 Performance
BRUNSW ICK CORPORATION – EARNINGS RELEASE Propulsion Segment – Q3’24 Performance 1 YTD and Q3 market share gains continue despite planned lower wholesale engine shipments Q3’24 Net Sales Adjusted Operating Margin of % Change vs. Q3’23 $485.9 11.0% Down 750 bps vs. Q3’23 (32%) $373.5 (GAAP Operating
Slide 15: Engine P&A Segment – Q3'24 Performance
BRUNSW ICK CORPORATION – EARNINGS RELEASE Engine P&A Segment – Q3’24 Performance 1 Record operating margins and strong international performance drive earnings improvement Q3’24 Net Sales % Change vs. Q3’23 Adjusted Operating Margin of $336.1 (3%) 25.9% Up 330 bps vs. Q3’23 (GAAP Operating Margin of
Slide 16: Navico Group Segment – Q3'24 Performance
BRUNSW ICK CORPORATION – EARNINGS RELEASE Navico Group Segment – Q3’24 Performance 1 Sales growth in EMEA and continued new product acceleration highlight stable quarter Adjusted Operating Margin of Update Image Q3’24 Navico Group Net Sales 4.9% Down 450 bps vs. Q3’23 (GAAP Operating Margin of -4.7%
Slide 17: Boat Segment – Q3'24 Performance
BRUNSW ICK CORPORATION – EARNINGS RELEASE Boat Segment – Q3’24 Performance 1 Steady performance consistent with expectations, FBC completed purchase of Southwest Florida territory Q3’24 Net Sales % Change vs. Q3’23 Adjusted Operating Margin of 1.2% Down 510 bps vs. Q3’23 $345.3 (GAAP Operating Margi
Slide 18: 2024 Guidance
BRUNSW ICK CORPORATION – EARNINGS RELEASE 2024 Guidance1 Operating Revenue EPS Margin $5.1B to ~10% ~$4.50 $5.2B Previously Previously Previously $5.2B to $5.4B 10.0% to 11.0% $5.00 to $5.50 Free Cash Capital Share Flow Expenditures Repurchases ~$250M ~$165M ~$200M Previously Previously Previously $
Slide 19: Wrap-Up – Dave Foulkes, CEO
BRUNSW ICK CORPORATION – EARNINGS RELEASE 03 Wrap-Up Dave Foulkes, CEO ©2024 BRUNSW ICK CO. CONFIDENTIAL AND ALL RIGHTS RESERVED. 19
Slide 20: Brunswick Surpasses 100 Awards for 3rd Consecutive Year
BRUNSW ICK CORPORATION – EARNINGS RELEASE Brunswick Surpasses 100 Awards for 3rd Consecutive Year TIME Magazine World's Multiple Product Awards IBEX Innovation Award National Boating Safety Best Companies Awards • Named as one of TIME • Sea Ray wins Moteur Boat of the • Navico Group wins 1st Place f
Slide 21: Boat Group Major Announcements in Ft. Lauderdale
BRUNSW ICK CORPORATION – EARNINGS RELEASE Boat Group Major Announcements in Ft. Lauderdale Launches the 330 Vantage Announces 3 New Models – 270SDX OB, 250SDX OB and 'sneak peak' of the 230SDX OB Makes its North American Debut ©2024 BRUNSW ICK CO. CONFIDENTIAL AND ALL RIGHTS RESERVED. 21
Slide 22: Appendix
BRUNSW ICK CORPORATION – EARNINGS RELEASE Appendix ©2024 BRUNSW ICK CO. CONFIDENTIAL AND ALL RIGHTS RESERVED. 22
Slide 23: Q3 2024 Revenue Mix & Growth Rates
BRUNSW ICK CORPORATION – EARNINGS RELEASE Geographical Revenue Mix Q3 2024 Canada, 6% Revenue Mix & 1 Europe, Growth Rates 13% • Q3’24 global sales Revenue YoY declined 21 percent on a U.S. -24% Asia Pacific, constant currency basis, U.S., Europe -14% 7% excluding acquisitions 68% Asia Pacific -11%
Slide 24: 2024 Outlook Segment Guide
BRUNSW ICK CORPORATION – EARNINGS RELEASE 2024 Outlook Segment Guide1 Propulsion Engine P&A Navico Group Boat Net Sales Guide2 ~$2B ~$1.15B ~$0.8B ~$1.5B Previously ~$2.1B No Change Previously ~$0.825B Previously ~$1.6B Operating Margin ~12.5% ~20% ~7.0% Mid Previously High Single Single Digit Perce
Slide 25: 2024 Outlook – Capital Strategy and Other Assumptions
BRUNSW ICK CORPORATION – EARNINGS RELEASE 2024 Outlook – Capital Strategy and Other Assumptions Average Diluted Quarterly Dividends Depreciation Debt Retirement Shares Outstanding ~$225M ~67.5M ~$50M $0.42 Per Share No Change No Change No Change No Change Combined Equity Working Capital Net Interest
Slide 26: Net Sales – Q3 2024
BRUNSW ICK CORPORATION – EARNINGS RELEASE Net Sales – Q3 2024 Net Sales decreased by $320.3 million, or 20 percent Segments Q3 2024 Q3 2023 % Change Propulsion $485.9 $718.2 (32%) Engine Parts & Accessories 336.1 344.6 (3%) NET Navico Group 184.1 213.4 (14%) Boat 345.3 428.6 (19%) SALES Segment Elim
Slide 27: Net Sales – YTD 2024
BRUNSW ICK CORPORATION – EARNINGS RELEASE Net Sales – YTD 2024 Net Sales decreased by $957.3 million, or 19 percent Segments YTD 2024 YTD 2023 % Change Propulsion $1,622.1 $2,173.1 (25%) Engine Parts & Accessories 934.6 962.1 (3%) NET Navico Group 605.1 718.5 (16%) Boat 1,205.2 1,564.6 (23%) SALES S
Slide 28: GAAP to Non-GAAP Reconciliations – Q3 2024
BRUNSW ICK CORPORATION – EARNINGS RELEASE GAAP to Non-GAAP Reconciliations – Q3 2024 Operating Earnings and Diluted Earnings per Share Operating Earnings Diluted Earnings per Share (in millions, except per share data) Q3 2024 Q3 2023 Q3 2024 Q3 2023 GAAP $98.4 $196.1 $0.71 $1.63 Restructuring, exit
Slide 29: GAAP to Non-GAAP Reconciliations – YTD 2024
BRUNSW ICK CORPORATION – EARNINGS RELEASE GAAP to Non-GAAP Reconciliations – YTD 2024 Operating Earnings and Diluted Earnings per Share Operating Earnings Diluted Earnings per Share (in millions, except per share data) YTD 2024 YTD 2023 YTD 2024 YTD 2023 GAAP $367.3 $626.6 $3.26 $5.10 Restructuring,
Slide 30: GAAP to Non-GAAP Reconciliations – YTD 2024 Operating Expenses
BRUNSW ICK CORPORATION – EARNINGS RELEASE GAAP to Non-GAAP Reconciliations – YTD 2024 Operating Expenses (1) EXCLUDES $14.7M AND $11.6M OF COST OF SALES RELATED RESTRUCTURING, EXIT AND IMPAIRMENT CHARGES FOR THE NINE MONTHS ENDED SEPTEMBER 28, 2024 AND SEPTEMBER 30, 2023, RESPECTIVELY. (2) EXCLUDES
Slide 31: Tax Rate
BRUNSW ICK CORPORATION – EARNINGS RELEASE Tax Rate Q3 2024 Q3 2023 1 Effective Tax Rate - GAAP 32.3% 28.9% Q3 Effective Tax Rate - As Adjusted 2 21.1% 20.6% YTD 2024 YTD 2023 3 YTD Effective Tax Rate - GAAP Effective Tax Rate - As Adjusted 2 23.8% 33.4% 21.4% 21.6% (1) THE INCREASE IN THE EFFECTIVE
Slide 32: Free Cash Flow
BRUNSW ICK CORPORATION – EARNINGS RELEASE Free Cash Flow (in millions) Q3 2024 Q3 2023 Net cash provided by operating activities from continuing operations $69.9 $203.7 Net cash (used for) provided by: Q3 Capital expenditures (36.0) 2.8 (59.7) 4.3 Proceeds from sale of property, plant, equipment Eff