Polaris Inc. · NYSE:PII
Polaris — Polaris Industries — Q1 2019 Earnings Presentation
27 slides from Polaris's earnings presentation, Apr 23, 2019
Slide 1: First Quarter 2019 Earnings Results
POLARIS INDUSTRIES INC. FIRST QUARTER 2019 EARNINGS RESULTS April 23, 2019
Slide 2: Safe Harbor & Non-GAAP Measures
SAFE HARBOR & NON-GAAP MEASURES Except for historical information contained herein, the matters set forth in this presentation, including management’s expectations regarding 2019 future sales, shipments, net income, and net income per share, operational initiatives, tariffs, currency fluctuations, i
Slide 3: Scott W. Wine, Chairman & CEO
FIRST QUARTER 2019 EARNINGS RESULTS SCOTT W. WINE CHAIRMAN & CEO April 23, 2019
Slide 4: 2018 Corporate Responsibility Report
2018 CORPORATE RESPONSIBILITY REPORT Highlights Employee Engagement Product Safety & Quality Corporate Responsibility Committee Supplier Code of Conduct Governance Highlights Environmental Policy & Goals Human Rights Policy Corporate Foundation Initiatives www.polaris.com/en-us/corporate-stewardship
Slide 5: First Quarter 2019 Summary
FIRST QUARTER 2019 SUMMARY Financial results exceeded expectations N.A. retail sales down 3% driven by unusually cold/wet weather Snowmobile retail strong for the quarter and season-end Grew market share in snowmobiles (season-to-date); maintained Indian market share Boats, PG&A and International ah
Slide 6: North American Powersports Retail Sales
NORTH AMERICAN POWERSPORTS RETAIL SALES Polaris POLARISRetail RETAILSales SALES Q1’19 Q1’19 Retail RETAIL Sales SALES by BY Business BUSINESS Year-Over-Year Retail % Change (units) Y/Y Retail % Change (units) POLARIS INDUSTRY +3% TOTAL COMPANY* 3% Flat Off-Road Vehicles . . . . . . . . . . mid-singl
Slide 7: North American Dealer Inventory
NORTH AMERICAN DEALER INVENTORY Polaris N.A. Dealer Inventory by Quarter Q1 2019 N.A. Dealer Inventory (in units) (Percent Impact on Total Inventory) 2017-2018 Qtrs Ended Q1'18 2018-2019 Qtrs Ended Q1'19 +4% -1% -4% -1% 1% Q2 Q3 Q4 Q1 Q1 2018 ORV Snowmobiles Motorcycles Q1 2019 Polaris Q1 2019 N.A.
Slide 8: N.A. Powersports Consolidated Market Share
N.A. POWERSPORTS CONSOLIDATED MARKET SHARE Consolidated Market Share in Units Using Total Motorcycle Industry; Excludes Boats (side-by-side data is estimated) Honda Harley Can Am Yamaha Kawasaki KTM John Deere Arctic Cat /Textron Suzuki 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 201
Slide 9: 2019 Polaris Sales Contribution
2019 POLARIS SALES CONTRIBUTION N.A. Powersports Consolidated Market Share* Full Year 2019 Expected Sales Contribution Consolidated Market Share in Units Using Total Motorcycle Industry; Excludes Boats $6.750B to $6.900B (side-by-side data is estimated) 11% to 13% Adjacent Markets Aftermarket ~1/2 P
Slide 10: Tariffs / Trade Update
TARIFFS / TRADE UPDATE Tariffs / Trade Costs A Dynamic Trade Environment ($ in millions) U.S. / China / EU trade is mutually beneficial, and fairer trade will benefit both countries Global trade issues are significant / complex: ~$80 to $90 Market access, intellectual property, government subsidies
Slide 11: Customer-Centric, Highly Efficient Growth Company
CUSTOMER-CENTRIC, HIGHLY EFFICIENT GROWTH COMPANY CUSTOMER-CENTRICITY EFFICIENCY GROWTH Expand Customer Base; CRM Data Strategic Sourcing Initiative Industry-leading Brands Analytics Retail Flow Management (RFM) Process Best in Class Safety & Quality Improve Rider Experience Post Sales Surveillance
Slide 12: Mike Speetzen, EVP Finance & CFO
FIRST QUARTER 2019 EARNINGS RESULTS MIKE SPEETZEN EVP FINANCE & CFO April 23, 2019
Slide 13: Q1 2019 Financial Results
Q1 2019 FINANCIAL RESULTS Sales Net Income Earnings Per Share ($ in millions) ($ in millions) GAAP $1,496 million $48 million $0.78 15% y/y 13% y/y 8% y/y 15% $1,496 4% ADJUSTED* $1,297 9% $74 $67 $1.13 $1.08 Q1 2018 Q1 2019 Q1 2018 Q1 2019 Q1 2018 Q1 2019 First quarter 2019 adjusted* results ahead
Slide 14: Q1 2019 Sales & Gross Profit Margins by Segment
Q1 2019 SALES & GROSS PROFIT MARGINS BY SEGMENT $ in millions ORV / Snowmobiles Motorcycles Global Adjacent Markets 4% 4% $867 $867 Motorcycles Commercial, Off-Road Snowmobiles 10% Gov’t & Defense, Vehicles 28% PG&A PG&A Indian 10% & Aixam 5% SALES 4% Slingshot 8% 10% 10% 7% $118 $118 $105 PG&A 12%
Slide 15: Supplemental Sales Data
Q1 2019 SALES & GROSS PROFIT MARGINS BY SEGMENT con’t. $ in millions Aftermarket Boats International ORV / Snow Motorcycles 5% 8% Other Flat TransAmerican Aftermarket 4% Adjacent $221 Auto Parts 12%** 23% $203 Markets 2% $185 10% SALES SUPPLEMENTAL SALES DATA EMEA Latin America 1% 6% Asia Pacific Q1
Slide 16: 2019 Full Year Sales & EPS Guidance
2019 FULL YEAR SALES & EPS GUIDANCE Full Year Total Company Adjusted* Sales Guidance Full Year Adjusted* EPS Guidance** ($ in millions) 14% to 18% ~($1.45) $0.94 to $1.19 $7.50 to $7.75 (slight favorability 11% to 13% (unchanged) (unchanged) due to F/X, Interest) $6,750 to $6,900 4% to 8% (unchanged
Slide 17: FY 2019 Sales Guidance by Segment
FY 2019 SALES GUIDANCE BY SEGMENT $ in millions ORV/Snowmobiles Motorcycles Adjacent Markets Aftermarket Boats International low-single digits % mid-single $805 (unchanged) digits % mid-single (unchanged) digits % $3,923 Supplemental Sales Data (unchanged) mid- $889 More than Segment Sales teens % m
Slide 18: Q1 2019 Financial Position & 2019 Expectations
Q1 2019 FINANCIAL POSITION & 2019 EXPECTATIONS Capital Summary March 2019 Cash Drivers ($ millions) ($ millions) Variance to $161 March 2018 +$141 $151 Cash $ 151 -9% ($38) Debt /Capital Lease Obligations $2,101 +104% ($37) Shareholders’ Equity $ 879 Flat Total Capital $2,980 +49% ($70) Debt to Tota
Slide 19: Scott W. Wine, Chairman & CEO
FIRST QUARTER 2019 EARNINGS RESULTS SCOTT W. WINE CHAIRMAN & CEO April 23, 2019
Slide 20: Summary
SUMMARY Good start to the year in spite of weather U.S. economy maintaining positive trend - global growth prospects less certain Competitive landscape intense but stable; Polaris now on offense Motorcycle market remains challenged; new products driving Polaris growth and share gains Supply chain in
Slide 21: Questions?
FIRST QUARTER 2019 EARNINGS RESULTS QUESTIONS? April 23, 2019
Slide 22: Appendix: Non-GAAP Reconciliations
APPENDIX GROSS PROFIT MARGINS – Q1 2019 ACTUAL & FY 2019 GUIDANCE NON-GAAP RECONCILIATIONS NON-GAAP RECONCILIATIONS - SEGMENTS 2019 GUIDANCE ADJUSTMENTS PII Q1'19 Earnings 4/23/19 22
Slide 23: Gross Profit Margins
GROSS PROFIT MARGINS Q1 2019 Gross Profit Margin FY 2019 Adjusted* Gross Profit Margin Guidance** 24.9% 25.4% +80 to +110 23.6% 24.0% bps ~(140 bps) (unchanged) (unchanged) 25.1% ~(30 bps) 24.2% to 24.5% (unchanged) (unchanged) VIP Volume Q1 2018 Q1 2018 Q1 2019 Q1 2019 Price GAAP* Adjusted* GAAP* A
Slide 24: 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 March 31, 2019 2018 Key Definitions: Throughout this presentation, the word “Adjusted” is used to refer Sales $ 1,495,690 $ 1,297,473
Slide 25: Non-GAAP Reconciliations - Segments
NON-GAAP RECONCILIATIONS - SEGMENTS In Thousands, Unaudited) Three months ended March 31, (In Thousands, Unaudited) Three months ended March 31, 2019 2018 2019 2018 SEGMENT SALES SEGMENT GROSS PROFIT ORV/Snow segment sales $ 867,447 $ 832,564 ORV/Snow segment gross profit 252,235 243,561 Restructuri
Slide 26: 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
Slide 27: Questions?
FIRST QUARTER 2019 EARNINGS RESULTS QUESTIONS? April 23, 2019