Polaris Inc. · NYSE:PII
Polaris — FY2020 Earnings Presentation
28 slides from Polaris's earnings presentation, Jan 26, 2021
Slide 1: Fourth Quarter & Full Year 2020 Earnings Results
Fourth Quarter & Full Year 2020 Earnings Results January 26, 2021
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, are forward-looking statements that involve certain risks and uncertainties that could cause actual results to differ materially from those forward-looking statements. Pote
Slide 3: Mike Speetzen, Interim CEO
Mike Speetzen Interim CEO Fourth Quarter & Full Year 2020 Earnings Results January 26, 2021
Slide 4: Fourth Quarter & Full Year 2020 Summary
Fourth Quarter & Full Year 2020 Summary Q4 sales up 24%; full year sales up 4% Full Year 2020 Sales Sales accelerated throughout the year $7.028 Billion Adjusted EPS finished at all-time highs Motorcycles Full year adjusted* earnings up 22% to $7.74 per share ORV/Snow Global Adjacent Markets New cus
Slide 5: Q4 2020 North American Powersports Retail Sales
Q4 2020 North American Powersports Retail Sales 2020 Polaris North American Retail by Quarter(1) Q4’20 Polaris Retail Sales by Business retail units year-over-year +57% % change Off-Road Vehicles low-thirties % Side-by-Sides high-thirties % +28% +25% ATVs high-teens % +15% Motorcycles high-thirties
Slide 6: North American Dealer Inventory
North American Dealer Inventory 2019 Qtrs Ended Q4'19 2020 Qtrs Ended Q4'20 Weighted Average Contribution N ote: Ex cludes Boats ORV . . . . . . . . . . -47% Motorcycles . . . . -2% Snowmobiles . . . -9% +8% Supply Chain -47% -55% Constraints Continue -58% Q1 Q2 Q3 Q4 Dealer Inventory Levels Signifi
Slide 7: Polaris New Customer Demographics
Polaris New Customer Demographics N.A. Customer Growth FY 2020 Polaris Adventures ~700,000 ~270,000 Rides New Customers Added in 2020 Completed at over 160 Adventure locations in 2020 +40% +30% +30% +25% ORV Slingshot Indian Snow ~217,000 ~35,000 ~1,100 ~15,000 Rides Rides Rides Rides Millenials His
Slide 8: Polaris Manufacturing Capacity Utilization
Polaris Manufacturing Capacity Utilization Additional capacity needed to m eet dem and P roduction Plants producing above target levels and fill dealer inventory and Dem and channel to targeted levels Balanced, but Quality remaining high Capacity 85% target Tight Supply chain constraints expected to
Slide 9: New Product Introductions
New Product Introductions Off-Road Vehicles Snowmobiles Motorcycles 10 New / ~85 Total Models 19 New / ~80 Total Models 10 New / ~25 Total Models Innovation Vitality Index Percentage of sales from products introduced in the past 3 years 84% 90% 73% 65% 66% Indian Challenger 2016 2017 2018 2019 2020
Slide 10: Polaris 2021 Priorities
Polaris 2021 Priorities Maintain the Health & Safety of Employees Deliver on Financial Plan Bring Dealer Inventory Up to Optimal Levels Execute on Strategic Initiatives: Quality, Digital, Electrification Focused Execution to Deliver on Strategic, Operational and Financial Objectives Q4/FY'20 Earning
Slide 11: Bob Mack, SVP & Interim CFO
Bob Mack SVP & Interim CFO Fourth Quarter & Full Year 2020 Earnings Results January 26, 2021
Slide 12: Q4 & FY 2020 Financial Results
Q4 & FY 2020 Financial Results Sales Net Income Earnings Per Share $ in billions $ in millions Q4 ‘20 FY ‘20 $ in millionsQ4 ’20 FY ‘20 Q4 ’20 FY ‘20 YoY % Chg. GAAP 24% 4% 101% 61% 99% 62% $2.156B $7.028B $199M $125M $3.15 $1.99 4% 23% 22% $7.025 $485 $7.74 ADJUSTED* 84% 83% YoY % Chg. 24% $211 $3.
Slide 13: Q4 2020 Segment Sales & Gross Profit Margins
Q4 2020 Segment Sales & Gross Profit Margins ORV/Snowmobiles Motorcycles* Global Adjacent Markets Aftermarket Boats* 29% $1,468 18% 8% 23% $1,140 $142 $221 $238 20% $147 $120 Q4 2020 Sales ($ in millions) $119 $135 $162 Q4 2019 Q4 2020 Q4 2019 Q4 2020 Q4 2019 Q4 2020 Q4 2019 Q4 2020 Q4 2019 Q4 2020
Slide 14: Full Year 2021 Sales & EPS Guidance
Full Year 2021 Sales & EPS Guidance* Total Company Adjusted* Sales Guidance Adjusted* Earnings Per Share Guidance $ in millions 13% to 16% 9% to 13% $7,950 to $8,150 $8.45 to $8.75 $7,025 $7.74 FY 2020 FY 2021 FY 2020 FY 2021 Sales Actual Sales Guidance EPS Actual EPS Guidance FY powersports market
Slide 15: 2021 Expected Sales & Adjusted Earnings Cadence
2021 Expected Sales & Adjusted Earnings Cadence Sales Adjusted* Earnings Per Share First Half Second Half First Half Second Half CEO Up single departure $6.22 Up thirty digits % ~0.20 Down $4,110 benefit to $6.02 % plus EPS in Q4 about 20% Up Promotions/ finance interest significantly Strategic inve
Slide 16: Full Year 2021 Sales Guidance by Segment
Full Year 2021 Sales Guidance by Segment Global Adjacent ORV/Snowmobiles Motorcycles Markets Aftermarket Boats International double- low to mid- digits % teens % $841 Supplemental Sales Data ($ in millions) $4,533 low- Segment Sales ($ in millions) single digits % $885 mid to low to FY 2020 FY 2021
Slide 17: Financial Position & Liquidity Profile
Financial Position & Liquidity Profile Capital Summary December 2020 Liquidity Profile $ in millions $ in millions Variance to Dec. 2020 Dec. 2019 Cash $635 NM Debt /Finance Lease Obligations $1,451 -14% Shareholders’ Equity $1,145 +3% Total Capital $2,596 -7% Credit Revolver – Capacity $700 - Credi
Slide 18: Mike Speetzen, Interim CEO
Mike Speetzen Interim CEO Fourth Quarter & Full Year 2020 Earnings Results January 26, 2021
Slide 19: 2021 Business Outlook & Priorities
2021 Business Outlook & Priorities Economic outlook remains tenuous Political landscape clearer; prepared to mitigate/manage changes, if warranted Powersports Industry expected robust, but muted from unprecedented 2020 Supply-chain constraints expected to moderate throughout the year Strategic sourc
Slide 20: Q&A
Q&A Fourth Quarter & Full Year 2020 Earnings Results January 26, 2021
Slide 21: Appendix
Appendix Gross Profit Margin - FY 2020 Actual & FY 2021 Guidance Q4 2020 Supplemental Sales – International & PG&A Q4 2020 Financial Services Income Q4 & FY 2020 Non-GAAP Reconciliations Q4 & FY 2020 Non-GAAP Reconciliations – Segments 2021 Guidance Adjustments Q4/FY'20 Earnings 1/26/21 21
Slide 22: Gross Profit Margin – Q4 2020
Gross Profit Margin – Q4 2020 Q4 2020 Gross Profit Margin – GAAP Q4 2020 Gross Profit Margin – Adjusted* 25.5% 25.6% 24.4% 24.7% Q4 2019 Q4 2020 Q4 2019 Q4 2020 GAAP* GAAP* Adjusted* Adjusted* Q4 2019 Q4 2020 Q4 2019 Q4 2020 Segments Segments GAAP GAAP Adjusted* Adjusted* ORV/Snow 26.3% 26.4% ORV/Sn
Slide 23: Gross Profit Margin – 2020 Actual & 2021 Guidance
Gross Profit Margin – 2020 Actual & 2021 Guidance FY 2020 Gross Profit Margin FY 2021 Gross Profit Margin Guidance 24.3% 24.6% 24.7% 24.7% Up Slightly 24.3% FY 2019 FY 2019 FY 2020 FY 2020 FY 2020 FY 2021 GAAP* Adjusted* GAAP* Adjusted* Adjusted* Adjusted* Guidance FY 2019 FY 2019 FY 2020 FY 2020 20
Slide 24: Q4 2020 Supplemental Sales – International & PG&A
Q4 2020 Supplemental Sales – International & PG&A Q4 2020 International Sales ($ millions) Sales by Segment Sales by Region 24% International $215 $266 ORV / Snow Motorcycles Europe, Latin America 27% 5% Middle East 55% and Africa Global Adjacent 22% Asia Pacific Markets 12% 27% Q4 2019 Q4 2020 Q4 2
Slide 25: Financial Services Arrangements
Financial Services Arrangements Financial Services Income by Category Wholesale Credit Retail Credit Contracts Written $ in millions $ in millions $ in millions Receivable Balance – U.S. Dealers 10% $334 $20.7 $1,423 $1,404 $303 $17.1 Other Activities $764 $733 $772 Wholesale Financing Retail Financ
Slide 26: Non-GAAP Reconciliations
Non-GAAP Reconciliations Reconciliation of GAAP "Reported" Results to Non-GAAP "Adjusted" Results (In Millions, Except Per Share Data; Unaudited) Three months ended December 31, Twelve months ended December 31, 2020 2019 2020 2019 Sales $ 2,156.3 $ 1,735.9 $ 7,027.9 $ 6,782.5 Key Definitions: This p
Slide 27: Non-GAAP Reconciliations – Segments
Non-GAAP Reconciliations – Segments (In Millions, Unaudited) Three months ended December 31, Twelve months ended December 31, (In Millions, Unaudited) Three months ended December 31, Twelve months ended December 31, 2020 2019 2020 2019 2020 2019 2020 2019 SEGMENT SALES SEGMENT GROSS PROFIT ORV/Snow
Slide 28: 2021 Guidance Adjustments
2021 GUIDANCE ADJUSTMENTS 2021 guidance excludes the pre-tax effect of supply chain transformation, restructuring and network realignment costs of approximately $5 million to $10 million, and approximately $5 million to $10 million for class action litigation-related expenses. Intangible amortizatio