Polaris Inc. · NYSE:PII
Polaris — Q4 2023 Earnings Presentation
19 slides from Polaris's earnings presentation, Feb 22, 2024
Slide 1: Fourth Quarter & Full Year 2023 Earnings Presentation
Fourth Quarter & Full Year 2023 Earnings Presentation January 30, 2024
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 are forward-looking statements that involve certain risks and uncertainties that could cause actual results to differ materially from those forward-looking statem
Slide 3: 2023 In Review
2023 In Review Off Road: Polaris XPEDITION, RANGER XD 1500, RZR XP and Lock & Ride Max Category- Supply chain normalized Defining On Road: Sport Chief, Indian Challenger Elite, Managing Innovation Indian Pursuit Elite Dealer Improved product availability Taking Marine: Bennington S and SV Inventory
Slide 4: Fourth Quarter and Full Year 2023 Overview
Fourth Quarter and Full Year 2023 Overview Total Company Results* Fourth Quarter Drivers • North America retail up 7% Q4’23 Y/Y Change FY’23 Y/Y Change o Utility up, Recreation down o Positive contribution from Snow Sales $2,289M 5% $8,934M 4% o On Road and Marine soft • Share gains in Off Road Adju
Slide 5: North America Retail Trends and Sentiment
North America Retail Trends and Sentiment • Retail Trends ORV Recreation and Utility Retail In Units o Premium and Utility continue to grow +14% o Recreation down for five quarters in a row +7% +5% o Elevated promotions in Q4'23 expected to continue in Q1'24 o Expect Q1'24 retail to be down due to d
Slide 6: Q4 2023 Financial Results
Q4 2023 Financial Results Sales Financial Highlights (Y/Y) $2,404 • Quarterly sales of $2.3B, down 5% $2,289 o Lower than expected shipment volumes and higher finance interest o International sales down 1% EMEA contribution offset by Latin America and Asia Pacific o PG&A sales up 14% • Adjusted* E
Slide 7: Off Road Q4 Summary
Off Road Q4 Summary Q4 Results & Y/Y Change PII Call-outs Sales: $1,917M 3% • Utility demand remained positive, recreation remained soft • Gained share in ORV and Snow during the quarter Wholegoods North America • Reduced shipments due to poor demand trends in October Flat PG&A 3% International 16%
Slide 8: On Road Q4 Summary
On Road Q4 Summary Q4 Results & Y/Y Change PII Call-outs Sales: $229M 24% • N.A. Indian Motorcycle lost modest share overall: gained share in mid-size and lost share in heavy-weight Wholegoods o Market share is ~11% North America 27% PG&A International 4% 39% 5% • Indian Motorcycle N.A. retail was d
Slide 9: Marine Q4 Summary
Marine Q4 Summary Q4 Results & Y/Y Change PII Call-outs • Pontoon industry down 7% in 2023 Sales: $143M 41% • Dealers cautious on adding new inventory in off-season • Early boat show season retail has been flat to modestly down year-over-year Gross Profit 17.9% 395 bps • Positive feedback on new Ben
Slide 10: FY 2023 Segment Summary
FY 2023 Segment Summary Off Road On Road Marine FY’23 Y/Y Change FY’23 Y/Y Change FY’23 Y/Y Change Sales $6,984M 9% $1,185M 2% $765M 23% Gross Profit 21.9% 174 bps 20.3% 257 bps 22.1% 42 bps Margin N.A. Market Off-Road Vehicles Indian Motorcycle Pontoons(1) Share Snowmobiles (season-to-date) Gained
Slide 11: Financial Position
Financial Position Operating Cash Flow Adjusted* Free Cash Flow $ in millions $ in millions 73% 154% $926 $507 $535 $199 FY 2022 FY 2023 FY 2022 FY 2023 2023 Capital Deployment Priorities Key Financial Metrics $ in millions #1 Priority – Organic Investment ~$413 million capital expenditures; 4% of s
Slide 12: Full Year 2024 Guidance & Expectations
Full Year 2024 Guidance & Expectations Total Company Sales Segment Sales Initial 2024 Outlook Assumptions $ in Millions • Ship volume lower due to retail outlook, 2023 Snow and channel refill MID-SINGLE Off Road DIGITS % • New products expected to drive retail outperformance vs. Industry 7% to 5% •
Slide 13: Closing Comments
Closing Comments • Share gains in 2023 across our business coupled with financial setbacks • New innovation expected in all three segments during 2024 leading to continued share gains • Continued discipline around dealer inventory • Focused on executing identified operational savings • Consistent ca
Slide 14: Q&A
Q&A
Slide 15: Appendix
Appendix • Non-GAAP Reconciliations – Total Company • Non-GAAP Reconciliations – Net Income to Adjusted EBITDA • Non-GAAP Reconciliations – Segments / Cash Flow • 2024 Guidance Adjustments Q4/FY'23 Earnings 1/30/24 15
Slide 16: Non-GAAP Reconciliations – Total Company
Non-GAAP Reconciliations – Total Company 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, 2023 2022 2023 2022 Gross profit 476.9 573.0 1,959.9 1,959.5 Restructurin
Slide 17: Non-GAAP Reconciliations – Net Income to Adjusted EBITDA
Non-GAAP Reconciliations – Net Income to Adjusted EBITDA Reconciliation of Net Income to Adjusted EBITDA (In Millions, Unaudited) Three months ended December 31, Twelve months ended December 31, 2023 2022 2023 2022 Sales 2,289.2 2,404.1 8,934.4 8,589.0 Net income from continuing operations 103.3 196
Slide 18: Non-GAAP Reconciliations – Segments / Cash Flow
Non-GAAP Reconciliations – Segments / Cash Flow Reconciliation of GAAP Segment Gross Profit to Non-GAAP Reconciliation of GAAP Operating Cash Flow to Non-GAAP Segment Gross Profit Adjusted Free Cash Flow (In Millions, Unaudited) (In Millions, Unaudited) Three months ended December 31, Twelve months
Slide 19: 2024 Guidance Adjustments
2024 Guidance Adjustments 2024 adjusted guidance excludes the pre-tax effect of restructuring, network realignment and acquisition/ integration costs of approximately $8 million, and approximately $20 million for class action litigation-related expenses. Intangible amortization of approximately $18