Slide 1: Q4 2023 Earnings Conference Call
Q4 2023 Earnings Conference Call FEBRUARY 1, 2024
Slide 2: Forward-Looking Statements
BRUNSWICK 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 abou
Slide 3: Use of Non-GAAP Financial Information and Constant Currency Reporting
BRUNSWICK 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 ca
Slide 4: Business Overview – Dave Foulkes, CEO
BRUNSWICK CORPORATION – EARNINGS RELEASE 01 Business Overview – Dave Foulkes, CEO ©2024 BRUNSW ICK CO. CONFIDENTIAL AND ALL RIGHTS RESERVED. 4
Slide 5: Resilient Performance in a Challenging Year
BRUNSWICK CORPORATION – EARNINGS RELEASE Resilient $6.4B $8.80 +50bps Performance in Net Sales Adjusted1 EPS Mercury U.S. Outboard Market Share vs. 2022 a Challenging (-6.0% vs. 2022) (-12.3% vs. 2022) Year Full Year 2023 $275M 36.7 $473M Share Repurchases U.S. Weeks on Hand Free Cash Flow1 (+146% v
Slide 6: Segments Continue to Adapt and Execute Strongly
BRUNSWICK CORPORATION – EARNINGS RELEASE Segments Continue to Adapt and Execute Strongly Propulsion Engine Parts & Navico Group Boat1 Accessories • 50bps FY 2023 vs. FY 2022 outboard • Q4 2023 Products sales up 3% vs. • Strong market reception to higher • Q4 U.S. SSI main powerboat retail retail mar
Slide 7: External, Customer and Consumer Conditions
BRUNSWICK CORPORATION – EARNINGS RELEASE External, Customer and Consumer Conditions Refresh Image Macro Backdrop Consumer Health Dealer Sentiment OEM Environment • Inflation moderating and • Good attendance and consumer • Marine dealer sentiment overall • Marine OEMs reducing first employment stable
Slide 8: Q4 2023 Revenue Mix & Growth Rates
BRUNSWICK CORPORATION – EARNINGS RELEASE Geographical Revenue Mix Q4 2023 Canada, 5% Revenue Mix1 & Europe, Growth Rates 12% Q4’23 sales declined 15 Revenue YoY percent on a constant Asia Pacific, U.S. -16% currency basis, excluding 7% U.S., Europe -17% acquisitions 69% Canada -38% Asia Pacific -14%
Slide 9: U.S. Industry Retail and Pipeline Trends
BRUNSWICK CORPORATION – EARNINGS RELEASE U.S. Industry Retail – Percentage Change in Retail Units U.S. Industry Retail and Main Powerboat Segment Outboard Engines Pipeline Trends Ending Q4 2023 1% -1% -2% • U.S. pipeline ended the year as expected at 36.7 weeks on hand -6% and ~14k units Q4 2023 FY
Slide 10: Financial Overview – Ryan Gwillim, CFO
BRUNSWICK CORPORATION – EARNINGS RELEASE Alli refresh image 02 Financial Overview – Ryan Gwillim, CFO ©2024 BRUNSW ICK CO. CONFIDENTIAL AND ALL RIGHTS RESERVED. 10 ©2024 BRUNSW ICK CO. CONFIDENTIAL AND ALL RIGHTS RESERVED. 10
Slide 11: Overview of Fourth Quarter 2023 Adjusted Results
BRUNSWICK CORPORATION – EARNINGS RELEASE Overview of Fourth Quarter 2023 Adjusted Results Net Sales ($M) Operating Margin1 % $1,583 12.8% 10.4% • As expected, Q4 sales and $1,362 10.0% (240) EPS results below prior (14%) bps year with softer wholesale $918 demand across all business units 2019 2022
Slide 12: Overview of Full Year 2023 Adjusted Results
BRUNSWICK CORPORATION – EARNINGS RELEASE Overview of Full Year 2023 Adjusted Results Net Sales ($M) Operating Margin1 % 15.4% $6,812 13.6% $6,401 12.9% • Second highest sales and (6%) (180) $4,108 bps adjusted EPS in BC history • Outstanding free cash 2019 2022 2023 2019 2022 2023 flow generation –
Slide 13: Propulsion Segment – Q4'23 Performance
BRUNSWICK CORPORATION – EARNINGS RELEASE 1 Propulsion Segment – Q4’23 Performance Strong operating margin growth despite softer wholesale engine shipments Q4’23 Net Sales Adjusted Operating Margin of % Change vs. Q4’22 $590.7 17.9% (12%) Up 110 bps vs. Q4’22 $472.8 (GAAP Operating Margin of 17.5% (1
Slide 14: Engine P&A Segment – Q4'23 Performance
BRUNSWICK CORPORATION – EARNINGS RELEASE Engine P&A Segment – Q4’23 Performance Solid performance in Products offset by moderating headwinds in third-party Distribution Q4’23 Net Sales % Change vs. Q4’22 Operating Margin of 11.9% Down 160 bps vs. Q4’22 $237.7 (1%) $133.3 $104.4 Operating Earnings of
Slide 15: Navico Group Segment – Q4'23 Performance
BRUNSWICK CORPORATION – EARNINGS RELEASE Navico Group Segment – Q4’23 Performance 1 Soft marine OEM and RV market demand impacting wholesale orders; new products on the horizon for 2024 Adjusted Operating Margin of Q4’23 Navico Group Net Sales 7.5% Down 570 bps vs. Q4’22 (GAAP Operating Margin of $1
Slide 16: Boat Segment – Q4'23 Performance
BRUNSWICK CORPORATION – EARNINGS RELEASE Boat Segment – Q4’23 Performance 1 Steady performance as anticipated, led by premium Saltwater Fishing products Q4’23 Net Sales % Change vs. Q4’22 Adjusted Operating Margin of $424.8 5.9% Down 410 bps vs. Q4’22 (22%) (GAAP Operating Margin of 5.7% down 510 bp
Slide 17: 2023 FY Capital Strategy Update
BRUNSWICK CORPORATION – EARNINGS RELEASE 2023 FY Capital $473M Strategy Update Free Cash Flow1 $480M $275M We successfully executed our capital strategy, ending the year with strong cash and liquidity positions, and a very manageable debt portfolio Cash and Marketable Share Repurchases Securities $1
Slide 18: 2024 Guidance
BRUNSWICK CORPORATION – EARNINGS RELEASE 2024 Guidance1 Operating Revenue EPS Margin $6.0B to 12.0% to $7.00 to $6.2B 13.0% $8.00 Free Cash Quarter 1 Quarter 1 Flow Revenue EPS $1.3B to $1.30 to $350M+ $1.4B $1.40 1EACH ON AN “AS ADJUSTED” BASIS WHERE APPLICABLE, VERSUS COMPARABLE PRIOR YEAR ©2024 B
Slide 19: 2024 EPS Full-Year Guidance Bridge
BRUNSWICK CORPORATION – EARNINGS RELEASE 2024 EPS Full-Year Guidance Bridge • Full year EPS guidance reflects impact of pipeline dynamics, external factors, capital strategies, and continued cost actions *Opex Factors Variable Compensation $(0.35) Inflation (0.25) Acquisitions (0.25) Cost Reductions
Slide 20: 2024 Outlook – P&L and Cash Flow Assumptions
BRUNSWICK CORPORATION – EARNINGS RELEASE 2024 Outlook – P&L and Cash Flow Assumptions Working Capital Depreciation Usage $50M to $75M ~$225M Effective Tariff Tax Rate- As Adjusted1 Impact ~23% ~$15M 1TAX PROVISION, AS ADJUSTED FOR SPECIAL TAX ITEMS ©2024 BRUNSW ICK CO. CONFIDENTIAL AND ALL RIGHTS RE
Slide 21: 2024 Outlook – Capital Strategy and Other Assumptions
BRUNSWICK CORPORATION – EARNINGS RELEASE 2024 Outlook – Capital Strategy and Other Assumptions Share Average Diluted Capital Debt Retirement Repurchases Shares Outstanding Expenditures $200M+ ~68M ~$225M ~$100M Foreign Currency Combined Equity Quarterly Dividends Net Interest Earnings Impact Earning
Slide 22: Wrap-Up Dave Foulkes, CEO
BRUNSWICK CORPORATION – EARNINGS RELEASE 03 Wrap-Up Dave Foulkes, CEO ©2024 BRUNSW ICK CO. CONFIDENTIAL AND ALL RIGHTS RESERVED. 22 ©2024 BRUNSW ICK CO. CONFIDENTIAL AND ALL RIGHTS RESERVED. 22
Slide 23: Enhancing and Expanding Our Industry-Leading Offerings
BRUNSWICK CORPORATION – EARNINGS RELEASE Enhancing and Expanding Our Industry-Leading Offerings Avator 75e and 110e SDX 270 and 270 Surf NSX ULTRAWIDE Savannah and Hilton Head Acquisition - 5 Locations ©2024 BRUNSW ICK CO. CONFIDENTIAL AND ALL RIGHTS RESERVED. 23
Slide 24: Pace of Awards Continues in 2024
BRUNSWICK CORPORATION – EARNINGS RELEASE Place Pace of Awards headline Continues in 2024 here 2023 – Record Year 2024 – On Pace for Miami Boat Show 100+ Awards Award Nominations Record high 115 awards during • NMMA Innovation Award in • Multiple NMMA Innovation 2023 Minneapolis – Harris Crowne 250 A
Slide 25: Thank You + Q&A
THANK YOU + Q&A JOIN US FOR MIAMI BOAT SHOW OUR EVENT FEBRUARY 15, 2024 Miami Beach Convention Center Contact Pam Eriksen for details pamela.eriksen@brunswick.com ©2024 BRUNSW ICK CO. CONFIDENTIAL AND ALL RIGHTS RESERVED. 25
Slide 26: Appendix
BRUNSWICK CORPORATION – EARNINGS RELEASE Appendix ©2024 BRUNSW ICK CO. CONFIDENTIAL AND ALL RIGHTS RESERVED. 26
Slide 27: 2024 Outlook Segment Guide
BRUNSWICK CORPORATION – EARNINGS RELEASE 2024 Outlook Segment Guide1 Propulsion Engine P&A Navico Group Boat Net Sales Guide2 ~$2.6B ~$1.2B ~$0.9B ~$1.8B Operating Margin ~16.0% ~20% Low Mid to High Guide Double Digit Percent Single Digit Percent 1EACH ON AN “AS ADJUSTED” BASIS WHERE APPLICABLE, VER
Slide 28: Net Sales – Q4 2023
BRUNSWICK CORPORATION – EARNINGS RELEASE Net Sales – Q4 2023 Net Sales decreased by $220.8 million, or 14 percent Segments Q4 2023 Q4 2022 % Change Propulsion $590.7 $669.5 (12%) Engine Parts & Accessories 237.7 240.1 (1%) NET Navico Group 196.2 236.8 (17%) SALES Boat Segment Eliminations 424.8 (87.
Slide 29: GAAP to Non-GAAP Reconciliations – Q4 2023
BRUNSWICK CORPORATION – EARNINGS RELEASE GAAP to Non-GAAP Reconciliations – Q4 2023 Operating Earnings Diluted Earnings per Share (in millions, except per share data) Q4 2023 Q4 2022 Q4 2019 Q4 2023 Q4 2022 Q4 2019 GAAP $108.3 $191.6 $74.5 $1.03 $1.93 $0.92 Restructuring, exit and impairment charges
Slide 30: Net Sales – Full Year 2023
BRUNSWICK CORPORATION – EARNINGS RELEASE Net Sales – Full Year 2023 Net Sales decreased by $410.8 million, or 6 percent Segments FY 2023 FY 2022 % Change Propulsion $2,763.8 $2,824.0 (2%) Engine Parts & Accessories 1,199.8 1,310.2 (8%) NET Navico Group 914.7 1,069.3 (14%) SALES Boat Segment Eliminat
Slide 31: GAAP to Non-GAAP Reconciliations – Full Year 2023
BRUNSWICK CORPORATION – EARNINGS RELEASE GAAP to Non-GAAP Reconciliations – Full Year 2023 Operating Earnings Diluted Earnings per Share (in millions, except per share data) FY 2023 FY 2022 FY 2019 FY 2023 FY 2022 FY 2019 GAAP $734.9 $947.8 $471.0 $6.13 $9.06 $0.36 Restructuring, exit and impairment
Slide 32: Net Sales Growth Drivers
BRUNSWICK CORPORATION – EARNINGS RELEASE Net Sales Growth Drivers % Change - GAAP Currency Impact Acquisitions Impact Propulsion (12%) 1% 1% Q4 2023 Engine Parts & Accessories (1%) - - vs. Navico Group Boat (17%) (22%) 1% - - - Q4 2022 Brunswick (14%) - 1% % Change - GAAP Currency Impact Acquisition
Slide 33: Tax Rate
BRUNSWICK CORPORATION – EARNINGS RELEASE Tax Rate Q4 2023 Effective Tax Rate at ~16% Q4 2023 Q4 2022 Effective Tax Rate - GAAP Q4 17.2% 14.4% 1 Effective Tax Rate - As Adjusted 16.0% 17.0% FY 2023 FY 2022 FY 2 Effective Tax Rate - GAAP 31.2% 20.2% 1 Effective Tax Rate - As Adjusted 20.8% 21.0% (1) T
Slide 34: Free Cash Flow
BRUNSWICK CORPORATION – EARNINGS RELEASE Free Cash Flow (in millions) Q4 2023 Q4 2022 Q4 2019 Net cash provided by operating activities from continuing $287.1 $266.6 $221.1 operations Net cash (used for) provided by: Q4 Capital expenditures (56.2) (89.0) (54.2) Proceeds from sale of property, plant,