Polaris Inc. · NYSE:PII
Polaris — Polaris Industries — Q1 2011 Earnings Presentation
26 slides from Polaris's earnings presentation, Apr 20, 2011
Slide 1: First Quarter 2011 Earnings Results
First Quarter 2011 Earnings Results April 20, 2011
Slide 2: Safe Harbor
Title:Safe Harbor Body:Except for historical information contained herein, the matters set forth in this document, including but not limited to management’s expectations regarding 2011 sales, shipments, net income, cash flow, and manufacturing realignment transition costs and savings, are forward-lo
Slide 3: First Quarter 2011 Earnings Results - Scott Wine, CEO
First Quarter 2011 Earnings Results April 20, 2011 Scott WineCEO
Slide 4: Q1 2011 Sales and Net Income
Title:Q1 2011 Sales and Net Income Q1 Net Income ($ in millions)Q1 Sales ($ in millions)$19.8$47.3+139%$361.7$537.2+49%Q1 2011Q1 2010Q1 2011Q1 2010Record first quarter sales and net income Record first quarter earnings per share of $1.34, up 127% over Q1 2010 Gross margins improved 210 basis points
Slide 5: Acquisition – Indian Motorcycle Company
Title: Acquisition – Indian Motorcycle Company Storied history and distinguished heritage: First US motorcycle company, founded 1901 Strong, recognizable American brand First major OEM owner in 70 years Distinct styling and appeal Strategic Fit With Victory and Indian, Polaris will: Appeal to 60% of
Slide 6: Strategic Progress Continues
Title:Strategic Progress Continues…$1.6 Billion $3.0 Billion Grow Sales $3 Billion by 2014 Expand Net Income Margins>8% of sales by 2014 Execution on Track Q1 2011 Progress 3-5 Year Strategic Initiatives Best in Powersports PLUS 5-8% organic growth Growth Through Adjacencies$100 - 300M growth Global
Slide 7: Full Year 2011 Guidance
Total Company Sales (in millions) Diluted EPS Title:Full Year 2011 Guidance $1,991 Up 17% to 20% $2,330 to $2,3902010 Actual2011 Guidance$4.28Up 29% to 33%$5.53 to $5.682010 Actual2011 Guidance2011 Sales & EPS Projections RaisedRetail sales growth continues to outdistance the industry Net income dol
Slide 8: First Quarter 2011 Earnings Results - Bennett Morgan, President & COO
First Quarter 2011 Earnings ResultsApril 20, 2011 Bennett MorganPresident & COO
Slide 9: Q1 2011 Revenue & N.A. Retail Sales Growth Remains Strong
Title: Q1 2011 Revenue & N.A. Retail Sales Growth Remains Strong Revenue (Million $)Polaris N.A. Retail Sales (Units) $361.7$137.6$3.4$19.6 $14.9$537.2+13%+12%-4%+25%+49%Q1 side-by-side Retail Sales and Revenue again up significantly Polaris Revenue and N.A. Retail Sales continue to outperform indus
Slide 10: Off-Road Vehicle Division
Title: Off-Road Vehicle Division New! RANGER RZR XP 900Polaris Sales (millions)FY 2011 Guidance FY 2010Q1 2011Q1 2010 $250.4+35% $1,376.4+55% $388.0#1 in ORV - Gained significant share in SxS and ATVs again New Ranger RZR XP 900 launch in January selling very well International ORV sales increased 2
Slide 11: Adjacencies
Title: Adjacencies Bobcat vehicle retail momentum increasingCo-developed vehicle on-track to push further into work side-by-sides Bobcat Strategic Alliance Military Bobcat Partnership – Progressing well Polaris Defense –Gaining momentum April 2011 Shipped initial vehicles under $67M National Guard c
Slide 12: Snowmobile Division
Title: Snowmobile Division $5.6+61%$8.9FY 2011guidance +5%$188.9Up about 30%FY 2010Q1 2011Q1 2010Polaris Sales (millions) Strong retail sales performance – Polaris N.A. retail up 31% for the seasonClear #2 in market share; largest share gaining OEM for seasonQuality issues resolvedDealer inventory d
Slide 13: On-Road Division – Victory / LEV
Title:On-Road Division – Victory / LEV Polaris Sales (millions) Improvements Continue April 2011 N.A. Motorcycle Industry 1400cc+ Q1 2011 Summary Worldwide Victory retail sales increased modestlyN.A. unit retail sales down slightlyInternational unit retail sales up significantlyDealer Inventory abou
Slide 14: PG&A Highest Margin Business Continues to Grow & Deliver
Title: PG&A Highest Margin Business Continues to Grow & Deliver Polaris Sales (millions) Q1 2011 PG&A Growth by Product line Q1 2011 PG&A Revenue by Product Category Aus/NZ 13% Parts 54% Accessories 44% Apparel 2% $80.4 +19% $95.3 FY 2011 guidance FY 2010 Q1 2011 Q1 2010 +10% $344.3 Margins remain s
Slide 15: International Division
Title: International Division International Investment & Expansion Continuing $75.1 +21% $91.1 +21%$305.9 Polaris Sales (millions) Q1 2011Revenue by Geography Q1 2011 Revenue by Business FY 2011guidance FY 2010 Q1 2011 Q1 2010 ME / Africa 9% Latin America 8% Asia 1% Aus/NZ 12% Europe 70% Off-Road Ve
Slide 16: Manufacturing Realignment
Title: Manufacturing Realignment Goal: 3 Manufacturing Centers of Excellence in Roseau, Spirit Lake and MonterreyMonterrey building is complete on-time and on budget; 100% occupancyProduction of RANGER product began in April; shipments to begin in Q2Roseau tube fabrication transition is on trackOsce
Slide 17: Impact of Japan crisis on material supply
Title: Impact of Japan crisis on material supply Fuji Tokyo Less than 10% of cost of sales comes from JapanPolaris global supply chain less dependent than competitors and automotiveAbout 40% of Polaris engines are produced by Fuji Facility damage is minimalEngines are being produced and shipping to
Slide 18: Operational Excellence - Q1 2011 Margins
Title: Operational Excellence - Q1 2011 Margins Net Income as a Percent of Sales Gross Margins GrossMargin OperatingExpense Other Non-Operating Income IncomeTaxes/Other Q1 2010 Q1 2011 26.2% 28.3% 5.5% 8.8% +210 bpts Gross margins continue to improve driven by:Continued value engineering investment
Slide 19: First Quarter 2011 Earnings Results - Mike Malone, CFO
First Quarter 2011 Earnings ResultsApril 20, 2011 Mike MaloneV.P. Finance and CFO
Slide 20: 2011 Full Year Revised Guidance
Title:2011 Full Year Revised Guidance METRIC GUIDANCE Product Line Sales - Off-Road Vehicles - Snowmobiles - On-Road Vehicles - PG&A - InternationalTotal Company SalesGross MarginsOperating expensesIncome TaxesNet IncomeEPS, DilutedShare Count Upper teens %Up about 30%Up over 50%, againUp low teens
Slide 21: Gross Profit Margin Percentage Trends
Title: Gross Profit Margin Percentage Trends Actual Q1 2010 Actual Q1 2011 Full Year Guidance 2011 Prior Period 24.5% 26.2% 26.6% Production volume adjustments Product cost reduction efforts Commodity costs Currency rates Higher selling prices Product mix Manufacturing realignment N/A Warranty costs
Slide 22: Manufacturing Realignment Remains on Plan
Title: Manufacturing Realignment Cost Charged to P&L (in millions) Aus/NZ 13% Capital Expenditures (in millions) Savings (in millions) Anticipated annualized savings upon completion 2011 anticipated savings in 2nd half $24 - $26 $12 - $14 $7 $35 $7 $30+ Estimated Total FY 2011 Guidance Q1 2011Actual
Slide 23: Balance Sheet and Liquidity Profile
Title: Balance Sheet and Liquidity Profile $ In millions (except per share and interest rate data) Q1 2011 Fav (Unfav) Q1 2010 2011 Full Year Guidance Cash $345.9 $221.5 Increase Total Debt – ending $200.0 $0.0 $100 private placement Credit Facility (expires December 2011) $450.0 -- TBD Debt Interes
Slide 24: First Quarter 2011 Earnings Results - Scott Wine, CEO
First Quarter 2011 Earnings Results April 20, 2011 Scott WineCEO
Slide 25: Excellent Start to 2011
Title: Excellent Start to 2011 Powersports momentum continuesRanger & RZR performance is strong, industry improvingSnow share gains and orders point to significant sales and profit growthVictory global growth plans on trackManufacturing realignment on planMonterrey plant began Ranger production in e
Slide 26: Thank you. Q & A
Thank you. Q & A Polaris Industries Inc. April 2011