THOR Industries, Inc. · NYSE:THO
THOR Industries — Q3 FY2019 Earnings Presentation
25 slides from THOR Industries's earnings presentation, 2019
Slide 1: Go Everywhere. Stay Anywhere.
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Slide 2: Forward-looking statements
This presentation includes certain statements that are “forward looking” statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forwar
Slide 3: Third Quarter Update 2019 / Overview & Current Industry Conditions / Appendix
Third Quarter Update 2019 4 Overview & Current Industry Conditions 11 Appendix: Financial & Market Data 19 3
Slide 4: Third Quarter Update 2019
| Update 2019
Slide 5: Third quarter highlights and update
• European expansion critical step on our long- • North American market remains challenging for term strategic plan remainder of FY 2019 with signs of improvement ◦ Closed on acquisition of Erwin Hymer Group ◦ Long-term consumer and demographic trends (EHG) on February 1, 2019. Transformational supp
Slide 6: Consolidated net sales, gross profit and diluted EPS
Net Sales Gross Profit Diluted EPS ($ millions) ($ millions) $2,506.6 $2,251.6 $2.53 $316.7 $292.4 $0.59 3QFY18 3QFY19 3QFY18 3QFY19 3QFY18 3QFY19 • Net sales increased 11.3% to $2.51 billion in the third quarter, • In addition to items impacting gross profit, third-quarter results including the $76
Slide 7: North American Towable segment results
Net Sales Gross Profit Gross Margin Backlog ($ millions) ($ millions) ($ millions) $1,608.2 $1,237.3 14.8% 14.5% $1,304.8 $238.8 $896.0 $179.6 3QFY18 3QFY19 3QFY18 3QFY19 3QFY18 3QFY19 3QFY18 3QFY19 • Net sales of travel trailers and fifth wheels decreased by 25.0% and 20.0%, respectively, as a resu
Slide 8: North American Motorized segment results
Net Sales Gross Profit Gross Margin Backlog ($ millions) ($ millions) ($ millions) $698.3 $598.5 $513.7 $459.2 10.8% 10.3% $64.8 $47.5 3QFY18 3QFY19 3QFY18 3QFY19 3QFY18 3QFY19 3QFY18 3QFY19 • Net sales of Class A and Class C decreased by 26.1% and 19.4%, respectively • Gross profit fell in the fisc
Slide 9: European RV segment results
Net Sales Gross Profit Loss Before Tax Backlog ($ millions) ($ millions) ($ millions) ($ millions) $767.5 $687.4 N/A N/A $54.0 N/A $(30.9) N/A $— $— $— $— 3QFY18 3QFY19 3QFY18 3QFY19 3QFY18 3QFY19 3QFY18 3QFY19 • European RV segment includes the results of newly-acquired EHG for the three months of
Slide 10: Financial summary, cash, working capital and debt
(1) (2) Net Sales Gross Margin Income Before Tax Diluted EPS (2) ($ millions) ($ millions) 15.7% 14.6% 14.1% $180.5 $2.53 $2,506.6 11.7% $166.2 $2,251.6 $2.11 $2,015.2 $116.3 $1.49 $1,284.1 $41.5 $0.59 3QFY16 3QFY17 3QFY18 3QFY19 3QFY16 3QFY17 3QFY18 3QFY19 3QFY16 3QFY17 3QFY18 3QFY19 3QFY16 3QFY17
Slide 11: Overview & Current Industry Conditions
& Overview Current Industry ions Cond
Slide 12: Track record of profitability and cash flow focus
• 38-year record of profitability — 23.3% compounded annual five-year EPS growth (1) ◦ Balance of organic growth and accretive acquisitions • Experienced leadership — Current Thor management team has an average of nearly 20 years inthe RV industry, leading through various market conditions and cycle
Slide 13: Thor Operating Entities
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Slide 14: RV product types and retail price ranges
includes camping trailers, truck hitch to the bumper of the tow hitch to a specially mounted campers and horse trailers with vehicle; hitch in the bed of a pickup truck; living quarters; Retail price: $12,000 - $150,000 Retail price: $20,000 - $185,000 Retail price: $12,000 - $110,000 fully enclosed
Slide 15: Management actions and outlook
• Reducing costs over time while • Based on current trends, it • Evaluating all capital taking advantage of our variable appears the North American retail expenditures to maintain cost structure — with a large market will likely be softer for the adequate capacity to meet long- majority of costs tha
Slide 16: Dealer inventory and credit conditions
• Following inventory shortages in FY17, independent • Credit broadly available dealers ordered aggressively in early FY18 • Normal seasonal credit line utilization • Although retail demand grew modestly in calendar 2018, • Lenders remain disciplined with curtailments, which that growth was not suff
Slide 17: 78.8 million households camping each year
• KOA study shows that 78.8 million 78.8 Million Households households camped in 2018, an increase of Camping Each Year (1) more than 7 million from 2014, and they campedmore often. (1) • Campers who borrow or rent an RV are the next logical target for the industry. Approximately one fourth of campe
Slide 18: Camper demographics and trends
• Millennials represented 41% of active campers in 2018, but made up 56% of new campers, illustrating the continued growth of this group • Among millennials, 32% consider themselves "lifelong campers," while 38% of Gen X identify themselves as such • Among Gen Z, 96% enjoy time camping with family a
Slide 19: Appendix: Financial & Market Data
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Slide 20: Industry retail demand and wholesale shipments
• Industry retail demand continued to grow in 2018, though the pace of growth moderated from the unusually high double-digit increases in 2016 and 2017. Consumers continue to value RVs as a flexible option for spending leisure time outdoors with friends and family 471,100 units 487,893 units 96,570
Slide 21: North American RV retail registrations and wholesale shipments
(Units 000's) (Units) 5-year CAGR: March 2019 March 2018 Unit Change % Change 8.5% 99,976 137,086 (37,110) (27.1)% 504.6 483.7 370.0 384.5 390.4 353.5 374.2 430.7 416.3 426.7 292.7 321.2 300.1 256.8 311.0 320.9 321.1 356.7 215.7 186.9 189.8 211.6 215.7 187.8 173.1 163.1 203.4 227.8 259.5 247.2 247.5
Slide 22: Dealer inventory rationalization and retail market share
(1) 49.7% 48.8% 49.2% 48.7% • During the remainder of our fiscal 2019, 41.2% 42.7% 45.5% 39.4% we expect North American independent 32.8% 37.8% dealer inventory rationalization will 22.1% continue, but we expect to see a 18.4% 14.6% resumption of growth in the North 9.8% 7.7% American markets in 202
Slide 23: European RV registrations
(1) Caravans Motorcaravans Total Country Calendar Year % Calendar Year % Calendar Year % • The Company monitors retail trends in the 2018 2017 Change 2018 2017 Change 2018 2017 Change European RV market as reported by the Annual Registrations Germany 24,327 22,702 7.2 % 46,859 40,568 15.5 % 71,186 6
Slide 24: Europe and North America RV penetration
600 488 500 471 416 400 366 376 333 324 320 310 304 292 289 300 272 274 274 264 253 251 247 222 228 217 219 220 207 203 210 208 206 203 201 198 192 189 190 200 182 182 168 170162 174 168 162 166 151 152 154 150 156 152 144 141 146 140 143 147 140 138 135 137 100 0 2011 2001 1989 1990 1991 1992 1993
Slide 25: www.thorindustries.com
Go Everywhere. Stay Anywhere: