Polaris Inc. · NYSE:PII
Polaris — Polaris Industries — FY2014 Earnings Presentation
25 slides from Polaris's earnings presentation, Jan 27, 2015
Slide 1: Fourth Quarter & Full Year 2014 Earnings Results
Fourth Quarter & Full Year 2014 Earnings Results January 27, 2015 POLARIS INDUSTRIES INC.
Slide 2: Safe Harbor
Safe Harbor Except for historical information contained herein, the matters set forth in this document, including but not limited to management’s expectations regarding 2015 sales, shipments, margins, net income and cash flow, the opportunities for expansion and diversification of the Company’s busi
Slide 3: Scott W. Wine, Chairman & CEO
Scott W. Wine Chairman & CEO Fourth Quarter & Full Year 2014 Earnings Results January 27, 2015 POLARIS INDUSTRIES INC.
Slide 4: Q4 2014 Sales and Net Income
Q4 2014 Sales and Net Income Record 4th quarter sales and net income Sales of Motorcycles +50%; PG&A +21%; ORV +19% Sales in EMEA -5%, Asia Pacific +7%; Latin America +14% N.A. retail sales increased 13%; ORV, motorcycles and snowmobiles up strong Earnings per share increased 27% to a record $1.98 O
Slide 5: 2014 Sales and Net Income
2014 Sales and Net Income 5th straight year of record full year sales and earnings All businesses grew sales in 2014 International Sales were up 16% EMEA +12%; Asia Pacific +33%; Latin America +17% Earnings per share* increased 23% to a record $6.65 Operating income increased 24% to $714.7 million N
Slide 6: Polaris Strategic Objectives
Polaris Strategic Objectives Vision & Strategy VISION STRATEGY Fuel the passion of riders, workers and outdoor enthusiasts around the world by delivering innovative, high quality vehicles, products, services and experiences that enrich their lives. Polaris will be a highly profitable, customer centr
Slide 7: Best in Powersports Plus and Strategic Progress
Best in Powersports Plus Over 30 new products; RZRs, RANGERs, ACE, Scout, Roadmaster, AXYS Complementary acquisitions; Kolpin and Pro Armor Customer loyalty strong; >12,000 in attendance at Camp RZR East Growth Through Adjacencies Introduced Slingshot, Polaris’ first three-wheeled Roadster motorcycl
Slide 8: Bennett Morgan, President & COO
Bennett Morgan President & COO Fourth Quarter & Full Year 2014 Earnings Results January 27, 2015 POLARIS INDUSTRIES INC.
Slide 9: N.A. Retail Sales & Dealer Inventory – FY 2014
N.A. Retail Sales & Dealer Inventory – FY 2014 Dealer Inventory Up, but Remains Appropriate, Opportunities Exist N.A. Powersports Market Share & Retail Sales N.A. Dealer Inventory Polaris N.A. retail 13% for Q4 and 12% FY 2014 vs. 2013 Gained share in ORV, motorcycles and snowmobiles season-to-date
Slide 10: Operational Excellence
Operational Excellence Q4 production delays in motorcycles – paint system, new product readiness Plant capacity challenges improving Spirit Lake paint system operational and Poland producing, other capacity projects coming on-line Gross Profit Margin in Q4 due primarily to currency pressures RFM imp
Slide 11: New Manufacturing Plant Announced
New Manufacturing Plant Announced 600,000 sq. ft. manufacturing plant ORV, primarily Ground breaking Feb. 2015, open Q2 2016 ~1,700 employees at capacity Central to Huntsville, Decatur & Athens (MSA 400,000 pop.) Investment ~$150 million Lean design, value stream focused Q4-FY14 1/27/15 11 Adding Ca
Slide 12: Off-Road Vehicles
Off-Road Vehicles Grew sales in every product line: RANGER, RZR, Sportsman Polaris ORV Q4 2014 retail sales were lowdouble digits SxS double digits %, ATV high-single digits % ACE accelerated sales in each sequential quarter in 2014 ORV remains #1 and gaining market share MY ‘15 products successful
Slide 13: Motorcycles
Motorcycles Polaris N.A. motorcycle retail sales 40% in Q4 Indian ; retail, share, and dealer expansion Victory single digits % Heavyweight Industry low-single digits %; tough comps Initial retail of Slingshot in November/December Indian Motorcycle distribution expanding Over 175 N.A. dealers signed
Slide 14: Snowmobiles
Snowmobiles N.A. Industry STD retail high-single digits% – early snow fall, colder weather and new products However Q1 2015 snow conditions spotty Polaris N.A. retail STD in the high-teens %; largest N.A. share winner STD N.A. Dealer inventory high-single digits % MY’15 sleds with new AXYS chassis s
Slide 15: PG&A
PG&A Record Q4 sales; 21% ORV sales 28%, Motorcycles 90%, Accessories 36%, Parts 6%, Apparel 2%, timing Pro Armor solid addition to Polaris aftermarket accessories portfolio Added over 400 new accessories & 200 new apparel items in 2014 Q4-FY14 1/27/15 15 Continued Strong Growth Polaris PG&A Sales Q
Slide 16: Global Adjacent Markets
Global Adjacent Markets Full Year 2014 Small Vehicles (SV) strong, but down in Q4 due to weak Europe economy Commercial: National Accounts & partnerships (Bobcat, Ariens) working well, BRUTUS improved in 2H Defense sales 55%; DAGOR well-positioned Announced contracts for U.S. Special Forces; first 1
Slide 17: International
ORV 46% Small Vehicles 19% PG&A 16% International International sales 3% in Q4 ORV 10%; Motorcycles 7%; SV 13%; Snow 25% EMEA 5%; Asia Pacific 7%; Latin America 14% Russia very weak, but just ~1% of sales EMEA market share gains in ORV, motorcycles, snow & Aixam Q4 European powersports industries st
Slide 18: Mike Malone, V.P. Finance & CFO
Mike Malone V.P. Finance & CFO Fourth Quarter & Full Year 2014 Earnings Results January 27, 2015 POLARIS INDUSTRIES INC.
Slide 19: 2015 Full Year Guidance
GUIDANCE Sales Components Off-Road Vehicles Up mid-single digits % (reclassified 2014 actuals) Snowmobiles Down mid-single digits % Motorcycles Up 50% to 65% Global Adjacent Markets Up 10% to 15% (reclassified 2014 actuals) PG&A Up high-teens % International Up low-single digits % Total Company sale
Slide 20: 2015 Gross Profit Margin Guidance
METRIC Actual Q4 2014 Actual FY 2014 Guidance FY 2015 Prior period 29.3% 29.7% 29.4% Production volume/capacity Product cost reduction efforts Commodity costs Currency rates Higher selling prices Product mix New plant start-up costs Warranty costs Depreciation/Tooling amortization Sales promotional
Slide 21: Major Foreign Currencies for Polaris
Major Foreign Currencies for Polaris Q4-FY14 1/27/15 Currency Approximate Exposure Δ in Avg. Rate 2013 to 2014 Δ to 2014 Avg. Rate in Jan. 2015 FY 2015 Exposure Hedged Impact 2015 vs. 2014 Canadian Dollar (CAD) Long ~$400M -7% -10% ~10% Negative Euro (EUR) Net Long ~$150M Flat -15% 0% Negative Austr
Slide 22: Balance Sheet and Liquidity Profile
Balance Sheet and Liquidity Profile $ In millions (except per share and rate data) FY 2014 Fav / (UnFav) FY 2013 2015 Full Year Guidance Cash $137.6 49% Increase Debt / Capital lease obligations $226.1 21% Unchanged Credit facility $350.0 Flat Unchanged Factory inventory $565.7 (35%) Improved Turns
Slide 23: Scott W. Wine, Chairman & CEO
Scott W. Wine Chairman & CEO Fourth Quarter & Full Year 2014 Earnings Results January 27, 2015 POLARIS INDUSTRIES INC.
Slide 24: Summary – 2015 Business Outlook
Improved Execution will Drive 6th Consecutive Year of Record Results 24 Summary – 2015 Business Outlook Q4-FY14 1/27/15 U.S. Economy improving; Europe weak Oil/gas and Ag/farm industries manageable; currency challenges ongoing Powersports Industry growing; competition remains aggressive Innovation &
Slide 25: Thank you, Questions?
€> PoLanis Thank you Questions?