Brunswick Corporation · NYSE:BC
Brunswick — Q1 2022 Earnings Presentation
29 slides from Brunswick's earnings presentation, Apr 28, 2022
Slide 1: Earnings Conference Call Q1 2022
Earnings Conference Call Q1 2022
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
BUSINESS OVERVIEW Dave Foulkes - CEO |4 ©2022 Brunswick Co. Confidential and all rights reserved.
Slide 5: Outstanding Performance Across the Company
Brunswick Corporation – Earnings Release Outstanding Performance Across the Company Record Q1 results: Top-line growth across all Field inventory remains Increased FY 2022 • Net sales of $1.7B (up businesses: at historically low guidance: 18.3%) • Outboard production increases levels: • Net sales of
Slide 6: We Continue to Successfully Navigate External Factors
Brunswick Corporation – Earnings Release We Continue to Successfully Navigate External Factors Year-over-year increase in fuel prices estimated to increase the seasonal ECONOMIC CONCERNS GEOPOLITICAL & OTHER fuel bill for the average Brunswick CONSUMER RUSSIA-UKRAINE boat owner by less Supply-side c
Slide 7: Each Segment Contributed to Strong Q1 2022 Performance
Brunswick Corporation – Earnings Release Each Segment Contributed to Strong Q1 2022 Performance PROPULSION PAR T S & B O AT S & B U S I N E S S ACCESSORIES A C C E L E R AT I O N • TTM retail market share gains • Organic sales growth of 2% • Pipelines remain at historic lows continue through Q1 2022
Slide 8: Mix By Region and Q1 Revenue Growth Rates
Brunswick Corporation – Earnings Release Mix By Region1 and Q1 Revenue Growth Rates ✓ International sales up 11 percent on a constant currency Canada Europe basis, excluding Growth +25% Growth +14% Mix: 7% Mix: 13% acquisitions Asia- ✓ All segments Pacific experienced U.S. Growth -1% substantial Gro
Slide 9: U.S. Powerboat Industry – Percentage Change in Retail Units
Brunswick Corporation – Earnings Release U.S. Powerboat Industry – Percentage Change in Retail Units ✓ SSI retail data CATEGORY Q1 2022 Q1 2021 FY FY trailing actual retail 2021 2020 performance due to delayed deliveries Outboard Boats (11)% 33% (6)% 14% and registrations Fiberglass SD/IB Boats (17)
Slide 10: Financial Overview
FINANCIAL OVERVIEW Ryan Gwillim – CFO | 10 ©2022 Brunswick Co. Confidential and all rights reserved.
Slide 11: Overview of First Quarter 2022 Adjusted Results
Brunswick Corporation – Earnings Release Overview of First Quarter 2022 Adjusted Results1 NET SALES ($m) OPERATING EARNINGS1 ($m) $268 ✓ Q1 2022 was the $1,696 $243 $1,433 seventh +18% +116% +10% +48% consecutive $966 quarter with record $113 operating earnings and EPS 2020 2021 2022 2020 2021 2022
Slide 12: Propulsion Segment – Q1 Performance
Brunswick Corporation – Earnings Release New image? Propulsion Segment – Q1 Performance %CHANGE VS PRODUCT CATEGORY SALES ($M) 2021 Outboard Engines $546.1 8% Sterndrive Engines $61.3 5% Controls, Rigging and Propellers $98.5 4% Total $705.9 7% OPERATING MARGIN OPERATING EARNINGS • Operating Margin
Slide 13: Parts & Accessories Segment – Q1 Performance
Brunswick Corporation – Earnings Release Parts & Accessories Segment – Q1 Performance1 %CHANGE VS PRODUCT CATEGORY SALES ($M) 2021 Engine Parts and Accessories $125.6 1% Distribution $203.5 1% Advanced Systems Group $151.9 13% Navico $136.8 N/A Total $617.8 34% OPERATING MARGIN OPERATING EARNINGS •
Slide 14: Boat Segment – Q1 Performance
Brunswick Corporation – Earnings Release Boat Segment – Q1 Performance1 % CHANGE VS PRODUCT CATEGORY SALES ($M) 2021 Aluminum Freshwater $220.6 24% Recreational Fiberglass $164.4 21% Saltwater Fishing $89.2 (8)% Business Acceleration $19.6 54% Total $492.82 18% OPERATING MARGIN OPERATING EARNINGS •
Slide 15: Pipeline Metrics
Brunswick Corporation – Earnings Release Pipeline Metrics UNITS IN PIPELINE ENDING WEEKS ON HAND (in thousands) 30.0 27.7 40 25.0 30 -6% 20.0 19 15.0 13.6 20 10.0 10 5.0 0 0.0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2019 2020 2021 2022 2019 2020 2021 2022 Expect 2022 WOH to follow a similar trajectory Sold ~9,500 u
Slide 16: Increasing Full Year 2022 Guidance
Brunswick Corporation – Earnings Release Increasing Full Year 2022 Guidance1 Changes to FY 2022 EPS Assumptions: • Higher interest expense Changes to FY’22 EPS Guidance • Lower shares $10.30 outstanding $10.25 • Q1 operating outperformance Increased FY 2022 Guidance: $0.15 • Revenue ($0.25) $0.20 •
Slide 17: Updated 2022 Full Year Assumptions
Brunswick Corporation – Earnings Release Updated 2022 Full Year Assumptions 1 Net Interest ~$95 MILLION Share ~$300 MILLION Expense Prev: ~$70M Repurchases Prev: ~$100M - $150M Debt ~76.0 – 76.5 $57 MILLION Average Diluted Retirement Prev: ~$100M MILLION Shares Outstanding Prev: ~77.0-77.5 ~$170 – $
Slide 18: Wrap-Up
WRAP-UP Dave Foulkes – CEO | 18 ©2022 Brunswick Co. Confidential and all rights reserved.
Slide 19: Freedom Boat Club Acquisitions and Growth
Brunswick Corporation – Earnings Release Freedom Boat Club Acquisitions – Now More Than 350 Locations Globally NEXT PHASE OF SHARED - CONTINUED RAPID RE-BRANDING ACCESS & PRE -OWNED GROWTH FAN AU T I C B O AT S T R AT E G Y • 350th location announced in late • Acquired a portfolio of marine assets •
Slide 20: Brunswick in the News
Brunswick Corporation – Earnings Release Brunswick in the News Virtual Investor Day Sustainability Report Navico Capacity Expansion Record Share at Key Boat Shows BRUNSWICK WINS RECORD 7 TOP ADDITIONAL PRODUCT AWARDS HEADLINES | 20 ©2022 Brunswick Co. Confidential and all rights reserved.
Slide 21: Appendix
Appendix | 21
Slide 22: Updated Assumptions and Guidance for 2022
Brunswick Corporation – Earnings Release Updated Assumptions and Guidance for 2022* 1 2 3 4 5 Revenue Operating EPS FCF in Q2 revenue between margin growth between EXCESS OF UP MID-TO- $6.8B - between 20 AND $9.80 - $350 MILLION HIGH TEENS $7.1B 60 BPS $10.30 % vs Q2 2021, with MID- 19% Operating 22
Slide 23: 2022 Updated Outlook – Segment Guidance
Brunswick Corporation – Earnings Release 2022 Updated Outlook – Segment Guidance Parts & Propulsion Accessories Boat NET SALES UP MID-TEENS UP HIGH-TWENTIES UP MID-TEENS GROWTH PERCENT PERCENT PERCENT Prev: +LDD% No Change Prev: +LDD% O P E R AT I N G FLAT TO UP FLAT TO UP 10.0+ PERCENT MARGIN 30 BP
Slide 24: 2022 Updated Outlook – P&L and Cash Flow Assumptions
Brunswick Corporation – Earnings Release 2022 Updated Outlook – P&L and Cash Flow Assumptions ~$170 – $200 Working Effective Book APPROXIMATELY MILLION Capital Usage Tax Rate 22% Prev: ~$140M - $180M No Change Depreciation & ~$160 – $170 Effective Cash HIGH-TEENS Amortization1 MILLION Tax Rate PERCE
Slide 25: 2022 Updated Outlook – Capital Strategy and Other Assumptions
Brunswick Corporation – Earnings Release 2022 Updated Outlook – Capital Strategy and Other Assumptions Capital ~$375 – $425 MILLION Share ~$300 MILLION Expenditures No Change Repurchases Prev: ~$100-$150M Debt $57 MILLION Quarterly $0.365 PER SHARE Retirement Prev: ~$100M Dividends Prev: $0.335 Net
Slide 26: GAAP to Non-GAAP Reconciliations
Brunswick Corporation – Earnings Release GAAP to Non-GAAP Reconciliations Operating Earnings Diluted Earnings per Share (in millions, except per share data) Q1 2022 Q1 2021 Q1 2022 Q1 2021 GAAP $239.5 $231.9 $2.25 $2.15 Restructuring, exit and impairment charges — 0.5 — — Purchase accounting amortiz
Slide 27: Q1 Net Sales increased by $262.5 million, or 18.3 percent
Brunswick Corporation – Earnings Release Q1 Net Sales increased by $262.5 million, or 18.3 percent Segments Q1 2022 Q1 2021 % Change Propulsion $705.9 $657.8 7.3% Parts & Accessories 617.8 459.6 34.4% Boat 492.8 419.5 17.5% Segment Eliminations (120.8) (103.7) Total $1,695.7 $1,433.2 18.3% Q1 2022 C
Slide 28: Tax Provision
Brunswick Corporation – Earnings Release Tax Provision Q1 2022 Q1 2021 ✓ Estimated 2022 Effective Tax Rate - GAAP 21.1% 21.9% effective book tax Effective Tax Rate - As Adjusted 1 21.1% 22.6% rate, as adjusted, is expected to be approximately 22 percent based on tax guidance issued to date ✓ Cash ta
Slide 29: Free Cash Flow – Q1
Brunswick Corporation – Earnings Release Free Cash Flow – Q1 (in millions) Q1 2022 Q1 2021 Net cash (used for) provided by operating activities ($140.9) $17.3 from continuing operations Net cash (used for) provided by: Capital expenditures (100.9) (42.9) Proceeds from sale of property, plant, equipm