Polaris Inc. · NYSE:PII
Polaris — Polaris Industries — Shareholder Meeting (April 2006)
43 slides from Polaris's shareholder meeting presentation, Apr 20, 2006
Slide 1: Polaris Annual Meeting April 20, 2006
Polaris Annual Meeting April 20, 2006
Slide 2: Gregory R. Palen, Chairman of the Board of Directors
Gregory R. Palen Chairman of the Board of Directors
Slide 3: Polaris Annual Meeting April 20, 2006
Polaris Annual Meeting April 20, 2006
Slide 4: Thomas C. Tiller and Bennett J. Morgan
Thomas C. Tiller Chief Executive Officer Bennett J. Morgan President and Chief Operating Officer
Slide 5: 2005 in Summary
2005 in Summary Good year by most measures, however, results fell short of our expectations The 2005 scorecard: Sales increased $97 million to $1.87 billion Net income from continuing operations increased 5% to $144.3 million 24th consecutive year of earnings per share growth Earnings per share incr
Slide 6: 2005 in Summary - Positives: Victory broke through
2005 in Summary - Positives Victory broke through In the fourth quarter of 2005, Victory delivered its first profitable quarter Retail sales grew in 2005 at ten times the pace of the overall motorcycle industry Momentum continues: The brand is stronger The dealer base is stronger, more confident The
Slide 7: 2005 in Summary - Positives: RANGERs and International
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr East 65 14 21 20.4 West 30.6 38.6 34.6 31.6 North 45.9 46.9 45 43.9 2005 in Summary - Positives RANGERs and International sustained double-digit growth Delivered solid growth in both RANGERs and ATVs outside North America, particularly Europe RANGERs growth double-dig
Slide 8: 2005 in Summary - Positives: PG&A
2005 in Summary - Positives Parts Garments & Accessories (PG&A) delivered solid performance PG&A continued its consistent record of good sales growth, generating high margins and execution across the board Continued to introduce new products including : Additional Lock & Ride accessories for ATVs an
Slide 9: 2005 in Summary - Made Three Strategic Moves
2005 in Summary - Made Three Strategic Moves KTM partnership Purchased 25% of Austrian motorcycle manufacturer KTM KTM is the second largest motorcycle manufacturer in Europe Completion of R&D Center in Wyoming, Minnesota Product innovation one of Polaris' competitive advantages $35 million investme
Slide 10: 2005 in Summary - Disappointments
2005 in Summary - Disappointments Execution in the snowmobile division was below expectations The overall ATV and snowmobile markets slowed in North America Commodity prices hurt our gross margins Experienced increased inventory levels
Slide 11: 2006 - The Road Ahead
2006 - The Road Ahead 2005 was a successful but challenging year In 2006 we will focus on: Improving our execution Getting factory inventory back in line and assisting dealers in reducing their inventory Executing the KTM cooperative projects Driving innovation Longer-term, nothing happened in 2005
Slide 12: Three Strategic Goals
The Road Ahead - 2006 and Beyond Three Strategic Goals Grow to $3 billion in sales by 2009 Expand net margins to 9% by 2009 Build a dominant brand with industry-leading product quality and distribution HOW? A number of opportunities exist to achieve the sales and net margin objectives, including: Co
Slide 13: 2006 - The Road Ahead
2006 - The Road Ahead Bennett J. Morgan President and Chief Operating Officer
Slide 14: Continue Rapid Growth in Victory Motorcycles: The Motorcycle Market
Triumph BMW Ducati Aprilia The Road Ahead - 2006 and Beyond Continue Rapid Growth in Victory Motorcycles The Motorcycle Market Major Competitors Harley Davidson Honda Yamaha Kawasaki Suzuki Polaris Outlook for Industry Long-Term Continue solid growth in Cruisers and Touring Demographics favorable at
Slide 15: Continue Rapid Growth in Victory Motorcycles
The Road Ahead - 2006 and Beyond Continue Rapid Growth in Victory Motorcycles Continue Rapid Growth in Victory Motorcycles Continue Rapid Growth in Victory Motorcycles Continue Rapid Growth in Victory Motorcycles Continue Rapid Growth in Victory Motorcycles The 2006 Line-Up Vegas Jackpot Hammer Vega
Slide 16: Utility Vehicles - Continue Rapid Growth in RANGERs
The Road Ahead - 2006 and Beyond Utility Vehicles - Continue Rapid Growth in RANGERs The Market - Utility Vehicles Worldwide Utility Industry Growth Major Competitors John Deere Kawasaki Yamaha Kubota Arctic Cat Other players Polaris Outlook for Industry Long-Term Continued fast growth Increased com
Slide 17: RANGER: The 2006 Line-Up
XP Midnight Blue XP Super Graphite Flame XP Browning Edition The 2006 Line-Up RANGER TM RANGER 4x4 EFI RANGER XP EFI RANGER 6x6 EFI Limited Edition Models 500 EFI Mossy Oak(tm) The Road Ahead - 2006 and Beyond Utility Vehicles - Continue Rapid Growth in RANGERs Competitive Advantage "Hardest working
Slide 18: Continue Rapid Growth in International Business
Honda Kawasaki Suzuki Other Asians The Road Ahead - 2006 and Beyond Continue Rapid Growth in International Business Major Competitors Kymco Yamaha Aeon SMC Polaris Outlook for Industry Long-Term Continued growth driven by: Ability to legally travel on-road to trails 35-46 year-old motorcycle riders
Slide 19: International Business: 2006 Line-Up and Sales Growth
The Road Ahead - 2006 and Beyond Continue Rapid Growth in International Business Polaris' 2006 Line-Up Sportsman 500E Quad ATP 330 Quad Phoenix 200 Quad Trailboss 330 Quad Scrambler 500E Quad Competitive Advantage Higher quality product Stronger brand "American Made" seen as better by consumer Inter
Slide 20: Sustain or Modestly Expand Share in North America ATVs
The Road Ahead - 2006 and Beyond Sustain or Modestly Expand Share in North America ATVs Polaris Outlook for Industry Long-Term Expect modest but slower growth over next several years Increased volatility The Market - North America Honda Polaris Yamaha Kawasaki Suzuki Arctic Cat Bombardier John Deere
Slide 21: Sustain or Modestly Expand Share in North America ATVs: New Vehicles
The Road Ahead - 2006 and Beyond Sustain or Modestly Expand Share in North America ATVs 2006 News - Five All New Vehicles Returning Products in line Hawkeye Sportsman 450 Sawtooth Outlaw Sportsman 800 EFI 700 EFI 700 Twin 500 HO/EFI 6x6 Youth Sportsman 90 Predator 90 Predator 50 Recreation/Utility M
Slide 22: Fix our Snowmobile Business: The Market
The Road Ahead - 2006 and Beyond Fix our Snowmobile Business The Market - Snowmobiles Worldwide Snowmobile Industry Retail Competitors Bombardier Arctic Cat Yamaha Polaris Outlook for Industry Long-Term Potential for modest growth with more normal snow fall 90% repeat buyers Innovation and snow fall
Slide 23: Fix our Snowmobile Business: 2007 Model Year Line-Up
The Road Ahead - 2006 and Beyond Fix our Snowmobile Business The 2007 Model Year Line-Up The 2007 Model Year Line-Up 700 HO CFI 600 HO CFI IQ "Standard & Dragon model" IQ LX FST IQ Cruiser New for 2007 Total Line-Up Performance 600 HO IQ 600 HO CF IQ Dragon FST IQ Mountain Trail RMK 136 600 HO RMK 1
Slide 24: 2006 - In Summary
Summary 2006 - In Summary First quarter 2006 results met expectations Second quarter sales and earnings will decrease from 2005 as announced last week Results for the 2nd half of 2006 are expected to be better than the 1st half of 2006 Full Year 2006 results now expected to be about flat with 2005 W
Slide 25: Thomas C. Tiller, Chief Executive Officer
The Road Ahead Thomas C. Tiller Chief Executive Officer
Slide 26: KTM: Why KTM?
The Road Ahead - 2006 and Beyond - KTM Why KTM? Growing by acquisition is a good idea for Polaris Slower growth in core businesses Low debt/strong cash flow make it manageable Experienced Polaris management team can drive the benefits Consistent with our strategic direction - "The Chart" Polaris has
Slide 27: KTM Phase II: The Goals and Growth Initiatives
The Road Ahead - 2006 and Beyond Potential Execution of Phase II of KTM Strategic Partnership The Goals... Grow to $3 Billion in Sales by 2009 Expand net margins to 9% by 2009 Build a dominant brand with industry-leading product quality and distribution Product Innovation Build strength and share in
Slide 28: 2005 Estimated Worldwide Market Sizes
The Road Ahead - 2006 and Beyond Potential Execution of Phase II of KTM Strategic Partnership Snowmobiles $ 0.7B Utility Vehicles $ 2.0B ATVs $ 6.5B Motorcycles ~ $ 25.0B Biggest market Polaris participates in. Polaris currently has less than 1% share of the total market. 2005 Estimated Worldwide Ma
Slide 29: KTM Phase II: Potential Benefits
The Road Ahead - 2006 and Beyond Potential Execution of Phase II of KTM Strategic Partnership Potential Benefits Polaris KTM Strengths North America ATVs Cost/Efficiency Europe Motorcycles Racing Opportunities Europe Motorcycles High Performance Engines North America ATVs Cost/Efficiency We Help Eac
Slide 30: Who is KTM?
The Road Ahead - 2006 and Beyond Potential Execution of Phase II of KTM Strategic Partnership Who is KTM? "READY TO RACE" Builds race-ready motorcycles for competitive as well as recreational riding Wins races - 120 World Championships Recent Wins: DAKAR RALLY: 6 consecutive wins (2001-2006) MOTOCRO
Slide 31: KTM Background and Operations
The Road Ahead - 2006 and Beyond Potential Execution of Phase II of KTM Strategic Partnership Background Austrian-based company founded in 1953 Largest non-Japanese off-road motorcycle company in the world Best known for its racing heritage, the company has won 120 world championship titles KTM's ph
Slide 32: KTM Product Offerings
The Road Ahead - 2006 and Beyond Potential Execution of Phase II of KTM Strategic Partnership KTM Product Offerings - KTM offers more than 23 different off-road and on-road motorcycles, ranging in engine size from 50 cc to 990 cc. Source: KTM Management Motocross Segment Enduro Segment Rally Youth R
Slide 33: KTM Super Duke
KTM SUPER DUKE On Road Sport Bike Precision and Agility 990 Super Duke
Slide 34: KTM Management: Stefan Pierer and Rudolf Knunz
The Road Ahead - 2006 and Beyond Potential Execution of Phase II of KTM Strategic Partnership Stefan Pierer, CEO Studied Business and Energy Management at the Montanuniversitat in Leoben, Austria. HOVAL GmbH in Marchtrenk, Upper Austria (sales management/authorized officer). Founder of CROSS Industr
Slide 35: KTM Unit Sales and Sales
The Road Ahead - 2006 and Beyond Potential Execution of Phase II of KTM Strategic Partnership Source: 7/19/2005 KTM Company Presentation found at www.KTM.com under Investor Relations/Company/Presentations CAGR 19.0% 17,257 20,554 26,214 28,794 34,097 45,648 61,723 70,514 76,815 80,356 CAGR 23.0% 78.
Slide 36: Future Growth of KTM
The Road Ahead - 2006 and Beyond Potential Execution of Phase II of KTM Strategic Partnership Future Growth of KTM Further penetration of on-road motorcycle market with focus on Europe by introducing new models Expansion into Eastern-European markets Expansion of "Related Products" OEM supply of KTM
Slide 37: Deal Overview - Phase I
The Road Ahead - 2006 and Beyond Potential Execution of Phase II of KTM Strategic Partnership Deal Overview - Phase I During phase I, the companies will be run separately: We have representatives on each others Board We communicate regularly We are conducting seven joint projects Phase I Objectives
Slide 38: Deal Overview - Phase II
The Road Ahead - 2006 and Beyond Potential Execution of Phase II of KTM Strategic Partnership Deal Overview - Phase II KTM management has the first option to buy our shares back Polaris has the second option, but not the obligation, to buy KTM management's shares Price is based on PII's market multi
Slide 39: What if it Works?
The Road Ahead - 2006 and Beyond Potential Execution of Phase II of KTM Strategic Partnership What if it Works? Polaris - With a Successful Phase II Transaction: Bigger & stronger in motorcycles ~30% of revenue Cruisers - Sport Bikes Dirt Bikes - NEW PRODUCTS COMING Much stronger internationally ~30
Slide 40: In Summary
Summary In Summary Our Strategic Goals remain unchanged Our Balance Sheet is healthy Our underlying businesses remain strong Our Management team is the strongest it has ever been and our employee owners are energized I remain confident that Polaris is well positioned to achieve our long term strateg
Slide 41: Private Securities Litigation Reform Act of 1995
Private Securities Litigation Reform Act of 1995 Polaris Industries Inc. Disclosure Litigation Statement Our presentation and responses to your questions may contain certain statements which may be considered forward looking for the purposes of the Private Securities Litigation Reform Act of 1995. W
Slide 42: Thank you - Questions?
¢ Thank you * Questions? + POLARIS
Slide 43: Polaris Annual Meeting April 20, 2006
Polaris Annual Meeting April 20, 2006
Polaris Industries — Shareholder Meeting (April 2006) on 6ix