Polaris Inc. · NYSE:PII
Polaris — Investor Day (July 2023)
96 slides from Polaris's investor day presentation, Jul 31, 2023
Slide 1: Capital Markets Day
CAPITAL MARKETS DAY Nashville, Tennessee July 31, 2023 1
Slide 2: Welcome
WELCOME 2023 CA PI TA L MARK ETS D AY 2
Slide 3: Safe Harbor & Non-GAAP Measures
Safe Harbor & Non-GAAP Measures Except for historical information contained herein, the matters set forth in this presentation are forward-looking statements that involve certain risks and uncertainties that could cause actual results to differ materially from those forward-looking statements. Poten
Slide 4: Agenda
AGENDA Polaris Capital Markets Day – July 31, 2023 TIME (CT) TOPIC PRESENTER 8:00 – 8:45 Business/Strategy Update Mike Speetzen, Chief Executive Officer 8:45 – 9:05 On Road Business Mike Dougherty, On Road and International President 9:05 – 9:20 PG&A Business Steve Eastman, PG&A and Aftermarket Pres
Slide 5: Mike Speetzen, Chief Executive Officer
MIRE SPEEI ZEN CHIEF EAECU TIVE OFFICER 2023 CAPITAL MARKETS DAY
Slide 6: Polaris Leadership Team
Polaris Leadership Team PICTURED FROM LEFT TO RIGHT: Lucy Clark Dougherty Senior Vice President, General Counsel and Secretary Ben Duke President of Marine Mike Dougherty President of On Road and International Ken Pucel Executive Vice President of Global Operations and Chief Technology Officer Vic K
Slide 7: Three Critical Questions for Our Strategy
Three Critical Questions for Our Strategy What can we be best in the world at? What are we deeply passionate about? What drives our economic engine? Clear…Simple…Focused PII Capital Markets Day 7-31-2023 7
Slide 8: 2022-2026 Targets
PuslLARiS Think Outside GLOBAL LEADER IN POWERSPORTS Powering passion and pioneering new possibilities for all those who play, work and THINK OUTSIDE Best Customer Experience © Rider-Driven Innovation cee Best Team, Best Culture ate Inspirational Brands Agile & Efficient Operations #3 Geared For Goo
Slide 9: Focus
F OC US PII Capital Markets Day 7-31-2023 9
Slide 10: Portfolio Focus
Portfolio Focus Portfolio exits contributed +120 bps 120 bps Adj* EBITDA Margin of adjusted* EBITDA margin improvement1 Management and investment attention refocused on core growth platforms Baseline1 New Run Rate *See GAAP/Non-GAAP Reconciliation in Appendix; see Appendix for discussion regarding N
Slide 11: Strong, Focused Business Segments
Strong, Focused Business Segments Off Road On Road Marine FY ‘22 Sales $6,436M $1,163M $989M Gross Profit Margin 23.7% 17.7% 22.5% 5-Year Sales Growth (CAGR1) 11% 9% 12% FY ‘23 Sales Guidance2 High-Single Digits % Low-Single Digits % Mid-Teens % *See GAAP/Non-GAAP Reconciliation in Appendix; s
Slide 12: Execution
E XE C UT I ON PII Capital Markets Day 7-31-2023 12
Slide 13: Delivering Category-Defining Innovation in Off Road
Rider-Driven Best Customer Delivering Category-Defining Innovation in Off Road Innovation Experience #1 Utility Market Share Polaris XPEDITION RZR XP First Adventure SxS Redefined Heart of Rec SxS #1 Q2 ‘23 Q1 ‘23 Recreation Market Share #1 RZR Pro R RANGER XP Kinetic RANGER XD 1500 ATV Redefined Wi
Slide 14: Accelerating Performance in On Road
Agile & Efficient Inspirational Accelerating Performance in On Road Operations Brands Global Indian Motorcycle Share On Road Margin Expansion Accelerating +3pts Growth 2019 2022 2019 2023E 2026E Steady share gains from strategic Volume, platform strategy and expense product launches discipline drivi
Slide 15: Building a Marine Growth Platform
Best Customer Agile & Efficient Building a Marine Growth Platform Experience Operations Business Performance Capability Investment 12% CAGR Product Innovation 5-yr Sales Growth 200+ bps Experiences Gross Profit Expansion Since 2019 +40% Execution vs Acquisition Financial Goal Automation & Scale $500
Slide 16: Delivering PG&A Growth
Rider-Driven Inspirational Delivering PG&A Growth Innovation Brands Sales Growth Accessory $/Unit 14% 21% CAGR CAGR 2017 2022 2017 2022 Ecommerce Sales Growth Aftermarket Apparel Growth 25% 21% CAGR CAGR 2017 2022 2017 2022 PII Capital Markets Day 7-31-2023 16
Slide 17: Growing Exposure to Powersports
Best Customer Growing Exposure to Powersports Experience Accomplishments 1.2M+ Total rides to date 240+ Locations 85+ Net promoter score More likely to 60 % 5-yr Sales CAGR 10 Marine pilot locations 2x buy after an Adventures ride PII Capital Markets Day 7-31-2023 17
Slide 18: Improving New Buyer Mix
Best Customer Inspirational Improving New Buyer Mix Experience Brands Multicultural Women 2017 2022 2017 2022 16% 8% 8% 3% ORV Indian Motorcycle Slingshot Slingshot Millennial + Gen Z 2017 2022 5% 23% 14% 6% ORV Indian Motorcycle Snowmobiles Marine Source: Internal Reports PII Capital Markets Day 7-
Slide 19: Enhancing Digital Experiences
Best Customer Rider-Driven Enhancing Digital Experiences Experience Innovation Site Transformation Digital Marketplace & Wholesale Consumer marketplace Dealer auctions Digital checklist -28% Drop in new user bounce rate 1M Unique users +33% Vehicle shopping progression 10K Leads +16% PG&A Ecommerce
Slide 20: Advancing Our Electric Portfolio
Rider-Driven Advancing Our Electric Portfolio Innovation Electrification Principles Lead with customer insight Deliver electrification as an enabler LAUNCHED LAUNCHED Test broadly; commercialize purposefully Build on established capabilities LAUNCHED DEMO SOON Partner for speed; build capa
Slide 21: Industry-Leading Connected Vehicles
Best Customer Rider-Driven Industry-Leading Connected Vehicles Experience Innovation Accomplishments 1st OEM connected vehicles Customer Value Business Value 15 New models with RIDE SECURITY PERFORMANCE DATA COMMAND+ features CONVENIENCE OVER THE AIR SERVICE 10+ New capabilities delivered COMMUNITY
Slide 22: Investing in Capacity and Capability
Agile & Efficient Investing in Capacity and Capability Operations Capability Investments ~$500M 2-yr Projected Investment Capital1 and M&A Robotic Weld DC Automation Paint Systems Elkhart, IN Wilmington, OH Roseau, MN + Monterrey, MX Capacity Expansion Off Road Capacity Motorcycle Mid-Size Engines M
Slide 23: Bringing THINK OUTSIDE to Life
Inspirational Bringing THINK OUTSIDE to Life Brands PII Capital Markets Day 7-31-2023 23
Slide 24: Best Team, Best Culture
Best Team, Best Culture Best Team, Best Culture ~16,000 Global Team Members Employees 10th Largest Shareholder ~2% of Polaris Owned by Employees PII Capital Markets Day 7-31-2023 24
Slide 25: Geared For Good
Geared For Good Geared For Good OUR FRAMEWORK THINK People THINK Product THINK Places THINK Production COMMUNITY GIVING 2035 ENVIRONMENTAL GOALS 11,000 Achieve Divert Reach Charitable organizations 90% 90% 75% donations recyclable content of waste renewable in off road vehicles from landfill electri
Slide 26: Adjusted EBITDA Margin on Path to 2026 Target
Adjusted* EBITDA Margin on Path to 2026 Target Margin Expansion Strategies Manufacturing optimization, embrace lean Path to Mid- to High- Modular designs & platforming Teens Adj* EBITDA Vertical integration & insourcing Portfolio optimization Motorcycle profitability Tariff mitigation 20
Slide 27: Looking Ahead
LOOKI NG AHE AD PII Capital Markets Day 7-31-2023 27
Slide 28: Market Opportunity
Market Opportunity Adventure Travel Additional $50B Hunt/ Fish Related Lifestyle Our Current Markets Categories $130-160B Camping/ Hiking Total Addressable Market ROOM FOR SIGNIFICANT GROWTH Global share in current Increased share of New customers from markets total addressable market outdoor activi
Slide 29: Evolution in Powersports
Evolution in Powersports Increased Vehicle Content Newly Introduced Categories Technology & Infotainment Accessories & Customization PII Capital Markets Day 7-31-2023 29
Slide 30: Innovation Pipeline Fueling Growth & Profitability
Innovation Pipeline Fueling Growth & Profitability • Global share in Utility and Rec SxS Off Road • Global share in seasonal products • Growth from electric products • Global share in Motorcycle On Road • Continued margin expansion • Global share in Pontoon Marine • Expanding Marine portfolio, inclu
Slide 31: Continuing to Invest in Innovation
Rider-Driven Continuing to Invest in Innovation Innovation Research & Development $238M ~$400M 2017 2023 Projected PII Capital Markets Day 7-31-2023 31
Slide 32: Making Powersports More Accessible
Making Powersports More Accessible Best Customer Experience Exposure Products Experience Make it easier for customers to Increase access to vehicles that Simplify key aspects of our experience powersports first- are well suited to be a shop, buy and ownership hand with safe, comfortable customer’s “
Slide 33: Reaffirming Our Commitment to 2026 Targets
Reaffirming Our Commitment to 2026 Targets PII Capital Markets Day 7-31-2023 33
Slide 34: Mike Dougherty, President, On Road and International
MIRE DUUGHERIT Fresigent, Un Koad and international 2023 CAPITAL MARKETS DAY 34
Slide 35: On Road Sales
On Road Sales Indian North America Motorcycle +20% y/y +7% 5-yr CAGR 52% Slingshot 17% Continued $1,163M Global 2022 Sales Expansion 31% Other Aixam, Goupil, International PG&A Aftermarket +4% y/y 18% +11% 5-yr CAGR PII Capital Markets Day 7-31-2023 35
Slide 36: On Road in Numbers
On Road in Numbers New models & ~575 Global 15 Limited Editions launched since 2022 Indian Motorcycle Dealers in the global network 4 manufacturing plants ~325 Slingshot 18 margin in 2022 % Gross profit 9 5-Year CAGR % Sales 12 5-Year CAGR % PG&A sales 2022 N.A. Market Share N.A. Retail Indian #2 20
Slide 37: Global On Road Channel Update
Global On Road Channel Update Indian Motorcycle Slingshot Global Dealer Count North America Dealer Count 2019 2020 2021 2022 2023 2019 2020 2021 2022 2023 • Back to growing global distribution post-supply • Network count stabilized disruptions • Optimizing network with strong operators in key • Deal
Slide 38: Executing Our On Road Plan
Executing Our On Road Plan 1 Market Share Gains 2 Product Excellence & Innovation 3 International Growth in Indian Motorcycle 4 Margin Expansion PII Capital Markets Day 7-31-2023 38
Slide 39: Market Share Gains | Global Indian Motorcycle Market Share
Executing Our On Road Plan 1 Market Share Gains | Global Indian Motorcycle Market Share MY19 FTR Supply Disruptions MY22 Chief MY18 Bobber MY22 Pursuit MY17 Chieftain Ltd. MY21 Challenger MY23 Sport Chief 2016 2017 2018 2019 2020 2021 2022 2023E PII Capital Markets Day 7-31-2023 39
Slide 40: Product Excellence & Innovation
Executing Our On Road Plan 2 Product Excellence & Innovation|High-Demand Product News Driving Results INDIAN SPORT CHIEF INDIAN CHALLENGER ELITE SLINGSHOT ROUSH EDITION Profitable expansion Performance, Style, Slingshot R + Roush DNA on Chief platform and Craftsmanship Performance Lifestyle PII Capi
Slide 41: International Growth in Indian Motorcycle
Executing Our On Road Plan 3 International Growth in Indian Motorcycle International is more than 1/3 of Indian Motorcycle sales 350+ Indian Motorcycle international dealers EMEA currently largest international market Indian Motorcycle #1 market share in Mexico Asia largest opportunity (China, Japan
Slide 42: Margin Expansion
Executing Our On Road Plan 4 Margin Expansion 2019 2023E 2026E Efficient pricing and promotional strategy International operations mitigating tariffs Improved operating expense leverage Volume growth driven by share gains PII Capital Markets Day 7-31-2023 42
Slide 43: On Road Closing Remarks
On Road Closing Remarks On Road is Building strong brands Healthy & growing checking all the with Indian Motorcycle dealer network boxes and Slingshot Product innovation Focused investments Expanding margins driving retail growth to capture global and global share gains opportunities #2 vs. 2019 PII
Slide 44: Steve Eastman, President, PG&A and Aftermarket
SIEVE EASTMAN President, PFGasA and Artermarket 2023 CAPITAL MARKETS DAY 44
Slide 45: PG&A Sales
PG&A Sales Accessories Off-Road Snowmobiles Vehicles Parts 60% 29% On Road $1,643M 12% 2022 Sales International 11% Other Garments Commercial, Gov’t/ Defense Record 2022 PG&A Sales PII Capital Markets Day 7-31-2023 45
Slide 46: PG&A in Numbers
PG&A in Numbers +14 5-Year CAGR % PG&A sales +34% Accessory 1 $/unit +32% Ecommerce sales 1 40+ % Gross profit margin 18M Parts delivered 500+ New accessories launched in 2022 Capitalizing on Substantial Owner Installed Base 12022 vs 2021 PII Capital Markets Day 7-31-2023 46
Slide 47: Executing Our PG&A Plan
Executing Our PG&A Plan 1 Product Innovation & Partnerships 2 Aftermarket Portfolio Leverage 3 Customer Shopping Experience 4 Delivery Performance & Efficiency PII Capital Markets Day 7-31-2023 47
Slide 48: Product Innovation & Partnerships
Executing Our PG&A Plan 1 Product Innovation & Partnerships LOCK & RIDE LIFESTYLE ACCESSORIES PREMIUM AUDIO Next Generation of Lock & Ride Exclusive Partnership with Global Leader Audio Roof with Ride Command No Tools Required Purpose-Built Offerings for Overlanding, Integrated Lighting Virtually En
Slide 49: Aftermarket Portfolio Leverage
Executing Our PG&A Plan 2 Aftermarket Portfolio Leverage APPAREL EXCELLENCE PRO ARMOR ACCESS MORE CUSTOMERS Apparel Center-of-Excellence ProBilt Customization – Corona, CA in Rigby, Idaho Pro Armor Wheels & Tires 5-Year CAGR +26% Significant Product Line Expansion Pro Armor Snow Introduced in 2022 T
Slide 50: Customer Shopping Experience
Executing Our PG&A Plan 3 Customer Shopping Experience DIGITAL COMMERCE ADVANCED ACCESSORIZATION MARKETING & EDUCATION Over 16M Annual Visits Plug-and-play Accessory Attachment Engage Massive Owner Installed-Base 600 Ship-to-Dealer Locations Factory-Installed Accessories Premium In-Store Displays Pr
Slide 51: Delivery Performance & Efficiency
Executing Our PG&A Plan 4 Delivery Performance & Efficiency WILMINGTON, OH MULTI-BRAND DC CAMPUS EXPANSION FUTURE DC AVAILABILITY DC CAPACITY DC AUTOMATION Backorders Improved 72% vs. Peak Five Primary DCs in North America + Int’l Goods-to-Person Average Time-to-Clear Down 60% 165,000 sqft Ohio Expa
Slide 52: PG&A Closing Remarks
PG&A Closing Remarks Sustained and highly Large addressable market profitable growth driver opportunity Highly integrated PG&A customer Strategic investments experience innovation in capability & capacity PII Capital Markets Day 7-31-2023 52
Slide 53: Agenda
AGENDA Polaris Capital Markets Day – July 31, 2023 TIME (CT) TOPIC PRESENTER 8:00 – 8:45 Business/Strategy Update Mike Speetzen, Chief Executive Officer 8:45 – 9:05 On Road Business Mike Dougherty, On Road and International President 9:05 – 9:20 PG&A Business Steve Eastman, PG&A and Aftermarket Pres
Slide 54: Ben Duke, President, Marine
BEN DUKE President, Marine PcslLARiS 2023 CAPITAL MARKETS DAY
Slide 55: Marine Sales
Marine Sales Pontoons Bennington, Godfrey Brands Price Range 89% Bennington $20k - $400k+ $989M Godfrey $20k - $350k 2022 Sales Hurricane $30k - $150k 11% Future growth coming from continued global Deck Boats share growth, PG&A expansion, & Hurricane Polaris Adventures PII Capital Markets Day 7-31-2
Slide 56: Polaris Marine in Numbers
Polaris Marine in Numbers ~30 New models introduced in 2022 ~550 Dealers in the global network 3 Manufacturing facilities ~500 Total models offered $20K- 22% Gross profit margin in 2022 12% Sales growth 5-Year CAGR $400K MSRP range 2022 N.A. Market Share #1 PII Capital Markets Day 7-31-2023 56
Slide 57: Marine Acquisition a Proven Winner
Marine Acquisition a Proven Winner Polaris Marine: Strategic fit Strong Cash Generation Leading brands Strong future global growth Returned $500M+ cash since acquisition Financial performance has Averaging ~$100M/year Exceeded expectations Sales growing at a 12% 5-Year CAGR Gross profit margin +200
Slide 58: Executing Our Marine Plan
Executing Our Marine Plan 1 Market Share Growth within Strong Segments 2 Product Excellence & Innovation 3 Expanding Plant Efficiencies & Capabilities PII Capital Markets Day 7-31-2023 58
Slide 59: Market Share Growth within Strong Segments
Executing Our Marine Plan 1 Market Share Growth within Strong Segments Polaris N.A. Pontoon Share Polaris N.A. Deck Boat Share Bennington Hurricane Godfrey 2018 2019 2020 2021 2022 2023E 2018 2019 2020 2021 2022 2023E Low dealer inventory caused share Bennington strategic focus Moving forward, globa
Slide 60: #3 Boat Manufacturer in N.A.
Executing Our Marine Plan Top Selling Boat Unit Categories (in units) 70,000 60,000 Pontoon is Second Fastest Growing Boat Category Over Last 5 Years 50,000 40,000 • Ease of overall use 30,000 • Great furniture layouts for friends and family 20,000 • Continued evolution, beautiful exterior designs 1
Slide 61: Global Dealer Expansion
Executing Our Marine Plan Global Dealer Expansion Europe, Latin America, Australia, New Zealand ~550 Total dealers...and Australia Perth growing Adelaide Cairns Brisbane #1 CSI New Zealand Sydney Auckland 1 Melbourne Wellington Canterbury Ranked dealer network in N.A. Minimal overlap between Godfrey
Slide 62: Product Excellence & Innovation | Product Refreshes
Executing Our Marine Plan 2 Product Excellence & Innovation| Product Refreshes Tied to the Customer GODFREY XP CONTINUED PRODUCT REFRESH HURRICANE SUNDECK 2600 Fresh New Design using internal Refreshed interiors and New Bennington S & SV Launching Hurricane into the Fiberglass Center of Excellence p
Slide 63: Expanding Plant Efficiencies & Capabilities
Executing Our Marine Plan 3 Expanding Plant Efficiencies & Capabilities Polaris Marine Annual CAPEX Spend 7-Year CAPEX CAGR = +43% • Robotic welding automation • Warehousing facilities • Center of Excellence – fiberglass first • Supplier partnerships 2016 2017 2018 2019 2020 2021 2022 2023E PII Capi
Slide 64: Robotic Automation and Partner Investment
Robotic Automation and Partner Investment Robotic Automation Continued investment in manufacturing automation Increases capacity and quality Polaris Marine Investment: December 2022 Offers insight into new furniture methods, quality and construction Broadens our furniture supply base PII Capital Mar
Slide 65: Marine Closing Remarks
Marine Closing Remarks Emphasis on product refresh Continued investment in with innovative designs the business Smart capacity investments Great addition to Polaris to drive safety, efficiency portfolio with strong results and quality and attractive returns PII Capital Markets Day 7-31-2023 65
Slide 66: Steve Menneto, President, Off Road
SIEVE MENNETU Fresidgent, Ui Koad 2023 CAPITAL MARKETS DAY 66
Slide 67: Off Road Sales
Off Road Sales North America Utility 17% y/y RANGER, 11% 5-yr CAGR SPORTSMAN, Recreation Commercial, RZR, GENERAL, Gov’t/ Defense 54% Adventures, 35% Youth Continued $6,436M Global 2022 Sales Expansion 11% PG&A Snowmobiles International 5% y/y 22% 10% 5-yr CAGR PII Capital Markets Day 7-31-2023 67
Slide 68: Off Road in Numbers
Off Road in Numbers Global +10 ~2,500 5 New models Dealers in the introduced in 2022 global network manufacturing plants 24 margin in 2022 % Gross profit 11 5-Year CAGR % Sales 14 5-Year CAGR % PG&A sales PII Capital Markets Day 7-31-2023 68
Slide 69: Utility Consumer Lifestyle & Usage
Utility Consumer Lifestyle & Usage 54% of Off Road sales 10% 4-Year sales CAGR 2022 N.A. Market Share N.A. Retail #1 2022 vs. 2019 Trailing 12 Month Utility MID- TEENS MSD UTILITY COMMERCIAL GOV’T / DEFENSE Peggy will Fix stretched photo Landowners, Farm & Ranch, Hunt, Leisure B2B, Fleet Sales Tacti
Slide 70: Recreation Consumer Lifestyle & Usage
Recreation Consumer Lifestyle & Usage 35% of Off Road sales 12% 4-Year sales CAGR 2022 N.A. Market Share N.A. Retail #1 2022 vs. 2019 Trailing 12 Month Recreation LSD LDD SPORT CROSSOVER / ADVENTURE YOUTH Sport Crossover Overland Recreation (RZR) (GENERAL) (Polaris XPEDITION) PII Capital Markets Day
Slide 71: Snow Consumer Lifestyle & Usage
Snow Consumer Lifestyle & Usage 11% of Off Road sales 15% 5-Year sales CAGR 2022 N.A. Market Share N.A. Retail #2 2022 vs. 2019 Trailing 12 Month Snowmobiles MSD LDD MOUNTAIN TRAIL PII Capital Markets Day 7-31-2023 71
Slide 72: Executing Our Off Road Plan
Executing Our Off Road Plan 1 Retaking Market Share with Rider Driven Innovation 2 Safety & Quality Focus 3 Best Customer Experience 4 Agile Operations to Drive Capacity & Efficiencies PII Capital Markets Day 7-31-2023 72
Slide 73: Retaking Market Share with Rider Driven Innovation
Executing Our Off Road Plan 1 Retaking Market Share with Rider Driven Innovation Q3 ’21 Q3 ’23 RANGER 570 RANGER Kinetic RZR XP Polaris XPEDITION RZR Pro R RZR Turbo R RIDE COMMAND+ RANGER XD 1500 PII Capital Markets Day 7-31-2023 73
Slide 74: Safety & Quality Focus
Executing Our Off Road Plan 2 Safety & Quality Focus Post Sales Surveillance Design & Engineering Supplier Quality Manufacturing Signal Investigation Decision Notify Regulators Recall Notification Identify, Test, Validate Solution Recall Execution PII Capital Markets Day 7-31-2023 74
Slide 75: Best Customer Experience
Executing Our Off Road Plan 3 Best Customer Experience Dealer Survey Engagement NorthStar Dealer Program International Dealers 94% of PII Dealers +1,000 Dealer Satisfaction engaged in program Driving improved Dealers in Dealer customer experience & 100+ countries Relationship better, more profitable
Slide 76: Agile Operations to Drive Capacity & Efficiencies
Executing Our Off Road Plan 4 Agile Operations to Drive Capacity & Efficiencies Upgrading capability (paint) Insourcing (battery) 1.3M sqft global capacity expansion PII Capital Markets Day 7-31-2023 76
Slide 77: Agile Operations to Drive Capacity & Efficiencies
Executing Our Off Road Plan 4 Agile Operations to Drive Capacity & Efficiencies Profit Drivers Platforming vs. Modular Design Platforming Examples Design to Value processes Platform Focus… Snow Engine: Common parts volume 10 ATV Exhausts to 2 driving cost down. ~$1M annual Modular designs savings Ag
Slide 78: Off Road Closing Remarks
Off Road Closing Remarks Off Road is Safety & quality driving Global leader in Off Road checking all the a better customer and retaking share boxes experience Expanding the category Driving margin Investing in growth through new products improvement through and innovation efficient operations PII Ca
Slide 79: Bob Mack, Chief Financial Officer
BUB MACK Cnier Financial Oificer, Executive vice Fresident, Finance & Corporate Development - es "4 tate : F ce ofl z 2023 CAPITAL MARKETS DAY
Slide 80: 2022 Adjusted EPS: $10.40
Last 5 Years Marine acquisition Sales $4.0B Price/mix Unit volume Investments Adjusted* EBITDA Premium product and product complexity Margin Tariffs / foreign currency Share repurchases Other Interest rates Tax rate 2022 Adjusted EPS*: $10.40 2X 2017 *See GAAP/Non-GAAP Reconciliation in Append
Slide 81: Product Evolution in Numbers
Product Evolution in Numbers Rider-Driven Innovation Driving Higher Contented Vehicles More Time and Space Required to Manufacture 2017 Today Comparable Set of SxS Vehicles 2017 to Today + ~50% Weight + ~30% Power Vehicles per shipping load ~25% + ~25% Weight Parts / vehicle ~95% + >100% Power L
Slide 82: Next 3+ Years of Strategic Plan
Next 3+ Years of Strategic Plan Strategic Plan First 2 Years Next 3 Years (2022-2026E) (2022-2023 Guidance) (2024E-2026E) Mid-Single Digits % 9% to 11% 5% to 6% Sales CAGR CAGR from 2021 at $7.4B CAGR from 2021 at $7.4B Adjusted* EBITDA Mid-to High-Teens 80 to 100 bps 3 to 5 pts from 2021 at
Slide 83: Where is the Growth Opportunity?
Where is the Growth Opportunity? 2023 - 2026 Estimated Drivers Share International Retail Growth New products SxS MSD New categories Growth Rate In-Line With Total Company New products ATV LSD Stable industry 2023E 2026E Snowmobiles MSD New products PG&A Indian New products Motorcycle
Slide 84: Significant Gross Margin Improvement Opportunities Exist
Significant Gross Margin Improvement Opportunities Exist • Higher contented vehicles and inflation drive recent increase • Promotional environment has returned, below pre-pandemic 8% CAGR • Mix tailwind expected to continue Sales $ / Unit • Higher contented vehicles, inflation and cost premiums driv
Slide 85: Adjusted EBITDA Growth
Adjusted* EBITDA Growth Margin Improvement Drivers 2021 EBITDA* 12% EBITDA* $ EBITDA* Rate Manufacturing Optimization +++ Modular Designs & Platforming +++ Vertical Integration & Insourcing ++ Portfolio Optimization ++ Motorcycle Profitability ++ +4-6 pts 12%1 Tariff Mitigation + Foreign Currency -
Slide 86: Strong Balance Sheet
Strong Balance Sheet Key Metrics of Capitalization • $700M estimated capital expenditures across 2022 & 2023 o Targeted at growth and margin expansion projects Cash $250M - $300M • Strong free cash flow generation with working capital expecting to trend lower Annual CAPEX $350M - $450M • Dividend Ar
Slide 87: Working Capital Management/Cash Flow Performance
Working Capital Management/Cash Flow Performance A/R – Days Sales Outstanding Days Inventory Net of Payables Free Cash Flow* Yield 45 12% 37 36 36 7% 17 5% 14 15 3% 12 11 10 0% 2018 2019 2020 2021 2022 2023E 2018 2019 2020 2021 2022 2023E 2018 2019 2020 2021 2022 2023E Days Sales Outstanding trend D
Slide 88: Capital Deployment Strategy
Capital Deployment Strategy Priority #1: Organic Investment 27% 27% 30% • Investing in R&D/Capital R&D • Best ROI CAPEX 22% 23% Priority #2: Dividends 30% • Dividend Aristocrat: 28 consecutive years Dividend of increasing dividend 14% 12% 12% Buyback 13% Priority #3: Share Repurchase / M&A 38% • Com
Slide 89: Why Invest in Polaris
Why Invest in Polaris Solid, stable growth in Significant Track record of winning core powersports competitive moat innovation Improving adjusted Strong balance sheet Disciplined capital EBITDA margin rate & & attractive ROIC deployment strategy expanding EBITDA dollars PII Capital Markets Day 7-31-
Slide 90: 2023 Capital Markets Day
2023 CA PI TA L MARK ETS D AY J U LY 3 1 , 2 0 2 3 90
Slide 91: Appendix
Appendix • Non-GAAP Reconciliations – Total Company • Non-GAAP Reconciliations – Net Income to Adjusted EBITDA • Non-GAAP Reconciliations – Segments / Cash Flow • 2023 Guidance Adjustments PII Capital Markets Day 7-31-2023 91
Slide 92: Non-GAAP Reconciliations – Total Company
Non-GAAP Reconciliations – Total Company Reconciliation of GAAP "Reported" Results to Non-GAAP "Adjusted" Results (In Millions, Except Per Share Data; Unaudited) Twelve months ended December 31, 2022 2021 Gross profit 1,959.5 1,750.9 Restructuring & realignment (3) 0.2 7.9 Adjusted gross profit 1,95
Slide 93: Non-GAAP Reconciliations – Net Income to Adjusted EBITDA
Non-GAAP Reconciliations – Net Income to Adjusted EBITDA Reconciliation of Net Income to Adjusted EBITDA (In Millions, Unaudited) Twelve months ended December 31, 2022 2021 Sales 8,589.0 7,439.2 Adjustments: Net Income from continuing operations 603.4 496.6 (1) Represents impairment charges and subs
Slide 94: Non-GAAP Reconciliations – Segments / Cash Flow
Non-GAAP Reconciliations – Segments / Cash Flow Reconciliation of GAAP Segment Gross Profit to Non-GAAP Segment Gross Profit (In Millions, Unaudited) Twelve months ended December 31, 2022 2021 Reconciliation of GAAP Operating Cash Flow to Non-GAAP Free Cash Flow Off Road segment gross profit $ 1,523
Slide 95: 2023 Guidance Adjustments
2023 Guidance Adjustments 2023 adjusted guidance excludes the pre-tax effect of supply chain transformation, restructuring and network realignment costs of approximately $5 million, and approximately $10 million for class action litigation-related expenses. Intangible amortization of approximately $
Slide 96: Slide 96