Polaris Inc. · NYSE:PII
Polaris — Q3 2021 Earnings Presentation
27 slides from Polaris's earnings presentation, Oct 26, 2021
Slide 1: Third Quarter 2021 Earnings Presentation
Third Quarter 2021 Earnings Presentation October 26, 2021
Slide 2: Safe Harbor & Non-GAAP Measures
Safe Harbor & Non-GAAP Measures Except for historical information contained herein, the matters set forth in this presentation and discussed in the corresponding earnings call are forward-looking statements that involve certain risks and uncertainties that could cause actual results to differ materi
Slide 3: Mike Speetzen, Chief Executive Officer
Mike Speetzen Chief Executive Officer Third Quarter 2021 Earnings Results October 26, 2021
Slide 4: Third Quarter 2021 Summary
Third Quarter 2021 Summary • Polaris met earnings expectations for the quarter on lower top line sales • Record year-to-date sales and earnings with significant growth vs. prior year • Retail demand remained strong, customer pre-orders are at all-time highs • Market share gains continued in ORV • PG
Slide 5: Market Share
Q3 2021 North American Powersports Retail Sales Polaris Industry ORV Motorcycles Snow Q3 2021 Total (1) Boats (2) 0% Q3 Retail Sales (yoy % chg) mid- single- mid- digits % teens % mid- high- 24% mid- twenties % about twenties % twenties % thirty % mid- low- high- SxSs mid-twenties % Indian twelve %
Slide 6: North American Dealer Inventory
North American Dealer Inventory Total N.A. Dealer Inventory N.A. Dealer Inventory by Business (in units) Note: Excludes Boats (75%) Q3 2021 vs. Q3 2020 2-year pre-COVID basis Q3 2021 vs. Q3 2019 (Q3 2021 vs. Q3 2019) ORV Snow Motorcycles 0% (46%) Continued Strong Dem and ~(40%) & Supply Chain Constr
Slide 7: Dealer Pre-Sold Orders Update
Dealer Pre-Sold Orders Update ORV Open Pre-Sold Orders Adjustments to Dealer Pre-Sold Order Program Dealer pre-sold orders 1. Adjusting shipment dates on limited number of orders rem ain at elevated levels 2. Improving communication related to order tracking 3. New Polaris Off-Road Reservations – pr
Slide 8: Sourcing Challenges / Production Update
Sourcing Challenges / Production Update Manufacturing Utilization* FY 2021 Supply Chain Input Cost Pressures Q3 2021 Q4 2021 5 Times January Guidance ~20% Expectations 12% Drivers Over • Expedites $300M Supplier Anticipated • Ocean & truck freight rates Constrained Supplier P roduction Constrained •
Slide 9: New Model Year 2022 ORV Products
New Model Year 2022 ORV Products RANGER RZR GENERAL SPORTSMAN RANGER SP 570 line-up RZR Pro XP GENERAL XP 1000 Sportsman 570 & XP 1000 Largest Cargo Bay Full doors; New accessory options Trailhead Edition Ride Command Edition Narrow 56” width Ride Command Ride Command RZR 200 EFI Lock & Ride Adventu
Slide 10: All-New Electric Ranger Launching December 2021
All-New Electric Ranger Episode #1 Pure Power More power and torque Cold weather capability Episode #5 Episode #2 ZERO + Polaris Partnership Optimal Performance 14+ years of electric manufacturing Next level hauling and towing 35+ years of off-road innovation Instant acceleration and torque Launchin
Slide 11: Bob Mack, Chief Financial Officer
Bob Mack Chief Financial Officer Third Quarter 2021 Earnings Results October 26, 2021
Slide 12: Q3 2021 Financial Results
Q3 2021 Financial Results Sales Net Income Earnings Per share $ in billions $ in millions Q3 2020 Q3 2021 Q3 2020 Q3 2021 Q3 2020 Q3 2021 YoY % Chg. GAAP Flat 31% 31% $1.955 $1.960 $167 $115 $2.66 $1.84 Flat $179 $2.85 $1.953 $1.960 31% 31% $1.98 ADJUSTED* $123 YoY % Chg. Q3 2020 Q3 2021 Q3 2020 Q3
Slide 13: Q3 2021 Segment Sales & Gross Profit Margins
Q3 2021 Segment Sales & Gross Profit Margins ORV/Snowmobiles Motorcycles Global Adjacent Markets Aftermarket Boats 6% 16% $1,289 37% 4% $1,208 $194 $147 $237 $227 18% $167 Q3 2021 Sales ($ in millions) $184 $107 $155 Q3 2020 Q3 2021 Q3 2020 Q3 2021 Q3 2020 Q3 2021 Q3 2020 Q3 2021 Q3 2020 Q3 2021 Com
Slide 14: Full Year 2021 Sales & EPS Guidance
Full Year 2021 Sales & EPS Guidance* Total Company Adjusted* Sales Guidance Adjusted* Earnings Per Share Guidance $ in millions ~16% ~16% ~$8.150B ~$9.00 (low ered) (low ered) $7,025 $7.74 FY 2020 FY 2021 FY 2020 FY 2021 Actual Guidance Actual Guidance Change from FY 2020 • Full-year powersports mar
Slide 15: Full Year 2021 Sales Guidance by Segment
Full Year 2021 Sales Guidance by Segment Global Adjacent ORV/Snowmobiles Motorcycles Markets Aftermarket Boats International low- thirties % (unchanged) $841 low- Supplemental Sales Data ($ in millions) teens % mid- (low ered) single Segment Sales ($ in millions) digits % $4,533 (low ered) $885 mid-
Slide 16: Polaris Manufacturing Capacity Investments
Polaris Manufacturing Capacity Investments Monterrey, Mexico Expansion Boats Capacity Expansions Bennington Facility - Elkhart, IN 55,000 square foot addition +~10% additional capacity Over 400,000 square foot expansion +~35% additional Hurricane Production - Syracuse, IN capacity at Restarted Monte
Slide 17: Financial Position & Liquidity Profile
Financial Position & Liquidity Profile Capital Summary YTD Sep 2021 Liquidity Profile $ in millions $ in millions, except dividends Variance to Sep 2021 Sep 2020 Cash $317 -61% Debt /Finance Lease Obligations $1,523 -18% Shareholders’ Equity $1,212 +28% Total Capital $2,735 -3% Credit Revolver – Cap
Slide 18: Mike Speetzen, Chief Executive Officer
Mike Speetzen Chief Executive Officer Third Quarter 2021 Earnings Results October 26, 2021
Slide 19: 2022 Initial Thoughts
2022 Initial Thoughts • Supply chain challenges expected to continue into 2022 o New pricing actions launched in Q4 2021 o Inventories expected to reset to lower than pre-pandemic levels • Consumer demand expected to remain healthy o New products and pent-up demand will drive growth • Ample plant ca
Slide 20: Questions?
Questions?
Slide 21: Appendix
Appendix • Q3 2021 Gross Profit Margin – Actual by Segment • Q3 2021 Supplemental Sales • Q3 2021 Financial Services Income • Q3 2021 Non-GAAP Reconciliations • Q3 2021 Non-GAAP Reconciliations – Segments • 2021 Guidance Adjustments Q3'21 Earnings 10/26/21 21
Slide 22: Q3 2021 Gross Profit Margin
Q3 2021 Gross Profit Margin Q3 2021 Gross Profit Margin – GAAP Q3 2021 Gross Profit Margin – Adjusted* 27.3% 27.5% 23.8% 23.9% Q3 2020 Q3 2021 Q3 2020 Q3 2021 GAAP GAAP Adjusted* Adjusted* Q3 2020 Q3 2021 Q3 2020 Q3 2021 Segments Segments GAAP GAAP Adjusted* Adjusted* ORV/Snow 29.3% 21.5% ORV/Snow 2
Slide 23: Q3 2021 Supplemental Sales – International & PG&A
Q3 2021 Supplemental Sales – International & PG&A Q3 2021 International Sales ($ millions) Sales by Segment Sales by Region 21% International $246 $203 ORV / Snow Motorcycles Europe, Latin America 22% 27% Middle East 42% and Africa Global Adjacent 16% Asia Pacific Markets 31% 15% Q3 2020 Q3 2021 Q3
Slide 24: Financial Services Arrangements
Financial Services Arrangements Financial Services Income by Category Wholesale Credit Retail Credit Contracts Written $ in millions $ in millions $ in millions Receivable Balance – U.S. Dealers $387 $18.1 $733 $772 Other Activities 42% $11.3 $519 $483 Wholesale Financing $391 $223 Retail Financing
Slide 25: Non-GAAP Reconciliations
Non-GAAP Reconciliations Reconciliation of GAAP "Reported" Results to Non-GAAP "Adjusted" Results (In Millions, Except Per Share Data; Unaudited) Key Definitions: This presentation contains certain GAAP financial Three months ended September 30, Nine months ended September 30, measures which have be
Slide 26: Non-GAAP Reconciliations – Segments
Non-GAAP Reconciliations – Segments (In Millions, Unaudited) Three months ended September 30, Nine months ended September 30, (In Millions, Unaudited) Three months ended September 30, Nine months ended September 30, 2021 2020 2021 2020 2021 2020 2021 2020 SEGMENT SALES SEGMENT GROSS PROFIT ORV/Snow
Slide 27: 2021 Guidance Adjustments
2021 GUIDANCE ADJUSTMENTS 2021 guidance excludes the pre-tax effect of supply chain transformation, restructuring and network realignment costs of approximately $10 million, and approximately $10 million for class action litigation-related expenses. Intangible amortization of approximately $35 milli