Polaris Inc. · NYSE:PII
Polaris — Polaris Industries — Q2 2014 Earnings Presentation
25 slides from Polaris's earnings presentation, Jul 22, 2014
Slide 1: Second Quarter 2014 Earnings Results
POLARIS INDUSTRIES INC. Second Quarter 2014 Earnings Results July 22, 2014
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 2014 sales, shipments, margins, net income and cash flow, the trend toward producing more of the Company’s own engines for its vehi
Slide 3: Scott W. Wine, Chairman & CEO
Scott W. Wine Chairman & CEO POLARIS INDUSTRIES INC. Second Quarter 2014 Earnings Results July 22, 2014
Slide 4: Q2 2014 Sales and Net Income
Q2 2014 Sales and Net Income Q2 Sales Q2 Net Income (in millions) +20% (in millions) +21% $844.8 $1,014.0 Q2 2013 Q2 2014 $80.0 $96.9 Q2 2013 Q2 2014 Record 2nd quarter sales and net income ORV sales increased 13%; Motorcycles up 107%; PG&A up 20%; International up 26% N.A. retail sales increased 15
Slide 5: Full Year 2014 Guidance
Full Year 2014 Guidance Total Company Sales (in millions) Diluted EPS* $3,777 Up 16% to 18% $4,375 to $4,475 2013 Actual FY 2014 Guidance $5.40 Up 20% to 22% $6.48 to $6.58 2013 Actual FY 2014 Guidance Record sales and earnings projected for 2014 North American retail sales growth and market share g
Slide 6: Leading Powersports Company from Humble Beginnings
60 Years of Powersports 1954 2014 MARKET SHARE (Worldwide - except where noted) #1 ATVs #1 Utility Side-by-Sides #1 Recreational Side-by-Sides #2 N.A. Heavyweight Motorcycles #2 Snowmobiles #1 Quadricycles (Europe) #1 ULTV for Military Leading Powersports Company from Humble Beginnings Q2-2014 6
Slide 7: Polaris Strategic Objectives
Polaris Strategic Objectives Vision & Strategy VISION Fuel the passion of riders, workers and outdoor enthusiasts around the world by delivering innovative, high quality vehicles, products, services and experiences that enrich their lives. STRATEGY Polaris will be a highly profitable, customer centr
Slide 8: Bennett Morgan, President & COO
Bennett Morgan President & COO POLARIS INDUSTRIES INC. Second Quarter 2014 Earnings Results July 22, 2014
Slide 9: N.A. Retail Sales & Dealer Inventory – Q2 2014
N.A. Retail Sales & Dealer Inventory – Q2 2014 Best in Powersports Plus N.A. Powersports Retail Sales N.A. Dealer Inventory +15% +5% Polaris Q2 2014 Industry Q2 2014 +13% 3% Existing Models 7% New models/ categories 3% New Dealers 13% Total Increase Q2-2013 Q2-2014 Polaris N.A. retail 15% for Q2 201
Slide 10: Off-Road Vehicles
Off-Road Vehicles Best in Powersports PLUS ORV Sales ($ millions) $619.2 +13% $701.5 Q2 2013 Q2 2014 FY ‘14 Guidance 11% to 13% INCREASED (previous: +9% to +11%) New 2015 RANGER XP 900 with 13% more horsepower N.A. Q2 Polaris ORV retail sales low-double digits %; Industry high-single digits % Polari
Slide 11: Motorcycles
Motorcycles Best in Powersports PLUS Motorcycle Sales ($ millions) $49.9 +107% $103.1 Q2 2013 Q2 2014 FY ‘14 Guidance 65% to 75% - UNCHANGED ˗ New 2015 Two-Tone Indian Chief Motorcycles Polaris N.A. motorcycle retail sales about 50% in Q2 Indian significantly: retail, share, and dealer expansion con
Slide 12: Slingshot Growth Through Adjacencies
Slingshot Growth Through Adjacencies Exhilarating on-road driving experience – consumer anticipation building Two initial models – base and premium trim levels Official public reveal on July 27th during 60th anniversary sales meeting The Worst Kept Secret in Powersports Q2-2014 12
Slide 13: Snowmobiles
Snowmobiles Snowmobile Sales Best in Powersports PLUS ($ millions) $8.5 $6.1 Q2 2013 Q2 2014 FY ‘14 Guidance mid-single digits % - UNCHANGED˗ MY’15 600 Switchback PRO-S Historically slow quarter for snowmobile shipments Final MY’15 orders slightly ahead of expectations Snowcheck orders strong Dealer
Slide 14: PG&A
PG&A Best in Powersports PLUS PG&A Sales ($ millions) $133.5 +20% $159.7 Q2 2013 Q2 2014 FY ‘14 Guidance About 20% ˗UNCHANGED˗ Record Q2 sales; 20% ORV sales 17%, Motorcycles 35%, Small Vehicles 21% All categories increased sales in Q2 Accessories 26%, Apparel 57%, Parts 9% Kolpin acquisition integr
Slide 15: Defense / Commercial Growth Through Adjacencies
Defense / Commercial Growth Through Adjacencies 2014 Sales Expectations Defense FY 2013 Actual FY 2014 Expectations Commercial FY 2013 Actual FY 2014 Expectations Product Line of Light Utility Tactical Vehicles (“ULTV”) Q2 Defense revenue about 50%; more stable environment U.S. DoD FY’14 &’15 Budget
Slide 16: Small Vehicles Growth Through Adjacencies
Small Vehicles Growth Through Adjacencies Small Vehicle Sales ($ millions) $33.7 +29% $43.5 Q2 2013 Q2 2014 FY ‘14 Guidance 25% to 30% ˗UNCHANGED˗ Aixam Mega sales up over 40% in Q2 Aixam market share notably, #1 share New MY’14 vehicles well-received GEM & Goupil sales 6%, combined New products com
Slide 17: International Global Market Leadership
International Global Market Leadership International Sales ($ millions) $135.5 +26% $170.5 Q2 2013 Q2 2014 FY ‘14 Guidance low-teens % INCREASED (previous: up low-double digits %) New Plant in Opole, Poland – SOP Q4 2014 International sales 26% in Q2 ORV 19%; Motorcycles 98%; Small Vehicles 32%; PG&
Slide 18: Operational Excellence
Operational Excellence LEAN Enterprise is Competitive Advantage Gross Margins 29.9% +20 bps 30.1% Q2 2013 Q2 2014 FY ‘14 Guidance 30-50 bps IMPROVED (previous: down 50-70 bps) LEAN initiatives driving productivity gains; +5% in Q2 RFM yielding results in motorcycles Implementing for ATVs in late 201
Slide 19: Mike Malone, V.P. Finance & CFO
Mike Malone V.P Finance & CFO POLARIS INDUSTRIES INC. Second Quarter 2014 Earnings Results July 22, 2014
Slide 20: 2014 Full Year Guidance
2014 Full Year Guidance METRIC GUIDANCE Product Line Sales Off-Road Vehicles Up 11% to 13% Snowmobiles Up mid-single digits % Motorcycles Up 65% to 75% Small Vehicles Up 25% to 30% PG&A Up about 20% International Up low-teens % Total Company Sales Up 16% to 18% Gross Margins Down 30 to 50 bps Operat
Slide 21: 2014 Gross Margin Guidance
2014 Gross Margin Guidance METRIC Actual Q2 2013 Actual Q2 2014 Guidance FY 2014 Prior Period 28.7% 29.9% 29.7% Production volume adjustments Product cost reduction efforts Commodity costs Currency rates Higher selling prices Product mix New Plant Start-up Costs Warranty costs Tooling amortization S
Slide 22: Balance Sheet and Liquidity Profile
Balance Sheet and Liquidity Profile $ In millions (except per share and rate data) YTD 2014 Fav / (UnFav) YTD 2013 2014 Full Year Guidance vs. 2013 Cash $119.0 ($98.6) Increase Debt / Capital Lease Obligations $367.6 ($260.0) Decrease Credit Facility $350.0 Flat Unchanged Factory Inventory $559.9 ($
Slide 23: Scott W. Wine, Chairman & CEO
Scott W. Wine Chairman & CEO POLARIS INDUSTRIES INC. Second Quarter 2014 Earnings Results July 22, 2014
Slide 24: Closing Comments
Closing Comments 1st half results solid – leading into new product launch MY ‘15 product introductions – another year of “big” news ORV expanding #1 market share position Both ATVs and side-by-sides growing share Military winning orders with DAGOR vehicle Indian Motorcycles’ first full year a succes
Slide 25: Thank you / Questions?
€> PSLARIsS Thank you Questions?