Polaris Inc. · NYSE:PII
Polaris — Polaris Industries — Q1 2013 Earnings Presentation
24 slides from Polaris's earnings presentation, Apr 23, 2013
Slide 1: First Quarter 2013 Earnings Results
First Quarter 2013 Earnings Results April 23, 2013 POLARIS INDUSTRIES INC.
Slide 2: Forward-looking statements
Except for historical information contained herein, the matters set forth in this document,including but not limited to management’s expectations regarding 2013 sales, shipments, margins, net income and cash flow are forward-looking statements that involve certain risks and uncertainties that could
Slide 3: Scott Wine, Chairman & CEO
Scott Wine Chairman & CEO First Quarter 2013 Earnings Results April 23, 2013 POLARIS INDUSTRIES INC. 3
Slide 4: Q1 2013 Sales and Net Income Record
$60.1 $75.5 Q1 2012 Q1 2013 +26% Q1 2013 Sales and Net Income Record 1st Quarter Sales and Net Income ORV Sales remained strong +7%; PG&A up 27% International Sales up 5% EMEA growth +6% in tough economic environment Earnings per Share up 26% to $1.07 Gross Profit Margin up 10 bps Net Income Margin
Slide 5: Aixam Mega Acquisition
5 Q1-2013 AIXAM MEGA Acquisition Acquisition Summary Closed April 10th 2013 Approximately $110M in sales focused in Europe Solidly profitable; slightly accretive to Polaris in 2013 after acquisition costs Strong leadership / lean structure Strategic Intent Build on existing European quadricycle busi
Slide 6: 2013 Sales & EPS Reflects Solid Execution of Plan
North American Retail Sales growth and market share gains expected to continue PG&A expected to grow 22% to 25% with Klim acquisition International Sales projected to increase about 20% with acquisitions Aixam Mega excellent addition to the portfolio Net Income projected up 15% to 18% Net Income Mar
Slide 7: 3-5 Year Objectives and Q1 2013 Progress
Best in Powersports PLUS 5-8% annual growth All Product lines gained market share again Snow dealer inventories lower PG&A grew 27%; Klim solid start Growth through Adjacencies $1B - $2B from acquisitions and new markets Launched Bobcat co-developed product Small Vehicles grew sales in Q1 Polaris De
Slide 8: Bennett Morgan, President & COO
Bennett Morgan President & COO First Quarter 2013 Earnings Results April 23, 2013 POLARIS INDUSTRIES INC. 8
Slide 9: Polaris Q1 N.A. retail sales and dealer inventory
Polaris Q1 N.A. retail sales up 7% Demand slower than recent quarters primarily due to late spring Industry retail down low single digits % in Q1 N.A. core ATV industry decreased double digits % in Q1 2013; Side-by-sides up Motorcycle industry down about 10% Polaris N.A. dealer inventory up 23% from
Slide 10: N.A. ORV Retail Sales
10 Q1-2013 N.A. ORV Retail Sales Q1 2013 Polaris Sales ($ in millions) #1 and Growth Continues #1 in ORV – Share expansion in SxS and ATVs in N.A. Polaris retail up in Q1 against tough comparisons; SxS retail up; core ATVs down but less than industry Q1 2012 retail sales for ORV were up mid-twenties
Slide 11: Growth Through Adjacencies: Defense and Commercial
11 Q1-2013 Growth Through Adjacencies Polaris Defense Gaining Traction Polaris Commercial Purpose-Built Commercial UTV launched in March, started shipping in April 2013 Multiple model configurations with available hydraulics, power take-off features and attachments Initial reception from dealers & c
Slide 12: N.A. Snowmobile Retail Sales
12 N.A. Snowmobile Retail Sales Q1 Snow Sales (in millions) Q1 2013 Product Innovation & Quality Keys to Success Industry retail sales up for the season with Q1 improving considerably due to good snowfall and extended snow cover Polaris N.A. and International Snowmobile market share increased for Q1
Slide 13: N.A. Motorcycle: Indian Re-launch Approaching
13 Q1-2013 Q1 2013 N.A. Motorcycle Industry 1400cc+ Polaris Total On-Road Sales (in millions) New Indian Thunder Stroke 111 Engine Q1 2013 Continue to Outperform the Industry – Indian Re-launch Approaching Industry N.A. retail sales declined about 10% due to late spring and tough Q1 comparables Vict
Slide 14: PG&A Produced Strong Q1 Results
ORV 62% On- Road 8% Snow 24% Other 6% FY 2012 FY 2013 Guidance Best in Powersports Plus 14 Q1-2013 Polaris PG&A Sales ($ in millions) Q1 2013 PG&A Produced Strong Q1 Results Record Q1 sales; up 27% vs. Q1 2012 ORV growth up 19% On-Road up 21% Snow up 58% - includes Klim in 2013 All categories and re
Slide 15: Small Vehicle Business Gaining Foothold
Q1 retail orders up 20% Expect 2013 revenue to grow double digits, in spite of European economy Goupil & Aixam Mega – Synergies expected in distribution, product development Aixam Goupil Growth Through Adjacencies 15 GEM x Small Vehicle Business Gaining Foothold Q1-2013 Q1 retail more than doubled E
Slide 16: Polaris International
16 Q1-2013 Polaris Sales (in millions) 2013 Objectives Gaining Share in Challenging Economic Environment ORV 57% Snow 11% On- Road 14% PG&A 18% Q1 2012 Q1 2013 FY 2012 FY 2013 Guidance Up about 20% * +5% $114.4 +9% $460.6 $109.3 Europe 70% LatAm 9% Asia 3% Aus/NZ 11% ME/Africa 7% Q1 2013 Sales by Ge
Slide 17: Operational Excellence
Operational Excellence Gross margins increased 10 bps in Q1 2013 Lower commodity costs, product cost reductions, pricing offset by unfavorable currency and higher promotions Net income margin increased 120 bps to 10.1% for Q1 2013 Income tax non-recurring benefit of $8.2 million in Q1 LEAN initiativ
Slide 18: Mike Malone, VP Finance & CFO
Mike Malone V.P Finance & CFO First Quarter 2013 Earnings Results April 23, 2013 POLARIS INDUSTRIES INC. 18
Slide 19: 2013 Guidance
METRIC GUIDANCE Product Line Sales Off-Road Vehicles Up 8% to 10% On-Road Vehicles Up 50% to 60% Snowmobiles About flat PG&A Up 22% to 25% International Up about 20% Total Company Sales Up 12% to 15% Gross Margins Expand up to 40 bps Operating Expenses About flat as a percent of sales Income Taxes 3
Slide 20: Gross Profit Margin Drivers
METRIC Actual Q1 2012 Actual Q1 2013 Full Year Guidance 2013 Prior Period 28.3% 28.9% 28.8% Production volume adjustments Product cost reduction efforts Commodity costs Currency rates Higher selling prices Product mix Mfg. realignment projects, net Warranty costs Tooling amortization Sales promotion
Slide 21: Cash, Debt and Other Financial Items
$ In millions (except per share and interest rate data) Q1 2013 Fav / (UnFav) Q1 2012 2013 Full Year Guidance Cash $380.8 $94.9 Decrease from acquisition funded Debt $106.4 $1.7 Unchanged Credit Facility $350.0 Flat Unchanged Factory Inventory $370.9 ($56.8) Increase similar % with sales Capital Exp
Slide 22: Scott Wine, Chairman & CEO
Scott Wine Chairman & CEO First Quarter 2013 Earnings Results April 23, 2013 POLARIS INDUSTRIES INC. 22
Slide 23: Economy remains weak, but manageable
Economy remains weak, but manageable Making Growth Happen remains our mantra Q1/Q2 building foundation for pivotal 2H 2013 Indian launch, MY ‘14 products poised to drive growth Investments in infrastructure, growth will continue ROIC will remain at industry-leading levels Margin expansion remains a
Slide 24: Thank you Q & A
Thank you Q & A 24