Slide 1: Earnings Conference Call Q4 and Full-Year 2020
Earnings Conference Call Q4 and Full-Year 2020 This data is internal to Brunswick.
Slide 2: Forward-Looking Statements
Brunswick Corporation - Earnings Release Forward-Looking Statements Certain statements in this presentation are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on current expectations, estimates, and projections abou
Slide 3: Use of Non-GAAP Financial Information and Constant Currency Reporting
Brunswick Corporation – Earnings Release Use of Non-GAAP Financial Information and Constant Currency Reporting In this presentation, Brunswick uses certain non-GAAP financial measures, which are numerical measures of a registrant’s historical or future financial performance, financial position or ca
Slide 4: Business Overview
BUSINESS OVERVIEW Dave Foulkes – CEO |4 ©2021 Brunswick Co. Confidential and all rights reserved. This data is internal to Brunswick.
Slide 5: 2020 in Review
Brunswick Corporation – 2020 in Review Outstanding Performance in a Tumultuous Year Strong financial results: Boat pipeline U.S. marine retail unit Updating 2021 inventory at historical demand surge continued guidance*: • Adjusted1 EPS of lows: through year end: $5.07 (up 17%) • U.S. retail market u
Slide 6: Propulsion Segment – 2020 Overview
Brunswick Corporation – Earnings Release Propulsion Segment – 2020 Overview Sales up 11.0%, operating margins of 15.2%, up 100bps • Significant U.S. and international retail market share gains • More than 70 new or enhanced OEM partnerships in 2020, with a recently announced exclusive partnership be
Slide 7: Parts & Accessories Segment – 2020 Overview
Brunswick Corporation – Earnings Release Parts & Accessories Segment – 2020 Overview Sales up 9.3%, adjusted operating margins of 20.2%, up 60bps 1 • Strong sales growth across all our aftermarket P&A businesses due to increased boat usage • Dealers still reporting extended service backlog at the en
Slide 8: Boat Segment – 2020 Overview
Brunswick Corporation – Earnings Release Boat Segment – 2020 Overview Sales down 6.3%, adjusted operating margins of 6.0%, down 130bps 1 • Recovered from pandemic related shutdowns during first half of 2020 to achieve robust second-half revenue, earnings and margin growth Second-half adjusted oper
Slide 9: Full-Year Revenue Growth Rates and Mix By Region
Brunswick Corporation – Earnings Release Full-Year Revenue Growth Rates and Mix By Region1 International revenues up 10 2020 BC percent on a FY REGION REVENUE 2020 MIX constant currency GROWTH basis U.S. 4% 69% Europe 6% 12% Continued strong Asia-Pacific 40% 9% outboard engine Canada (11)% 6% de
Slide 10: U.S. Powerboat Industry – Percentage Change in Retail Units
Brunswick Corporation – Earnings Release U.S. Powerboat Industry – Percentage Change in Retail Units 2H 2020 industry unit volume for main powerboat CATEGORY 1H- 1H- 2H- 2H- FY FY segments was up 32 20 19 20 19 2020 2019 percent vs. 2H 2019 Outboard Boats 0% (7)% 32% 3% 13% (3)% FY 2020 growth i
Slide 11: Financial Overview
FINANCIAL OVERVIEW Ryan Gwillim - CFO | 11 ©2021 Brunswick Co. Confidential and all rights reserved. This data is internal to Brunswick.
Slide 12: Overview of Full-Year 2020
Brunswick Corporation – Earnings Release Overview of Full-Year 2020 Consolidated results on an as adjusted basis1: Diluted EPS of $5.07, Net sales of $4.35B, up Operating margin of up 17.1 percent 5.8 percent 13.3 percent, up 40bps Operating earnings of Operating leverage of Free cash flow of $578.9
Slide 13: Overview of Fourth Quarter 2020
Brunswick Corporation – Earnings Release Overview of Fourth Quarter 2020 Consolidated results on an as adjusted basis1: Diluted EPS of $1.32, Net sales of $1.16B, up Operating margin of up 61.0 percent 26.5 percent 12.5 percent, up 250bps Operating earnings of Operating leverage of Free cash flow of
Slide 14: Propulsion Segment – Q4 Performance
Brunswick Corporation – Earnings Release Propulsion Segment – Q4 Performance PRODUCT CATEGORY SALES ($M) % CHANGE Outboard Engines $393.4 33% Sterndrive Engines $43.7 9% Controls, Rigging and Propellers $70.8 51% Total $507.9 33% OPERATING MARGIN OPERATING EARNINGS • Operating Margin of 16.2 percent
Slide 15: Parts & Accessories Segment – Q4 Performance
Brunswick Corporation – Earnings Release Parts & Accessories Segment – Q4 Performance1 PRODUCT CATEGORY SALES ($M) % CHANGE Engine Parts and Accessories $104.5 36% Distribution $147.2 27% Advanced Systems Group $109.1 21% Total $360.8 27% OPERATING MARGIN OPERATING EARNINGS • Adjusted Margin of 15.6
Slide 16: Boat Segment – Q4 Performance
Brunswick Corporation – Earnings Release Boat Segment – Q4 Performance1 PRODUCT CATEGORY SALES ($M) % CHANGE Aluminum Freshwater $149.3 20% Recreational Fiberglass $124.7 16% Saltwater Fishing $97.3 27% Business Acceleration $11.0 26% Total $380.82 20%3 OPERATING MARGIN OPERATING EARNINGS • Adjusted
Slide 17: Pipeline Metrics
Brunswick Corporation – Earnings Release Pipeline Metrics ENDING CHANGE UNITS IN CHANGE Historically low YEAR WEEKS ON VERSUS PRIOR PIPELINE VERSUS PRIOR HAND YEAR (WOH) (THOUSANDS) YEAR (UNITS) pipelines due to strongest retail demand since pre- 20 19.4 -17.2 weeks 14.1 (40)% GFC 19 36.6 +0.4 wee
Slide 18: Capital Strategy Update
Brunswick Corporation – Earnings Release Capital Strategy Update We successfully executed our capital strategy, ending the year with a stronger cash position and lower debt than anticipated Ending cash and marketable securities of $587 million, free cash flow of $629 million Deployed $182 millio
Slide 19: Assumptions and Guidance for 2021
Assumptions and Guidance for 2021* U.S. marine industry retail unit demand up low-to-mid single digit percent from 2020 levels Revenue between $4.75B and $5.0B Operating margin growth between 60 and 100 bps, with operating expenses as a percent of sales lower than 2020 EPS between $6.00 - $6.40 5 FC
Slide 20: 2021 Outlook – P&L and Cash Flow
Brunswick Corporation – Earnings Release 2021 Outlook – P&L and Cash Flow 2021 ESTIMATES Working capital increase ~$140 - $150 million Depreciation and amortization1 ~$125 - $135 million Acquisition intangible ~$30 million amortization Combined equity earnings and Comparable to 2020 other income Eff
Slide 21: 2021 Outlook – Capital Strategy Assumptions
Brunswick Corporation – Earnings Release 2021 Outlook – Capital Strategy Assumptions 2021 ESTIMATES Debt retirement ~$100 million Capital expenditures ~$200 - $220 million Share repurchases ~$80 - $120 million Quarterly dividends $0.27 per share Net interest expense ~$60 million | 21 ©2021 Brunswick
Slide 22: Outlook
OUTLOOK Dave Foulkes – CEO | 22 ©2021 Brunswick Co. Confidential and all rights reserved. This data is internal to Brunswick.
Slide 23: Propulsion Segment
Propulsion Segment Strength in Outboard Engines and Propulsion Control Systems Led by Continued Innovation Operating and Strategic Priorities Expand global share growth, especially in Execute new product under-represented programs markets Continue investment in Efficient production innovation increa
Slide 24: Parts & Accessories Segment
Parts & Accessories Segment Strong Advanced Systems Group Growth and Solid Distribution and Aftermarket Engine P&A Sales Operating and Strategic Priorities Optimize global Identify M&A targets to operating model and broaden technology and distribution systems portfolio Capitalize on advanced Grow Sy
Slide 25: Boat Segment
Boat Segment New Product Introductions, Elevated Production, and Margin Improvements Lead to Earnings Growth Operating and Strategic Priorities Focus on operational Increase production, excellence and margin execute expansion improvement plans Successfully launch Grow Freedom Boat new products acros
Slide 26: Focus on ACES, Digital-First Initiatives and ESG/DEI
Focus on ACES, Digital-First Initiatives and ESG/DEI We are Pivoting to Satisfy Tomorrow’s Consumer NEW VALUE PRODUCT NEW MODES OF CONTEMPORARY DIGITAL ENGAGEMENT CONNECTED ENTRY POINTS PARTICIPATION DIGITAL ASSETS & TRANSACTIONS PRODUCTS NEW COMMUNITIES & NEW PERSONALIZED ENHANCED BOATER FORUMS CON
Slide 27: Brunswick Is Award Winning
BRUNSWICK IS AWA R D WINNING | 27
Slide 28: Game Changer Sundancer 370 OB
GAME CHANGER SUNDANCER 370 OB 2 . 11 . 2 1 2.18.21 This data is internal to Brunswick.
Slide 29: This data is internal to Brunswick.
This data is internal to Brunswick.
Slide 30: Appendix
Appendix | 30 This data is internal to Brunswick.
Slide 31: GAAP to Non-GAAP Reconciliations
Brunswick Corporation – Earnings Release GAAP to Non-GAAP Reconciliations (in millions) Q4 2020 Q4 2019 FY 2020 FY 2019 Net Sales 1,161.1 917.6 4,347.5 4,108.4 Sport yacht & yachts — — — 0.7 Adjusted net sales 1,161.1 917.6 4,347.5 4,109.1 Operating earnings 136.5 74.5 539.3 471.0 Restructuring, exi
Slide 32: GAAP to Non-GAAP Reconciliations
Brunswick Corporation – Earnings Release GAAP to Non-GAAP Reconciliations Earnings per Share Q4 2020 Q4 2019 FY 2020 FY 2019 Diluted earnings per share from continuing operations $1.22 $0.92 $4.70 $0.36 Restructuring, exit and impairment charges (0.00) 0.01 0.04 0.21 Purchase accounting amortization
Slide 33: Q4 Net Sales increased by $243.5 million, or 26.5 percent
Brunswick Corporation – Earnings Release Q4 Net Sales increased by $243.5 million, or 26.5 percent Segments Q4 2020 Q4 2019 % Change Propulsion $507.9 $382.1 32.9% Parts & Accessories 360.8 283.5 27.3% Boat 380.8 317.0 20.1% Segment Eliminations (88.4) (65.0) Total $1,161.1 $917.6 26.5% Q4 2020 Cons
Slide 34: FY Net Sales increased by $239.1 million, or 5.8 percent
Brunswick Corporation – Earnings Release FY Net Sales increased by $239.1 million, or 5.8 percent Segments FY 2020 FY 2019 % Change Propulsion $1,878.4 $1,692.9 11.0% Parts & Accessories 1,508.8 1,380.1 9.3% Boat 1,250.3 1,334.3 -6.3% Segment Eliminations (290.0) (298.9) Total $4,347.5 $4,108.4 5.8%
Slide 35: Q4 2020 vs. Q4 2019
Brunswick Corporation – Earnings Release Q4 2020 vs. Q4 2019 Parts & Propulsion Boat Brunswick Accessories Organic 32% 26% 19% 26% Acquisitions - - - - Currency 1% 1% 1% 1% 2020 Net Sales - GAAP 33% 27% 20% 27% Parts & Propulsion Boat Brunswick Accessories US - GAAP 30% 28% 19% 25% International - G
Slide 36: FY 2020 vs. FY 2019
Brunswick Corporation – Earnings Release FY 2020 vs. FY 2019 Parts & Propulsion Boat Brunswick Accessories Organic 12% 9% (7%) 6% Acquisitions - - 1% 0% Currency (1%) 0% 0% 0% 2020 Net Sales - GAAP 11% 9% (6%) 6% Parts & Propulsion Boat Brunswick Accessories US - GAAP 5% 11% (5%) 4% International -
Slide 37: Tax Provision
Brunswick Corporation – Earnings Release Tax Provision Q4 2020 Q4 2019 Estimated 2021 Effective Tax Rate - GAAP 19.4% (22.0%) effective book tax Effective Tax Rate - As Adjusted 1 19.0% 12.7% rate, as adjusted, is expected to be approximately 23 percent based on tax guidance issued to date FY 2020
Slide 38: Review of Foreign Currency Impact
Brunswick Corporation – Earnings Release Review of Foreign Currency Impact1 Q4 2020: 35% Minimal impact on 30% sales and earnings LA/Other LA/Other Outlook for Full-Year 25% Canada Canada 2021: % of Total Sales International Sales 20% Favorable impact on Asia Pacific consolidated sales of Asia 1
Slide 39: Tariff Update
Brunswick Corporation – Earnings Release Tariff Update Change from Q3 call Net impact to 2020 2020 estimates incorporate tariffs paid on 40 pre-tax earnings of to 60 horsepower outboard engines assembled in our Suzhou, China facility No Change $31 million vs. $19 million in 2019 Assumes Waves 1- 3
Slide 40: Other Factors Affecting GAAP Operating Earnings
Brunswick Corporation – Earnings Release Other Factors Affecting GAAP Operating Earnings (in millions) Q4 2020 Q4 2019 Restructuring, exit and impairment ($0.2) $2.8 Purchase accounting amortization 7.5 7.5 Acquisition and IT related costs 1.8 1.8 Sport yacht & yachts — 4.9 Total Operating Earnings
Slide 41: Free Cash Flow – Full Year
Brunswick Corporation – Earnings Release Free Cash Flow – Full Year (in millions) FY 2020 FY 2019 Net cash provided by operating activities from $800.0 $475.3 continuing operations Net cash provided by (used for): Capital expenditures (182.4) (232.6) Proceeds from sale of property, plant, equipment