Polaris Inc. · NYSE:PII
Polaris — Polaris Industries — Investor Presentation (May 2009)
23 slides from Polaris's investor presentation, May 5, 2009
Slide 1: Polaris Industries Inc. Investor Presentation May 2009
Polaris Industries Inc. Investor Presentation May 2009
Slide 2: Strong Business Foundation
Strong Business Foundation Percentage of Sales by Product line 2008 $1.95 Billion Off-Road Vehicles (ORV) 67% Victory 5% Snowmobile 10% PG&A 18% Snowmobiles ORVs PG&A Victory 10 67 18 5 ATVs Side-by-Sides
Slide 3: Consistent Financial Performance
Consistent Financial Performance Net Income Per Share from Continuing Operations Sales from Continuing Operations +9% * A reconciliation of the Company's calculation of cash flow provided to the most directly comparable cash flow measure, as required by Regulation G, appears in the appendix of this
Slide 4: Industry-Leading Returns
Industry-Leading Returns 2004 2005 2006 2007 2008 0.18 0.18 0.15 0.14 0.15 Peers 0.1251118 0.1197862 0.1078636 0.098095 0.0437014 S&P 0.065443378 0.070686342 0.07608951 0.074584368 0.070991254 2004 2005 2006 2007 2008 0.38 0.37 0.41 0.66 0.76 Peers 0.2412936 0.2473326 0.2295802 0.2180638 0.0026454 S
Slide 5: Ready for 2009
Ready for 2009 Aligned Strategy & Structure Off-Road Vehicle Division International Team Adjacencies Attacked Costs Workforce reductions announced 460 Operating Expense reductions > $10M Manufacturing/Production costs reduced with volume Accelerated Operational Excellence Speed / Factory Adjustments
Slide 6: North American Retail Sales
North American Retail Sales ATVs, Side-by-sides, Motorcycle and Snowmobiles, combined North American retail sales deteriorated throughout Q4 2008 into Q1 2009 International also declined in Q4 2008 and Q1 2009 Polaris gained market share in all businesses in 2008 for 2nd year straight % change from
Slide 7: Dealer Health
Dealer Health North American Dealer Inventory Levels Receivable Balance - U.S. Dealers ($ in millions) North American Dealer Count Down 7% from Q1 2008 Down 8% from Q4 2008 Expected to decline further throughout 2009 MVP progressing well Down 2% from Q1 2008 Down 8% from Q4 2008 Losses remain well l
Slide 8: 2009 Full Year Guidance
2009 Full Year Guidance Total Company Sales Down 15% to 23% Off Road Vehicles (ORV) Down 17% to 25% Snowmobiles Down 10% to 20% Victory Motorcycles Down 25% to 40% PG&A Down 9% to 13% Gross Margins Up to 130 bpts improvement Operating expenses Reduction > $10 million - up as a percent of sales EPS -
Slide 9: Balance Sheet and Liquidity Profile - Remains Healthy
Balance Sheet and Liquidity Profile - Remains Healthy $ In millions (except per share data) Q1 2009 +/- Q1 2008 Full Year / Year End 2009 Guidance Cash and cash equivalents $17.9 $0.3 Increase over 2008 Factory Inventory $245.6 -$33.7 Lower than 2008 Net Debt - ending (debt less cash balances) $226.
Slide 10: First Quarter 2009 Results
2008 2009 Sales 0.55 0.26 0 First Quarter 2009 Results Results in line with Company expectations Balance sheet remains strong Q1 EPS includes $0.18 per share impairment charge - KTM Investment 2008 2009 Sales 388.7 312 0 Diluted EPS $0.55 $0.26 - -53% $388.7 $312.0 - -20% Total Company Sales ($ in m
Slide 11: Gross Profit Margin Percentage Trends
Gross Profit Margin Percentage Trends Flexible variable cost structure and timely execution drives gross margin expansion
Slide 12: Research & Development / New Product Tooling
Research & Development / New Product Tooling Engineering and new product development is competitive advantage Objective: Best products and quality at the lowest cost Value engineering is key 4.6% 5.0% 5.4% 5.7% 5.5% RANGER RZR Sportsman XP RANGER HD Victory Vision RUSH Recent New Product Introductio
Slide 13: Second Quarter 2009 Guidance
Second Quarter 2009 Guidance Weak Industry retail sales expected to continue in Q2 2009 Cuts made for end of model year 2009 production for ORV and Victory Commodity cost and expense reduction will help offset weak demand Total Company Sales (in millions) Diluted EPS 2008 2009 Sales 455.7 300 50 $45
Slide 14: Off-Road Vehicle Division
Off-Road Vehicle Division $264.5M - -19% $215.5M Full Year 2009 Sales Guidance: -17% to - 25% (unchanged) New Sportsman XP & Ranger Gained ORV share in Q1 2009 ORV Industry retail declined in Q1 - - ATVs down 30 percent range Side-by-sides down low double digits (estimate) International ORV sales do
Slide 15: Snowmobile Division
Snowmobile Division $9.4M - -13% $8.2M Polaris Revenue ($000's) - -12% N.A. Snowmobile Industry Sales Full Year 2009 Sales Guidance: -10% to - 20% (unchanged) #2 in N.A. market share for season ending March 31, 2009 New RUSH(tm) model well received - - Industry's only progressive rate rear suspensio
Slide 16: Victory Division
Victory Division $27.3M Polaris Revenue ($000's) N.A. Motorcycle Industry 1400cc+ - -49% $13.8M Full Year 2009 Sales Guidance: -25% to -40% (unchanged) Expect N.A. Industry >1400cc to be down 15% to 25% for Calendar 2009 Dealer inventory down 24% at Q1 2009 Aggressive supply reduction Industry leade
Slide 17: PG&A Division
PG&A Division $87.4M - -15% $74.5M Polaris Revenue ($000's) Full Year 2009 Sales Guidance: -9% to -13% (unchanged) Revenue impacted by wholegoods decline Highest gross margin business - expect gross margin percentage expansion in 2009 Expect to outperform wholegood sales in '09 Q1 2009 PG&A Revenue
Slide 18: International Division
Europe ME/Africa Latin America Asia Aus/NZ East 41 4 3.1 0.5 5 International Division ORV Victory Snow PGA East 33.1 2.4 6.5 11.4 Polaris Revenue ($000's) Q1 2009 Revenue by Geography Q1 2009 Revenue by Business Unit Full Year 2009 Sales Guidance: -10% to -20% (unchanged) ORV gaining share in EMEA E
Slide 19: Adjacencies
Adjacencies Military Solid first quarter New customer penetration continues New customer quote activity and order backlog up significantly Global expansion / after sale support Bobcat Strategic Alliance #1 ORV manufacturer / #1 Compact construction manufacturer Technology sharing Co-development and
Slide 20: Financial Services Income
Financial Services Income FY 2009 Guidance: down about 50% of 2008 (unchanged) Q1 2009 Wholesale credit income similar to Q1 2008 Retail credit income down significantly again in Q1 2009 - as expected Sheffield quickly adding volume since February 2009 Q1 2008 Q1 2009 Retail Financing 3.3 0.3 Wholes
Slide 21: Operational Excellence
Operational Excellence Full Year 2009 gross margin guidance = increase up to 130 bpts - unchanged Commodity cost significantly lower in 2009 Factory Inventory improving (down 12%) Lean expansion continues Cost reduction/avoidance initiatives in place and gaining traction Q1 2008 Q1 2009 East 22.7 24
Slide 22: Polaris 5-Year Strategic Objectives
Polaris 5-Year Strategic Objectives Best in Powersports PLUS 5-8% organic growth Growth through Adjacencies $100 - 300M growth Global Market Leadership >25% of Polaris Revenue Operations is a Competitive Advantage Op Ex drives >200bpts Operating Margin improvement Strong Financial Performance Sustai
Slide 23: Appendix
Appendix Our presentation and responses to your questions may contain certain statements which may be considered forward looking for the purposes of the Private Securities Litigation Reform Act of 1995. We caution you that actual results could differ materially from those projected in a forward look
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