Polaris Inc. · NYSE:PII
Polaris — Polaris Industries — Q4 2013 Earnings Presentation
26 slides from Polaris's earnings presentation, Jan 28, 2014
Slide 1: Fourth Quarter & Full Year 2013 Earnings Results
Fourth Quarter & Full Year 2013 Earnings Results January 28, 2014 POLARIS INDUSTRIES INC.
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 from continuing operations and cash flow, the trend toward producing more of the Company
Slide 3: Scott W. Wine, Chairman & CEO
Scott W. Wine Chairman & CEO Fourth Quarter & Full Year 2013 Earnings Results January 28, 2014POLARIS INDUSTRIES INC.
Slide 4: Q4 2013 Sales and Net Income: Record Fourth Quarter
$88.1 $108.7 Q4 2012 Q4 2013 Q4 2013 Sales and Net Income (from continuing operations) Record 4th quarter sales and net income ORV Sales up 16%; Motorcycles up 94%; PG&A up 33%; International up 46% N.A. Retail sales increased 9%; ORV up mid-single digits, Motorcycles up significantly; Snow up lowdo
Slide 5: 2013 Financial Metrics
2013 Financial Metrics METRIC 2013 Actual (millions) Variance to 2012 Sales $3,777 +18% Gross Profit % 29.7% +90 bps Operating Income $578 +21% Operating Income % 15.3% +40 bps Net Income* $381 +22% Net Income* % 10.1% +40 bps EPS* $5.40 +23% Operating Cash Flow* $499 +20% Shareholder Return 75% +22
Slide 6: 4th Straight Year of Exceptional Financial Performance
$1,566 $1,991 $2,657 $3,210 $101 $147 $228 $312 $381 2009 2010 2011 2012 2013 Revenue Net Income* Stock Price 4th Straight Year of Exceptional Financial Performance Five-Year Progress 12/31/2008 12/31/2013 __ 5-Year CAGR Sales = 14% Net Income* = 27% Stock Price = 59% * from continuing operations Q4
Slide 7: Polaris Strategic Objectives
Polaris Strategic Objectives Vision & Strategy Strategic Objectives VISION STRATEGY Fuel the passion of riders, workers and outdoor enthusiasts around the world by delivering innovative, high quality vehicles, products, services and experiences that enrich their lives. Polaris will be a highly profi
Slide 8: Bennett Morgan, President & COO
Bennett Morgan President & COO Fourth Quarter & Full Year 2013 Earnings Results January 28, 2014 POLARIS INDUSTRIES INC.
Slide 9: N.A. Retail Sales & Dealer Inventory – FY 2013
N.A. Retail Sales & Dealer Inventory – FY 2013 Dealer Inventory Remains Appropriate N.A. Dealer Inventory N.A. Powersports Market Share & Retail Sales Best in Powersports Plus Polaris N.A. retail up 10% for FY 2013 vs. 2012 Gained share in ORV and motorcycles, season-to-date snowmobile market share
Slide 10: Off-Road Vehicles: Breadth of Products & Innovation
Consolidated Market Share in Units Using Total Motorcycle Industry Retail Sales Market Share SxS SxS SxS ATV ATV ATV Q4 2013 FY 2013 FY 2014 Guidance Best in Powersports Plus Breadth of Products & Innovation Key to Leadership Position 2013 N.A. ORV Retail Sales Polaris N.A. ORV Sales ($ millions) Up
Slide 11: Introducing a Whole New Off-Road Experience
Introducing a Whole New Off-Road Experience Continuing to Innovate How People Experience the Off-Road $7,499 US RIDE 32 HP Pro-Star DOHC engine 48” Width - Trail Capable On-Demand All-Wheel Drive 10.25” Ground Clearance Independent suspension Front Struts w/ 8.2” Travel Rear Dual A-Arms w/ 9.5” Trav
Slide 12: Growth Through Adjacencies
TARGET CUSTOMER Trail Rider / Recreational Hunter / Fisherman Light Work Growth Through Adjacencies. Established Momentum into 2014. Revenue up over 120% for FY 2013 Brutus Q4 retail sales improved sequentially Dedicated Commercial field sales force in 2014 Established partnership with Ariens Growin
Slide 13: Snowmobiles and Ultra Light Tactical Vehicles
Polaris Line of Ultra Light Tactical Vehicles Commercial / Defense Polaris Industry Best in Powersports Plus Q4 2013 FY 2013 FY 2014 Guidance 2014 Marks 60 Years in the Snowmobile Business 2013 N.A. Snowmobile Industry STD Polaris N.A. Snowmobile Sales ($ millions) Industry retail up strong – early
Slide 14: Victory/Indian Motorcycles
Best in Powersports Plus Q4 2013 FY 2013 FY 2014 Guidance Victory/Indian: A 1-2 Punch in Heavy Weight Cruiser & Touring Category 2013 N.A. Motorcycle Industry 1400cc+ Polaris Motorcycle Sales ($ millions) Polaris Q4 retail sales up over 100%; FY 2013 up mid-20% Indian Motorcycle retail off to a stro
Slide 15: Indian Motorcycle Update
Indian Motorcycle Update Production Distribution Award Winning Bikes, Quality Dealers, Expanding Capacity Spirit Lake Production Capacity Expanding Distribution: ~210 global locations in 2013 Signed ~140 in N.A. and ~70 outside N.A. Q4-FY13 15 Motorcycle of the Year Indian Chieftain December 2013 Ge
Slide 16: PG&A Growth Accelerating
Best in Powersports Plus PG&A Growth Accelerating Polaris PG&A Sales ($ millions) Record Q4 sales; up 33% ORV sales up 19% Motorcycles up 35% - includes Klim in 2013 Snow up 68% - includes Klim in 2013 All categories increased sales >15% vs. Q4 2012 Klim Center-of-Excellence in place New Wilmington
Slide 17: Small Vehicle Business Well-positioned for Growth
Aixam Mega integration progressing Leveraging Polaris global supply base Retail sales accelerating; gained share in 2013 Goupil increased sales in Q4, FY 2013 up >20% GEM Q4 sales down due to timing of shipments Retail sales up >50% for CY13 Building traction in B2B and B2C New GEM eM 1400 initial s
Slide 18: Global Market Leadership: International Sales
Global Market Leadership Polaris International Sales ($ millions) Gaining Share in Challenging Economic Environment Q4 2013 FY 2013 FY 2014 Guidance Up about 10% +29% $592.5 +46% $203.2 Sales up in all regions in Q4 EMEA sales increase driven by market share gains in ORV; Aixam acquisition PG&A up 2
Slide 19: Operational Excellence: Polaris LEAN Enterprise
Operational Excellence Polaris LEAN Enterprise Principals Gross Margins Ramping up LEAN Activities in 2014 Net income margin* solid 10.1% LEAN initiatives driving productivity gains; +6% in 2013 Factory inventory up 21% vs. 2012 due to product mix and acquisitions Use “Pull” systems to stay linked t
Slide 20: Mike Malone, V.P. Finance & CFO
Mike Malone V.P Finance & CFO Fourth Quarter & Full Year 2013 Earnings Results January 28, 2014 POLARIS INDUSTRIES INC.
Slide 21: 2014 Full Year Guidance
Another Year of Double-digit Sales and Earnings Growth Expected 2014 Full Year Guidance METRIC GUIDANCE Product Line Sales Off-Road Vehicles Up high single digits % Snowmobiles Up mid-single digits % Motorcycles Up 65% to 75% Small Vehicles Up 25% to 30% PG&A Up mid-teens % International Up about 10
Slide 22: 2014 Gross Margin Guidance
2014 Gross Margin Guidance METRIC Actual Q4 2013 Actual FY 2013 2014 Full Year Guidance Prior Period 28.2% 28.8% 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 amortiz
Slide 23: Balance Sheet & Liquidity Profile Remains Healthy
Balance Sheet & Liquidity Profile Remains Healthy Balance Sheet and Liquidity Profile $ In millions (except per share and rate data) FY 2013 Fav / (UnFav) 2012 2014 Full Year Guidance Cash $92.2 ($324.8) Increase Debt $287.6 ($180.4) Decreased Credit Facility $350.0 Flat Unchanged Factory Inventory
Slide 24: Scott W. Wine, Chairman & CEO
Scott W. Wine Chairman & CEO Fourth Quarter & Full Year 2013 Earnings Results January 28, 2014 POLARIS INDUSTRIES INC.
Slide 25: Summary – 2014 Business Outlook
Execution Key to Delivering 5th Straight Year of Record Performance Summary – 2014 Business Outlook Tenuous improvement in U.S., global economies Risks outweigh opportunities Powersports Industry growing; competition intensifying Resilient, dedicated customers Innovation and execution drive ORV, PG&
Slide 26: Thank you, Questions?
Polaris Thank you Questions?