Polaris Inc. · NYSE:PII
Polaris — Polaris Industries — Raymond James Conference 2013
32 slides from Polaris's conference presentation, Mar 5, 2013
Slide 1: Polaris Industries Inc. – Raymond James Conference
Scott Wine, Chairman & CEO Raymond James ConferenceMarch 5, 2013 POLARIS INDUSTRIES INC.
Slide 2: Polaris at a Glance
Polaris at a Glance Key Facts Manufacturer of high-performance motorized products Strong distribution channel 1,650 dealers in North America 1,100 dealers Internationally Productive loyal workforce ~4,900 strong Stakeholder focus Product innovation for customers Profit sharing for employees Dividend
Slide 3: FY 2012 Sales and Net Income
FY 2012 Sales and Net Income Record Sales, Net Income & EPS Revenue increases across all product lines EPS of $4.40 up 38% over 2011North American retail sales up 14% on continued strong market share gainsStrong Balance Sheet & increasing cash flow: well-positioned for 2013Total Shareholder return +
Slide 4: FY 2012 Sales and Net Income
FY 2012 Sales and Net Income Record Sales, Net Income & EPS Revenue increases across all product lines EPS of $4.40 up 38% over 2011North American retail sales up 14% on continued strong market share gainsStrong Balance Sheet & increasing cash flow: well-positioned for 2013Total Shareholder return +
Slide 5: Off-Road Vehicles: #1 and Momentum Continues
5 IR Mar2013 Best in Powersports Plus #1 in ORV - Expanding share in SxS and ATVs ATVs #1 in market share in North AmericaRetail up high single digits % for FY 2012SxS retail up over 20% in FY 2012New RZR XP900 Jagged X sold out in 24 hours New MY’13 products selling brisklyRANGER 900 XP, RANGER 800
Slide 6: Innovation + Performance = Growth
Best in Powersports Plus 6 IR Mar2013 Innovation + Performance = Growth POSITIONING + CUSTOMER SOLUTIONS (Gp:) SUSPENSION Chassis Optimization Application Based Wheelbase (Gp:) AGILITY Optimized Mass PlacementPrecision ResponseManeuverability (Gp:) POWER Class Leading Power to Weight Ratio MARKET /
Slide 7: Investing to Maintain our Leadership Position
7 IR Mar2013 Best in Powersports Plus N.A. ORV Market Share ORV Engineering Headcount ORV Engineering Investment Investing to Maintain our Leadership Position +26% Off-Road Vehicles +9% +10% (in millions)
Slide 8: Victory Continues to Outperform the Industry
Best in Powersports Plus Polaris Total On-Road Sales (in millions) Global Motorcycle Sales Opportunity Full Year 2012 Victory Continues to Outperform the Industry Victory N.A. retail grew 10 times industry rate for 2012Victory gained share again in 2012, clear #2 in heavyweight segmentGained share i
Slide 9: Indian Motorcycle Launch
9 Indian Motorcycle Launch 9 IR Mar2013 Indian Motorcycles – 1st American Motorcycle Brand – est. 1901
Slide 10: Indian Motorcycle Commercial
Indian Motorcycle Commercial 10 IR Mar2013
Slide 11: Snowmobiles: New MY'14 Indy Models
Best in Powersports Plus 7 New MY’14 Indy Models - reaching new customers in new product segments New MY’14 600 Switchback Assault Polaris Total Snowmobile Sales (in millions) Proven 600 Cleanfire™ Engine Polaris Brand Momentum Continues 550 Indy 550 Indy 144” 800 Indy SP 550 Indy LXT 550 Adventure
Slide 12: KLIM Strategic Opportunity / PG&A
Best in Powersports Plus KLIM Strategic Opportunity Polaris Sales ($ in millions) KLIM Product Lines Polaris PG&A High Margin Growth Business Sales up 13% for FY 2012All categories and regions increased sales for 2012Launched 250+ new MY ‘13 accessory products; 900XP cab system has been very success
Slide 13: Leveraging Strong Brands to Fuel Growth
Leveraging Strong Brands to Fuel Growth 13 Adjacency Growth: Focus on Brand Expansion IR Mar2013 (Gp:) Off-Road&TATV Best in Powersports PLUS Global Market Leadership Growth through Adjacencies Strong Financial Performance Operations: A Competitive Advantage (Gp:) Private Limited
Slide 14: Growth Through Adjacencies: Polaris Defense
14 IR Mar2013 Growth Through Adjacencies Family of Light Tactical Vehicles Polaris Defense Sales A Leader in Light Tactical Vehicles Unmanned Vehicles Light-weight Armor Non-pneumatic Tires MV850 MRZR2 MRZR4 Coming Soon (Gp:) Polaris Defense
Slide 15: Growth Through Adjacencies: Goupil
15 IR Mar2013 Growth Through Adjacencies Goupil Small Vehicle Business Gaining Foothold Added over 150 dealers in 2012Expect 2013 revenue to grow double digits, again Lean will improve cost, quality and lead time2013 focus on growing B2B customers 2012 revenue up double digits percent (proforma) Cor
Slide 16: Global Market Leadership
(Gp:) EMEA+5% (Gp:) LATIN AMERICA+9% (Gp:) ASIA PACIFIC+27% (Gp:) EMEAHEADQUARTERS (Gp:) POLARIS INTERNATIONAL SUBSIDIARIES (Gp:) Global Market Leadership Polaris Sales (in millions) New European Manufacturing Gaining Share in Challenging Economic Environment Up slightly +39%$424.3 Guidance India Jo
Slide 17: Operational Excellence
Operational Excellence Gross margins increased 90 bps in 2012Higher volume, product cost reductions, pricingManufacturing realignment savings Productivity continued to improve; +6% in 201276% improvement in motorcycle delivery time thru RFMWarranty as % of sales lowest in 5 yearsInvesting incrementa
Slide 18: Profitable Growth
Profitable Growth 18 IR Mar2013 Relentless Focus on Sustainable, Profitable Growth PII Year-end Stock Price Revenue Net Margin % $14.33 $21.82 $39.01 $55.98 $84.15
Slide 19: Full Year 2013 Guidance
Full Year 2013 Guidance Expect U.S. GDP growth to remain muted, Europe negative; BIC better, but mixedOpportunities for global growth & investment are highNorth American Retail Sales growth and market share gains expected to continuePG&A growth accelerating faster than overall companyInternational S
Slide 20: Thank you / Q&A
20 Thank youQ & A IR Mar2013
Slide 21: Appendices
Appendices 2012 SummaryN.A. Retail Sales – 2012 N.A. Dealer Inventory Trends – 20122012 Full Year Guidance Detail2012 Full Year Gross Margin GuidanceBalance Sheet and Liquidity Profile Product InnovationPolaris / Eicher Joint VentureR&D Facility ExpansionCredit ArrangementsSafe Harbor Statement 21 I
Slide 22: Consistently Outstanding Results: 2012 Summary
Consistently Outstanding Results 2012 Summary 22 IR Mar2013 Metric Sales Gross Profit Operating Income Net Income EPS Operating Cash Flow Shareholder Return $3,210 28.8 $478.4 $312.3 $4.40 $416.1 9.7 14.9 53 +21 +90 bps +37 +170 +110 +38 +7
Slide 23: N.A. Retail Sales – 2012
N.A. Retail Sales – 2012 23 IR Mar2013 Polaris N.A. Retail Sales Remain Strong; Industry Healthier N.A. Powersports Market Share (units) N.A. Retail Sales by Quarter (Gp:) Best in Powersports Plus Polaris Q4 N.A. retail sales up 13%; Full Year up 14%, demand remains strongContinue to gain market sha
Slide 24: N.A. Dealer Inventory Trends – 2012
N.A. Dealer Inventory Trends – 2012 24 IR Mar2013 Dealer Inventory Remains in Excellent Shape N.A. Sales vs. Dealer Inventory Dealer Inventory (Gp:) Best in Powersports Plus LEAN initiatives improving delivery and inventory qualityNew Retail Flow Management (RFM) “pull” order process progressing wel
Slide 25: 2013 Full Year Guidance Detail
Continued Strong Financial Performance 2013 Full Year Guidance Change vs 2012 Increased Decreased Flat 25 IR Mar2013
Slide 26: 2013 Full Year Gross Margin Guidance
2013 Full Year Gross Margin Guidance (Gp:) Improvement to gross profit margin % (Gp:) Impairment to gross profit margin % (Gp:) Neutral to gross profit margin % 26 IR Mar2013
Slide 27: Balance Sheet and Liquidity Profile
Financial Position Remains Healthy Balance Sheet and Liquidity Profile 27 IR Mar 2013
Slide 28: Product Innovation
Product Innovation 28 IR Mar2013 Research & Development Innovation Vitality Index Off-Road Vehicles7 New MY’13 (36 Models) Product Innovation Remains a Competitive Advantage Scrambler 850 XP RANGER XP 900 RZR 570 LE Snowmobiles10 New MY’13 (27 Models) 800 Pro-RMK MY’13 Boardwalk INDIAN Chief Vintage
Slide 29: Polaris / Eicher Joint Venture
Polaris / Eicher Joint Venture 29 IR Mar2013 Aligns With Polaris Key Strategic Objectives Proven product development capabilitiesWorld class quality and reliability LEAN manufacturing know-howProven distribution expertise (Gp:) Growth Through AdjacenciesGlobal Market Leadership Signed July 24, 2012$
Slide 30: R&D Facility Expansion
30 IR Mar2013 R&D Facility Expansion Expanding Capacity and R&D Capabilities Wyoming, MN 2012 R&D investments up 21%; new product vitality index over 78%Announced 144,000 sq. ft. R&D expansion in Wyoming, MNAnticipated completion Q3 2013Additional manufacturing expansions to meet capacity demandsLea
Slide 31: Credit Arrangements
Unsecured Credit Agreement Expires 2018Unsecured Senior Notes(due 2021); Capital Leases Credit Arrangements 31 Polaris Credit Facility ($ in Millions) Ample Credit Capacity for Future Growth Retail Credit($ in Millions) Wholesale Credit($ in Millions) Ample Credit Capacity10 banks in Credit Facility
Slide 32: 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 2013 sales, shipments, margins, net income, cash flow, and manufacturing realignment project transition costs and savings, are forw