Slide 1: Q4 and Full Year 2022 Earnings Conference Call
Q4 and Full Year 2022 Earnings Conference Call FEBRUARY 2, 2023
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 – Dave Foulkes, CEO
BRUNSWICK CORPORATION – EARNINGS RELEASE 01 Business Overview – Dave Foulkes, CEO ©2023 BRUNSW ©2023 ICKICK BRUNSW CO. CONFIDENTIAL CO. AND CONFIDENTIAL ALL AND RIGHTS ALL RESERVED. RIGHTS RESERVED. 4 4
Slide 5: Brunswick Delivers Record Performance Full Year 2022
BRUNSWICK CORPORATION – EARNINGS RELEASE …we are confident 16.5% $10.03 15.4% that we will continue to lead the marine Brunswick industry in growth and innovation… Delivers Net Sales Growth – David Foulkes, January Earnings Call Adjusted1 EPS Adjusted1 Operating Record ($6.8B Net Sales) (up 21% vs.
Slide 6: Robust Performance by Propulsion, Boats & Business Acceleration, Parts & Accessories
BRUNSWICK CORPORATION – EARNINGS RELEASE Place Robust headline Performance by Propulsion Boats & Business Acceleration Parts & Accessories All Segments here • Full-year operating margin of • Record full-year adjusted1 • Adjusted1 operating margin in 18.5% operating margin of 10.2% Q4’22 +140bps vs.
Slide 7: Q4'22 Revenue Mix & Growth Rates
BRUNSWICK CORPORATION – EARNINGS RELEASE Europe Canada Growth +15% Growth +14% Mix: 13% Mix: 7% Q4’22 Revenue Mix & 1 Growth Rates U.S. • Strong sales growth across all Asia- Growth +13% regions Pacific Mix: 68% Growth +8% • Q4’22 sales grew 12 percent on a Mix: 8% constant currency basis, excluding
Slide 8: Landscape
BRUNSWICK CORPORATION – EARNINGS RELEASE Landscape EXTERNAL FACTORS CONSUMER ACTIVITY DEALER SENTIMENT • Supply chain disruptions generally • Consumer interest and boating engagement • Dealers still appropriately stocking while improving but remain a challenge remain strong with encouraging early se
Slide 9: U.S. Main Powerboat Industry – Percentage Change in Retail Units
BRUNSWICK CORPORATION – EARNINGS RELEASE U.S. Main Powerboat Industry – Percentage Change in Retail Units Main Powerboat Outboard Engines Segment 2022 vs. (NMMA) 2022 vs. 9% • 2022 main powerboat industry retail down 15% vs. 2021 and 7% vs. 2019 -1% • 2022 outboard engine industry retail down 1% vs.
Slide 10: Historical Industry Retail
BRUNSWICK CORPORATION – EARNINGS RELEASE Historical Industry Retail New Boat Cycle Dynamics Boat Registrations in millions • 2022 US main 11.0 powerboat industry retail 10.8 250 10.5 10.5 10.3 10.4 10.2 10.3 40% estimated down ~15% 200 30% vs. 2021 214 199 20% 150 180 190 184 • Registrations steady
Slide 11: U.S. Pipeline Metrics
BRUNSWICK CORPORATION – EARNINGS RELEASE U.S Pipeline Units – End of Q4 2022 U.S. Pipeline Metrics Total Pipeline Aluminum Pipeline Fiberglass Pipeline • U.S. unit pipeline levels increasing but remain 28% 16K -28% below 2019 11K 11K -27% • U.S. Fiberglass pipeline 8K -31% 6K remains 31% below 2019
Slide 12: Financial Overview – Ryan Gwillim, CFO
BRUNSWICK CORPORATION – EARNINGS RELEASE 02 Financial Overview – Ryan Gwillim, CFO ©2023 BRUNSW ICK CO. CONFIDENTIAL AND ALL RIGHTS RESERVED. 12
Slide 13: Overview of Fourth Quarter 2022 Adjusted Results
BRUNSWICK CORPORATION – EARNINGS RELEASE Overview of Fourth Quarter 2022 Adjusted Results Net Sales ($M) Operating Earnings1 ($M) $1,431 $1,583 $202 • Delivered record +10.6% $156 +29% revenue, operating $918 $92 earnings, and EPS for any fourth quarter in Brunswick history 2019 2021 2022 2019 2021
Slide 14: Overview of Full Year 2022 Adjusted Results
BRUNSWICK CORPORATION – EARNINGS RELEASE Overview of Full Year 2022 Adjusted Results Net Sales ($M) Operating Earnings1 ($M) $1,049 $6,812 $887 $5,846 +18% +16.5% $4,108 $532 • Delivered another record year of sales, operating earnings and 2019 2021 2022 2019 2021 2022 margin, and EPS Operating Marg
Slide 15: Capital Strategy Update
BRUNSWICK CORPORATION – EARNINGS RELEASE $613M $450M Capital Strategy Cash and Marketable Share Repurchases Securities Update $109M $388M Dividends Capital Expenditures We successfully executed our capital strategy, 1.6x $192M ending the year with strong cash and liquidity Net Leverage1 Free Cash Fl
Slide 16: Propulsion Segment – Q4'22 Performance
BRUNSWICK CORPORATION – EARNINGS RELEASE Operating Margin of – Propulsion Segment – Q4’22 Performance Outstanding quarter with operating earnings up 24% and operating margins up 90 bps 16.8% Up 90 bps vs. Q4 ’21 % CHANGE VS. SALES P R O D U C T C AT E G O RY 2021 2019 ($M) Outboard Engines $544.4 21
Slide 17: Parts and Accessories Segment – Q4'22 Performance
BRUNSWICK CORPORATION – EARNINGS RELEASE Adjusted Operating Margin of 13.6% 1 Parts and Accessories Segment – Q4’22 Performance Strong operating margin growth drives higher operating earnings despite slight sales decrease (down 5% on a constant currency basis) Up 140 bps vs. Q4 ’21 (GAAP Operating M
Slide 18: Boat Segment – Q4'22 Performance
BRUNSWICK CORPORATION – EARNINGS RELEASE Adjusted Operating Margin of 10.0% 1 Boat Segment – Q4’22 Performance Another fantastic quarter with strong revenue growth and double-digit adjusted operating margins for the third consecutive quarter Up 210 bps vs. Q4 ’21 (GAAP Operating Margin of 10.8% up 3
Slide 19: 2023 Guidance
BRUNSWICK CORPORATION – EARNINGS RELEASE $6.8 to $7.2B Full Year Revenue ~15% Flat to up slightly Operating Margin Operating expenses as a % of sales 2023 Guidance $9.50 to $11.00 $375M+ Full Year EPS Free Cash Flow 2023 Guidance Flat to up slightly $2.30 to $2.40 Quarter 1 Revenue Quarter 1 EPS NOT
Slide 20: 2023 Outlook Segment Guide
BRUNSWICK CORPORATION – EARNINGS RELEASE Propulsion Parts & Boats Accessories Flat -5 Up Net Sales Growth 2023 Outlook Mid to High to Up Low to +3% Percent Segment Guide Single Single Digit Change Digit Percent Percent Operating Margin Target* +/- +/- ~10% 30 BPS 30 BPS Operating vs. 2022 vs. 2022 M
Slide 21: 2023 Outlook – P&L and Cash Flow Assumptions
BRUNSWICK CORPORATION – EARNINGS RELEASE 2023 Outlook – P&L and Cash Flow Assumptions ~$100 Million ~$190 Million ~$55 Million Working Capital Depreciation & Acquisition Usage Amortization1 Amortization ~23% ~71.5 Million Effective Book Average Diluted Tax Rate Shares Outstanding 1EXCLUDES PURCHASE
Slide 22: 2023 Outlook – Capital Strategy and Other Assumptions
BRUNSWICK CORPORATION – EARNINGS RELEASE 2023 Outlook – Capital Strategy and Other Assumptions ~$350 ~$80 ~$100 ~$35 – Million Million Million $40 Million Capital Debt Net Interest Foreign Expenditures Retirement Expense Currency Earnings Headwind $0.365 Slightly Higher ~$150 Million Per Share vs. 2
Slide 23: Wrap-Up Dave Foulkes, CEO
BRUNSWICK CORPORATION – EARNINGS RELEASE 03 Wrap-Up Dave Foulkes, CEO ©2023 BRUNSW ICK CO. CONFIDENTIAL AND ALL RIGHTS RESERVED. 23 ©2023 BRUNSW ICK CO. CONFIDENTIAL AND ALL RIGHTS RESERVED. 23
Slide 24: Brunswick brands recognized for excellence in 2022
BRUNSWICK CORPORATION – EARNINGS RELEASE Brunswick brands are redefining luxury, 95 affordability, wake sports and stress-free boating, making clear Recognized for choices as Top Products Excellence in for 2022 Total Awards Received in 2022 3rd Consecutive Year 2022 – Boating Industry Magazine Bruns
Slide 25: Brunswick booth at CES 2023
BRUNSWICK CORPORATION – EARNINGS RELEASE Brunswick (BC), the world’s largest consumer marine company behind brands like Boston Whaler, Sea Ray, and Mercury is making waves at the Consumer Electronics Show (CES) in land-locked Las Vegas this year. Yahoo Finance Brunswick Booth CES 2023 ©2023 BRUNSW I
Slide 26: Recent Product Launches
BRUNSWICK CORPORATION – EARNINGS RELEASE Place SPX 210 V13 Recent Product headline Launches here V10 HDS Live ©2023 BRUNSW ICK CO. CONFIDENTIAL AND ALL RIGHTS RESERVED. 26
Slide 27: Thank You + Q&A
THANK YOU + Q&A JOIN US FOR AN MIAMI BOAT SHOW INVESTOR EVENT FEBRUARY 16, 2023 Miami Beach Convention Center Contact Pam Eriksen for details pamela.eriksen@brunswick.com
Slide 28: Appendix
BRUNSWICK CORPORATION – EARNINGS RELEASE Appendix
Slide 29: GAAP to Non-GAAP Reconciliations – Q4
BRUNSWICK CORPORATION – EARNINGS RELEASE GAAP to Non-GAAP Reconciliations – Q4 Operating Earnings Diluted Earnings per Share (in millions, except per share data) Q4 2022 Q4 2021 Q4 2022 Q4 2021 GAAP $191.6 $121.8 $1.93 $1.31 Restructuring, exit and impairment charges 0.5 0.1 — — Purchase accounting
Slide 30: GAAP to Non-GAAP Reconciliations – Full Year
BRUNSWICK CORPORATION – EARNINGS RELEASE GAAP to Non-GAAP Reconciliations – Full Year Operating Earnings Diluted Earnings per Share (in millions, except per share data) FY 2022 FY 2021 FY 2022 FY 2021 GAAP $947.8 $812.9 $9.06 $7.59 Restructuring, exit and impairment charges 25.1 0.8 0.25 0.01 Purcha
Slide 31: Net Sales and Growth – Q4
BRUNSWICK CORPORATION – EARNINGS RELEASE Net Sales and Growth – Q4 Net Sales increased by $151.7 million, or 11 percent Segments Q4 2022 Q4 2021 % Change Propulsion $669.5 $570.5 17% NET Parts & Accessories 466.6 505.6 -8% SALES Boat 547.5 433.0 26% Segment Eliminations (100.9) (78.1) (in millions)
Slide 32: Net Sales and Growth – Full Year
BRUNSWICK CORPORATION – EARNINGS RELEASE Net Sales and Growth – Full Year Net Sales increased by $966.0 million, or 17 percent Segments FY 2022 FY 2021 % Change NET Propulsion Parts & Accessories $2,824.0 2,323.7 $2,504.7 2,008.1 13% 16% SALES Boat 2,119.4 1,703.1 24% (in millions) Segment Eliminati
Slide 33: Sales Growth Drivers
BRUNSWICK CORPORATION – EARNINGS RELEASE Sales Growth Drivers Acquisitions % Change - GAAP Currency Impact Impact Q4 2022 Propulsion 17% (3%) - Parts & Accessories (8%) (3%) - VS. Q4 Boat 26% (2%) 3% 2021 Brunswick 11% (2%) 1% Acquisitions % Change - GAAP Currency Impact Impact Propulsion 13% (2%) -
Slide 34: Tax Rate
BRUNSWICK CORPORATION – EARNINGS RELEASE Tax Rate Q4 ’22 Effective Tax Rate at ~14% Q4 2022 Q4 2021 Quarter 4 Effective Tax Rate - GAAP 1 14.4% (0.4%) Effective Tax Rate - As Adjusted 17.0% 17.3% FY 2022 FY 2021 Full Year Effective Tax Rate - GAAP 1 20.2% 19.1% Effective Tax Rate - As Adjusted 21.0%
Slide 35: Free Cash Flow
BRUNSWICK CORPORATION – EARNINGS RELEASE Free Cash Flow (in millions) FY 2022 FY 2021 Net cash provided by operating activities from $580.4 $586.2 continuing operations Net cash (used for) provided by: Capital expenditures (388.3) (267.1) Proceeds from sale of property, plant, equipment 11.3 7.2 Eff