Brunswick Corporation · NYSE:BC
Brunswick — Q1 2021 Earnings Presentation
32 slides from Brunswick's earnings presentation, Apr 29, 2021
Slide 1: Earnings Conference Call Q1 2021
Earnings Conference Call Q1 2021 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: Q1 2021 in Review
Brunswick Corporation – Q1 2021 in Review Outstanding Performance across the Company Historically strong Growth across all U.S. marine retail unit Increasing 2021 financial results: businesses: demand surge guidance: • continues: • Adjusted1 EPS of Significant Mercury • U.S. retail market up $2.24 (
Slide 6: Brunswick Is Outperforming in Attracting Younger and Women Boaters
Brunswick Corporation – Earnings Release Brunswick Leads the Industry with Younger Boaters and Women Boaters BRUNSWICK IS OUTPERFORMING the industry in attracting younger and more female boaters FTBBs ALL BOAT BUYERS FREEDOM MEMBERS First-time boat buyers (FTBB) of The average age of the Brunswick b
Slide 7: Q1 2021 Awards and Milestones
Brunswick Corporation – Earnings Release Q1 2021 Awards and Milestones RECENT ESG B O AT S H O W AW A R D S I N I T I AT I V E S U P D AT E S |7 ©2021 Brunswick Co. Confidential and all rights reserved. This data is internal to Brunswick.
Slide 8: Propulsion Segment – Q1 2021 Overview
Brunswick Corporation – Earnings Release Propulsion Segment – Q1 2021 Overview Sales up 46.6%, operating margins of 18.9%, up 520bps • U.S. and international retail market share gains continue in the first quarter: Strong share gains in each horsepower category over 50hp Significant share gains
Slide 9: Parts & Accessories Segment – Q1 2021 Overview
Brunswick Corporation – Earnings Release Parts & Accessories Segment – Q1 2021 Overview 1 Sales up 52.4%, adjusted operating margins of 21.3%, up 350bps • Strong sales growth across all aftermarket P&A businesses due to increased boat usage and service needs • Dealers still reporting extended servic
Slide 10: Boat Segment – Q1 2021 Overview
Brunswick Corporation – Earnings Release Boat Segment – Q1 2021 Overview 1 Sales up 43.9%, adjusted operating margins of 10.9%, up 880bps • First quarter with double-digit operating margins since 2000 – 31 percent adjusted operating leverage • FY 2021 production plan remains on schedule -- targeting
Slide 11: Positive 2021 Outlook Despite Certain Operating Challenges
Brunswick Corporation – Earnings Release Positive 2021 Outlook Despite Certain Operating Challenges • Supply chain disturbances Propulsion & P&A – semiconductors, resin, steel Boat Group – foam (floatation and upholstery), fiberglass, resin • Tight labor conditions in several manufacturing locat
Slide 12: Q1 Sales Growth Rates and Mix By Region
Brunswick Corporation – Earnings Release Q1 Sales Growth Rates and Mix By Region1 International sales up 42 percent on a constant currency Q1 2021 BC FY basis REGION SALES 2020 MIX GROWTH United States 47% 69% All segments Europe 33% 12% experienced significant Asia-Pacific 31% 9% international
Slide 13: U.S. Powerboat Industry – Percentage Change in Retail Units
Brunswick Corporation – Earnings Release U.S. Powerboat Industry – Percentage Change in Retail Units Industry sold 211K units in the main CATEGORY Q1- Q1- FY FY powerboat segment 2021 2020 2020 2019 in 2020 Outboard Boats 33% (1)% 14% (3)% Brunswick brands’ Fiberglass SD/IB Boats 25% (20)% 8% (1
Slide 14: Financial Overview
FINANCIAL OVERVIEW Ryan Gwillim - CFO | 14 ©2021 Brunswick Co. Confidential and all rights reserved. This data is internal to Brunswick.
Slide 15: Overview of First Quarter 2021
Brunswick Corporation – Earnings Release Overview of First Quarter 2021 Consolidated results on an as adjusted basis1: Diluted EPS of $2.24, Net sales of $1.43B, up Operating margin of up 133.3% 48.4% 17.0%, up 530bps Operating earnings of Operating leverage of Free cash flow of $243.0M, up 116.0% 2
Slide 16: Propulsion Segment – Q1 Performance
Brunswick Corporation – Earnings Release Propulsion Segment – Q1 Performance PRODUCT CATEGORY SALES ($M) % CHANGE Outboard Engines $504.5 43% Sterndrive Engines $58.4 57% Controls, Rigging and Propellers $94.9 65% Total $657.8 47% OPERATING MARGIN OPERATING EARNINGS • Operating Margin of 18.9%, • Op
Slide 17: Parts & Accessories Segment – Q1 Performance
Brunswick Corporation – Earnings Release Parts & Accessories Segment – Q1 Performance1 PRODUCT CATEGORY SALES ($M) % CHANGE Engine Parts and Accessories $124.2 61% Distribution $200.6 65% Advanced Systems Group $134.8 31% Total $459.6 52% OPERATING MARGIN OPERATING EARNINGS • Adjusted Margin of 21.3
Slide 18: Boat Segment – Q1 Performance
Brunswick Corporation – Earnings Release Boat Segment – Q1 Performance1 PRODUCT CATEGORY SALES ($M) % CHANGE Aluminum Freshwater $177.8 48% Recreational Fiberglass $135.4 33% Saltwater Fishing $96.8 62% Business Acceleration $12.7 27% Total $419.52 44% OPERATING MARGIN OPERATING EARNINGS • Adjusted
Slide 19: Pipeline Metrics
Brunswick Corporation – Earnings Release Pipeline Metrics Production increases during ENDING CHANGE UNITS IN CHANGE Q1 resulted in YEAR WEEKS ON VERSUS PRIOR PIPELINE VERSUS PRIOR HAND YEAR (WOH) (THOUSANDS) YEAR (UNITS) ~9,400 units sold at wholesale 21 18.7 -20.1 weeks 14.5 (41)% Up 27% vs Q1’
Slide 20: Updated 2021 Assumptions and Guidance
Updated 2021 Assumptions and Guidance* U.S. marine industry retail unit demand up mid-to-high single digit percent from 2020 levels Revenue between $5.4B and $5.6B Operating margin growth between 130 and 170 bps Operating expenses as a % of sales lower than 2020 EPS between $7.30 - $7.60 5 FCF i
Slide 21: 2021 Outlook – P&L and Cash Flow Assumptions
Brunswick Corporation – Earnings Release 2021 Outlook – P&L and Cash Flow Assumptions CHANGE FROM PRIOR 2021 ESTIMATES CONFERENCE CALL ESTIMATE Working capital increase ~$80 - $100 million Lower Depreciation and ~$130 - $140 million Slightly Higher amortization1 Acquisition intangible ~$30 million U
Slide 22: 2021 Outlook – Capital Strategy and Other Assumptions
Brunswick Corporation – Earnings Release 2021 Outlook – Capital Strategy and Other Assumptions CHANGE FROM 2021 PRIOR CONFERENCE ESTIMATES CALL ESTIMATE Debt retirement ~$100 million Unchanged Capital expenditures ~$250 - $270 million Higher Share repurchases ~$80 - $120 million Unchanged Quarterly
Slide 23: Outlook
OUTLOOK Dave Foulkes – CEO | 23 ©2021 Brunswick Co. Confidential and all rights reserved. This data is internal to Brunswick.
Slide 24: Operating and Strategic Priorities
Brunswick Corporation – Earnings Release Operating and Strategic Priorities BOATS & PARTS & PROPULSION BUSINESS ENTERPRISE ACCESSORIES ACCELERATION • Continue global share • Optimize global operating • Focus on operational • Accelerate Brunswick-wide growth, especially in model and distribution exce
Slide 25: This data is internal to Brunswick.
©2020 Brunswick Co. Confidential and all rights reserved. This data is internal to Brunswick.
Slide 26: Appendix
Appendix | 26 This data is internal to Brunswick.
Slide 27: 2021 Outlook – Segment Guidance
Brunswick Corporation – Earnings Release 2021 Outlook – Segment Guidance ORIGINAL UPDATED GUIDANCE GUIDANCE High-single to low- Propulsion 28% - 32% double digit Parts & Accessories Mid-single digit 18% - 20% Boat 30+ percent Unchanged Propulsion Up 20+ bps Up 120+ bps Parts & Accessories Flat to up
Slide 28: GAAP to Non-GAAP Reconciliations
Brunswick Corporation – Earnings Release GAAP to Non-GAAP Reconciliations Operating Earnings Diluted Earnings per Share (in millions, except per share data) Q1 2021 Q1 2020 Q1 2021 Q1 2020 GAAP $231.9 $103.2 $2.15 $0.88 Restructuring, exit and impairment charges 0.5 0.4 0.00 0.00 Purchase accounting
Slide 29: Q1 Net Sales increased by $467.7 million, or 48.4 percent
Brunswick Corporation – Earnings Release Q1 Net Sales increased by $467.7 million, or 48.4 percent Segments Q1 2021 Q1 2020 % Change Propulsion $657.8 $448.6 46.6% Parts & Accessories 459.6 301.6 52.4% Boat 419.5 291.5 43.9% Segment Eliminations (103.7) (76.2) Total $1,433.2 $965.5 48.4% Q1 2021 Con
Slide 30: Q1 2021 vs. Q1 2020 Net Sales Reconciliation
Brunswick Corporation – Earnings Release Q1 2021 vs. Q1 2020 Parts & Propulsion Accessories Boat Brunswick Organic 44% 49% 42% 46% Acquisitions - - 0% 0% Currency 3% 3% 2% 2% 2021 Net Sales - GAAP 47% 52% 44% 48% Parts & Propulsion Accessories Boat Brunswick US - GAAP 45% 48% 45% 47% International -
Slide 31: Tax Provision
Brunswick Corporation – Earnings Release Tax Provision Q1 2021 Q1 2020 Estimated 2021 Effective Tax Rate - GAAP 21.9% 20.7% effective book tax Effective Tax Rate - As Adjusted 1 22.6% 21.3% rate, as adjusted, is expected to be approximately 23 percent based on tax guidance issued to date Cash ta
Slide 32: Free Cash Flow – Q1
Brunswick Corporation – Earnings Release Free Cash Flow – Q1 (in millions) Q1 2021 Q1 2020 Net cash provided by (used for) operating activities $17.3 ($83.9) from continuing operations Net cash provided by (used for): Capital expenditures (42.9) (55.9) Proceeds from sale of property, plant, equipmen