Polaris Inc. · NYSE:PII
Polaris — Polaris Industries — Investor Presentation (March 2011)
24 slides from Polaris's investor presentation, Mar 2, 2011
Slide 1: Investor Presentation March 2011
Slide: 1 Investor Presentation March, 2011
Slide 2: Polaris at a Glance
Slide: 2 Sales By Product - 2010 Founded in 1954 Manufacturer of high-performance motorized products Strong distribution channel ~ 1,600 dealers in North America ~ 1,000 dealers Internationally Productive non-union workforce ~ 3,000 strong Product innovation key to success Title: Leader in The Power
Slide 3: Strong Market Share in Most Categories
Slide: 3 Title: Strong Market Share in Most Categories (N.A.) 2010 data. Side-by-side data is estimated. Strong Position in ˜ $10 Billion Powersports Market Others (5) Others (5) Others (2) Others (5) Mar2011 3
Slide 4: Solid, Loyal Customer Base
Slide: 4 Title: Solid, Loyal Customer Base Side-by-Side Market Approx. $2.6 Billion market* (11% 5-Yr CAGR) Typical Utility Customer Customer Usage Patterns Large utility and commercial customer base provides balance and stability Large utility and commercial customer base provides balance and stabi
Slide 5: Strategic Progress Continues
Slide: 5 Title: Strategic Progress Continues… $1.6 Billion $3.0 Billion Grow Sales $3 Billion by 2014 Expand Net Income Margins8% of sales by 2014 Strategy is Working – Staying on the Gas Full Year 2010 Progress 3-5 Year Strategic Initiatives Best in Powersports PLUS - 5-8% organic growth Growth Thr
Slide 6: Full Year 2011 Guidance
Slide: 6 Total Company Sales (in millions) Diluted EPS Title: Full Year 2011 Guidance $1,991.1 Up 8% to 11%$2,150 to $2,210 2010 Actual 2011 Guidance $4.28 Up 9% to 13% $4.65 to $4.85 2010 Actual 2011 Guidance 2011 Sales & EPS Projection: Record High Polaris retail sales continue to accelerate, outp
Slide 7: Qualitative Comments for 2011
Slide: 7 Title: Qualitative Comments for 2011 Mar2011 Expect record 1st quarter sales, net income and EPS Sales growth percentage higher in 1st half of 2011 Under shipped retail sales in 1st half of 2010 40 bpts gross margin improvement for 2011 Begin realizing Monterrey plant savings in 2nd half of
Slide 8: Business Unit Summary
Slide: 8 Title: Business Unit Summary Off-Road Vehicle Division Snowmobile Division On-Road Division: Victory/LEV Polaris Sales (in millions) Polaris Sales (in millions) Polaris Sales (in millions) #1 in ORV - Gained significant share in SxS and ATVs Launched 12 new/significantly improved products A
Slide 9: Polaris Side-by-Side Product Leadership
Slide: 9 RANGER RZR = Razor Sharp Performance RANGER = Hardest Working, Smoothest Riding RANGER XP Xtreme Performance RANGER Crew Full-Size 6-Passenger RANGER 400/500 Mid-Size Value RANGER 500 Crew Mid-size 4-Passenger Industry Leading Product in Every Segment Title: Polaris Side-by-Side Product Lea
Slide 10: International Division
Slide: 10 International Investment & Expansion Continuing Title: International Division Profitable global growth of 21% Expanded into Brazil and China Victory sales up over 50% in Europe in 2010 Grew market share in every product line Polaris Sales (millions) Brazil ORV Launch Sao Paulo Auto Show 1s
Slide 11: Dealer Health
Slide: 11 Title: Dealer Health Healthy Distribution Channel Max Velocity Program (MVP) North American Polaris Dealer Inventory Levels Currently 100% of N.A. ORV dealer volume Smaller dealers on less frequent order cycle MVP is working Retail Sales accelerating Inventory Turns improving Increasing ma
Slide 12: Strong Cash Flow Generation – Solid Balance Sheet
Slide: 12 Title: Strong Cash Flow Generation – Solid Balance Sheet Full Year 2010 Cash Flow Generation (in millions) Cash/Debt (in millions) December 31, 2010 Credit Facility (Expires 12/2011) Total Debt Cap.Ex Dividends Mar2011 12 Cash exceeds debt by $194 million 2010 Cash Flow / Net Income = 203%
Slide 13: Consistent Financial Performance
Slide: 13 Other Placeholder: 13 Other Placeholder: Mar 2011 Title: Consistent Financial Performance Q3 2009 Q2 2010 Q3 2010 Q32009 Q2 2010 Q3 2010 Return on Assets (2007-2010) Return on Invested Capital (2007-2010) PII Peer Average (ACAT, BC, DE, HOG, WGO, TTC) S&P 500 Average
Slide 14: Manufacturing Realignment
Slide: 14 Title: Manufacturing Realignment Goal: three manufacturing Centers of Excellence in Roseau, Spirit Lake and MonterreyProduction expected to begin Q2 2011 in Monterrey Total investment remains in line with original forecast 2011 costs up slightly to improve plant efficiency, mitigate risk,
Slide 15: Monterrey Facility
Slide: 15 Title: Monterrey Facility 425,000 sq. ft. with incubator bldg for startup, staging, and training Currently at 50% beneficial occupancy Increased security capabilities: cameras, fencing, truck tracking, escorts, etc. Roseau transition on plan: tube fabrication, production flexibility Osceol
Slide 16: 2011 – Momentum Continues
Slide: 16 Title: 2011 – Momentum Continues US Economy aided by a more business-friendly Washington Planning for ~3% growth; developing economies outpace US & Europe Powersports competition will increase; markets probably will not Make Growth Happen theme unchanged; ORV extends #1 position Remain foc
Slide 17: Thank you. Q & A
Slide: 17 Other Placeholder: Mar2011 Title: Polaris Industries Inc. Body: Thank you. Q & A
Slide 18: Appendices
Slide: 18 Other Placeholder: Mar2011 Title: Appendices Body: 2011 Full Year Guidance Gross Margin Percentage Trends – Q4 2010Balance Sheet and Liquidity Profile – Q4 2010 Financial Services Income – Q4 2010 Management Team Safe Harbor Statement
Slide 19: 2011 Full Year Guidance
Slide: 19 Title: 2011 Full Year Guidance Product Line Sales - Off-Road Vehicles - Snowmobiles - On-Road Vehicles - PG&ATotal Company Sales Gross Margin Operating expenses Income Taxes Net Income EPS, Diluted Share Count Up about 10% Up modestly Up over 50%, again Upper single digits % Up 8% to 11% U
Slide 20: Gross Profit Margin Percentage Trends
Slide: 20 Title: Gross Profit Margin Percentage Trends (Gp:) Improvement to gross profit margin % (Gp:) Impairment to gross profit margin % (Gp:) Neutral to gross profit margin % Other Placeholder: Mar2011
Slide 21: Balance Sheet and Liquidity Profile
Slide: 21 Title: Balance Sheet and Liquidity Profile Mar2011 21 $ In millions (except per share and interest rate data) 2010 Fav (Unfav) 2009 2011 Full Year Guidance Cash $393.9 $253.7 Increase Total Debt – ending $200.0 $0.0 $100 private placement Credit Facility (expires December 2011) $450.0 – TB
Slide 22: Financial Services Income
Slide: 22 Title: Financial Services Income Retail Credit is Available for Qualified Customers 2010 wholesale credit income from PA joint venture = $12.7 million, down 7% Retail credit approval rates and penetration rates at acceptable levels 2011 retail credit income expected to increase Retail Cred
Slide 23: Management
Slide: 23 Other Placeholder: Mar2011 Title: Management Scott Wine CEO Joined September, 2008 Bennett Morgan President & COO 23 years at Polaris 5 Years as COO Michael Malone V.P. Finance & CFO 26 years at Polaris 13 Years as CFO RECENT EVENTS Created ORV Structure: ATVs and Side-by-Sides Combined Cr
Slide 24: Safe Harbor
Slide: 24 Title: Safe Harbor Body: Except for historical information contained herein, the matters set forth in this document, including but not limited to management’s expectations regarding 2011 sales, shipments, net income, cash flow, and manufacturing realignment transition costs and savings, ar
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