Slide 1: Q3 2023 Earnings Conference Call
Q3 2023 Earnings Conference Call OCTOBER 26, 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
Slide 5: Brunswick Delivers Solid Q3 2023
BRUNSWICK CORPORATION – EARNINGS RELEASE $1.6B $2.42 +90bps Brunswick Net Sales Adjusted1 EPS U.S. YTD Mercury Delivers (-6.2% vs Q3’22) (-9.4% vs. Q3’22) Market Share vs. 2022 Solid Q3 2023 $220M 32.8 $143M YTD Share Repurchases Q3 Global Weeks Q3 Free Cash Flow1 on Hand (+163% vs. Q3’22) (5,670 un
Slide 6: Q3 2023 Segment Performance
BRUNSWICK CORPORATION – EARNINGS RELEASE Q3 2023 Segment Performance Propulsion Engine Parts & Navico Group Boat1 Accessories • 150hp+ outboard retail market share • Products sales up 4% in the quarter • Strong performance of higher • Q3 U.S. SSI main powerboat retail vs. prior year margin new produ
Slide 7: External, Customer, and Consumer Conditions and Sentiment
External, Customer, and Consumer Conditions and Sentiment Macro Backdrop Consumer Health Dealer Sentiment OEM Environment • Inflation moderating and • Consumers hesitant based on • Dealers remain anxious to avoid • RV orders remain soft although employment stable prices and interest rates but holdin
Slide 8: Q3 2023 Revenue Mix & Growth Rates
BRUNSWICK CORPORATION – EARNINGS RELEASE Geographical Revenue Mix Q3 2023 Rest-of-World, Revenue Mix1 & Asia Pacific, 5% 7% Growth Rates Canada, Q3’23 sales fell 7 percent on a 6% Revenue YoY constant currency basis U.S. -7% Europe, Europe -5% 11% Canada -19% Asia Pacific -7% Rest-of-World +17% U.S.
Slide 9: U.S. Industry Retail and Pipeline Trends
BRUNSWICK CORPORATION – EARNINGS RELEASE U.S. Industry Retail – Percentage Change in Retail Units U.S. Industry Retail and Main Powerboat Segment Outboard Engines Pipeline Trends 3% Ending Q3 2023 0% • Brunswick retail sales outperforming -2% industry -7.5% • Anticipate U.S. pipeline to end the year
Slide 10: Enhancing and Expanding Our Industry-Leading Offerings
BRUNSWICK CORPORATION – EARNINGS RELEASE Enhancing and Expanding Our Industry-Leading Offerings Acquisition Brand Launch Brunswick Integrated Australia Expansion - Retail Finance Offering 7th Location Announced ©2023 BRUNSW ICK CO. CONFIDENTIAL AND ALL RIGHTS RESERVED. 10
Slide 11: Financial Overview – Ryan Gwillim, CFO
BRUNSWICK CORPORATION – EARNINGS RELEASE Alli refresh image 02 Financial Overview – Ryan Gwillim, CFO ©2023 BRUNSW ICK CO. CONFIDENTIAL AND ALL RIGHTS RESERVED. 11
Slide 12: Overview of Third Quarter 2023 Adjusted Results
BRUNSWICK CORPORATION – EARNINGS RELEASE Overview of Third Quarter 2023 Adjusted Results Net Sales ($M) Operating Margin1 % 16.4% $1,698 13.9% 14.4% $1,594 • As expected, Q3 sales and (6%) (200) bps EPS results below prior year as market conditions $977 soften 2019 2022 2023 2019 2022 2023 • Robust
Slide 13: Overview of YTD 2023 Adjusted Results
BRUNSWICK CORPORATION – EARNINGS RELEASE Overview of YTD 2023 Adjusted Results Net Sales ($M) Operating Margin1 % $5,230 $5,040 16.2% 13.8% 14.4% (4%) (180) • Resilient YTD $3,191 bps performance despite uncertain macro- economic conditions 2019 2022 2023 2019 2022 2023 • Strong free cash flow Dilut
Slide 14: Propulsion Segment – Q3'23 Performance
BRUNSWICK CORPORATION – EARNINGS RELEASE 1 Propulsion Segment – Q3’23 Performance Continued market share gains, with sales increases in outboard engines and controls, rigging, and props Q3’23 Net Sales Adjusted Operating Margin of % Change vs. Q3’22 18.5% $718.2 1% $580.3 3% Down 150 bps vs. Q3’22 (
Slide 15: Engine P&A Segment – Q3'23 Performance
BRUNSWICK CORPORATION – EARNINGS RELEASE Engine P&A Segment – Q3’23 Performance 1 Solid performance in Products offset by moderating headwinds in third-party Distribution Q3’23 Net Sales Adjusted Operating Margin of % Change vs. Q3’22 $344.6 (4%) 22.6% Down 210 bps vs. Q3’22 (GAAP Operating Margin o
Slide 16: Navico Group Segment – Q3'23 Performance
BRUNSWICK CORPORATION – EARNINGS RELEASE Navico Group Segment – Q3’23 Performance 1 Steady aftermarket performance offset softer marine and RV OEM orders to drive margin and earnings growth Adjusted Operating Margin of Q3’23 Navico Group Net Sales 9.4% Up 110 bps vs. Q3’22 (GAAP Operating Margin of
Slide 17: Boat Segment – Q3'23 Performance
BRUNSWICK CORPORATION – EARNINGS RELEASE Boat Segment – Q3’23 Performance 1 Resilient performance despite planned volume reductions Q3’23 Net Sales % Change vs. Q3’22 Adjusted Operating Margin of $428.6 6.3% Down 390 bps vs. Q3’22 (16%) (GAAP Operating Margin of 4.7% down 500 bps vs. Q3’22) $141.3 $
Slide 18: Updated 2023 Full Year Guidance
BRUNSWICK CORPORATION – EARNINGS RELEASE Updated 2023 Full Year Guidance1 Operating Operating Expenses Revenue EPS Margin as % of Sales $6.45B to ~14.0% Up Slightly ~$9.00 $6.5B Previously $6.7 to $6.8B Previously ~14.5% Previously Flat to Up Slightly Previously ~$9.50 Free Cash Quarter 4 Quarter 4
Slide 19: Updated 2023 Outlook – Other Assumptions
BRUNSWICK CORPORATION – EARNINGS RELEASE Updated 2023 Outlook – Other Assumptions Average Diluted Share Repurchases Shares Outstanding $275M+ ~70.25M Previously $250M+ Previously ~70.5 Foreign Currency Quarterly Dividends Earnings Headwind $0.40 Per ~$35M Share Previously ~$30M No Change ©2023 BRUNS
Slide 20: Wrap-Up – Dave Foulkes, CEO
BRUNSWICK CORPORATION – EARNINGS RELEASE 03 Wrap-Up Dave Foulkes, CEO ©2023 BRUNSW ICK CO. CONFIDENTIAL AND ALL RIGHTS RESERVED. 20
Slide 21: Exceptional Recognition
BRUNSWICK CORPORATION – EARNINGS RELEASE Exceptional XX Recognition XX • On track for another record number of awards for people, Sea Ray SPX 210 business, culture and products in 2023 • 4th consecutive year on Forbes World’s Best Employers list ©2023 BRUNSW ICK CO. CONFIDENTIAL AND ALL RIGHTS RESER
Slide 22: Thank You + Q&A
BRUNSWICK CORPORATION – EARNINGS RELEASE Thank You + Q&A ©2023 BRUNSW ICK CO. CONFIDENTIAL AND ALL RIGHTS RESERVED. 22
Slide 23: Appendix
BRUNSWICK CORPORATION – EARNINGS RELEASE Appendix ©2023 BRUNSW ICK CO. CONFIDENTIAL AND ALL RIGHTS RESERVED. 23
Slide 24: Updated 2023 Full Year Outlook Segment Guide
BRUNSWICK CORPORATION – EARNINGS RELEASE Updated 2023 Full Year Outlook Segment Guide1 Propulsion Engine P&A Navico Group Boat Flat to Down Down Down Up Slightly High Single Double Mid Single Net Sales Digit Percent Digit Percent Digit Percent Growth Previously Up Mid Single Previously Down Mid Sing
Slide 25: Updated 2023 Outlook – P&L and Cash Flow Assumptions
BRUNSWICK CORPORATION – EARNINGS RELEASE Updated 2023 Outlook – P&L and Cash Flow Assumptions Working Capital Depreciation & Usage Amortization1 ~$100M ~$200M No Change No Change Effective Book Acquisition Tax Rate- As Adjusted2 Amortization ~22% ~$55M Previously ~23% No Change 1EXCLUDES PURCHASE AC
Slide 26: Updated 2023 Outlook – Capital Strategy and Other Assumptions
BRUNSWICK CORPORATION – EARNINGS RELEASE Updated 2023 Outlook – Capital Strategy and Other Assumptions Capital Debt Retirement Expenditures ~$325M ~$80M Previously ~$350M No Change Net Interest Combined Equity Earnings Expense and Other Income1 Slightly Higher ~$100M vs 2022 No Change No Change 1EXC
Slide 27: Net Sales – Q3 2023
BRUNSWICK CORPORATION – EARNINGS RELEASE Net Sales – Q3 2023 Net Sales decreased by $104.6 million, or 6 percent Segments Q3 2023 Q3 2022 % Change Propulsion $718.2 $714.4 1% NET Engine Parts & Accessories 344.6 360.3 (4%) SALES Navico Group Boat 213.4 428.6 234.8 510.7 (9%) (16%) (in millions) Segm
Slide 28: Net Sales – YTD 2023
BRUNSWICK CORPORATION – EARNINGS RELEASE Net Sales – YTD 2023 Net Sales decreased by $190.0 million, or 4 percent Segments FY 2023 FY 2022 % Change Propulsion $2,173.1 $2,154.5 1% NET Engine Parts & Accessories 962.1 1,070.1 (10%) SALES Navico Group Boat 718.5 1,564.6 832.5 1,571.9 (14%) (1%) (in mi
Slide 29: GAAP to Non-GAAP Reconciliations – Q3 2023
BRUNSWICK CORPORATION – EARNINGS RELEASE GAAP to Non-GAAP Reconciliations – Q3 2023 Operating Earnings Diluted Earnings per Share (in millions, except per share data) Q3 2023 Q3 2022 Q3 2019 Q3 2023 Q3 2022 Q3 2019 GAAP $196.1 $237.7 $119.7 $1.63 $2.26 ($2.74) Restructuring, exit and impairment char
Slide 30: GAAP to Non-GAAP Reconciliations – YTD 2023
BRUNSWICK CORPORATION – EARNINGS RELEASE GAAP to Non-GAAP Reconciliations – YTD 2023 Operating Earnings Diluted Earnings per Share (in millions, except per share data) YTD 2023 YTD 2022 YTD 2019 YTD 2023 YTD 2022 YTD 2019 GAAP $626.6 $756.2 $396.5 $5.10 $7.12 ($0.52) Restructuring, exit and impairme
Slide 31: Net Sales Growth Drivers
BRUNSWICK CORPORATION – EARNINGS RELEASE Net Sales Growth Drivers % Change - GAAP Currency Impact Acquisitions Impact Q3 2023 Propulsion 1% 1% - Engine Parts & Accessories (4%) - - VS. Q3 Navico Group (9%) 1% - 2022 Boat (16%) - - Brunswick (6%) 1% - Acquisitions % Change - GAAP Currency Impact Impa
Slide 32: Tax Rate
BRUNSWICK CORPORATION – EARNINGS RELEASE Tax Rate Q3 2023 Effective Tax Rate at ~21% Q3 2023 Q3 2022 Quarter 3 Effective Tax Rate - GAAP 28.9% 21.7% 1 Effective Tax Rate - As Adjusted 20.6% 22.2% YTD 2023 YTD 2022 Year to Date Effective Tax Rate - GAAP 2 1 33.4% 21.6% Effective Tax Rate - As Adjuste
Slide 33: Free Cash Flow
BRUNSWICK CORPORATION – EARNINGS RELEASE Free Cash Flow (in millions) Q3 2023 Q3 2022 Q3 2019 Net cash provided by operating activities from continuing $203.7 $164.4 $106.8 operations Net cash (used for) provided by: Capital expenditures (59.7) (102.8) (43.2) Proceeds from sale of property, plant, e