Polaris Inc. · NYSE:PII
Polaris — Polaris Industries — Baird 2005 Growth Stock Conference
31 slides from Polaris's conference presentation, May 11, 2005
Slide 1: Baird 2005 Growth Stock Conference
BAIRD 2005 GROWTH STOCK CONFERENCE MAY 11, 2005
Slide 2: Polaris at a glance
Polaris at a glance: Manufacturer of a diversified mix of high-quality, high-performance motorized products for recreational and utility use Manufacturing and distribution facilities located in Minnesota, Wisconsin, Iowa and South Dakota Highly productive non-union workforce - 3,600 strong Product i
Slide 3: Strong Business Foundation
Strong Business Foundation Percentage of Sales by Product line Percent of 2004 Sales from Continuing Operations
Slide 4: Consistent Financial Performance
Ten Year CAGR: 12% Ten Year CAGR: 10% Consistent Financial Performance Dollars (in millions) Net Income Per Share from Continuing Operations 1995-2004 $3.28 - $3.42 8 - 13% Increase 23 consecutive years of earnings growth 28 consecutive quarters of increased sales and earnings Sales from Continuing
Slide 5: Consistent Financial Performance: Debt to Capital and ROE
Consistent Financial Performance Debt to Total Capital Ratio 1995-2004 Ample Credit Capacity 1993 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 0.41 0.45 0.52 0.47 0.49 0.53 0.48 0.44 0.43 0.4 0.4 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 0.25 0.18 0.13 0.12 0.19 0.19 0.07 0.06 0.05 0.05
Slide 6: Consistent Financial Performance: Cash Flow
Ten Year CAGR: 9% Consistent Financial Performance 1993 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 59 91 96 100 109 120 129 150 174 178 201 (Dollars in Millions) *Before Changes in Current Operating Items and Deferred Taxes Note: A reconciliation of the Company's calculation of cash flow prov
Slide 7: Cash Flow Used to Fund Investments, Repurchases, Dividends
1997 1998 1999 2000 2001 2002 2003 2004 Q1 2005 Actual East 3 2.2 3 2.4 2.2 2.4 2.4 1.4 0.3 West 38.6 34.6 31.6 North 46.9 45 43.9 Consistent Financial Performance Cash Flow Used to Fund... Capital Investments for Continuing Operations Shares Repurchased Through March 31, 2005 the Company has repurc
Slide 8: 1st Quarter 2005
2005 Year 1st Quarter 2005 Earnings up 11% on 9% sales growth 28th consecutive quarter of increased sales and earnings Confirmed full year 2005 earnings per share guidance of $3.28 to $3.42 per share, an increase of 8% to 13% over 2004 Polaris Investor concerns: Rising commodity prices ATV industry
Slide 9: Strategic Goals
The Game Plan Next 5 Years - 3 Strategic Goals Build a dominant brand with industry-leading quality and distribution 2004 2009 Snowmobiles 2004 Guidance 2004 Guidance 1.773 3 1 1043 1043 52 52 North 45.9 46.9 45 $3 Billion $1.773 Billion +11% CAGR Sales Grow Sales to $3 Billion by 2009 2004 Actual 2
Slide 10: By Year 2009
The Game Plan Next 5 Years By Year 2009 } $3 billion in sales 9% net margins Dominant brand Dual Strategy Strong businesses ATVs, utility vehicles, snowmobiles Build powertrain capability Expand PG&A and financial services Product Innovation Improve dealer network Grow Victory motorcycles Expand glo
Slide 11: Product Innovation: ATVs and Utility Vehicles
The Game Plan Next 5 Years - Product Innovation 2000 2001 2002 2003 2004 775 861 982 1041 1072 Year 2004: 6.5% growth Worldwide ATV Industry Growth N.A. Utility Industry Growth * Includes Utility Vehicles Utility Vehicles ATVs Motorcycles* Snowmobiles 2004 Guidance 1 6.5 6 1 1043 52 52 North 45.9 46
Slide 12: Waves of New Products - ATVs and Utility Vehicles
Waves of New Products - ATVs and Utility Vehicles Planned and Executed Flawlessly Planned and Executed Flawlessly Planned and Executed Flawlessly Phoenix 2000 Troy Lee Edition Predator RANGER XP Sportsman 800 EFI 2005 Sport ATV of the Year 62% of the line is new for 2005 The Game Plan Next 5 Years -
Slide 13: Product Innovation: Snowmobiles
The Game Plan Next 5 Years - Product Innovation Build Strength in Existing Strong Businesses Snowmobiles 1998 1999 2000 2001 2002 2003 2004 2005 255.9 233 213 213 206 187 181 174 Worldwide Snowmobile Industry Growth Season-end March 31 2001 2002 2003 2004 2005 Guidance 373 293 229 288 286 Snowmobile
Slide 14: Waves of New Snowmobiles
The Game Plan Next 5 Years - Product Innovation Waves of New Snowmobiles FST Switchback (Four Stroke Turbo) Fusion 600 HO 64% of the line is new for model year 2006 15 new sleds 5 new engines
Slide 15: Build Powertrain Capability to Control Our Destiny
The Game Plan Next 5 Years - Product Innovation Build Powertrain Capability to Control Our Destiny Recent Polaris New Technology ATV Liberty(tm) 800 and 700 engines with EFI Snowmobiles Polaris FS and FST four-stroke engines Clean fire injection 900 and 700 two- stroke engines New 600 HO (high outpu
Slide 16: Expand Parts, Garments & Accessories
The Game Plan Next 5 Years - Product Innovation Expand Parts, Garments & Accessories (PG&A) 1999 2001 2002 2003 2004 2005 Guidance East 158 209 203 223 251 251 19 North 45.9 45 43.9 PG&A Sales $ in millions +13% $209 $203 $223 Snowmobiles PWC ATVs PG&A Motorcycles 28 4 56 7 5 PWC 4% General Merchand
Slide 17: New Lock & Ride System
The Game Plan Next 5 Years - Product Innovation Expand Parts, Garments & Accessories (PG&A) New Lock & Ride System for ATVs & Utility Vehicles Locks in Seconds Cargo box in 15 seconds Tool holder in 10 seconds Water cooler in 5 seconds Windshield for ATV in 5 seconds
Slide 18: Expand Financial Services
The Game Plan Next 5 Years - Product Innovation Expand Financial Services 2004 Year End: Generated $32.0 million of income in 2004 from financial services Now 16% of pretax income High return on investment = 36% Portfolio losses are within industry norms 2005 Guidance: Expect to grow mid- single dig
Slide 19: Growth Initiatives
The Game Plan Next 5 Years Growth Initiatives
Slide 20: Improve the Dealer Network
The Game Plan Next 5 Years - Growth Initiatives Goal: 1500 to 1700 stronger, more profitable dealers in North America Improve the Dealer Network Resources Available to Dealers: Polaris "Ride of Your Life" Sweepstakes Factory Authorized Clearance The Way Out Training Tour Capital Assistance ATV Exper
Slide 21: Grow Victory Motorcycles
The Game Plan Next 5 Years - Growth Initiatives Grow Victory Motorcycles The Size of the Prize Viewed as $300-$500 million opportunity At 5% target share in 2010 = $300+ million Longer-term $1 billion opportunity We have the plan to get there: hot new products, growing brand strength, and an improvi
Slide 22: Victory Motorcycles - Waves of New Products
The Game Plan Next 5 Years - Growth Initiatives Victory Motorcycles - Waves of New Products Hammer Vegas 8-Ball New 100 cubic inch 6-Speed
Slide 23: International Growth
The Game Plan Next 5 Years - Growth Initiatives International Growth 65% 301% 135% 1999 2001 2002 2003 2004 Q1 2005 Actual East 68 83 90 142 194 54 $83 $142 $90 International Sales $194 Expand Globally Victory ATV Snowmobile PG&A East 69 18 13 West 30.6 38.6 34.6 31.6 North 45.9 46.9 45 43.9 Interna
Slide 24: One Big Idea
The Game Plan Next 5 Years - Growth Initiatives Idea that creates or transforms a market Likely adjacent or segment of current markets Internally developed or possibly through strategic acquisition or partnership One Big Idea
Slide 25: World Class Technology
The Game Plan Next 5 Years - Growth Initiatives New Polaris Technology Center opened in Wyoming, Minnesota in early April 2005 World Class Technology Single biggest investment in Company history Required to remain a technology leader in the industry Consolidate R&D personnel into two locations Wyomi
Slide 26: Ongoing Productivity Gains
The Game Plan Next 5 Years - Growth Initiatives Ongoing Productivity Gains Aggressively seek improvement to our cost structure Continue to reduce the number of platforms where feasible Use more common components More disciplined logistics solutions Global sourcing 1 2 3 4 2005 Guidance East 21.5 22.
Slide 27: Attract & Retain the Best People in the Industry
The Game Plan Next 5 Years - Growth Initiatives Attract & Retain the Best People in the Industry Recent management changes: Bennett Morgan - President & COO Mike Dougherty - GM ATVs Tim DeJong - GM Utility Vehicles Mike Jonikas - GM Sales & Marketing Bill Fisher - adding responsibility for service o
Slide 28: Expectations for 2005
Expectations for 2005 All numbers reflect continuing operations and exclude the impact of the disposition of the marine business in the third quarter 2004.
Slide 29: Disclosure Statement
1995 Private Securities Reform Act Polaris Industries Inc. Disclosure Statement Our presentation and responses to your questions may contain certain statements which may be considered forward looking for the purposes of the Private Securities Reform Act of 1995. We caution you that actual results co
Slide 30: An Even Better Ride
AN EVEN BETTER RIDE aS
Slide 31: Appendix Regulation G Reconciliation
Appendix Regulation G Reconciliation
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