Slide 1: Fourth Quarter & Full Year 2021 Earnings Presentation
Fourth Quarter & Full Year 2021 Earnings Presentation January 25, 2022
Slide 2: Safe Harbor & Non-GAAP Measures
Safe Harbor & Non-GAAP Measures Except for historical information contained herein, the matters set forth in this presentation and discussed in the corresponding earnings call are forward-looking statements that involve certain risks and uncertainties that could cause actual results to differ materi
Slide 3: Mike Speetzen, Chief Executive Officer
Mike Speetzen Chief Executive Officer Fourth Quarter & Full Year 2021 Earnings Results January 25, 2022
Slide 4: 2021 Accomplishments
2021 Accomplishments Achieved meaningful performance milestones Record financial performance; ORV gained market share; PG&A exceeded $1.5 billion in sales; Int’l exceeded $1 billion in sales; Polaris customers expanded by 16% on a 2-year basis representing strong new customer growth; existing owners
Slide 5: FY 2021 Global Powersports Retail Sales & Market Share
FY 2021 Global Powersports Retail Sales & Market Share North America International (2) Polaris Industry Polaris Industry (1) ORV Motorcycles Snowmobiles Boats ORV Motorcycles Snow (season-to-date) Retail Sales (yoy % chg) 0% mid- high- high- high- low- low- low- teens % teens % low to mid- twenties
Slide 6: North American Dealer Inventory
North American Dealer Inventory Total N.A. Dealer Inventory N.A. Dealer Inventory by Business (in units) Note: Excludes Boats (70%) Q4 2021 vs. Q4 2020 2-year pre-COVID basis (Q4 2021 vs. Q4 2019) Q4 2021 vs. Q4 2019 ORV Snow Motorcycles 0% (30%) ~(20%) ~(30%) Continued Strong Dem and & Supply Chain
Slide 7: Dealer Pre-Sold Orders Update
Dealer Pre-Sold Orders Update ORV Pre-Sold Orders ORV Pre-Sold Units as a % of Retail Sales Decline attributed to accelerated shipments at year-end as component ~75% availability improved ~60% ~55% ~15% ~10% Q4 Q1 Q2 Q3 Q4 2020 2021 Dealer Pre-sold Orders Remain at Elevated Levels at Year-end Q4/FY'
Slide 8: Sourcing Update
Sourcing Update Material Shortages Challenges Countermeasures Material Shortages • Logistics: Continued global logistics • Finished Goods: Provide key suppliers an Impacting more than 100 Units challenges driving supply and commercial increased purchase commitment concerns ~50 • Forecast Visibility:
Slide 9: Category Defining Vehicles in ORV
Category Defining Vehicles in ORV RZR Pro R – Launched Nov. 9, 2021 Ranger XP Kinetic – Launched Dec. 1, 2021 SOLD OUT PR IMPRESSIONS Order Limit Reached in vs. entire MY’22 line-up VIDEO VIEWS SOLD OUT PR IMPRESSIONS VIDEO VIEWS ~2 HOURS 2.5x ~280k Order Limit Reached in Under 10 MINUTES 450+ milli
Slide 10: Bob Mack, Chief Financial Officer
Bob Mack Chief Financial Officer Fourth Quarter & Full Year 2021 Earnings Results January 25, 2022
Slide 11: Q4 & FY 2021 Financial Results
Q4 & FY 2021 Financial Results Sales Net Income Earnings Per share $ in billions $ in millions Q4 ‘21 FY ‘21 Q4 ’21 FY ‘21 Q4 ’21 FY ‘21 YoY % Chg. GAAP 1% 17% 56% 296% 56% 296% $2.170 $8.198 $87 $494 $1.40 $7.88 17% 18% 18% Flat $8.198 $573 $9.13 31% 31% ADJUSTED* YoY % Chg. 1% 36% 35% $2.170 $134
Slide 12: Q4 2021 Segment Sales & Gross Profit Margins
Q4 2021 Segment Sales & Gross Profit Margins ORV/Snowmobiles Motorcycles Global Adjacent Markets Aftermarket Boats 2% $1,468 $1,431 23% 2% 2% $174 12% $147 $142 $238 $234 $150 Q4 2021 Sales ($ in millions) $180 $162 Q4 2020 Q4 2021 Q4 2020 Q4 2021 Q4 2020 Q4 2021 Q4 2020 Q4 2021 Q4 2020 Q4 2021 Comm
Slide 13: Full Year 2022 Sales & EPS Guidance
Full Year 2022 Sales & EPS Guidance Total Company Sales Guidance Adjusted* Earnings Per Share Guidance $ in millions 12% to 15% 11% to 14% $8,198 $9,215 to $9,455 $10.10 to $10.40 $9.13 FY 2021 FY 2022 FY 2021 FY 2022 Actual Guidance Actual Guidance Key Metrics FY 2022 Expectations Adjusted* Gross M
Slide 14: 2022 Expected Sales & Adjusted Earnings Cadence
2022 Expected Sales & Adjusted Earnings Cadence Sales Adjusted* Earnings Per Share high-teens % strong, about 50% high-single to low low-single double digits % $4.99 digits % $4,068 $4,130 $4.14 Price Price Volume Volume Price Price Supply Supply Chain Cost Chain Cost Pressures Pressures Op Expense
Slide 15: Full Year 2022 Sales Guidance by Segment
Full Year 2022 Sales Guidance by Segment Off-Road On-Road Marine Aftermarket International low- $1,123 teens % Supplemental Sales Data ($ in millions) low to mid- mid to high- Segment Sales ($ in millions) teens % mid- teens % twenties % mid- single $5,440 digits% FY 2021 FY 2022 $995 $760 $930 GAAP
Slide 16: Financial Position & Liquidity Profile
Financial Position & Liquidity Profile Operating Cash Flow Liquidity Profile $ in millions $ in millions, except dividends Variance to Up FY 2021 FY 2020 $1,019 significantly Cash $509 -20% -71% Debt /Finance Lease Obligations $1,801 +24% $294 Shareholders’ Equity $1,224 +7% Total Capital $3,025 +17
Slide 17: Mike Speetzen, Chief Executive Officer
Mike Speetzen Chief Executive Officer Fourth Quarter & Full Year 2021 Earnings Results January 25, 2022
Slide 18: New Strategic Framework
New Strategic Framework . Q4/FY'21 Earnings 1/25/22 18
Slide 19: 2022 Business Outlook & Priorities
2022 Business Outlook & Priorities • Anticipated to be another record year • New strategy to drive investment decisions • Overall Powersports industry expected to be approximately flat; demand strong, supply constraining growth • Modest supply chain improvement expected beginning in the third quarte
Slide 20: Questions?
Questions?
Slide 21: Appendix
Appendix • Gross Profit Margin – Q4 2021 Actual • Gross Profit Margin - FY 2021 Actual & FY 2022 Guidance • Q4 2021 Supplemental Sales & FY 2022 Guidance – International & PG&A • Q4 2021 Financial Services Income • Q4 & FY 2021 Non-GAAP Reconciliations – Total Company • EBITDA Non-GAAP Reconciliatio
Slide 22: Q4 2021 Gross Profit Margin
Q4 2021 Gross Profit Margin Q4 2021 Gross Profit Margin – GAAP Q4 2021 Gross Profit Margin – Adjusted* 25.5% 25.6% 20.5% 20.6% Q4 2020 Q4 2021 Q4 2020 Q4 2021 GAAP GAAP Adjusted* Adjusted* Q4 2020 Q4 2021 Q4 2020 Q4 2021 Segments Segments GAAP GAAP Adjusted* Adjusted* ORV/Snow 26.4% 19.1% ORV/Snow 2
Slide 23: Gross Profit Margin – FY 2021 Actual & 2022 Guidance
Gross Profit Margin – FY 2021 Actual & 2022 Guidance FY 2020 & 2021 Gross Profit Margin FY 2022 Gross Profit Margin Guidance 24.7% Down 24.3% 23.7% 23.8% 23.8% 80 to 100 bps FY 2020 FY 2020 FY 2021 FY 2021 FY 2021 FY 2022 GAAP* Adjusted* GAAP* Adjusted* Adjusted* Adjusted* Guidance FY 2020 FY 2020 F
Slide 24: Q4 2021 Supplemental Sales – International & PG&A
Q4 2021 Supplemental Sales – International & PG&A Q4 2021 International Sales ($ millions) Sales by Segment Sales by Region 4% International $266 $278 ORV / Snow Motorcycles Europe, Latin America 7% 9% Middle East 0% and Africa Global Adjacent 0% Asia Pacific Markets 34% 28% Q4 2020 Q4 2021 Q4 2021
Slide 25: Financial Services Arrangements
Financial Services Arrangements Financial Services Income by Category Wholesale Credit Retail Credit Contracts Written $ in millions $ in millions $ in millions Receivable Balance – U.S. Dealers $334 $17 $772 27% $13 Other Activities $519 $243 $638 Wholesale Financing $391 $483 Retail Financing Q4 Q
Slide 26: Non-GAAP Reconciliations
Non-GAAP Reconciliations Reconciliation of GAAP "Reported" Results to Non-GAAP "Adjusted" Results (In Millions, Except Per Share Data; Unaudited) Three months ended December 31, Twelve months ended December 31, 2021 2020 2021 2020 Key Definitions: This presentation contains certain GAAP financial me
Slide 27: Non-GAAP Reconciliation - EBITDA
Non-GAAP Reconciliation - EBITDA Year-Ended December 31, 2021 Adjustments: (1) Represents impairment charges related to an investment held by the Company Sales 8,198.2 (2) Represents the loss associated with the Company's divestiture of the Global Electric Motorcar (GEM) and Taylor-Dunn businesses N
Slide 28: Non-GAAP Reconciliations – Segments
Non-GAAP Reconciliations – Segments (In Millions, Unaudited) Three months ended December 31, Twelve months ended December 31, (In Millions, Unaudited) Three months ended December 31, Twelve months ended December 31, 2021 2020 2021 2020 2021 2020 2021 2020 SEGMENT SALES SEGMENT GROSS PROFIT ORV/Snow
Slide 29: 2022 Guidance Adjustments
2022 Guidance Adjustments 2022 guidance excludes the pre-tax effect of supply chain transformation, restructuring and network realignment costs of approximately $5 million, and approximately $5 to $10 million for class action litigation-related expenses. Intangible amortization of approximately $30
Slide 30: 2020 and 2021 Reclassified Pro Forma Segment Data
2020 and 2021 Reclassified Pro Forma Segment Data (In Millions, Unaudited) GAAP Sales Non-GAAP Sales Segment Sales FY-20 Q1-21 Q2-21 Q3-21 Q4-21 FY-21 Segment Sales FY-20 Q1-21 Q2-21 Q3-21 Q4-21 FY-21 OFF-ROAD 4,696.9 1,278.3 1,378.6 1,276.8 1,506.0 5,439.7 OFF-ROAD 4,696.9 1,278.3 1,378.6 1,276.8 1