Slide 1: Q1 2023 Earnings Conference Call
Q1 2023 Earnings Conference Call APRIL 27, 2023
Slide 2: Forward-Looking Statements
BRUNSW ICK 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 abo
Slide 3: Use of Non-GAAP Financial Information and Constant Currency Reporting
BRUNSW ICK 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 c
Slide 4: Business Overview – Dave Foulkes, CEO
BRUNSW ICK CORPORATION – EARNINGS RELEASE 01 Business Overview – Dave Foulkes, CEO ©2023 BRUNSW ICK CO. CONFIDENTIAL AND ALL RIGHTS RESERVED. 4
Slide 5: Brunswick Delivers Outstanding Q1 2023
BRUNSW ICK CORPORATION – EARNINGS RELEASE 2.8% $2.57 15.0% Brunswick Net Sales Growth Adjusted1 EPS Adjusted1 Operating Delivers ($1.7B Net Sales) (up 1.6% vs. Q1’22) Margin (down 80 bps vs. Q1’22) Outstanding Q1 2023 $60M 21.5k +$135M Share Repurchases Quarter 1 Free Cash Flow vs Q1’22 Global Pipel
Slide 6: Segment Change
BRUNSW ICK CORPORATION – EARNINGS Formerly Parts & Accessories RELEASE Engine Parts Propulsion & Accessories Navico Group Boat1 Place Segment Change headline Brunswick updated its here reportable segments from three segments to FY 2022 four - Propulsion, Revenue2 $2.8 $1.3 $1.1 $2.1 Engine Parts & (
Slide 7: Q1 2023 Segment Performance
BRUNSW ICK CORPORATION – EARNINGS RELEASE Q1 2023 Segment Performance Propulsion Engine Parts & Navico Group Boat1 Accessories • Very strong sales and margin growth • Solid U.S. Products net sales; • Margin challenges vs. Q1 2022, as • Fourth straight quarter of 10%+ vs. Q1 2022 softness in internat
Slide 8: Landscape
BRUNSW ICK CORPORATION – EARNINGS RELEASE Landscape EXTERNAL FACTORS • Inflation and interest rate increases continue to be a headwind for value segment buyers – boat loan rates stabilizing • Supplier part recall impacting units across the industry mainly for sterndrive fiberglass boats, which we an
Slide 9: Q1 2023 Revenue Mix & Growth Rates
BRUNSW ICK CORPORATION – EARNINGS RELEASE Europe Canada Growth +2% Growth -3% Mix: 15% Mix: 6% Q1 2023 Revenue Mix & Growth Rates 1 U.S. • Q1’23 sales grew 3 percent Asia- Growth +5% on a constant currency basis, Pacific Mix: 67% excluding acquisitions Growth -7% Mix: 7% • Sales growth led by U.S.,
Slide 10: U.S. Retail – Percentage Change in Retail Units
BRUNSW ICK CORPORATION – EARNINGS RELEASE U.S. Retail – Percentage Change in Retail Units • March Brunswick internal March 2023 vs. 2022 Q1 2023 vs. Q1 2022 boat retail strong at 4% increase above prior year 12% • Q1 2023 Brunswick internal 4% retail down 10% vs. prior year -2% • Q1 2023 outboard en
Slide 11: U.S. Pipeline Metrics
BRUNSW ICK CORPORATION – EARNINGS RELEASE U.S Pipeline Units – End of Q1 (in thousands) U.S. Pipeline 17.9 Metrics 16.8 7% 15.5 • U.S. pipeline units ahead of -13% 12.9 prior year, however, well 77% below historical levels 7.9 7.3 • Global pipeline levels at -49% 21.5 thousand units at the -8% end o
Slide 12: Financial Overview – Ryan Gwillim, CFO
BRUNSW ICK CORPORATION – EARNINGS RELEASE 02 Financial Overview – Ryan Gwillim, CFO ©2023 BRUNSW ICK CO. CONFIDENTIAL AND ALL RIGHTS RESERVED. 12
Slide 13: Overview of First Quarter 2023 Adjusted Results
BRUNSW ICK CORPORATION – EARNINGS RELEASE Overview of First Quarter 2023 Adjusted Results Net Sales ($M) Operating Earnings1 ($M) $1,744 $268 $262 $1,696 • Delivered record +3% -2% revenue and EPS for any first quarter in Brunswick history 2022 2023 2022 2023 • Free Cash Flow improvement of $135M Op
Slide 14: Propulsion Segment – Q1'23 Performance
BRUNSW ICK CORPORATION – EARNINGS RELEASE Propulsion Segment – Q1’23 Performance Strong sales in high-horsepower outboards and controls and rigging coupled with operational excellence driving significant earnings growth Q1’23 Net Sales Change vs. Q1’22 Operating Margin of $751.6 $593.2 7% 20.1% 9% U
Slide 15: Engine P&A Segment – Q1'23 Performance
BRUNSW ICK CORPORATION – EARNINGS RELEASE Engine P&A Segment – Q1’23 Performance 1 Steady performance by U.S. Products business offset by headwinds in international markets and third-party Distribution Q1’23 Net Sales Adjusted Operating Margin of Change vs. Q1’22 $288.6 16.8% Down 170 bps vs. Q1’22
Slide 16: Navico Group Segment – Q1'23 Performance
BRUNSW ICK CORPORATION – EARNINGS RELEASE Navico Group Segment – Q1’23 Performance 1 Marine OEM channel resilient, with major integration and restructuring actions completed in support of go-forward margin improvement Adjusted Operating Margin of Q1’23 Navico Group Net Sales 11.0% Down 680 bps vs. Q
Slide 17: Rest of Year Earnings Headwinds - Engine P&A and Navico Group
BRUNSW ICK CORPORATION – EARNINGS RELEASE Rest of Year Earnings Headwinds - Engine P&A and Navico Group Retail/Dealer Input Costs Currency RV Softness Distribution Center Restocking Rest of Year Consideration Engine P&A Navico Group N/A Significant None ©2023 BRUNSW ICK CO. CONFIDENTIAL AND ALL RIGH
Slide 18: Boat Segment – Q1'23 Performance
BRUNSW ICK CORPORATION – EARNINGS RELEASE Boat Segment – Q1’23 Performance 1 Strong top-line and earnings growth – fourth straight quarter of double-digit adjusted operating margins Q1’23 Net Sales Change vs. Q1’22 Adjusted Operating Margin of $575.2 17% 10.6% Up 80 bps vs. Q1’22 (GAAP Operating Mar
Slide 19: 2023 Guidance
BRUNSW ICK CORPORATION – EARNINGS RELEASE 2023 Guidance1 Full Year Operating Operating Expenses Full Year Revenue Margin as % of Sales EPS $6.8 to Flat to Up $9.50 to ~15% $7.2B Slightly $11.00 No Change No Change No Change No Change Free Cash Quarter 2 Quarter 2 Flow Revenue EPS Flat to Up $2.60 to
Slide 20: 2023 Outlook Segment Guide
BRUNSW ICK CORPORATION – EARNINGS RELEASE 2023 Outlook Segment Guide1 Propulsion Engine P&A Navico Group Boat Up Flat to Down Flat to Up -3% to +3% Mid to High Low Single Low Single Net Sales Single Digit Percent Digit Percent Digit Percent Growth No Change Previously -5% to +3% Operating Flat to Up
Slide 21: 2023 Outlook – Other Assumptions
BRUNSW ICK CORPORATION – EARNINGS RELEASE 2023 Outlook – Other Assumptions Average Diluted Share Repurchases Quarterly Dividends Shares Outstanding $0.40 Per $200M+ ~71M Share Previously $150M+ Previously $0.365 Per Share Previously ~71.5M ©2023 BRUNSW ICK CO. CONFIDENTIAL AND ALL RIGHTS RESERVED. 2
Slide 22: Wrap-Up – Dave Foulkes, CEO
BRUNSW ICK CORPORATION – EARNINGS RELEASE 03 Wrap-Up Dave Foulkes, CEO ©2023 BRUNSW ICK CO. CONFIDENTIAL AND ALL RIGHTS RESERVED. 22
Slide 23: Exceptional Recognition
BRUNSW ICK CORPORATION – EARNINGS RELEASE 40 12 A Exceptional Record First Quarter Awards Zero-Waste-to-Landfill Locations MSCI ESG Rating Recognition Record number of first quarter company, talent, and product awards ©2023 BRUNSW ICK CO. CONFIDENTIAL AND ALL RIGHTS RESERVED. 23
Slide 24: New Products, Synergies, and Innovation
BRUNSW ICK CORPORATION – EARNINGS RELEASE New Products, Place Synergies, and Innovation SLX 280 Australia Expansion headline Differentiating here Our Business Commercialization of ACES strategy and cross-business synergies coming to life 400R V10 HDS Pro Element M19 ©2023 BRUNSW ICK CO. CONFIDENTIAL
Slide 25: Thank You & Q&A
BRUNSW ICK CORPORATION – EARNINGS RELEASE THANK YOU + Q&A
Slide 26: Appendix
BRUNSW ICK CORPORATION – EARNINGS RELEASE Appendix
Slide 27: 2023 Outlook – P&L and Cash Flow Assumptions
BRUNSW ICK CORPORATION – EARNINGS RELEASE 2023 Outlook – P&L and Cash Flow Assumptions Working Capital Depreciation & Usage Amortization1 ~$100M ~$190M No Change No Change Effective Book Acquisition Tax Rate- As Adjusted2 Amortization ~23% ~$55M No Change No Change 1EXCLUDES PURCHASE ACCOUNTING AMOR
Slide 28: 2023 Outlook – Capital Strategy and Other Assumptions
BRUNSW ICK CORPORATION – EARNINGS RELEASE 2023 Outlook – Capital Strategy and Other Assumptions Capital Net Interest Debt Retirement Expenditures Expense ~$350M ~$80M ~$100M No Change No Change No Change Foreign Currency Combined Equity Earnings Earnings Headwind and Other Income Slightly Higher ~$3
Slide 29: GAAP to Non-GAAP Reconciliations – Q1 2023
BRUNSW ICK CORPORATION – EARNINGS RELEASE GAAP to Non-GAAP Reconciliations – Q1 2023 Operating Earnings Diluted Earnings per Share (in millions, except per share data) Q1 2023 Q1 2022 Q1 2023 Q1 2022 GAAP $236.1 $239.5 $1.56 $2.25 Restructuring, exit and impairment charges 9.5 — 0.10 — Purchase acco
Slide 30: Net Sales and Growth – Q1 2023
BRUNSW ICK CORPORATION – EARNINGS RELEASE Net Sales and Growth – Q1 2023 Net Sales increased by $47.9 million, or 3 percent Segments Q1 2023 Q1 2022 % Change Propulsion $751.6 $705.9 7% NET Engine Parts & Accessories 288.6 330.3 (13%) SALES Navico Group Boat 277.3 575.2 311.6 492.8 (11%) 17% (in mil
Slide 31: Net Sales Growth Drivers
BRUNSW ICK CORPORATION – EARNINGS RELEASE Net Sales Growth Drivers % Change - GAAP Currency Impact Acquisitions Impact Q1 2023 Propulsion Engine Parts & Accessories 7% (13%) (2%) (1%) - - VS. Q1 Navico Group (11%) (2%) - 2022 Boat 17% (1%) 3% Brunswick 3% (1%) 1% ©2023 BRUNSW ICK CO. CONFIDENTIAL AN
Slide 32: Tax Rate
BRUNSW ICK CORPORATION – EARNINGS RELEASE Tax Rate Q1 2023 Effective Tax Rate at ~47% Q1 2023 Q1 2022 Quarter 1 1 Effective Tax Rate - GAAP 46.8% 21.1% 2 Effective Tax Rate - As Adjusted 22.5% 21.1% 1INCREASE IN THE EFFECTIVE TAX RATE IS DUE TO THE DISCRETE INCOME TAX EXPENSE RECORDED IN CONNECTION
Slide 33: Free Cash Flow
BRUNSW ICK CORPORATION – EARNINGS RELEASE Free Cash Flow (in millions) Q1 2023 Q1 2022 Net cash (used for) operating activities from continuing ($14.5) ($140.9) operations Net cash (used for) provided by: Capital expenditures (93.5) (100.9) Proceeds from sale of property, plant, equipment 2.7 2.2 Ef