Polaris Inc. · NYSE:PII
Polaris — Polaris Industries — Q1 2015 Earnings Presentation
27 slides from Polaris's earnings presentation, Apr 23, 2015
Slide 1: First Quarter 2015 Earnings Results
First Quarter 2015 Earnings Results April 23, 2015 POLARIS INDUSTRIES INC.
Slide 2: Forward-looking statements
Except for historical information contained herein, the matters set forth in this document, including but not limited to management’s expectations regarding 2015 sales, shipments, margins, currencies, net income and cash flow, the opportunities for expansion and diversification of the Company’s busi
Slide 3: Scott W. Wine, Chairman & CEO
Scott W. Wine Chairman & CEO First Quarter 2015 Earnings Results April 23, 2015 POLARIS INDUSTRIES INC .
Slide 4: Record Results In Spite of Stiff Currency Pressures
Record 1st quarter sales, operating income and net income Sales of Motorcycles +74%; PG&A +12%; ORV +11% Sales in EMEA -15%; Asia Pacific +6%; Latin America +75% Earnings per share increased 9% to a record $1.30 Gross profit margin down 66 bps, primarily currency and mix pressures Operating income m
Slide 5: Recent Acquisitions: Timbersled and Hammerhead
Timbersled Acquisition Hammerhead Acquisition Complementary to Snow Business Recent Acquisitions Builds on Growing Asian Business Light Utility Vehicles (Gas/Electric) MSRP-US $3,499 - $5,499 Adult go-karts MSRP-US $1,999-$2,799 Youth go-karts MSRP-US $1,099 - $1,699 Leverage low-cost supplier/manuf
Slide 6: Polaris Strategic Objectives, Vision & Strategy
Polaris Strategic Objectives Vision & Strategy VISION STRATEGY Fuel the passion of riders, workers and outdoor enthusiasts around the world by deliveringinnovative, high quality vehicles, products, services and experiences that enrich their lives. Polaris will be a highly profitable, customer centri
Slide 7: Full Year 2015 Guidance
Full Year 2015 Guidance Narrowing EPS guidance – raising lower end of range North American retail sales growth and market share gains expected to continue International sales now projected to decline low-single digits% (weak EMEA & currencies) Total sales projected up 9% to 12% (unchanged from previ
Slide 8: Bennett Morgan, President & COO
Bennett Morgan President & COO First Quarter 2015 Earnings Results April 23, 2015 POLARIS INDUSTRIES INC.
Slide 9: Polaris Retail Sales
Q1-2015 4-23-15 9 Polaris Retail Sales Solid Retail Quarter for Most Businesses; Slingshot Strong 7% 15% 12% 13% 8% Q1-14 Q2-14 Q3-14 Q4-14 Q1-15 Polaris N.A. retail 8% for Q1 2015 vs. Q1 2014 Gained share in powersports driven by motorcycles ORV market share flat in Q1 – Intense competitive promoti
Slide 10: N.A. Dealer Inventory
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2015 2014 2013 2012 Q1-2015 4-23-15 10 N.A. Dealer Inventory ORV Dealer Inventory High, but Expect to Improve by Year-end Dealer Inventory – Q1 2015 4% Existing ORV Models 3% New ORV Models 3% ACE / New Segments 2% Snowmobiles 1% Slingshot 4% New Deale
Slide 11: Gross Profit Margin Challenging Circumstances in Q1
Production delays in motorcycles – paint system, new product readiness Began shipping Indian Scouts very late in Q1 New paint system ramped-up throughout Q1; progress accelerating Gross Profit Margin in Q1 due to currency and product mix pressures New LEAN Value Improvement Process (VIP) implemented
Slide 12: Polaris ORV Sales
Q1 2014 (Reclassified) Q1 2015 FY 2014 (Reclassified) FY 2015 Guidance Strong N.A. sales offset by weaker international sales (currency) N.A. Polaris ORV retail sales mid-single digits %; Industry mid-single digits % - market share flat Polaris side-by-side retail sales almost 10%; both RANGER and R
Slide 13: Polaris Motorcycle Sales
Q1 2014 Q1 2015 FY 2014 FY 2015 Guidance Polaris N.A. motorcycle Q1 retail sales double last year Indian significantly, new products well-accepted; share Victory retail sales slightly; share Slingshot exceeding expectations; increasing line rate Significant order backlog in all brands Indian Motorcy
Slide 14: Polaris Snowmobile Sales
gh-single digits % season-end March 31, 2015; Q1 low-double digits % N.A. Industry mid-single digits % for the season - best industry performance in six years Gained share in 2014/2015 season on strength of new Axys® platform Strong MY’16 introductions, again Award winning Axys® platform expanded in
Slide 15: Global Adjacent Markets
Global Adjacent Markets Q1-2015 4-23-15 15 Global Adjacent Market Sales Growing Outside Powersports ($ millions) *2014 reclassified to include Defense and Commercial Sales New Organization; focus on growth outside Powersports Work & Transportation (“W&T”), Military W&T Sales mid-single digits % N.A.
Slide 16: PG&A Sales
50% 43% 7% Record Q1 sales; 12% ORV sales 16%, Motorcycles 78% All categories increased sales in Q1 Accessories 23%, Apparel 8%, Parts 1% (poor snow) U.S. sales 21%; Canada & International sales (currency) Aftermarket brand portfolio & e-commerce strong (Kolpin, Klim & Pro Amor) Q1-2015 4-23-15 16 P
Slide 17: International
International Q1-2015 4-23-15 17 Focused on Execution in Challenging Markets and Currency Pressures International Sales International sales 7% in Q1, currency impact of $23 million All product categories in Q1 Asia Pacific 6% – strong market performance in China, New Zealand and India Latin America
Slide 18: Mike Malone, V.P. Finance & CFO
Mike Malone V.P. Finance & CFO First Quarter 2015 Earnings Results April 23, 2015 POLARIS INDUSTRIES INC.
Slide 19: 2015 Full Year Guidance
METRIC GUIDANCE Sales Components Off-Road Vehicles Up mid-single digits % (reclassified 2014 actuals) Snowmobiles Down low-single digits % Motorcycles Up 55% to 70% Global Adjacent Markets Up 5% to 10% (reclassified 2014 actuals) PG&A Up high-teens % International Down low-single digits % Total Comp
Slide 20: 2015 Gross Profit Margin Guidance
METRIC Actual Q1 2014 Actual Q1 2015 Guidance FY 2015 Prior period 29.0% 29.1% 29.4% Production volume/capacity Product cost reduction efforts Commodity costs Currency rates Higher selling prices Product mix New plant start-up costs Warranty costs Depreciation/Tooling amortization Sales promotional
Slide 21: Foreign Currency Exposures for Polaris
Significant Impact in Q1 2015, Expected to Persist for Remainder of 2015 21 Foreign Currency Exposures for Polaris Q1-2015 4-23-15 Foreign Currency Hedging Contracts Currency Impact on Net Income % of Remaining Notional Avg. Exchange Compared to Prior Year Period Foreign Currency Currency Position 2
Slide 22: Balance Sheet and Liquidity Profile
Balance Sheet and Liquidity Profile $ In millions (except per share and rate data) Q1 2015 Fav / (UnFav)Q1 2014 2015 Full Year Guidance Cash $111.0 9% Increase from 2014 Debt / Capital lease obligations $329.1 1% Similar to 2014 Credit facility $500.0 43% Increased $150M from 2014 Factory inventory
Slide 23: Scott W. Wine, Chairman & CEO
Scott W. Wine Chairman & CEO First Quarter 2015 Earnings Results April 23, 2015 POLARIS INDUSTRIES INC.
Slide 24: Closing Comments
24 Closing Comments Q1-2015 4-23-15 nticipation lignment ccountability gility
Slide 25: Deep Bench Ensures Continuity
Q1-2015 4-23-15 25 Deep Bench Ensures Continuity Organizational Changes Chris Wolf V.P. – Snowmobiles 12+ Years with Polaris GM – Snowmobiles 2014 Dir. Snowmobiles 2011 Sales & Service Craig Scanlon V.P. – Slingshot 10+ Years with Polaris GM – Side-by-Sides 2012 Dir. ORV Sales & Mktg 2010 ORV Mgmt.
Slide 26: Closing Comments
26 Closing Comments Q1-2015 4-23-15 nticipation lignment ccountability gility
Slide 27: Thank you, Questions?
Polaris Thank you Questions?