Polaris Inc. · NYSE:PII
Polaris — Investor Day (February 2022)
101 slides from Polaris's investor day presentation, Feb 24, 2022
Slide 1: Analyst & Investor Meeting
Analyst & Investor Meeting Las Vegas February 24, 2022
Slide 2: Welcome
Welcome Richard Edwards J.C. Weigelt Vice President of Investor Relations Vice President of Investor Relations Analyst & Investor Meeting February 24, 2022
Slide 3: 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 investor presentation are forward-looking statements that involve certain risks and uncertainties that could cause actual results to diffe
Slide 4: Agenda
Agenda Polaris Inc. Analyst & Investor Meeting February 24, 2022 – Las Vegas, NV TIME (PT) TOPICS PRESENTERS 8:00 – 8:30 Strategy Overview Mike Speetzen, Chief Executive Officer 8:30 – 9:00 Best Customer Experience Pam Kermisch, Chief Customer Growth Officer 9:00 – 9:30 Rider-Driven Innovation Mike
Slide 5: Strategy Overview
Strategy Overview Mike Speetzen Chief Executive Officer Analyst & Investor Meeting February 24, 2022
Slide 6: Polaris At-a-Glance
Polaris At-a-Glance 2021 Sales by Segment Polaris Founded $8.2B On-Road Employees Worldwide +17% Off-Road 12% YOY Growth 67% 11% Aftermarket Powersports Market Share Leader 9% Marine 1% Other Global Manufacturing Locations 2021 Sales by Geography Powersports Dealers Worldwide United Units Shipped Wo
Slide 7: Polaris Executive Leadership
Polaris Executive Leadership Global Business Unit Leaders STEVE MENNETO MIKE DOUGHERTY JAKE VOGEL STEVE EASTMAN President, Off-Road President, On-Road & President, Marine President, PG&A & International Aftermarket Function Leaders BOB MACK KEN PUCEL LUCY MIKE DONOUGHE PAM KERMISCH VIC KOELSCH JIM W
Slide 8: Strategic Framework Evolution
Strategic Framework Evolution Achieved Goals Set Out in 2018 Polaris Investor Day - 2022 8
Slide 9: Delivering on Commitments
Delivering on Commitments Drove customer-centric change Delivered +11% category-defining innovation +15% Adj. Sales Launched Adj. Net new business models Income CAGR* CAGR* Transformed supplier relationships Executed through unprecedented environment Expanding Opportunity *2021 results vs.2017 basel
Slide 10: Three Critical Questions for Our Strategy
Three Critical Questions for Our Strategy 1 What can we be best in the world at? 2 What are we deeply passionate about? 3 What drives our economic engine? Clear…Simple…Focused Polaris Investor Day - 2022 10
Slide 11: Polaris: Think Outside
PuslLARiS Think Outside GLOBAL LEADER IN POWERSPORTS Powering passion and pioneering new possibilities for all those who play, work and THINK OUTSIDE gs Best Customer Experience © Rider-Driven Innovation ema Best Team, Best Culture €3 Inspirational Brands Agile & Efficient Operations © Geared For Go
Slide 12: Expanding Opportunity
Expanding Opportunity Polaris Customers Macro-Trend Themes Millennial Spending Return to the Outdoors Focus on Sustainability Growth in Electric Vehicles Priority on Experiences 2018 2021 Urban to Rural Shift Rapidly Expanding Opportunity in Powersports Polaris Investor Day - 2022 12
Slide 13: Market Opportunity
Market Opportunity $55B Adventure Our Current Markets Travel Related Hunt/ Fish Lifestyle Categories $130-160B Camping/ Addressable Market Hiking 1. Drive global share growth in current markets Growth 2. Grow share of wallet in addressable market Opportunity 3. Attract new customers who engage in ou
Slide 14: Best Customer Experience
Best Customer Experience Product Experience Omni-Channel Experience Entryway Experience Strongest dealer network & Capable, high-performing services Industry-leading rentals products Omni-channel New Next level quality experiences business models & customer solutions Polaris Investor Day - 2022 14
Slide 15: Think Outside
THINK OUTSIDE 15
Slide 16: Rider-Driven Innovation
Rider-Driven Innovation RIDER-DRIVEN INNOVATION ESTABLISHED CAPABILITIES EMERGING CAPABILITIES Power & Driveline Ride & Handling Fit, Finish & Customization Connected Vehicles Advanced Materials Electrification Product & Rider Safety Infotainment CUSTOMER DATA & INSIGHTS RIDING CULTURE & INDUSTRY EX
Slide 17: Agile & Efficient Operations
Agile & Efficient Operations Productivity Delivery Leverage scale to drive Deliver the most responsive, customer-centric industry-leading productivity. service levels in powersports. Manufacturing Sourcing Distribution Logistics Product Software Sales & Retail Dealer & Development Development Operat
Slide 18: Global Manufacturing Footprint Optimization
Global Manufacturing Footprint Optimization Optimized Global Supply Chain Footprint Select Insourcing Capacity Expansion Productivity Investment Ongoing Network Optimization; Additional Capacity Expansion on Horizon Polaris Investor Day - 2022 18
Slide 19: Strategic Sourcing
Strategic Sourcing Transforming Strategic Sourcing with Project Sunburst as the catalyst to drive long-term sourcing excellence. Enable Key Strategies Drive Execution Excellence Product Quality Sourcing Capability Transformation Electrification & Connected Vehicle Suppler Capacity Planning Supplier
Slide 20: Best Team, Best Culture
Best Team, Best Culture ~16,000 Global Team Members Understand the riding experience. Live the riding experience. Work to make it better. Polaris Investor Day - 2022 20
Slide 21: Geared For Good
Geared For Good VISION POLARIS ESG FRAMEWORK Driven by innovation, integrity & accountability, we continually tune to be good stewards for the industry, our employees, riders, communities & the outdoors. ESG Focus Tied to Business Strategy Polaris Investor Day - 2022 21
Slide 22: Geared For Good
Geared For Good IMPLEMENTED SASB DISCLOSURES MULTI-YEAR NFF COMMITMENT IMPROVED MSCI RANKING Next Step in Our Reporting Journey Focus on Trail Preservation First Score Shift Since Geared For Good REIMAGINED SAFETY STELLAR EMPLOYEE SAFETY CONTINUED RECOGNITION Marketing Standards & Content Focus Safe
Slide 23: 2022-2026 Targets
PuslLARiS Think Outside GLOBAL LEADER IN POWERSPORTS Powering passion and pioneering new possibilities for all those who play, work and THINK OUTSIDE © Rider-Driven Innovation eFa Best Team, Best Culture 4th Agile & Efficient Operations 2 Geared For Good
Slide 24: Global Leader in Powersports
Global Leader in Powersports OFF-ROAD ON-ROAD MARINE AFTERMARKET Strong & Growing Portfolio Polaris Investor Day - 2022 24
Slide 25: On-Road Highlights
On-Road Highlights ON-ROAD Delivering Great Products Financial Highlights Indian Chief Indian Scout Rogue ‘21 Sales: $995M MY’22 FTR Slingshot AutoDrive ‘21 Gross Profit Margin: 15% Building Strong Brands Strong progress towards profitability goals Slingshot multicultural growth Strong global perfor
Slide 26: Marine Highlights
Marine Highlights MARINE Attractive Growth Financial Highlights Mix & pricing strength ‘21 Sales: $760M Organic & M&A growth options ‘21 Gross Profit Margin: 22% Strong profitability & cash Expanding Innovation generation Strong product pipeline for 3+ years Exploration of electric propulsion Strong
Slide 27: Aftermarket Highlights
Aftermarket Highlights AFTERMARKET Powersports Aftermarket Growth Financial Highlights Mass retail & digital expansion ‘21 Sales: $930M Line extensions into new categories ‘21 Gross Profit Margin: 27% Attractive profit margins in Omni-Channel Scale powersports aftermarket 4WP: 101 stores now open Op
Slide 28: Best Customer Experience
Best Customer Experience Pam Kermisch Chief Customer Growth Officer Analyst & Investor Meeting February 24, 2022
Slide 29: Reasons to Believe We Can Grow Powersports
Reasons to Believe We Can Grow Powersports We are seeing accelerated growth coming from existing owners repurchasing & new customers New customers have always been a core part of our retail We have seen a demographic shift within our new customer mix We have seen growth coming from key lifestyle act
Slide 30: Leading the Industry in Customer Growth
Leading the Industry in Customer Growth Polaris Enterprise Customer Base & Diverse Owner Growth 5 Year Growth Rates +50% Millennial 44% New Customers Women 28% Hispanic 21% African American 7% 2016 2021 2026E 2031E Core & New Customers New Diverse Customers Target to Increase Customers by +50% in th
Slide 31: Evolution of Polaris Customer Base
Evolution of Polaris Customer Base Customer Profile 2016 Age 2021 Silent Gen Silent Gen 5% 2% 71% 70% Boomers Gen Z 65% Boomers Gen Z 27% 5% 36% 1% 35% 29% 30% Millennials Millennials Gen X 30% Gen X 22% 2016 2019 2020 2021 36% 36% Existing Customers New Customers 2016 Race 2021 2016 Gender 2021 His
Slide 32: Customer Growth Progress
Customer Growth Progress 2016 2021 Outdoor Enthusiast Hunter Landowner Farmer We Have Seen Growth Coming From Key Lifestyle Activity Segments Polaris Investor Day - 2022 32
Slide 33: Brand Awareness with Category Intenders
Brand Awareness with Category Intenders 2-YEAR GROWTH/DECLINE (2019-2021) Competitor A Competitor B 15% 10% 5% 0% -5% Black Black Black Gen X Male Gen X Male Gen X Male White Boomer White Boomer White Boomer Hispanic Hispanic Hispanic Millennial Female Millennial Female Millennial Female Ethnicity A
Slide 34: Customer Growth Strategies
Customer Growth Strategies Understand Increase Authentic Dedicated Our Customers Accessibility Commitment Focus Polaris is Well Positioned to Drive Customer Growth Due to Pre-Pandemic Focus & Investment Polaris Investor Day - 2022 34
Slide 35: Understand Our Customers
Understand Our Customers Invest in Consumer Insights Build Marketing Analytics Capabilities Enterprise Customer Growth Focus Evolution in 2019 Launched in 2018 Launched in 2019 Customer analysis OWNER TYPE Real-time customer 360 Customer understanding View CRM Core Growth Marketing automation Tested
Slide 36: From Insights to Differentiated Innovation
From Insights to Differentiated Innovation Slingshot AutoDrive & Paddle Shifting Ride Command: Group Ride Youth Safety Bennington Bowrider Helmet Aware Digital Speed Technology Limiting Product Innovation Driven By a Passionate & Disciplined Customer Focus Polaris Investor Day - 2022 36
Slide 37: Increase Accessibility
Increase Accessibility Launched in 2017 at 21 locations Membership offering initiated in 2018, launched in 2021 Grown to 197 Outfitters & Affiliates in 4 years 4 markets: Arizona, Utah, Colorado, Nevada 164M people within 1 hour of our network 94% Non-owners 88 NPS | +750K Rides 92 NPS Providing Ent
Slide 38: Increase Accessibility: New Business Model + Expanded Reach
Increase Accessibility: New Business Model + Expanded Reach Access in Local & Epic Riding Destinations Welcoming New Customers with Polaris Adventures 2021 Race Age Gender Race 60-minute drive time = 164M (50%) 120-minute drive time = 263M (80%) White/other Gen X Male Hispanic Millennials Female Afr
Slide 39: Increase Accessibility to Powersports for a New Generation
Increase Accessibility to Powersports for a New Generation +200,000 people virtually riding a Sportsman daily Covered by: Creating New Ways for People to Participate with Polaris Polaris Investor Day - 2022 39
Slide 40: Authentic Commitment
Authentic Commitment Inclusion + Focused Learning Efforts Build Connection Through Partners Inclusive & Empowered Formal Commitment in 2019 Launched in 2016 Consistent Implementation in 2020 Women Have just as much passion for riding Ergonomic challenges in all vehicles Security & confidence are cri
Slide 41: Dedicated Focus
Dedicated Focus Invest for Growth Reach The Right People Show How Vehicle Fits Into Their Lives Lead Share of Voice (SOV) Data & Analytics Dedicated Outreach Support Dealer Readiness Smarter Targeting 1:1 Marketing Capabilities Increased ROI Advanced Analytics Targeting to Reach the Best Prospects $
Slide 42: Dedicated Focus: Accelerate Our Customer Focus
Dedicated Focus: Accelerate Our Customer Focus Purchase Journey How We Make Buying Easier & Faster INTEREST BEGINS RESEARCH PURCHASE AFTER PURCHASE Past Exposure & Active Word of OEM Social Online Dealer Dealership Taking OEM & Dealer Ownership Additional Community Accessorizing Experiences Need M
Slide 43: Dedicated Focus: From Insights to Action
Dedicated Focus: From Insights to Action FROM TO Product Driven Customer Driven New Customer Growth + Owner Repurchase Retail Focus to Deliver Retail Fixed Path to Personalized Shopping Experience Purchase Post-Purchase Engagement Owner Relationship Primarily Held By Dealers Enable Dealers to Provid
Slide 44: Dedicated Focus: Evolve the Customer Experience
Dedicated Focus: Evolve the Customer Experience Digital Shopping Transformation Personalized Experience / Step 2 / Step 3 / Step 4 / Step 5 Pre Order Online Order Visibility Buying Guides Best UTV for Hunting ATV Side-by-Side Show me both Buying Guides UTV Windshield Buying Guide In-Store Experience
Slide 45: Dedicated Focus: Acclimate New Customers
Dedicated Focus: Acclimate New Customers YouTube Content Series My Garage POLARIS ACCOUNT NEW OWNERS Critical Owner Information “I just bought a vehicle, at Fingertips now what?” Elevating the ownership experience by Knock down barriers, easy access to vehicle, riding & profile give specialized info
Slide 46: Rider-Driven Innovation
Rider-Driven Innovation Mike Speetzen Chief Executive Officer Analyst & Investor Meeting February 24, 2022
Slide 47: Rider-Driven Innovation
Rider-Driven Innovation RIDER-DRIVEN INNOVATION ESTABLISHED CAPABILITIES EMERGING CAPABILITIES Power & Driveline Ride & Handling Fit, Finish & Customization Connected Vehicles Advanced Materials Electrification Product & Rider Safety Infotainment CUSTOMER DATA & INSIGHTS RIDING CULTURE & INDUSTRY EX
Slide 48: Category-Defining Innovation
Category-Defining Innovation CREATED THE CATEGORY REDEFINED CATEGORY STANDARD Snowmobiles – 1954 Sportsman – 1994 Ranger – 1997 RZR – 2007 Deck Boats – 1974 Indian – 2012 Luxury Pontoon – 3-Wheel – 2015 1998 Legacy of Innovation; New Breakthroughs Ahead Polaris Investor Day - 2022 48
Slide 49: Engineering & Development Talent
Engineering & Development Talent GLOBAL TALENT & RESOURCES DISCISPLINED APPROACH Safety, Quality & Sustainability Innovative Technology Application Wyoming, MN Rigby, ID (R&D) (Apparel) Platform Mindset Analysis Led Design Polaris Proving Grounds Roseau, MN Bangalore, India Systems Engineering (Prod
Slide 50: Innovation Examples
Innovation Examples Wide-Beam Pontoon Platform Parts Shopping: Reinvented Indian Motorcycle Display Ride Command: Plow Mode Innovation Through Established & Emerging Capabilities Polaris Investor Day - 2022 50
Slide 51: New Category-Defining Opportunities
New Category-Defining Opportunities Polaris Investor Day - 2022 51
Slide 52: Leading Electrification & Connected Opportunity
Leading Electrification & Connected Opportunity Growth Opportunity Emerging Industry Opportunities Connected Vehicle Electrification 1. Drive global share growth in current 1. Opportunity for competitive advantage markets in current markets 2. Grow share of wallet in addressable 2. New use cases tha
Slide 53: Connected Vehicle & Electrification Approach
Connected Vehicle & Electrification Approach FOCUS: Create The Best Customer Experience Lead with customer insight Deliver electrification & connected vehicle as enablers Test broadly; commercialize purposefully Leverage established capabilities to deliver complete solutions Partner for speed; build
Slide 54: Connected Vehicle: Ride Command+
Connected Vehicle: Ride Command+ Opportunity Polaris Connected Vehicle Installed Base Safety & convenience features Service & improved channel experience Internal value & cost saving potential Flexible, scalable & affordable solutions available Current 2026E 2030E Ride Command+ available in most Sus
Slide 55: Connected Vehicle Requirements
Connected Vehicle Requirements On-board Technology Existing Enablers Infotainment scale & architecture Ride Command App Use Case >1 million miles of trail data Adoption & Connectivity Monetization Solution ~100K hours of rides / month In-house analytics, software & UX Software Data & Analytics Fixed
Slide 56: Connected Vehicle & Electrification
Connected Vehicle & Electrification Data & OTA capability Influential Trends Automotive Experience Safety & Sustainability Connected Electrification Vehicle Regulatory Actions Expanded use case potential Two Critical Technologies with Related Trends Influencing Adoption Polaris Investor Day - 2022 5
Slide 57: Why Electrification
Why Electrification Why • EV Electrification? ADVANTAGES Acceleration & power Control Lower total cost of ownership Quiet operation Zero emissions Improved Customer Experiences Electric Vehicles Will be a Significant Platform in Powersports Polaris Investor Day - 2022 57
Slide 58: Electrification Challenges
Electrification Challenges Balancing • EV BARRIERSForces Range & Charging Infrastructure Battery Technology Demanding Environments DIY & Modifications Emotional Connection to Sounds & Smells Internal Combustion Has a Continued Leadership Role in Powersports Customer Adoption Will Vary as Use Cases &
Slide 59: RANGER XP Kinetic
RANGER XP Kinetic Uses: Hunt/Ag/Landowners LINEUP Target: Needs: Demanding Ultimate: Extended Range, Fast Charge - More productivity Utility Customer - Maximum uptime - Smarter work MSRP: $29,999 More power than RANGER XP 1000 Up to 80mi Range Uncompromised More cargo box capacity Charge As-Fast-As
Slide 60: Electric Test Vehicles on Display
Electric Test Vehicles on Display Electrification Test Vehicles ATV Side-by-Side Snowmobile Youth Committed to Aggressive Learning with Test Vehicles Note: Test vehicles only. May or may not be commercialized. Polaris Investor Day - 2022 60
Slide 61: Rider-driven Innovation
Rider-driven Innovation RIDER-DRIVEN INNOVATION ESTABLISHED CAPABILITIES EMERGING CAPABILITIES Power & Driveline Ride & Handling Fit, Finish & Customization Connected Vehicles Advanced Materials Electrification Product & Rider Safety Infotainment CUSTOMER DATA & INSIGHTS RIDING CULTURE & INDUSTRY EX
Slide 62: Off-Road
Off-Road Steve Menneto President, Off-Road Analyst & Investor Meeting February 24, 2022
Slide 63: Polaris Off-Road
Polaris Off-Road Strong, healthy, global business More customer centric than ever Executing across all strategic pillars Driving margin improvement Well positioned for long-term growth Polaris Investor Day - 2022 63
Slide 64: Off-Road At-a-Glance
Off-Road At-a-Glance Snow Utility #1 N.A. Market Share Utility 2021 +1.5pts Recreation 2021 Sales $5.4 Billion +16% Recreation #1 N.A. Market Share 30+ New models in 2021 2021 Flat 23% PG&A growth YoY 2600 Global dealers Snow #2 N.A. Market Share 5 Global Manufacturing Plants 2021 Flat Global Lead
Slide 65: 2021 Off-Road Results
2021 Off-Road Results US / CANADA Sales +14% EMEA #1 Share & Growing Sales +24% #2 Share & Growing LATIN AMERICA Sales +45% ASIA PACIFIC #1 Share & Growing Sales +49% #1 Share & Growing Growing Share & Sales Across the Globe Polaris Investor Day - 2022 65
Slide 66: Global Consumer Lifestyles & Usage
Global Consumer Lifestyles & Usage Utility Recreation Snow Commercial Gov/Defense Hunt/Land/Farm/Ranch Adventure/Recreation Mountain/Recreation B2B, Fleet Sales Tactical/Government $60 to $80B Addressable Market – Millions of New Customer Opportunity Polaris Investor Day - 2022 66
Slide 67: Off-Road Strategic Priorities
Off-Road Strategic Priorities Global Leader in Off-Road Evolving the Off-Road Customer Experience Best Customer Experience Channel Improvements Rider-Driven Innovation Product Excellence & Innovation Process Excellence through Retail Flow Management (RFM) Agile & Efficient Operations Margin Expansio
Slide 68: Evolving the Off-Road Customer Experience
Evolving the Off-Road Customer Experience Best Customer Experience Digital Shopping Personalized Experiences 1 Make Every Contact Count In-Store Experience 2 Elevate Dealer Channel Dealer Readiness Acclimate New Customers Adapting to Attract & Fulfill New Customer Expectations Polaris Investor Day -
Slide 69: Make Every Contact Count
Make Every Contact Count Best Customer Experience Help at every touch point Social listening Analytics: Anticipate Proactive outreach predictable behaviors Correct Plan Studies focused on Quality & early warning Listen experience Voice of customer Live Chat with gap analysis Product Pros The Smalles
Slide 70: Channel Improvements
Channel Improvements Best Customer Experience Metrics Aligned to Customer …Rewards & Benchmarks Drive Experience…. Dealer Profitability Experience Execution earns rebates & incentives Staff training Performance criteria aligned to PG&A Execution profit-driving activities Service Feedback helps deale
Slide 71: Off-Road Rider-Driven Innovation: Established
Off-Road Rider-Driven Innovation Rider-Driven Innovation Core Vehicle Powertrain & Drive Line Cab Systems Established Electrification Ride Command + Emerging • Innovation Innovation & Technology & Technology that Improves that Improves theExperience the Product Product Experience & Drives Share Pola
Slide 72: Off-Road Rider-Driven Innovation: Commercial
Off-Road Rider-Driven Innovation Rider-Driven Innovation Patriot Boost Integrated Technology Lock & Ride Flex Snow Vehicle Fault Alarms Kevlar-Backed Seats Speed Limiters Commercial • Innovation Innovation & Technology & Technology that Improves that Improves theExperience the Product Product Experi
Slide 73: Product Solutions
Product Solutions Rider-Driven Innovation NorthStar Editions Ride Command in ATVs Get More Done with RANGER Northstar’s Explore Like Never Before with Factory Installed, Comfortable Climate Ride Planning, Group Tracking & Real- Controlled Cab time Messaging Hardest Working Smoothest Riding Vehicles
Slide 74: Product Solutions
Product Solutions Rider-Driven Innovation RZR Pro R RZR Turbo R Power, Strength & Control Delivers Next Level Thrill Redefining the Category with New Levels of Performance Polaris Investor Day - 2022 74
Slide 75: Product Solutions
Product Solutions Rider-Driven Innovation 850 Indy Matryx RMK Pro Patriot Boost Unrivaled Acceleration, Effortless Control, Instantaneous Lift, Immediate Response, Intelligent Technology More Power at any Elevation Thriving on the Snow with Complete Control & Breakthrough Rider Dynamics Polaris Inve
Slide 76: Accessory Solutions
Accessory Solutions Rider-Driven Innovation Cabs, Lights, Bumpers Racks, Storage Plowing, Boxes Protection Winches, Windshields Ice Fishing Tires Customization Great Opportunity for Owners to Customize Their Machines & Drives PGA Growth Polaris Investor Day - 2022 76
Slide 77: Global Supply Chain – The Big Picture
Global Supply Chain – “The Big Picture” Agile & Efficient Operations What is Happening Across Global Industries? When Will We See Recovery? Modest recovery expected in late 2022 Inventories remain Inventory critically low Some issues (semiconductors) likely to persist into 2023 Market driven cost pr
Slide 78: Process Excellence Through RFM
Process Excellence Through RFM Agile & Efficient Operations Process Innovation ORV Open Pre-Sold Orders Dealer pre-sold orders remain elevated Strong ship execution in Q4 ‘21 Improved the Experience Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2020 2021 Responded to Demand Dealer Readiness Dealer inventory recovers to 2
Slide 79: Margin Expansion
Margin Expansion Agile & Efficient Operations Profitability Drivers Design to Value (DTV) Product Focus to… Design to Value Processes Modular Designs Customer Best Need Design Aggressive Product Plan Robust PGA Business Integrate Suppliers in Best Best Margin Expansion Features Value Lean Tools & St
Slide 80: Off-Road Plant Capacity
Off-Road Plant Capacity Agile & Efficient Operations Global Manufacturing Footprint Monterrey Expansion Monterrey, MX Expansion Capacity Expansion Polaris 2020 2021 Expansion 2022 Expansion Polaris 2022 Efficiency Improvements Sustainability Nearly 1 Million Sq. Ft. Expansion vs. 2020 Substantial In
Slide 81: Polaris Off-Road
Polaris Off-Road Strong, healthy, global business More customer centric than ever Executing across all strategic pillars Driving margin improvement Well positioned for long-term growth Polaris Investor Day - 2022 81
Slide 82: Financial Outlook
Financial Outlook Bob Mack Chief Financial Officer Executive Vice President, Finance & Corporate Development Analyst & Investor Meeting February 24, 2022
Slide 83: Financial Results
Financial Results Adjusted Sales* ($ billion) Adjusted Net Income* ($ million) 12% to 15% $9.2 to $9.5 $573 $8.2 $485 $420 $394 $6.8 $7.0 17-22 CAGR: $327 $6.1 2.1 $5.4 1.8 ~12% 1.5 1.8 M&A 1.1 6.1 Organic: Organic 4.3 4.6 5.0 5.2 ~9% CAGR 2017 2018 2019 2020 2021 2022 Guidance 2017 2018 2019 2020 2
Slide 84: Moving Forward….
Moving Forward…. Polaris Investor Day - 2022 84
Slide 85: 2022-2026 Targets
PuslLARiS Think Outside GLOBAL LEADER IN POWERSPORTS Powering passion and pioneering new possibilities for all those who play, work and THINK OUTSIDE © Rider-Driven Innovation eFa Best Team, Best Culture 4th Agile & Efficient Operations 2 Geared For Good
Slide 86: Long-Range Financial Outlook
Long-Range Financial Outlook Sales Growth Adjusted EBITDA* % Mid-Single Mid- to Digits CAGR High-Teens 12% $8.2B 2021 2026E 2021 2026E ROIC % Adjusted EPS Growth* Mid- Double 27% Twenties** Digits $9.13 2021 2026E 2021 2026E Significant Growth & Profit Expansion in Our Financial Targets *See GAAP/No
Slide 87: Why Invest in Polaris
Why Invest in Polaris Solid, Stable Growth in Core Powersports Significant Competitive Moat Track Record of Winning Innovation Improving EBITDA Margin Rate & Expanding EBITDA Dollars Strong Balance Sheet & Attractive ROIC New Focus on Capital Deployment Simple, Focused Strategy; Compelling Financial
Slide 88: Competitive Moat
Competitive Moat 2021 Powersports Unit Retail Off-Road #1 +80% Off-Road Share Vs. #2 player On-Road #2 +130% Bikes > 900cc Vs. #3 player Marine #1 +70% ~2x Pontoon & Deck Boats Vs. #2 player closest competitor Innovation Engine Product Breadth Scale Brand Presence Advantages Manufacturing & Sourcing
Slide 89: EBITDA Growth
EBITDA Growth EBITDA* $ EBITDA* Rate Margin Improvement Drivers 2021 EBITDA* 12% Price / Cost Balance +++ Modular Designs & Sunburst +++ Portfolio Optimization ++ Motorcycle / TAP Profitability ++ +4-6 pts 12% Tariff Mitigation + 2026 EBITDA Target Mid- to High-Teens 2021 2026E Multiple Levers to Re
Slide 90: EPS Growth
EPS Growth Adjusted EPS* Growth EPS Drivers Sales growth $9.13 Double Digits EBITDA margin rate expansion $7.74 $6.56 $6.32 Reduction in base share count $5.10 No significant tax rate changes Interest & FX likely headwinds 2017 2018 2019 2020 2021 Execution Against Fundamentals Drives Attractive EPS
Slide 91: Strong Balance Sheet & ROIC
Strong Balance Sheet & ROIC ROIC Net Debt / EBITDA Leverage Ratio 2.6 2.2 27% 1.4 1.5 1.1 19% 2017 2018 2019 2020 2021 13% WACC Operating Cash Flow ($ million) 10.9% $1,240 $1,152 $1,132 $908 $969 S&P 500 PS & Rec OEMs Polaris 2021 2012-13 2014-15 2016-17 2018-19 2020-21 Strong Balance Sheet & Cash
Slide 92: New Focus on Capital Deployment
New Focus on Capital Deployment Capital Deployment ($ million) 1. Capital Expenditures 2. Dividend 3. Net Share Repurchases* $1,173 $749 $664 2017-2021 2022-2026E 2017-2021 2022-2026E 2017-2021 2022-2026E Capital Priorities 1. High return organic investments • Plant expansions / potential for a new
Slide 93: Acquisition Financial Performance
Acquisition Financial Performance EBITDA ROA Comments Platform Acquisitions Low-Single • Focus on path to improved profitability TAP <WACC Digits • Customer / lifestyle overlap • ROIC above cost of capital within three years Boats Mid-Teens ~WACC • Strategic platform for future M&A Tuck-in Acquisiti
Slide 94: Why Invest in Polaris
Why Invest in Polaris Solid, Stable Growth in Core Powersports Significant Competitive Moat Track Record of Winning Innovation Improving EBITDA Margin Rate & Expanding EBITDA Dollars Strong Balance Sheet & Attractive ROIC New Focus on Capital Deployment Simple, Focused Strategy; Compelling Financial
Slide 95: Q&A
Q&A
Slide 96: 2022-2026 Targets
PuslLARiS Think Outside GLOBAL LEADER IN POWERSPORTS Powering passion and pioneering new possibilities for all those who play, work and THINK OUTSIDE Best Customer Experience © Rider-Driven Innovation ce Best Team, Best Culture 4+ Inspirational Brands Agile & Efficient Operations #4 Geared For Good
Slide 97: Appendix
Appendix • 2017–2021 Non-GAAP Reconciliations – Total Company • EBITDA Non-GAAP Reconciliation • 2022 Guidance Adjustments Polaris Investor Day - 2022 97
Slide 98: Non-GAAP Reconciliations
Non-GAAP Reconciliations Key Definitions: This presentation contains certain GAAP financial measures which Reconciliation of GAAP "Reported" Results to Non-GAAP "Adjusted" Results (In Millions, Except Per Share Data; Unaudited) have been "adjusted" for certain revenues, expenses, gains and losses as
Slide 99: 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 100: 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 101: Analyst & Investor Meeting
Analyst & Investor Meeting Las Vegas February 24, 2022