Polaris Inc. · NYSE:PII
Polaris — Polaris Industries — Q2 2012 Earnings Presentation
24 slides from Polaris's earnings presentation, Jul 24, 2012
Slide 1: Second Quarter 2012 Earnings Results
POLARIS INDUSTRIES INC. Second Quarter 2012 Earnings Results July 24, 2012
Slide 2: Safe Harbor
Safe Harbor Except for historical information contained herein, the matters set forth in this document, including but not limited to management’s expectations regarding 2012 sales, shipments, net income, cash flow, and manufacturing realignment transition costs and savings, are forward-looking state
Slide 3: Scott Wine, CEO
Scott Wine, CEO POLARIS INDUSTRIES INC. Second Quarter 2012 Earnings Results July 24, 2012
Slide 4: Q2 2012 Sales and Net Income
Q2 2012 Sales and Net IncomeQ2 Sales (in millions) Q2 Net Income (in millions) $69.8 +24% $755.4 +43% $607.9 $48.7 Q2 2011 Q2 2012 Q2 2011 Q2 2012 Record 2nd Quarter Sales and Net Income ORV Sales remained strong +20%; On-Road up 110%; PG&A up 15% International Sales up 7%; EMEA growth slowed, Asia
Slide 5: Full Year 2012 Guidance
Full Year 2012 Guidance Total Company Sales (in millions) Diluted EPS Up 14% to 17% Up 27% to 30% $3,025 to $3,100 $4.05 to $4.15 $2,657 $3.20 2011 Actual FY 2012 2011 Actual FY 2012 Guidance Guidance North American Retail Sales growth, market share gains expected to continue Model Year ‘13 Product
Slide 6: Polaris / Eicher Joint Venture
Polaris / Eicher Joint Venture Growth Through Adjacencies Global Market Leadership Signed July 24, 2012 50/50 Joint Venture in India Eicher is a $1.3 billion manufacturer in the commercial automotive industry in India $50 million investment over the next 3 years, shared equally by each partner Vehic
Slide 7: Polaris Strategic Objectives
Polaris Strategic Objectives 3-5 Year Objectives Q2 2012 YTD Progress Best in Powersports PLUS 5-8% annual organic growth ORV & Victory retail sales & market share up PG&A ramping up throughout the year Major Innovation investments continue Growth through Adjacencies $200 - $500M growth Eicher JV si
Slide 8: Bennett Morgan, President & COO
Bennett Morgan President & COO POLARIS INDUSTRIES INC. Second Quarter 2012 Earnings Results July 24, 2012
Slide 9: N.A. Retail Sales & Inventory Trends
N.A. Retail Sales & Inventory Trends Best in Powersports Plus Snow ORV Victory TOTAL 2008 19% 17% 2009 2010 2011 2012 Q1-11 Q2-11 Q3-11 Q4-11 Q1-12 Q2-12 Polaris Q2 N.A. retail sales up 17%, demand remains strong N.A. ORV and Motorcycle industry growth continues in Q2 SxS industry growth estimated a
Slide 10: Off-Road Vehicles
Best in Powersports Plus Off-Road Vehicles #1 in ORV -Gained share in SxS and ATVs again Industry retail sales remain strong in both ORV and ATV Announcing strong MY ‘13 product next week RANGER Crew in Las Vegas Sportsman 500 EFI Polaris Sales ($ in millions) N.A. ORV Retail Sales Q2 2012 +20% Up m
Slide 11: Growth Through Adjacencies: Military and Bobcat
Growth Through Adjacencies Military Bobcat Strategic Alliance Remain #1 in Ultra-light Segment 1st Half sales up over 2011 Began first shipments of SOCOM ATV MV850 Strong interest in Military RZR, available Q3 2012 Defense up-fit capability established in Osceola Numerous technology and business dev
Slide 12: On-Road Vehicles
Best in Powersports Plus On-Road Vehicles Polaris Total On-Road Sales (in millions) Q2 2012 N.A. Motorcycle Industry 1400cc+ Victory N.A. retail sales up over 10% in Q2; #2 in heavyweight share Industry growth slower than Q1 due to seasonal pull-forward International unit retail sales up significant
Slide 13: Growth Through Adjacencies: GEM and Goupil
Growth Through Adjacencies GEM Goupil Strong Q2 dealer orders -highest level since Q4 2009 Added more than 60 dealers YTD 2012 2H focused on Int’l, GSA, and dealer adds 1st half revenue up over last year (proforma) Cost down and operational efficiency improvements progressing well Some challenges wi
Slide 14: PG&A
Best in Powersports Plus PG&A Q2 2012 PG&A Revenue by Category Parts, Garments & Accessories ORV growth up 17% vs Q2 2011 On-Road up 54% vs Q2 2011 International up 19% from Q2 2011 Launching 200+ new MY ‘13 accessory products in Vegas later this month 51% 47% 2% Parts Accessories Apparel Q2 2012 PG
Slide 15: Global Market Leadership
Global Market Leadership Polaris Sales (in millions) Q2 2012 Growth by Region Global Market Snow 2%Up low-double digits +7% $111.5 +39% Increased ORV market share – remain clear leader in Europe Sales up 7%; Currency was negative 5% in Q2 On-Road / Victory sales up over 130% ORV down 8% due to weake
Slide 16: Operational Excellence
Operational Excellence Gross Margins Net Income as a Percent of Sales Q2 2012 Margins Up 60 to 80 bps 29.2% -50 bps 2.3% 0.2% -0.8% 28.5% to 28.7% 28.7% 27.9% Q2 2011 Q2 2012 FY 2011 FY 2012 Q2 Gross Operating Financial Income Taxes Q2 Guidance 2011 Margin Expense Services / Non-2012 Operating Gross
Slide 17: Mike Malone, V.P. Finance & CFO
Mike Malone V.P. Finance & CFO Second Quarter 2012 Earnings Results July 24, 2012 POLARIS INDUSTRIES INC.
Slide 18: 2012 Full Year Guidance
2012 Full Year Guidance METRIC GUIDANCE Product Line Sales Off-Road Vehicles Up mid-double digits % On-Road Vehicles Up 50% to 60% Snowmobiles Down mid-single digits % PG&A Up low-double digits % International Up low-double digits % Total Company Sales Up 14% to 17% Gross Margins Expand 60 to 80 bps
Slide 19: 2012 Full Year Gross Margin Guidance
2012 Full Year Gross Margin Guidance METRIC Actual Q2 2011 Actual Q2 2012 Full Year Guidance 2012 Prior Period 26.2% 29.2% 27.9% Production volume adjustments Product cost reduction efforts Commodity costs Currency rates Higher selling prices Product mix Manufacturing realignment, net Warranty costs
Slide 20: Manufacturing Realignment: Monterrey Facility
Manufacturing Realignment Monterrey Facility Operations as a Competitive Advantage Vehicle Assembly Engine Assembly Employee Headcount (Units) (Units) $30+ $12 -$15 850 1 st Half 22,500 20,0001st Half 1st Half FY 12 Anticipated FY 2011 FY 2012 FY 2013 FY 2011 FY 2012 FY 2013 FY 2011 FY 2012 FY 2013
Slide 21: Balance Sheet and Liquidity Profile
Balance Sheet and Liquidity Profile $ In millions (except per share and interest rate data) YTD 2012 Fav/(UnFav) 2011 2012 Full Year Guidance Cash $289.3 $27.1 Increase from 2011 Debt $107.6 ($7.6) Unchanged Credit Facility $350.0 ($100.0) Renewed to 2016 Factory Inventory $358.0 ($71.8) Decrease fr
Slide 22: Scott Wine, CEO
Scott Wine, CEO POLARIS INDUSTRIES INC. Second Quarter 2012 Earnings Results July 24, 2012
Slide 23: Priorities for 2nd Half 2012
Priorities for 2nd Half 2012 Stay on Offense Accelerate progress from Dealer Show Win competitive battle with innovation & execution; MY ‘13 launch Actively manage risk Be diligent & prepared for adversity Leverage speed & agility to deal with volatile economic environment Accelerate Operational Exc
Slide 24: Thank you / Q&A
Thank you Q &A 24