Slide 1: Third Quarter 2024 Earnings Presentation
Third Quarter 2024 Earnings Presentation October 22, 2024
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 are forward-looking statements that involve certain risks and uncertainties that could cause actual results to differ materially from those forward-looking statements. Poten
Slide 3: Third Quarter 2024 Overview
Third Quarter 2024 Overview Total Company Results(1) Third Quarter Drivers Q3’24 Y/Y Change • North America retail down 7% • Lost modest share in ORV, Motorcycles and Pontoons Sales $1,722M 23% • Dealer inventory down 1% relative to 12/31/23; down 6% excluding Snow and Youth Adjusted Gross • Sales p
Slide 4: Third Quarter North America Retail Trends and Sentiment
Third Quarter North America Retail Trends and Sentiment • Retail Trends ORV Recreation and Utility Retail In Units o ORV Utility down LSD% with RANGER outperforming Sportsman 5% 7% 3% -4% -3% o ORV Recreation down for eight quarters in a row • Crossover up over 25% with Polaris XPEDITION and GENERAL
Slide 5: Q3 2024 Financial Results
Q3 2024 Financial Results Sales Financial Highlights (Y/Y) $2,249 • Quarterly sales of $1.7B, down 23% $1,722 o Lower volumes, mix, and net price ($388) ($135) ($4) o International sales down 5% o PG&A sales down 17% • Adjusted* EBITDA margin down 333 bps Q3 2023 Volume Mix/ FX Q3 2024 o Negative pl
Slide 6: Off Road Q3 Summary
Off Road Q3 Summary Q3 Results & Y/Y Change PII Call-outs • N.A. ORV Sales: $1,400M 24% o Retail down 3% y/y; Utility and Recreation down LSD% Wholegoods North America o Dealer inventory trending lower relative to 12/31/2023 26% PG&A 26% International 18% 7% • Lost modest market share in ORV; YTD sh
Slide 7: On Road Q3 Summary
On Road Q3 Summary Q3 Results & Y/Y Change PII Call-outs • N.A. Indian Motorcycle retail was down low-double digits Sales: $237M 13% • Indian Motorcycle lost modest share in N.A. Wholegoods PG&A North America International • Continue to see pressure in heavyweight resulting in a mix 14% 19% 7% 3% he
Slide 8: Marine Q3 Summary
Marine Q3 Summary Q3 Results & Y/Y Change PII Call-outs • Dealer inventory down ~35% relative to beginning of the year Sales: $86M 36% • Lost share in Pontoons • Positive momentum from our dealer meetings in August Gross Profit where we showcased new innovation 12.2% 587 bps Margin: • Continue build
Slide 9: Financial Position
Financial Position Operating Cash Flow Adjusted* Free Cash Flow $ in millions $ in millions $926 $507 ~$300 ~$100 FY 2023 FY 2024 FY 2023 FY 2024 Expectations Expectations 2024 Capital Deployment Priorities Key Financial Metrics $ in millions #1 Priority – Organic Investment Lighter than expected ca
Slide 10: Full Year 2024 Guidance & Expectations
Full Year 2024 Guidance & Expectations Total Company Sales Segment Sales Q4 2024 Outlook Assumptions $ in Millions • Lowering guidance due to Q3 performance and lower retail Lowered ~20% Off Road expectations Lowered o Ship volume lower due to holding goal of dealer inventory reduction ~20% ~15% o R
Slide 11: 2025 Initial Thoughts
2025 Initial Thoughts • Expect the retail environment to remain challenging • Encouraged to see Fed cut rates; we expect more needs to be done to impact purchasing decisions • Anticipate dealers will be more comfortable with their inventory position • Expand our market presence with innovation • Con
Slide 12: Closing Comments
Closing Comments • Remain committed to reducing dealer inventory despite lower industry retail • Expect current trends to persist into Q4 and 2025 • Continue to launch new innovation • Collaborating with dealers to help improve their profitability • Focusing on executing operational excellence • Rem
Slide 13: Polaris
PssLARIS
Slide 14: Appendix
Appendix • Non-GAAP Reconciliations – Total Company • Non-GAAP Reconciliations – Net Income to Adjusted EBITDA • Non-GAAP Reconciliations – Segments / Cash Flow • 2024 Guidance Adjustments Q3’24 Earnings 10/22/24 14
Slide 15: Non-GAAP Reconciliations – Total Company
Non-GAAP Reconciliations – Total Company Reconciliation of GAAP "Reported" Results to Non-GAAP "Adjusted" Results (In Millions, Except Per Share Data; Unaudited) Three months ended September 30, Nine months ended September 30, Full Year 2024 2023 2024 2023 2023 Gross profit 354.6 508.8 1,108.9 1,483
Slide 16: Non-GAAP Reconciliations – Net Income to Adjusted EBITDA
Non-GAAP Reconciliations – Net Income to Adjusted EBITDA Reconciliation of Net Income to Adjusted EBITDA (In Millions, Unaudited) Three months ended September 30, Nine months ended September 30, Full Year 2024 2023 2024 2023 2023 Sales 1,722.4 2,248.9 5,420.0 6,645.2 8,934.4 Net income 27.6 151.5 10
Slide 17: Non-GAAP Reconciliations – Segments / Cash Flow
Non-GAAP Reconciliations – Segments / Cash Flow Reconciliation of GAAP Segment Gross Profit to Non-GAAP Reconciliation of GAAP Operating Cash Flow to Non-GAAP Segment Gross Profit Adjusted Free Cash Flow (In Millions, Unaudited) (In Millions, Unaudited) Three months ended September Nine months ended
Slide 18: 2024 Guidance Adjustments
2024 Guidance Adjustments 2024 adjusted guidance excludes the pre-tax effect of restructuring costs of approximately $25 million, and approximately $10 million for class action litigation-related expenses. Intangible amortization of approximately $18 million related to all acquisitions has also been