Polaris Inc. · NYSE:PII
Polaris — Polaris Industries — Q2 2013 Earnings Presentation
24 slides from Polaris's earnings presentation, Jul 23, 2013
Slide 1: Second Quarter 2013 Earnings Results
Second Quarter 2013 Earnings Results July 23, 2013 POLARIS INDU STRIESINC.
Slide 2: Forward-looking statements disclaimer
Except for historical information contained herein, the matters set forth in this document, including but not limited to management’s expectations regarding 2013 sales, shipments, margins, net income and cash flow are forward-looking statements that involve certain risks and uncertainties that could
Slide 3: Scott Wine, Chairman & CEO
Scott Wine Chairman & CEO Second Quarter 2013 Earnings Results July 23, 2013 POLARIS INDUSTRIES INC.
Slide 4: Q2 2013 Sales and Net Income Record
$69.8 $80.0 Q2 2012 Q2 2013 +15% Q2 2013 Sales and Net Income Record 2nd Quarter Sales and Net Income ORV Sales remained strong +7%; PG&A up 33% International Sales up 22%, includes sales of Aixam Mega EMEA (excluding Aixam) flat in tough economic environment Earnings per Share up 15% to $1.13 Gross
Slide 5: 2013 Sales & EPS Guidance Reflects Another Record Year
North American Retail Sales growth and market share gains expected to continue PG&A expected to grow 27% to 30% with Klim acquisition International Sales projected to increase about 20% with acquisitions Aixam Mega integration has begun Net Income projected up 18% to 20% Net Income Margin expectatio
Slide 6: Victory Motorcycles - 15 Years
#2 Heavyweight Brand; Highly Complimentary with Indian Victory Motorcycles - 15 Years 2012 Cycle World Victory Judge™ “Honorable Mention” 1998 Victory V92C Cruiser of the Year 2003 VICTORY VEGAS Best Cruiser Bike of the Year Cruising Rider Magazine Best Cruiser Motorcyclist Magazine 2008 Victory Vis
Slide 7: Indian Motorcycle Re-launch Has Arrived
Unveiling August 3rd in Sturgis, South Dakota Indian Motorcycle Re-launch Has Arrived In American Motorcycles 7 Q2-2013
Slide 8: Polaris Strategic Objectives
Polaris Strategic Objectives Best in Powersports PLUS 5-8% annual growth ORV gained market share again Dealer inventories lower sequentially PG&A grew 33%; Klim solid start Growth through Adjacencies $1B - $2B from acquisitions and new markets Shipments began for Brutus to both channels Aixam Mega a
Slide 9: Bennett Morgan, President & COO
Bennett Morgan President & COO Second Quarter 2013 Earnings Results July 23, 2013 POLARIS INDUSTRIES INC.
Slide 10: Polaris N.A. Retail Sales and Dealer Inventory Improved
10 Q2-2013 Polaris N.A. Retail Sales and Dealer Inventory Improved Dealer Inventory Change Dealer Inventory Best in Powersports Plus Units 2013 2012 2011 2010 2009 2008 Polaris N.A. retail sales improved to +11% in Q2; YTD now +9% N.A. Powersports industry retail sales were up in Q2 Polaris Q2 N.A.
Slide 11: Continuing to Grow Sales and Market Share in ORV
11 Q2-2013 N.A. ORV Retail Sales Q2 2013 Polaris ORV Sales ($ in millions) Continuing to Grow Sales and Market Share #1 in ORV – Share expansion in SxS and ATVs in N.A. Polaris retail up in Q2 against tough comparisons Q2 2013 retail sales for ORV were up low-double digits % and core ATVs were up mi
Slide 12: Growth Through Adjacencies
12 Q2-2013 Growth Through Adjacencies Polaris Defense Sales Expected to Accelerate Polaris Commercial – Bobcat UTV / BRUTUS Over 400 Polaris Commercial dealers Strong initial dealer orders for Brutus + attachments Pipeline fill will continue into Q3 2H focus on retail, training & dealer development
Slide 13: Victory + Indian = A Growing Motorcycle Business
13 Q2-2013 Q2 2013 N.A. Motorcycle Industry 1400cc+ Polaris Motorcycle Sales (in millions) Q2 2013 Victory + Indian = A Growing Motorcycle Business Polaris Q2 and YTD sales down due to timing of RFM segment stocking vs. annual order + ship model Victory Q2 N.A. retail up low single digits %; share a
Slide 14: Small Vehicle Business Gaining Foothold
14 Q2-2013 Polaris Small Vehicles Sales (in millions) Small Vehicle brands Q2 2013 Small Vehicle Business Gaining Foothold Completed Aixam Mega acquisition – Q2 on plan Gained share in Q2 Synergies identified and initiated GEM & Goupil increased sales in Q2 Goupil orders up 30+ % in Q2 GEM retail sa
Slide 15: PG&A Produced Strong Q2 Results
FY 2012 FY 2013 Guidance Best in Powersports Plus 15 Q2-2013 Polaris PG&A Sales ($ in millions) Q2 2013 PG&A Produced Strong Q2 Results Record Q2 sales; up 33% vs. Q2 2012 ORV growth up 25% Motorcycles up 71% - includes Klim in 2013 Snow up 58% - includes Klim in 2013 All categories and regions incr
Slide 16: International: Gaining Share in Challenging Economic Environment
Q2-2013 2013 Objectives Gaining Share in Challenging Economic Environment ORV 53% Small Vehicles 21% PG&A 17% Q2 2012 Q2 2013 FY 2012 FY 2013 Guidance Up about 20%* +22% 135.5* +9% $460.6 $111.5 Europe 75% Latin America 5% Asia 3% Aus / NZ 14% ME / Africa 3% * Includes Aixam Mega Polaris Internation
Slide 17: Operational Excellence Initiatives Continue to Add Value
Gross margins increased 120 bps in Q2 2013 Net income margin increased 30 bps to 9.5% LEAN initiatives driving productivity gains; +5% in Q2 Factory inventory up 20% vs. Q2 2012 due to product mix and acquisitions Capital projects on track – Wyoming, MN R&D Center expansion complete 17 Q2-2013 +90 b
Slide 18: Mike Malone, VP Finance & CFO
Mike Malone V.P Finance & CFO Second Quarter 2013 Earnings Results July 23, 2013 POLARIS INDUSTRIES INC.
Slide 19: 2013 Full Year Guidance
Continued Strong Financial Performance 2013 Full Year Guidance METRIC GUIDANCE Product Line Sales Off-Road Vehicles Up 8% to 10% Motorcycles Up 15% to 20% Small Vehicles Well over 100% Snowmobiles Up low single digits % PG&A Up 27% to 30% International Up about 20%, incl. Aixam Total Company Sales U
Slide 20: 2013 Gross Margin Guidance
2013 Gross Margin Guidance METRIC Actual Q2 2012 Actual Q2 2013 2013 Full Year Guidance Prior Period 29.2% 28.7% 28.8% Production volume adjustments Product cost reduction efforts Commodity costs Currency rates Higher selling prices Product mix Mfg. realignment projects, net Warranty costs Tooling a
Slide 21: Balance Sheet & Liquidity Profile
Balance Sheet & Liquidity Profile Solid Balance Sheet and Liquidity Profile $ In millions (except per share and rate data) First Half 2013 Fav / (UnFav) First Half 2012 2013 Full Year Guidance Cash $217.7 ($71.6) Decrease due to funded acquisition Debt $107.6 Flat Unchanged Credit Facility $350.0 Fl
Slide 22: Scott Wine, Chairman & CEO
Scott Wine Chairman & CEO Second Quarter 2013 Earnings Results July 23, 2013 POLARIS INDUSTRIES INC.
Slide 23: 2nd Half Growth is Expected to Accelerate
2nd Half Growth is Expected to Accelerate Closing Comments 1st half results solid – 2nd half will benefit from MY’14 introductions Unprecedented new product launch Investments in infrastructure to meet current and future demand Roseau, Spirit Lake, Osceola and Monterrey have added capacity and capab
Slide 24: Thank you, Questions?
Polaris Thank you Questions?