Polaris Inc. · NYSE:PII
Polaris — Polaris Industries — Investor Presentation (May 2015)
25 slides from Polaris's investor presentation, May 2015
Slide 1: Investor Presentation
POLARIS INDUSTRIES INC. Investor Presentation May, 2015
Slide 2: Polaris Industries Inc. – A Global Corporation
Polaris Industries Inc. – A Global Corporation ~8,100 Employees Worldwide 15 Manufacturing Locations 5 Research & Development Centers of Excellence ~1,850 Dealers In North America ~1,400 Dealers Outside North America >380,000 Units Shipped Worldwide in 2014 >100 Countries – Polaris Products Sold IR
Slide 3: Corporate Overview: 2014 Sales
Corporate Overview: 2014 Sales Sales by Geography Sales by Component* PG&A 17% United States Off-Road 15% International Vehicles 7% Snowmobiles 75% 62% 8% Motorcycles 10% Canada 6% Global Adjacent Markets BILLION UP IR May 2015 *Reclassified for new Global Adjacent Markets organizational structure 3
Slide 4: Polaris at a Glance – Key Financial Metrics
Polaris at a Glance – Key Financial Metrics Sales Guidance Net Income* SALES UP 9% TO 12% 5-Year CAGR +19% Sales +23% $4,480 EPS* +34% $3,777 NET INCOME UP $3,210 $454 9% TO 12% $2,657 $381 $312 $1,991 $228 $147 2010 2011 2012 2013 2014 2015 Guidance EPS* $2.14 $3.20 $4.40 $5.40 $6.65 $7.27 TO $7.42
Slide 5: Polaris Strategic Objectives
Polaris Strategic Objectives Vision & Strategy Guiding Principles VISION STRATEGY Fuel the passion of riders, Polaris will be a highly profitable, customer centric, workers and outdoor enthusiasts $8B global enterprise by 2020. We will make the best Best People, Best Team around the world by deliver
Slide 6: Off-Road Vehicles
Off-Road Vehicles 3-Yr CAGR +17% Sales Up mid-single digits % $2,909 +15% (unchanged) $2,793* $2,522 $2,226 $ in Millions 2012 2013 2014 FY 2014 FY 2015 (Reclassified) Guidance #1 in Market Share – Double the Nearest Competitor IR May 2015 *2014 reclassified to exclude Defense and Commercial Sales 6
Slide 7: Motorcycles
Motorcycles Acquired 2011 Est. 1998 3-Yr CAGR +38% Est. 2014 Sales Up 55% to 70% (increased) +59% $349 $ in Millions $220 $196 2012 2013 2014 FY 2015 Guidance Amazing Products & Launches – Big Opportunity! IR May 2015 7
Slide 8: Snowmobiles
Snowmobiles 3-Yr CAGR +5% Sales Down low-single +7% digits % $302 $322 (increased) $283 $ in Millions 2012 2013 2014 FY 2015 Guidance Solid #2 – Growing Market Share & Continuous Quality Improvement IR May 2015 8
Slide 9: Global Adjacent Markets
Global Adjacent Markets Total Sales** Work & Transportation* Up 5% to 10% +24% (decreased) $273 $221 $ in Millions *Small Vehicles + Commercial 2013 2014 FY 2015 Military (Reclassified) (Reclassified) Guidance **Beginning in 2015 the organization restructured by combining Small Vehicles, Commercial
Slide 10: Parts, Garments & Accessories (PG&A)
Parts, Garments & Accessories (PG&A) 3-Yr CAGR +22% Sales Up high-teens % (unchanged) +21% $742 Motorcycles Parts $611 Small $461 Vehicles $ in Millions Off-Road Garments Vehicles Snow Accessories Other 2012 2013 2014 FY 2015 FY 2014 Guidance FY 2014 Growing Core Brands; Leveraging Aftermarket Oppor
Slide 11: International
International 2014 Sales by Product 2014 Sales by Geography Latin Snow Motorcycles America 8% 11% 7% Asia 4% ORV Small Europe 46% Vehicles 68% Aus / NZ 19% 12% PG&A 16% ME / Africa 9% Total International Sales ($ in millions) 3-Yr CAGR +17% Down low-single +16% digits % $685 (decreased) $592 Latin A
Slide 12: Thank you – Questions?
€> POLARIS: Thank you Questions?
Slide 13: Appendices
Appendices Slide Consistent Financial Performance 14 Q1 2015 Sales and Income 15 N.A. Retail Sales & Q1 2015 16 Dealer Inventory – Q1 2015 17 2015 Full Year Detailed Guidance 18 2015 Gross Profit Margin Guidance 19 Foreign Currencies Exposures for Polaris 20 Balance Sheet and Liquidity Profile 21 LE
Slide 14: Consistent Financial Performance
Consistent Financial Performance 5+Year Total Return Dec. 31, 2009 – April 24, 2015 Dividends (Per Share) 5-year dividend payout $457 million Dividends increased 20% per year compounded 617% annually for the past 5 years $2.12 $1.92 $1.68 $1.48 $0.80 $0.90 203% 111% 90% 73% Polaris Peer S&P S&P DJIA
Slide 15: Q1 2015 Sales and Income
Q1 2015 Sales and Income ($ in millions) Q1 Sales Q1 Operating Income Q1 Net Income $150.3 $88.6 $1,033.3 $126.7 $80.9 $888.3 Q1 2014 Q1 2015 Q1 2014 Q1 2015 Q1 2014 Q1 2015 Record 1st quarter sales, operating income and net income Sales of Motorcycles +74%; PG&A +12%; ORV +11% Sales in EMEA -15%; A
Slide 16: N.A. Powersports Retail Sales – Q1 2015
N.A. Powersports Retail Sales – Q1 2015 Polaris Retail Sales Industry Retail Sales 15% 13% 12% 8% 7% +4% +4% Industry Industry Q1-14 Q2-14 Q3-14 Q4-14 Q1-15 Q1 2014 Q1 2015 Polaris N.A. retail 8% for Q1 2015 vs. Q1 2014 Gained share in powersports driven by motorcycles ORV market share flat in Q1 –
Slide 17: Dealer Inventory – Q1 2015
Dealer Inventory – Q1 2015 N.A. Dealer Inventory 4% Existing ORV Models 3% New ORV Models 2015 3% ACE / New Segments 2% Snowmobiles 2014 1% Slingshot 2013 4% New Dealers 2012 17% Total Increase Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Polaris Q1 2015 N.A. dealer inventory 17% vs. 2014 ORV mid
Slide 18: 2015 Full Year Guidance
2015 Full Year Guidance METRIC GUIDANCE Sales Components Off-Road Vehicles Up mid-single digits % (reclassified 2014 actuals) Snowmobiles Down low-single digits % Motorcycles Up 55% to 70% Global Adjacent Markets Up 5% to 10% (reclassified 2014 actuals) PG&A Up high-teens % International Down low-si
Slide 19: 2015 Gross Profit Margin Guidance
2015 Gross Profit Margin Guidance Actual Actual Guidance METRIC Q1 2014 Q1 2015 FY 2015 Prior period 29.0% 29.1% 29.4% Production volume/capacity Product cost reduction efforts Commodity costs Currency rates Higher selling prices Product mix New plant start-up costs Warranty costs Depreciation/Tooli
Slide 20: Foreign Currency Exposures for Polaris
Foreign Currency Exposures for Polaris F/X Impacts vs. 2014 Actual FY 2015 Expectations* ($ in millions) Q1 2015 (Included in Guidance) Sales ($32) ($140 - $160) Gross Profit ($12) ($65 - $75) Operating Expenses $5 $15 - $17 Other Expense ($9) ($15 - $17) Pretax Income ($16) ($65 - $75) *Assumes exc
Slide 21: Balance Sheet and Liquidity Profile
Balance Sheet and Liquidity Profile $ In millions Fav / (UnFav) (except per share and rate data) Q1 2015 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 22: LEAN is a Competitive Advantage
LEAN is a Competitive Advantage Gross Profit Margin Up to +20 bps 29.4% to 29.6% 29.1% -66 bps 28.4% Q1 2014 Q1 2015 FY 2015 Guidance Future Plant Rendering – 600,000 sq ft Production delays in motorcycles – paint system, new product readiness Began shipping Indian Scouts very late in Q1 New paint s
Slide 23: Customer Profiles
Customer Profiles OFF-ROAD VEHICLES MOTORCYCLES SNOWMOBILES Avg. 49 43 44 47 52 25 to 55 42 Age Income ~$100k ~$100k ~$90k ~$90k ~$100-$125k ~$150k ~$90k Male / 95% / 5% 90% / 10% 90% / 10% 75% / 25% 90% / 10% 90% / 10% 90% / 10% Female Primary Mostly Work Mostly Play Work & Play Rec/Trail Cruising
Slide 24: Recent Acquisitions
Recent Acquisitions Timbersled Acquisition Hammerhead Acquisition Light Utility Adult go-karts Vehicles MSRP-US (Gas/Electric) $1,999-$2,799 MSRP-US $3,499 - $5,499 Youth go-karts MSRP-US $1,099 - $1,699 Mountain Horse Conversion Kit MSRP-US $5,300 - $6,500 New snow category complements mountain Lev
Slide 25: 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 2015 sales, shipments, margins, currencies, net income and cash flow, the opportunities for expansion and diversification of the Co
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