Polaris Inc. · NYSE:PII
Polaris — Polaris Industries — Robert Baird 2007 Growth Stock Conference
24 slides from Polaris's conference presentation, May 9, 2007
Slide 1: Robert Baird 2007 Growth Stock Conference
Robert Baird 2007 Growth Stock Conference May 9, 2007
Slide 2: Polaris at a glance
Polaris at a glance: Founded in 1954 Manufacturer of a diversified mix of high-quality, high-performance motorized products for recreational and utility use Manufacturing and distribution facilities located in Minnesota, Wisconsin, Iowa and South Dakota Highly productive non-union workforce - 3,400
Slide 3: Strong Business Foundation
Strong Business Foundation Highest margin product PG&A 16% $300-500 million long-term opportunity Unique product features and quality Victory 7% Leverage Brand / grow market share Generate cash Snowmobiles 10% Among top 3 in market share in N.A. Growth Opportunity in several segments including side-
Slide 4: Consistent Financial Performance
Consistent Financial Performance Dollars (in millions) Net Income Per Share from Continuing Operations 1997-2006 $2.91 to $3.03 Up 7% to 11% Sales from Continuing Operations 1997-2006 Up 1% to 3% ** A reconciliation of the Company's calculation of cash flow provided to the most directly comparable c
Slide 5: Consistent Financial Performance: Cash Flow Used to Fund
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 East 14 40 38 52 40 49 76 73 67 132 308 West 38.6 34.6 31.6 North 46.9 45 43.9 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 0.32 0.36 0.4 0.44 0.5 0.56 0.62 0.92 1.12 1.24 1.36 West 34.6 31.6 North 45 43.9 1996 1997 1998 1999 2000 2001
Slide 6: Getting Back to Great: 2007 Guidance
Getting Back to Great 2007 Year Guidance Full Year 2007 Full year 2007 earnings from continuing operations is expected to be in the range of $2.91 to $3.03 per diluted share, up 7% to 11% from the $2.72 in 2006. Sales growth for full year 2007 is expected to be in a range of up 1% to 3% from 2006 sa
Slide 7: 2007 - Getting Back to Great
2007 - Getting Back to Great 2006 2007 2008/2009 Overview Tough Year Disappointing Getting back on track Anticipate good years Major Themes ATV inventory No KTM deal Snowmobiles and ATVs declining Cost pressures Stock buyback ATV inventory fixed Post KTM plan Operations more predictable Win in the c
Slide 8: 2007 - Getting Back to Great: Awesome Products
2007 - Getting Back to Great Awesome Products...Customer Focused...Results Driven 1. Win in the Core Grow market share in snowmobiles and ATVs. Leverage PG&A and Financial Services to deliver superior total value. 2. Delivering Operational Excellence Industry-leading quality in every product line. >
Slide 9: Win in the Core: Improving Our ATV Business
1. Win in the Core..... Improving Our ATV Business ATV/Side-by-Side (SxS) Global Industry $8+ Billion Global Vehicle Market Polaris is Strongest in Most Profitable Segments Top 3 Global Player #1 American Brand 2002 2003 2004 2005 2006 Total Vehicles NA ATV Side-by-Side Asian Imports Int'l ATV Total
Slide 10: 2007: ATVs Will be More Competitive
2007: ATVs Will be More Competitive N.A. industry expected to decline mid single digits (similar to 2006) Strong promotions throughout year More advertising support More competitive product in every class Dealer inventory at acceptable levels Correction of inventory levels completed by mid-year 2007
Slide 11: The Future Looks Better
The Future Looks Better 2003 2004 2005 2006 2007 2008 Shipments Retail Dealer Inventory Shipments Start Growing Again! Inventory Healthy Level ATV 2008 = Positioned For Success More Competitive MY08 Product Line Stronger Brand-World's Toughest ATV Growing Military Business Units 1. Win in the Core..
Slide 12: Continued Recovery of Our Snow Business
Industry struggling due to lack of snowfall East of the Rockies. N.A. market down 7% in 06-07 season, Polaris lost some share Quality remains #1 focus. Starting to see result in MY 2007. 600 SDI and 700 SDI have had very few issues. Response to field issues has improved significantly. MY 2008 produc
Slide 13: Leverage PG&A and Financial Services
Wholesale credit 37% 1st Qtr 3rd Qtr 4th Qtr East 6 57 34 West 30.6 34.6 31.6 North 45.9 45 43.9 Other Activities 6% Retail Financing (HSBC) 57% Financial Services Income by Category - 2006 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr East 22 6 7 2 63 West 30.6 38.6 34.6 31.6 North 45.9 46.9 45 43.9 4 5 6 4th Qt
Slide 14: Strengthen Our Lean Cost Competitive Edge
Striving for a "Toyota-like" level of operational excellence Objective of being #1 in quality in all businesses Currently: #1 in motorcycles and RANGERs #2 in ATVs #4 in Snowmobiles Drive lower costs 5% labor productivity improvement each year Drive for 5% cost reduction yearly Simple, robust produc
Slide 15: Polaris Outlook for Industry Long-Term
Polaris Outlook for Industry Long-Term Continue solid growth in Touring Demographics favorable at least through 2010 Customers want unique designs - "Attention Getting" models like Victory Vision U.S. Motorcycle Market Top Three On-Highway Segments 1995-2006 Market Trends Demographics favorable Harl
Slide 16: Victory Vision Luxury Touring Opportunity
Entering the Luxury Touring segment with Victory Vision opens up a large segment of the heavyweight motorcycle business for Victory Fastest growing Demographics favorable for Touring Extensive market research - consumers and competitors Most beautiful Most comfortable Unique differentiated market po
Slide 17: Build an Industry Leading Side-by-Side Vehicle Business
Build an Industry Leading Side-by-Side Vehicle Business Aggressively Expand RANGER(tm) in Utility Segment Enter and Lead Emerging Recreation Segment #1 Quality Side-By-Side Vehicle Strongest Side-By-Side Dealer Network Industry Leading Side-by-Side Vehicles RANGER(tm) Strategy 3. Grow $500 Million i
Slide 18: RANGER RZR Capitalizes on High Growth Market
Capitalizes on High Growth Market Recreation Segment has grown from zero to 40K units in 5 years Brings Incremental Customers to RANGER Business RANGER = Ag, Multi-Acre Homeowners, and Hunters RANGER RZR = Big Bore Trail, SxS Sport, and Hunters Expands Polaris Coverage of Key Customer Segments Sport
Slide 19: Growth Opportunities Internationally
* Polaris Estimate 2006 Market - $1.8 Billion Estimated Market Size For Polaris Products* Polaris Subsidiaries France Australia/NZ UK Sweden/Norway Finland Russia Germany Italy Spain Portugal Others Japan 1999 2002 2003 2004 2005 2006 East 68 90 142 194 233 233 $141 $90 International Sales $194 Expa
Slide 20: Military Growth Opportunity
Growth Opportunity of $50-$75 Million by 2009 Weapons Mount Mission Utility Water Crossing Rugged Terrain Self Recovery Track Kit for Snow Military Increased investment planned in 2007 Enhanced product plan Leverage relationship in consumer marketing supports "toughest" position 3. Grow $500 Million
Slide 21: Adjacent Market Growth Opportunities
? ? ? ? ? ? Polaris Traditional Markets Snowmobiles ATVs PWC Work RANGER Widetrack Snowmobiles Fun/Lifestyle Victory Quadricycles Sport ATVs RANGER RZR(tm) Military MV Ranger Adjacent Markets Profitable Top Line Growth of Approximately $75 million by 2009 Migrate Polaris into at least one Adjacent M
Slide 22: Appendix: Forward-Looking Statements
Appendix Our presentation and responses to your questions may contain certain statements which may be considered forward looking for the purposes of the Private Securities Litigation Reform Act of 1995. We caution you that actual results could differ materially from those projected in a forward look
Slide 23: Thank You, Questions?
GETTING BACK T0 Thank You Questions?
Slide 24: Getting Back To
GETTING BACK T0
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