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DAGOR
MRZR Turbo
Diesel
PREMIUM BACKCOUNTRY
Investor PresentationNovember 2019
PII IR Nov-2019 1
82%
12%
6%
POLARIS INC. – A GLOBAL CORPORATION
PII IR Nov-2019 2
1954 Year Polaris was Founded
~13,000 Employees Worldwide
22 Global Manufacturing Locations
9 Key Research & Development Centers
~2,300 Dealers In North America
~1,400 Dealers Outside North America
>400,000 Units Shipped Worldwide in 2018
>120 Countries – Polaris Products Sold
2019 EXPECTED SALES* BY SEGMENT
2019 EXPECTED SALES* BY GEOGRAPHY
*Sales expectations are adjusted, and based on current FY’19 guidance
62%9%
7%
13%
9%
Global Adjacent
Markets
Motorcycles
Aftermarket
Boats
Off-road Vehicles /
Snowmobiles
Canada
United
States
International
PII IR Nov-2019 3
POLARIS 2019 – A MORE DIVERSE GROWTH COMPANY
2019 Expectations*2008
94%
6%
62%
9%
7%
13%
9%
~$2 Billion Invested in Acquisitions Since 2008PII IR Nov-2019 4
Global AdjacentMarkets
Motorcycles
Off-RoadVehicles/
Snow
*Based on FY’19 Guidance
Aftermarket
Motorcycles
Off-RoadVehicles/
Snow
2008 >> 2010 2011 2012 2013 2014 2015 2016 2017 2018
BILLIONBILLION
Boats
N.A. POWERSPORTS CONSOLIDATED MARKET SHARE
5PII IR Nov-2019
#1 Market Share Position in N.A. Powersports Improved in 2018
Dividends & Share RepurchaseReturn on Invested Capital
FINANCIAL STRENGTH & FLEXIBILITY
Sales* & Earnings Per Share*
PII IR Nov-2019 6
20%
$5,428
12%
$6,083
$5.10
$6.56 $6.20to
$6.30
2017 2018 2019Guidance
Sales EPS
$235
$402
2017 2018 2019
Dividends Repurchases
Dividend 2%
Debt reduction
is current free cash
flow priority given
recent acquisitions
$ millions; Non-GAAP Adjusted Results
*DOO, BC, DE, HOG, WGO, TTC, TXT(ACAT)
Expectations
*Adjusted Results: See GAAP/Non-GAAP Reconciliation detail
~12%
13%
17%
19%
2016 2017 2018
Polaris
Peer Average*
S&P 500 Average
Industry-Leading
$ millions
DAGOR
MRZR Turbo
Diesel
PREMIUM BACKCOUNTRY
Customer Centric, Highly Efficient Growth Company
PII IR Nov-2019 7
NEW MODEL YEAR 2020 PRODUCT INTRODUCTIONS
8PII IR Nov-2019
Research & Development Investments Beginning to Pay Dividends
RESEARCH & DEVELOPMENTOFF-ROAD VEHICLES
MOTORCYCLES FACTORY CHOICE PACKAGES
Bennington Bowrider Bennington Center Console Fishing
BOATS
RANGER 1000
$185
$238$260
~$295
2016 2017 2018 2019Projected
SPORTSMAN XP 1000 SRZR PRO XP4
($ in millions)
Sanpan Hurricane (6 new models)
Scout 100th Anniversary Edition
FTR 1200New Slingshot (Automatic)
-launch pending-
Indian Challenger
launched 10/30/19
Winter Prep Package
New Ride Command Features
Back Country Package
RZR PRO XP
CUSTOMER CENTRIC APPROACH TO GROWTH
Polaris Adventures
9PII IR Nov-2019
Actively Cultivating New Customers to Powersports
Customer Engagement & Growth
100,000+Consumer Rides YTD
125+Locations 90+%
New Customers
to Polaris
“Creating an ever expanding lifestyle surrounding our products.”
8% 10%
20%12%
20%26%
RZRLatino
RANGERMillennial
SlingshotMulticultural
Total Owner Base
New Owners Since May'19
• Premier Experiences
• Guided
• Self-Guided
• Rentals
POLARIS BRAND TRANFORMATION
10PII IR Nov-2019
REFINED – MODERNIZED – BROADENED
We believe what’s outside should challenge what’s inside us.
We exist to take you there.
Think Outside
Our call for people to experience the outdoors and discover new possibilities.
Our defining quality of inventing and improving work and play experiences.
Add Pic of
Water tower
DAGOR
MRZR Turbo
Diesel
PREMIUM BACKCOUNTRY
Business Segment Overview
PII IR Nov-2019 11
ORV/Snowmobiles Sales*Snowmobiles
12PII IR Nov-2019
Off-Road Vehicles
$3,572$3,923
FY 2017 FY 2018 FY 2019Guidance
Market Leader in Off-Road Vehicles, #2 in Snowmobiles
OFF-ROAD VEHICLES / SNOWMOBILES
ProductAvg.
Age
HH
Income
Primary
Usage
RANGER 51 ~$110kWORK, HUNTING,
FARMING, RANCHING,
RZR 42 ~$110k PLAY, DUNES, TRAILS
GENERAL 48 ~$110k WORK / PLAY, HUNT
SPORTSMAN 43 ~$95kWORK / PLAY, HUNT,
PROPERTY MAINT.
SNOWMOBILES 45 ~$120k PLAY ON/OFF TRAIL
$ in millions; includes related PG&A Sales
high-single
digits %
*Adjusted Results: See GAAP/Non-GAAP Reconciliation detail
FY 2017 FY 2018 FY 2019Guidance
Motorcycle Sales*Slingshot (Est. 2014)
13
Indian Motorcycles (Acquired 2011)
Building Strong Foundation for Growth & Profitability
MOTORCYCLES
ProductAvg.
Age
HH
Income
Primary
Usage
48 ~$110k CRUISING,
DAY TRIPS,
AROUND TOWN,
COMMUTE54 ~$110k
$ in millions; includes related PG&A Sales
PII IR Nov-2019
high-single
digits %$546$574
Fix pics
Add
FTR
*Adjusted Results: See GAAP/Non-GAAP Reconciliation detail
FY 2017 FY 2018 FY 2019Guidance
Global Adjacent Market Sales
14PII IR Nov-2019
Diversifying Into Products/Markets Adjacent to Core PII Portfolio
GLOBAL ADJACENT MARKETS (GAM)
Commercial, Government
& DefenseAixam
Market
Size$15+ Billion
$300+
Million
Primary
End
Markets
COMMERCIAL / GOVERNMENT
COLLEGES / UNIVERSITIES,
MUNICIPALITIES, URBAN
DELIVERIES, MATERIAL
HANDLING
MILITARY / DEFENSE
RURAL / YOUNG,
LICENSE-FREE
DRIVERS
mid-single
digits %$445
$397
$ in millions; includes related PG&A Sales
Aftermarket Sales
Other Aftermarket Brands
15PII IR Nov-2019
Transamerican Auto Parts (TAP)
TAP Market Leader in $10+ Billion Jeep & Truck Aftermarket
AFTERMARKET
$ in millions
FY 2017 FY 2018 FY 2019Guidance
$889
mid-single
digits %$885
Jeep & Truck Aftermarket
Market Size $10+ Billion
Accessory
Applications
SUSPENSIONS
TIRES AND WHEELS
BUMPERS AND SIDESTEPS
ROOF RACKS / CARGO SOLUTIONS
GRILL GUARDS
WINCHES
Boat Sales
16
Broadens Polaris’ Powersports Portfolio of High Quality, Enjoyable Outdoor Products
BOATS
FY 2018 FY 2019Guidance
New SegmentAcquisition closed
7/2/18 more than
double
PII IR Nov-2019
$280
Market
Opportunity
Current
Demographics
140 Million
people go boating
each year
10+ Million
Registered Boat
Owners
~250,000
New Boats Sold Annually
~60,000New Pontoons Sold Annually
90% Male
90% Married
95% White
50% 60+ Years Old
35% Income of $200K+
$ in millions; includes related PG&A Sales
FY 2017 FY 2018 FY 2019Expectations
INTERNATIONAL
17PII IR Nov-2019
$1B+ Revenue by 2022 and ~100,000 Units by 2024
INTERNATIONAL SALES FUTURE GROWTH OPPORTUNITY
Latin America
EMEAAsia
Pacific
AdjacentMarkets
ORV/Snow Motorcycles
Sales by Category* Sales by Segment*
$ in millions
mid-single
digits %11%$725
11%$805
*Based on FY 2018 GAAP data.
DAGOR
MRZR Turbo
Diesel
PREMIUM BACKCOUNTRY
2019 Guidance / Expectations
PII IR Nov-2019 18
$6,083
~12%(narrowed)
FY 2018Sales
FY 2019Sales Guidance
$6.56
Powersports Industry remains positive (unchanged)
Motorcycles / Boats expectations (lowered)
F/X expected to be negative to sales ~1% (unchanged)
Gross profit margins down 40-60 bps, up 105-125 bps excl. tariffs/FX (improved)
Adjusted operating expenses increase mid-teens % (unchanged)
FY Boats / strategic investments / 65th anniversary celebration
Up about 40 bps, as a % of sales, due to revised YoY sales guidance (increased)
Financial services down high-single digits % (unchanged)
Q3 2019 penetration rates at 32%; approval rates at 66% – both in-line with expectations
Interest expense up high-thirty %; acquisition funding (unchanged)
Tax rate approximately 22.5% of pretax income (unchanged)
Diluted shares outstanding down approximately 1% (unchanged)
F/X expected to have negative impact to pre-tax profit (unchanged)
2019 FULL YEAR SALES & EPS GUIDANCE
19PII IR Nov-2019
Raising Lower End of EPS Range Given YTD Performance; Holding Upper End of Range
($ in millions)
*See GAAP/Non-GAAP Reconciliation detail
**See Appendix for discussion regarding non-GAAP adjustments excluded from 2019 guidance
FY 2018Adjusted* EPS
Boats, Growth/Productivity
FY 2019Adjusted* EPS
Tariff Costs, F/X, Interest
FY 2019Adjusted* EPS
Guidance
~($1.40)(improved) 4% to 5%
$6.20 to $6.30
(narrowed)
16% to 17%
$7.60 to $7.70
(narrowed)
$1.04 to $1.14
(narrowed)
Full Year Total Company Adjusted* Sales Guidance Full Year Adjusted* EPS Guidance**
Mitigation efforts
partially offsetting
costs
Q3’19 Earnings Presentation 10/22/19
AftermarketORV/Snowmobiles
$3,923
FY 2018Adjusted*
FY 2019Guidance
FY 2018** FY 2019Guidance
FY 2018Adjusted*
FY 2019Guidance
FY 2018** FY 2019Guidance
Adjacent MarketsMotorcycles Boats
FY 2018** FY 2019Guidance
FY 2019 SALES GUIDANCE BY SEGMENT
20PII IR Nov-2019
Positive Product Mix Driving ORV / Snowmobile Sales Growth Improvement
$546
$445
$889
*See GAAP/Non-GAAP Reconciliation detail. **No non-GAAP adjustments made to reported GAAP numbers.
20
$280
(1)down low-single digits %
on a FY proforma basis
(lowered)
high-single
digits %(increased)
high-single
digits %(lowered) mid-single
digits %(unchanged)
mid-single
digits %(unchanged)
More than
double(1)
(unchanged)
Su
pp
lem
en
tal S
ale
s D
ata
Se
gm
en
t S
ale
s
International
FY 2018GAAP
FY 2019Guidance
PG&A
FY 2018GAAP
FY 2019Guidance
mid to
high-single
digits %(unchanged)
mid-single
digits %(unchanged)$805
$841
$ in millions
Q3’19 Earnings Presentation 10/22/19
Previous2019 Incremental
Gross Impact
Updated FY 2019Incremental
Gross Impact
TARIFFS / TRADE UPDATE
Further progress on supply chain mitigation
Supplier negotiations
New suppliers outside China
Existing suppliers moved production
301 exclusion requests under review
Monitoring US/China trade negotiations
Possible permanent relief if deal struck
Tariffs / Trade Costs
21PII IR Nov-2019
Tariffs Remains a Fluid Topic – Aggressively Attacking
Update Comments
Estimates based on effective dates and items included in lists as the Company understands them today.
($ in millions)
~$75 to $85(Improved)
~$80 to $90previous
guidance
Mitigation Actions
China 301 List 4
Q3’19 Earnings Presentation 10/22/19
FY 2018Adjusted*
Growth/Leverage/
Productivity
GrossTariff Impact
F/X FY 2019Adjusted*Guidance
25.1%
26.2% to 26.4%+105 to +125 bps
(improved)
~(135 bps)(improved)
~(30 bps)(unchanged)
24.5% to 24.7%(improved)
Productivity
Volume/Mix
Price
Promo
GROSS PROFIT MARGINS
FY 2019 Adjusted* Gross Profit Margin Guidance**Q3 2019 Gross Profit Margin
PII IR Nov-2019 22
24.3% 24.8% 24.6% 24.9%
Q3 2018GAAP*
Q3 2018Adjusted*
Q3 2019GAAP*
Q3 2019Adjusted*
Productivity
Price/Mix
Promo
Tariffs
Segments
Q3 2018
GAAP
Q3 2018
Adjusted*
Q3 2019
GAAP
Q3 2019
Adjusted*
ORV/Snow 28.1% 28.1% 28.1% 28.1%
Motorcycles 12.6% 13.3% 8.0% 8.0%
Adj. Markets 25.1% 25.1% 27.3% 27.3%
Aftermarket 28.7% 28.7% 26.2% 26.2%
Boats 15.1% 17.4% 18.8% 18.8%
*See GAAP/Non-GAAP Reconciliation detail; N/A = Not Applicable
**See Appendix for discussion regarding non-GAAP adjustments excluded from 2019 guidance
Gross Profit Margins Improved Due to Successful Tariff Mitigation
Segments2019 Adj. Expectations
Including Tariff Impact
2019 Adj. Expectations
Excluding Tariff Impact
ORV/Snow
Motorcycles
Adjacent Markets
Aftermarket
Boats
KEY: Improvement Headwind Neutral
Q3’19 Earnings Presentation 10/22/19
Q3 2019 FINANCIAL POSITION & 2019 EXPECTATIONS
23PII IR Nov-2019
CashYE 2018
OperatingActivities
Dividends Capex ShareRepurchase
Net Debt/Other
CashQ3 2019
$161
Sept 2019
Variance to
Sept 2018
Cash $ 122 -33%
Debt /Capital Lease Obligations $ 1,784 -4%
Shareholders’ Equity $ 1,013 +13%
Total Capital $ 2,797 +1%
Debt to Total Capital
Leverage Ratio*
ROIC**
64%
~2.4
15.8%
-3 pts
flat
-230 bps
$354
YTD 2018 YTD 2019
Operating cash flow up as expected
Factory inventory up; new products, tariff costs
Leverage ratio improving sequentially as cash flow improves
Company Financial Position Remains Strong
$477
FY 2018 FY 2019
Capital Summary September 2019 Cash Drivers
Operating Cash Flow
($ millions)($ millions)
($ millions)
Up Approx.
20% to 30%
(Unchanged)
Expectations
$436
($112)
($189)
($167)
+23%
$436
($7)
* Based on bank leverage ratio calculation
**Calculated using trailing twelve months adjusted net income
Q3 Summary
FY 2019 Expectations
$122
Cash Flow expectations tracking expectations
Cap Ex up over 2018; new product tooling / distribution center
Debt reduction continues to be main priority
Q3’19 Earnings Presentation 10/22/19
SAFE HARBOR & NON-GAAP MEASURES
Except for historical information contained herein, the matters set forth in this presentation, including management’s expectations regarding 2019 and 2020
future sales, shipments, net income, and net income per share, future cash flows and capital requirements, operational initiatives, tariffs, currency fluctuations,
interest rates, and commodity costs, are forward-looking statements that involve certain risks and uncertainties that could cause actual results to differ
materially from those forward-looking statements. Potential risks and uncertainties include such factors as the Company’s ability to successfully implement its
manufacturing operations expansion and supply chain initiatives, product offerings, promotional activities and pricing strategies by competitors; economic
conditions that impact consumer spending; disruptions in manufacturing facilities; acquisition integration costs; product recalls, warranty expenses; impact of
changes in Polaris stock price on incentive compensation plan costs; foreign currency exchange rate fluctuations; environmental and product safety
regulatory activity; effects of weather; commodity costs; freight and tariff costs (tariff relief or ability to mitigate tariffs); changes to international trade policies
and agreements; uninsured product liability claims; uncertainty in the retail and wholesale credit markets; performance of affiliate partners; changes in tax
policy; relationships with dealers and suppliers; and the general overall economic and political environment. Investors are also directed to consider other risks
and uncertainties discussed in documents filed by the Company with the Securities and Exchange Commission. The Company does not undertake any duty
to any person to provide updates to its forward-looking statements.
The data source for retail sales figures included in this presentation is registration information provided by Polaris dealers in North America compiled by the
Company or Company estimates and other industry data sources. The Company must rely on information that its dealers supply concerning retail sales, and
other retail sales data sources related to Polaris and the powersports industry, and this information is subject to revision. Retail sales references to total
Company retail sales includes only ORV, snowmobiles and motorcycles in North America unless otherwise noted.
This presentation contains certain non-GAAP financial measures, consisting of “adjusted" sales, gross profit, income before taxes, net income and net income
per diluted share as measures of our operating performance. Management believes these measures may be useful in performing meaningful comparisons of
past and present operating results, to understand the performance of its ongoing operations and how management views the business. Reconciliations of
reported GAAP measures to adjusted non-GAAP measures are included in the financial schedules contained in this presentation. These measures, however,
should not be construed as an alternative to any other measure of performance determined in accordance with GAAP.
24PII IR Nov-2019
NON-GAAP RECONCILIATIONS
25PII IR Nov-2019
Key Definitions: Throughout this presentation, the word
“Adjusted” is used to refer to GAAP results excluding: TAP
inventory step-up purchase accounting / integration
expenses, corporate restructuring, network realignment
and supply chain transformation costs, EPPL impairment,
gain on Brammo investment, and impacts associated with
the Victory Motorcycles® wind down.
Reconciliation of GAAP "Reported" Results to Non-GAAP "Adjusted" Results(In Thousands, Except Per Share Data; Unaudited)
Three months ended September 30, Nine months ended September 30, Full Year Full Year Full Year
2019 2018 2019 2018 2018 2017 2016Sales $ 1,771,647 $ 1,651,415 $ 5,046,652 $ 4,451,420 $ 6,078,540 $ 5,428,477 $ 4,516,629
Victory wind down (1) — 1,055 — 1,304 823 (1,857) —Restructuring & realignment (3) — 660 — 2,789 3,177 1,048 —
Adjusted sales 1,771,647 1,653,130 5,046,652 4,455,513 6,082,540 5,427,668 4,516,629
Gross profit 436,542 401,270 1,225,438 1,109,927 1,501,200 1,324,651 1,105,623Victory wind down (1) — 1,239 — 417 40 57,844 —Acquisition-related costs (2) — 3,130 — 3,130 3,130 12,950 8,803Restructuring & realignment (3) 4,765 4,128 18,048 15,965 19,375 12,980 —
Adjusted gross profit 441,307 409,767 1,243,486 1,129,439 1,523,745 1,408,425 1,114,426
Income before taxes 108,160 123,059 286,890 309,599 429,249 318,791 313,251Victory wind down (1) — 1,514 — 1,757 2,383 77,398 —Acquisition-related costs (2) 1,838 8,989 5,319 16,798 22,737 26,921 21,454Restructuring & realignment (3) 4,765 4,671 18,048 22,564 26,012 22,116 —EPPL impairment (5) — — — 23,447 27,048 — —Brammo (6) — — — (13,478) (13,478) — —Intangible amortization (7) 10,428 10,403 30,925 22,591 32,932 25,855 17,424Other expenses (4) 4,189 3,288 16,699 5,010 7,539 — —
Adjusted income before taxes 129,380 151,924 357,881 388,288 534,422 471,081 352,129
Net income attributable to PII 88,388 95,529 225,029 243,783 335,257 172,492 212,948Victory wind down (1) — 1,154 — 1,339 1,815 52,366 —Acquisition-related costs (2) 1,401 6,848 4,054 12,799 17,327 16,923 13,515Restructuring & realignment (3) 3,632 3,559 13,753 17,192 19,819 13,902 —EPPL impairment (5) — — — 22,325 25,069 — —Brammo (6) — — — (13,113) (13,113) — —Intangible amortization (7) 7,853 7,763 23,283 16,708 24,437 16,415 11,115Other expenses (4) 3,192 3,073 12,724 5,110 8,960 55,398 —
Adjusted net income attributable to PII (8) $ 104,466 $ 117,926 $ 278,843 $ 306,143 $ 419,571 $ 327,496 $ 237,578
Diluted EPS attributable to PII $ 1.42 $ 1.50 $ 3.62 $ 3.78 $ 5.24 $ 2.69 $ 3.27Victory wind down (1) — 0.02 — 0.02 0.03 0.82 —Acquisition-related costs (2) 0.02 0.11 0.07 0.20 0.27 0.26 0.21Restructuring & realignment (3) 0.06 0.06 0.22 0.26 0.31 0.22 —EPPL impairment (5) — — — 0.34 0.39 — —Brammo (6) — — — (0.20) (0.20) — —Intangible amortization (7) 0.13 0.12 0.37 0.26 0.38 0.25 0.17Other expenses (4) 0.05 0.05 0.21 0.08 0.14 0.86 —
Adjusted EPS attributable to PII (8) $ 1.68 $ 1.86 $ 4.49 $ 4.74 $ 6.56 $ 5.10 $ 3.65
Adjustments:
(1) Represents adjustments for the wind down of Victory Motorcycles, including wholegoods, accessories and apparel
(2) Represents adjustments for integration and acquisition-related expenses and purchase accounting adjustments
(3) Represents adjustments for corporate restructuring, network realignment costs, and supply chain transformation
(4) Represents adjustments for class action litigation-related expenses and the impacts of tax reform
(5) Represents adjustments for the impairment of the Company's equity investment in Eicher-Polaris Private Limited (EPPL). This charge is included in Equity in loss of other affiliates (non-operating) on the Consolidated Statements of Income.
(6) Represents a gain on the Company's investment in Brammo, Inc. This gain is included in Other income (non-operating) on the Consolidated Statements of Income.
(7) Represents amortization expense for acquisition-related intangible assets
(8) The Company used its estimated statutory tax rate of 23.8% for the non-GAAP adjustments in 2019 and 2018, and 37.1% for the non-GAAP adjustments in 2017 and 2016, except for the non-deductible items and the tax reform related changes noted in Item 4
NON-GAAP RECONCILIATIONS - SEGMENTS
26PII IR Nov-2019
In Thousands, Unaudited) Nine months ended September 30, Full Year Full Year Full Year
2019 2018 2018 2017 2016
SEGMENT SALES
ORV/Snow segment sales $ 3,069,173 $ 2,858,959 $ 3,919,417 $ 3,570,753 $ 3,283,890
Restructuring & realignment (3) — 2,789 3,177 1,048 —
Adjusted ORV/Snow segment sales 3,069,173 2,861,748 3,922,594 3,571,801 3,283,890
Motorcycles segment sales 464,615 458,285 545,646 576,068 699,171
Victory wind down (1) — 1,304 823 (1,857) —
Adjusted Motorcycles segment sales 464,615 459,589 546,469 574,211 699,171
Global Adjacent Markets (GAM) segment sales 340,883 322,996 444,644 396,764 341,937
No adjustment — — — — —
Adjusted GAM segment sales 340,883 322,996 444,644 396,764 341,937
Aftermarket segment sales 685,668 676,859 889,177 884,892 191,631
No adjustment — — — — —
Adjusted Aftermarket sales 685,668 676,859 889,177 884,892 191,631
Boats segment sales 486,313 134,321 279,656 — —
No adjustment — — — — —
Adjusted Boats sales 486,313 134,321 279,656 — —
Total sales 5,046,652 4,451,420 6,078,540 5,428,477 4,516,629
Total adjustments — 4,093 4,000 (809) —
Adjusted total sales $ 5,046,652 $ 4,455,513 $ 6,082,540 $ 5,427,668 $ 4,516,629
Adjustments:
(1) Represents adjustments for the wind down of Victory Motorcycles, including wholegoods, accessories and apparel
(2) Represents adjustments for integration and acquisition-related expenses and purchase accounting adjustments
(3) Represents adjustments for corporate restructuring, network realignment costs, and supply chain transformation
(In Thousands, Unaudited) Nine months ended September 30, Full Year Full Year Full Year
2019 2018 2018 2017 2016
SEGMENT GROSS PROFIT
ORV/Snow segment gross profit 888,864 831,413 1,113,908 1,054,557 907,597
Restructuring & realignment (3) — 2,789 3,177 1,048 —
Adjusted ORV/Snow segment gross profit 888,864 834,202 1,117,085 1,055,605 907,597
Motorcycles segment gross profit 45,704 60,817 63,045 16,697 87,538
Victory wind down (1) — 417 40 57,844 —
Restructuring & realignment (3) — 1,185 1,220 — —
Adjusted Motorcycles segment gross profit 45,704 62,419 64,305 74,541 87,538
Global Adjacent Markets (GAM) segment gross profit 94,851 83,520 116,583 94,920 95,149
Restructuring & realignment (3) — 479 490 10,932 —
Adjusted GAM segment gross profit 94,851 83,999 117,073 105,852 95,149
Aftermarket segment gross profit 173,483 182,291 234,365 225,498 46,289
No adjustment — — — 12,950 8,803
Adjusted Aftermarket segment gross profit 173,483 182,291 234,365 238,448 55,092
Boats segment gross profit 98,976 20,253 46,252 — —
Acquisition-related costs (2) — 3,130 3,130 — —
Boats segment gross profit 98,976 23,383 49,382 — —
Corporate segment gross profit (76,440) (68,367) (72,953) (67,021) (30,950)
Restructuring & realignment (3) 18,048 11,512 14,488 1,000 —
Adjusted Corporate segment gross profit (58,392) (56,855) (58,465) (66,021) (30,950)
Total gross profit 1,225,438 1,109,927 1,501,200 1,324,651 1,105,623
Total adjustments 18,048 19,512 22,545 83,774 8,803
Adjusted total gross profit 1,243,486 1,129,439 1,523,745 1,408,425 1,114,426
2019 GUIDANCE ADJUSTMENTS
2019 guidance excludes the pre-tax effect of acquisition integration costs of approximately $5 million to $10 million, supply
chain transformation and network realignment costs of approximately $25 million to $30 million, and approximately $17 million to
$20 million for class action litigation-related expenses. Intangible amortization of approximately $40 million related to all
acquisitions has also been excluded. The Company has not provided reconciliations of guidance for adjusted diluted net income
per share, in reliance on the unreasonable efforts exception provided under Item 10(e)(1)(i)(B) of Regulation S-K. The Company
is unable, without unreasonable efforts, to forecast certain items required to develop meaningful comparable GAAP financial
measures. These items include restructuring and realignment costs and acquisition integration costs that are difficult to predict in
advance in order to include in a GAAP estimate.
27PII IR Nov-2019
APPENDIX
POWERSPORTS MARKET
POLARIS GLOBAL MANUFACTURING
SUPPLY CHAIN TRANSFORMATION INITIATIVE
Q3 2019 EARNINGS PRESENTATION SLIDES
Q3 2019 FINANCIAL RESULTS
NORTH AMERICAN POWERSPORTS RETAIL SALES
NORTH AMERICAN DEALER INVENTORY
Q3 2019 SALES & GROSS PROFIT MARGINS BY SEGMENT
2020 INITIAL THOUGHTS
PII IR Nov-2019 28
POWERSPORTS MARKET
Polaris #1 in Powersports Worldwide
EMEA (Europe, Middle East & Africa)North America
PII IR Nov-2019 29
ORV*725,000 Units
Snowmobiles61,000 Units
Motorcycles**213635 Units Pontoon Boats
Others
Others
ORV*______ Units
Snowmobiles_____ Units
Motorcycles**______ Units
Others
Others
Billion Market Worldwide * Side-by-side data is estimated; ** Motorcycles 880cc+
ORV* ~725,000 units
ORV* ~80,000 units
Snowmobiles~100,000 units
Snowmobiles~20,000 units
Motorcycles**~55,000 units
Motorcycles**~215,000 units
Tracker®
Forest River Marine
Avalon® / Tahoe®
Pontoon Boats~60,000 units
Others
Bennington /
Godfrey Pontoon
Boats
Other LCC
POLARIS GLOBAL MANUFACTURING
30PII IR Nov-2019
22 In-house Manufacturing Facilities Worldwide
SxS, EnginesMonterrey, MEXICO
EnginesOsceola, WI
GoupilBourran, FRANCE
Aixam1. Chanas, FRANCE2. Aix-les-Bains, FRANCE
Premier OEM, Kolpin
Cuyahoga Falls, OH
HammerheadShanghai, CHINA
SxS, SlingshotHuntsville, AL
ATV, SxS, Indian Motorcycles
Opole, POLAND
TimbersledSandpoint, ID
Indian Motorcycles1. Spirit Lake, IA2. Spearfish, SD
Taylor-Dunn, GEMAnaheim, CA
TAP, Pro Armor1. Chula Vista, CA
2. Corona, CA
Pontoons & Boats1. & 2. Elkhart, IN 3. Syracuse, IN
Engine Component
Parts Monticello, MN
Outside North America
North America
KEY
Component PartsVinh Yen City, VIETNAM
Trail Tech GaugesBattle Ground, WA
Snowmobiles, ATVs, Military
Roseau, MN
SUPPLY CHAIN TRANSFORMATION INITIATIVE
31PII IR Nov-2019
Supply Chain Transformation Initiative Designed to Deliver Improved Quality / Margin Expansion
Supplier Rationalization
30%Fewer
Improved Quality
ReducedPPM Rejects
Multi-Wave Multi-Year
Project Timing
Cost Savings Target
>$200 Million by 2022
Q3 2019 FINANCIAL RESULTS
$1,772 million
7% y/y
$88 million
7% y/y
Third quarter 2019 adjusted* results slightly better than Company expectations; tariff mitigation
GAAP gross profit up; net income margins lower
Adjusted* gross profit margins up due to mix
32PII IR Nov-2019
Q3 Results Slightly Ahead of Company Expectations
*See GAAP/Non-GAAP Reconciliation detail
GA
AP
AD
JU
ST
ED
*
$1.425% y/y
Sales Net Income Earnings Per Share
$1,653 $1,772
Q3 2018 Q3 2019
$1.86$1.68
Q3 2018 Q3 2019
10%7%$118
$104
Q3 2018 Q3 2019
11%
($ in millions) ($ in millions)
Q3’19 Earnings Presentation 10/22/19
Polaris Retail Comments
Off-Road Vehicles ~Flat SxS continues solid
growth: RANGER/
GENERAL & RZRSide-by-Sides
ATVs
low-single digits %
mid-single digits %
Motorcycles low-double digits % Weak market; heavy
competitive
pressureIndian
Slingshot
mid-teens %
low-single digits %
Snowmobiles(season-end Mar’20)
mid-thirties % Pre-ordered
snowmobiles
retailing
Boats* high-single digits % Bennington
outperforming
industry
NORTH AMERICAN POWERSPORTS RETAIL SALES
33PII IR Nov-2019
Side-by-side Winning in Most Profitable Segments Against Strong Competitive Actions
Polaris N.A. retail flatSide-by-sides up driven by all brands: RANGER, General and RZR
Polaris promotional expense remains elevated YoY given competitive
dynamics
North American Powersports* Industry retail up in Q3ORV up mid-single digits; motorcycles down low-single digits, snowmobiles
up high-teens %
Polaris Boats SSI**Boats industry retail up high-single digits %
Bennington retail up more than industry, gained share* Boats not included in Total Company retail sales or Powersports Industry
**Preliminary SSI data, pontoons only, subject to change
Polaris Retail Sales Q3’19 Retail Sales by Business
Flat
SxS
Snowmobiles
Motorcycles
ATVs
Year-Over-Year Retail % Change (units)*
0%
Q3 2019
Q3’19 Earnings Presentation 10/22/19
Q4 Q1 Q2 Q3
2017-2018 Qtrs Ended Q3'18
2018-2019 Qtrs Ended Q3'19
NORTH AMERICAN DEALER INVENTORY
Polaris Q3 2019 N.A. dealer inventory up 4%ORV up mid-single digits primarily driven by side-by-sides
ORV up due to MY ‘20 shipments and additional Factory Choice models
Motorcycles up low-single digits with Indian up, Slingshot down significantlyIndian up from FTR shipments
Dealer inventory, in aggregate, at acceptable levelsRFM process managing inventory based on retail sales
34PII IR Nov-2019
RFM Process Calibrating Dealer Inventory Based on Retail Velocity
Note: Excludes Boats
Weighted Average
Contribution
ORV . . . . . . . . . . +3%
Snowmobiles. . . +1%
Motorcycles. . . . Flat +4%
Q3’19 Earnings Presentation 10/22/19
Q3 2019 SALES & GROSS PROFIT MARGINS BY SEGMENT
ORV / Snowmobiles
35PII IR Nov-2019
ORV / Global Adjacent Markets Experienced Strong Growth in Q3
Global Adjacent MarketsMotorcycles
Q3 2019GAAP
Q3 2019Adjusted*
Q3 2019GAAP
Q3 2019GAAP
Q3 2019Adjusted*
Q3 2019GAAP
Q3 2019Adjusted*
Q3 2019GAAP
Q3 2019Adjusted*
Q3 2019GAAP
Q3 2019Adjusted*
11%$1,152
11%$1,152
Note: Pie charts based on adjusted* sales. *See GAAP/Non-GAAP Reconciliation detail.
4%
$150
3%
$15018%
$114
flat28.1%
flat28.1%
-530 bps
8.0%
-460 bps
8.0%
Commercial,
Gov’t & Defense,
& Aixam
18%
PG&A
21%
Off-Road
Vehicles
8%
PG&A
10%
Snowmobiles
53%PG&A
8%
Motorcycles
6%
Indian
Slingshot
$ in millions
SA
LE
SG
RO
SS
PR
OF
IT M
AR
GIN
+220 bps
27.3%
+220 bps
27.3%
RZR Pro XP
New Chieftain
Elite Commercial
or Military
Q3’19 Earnings Presentation 10/22/19
Q3 2019GAAP
Q3 2019Adjusted*
Q3 2019 SALES & GROSS PROFIT MARGINS BY SEGMENT con’t.
Aftermarket
36PII IR Nov-2019
PG&A and International Continued Solid Growth Trend in Q3
InternationalBoats
SA
LE
S
*See GAAP/Non-GAAP Reconciliation detail
Q3 2019GAAP
11%
$119
+370 bps
18.8%
Q3 2019GAAP
-250 bps
26.2%
TransAmerican
Auto Parts
2%
Other
Aftermarket
5%
Pie chart based
on adjusted* sales
PG&A
SU
PP
LE
ME
NTA
L S
AL
ES
DA
TA
Q3 2019GAAP
Q3 2019GAAP
8%
$187
11%
$247
ORV / Snow
1%
Adjacent
Markets
20%
Motorcycles
23%
Accessories
18%
Apparel 13%
Parts 1%
ORV / Snow
10%
Adjacent
Markets
21%
Motorcycles
8%
EMEA
12%
Asia Pacific
1%
Latin America
1%
Pie charts based on GAAP
$ in millions
GR
OS
S P
RO
FIT
MA
RG
IN
Q3 2019GAAP
3%
$236
+140 bps
18.8%
Q3’19 Earnings Presentation 10/22/19
2020 INITIAL THOUGHTS
Economy slowing, but consumer confidence and low unemployment remains positive
Trade resolution / election unknown
Powersports industry remains positive driven by product introductions
Industry side-by-sides up; ATV’s and motorcycles remain challenged
Polaris retail expected positive driven by accelerated new product cadence
Supply chain initiative continues to gain traction; executing Wave 1 & 2, initiating Wave 3
Customer-centric drive becomes more evident
Innovative products / Factory Choice / Ride Command / Dealer Capabilities / RFM 2.0
37PII IR Nov-2019
Strategic & Product Investments, Geared to Maintain Polaris’ Leadership Position in PowersportsQ3’19 Earnings Presentation 10/22/19