March 2020 Investor Meetings - Marine Industry Overview - cloudfront.net
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March 2020 Investor Meetings
Marine Industry Overview
Forward-Looking Statements
Certain statements in this presentation are forward-looking as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on current expectations, estimates,
and projections about Brunswick’s business and by their nature address matters that are, to different degrees, uncertain. Words such as “may,” “could,” “expect,” “intend,” “target,” “plan,” “seek,”
“estimate,” “believe,” “predict,” “outlook,” and similar expressions are intended to identify forward-looking statements. Forward-looking statements are not guarantees of future performance and involve
certain risks and uncertainties that may cause actual results to differ materially from expectations as of the date of this presentation. These risks include, but are not limited to: the effect of adverse
general economic conditions, including the amount of disposable income consumers have available for discretionary spending, tight consumer credit markets, and the level of consumer confidence on
the demand for our products and services; our ability to successfully implement our strategic plan and growth initiatives; our ability to integrate targeted acquisitions, including the Global Marine & Mobile
Business of Power Products; the risk that unexpected costs will be incurred in connection with these transactions; the possibility that the expected synergies and value creation from these transactions
will not be realized or will not be realized within the expected time period; having to record an impairment to the value of goodwill and other assets; changes to U.S. trade policy and tariffs; the inability to
identify and complete targeted acquisitions; negative currency trends, including shifts in exchange rates; fiscal policy concerns; adequate financing access for dealers and customers and our ability to
access capital and credit markets; maintaining effective distribution; adverse economic, credit, and capital market conditions; loss of key customers; attracting and retaining skilled labor, implementing
succession plans for key leadership, and executing organizational and leadership changes; inventory reductions by dealers, retailers, or independent boat builders; requirements for us to repurchase
inventory; actual or anticipated increases in costs, disruptions of supply, or defects in raw materials, parts, or components we purchase from third parties, including as a result of new tariffs on raw
materials, increased demand for shipping carriers, and transportation disruptions; higher energy and fuel costs; our ability to protect our brands and intellectual property; absorbing fixed costs in
production; managing our manufacturing footprint; outages, breaches, or other cybersecurity events regarding our technology systems, which could result in lost or stolen information and associated
remediation costs; managing our share repurchases; competitive pricing pressures; our ability to develop new and innovative products and services at a competitive price, in legal compliance with
existing rules; maintaining product quality and service standards; product liability, warranty, and other claims risks; legal and regulatory compliance, including increased costs, fines, and reputational
risks; changes in income tax legislation or enforcement; certain divisive shareholder activist actions; joint ventures that do not operate solely for our benefit; international business risks; and weather and
catastrophic event risks.
Additional risk factors are included in the Company’s Annual Report on Form 10-K for 2019 and the Quarterly Reports on Form 10-Q for subsequent periods. Forward-looking statements speak only as
of the date on which they are made, and Brunswick does not undertake any obligation to update them to reflect events or circumstances after the date of this presentation or for changes by wire services
or Internet service providers.
Alexander F. Marchetti, Senior Director, Investor Relations
Brunswick Corporation, 26125 N. Riverwoods, Mettawa, IL 60045
Phone: +1-847-735-4023 Fax: +1-847-735-4750
Email: al.marchetti@brunswick.com
|2
Use of Non-GAAP Financial Information & Constant Currency Reporting
In this presentation, Brunswick uses certain non-GAAP financial measures, which are numerical measures of a registrant’s historical or future financial performance, financial position
or cash flows that exclude amounts, or are subject to adjustments that have the effect of excluding amounts, that are included in the most directly comparable measure calculated and
presented in accordance with GAAP in the statements of operations, balance sheets or statements of cash flows of the registrant; or include amounts, or are subject to adjustments
that have the effect of including amounts, that are excluded from the most directly comparable measure so calculated and presented.
Brunswick has used certain non-GAAP financial measures that are included in this presentation for several years, both in presenting its results to shareholders and the investment
community and in its internal evaluation and management of its businesses. Brunswick’s management believes that these measures (including those that are non-GAAP financial
measures) and the information they provide are useful to investors because they permit investors to view Brunswick’s performance using the same tools that Brunswick uses and to
better evaluate Brunswick’s ongoing business performance. In addition, in order to better align Brunswick's reported results with the internal metrics used by the Company's
management to evaluate business performance as well as to provide better comparisons to prior periods and peer data, non-GAAP measures exclude the impact of purchase
accounting amortization related to the Power Products and Freedom Boat Club acquisitions.
Slides including non-GAAP measures include an asterisk (*) denoting such usage, with the exclusions or adjustments, along with reconciliations to GAAP measures, described in
Brunswick's Current Report on Form 8-K issued on January 30, 2020 (for 2019 and 2018 information), or in Current Reports on Form 8-K dated February 1, 2018, January 26, 2017,
January 28, 2016, and January 29, 2015 (for information from 2017 and earlier), all of which are available at www.brunswick.com.
Brunswick does not provide forward-looking guidance for certain financial measures on a GAAP basis because it is unable to predict certain items contained in the GAAP measures
without unreasonable efforts. These items may include pension settlement charges, restructuring, exit and impairment costs, special tax items, acquisition-related costs, and certain
other unusual adjustments.
For purposes of comparison, 2019 net sales growth is also shown using 2018 exchange rates for the comparative period to enhance the visibility of the underlying business trends,
excluding the impact of translation arising from foreign currency exchange rate fluctuations. We refer to this as "constant currency" reporting.
|3
The Evolution of the Recreational
Marine Market will Create
Opportunities
COMPETITION
FOR RECREATION TIME
CHANGING CHANGING
CONSUMER COMPETITIVE
EXPECTATIONS ENVIRONMENT
We are uniquely positioned to create the future of marine
– contemporary, relevant, compelling, high-quality, frictionless and inclusive.
TECHNOLOGY-ENABLED
SOLUTIONS
CHANGING
|4 DEMOGRAPHICS
Clear Drivers of Value – Both Short Term and Long Term
Adjacencies and
Core Portfolio Core Expansion
Accelerators
Predictable engine of near term Profitable extensions of core business Core-strengthening, profitable
profits and long term foundation of with multi-year growth runway initiatives with long term value
business opportunity
• Outboard engine growth • P&A product acquisitions • Connectivity
• P&A products growth • New engine programs • Autonomy
• Operating expense efficiency • P&A distribution expansion • Boater Services
• Boat margin improvement • Boat white space expansion • Boat clubs and rentals
• Sea Ray reinvention
We have well understood avenues to drive significant opportunity while profitably expanding in
critical areas of future value
|5
Sample Image
Premium Shareholder Returns Across All
Market Conditions
Great • Best, premium brands
• Leading market positions
Business • Unique, value creating marine platform
Attractive • Marine-only with broad participation
• Focus on profitable segments
SAMPLE IMAGE
SAMPLE IMAGE
Markets • P&A aftermarket strength lowers cyclicality
• Outboard engine runway
Credible,
• P&A products
Profitable Growth • Services and technology
• Strong balance sheet
Financially
• Balanced capital strategy
Balanced • Excellent through cycle cash flow
Brunswick is the best investment in both marine
SAMPLE IMAGE and recreational durables
Investment Considerations
2020-2022 Strategic Plan
HEALTHY FORMIDABLE INDUSTRY- PROVEN STRONG BALANCED
Marine Market Competitive LEADING Track Record of and Improving Portfolio with
Supportive of Position Operating Delivering Earnings and Growing
Growth Capabilities and Shareholder Free Cash Recurring
Execution Returns Flow Revenue Base
2 0 2 2 P L A N TA R G E T S
$6.25 - $7.25 14.0% - 15.0% $425M to $475M
EPS OPERATING MARGIN FCF
|7
Major Strategic Actions
New North-Star
& Narrative
Strategic M&A
New Operating Model
& Talent
Technology & ESG Strategies
|8
Streamlined Business & Narrative Supported by Strategic M&A
N E W N O R T H - S TA R & N A R R AT I V E
• Largest recreational marine company
with the leading brands
• Synergistic business segments;
cycle-resistant platform
• Leveraging scale to lead in technology
and digital transformation
• Expanding participation; engaging
the next generation
• Lean, agile organization and
operations with clear goals
S T R AT E G I C
M&A
INTEGRATED SOLD ACQUIRED
Power Products Life Fitness Freedom Boat Club
|9
Generating Momentum
for 2020+
New
Products, Added Execution
Right-Sized
Technologies Manufacturing & Capital
Organization
& Digital Capacity Strategy
Initiatives
Major Strategic Actions
New North-Star New Operating Technology &
Strategic M&A
& Narrative Model & Talent ESG Strategies
| 10Major Investments in Product, Technology, Digital, & Capacity
Major Strategic Actions
P R O D U C T, T E C H N O L O G Y & D I G I T A L
MERCURY 400HP & 450HP ALL-NEW BOSTON FATHOM E-POWER 70%+ IT INFRASTRUCTURE MAJOR INVESTMENTS IN
OUTBOARDS WHALER 405 CONQUEST, SYSTEM MIGRATED TO THE CLOUD E-COMMERCE AND
325 CONQUEST & 280 AND MODERNIZING ERP DIGITAL MARKETING
VANTAGE SYSTEMS PLATFORMS
AD D E D M AN U FAC T U R I N G C APA C I T Y
EXPANDED EXPANDED FLEXIBLE VERTICAL DOUBLING
Outboard Boston Whaler Manufacturing INTEGRATION CAPACITY
Manufacturing Manufacturing Capacity for High of Sea Ray and at Portugal Boat
Capacity Capacity Demand Sea Ray Whaler Sub- Plant with Minimal
Boats Systems Investment
| 11We Will Grow in Both Our Traditional Markets and New Markets
PROPULSION P&A BOATS SERVICES
$5B $6B $9B $20B
Global Market Global Market US Market US Market
Margin & Synergistic Growth
Strategic
Share & Share &
Focus
Margin Margin Premium Share Opportunities
Accretive
Operating
14%+ 20%+ 10%+
Margins
~30% ~25% ~14% ~1%
Share
BC
| 12 Note: Propulsion and P&A market sizes are internal estimates; Brunswick Share
Boat and Services market size from NMMAThe Future of Boating Experiences is Being Shaped by New
Expectations and a Wider Demographic of Participation
Business Acceleration will integrate a portfolio of strategic and
innovation assets to shape the future of boating experiences:
1 Make Boating Accessible
to expand marine participation
with Connected Solutions
2 Lead
that enhance the customer experience and channel
effectiveness
3 Amplify the Boating Experience
through services and new business models
| 14There is Value Expanding Connection to Services
Brunswick has a range of innovation partnerships underway to
enhance our core business offering and / or discover new markets Collaboration Core Business
Ventures through & Business
TechNexus Acceleration Assets
Business Model Innovation
Myra
Labs
| 15Propulsion and P&A Segments | 16
Financial Overview – Engine Segment
2019 Revenue Mix
BBG
10%
OEM Retailer
Europe 24% 21%
U.S. 14%
Propulsion Distributor
68%
55% P&A 9%
45% Asia Pacific
8% Dealer
32%
Canada
5% Government
& Others
Rest of World 4%
5%
80 Facilities in 22 Countries Engine Manufacturing: Employees: Distribution:
• Fond du Lac, Wisconsin • More than 7,000 worldwide • More than 10,000 global sales and
• Suzhou, China service points
• Komagane, Japan
(joint venture)
| 17Mercury’s Complementary Segments Create Unique Value
AD V A N C E D
M E R C U R Y M AR I N E
SYSTEMS
PROPULSION ENGINE P&A DISTRIBUTION
Outboards Racing
Controls &
Rigging and Sterndrives
Service Parts, Accessories and
Propellers
Consumables & Distribution
Accessories
$1.7B PROPULSION
$1.4B PARTS & ACCESSORIES
Propulsion leadership and system solutions drive share gain while distribution
maximizes leverage in the installed base
| 18Mercury is Positioned to
Accelerate Growth in our
Core Market
Exceptional
Products and Brands
PROPULSION MARKET OVERVIEW
Global Addressable
$4.9B
Market Size1 ($B)
KEY MARKET TRENDS
Increasing average OB horsepower
Migration to OB from gasoline IB/SD has
stabilized
Consumer demand for intuitive systems
continues to grow
Global conversion from 2-stroke to 4-stroke
Conversion from diesel IB to higher HP
gasoline OB expected
1
Company estimates
| 19The Trend Towards Larger HP Outboard Engines Continues
$1,250 U.S. Outboard Engine Wholesale Sales
$1,000
Recovery trend fueled by larger
$ in millions
$750 four-stroke engines
300+ horsepower segment now
$500
approaching 25% of total market
value (non-existent in 2006,
$250 race/specialty only in 2011)
$0U.S. Outboard Market Migration From 2-Stroke to 4-Stroke
350,000
300,000 2009 – 2019 CAGR
4-Stroke = 8%
250,000 2-Stroke = (12%)
200,000
150,000
100,000
50,000
0
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
4 stroke 2 stroke
In 2005, nearly 50 percent of new outboard engines registered in the U.S. were 2-stroke;
today, less than 10 percent registered are 2-stroke
| 21Mercury Product Leadership
Driven by Consumer Research and Process Rigor
Exceptional
Products and Brands
• Extensive Market Research
• Voice of Customer
• Data Driven Decisions
% sales from products
within 3 years from release
• Validation and Craftsmanship 2017
2018
38% 2019
16% 19%
| 22| 23
Sustainability – A Core Value and Significant Focus Area
9-Time Green Masters Designation
Winner of The Sustainable Process Award for
responsible use of aluminum
Received ‘Zero Waste to Land Fill’ designation
2-Time Winner of the Wisconsin Business Friend of
the Environment Award
2-Time Most Eco-Friendly Business Award
Glassdoor: #1 Company Committed to the
Environment
| 24Consumer Research Indicates Growing Need For Integrated
Offerings
Frictionless
Consumer Experiences
N E X T G E N E R AT I O N C O N T R O L S
INTEGRATED and CONNECTED
REFINED ERGONOMICS
EFFORTLESS CONTROLS
SIMPLIFIED INSTALLATION
| 25New Products Have Strengthened Our Market Position
Year Introduced 2012 2014 2014 – 2016 2015 2016
Horsepower 150 75 – 115 40 – 150 350 – 400 115
We have a rich technology pipeline that has and will produce class-leading products
and share gains, with additional product launches planned for 2020 and beyond
| 262018 was a Momentous Year for New Product Introductions…
Year Introduced 2018 2018 2018
Horsepower 175-225 150-175 Pro XS 200 SeaPro
As of the end of year 2019, more than 80% of our outboard revenue comes from
product introduced since 2012
| 27…With the 4.6L V-8 Launch - Revolutionizing the Industry
Year Introduced 2018 2018 2018 2018 2018
Horsepower 250-300 250-300 Verado 225-300 SeaPro 200-300 Pro XS 250-300 Racing
These engines represent the culmination of the largest outboard engine launch in
Mercury’s history
| 28SUCCESS OF THE
V 6 / V 8 P L AT F O R M
PERFORMANCE
NVH
FUEL-ECONOMY
INDUSTRY-FIRST FEATURES
UP TO...
• 35% Quieter
• 66% Less Vibration
• >60 lbs. Lighter
…VS. LEADING COMPETITOR
| 29Mercury Continues To Reshape Industry Dynamics
Setting New Benchmarks With V6/V8 Platform
Exceptional
Products and Brands
Global 175-300HP Shipments
2016 2017 2018 2019 2020E
+3-4 pts 10+
share gain in the US Account Acquisitions
since 2018 / Expansions
| 30450R
4.6L V8 DISPLACEMENT
SUPERCHARGED INDUCTION
QC4 CYLINDER HEADS
RACING ADVANCED MIDSECTION
MULTIPLE GEARCASE OPTIONS
RACING PROPELLERSMercury Marine wins Most Innovative Marine
HIGH HP PROPULSION Company Award from Soundings Trade Only
– October 2019
| 32Continued Focus On Large Underserved Markets
Saltwater
Market Opportunity
• U.S. market $600 million 65+ Saltwater Boat
Builders
• Mercury share high 20 percent range
Strategy To Win
• ‘Best in class’ core products
• New integrated solutions drive expanded OEM
relationships
• Consumer engagement events
Progress
• Share gains in each year since 2013
2006 2019
Share gains in saltwater will continue to drive growth
| 33Continued Focus On Large Underserved Markets
Repower
Market Opportunity
• U.S. market $425 million
• Mercury share high 20 percent range
Strategy To Win
• Product development and integration
• Expanded compatibility with legacy mechanical
systems
Progress
• Share gains in each year since 2013
Share gains in repower will continue to drive growth
| 34Continued Focus On Large Underserved Markets
Commercial
Market Opportunity
• Global market $750 million (mainly two-stroke but
early stages of transition to four-stroke)
• Mercury share high teens range
Expanding Dealer Network (Mexico example)
Strategy To Win
• Four-stroke commercial product development
• Commercial distribution expansion
Progress
• Expanded service and distribution channels in Asia,
Mexico and Central America
Share gains in commercial markets will continue to drive growth
| 35World-Class Manufacturing Helps Maintain Pace Of Innovation
Operating and
Quality Excellence
WORLD’S MOST
AD VAN C E D
~13% I N D U S T RY- L E AD I N G ~50%
Cost Reduction MANUFACTURING Capacity Increase since 2018
PROPELLER
MANUFACTURING
O P E R AT I O N
>60% TECHNOLOGY &
SCALE >25pts
Capacity Increase Productivity Growth since 2018
| 36Advanced Engineering Initiatives Ensure Mercury Remains at the
Forefront of Technology and Industry Trends
Exceptional
Products and Brands
Improved NVH / Weight Joystick Docking &
Autonomous Docking
Helm Assistance
Making technology more accessible to, and effective for, marine customers
| 37Expand our Lead in Control Systems, the Fastest Growing Product
Category in Mercury’s Portfolio
Customer-Centric
Innovation
Improve Boater Experience Improve OEM/Dealer Experience
Integration Services
Active Trim VesselView Mobile
Owned by Mercury
Owned by Others
Joystick Piloting Downloadable Content
Leading propulsion systems integration (including electrical) will drive increased
share of boat OEM spend
| 38Brunswick’s Connectivity Platforms are Differentiated and Value-Enabling
Customized B2B and B2C solutions enhance the consumer experience and enable profit opportunities
Customer-Centric
Innovation
Leveraged Infrastructure Customized Solutions Consumer Value
Secure/
Cloud Analytics
VesselView Nautic-ON Nautic-ON
White-label
Efficient Service Concierge New Business Model
Delivery Opportunities
Proprietary Proprietary Boat/ Consumer
| 39 Dealer Portal OEM Portal ServicesMercury Parts & Accessories Group Organizational Overview
Parts & Accessories Organization
Engine P&A Electrical Systems & Boat Components & Distribution*
($0.5B) Integration Services Systems ($0.5B)
($0.25B) ($0.2B)
Products
Brands Mercury/ Attwood/ Power
Products and other brands
Product Business Distribution Business
˟ Mercury Products sold through captive distribution included
in product categories; all figures represent FY 2019 data
Bringing these businesses and capabilities together provides
tremendous growth opportunities
| 40Mercury is a Leader in ~$6B Global P&A Products Market
EXAMPLE
CATEGORY MARKET SIZE1 MERCURY SHARE
PRODUCTS
Engine Parts &
HIGH ~$1.2B High
Consumables
Control Systems ~$0.8B Medium
RIGHT-TO-WIN
Electrical Systems ~$0.3B High
Boat Components &
~$0.7B Medium
Systems
Electronic Systems ~$1.2B N/A
Boating Accessories ~$0.8B Low
LOW Non-Mercury Engine
~$0.8B N/A
Parts
| 41 1
Market size and share estimates are based on Company estimatesReshaping the Customer Experience
The industry’s most extensive portfolio of products and services
positioned to win in every channel
CONNECTED PRODUCTS INDUSTRY LEADING CHANNEL PRESENCE
INTEGRATION SERVICES
| 42CONNECTED and SEAMLESS
CONNECTED ECOSYSTEM AND
DIGITAL CONTROLS
>70% uptake rate on new Harris boats
| 43Transforming the Electric Systems Supply Chain
I N T E G R AT I O N S E R V I C E S –
O E M PAR T N E R
Design, Configure and Commissioning
Simplify Installation and Improve Quality
Integration of Discrete Technologies
Grow OEM platforms leveraging Integration
services to >30 by 2020
| 44Expanding into High Growth Adjacencies
POWER MANAGEMENT SYSTEMS
NON-MARINE OEM PLATFORMS/MODELS
Increasing power management needs
in Specialty and RV segments LEVERAGING PPSI 6+
Source: Camping world;
| 45A Powerful Multi-Channel Consumer Portfolio
SERVICE P&A and DISTRIBUTION E-COMMERCE: B2B and B2C
Sales through >26,000 retail locations Accelerated growth in e-commerce sales
Grow 40% faster than distribution market Grow e-commerce revenue by >2X by 2023
| 46Power Products is an Industry Leading Provider of Power
Management Systems
Revenue Mix
SEGMENT CHANNEL
Other E-commerce &
~2% Other
Transportation, ~13%
Specialty Vehicle RV
~10% ~8% OEM
Specialty
~36%
Retailer
Marine ~14%
Industrial Wiring
~66%
~14% Devices
~13% Distribution
~36%
CATEGORY GEOGRAPHY
Accessories &
Other APAC
~11% ~5%
Digital Power
Switching Conversion EMEA
~5% Control ~24% ~19%
Systems
~11% Wiring
Battery
Wiring
Mgmt.
Devices Americas
Devices ~13%
Circuit ~16% ~75%
~13%
1Transaction and figures do not include Power Products’ Electrical Construction & Maintenance business, including the Gardner Protection
Bender, Bergen and King brands, which will be retained by Genstar; all figures are for the year ended December 31, 2019 ~12%
Wire Mgmt.
~8%
| 47Power Products Augments Mercury’s Connected Boat Strategy
Czone Enables Full System Integration Capability
The line is at the center of boat connectivity and system integration
Audio Multi-Function Displays Remote Connectivity Live Wells
Desalination
Retractable
Lighting Steps
Sensors HVAC Engines
Pumps Jack Plates Trim Systems
The Czone product line is at the center of boat connectivity and system integration
| 48CZONE Offerings for a Wide Range of Boat Segments
| 49Our First-Fit OEM Products and Existing Installed Base Drive P&A
Sales in the Aftermarket
Existing installed base and increasing boat First-fit OEM products drive aftermarket
registrations drive aftermarket P&A sales sales through dealers, retailer, etc.
Example
140 MILLION Dealer
people go boating annually;
50% are under 40 years old 50 MILLION
fisherman and anglers
Retailer
10 MILLION
registered recreational boats
Specialty
E-commerce
200 THOUSAND
new boats sold annually
| 50Mercury’s Leading Products with Broad Portfolio of Brands are
Unmatched in the Industry
Largest Aftermarket Leading Brands for All Extensive Market Access
w
Portfolio Customer w
Segments w
RETAILER
| 51Extensive Market Access Through Distribution Businesses Across
the Globe
~26,000 Customers > 19,000 SKU’s
North America Europe Australia
Our products are available every place where consumers shop
| 52Mercury P&A is a Strong & Profitable Business, with Right Capabilities to
Grow and Accelerate Market Leadership
Leading Market Unique OEM Aftermarket Financial Strength
Position Capabilities Leadership and Scale
• Largest P&A player • Industry-leading • Differentiated products • >$1.6B in annualized
• #1 or #2 Brands in Intuitive solutions sales and growing
• Leading brands for all
each segment • Only provider with customer segments • High margins in core
• Broadest product integrated solutions categories
• Available wherever
portfolio • Unique value through consumers shop • Low cyclicality
• Unmatched global digital backbone • Largest distribution
presence • Comprehensive outreach
integration services
| 53LARG EST
MARINE SOLUTIONS JOYSTICK PILOTING
PORTFOLIO & VIRTUAL
ANCHORS
WE ARE WELL POSITIONED FOR
SUCCESS IN 2020 AND BEYOND
ADVANCED
CONTROL
SYSTEMS
POWER &
ELECTRICAL
SYSTEMS DIGITAL
CONNECTIVITY
& INFOTAINMENT
BOAT
COMPONENTS
& SYSTEMS
SAFETY &
SECURITY SYSTEMS
PROPULSION
SYSTEMS
DYNAMIC
RIDE CONTROL
| 54Boat Segment | 55
Financial Overview – Boat Segment
2019 Revenue Mix
Saltwater
Fishing
24%
Canada
Recrational 12%
U.S.
Fiberglass
33% 75%
Europe
Aluminum 9%
Rest of
Frehwater World
42% 2%
Asia Pacific
Business 2%
Acceleration
1%
Employees: Distribution: Boat Manufacturing:
• Edgewater, Florida (F) • Princeville, Quebec, Canada (A)
• More than 3,500 worldwide • More than 2,000 dealers worldwide
• Fort Wayne, Indiana (A) • Reynosa, Mexico (F)
• New York Mills, Minnesota (A) • Auckland, New Zealand (F)
• Lebanon, Missouri (A) • Augustow, Poland (contract
• Vonore, Tennessee (F) manufacturing) (F)
• Clarkston, Washington (A) • Vila Nova de Cerveira, Portugal (F)
| 56
(A) = Aluminum, (F) = FiberglassBoat Group Portfolio is Healthier
2006 2019
Revenue $2.9B $1.3B
Revenue Mix: 36% 22%
18% 20%
9% 15%
More balanced and
5% 9%
profitable portfolio
3% 8%
is yielding strong
returns at lower
Operating Margin 5.0% 5.9% risk
# of North American
29 8
Boat Plants
ROIC 9% 24%
| 57Brunswick’s Overall Business Portfolio Continues to Reduce Cyclicality
Marine Portfolio Detailed Revenue Migration1
Total Revenue $5.7B $4.7B $4.4B to $4.5B
100% IB/SD Boats and IB/SD Boats and
Engines Engines
More Cyclical
90%
IB/SD Boats and
80% Engines
OB Boats and
70% Engines
OB Boats and
60% Engines
50% OB Boats and
Engines
40%
Fitness (3)
30% Bow ling (2)
Less
20% Fitness (3)
P&A P&A
10%
P&A
0%
1 2007 and 2017 figures include Sea Ray, 2020 figure excludes Sea Ray
2007 2017 2020
2 Divested in 2014 & 2015
3 Divested in 2019
| 58Brunswick Boat Brands Outperform
Our Iconic Brands Drive Sustained Sales, Share, and Margin Growth
Brunswick is home to 3 of top 4 nationally
recognized marine brands
Source: Wedbush Securities, January 2019
Segment Leadership
#1 #1 #2
Saltwater Recreational Aluminum
Fishing Fiberglass Fishing• Leading new product portfolio reflects
Sea Ray's reinvention and a stronger
margin profile
• Technology Center accelerates
innovation
• Integrated Manufacturing Center adds
capacity
• Streamlined option packages simplify
consumer experience and drive
productivity improvements
Outperform market in growing
large, premium fiberglass
| 60Boston Whaler
• Segment-defining product line with
advanced technology
• Margin expansion through vertical
integration at the Integrated
Manufacturing Center
• New competitive advantage with
best-in-class service
Outperform market in growing
large, saltwater fish
| 61• Unrivaled portfolio
• Outstanding consumer loyalty
• World-class operating facilities with
market-leading quality
• New consumer reach with disruptive
product development
Gain share in low-growth
environment
| 62Boat Group’s Technology Centers are Hubs of Engineering and
Design Talent that Propel Our Technology and Product Leadership
Consumer Insights, Naval
Material Sciences, CAD Cost Engineering,
Architecture, Fluid Dynamics,
Design, Automation Platforming
Autonomy, Connectivity
| 63 200+ designers, engineers, and product techniciansTechnology Centers Commercialize Innovation that Elevates the
Consumer's Experience On- and Off- the Water
First assisted docking 100% Connected Fleets generate service
system will be available opportunities and enable partnership
this summer with Business Acceleration
| 64Electrification and Shared Access Designs Will Scale
Beyond Niche Solutions
First pontoon with digital switching and Freedom fleet renewal cycle
commercialized e-Power System prove creates 1000+ unit
demand and build pathways to scale opportunity annually
| 65Next Gen Designs Target New Consumer Segments
and Launch This Year
MILLENNIALS
New products developed
for the next generation of
boaters launching in 2020!
| 66Operating Model Transformation in 2019 Positions Boat Group to
Accelerate Pace of Change
2
Opening of Integrated Formation of Venture Boat Group and
Manufacturing Center Aluminum Boat Group
0
1 •
•
$40M in revenue from Integrated
Manufacturing Center in 2020
Tooling & Milling Centralized capability
•
•
Standardize proven quality and
productivity system
30% capacity increase inA Single BBG Production System Delivers Results With a Focus on
Productivity, Quality, Sourcing, and Sustainability
Quality management
Deploy BBG systems will drive
Production System to 25% quality
every facility Review Inspection improvement
Finish Inspection annually
Deliver $7M in cost Transition to 100%
savings through recycled structural
centrally led sourcing cores in 2020
| 68Leading Digital Capabilities Will Transform How We Engage with Consumers,
Personalize the Purchase Experience, and Cultivate Lifetime Boaters
Discover Purchase Experience
+25% lead generation in Transform 6 brand Net Promoter Score >70%
2020 websites in 2020
Launched Digital Advance online Ignite brand experiences
Marketing Center of sales capability in through events and deliver
Excellence and shifted 2020 new, elevated service offerings
spend to digital
| 69Boat Market Recovery In Dollars Outpacing Units
U.S. New Boat Retail Sales
12 55
Recovery Since 2006 Peak
10 50
Units: 71%
$ASP in thousands
Market Size in $B
8 45 Dollars: 120%
(Blue bars)
(Green line)
6 40
Market Revenue Growth
4 35 2011 – 2018 CAGR
2 30 Units: 6%
Dollars: 12%
0 25
2006 2011 2012 2013 2014 2015 2016 2017 2018
# of
283k 130k 142k 152k 162k 174k 185k 195k 201K
units
Our boat business has outperformed the market and is positioned for continued growth
| 70Boat Market Recovery Is Very Different By Segment
U.S. New Boat Retail Sales
$8
$7
$6
USD in billions
$5
$4
$3
$2
$1
$0
Outboard Sterndrive IB - Ski/Tow IB - Cruisers*
2006 2011 2016 2017 2018
Source: NMMA and SSI
Note: Cruiser as defined by NMMA represents inboard cruiser type sized 21’ to 66’+
Brunswick has made significant investment in outboard segments
| 71Boat Registrations Growing In Key Market Segments
12 Registered Boats in U.S.
10 20 22
24 Major declines inCAPITAL STRATEGY AND
MARINE METRICS
| 73Strong Growth in Aftermarket Business Enhances
Stability
Aftermarket Parts & Engines
16% Boats
30% Aftermarket
Parts & Engines
2006 2019 32%
Boats REVENUE REVENUE Strong aftermarket
56% ~$5.1B ~$4.4B business enables
OEM Parts & Engines
28% improved earnings
stability in various
OEM Parts & Engines market conditions
Boats
38% and benefits our
13% capital strategy
execution
Boats
2006 Aftermarket Parts & Engines 2019
41% EARNINGS 39% EARNINGS
~$330M ~$610M
Aftermarket
Parts & Engines
49%
OEM Parts & Engines
OEM Parts & Engines
20% 38%
| 74 1. P&A distribution included in Aftermarket Parts and Engines
2. Revenue figures not adjusted for Marine eliminations
3. Earnings figures exclude corporate expenses, and 2006 figures exclude all non-marine earningsDebt Retirement Plan – Addressing Near-Term Debt Maturities
$ in billions
MANAGING DEBT
$1.4 Due by 2023 Long-Term
$1.2
$1.2B
$1.1B
REFINANCED
$1.0B $500M+ of near-term debt in
$1.0 $.90B last 12 months
$.80B
$0.8
$0.6 TARGET LEVERAGE
$0.4
Under 1.5x on gross basis
$0.2
$- MAINTAIN
2018 2019 2020F 2021P 2022P Investment-grade credit rating
Leverage 2.0x 1.7x 1.4x 1.1x 0.9x
Plan manages maturity risk while building capacity to fund incremental strategic M&A
or shareholder return activities
| 75Returning Capital to Shareholders – Dividends
Annual Dividend
DIVIDEND POLICY
$0.84
$0.96
TARGET 20 – 25%
Payout Ratio
$0.50
TARGET 1.5 – 2.0%
Dividend Yield
2014 2018 2019
Avg Yield(1) 1.2% 1.3% 1.9%
PAYOUT
SUSTAINABLE
Payout Ratio(2) 21% 20% 22% Through Economic Cycle
(1) Based on quarterly dividend payout at year-end divided by average annual stock price
(2) Based on quarterly dividend payout at year-end divided by full-year, as adjusted, EPS
We plan to continue to increase dividends as earnings and cash flow improve
| 76Returning Capital to Shareholders – Share Repurchase Activity
SHARE REPURCHASE
100.0
95.1
POLICY
95.0
SYSTEMATIC
90.0 88.2 (1) Use of 10b5-1 plans
85.6
85.0
79.5 $80 - $120 MILLION
80.0 Target annual repurchase
75.0
70.0
REMAINING
2014 2018 2019 2020F AUTHORIZATION
Of $235 Million
Shares (in MM) 9.0 7.7 1.7
ABILITY TO FLEX
Dollars (in MM) $465 $400 $100 Depending on conditions /
(1) Full impact of 2019 repurchases reflected in 2020 as repurchases occurred in the second half of 2019
other opportunities
Our recent share repurchase activity has been more aggressive due to the
deployment of Fitness sale proceeds and strong growth in free cash flow
| 77Invest in Growth – Acquisitions
RECENT SUCCESSES
We will continue
PARTS &
ACCESSORIES to execute
BOLT-ONS against our
acquisition
strategy, and
2019 2018 2014 - 2017 have flexibility to
engage in more
2020-2022 PLAN • Focused mostly on P&A Segment and technology significant M&A
ASSUMES 1-2% ANNUAL expansion activity with
REVENUE GROWTH
FROM M&A • Financial Targets: attractive returns
• Accretive in year 1
• Mid-to-high teens returns with synergies
| 782020 Guidance
2020 diluted EPS, as adjusted, range of $5.10 to $5.40
Revenue growth of 6 to 8 percent
Operating margin improvements of 40 to 60 bps
Operating earnings growth of low-double digit percent;
Operating expense to decrease as % of sales
5 2020 FCF in excess of $325 million
Q1: Challenging comparisons vs. 2019, EPS up high-single
5 digit percent vs. $0.94 in 2019, revenue up low-single digit
percent, slightly lower margins vs. 2019Tariff Update
Change
from Q3 call
We anticipate
2020 estimates incorporate tariffs paid on 40 a net impact
to 60 horsepower outboard engines
assembled in our Suzhou, China facility
More Negative to 2020 pre-
tax earnings
Assumes Waves 1- 3 staying at 25% rate,
No Change
of $30 to $35
and no additional exemptions received
million ($10 to
$15 million
Minimal impact from Wave 4 (if enacted) No Change incremental
to 2019)
related to
Impact of retaliatory tariffs on boat exports
into E.U. remain incorporated in our plan No Change tariffs
| 802020 Outlook – P&L and Cash Flow
2020 Estimates
Free cash flow Exceeding $325 million
Working capital usage ~$30 - $50 million
Depreciation and amortization1 ~$120 - $130 million
Acquisition intangible amortization2 ~$30 million
Combined equity earnings and other income Comparable to 2019
Effective book tax rate3 ~21 and 22 percent
Low to mid-teens
Effective cash tax rate
percent
Average diluted shares outstanding ~79.5 million
1
Excludes acquisition intangible amortization
2
Amortization related to Freedom Boat Club acquisition is not material
| 81 3
As adjusted to exclude the net impact of special tax items.2020 Outlook – Capital Strategy Assumptions
2020 Estimates
Debt retirement ~$100 million
Capital expenditures ~$200 - $220 million
Share repurchases ~$100 million
Quarterly dividends $0.24 per share
Net interest expense ~$65 million
| 82Review of Foreign Currency Impact1
Q4 2019:
• Unfavorable impact on sales of less than 1
LA/Other percent
• Unfavorable impact on operating earnings of
Canada approximately $4 million
Outlook for Full-Year 2020:
Asia
Pacific
• Neutral impact on consolidated sales
Sales in • Unfavorable impact on operating earnings of $5
foreign to $10 million
currency
Europe
Canada
Net exposure is about
| 83 10 percent of sales 1Includesimpact of hedging activity, with full-year estimates assuming rates
remain consistent with current rates.U.S. Industry Retail Powerboats (1965 – 2018)
Industry
Volume
600,000
500,000
400,000
2018 = 201,000
300,000
1965 -1991
200,000
Average 400,000
1992 -2006
Average 309,000
100,000
-
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
The U.S. marine market continues its steady recovery
| 84Favorable Replacement Cycle Dynamics
Registrations
10,906 10,521 10,605
10,389 10,340 10,466 10,230 10,532 10,397 10,658 10,423
9,926 9,848 9,829 9,674 9,805 9,791 9,870 9,730
1,400
1,200
1,000
800
Thousand Units
600
400
200
-
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
Pre-Owned
843 862 873 827 828 845 827 790 724 780 756 740 793 786 775 792 811 828 802
Boats Sold
New Boats
344 312 304 296 308 306 292 267 203 154 139 140 153 158 168 179 189 199 201
Sold
% New of
29 27 26 26 27 27 26 25 22 16 16 16 16 17 18 18 18 19 20
Transactions
Note: All data in thousand units
Source: Pre-Owned Boat Market Study conducted for NMMA by Info-Link Technologies
| 85Pro Forma Annual Replacement Demand
Pro Forma Annual
Average Life
Registered Boats ÷ Expectancy
= (Obsolescence)
Replacement
Demand
9,500,000 Units 30 - 35 Years 271,000 – 317,000
Pro Forma Annual Replacement Demand – Sensitivity Analysis
Average Life Expectency
30 years 35 years
Registered Boats
10,000,000 333,000 286,000
9,500,000 317,000 271,000
9,000,000 300,000 257,000
| 86U.S. Powerboat Industry Growth (2013 – 2018)
U.S. Aluminum Outboard U.S. Fiberglass - Saltwater Outboard
Pontoon 21% Fish Saltwater Fish < 23' Saltwater Fish > 23'
12% 35%
10% 30%
30%
10%
9% 25%
8% 8%
8% 7% 18%
20%
6% 15%
6% 14%
6% 6% 15%
5% 5% 9%
10% 7% 8%
4% 6%
5% 4%
2% 0%
2014 2015 2016 2017 2018
0% -5% -3%
2014 2015 2016 2017 2018
U.S. Fiberglass - Yachts, Cruisers, and RDBs SSI - Total U.S. Powerboat Industry
RDB Value RDB Premium and Cruisers (< 40') Yachts (40' - 65') Total U.S. Powerboat Industry
15% 14% 8%
7% 7%
7% 6%
10% 9% 9%
7% 6% 5%
6% 6%
4%
5% 3% 5%
3% 4%
2%
4%
0%
3%
-1%
-1% -1% -2% 2%
-5%
1%
-10% -9% 0%
2014 2015 2016 2017 2018 2014 2015 2016 2017 2018
Source: Statistical Surveys, Inc. & NMMA
| 87Boat Segment pipeline metrics
Ending Change Units in Change As expected,
Year Weeks on Versus Prior Pipeline Versus Prior
pipelines have
Hand Year (WOH) (thousands) Year (Units)
returned to normal
and are well-
19 36.6 +0.4 week 23.7 (7)% positioned to begin
the boat show
18 36.2 +0.4 week 25.4 1% season
17 35.8 +0.4 week 25.2 6%
Pipeline inventory
units at year-end
16 35.4 No change 23.8 4% were down 7 percent
as compared to year-
end 2018
20F 35 - 36 Slightly lower
| 88Boat Segment Ending Weeks on Hand*
45
40
35
30
25
20
2015
2016
2017
2018
2019
2015
2016
2017
2018
2019
2015
2016
2017
2018
2019
2015
2016
2017
2018
2019
Q1 Q2 Q3 Q4
*All figures are ex-Sea Ray SYY
| 89SSI Variability*
2016 2017
25% 14%
12%
20%
10%
15% 8%
6%
10%
4%
5% 2%
0%
0% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec -2%
-5% -4%
2018 2019
15% 10%
5%
10%
0%
5% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
-5%
0%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec -10%
-5%
-15%
-10% -20%
*All 2019 comparisons are based off of partially complete data and are therefore not representative of final results; 85% in Oct, 79% in Nov, & 63% in Dec
| 90 Rolling 12-month market growth Monthly Reported market growthSeasonality Of New Boat Sales
U.S. Retail-Units
Month
2001 to 2018
January 3.2%
February 5.3%
March 10.0%
April 12.8%
May 16.0%
June 15.0%
July 12.4%
August 9.5%
September 5.8%
October 4.3%
November 3.1%
December 2.6%
Source: NMMA, Info-Link
| 91FY Revenue Growth Rates By Region1
Consolidated
Region Engines Boats Total BC 2019 Mix revenue grew
U.S. (4)% (8)% (4)% 69% by 1 percent;
Europe 7% (8)% 4% 13%
Canada (5)% 0% (2)% 7%
Asia-Pacific 9% (8)% 7% 7%
On a constant
Rest-of-World 8% (2)% 6% 4%
currency, ex-
Total International 6% (4)% 4% 31%
acquisitions
Total Consolidated (1)% (7)% (2)% 100%
basis, revenue
was down 2
percent
1All figures shown on a constant currency basis, excluding acquisitions and Sea Ray Sport Yacht and Yachts.
| 92You can also read
