Brunswick Boat Group Aine Denari, President—Brunswick Boat Group
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This data is confidential to Brunswick BRUNSWICK BOAT GROUP AINE DENARI, PRESIDENT—BRUNSWICK BOAT GROUP Hello, my name is Aine Denari. I joined the company last October as president of Brunswick’s Boat Group. I am delighted to have the opportunity to be with you here today, to share some of the great achievements and exciting plans on behalf of Boat Group. 1 This data is confidential to Brunswick 3 OF TOP 4 MOST RECOGNIZABLE BRANDS Let’s start with Boat Group’s great foundation at this exciting time when boating is booming. We are the largest player in the recreational marine space, and have the most iconic portfolio in the industry, including 3 of the 4 most recognizable brands. Let me share some of the foundational elements that Boat Group has delivered over the past 18 months, since Brunswick has evolved as a marine powerhouse. 2 This data is confidential to Brunswick THIRTY-FIVE NEW PRODUCTS DEVELOPED IN 2020 First, we have delivered 35 exciting new products across our brands in 2020. 3 This data is confidential to Brunswick ESTABLISHED WORLD-CLASS BOAT TECHNOLOGY CENTER We established a series of world‐class tech centers staffed by the world’s most tenured naval engineers, including a flagship tech center in Florida, and additional locations in Minnesota and Indiana. 4 This data is confidential to Brunswick NEW DIGITAL EXPERIENCES ACROSS ENTIRE CONSUMER JOURNEY We dramatically increased our investment and built our capabilities in digital, and we delivered 20 new digital consumer experiences across the consumer journey. 5 This data is confidential to Brunswick FIRST RECREATIONAL BOAT MANUFACTURER AT CES We are engaging consumers in new ways, and are proud to say we were the first boat manufacturer at CES last year, showcasing our Sea Ray SLX‐R 400e –with Fathom ePower generator system, to rave reviews. 6 This data is confidential to Brunswick RAPID CAPACITY EXPANSION WITH INTEGRATED MANUFACTURING CENTER AND PALM COAST And, in 2020 as demand started exploding, we focused on quickly increasing our capacity, including leveraging existing assets to relaunch boat production, such as bringing online our facility in Palm Coast. 7 This data is confidential to Brunswick OUTPERFORMING COMPETITION WITH EMERGING CONSUMERS & OUR PREMIUM BRANDS Now, as we move forward to the “Next Wave”, let’s talk about where Boat Group is going: First, we are leveraging our incredible brand equity and new digital experiences across brands to outperform the market, especially with emerging consumer segments. 8 This data is confidential to Brunswick GREATER THAN 10% OPERATING MARGINS We will deliver sustained double‐digit margins –as evidenced by our Q1 2021 results. 9 This data is confidential to Brunswick FOUR NEW ELECTRIC BOAT APPLICATIONS We continue to leverage our scale and expertise to deliver market‐leading technologies across ACES, and we will launch 4 new electric boat platforms by 2023; 10 This data is confidential to Brunswick BEST-IN-CLASS SERVICE We continue to invest in delivering a best‐in‐class consumer experience, turning our attention to a frictionless service experience; 11 This data is confidential to Brunswick QUALITY LEADERSHIP We will deliver consistent, industry‐leading quality…across all our products; 12 This data is confidential to Brunswick CONSCIOUS, SUSTAINABLE LEADERSHIP And finally, we will continue to focus on sustainability leadership across all our manufacturing facilities. 13 PATH TO DOUBLE-DIGIT MARGINS • New Product • Market Demand • Share Gain • Pipeline Refuel • Productivity • Organizational Transformation • Quality Boat Group put a stake in the ground in early 2020 committing that we would deliver double‐digit operating margins by 2022, and we remain on‐track to do that. We closed Q4 2020 above 9% and ended Q1 above 10%. The drivers of our profitability have been consistent: First, is our portfolio of new products across our brands, which will include 122 new product launches over the next 2 years, enabling us to capture market share. Additionally, the current unprecedented market demand is giving us strong tailwinds, and refilling the pipeline will continue to serve our business deep into 2022 to eensur sustainability of our margin position. Finally, our investments in additional capacity, as well as our focus on productivity and quality improvements, will support delivery of these goals. 14 This data is confidential to Brunswick CONSUMER TECHNOLOGY OPERATIONS Elevated Consumer Product Leadership Operational Experience and Differentiated Excellence Technology The core of Boat Group’s strategy to win with consumers continues to focus on 3 key pillars, which we believe are unmatched in the marine sector. The first of these pillars is delivering an elevated consumer experience, throughout the lifecycle, starting with purchase and onboarding, and continuing through ownership and ongoing community involvement. The second pillar is our unrivaled product leadership position across brands, and our differentiated technology ecosystem. We are uniquely positioned in the industry to be able to drive and shape this position, given our size and scale, and our strong partnerships with our sister divisions within Brunswick. Third is our focus on operational excellence, including advanced manufacturing, continuous productivity improvements, and focus on quality and sustainability leadership. Combined, these 3 pillars are enabling us to be more responsive to consumer demands, provide an unmatched ownership experience, and to deliver highly reliable products with differentiated technology. 15 This data is confidential to Brunswick HOME TO 3 OF THE TOP 4 NATIONALLY RECOGNIZED MARINE BRANDS Our iconic brands drive sustained sales, share, and margin growth Source: Wedbush Securities, January 2019 It starts with our brands. For many years, we have had the most global and iconic portfolio of brands in the world, which includes 3 of the top 4 most recognized brands, and 5 of the top 10. 16 This data is confidential to Brunswick #1 #1 #2 Saltwater Recreational Aluminum Fishing Fiberglass Fishing And we hold positions of strength in all major segments of the recreational marine space, with the #1 market share position in saltwater fishing, the #1 position in recreational fiberglass, and the #2 position in aluminum fishing. 17 This data is confidential to Brunswick WOMEN FTBB YOUNGER REGISTRATION BY OUTPERFORMED PORTFOLIO AVERAGE WOMEN HIGHEST RESPECTIVE AGE LOWER THAN EVER ON RECORD CATEGORIES IN INDUSTRY AVERAGE ATTRACTING FTBB We are delighted that we are seeing the outcome of that brand equity translate into attracting new and emerging boating consumers, which will lead to the long‐term sustainability of our growth. We over‐index in the percentage of women buying boats: In 2020, our female buyers were the highest on record, and we outperformed the market by 7%. We are also seeing most of our brands significantly outperform their peers in attracting firstt‐time boa buyers of new boats. We are also seeing the youngest boat owners since 2011, with the average age of a Boat Group owner being 2 years younger than our industry peers. 18 This data is confidential to Brunswick New New Shopping Omnichannel Websites Experiences Transformation To continue to attract and retain these new boaters, who have some pretty high expectations regarding their consumer experience, we are investing heavily in the purchase experience. This is enabled by a contemporary digital backbone, which includes new websites across all our brands, and which have enhanced capabilities such as guided selling, digital configurators, and virtual tours. This is enabling us to nurture consumers earlier in the process, and to deliver more educated and warmer leads to dealers for fulfillment. 19 This data is confidential to Brunswick Expand New Boater Grow Community Seamless, Education Engagement Proactive Service Tailored Brand Content 1.4M Owners Contemporary Service Platforms We are also focused on enhancing the ongoing ownership experience of our boaters through a variety of initiatives. We are offering enhanced physical and digital training, new ways to purchase parts & accessories, and building community engagement via owners clubs and online communities, such as our Ripl community. We are also investing in improving our consumers’ service experience, supported by back‐ end tools, as well as by working closely with our dealer base to deliver a more frictionless consumer experience. 20 Intuitive Connected Owners’ Charting a Maximize Operations Applications Sustainable Future Synergies Moving to the second pillar of our overall strategy, technology and product innovations. Our portfolio of brands offers a platform for us to deliver our differentiated technologies and enables us to drive our ACES strategy in partnership with our sister Brunswick divisions. We are delivering Autonomy, Connectivity and Electrified solutions across our brands and roadmaps, and we are working with our Freedom Boat Club partners to deliver best‐in‐ class shared‐access solutions. 21 This data is confidential to Brunswick Build-cutting edge Sensor Integrate Suites and core Tech Stack Propulsion System Automation Reimagine User Controls and Communicate Intent Starting with autonomy, we have a clear vision for what the future of boating looks like, and where autonomous solutions will make consumers: • Feel safer in challenging or complex conditions, • Give them confidence in executing difficult tasks, • And ultimately move towards a world where the boat executes specific tasks for them. We