Brunswick Corporation At-A

Brunswick Corporation
At-A-Glance
November 2013
Helping Active People Live Active Lives
Brunswick Corporation At-A-Glance
What We Do
Brunswick Corporation
World’s leading provider
of marine engines,
pleasure boats,
fitness equipment and
bowling and billiards
products and services
Founded
Helping people enjoy their lives and each other
since 1845.
By John Brunswick,
a Swiss immigrant woodworker
in 1845, in Cincinnati, Ohio,
to make billiards tables.
Headquarters:
Lake Forest, Illinois,
a Chicago suburb.
Total sales
2012 net sales were
approximately $3.7 billion.
Geographic reach
Brunswick’s products are sold
throughout North America,
Europe, Asia/Pacific, South America,
Africa and the Middle East.
Stock symbol
BC. Brunswick stock is traded on
the New York and Chicago stock
exchanges. Brunswick has been
a member of the New York Stock
Exchange since 1925.
Shares outstanding
90.2 million as of February 19, 2013.
Employees
Approximately 16,000 people
worldwide at December 31, 2012.
Website
www.brunswick.com
2
Helping Active People Live Active Lives
Financial Profile
9%
47%
17%
Continuing
Operations
2010
2011
2012
Revenue
$3.3 B
$3.7 B
$3.7 B
Operating
Earnings2
$117 M
$235 M
$290 M
Operating
Margin2
3.5%
6.4%
7.8%
EPS, as adjusted3
($0.03)
$1.36
$2.09
27%
2012 Revenue by Segment
47% – Engine1
74% – Marine
27% – Boat
17% – Fitness
9% – Bowling & Billiards
26% – Recreation
Products and Services
6%
by Category and Region
2%
8%
9%
13%
62%
Segment
U.S.
International
Engine
63%
37%
Boat
63%
37%
Fitness
52%
48%
Bowling & Billiards
79%
21%
Total
62%
38%
Global Customer Base 2012
62% – U.S.
13% – Europe
9% – Canada
8% – Asia Pacific
6% – Latin America
2% – Africa & Middle East
1
Adjusted for marine eliminations
Excludes restructuring charges of $54.2 million, $21.3 million and
$25.8 million in 2010, 2011 & 2012, respectively
2
Excludes restructuring charges, debt losses and special tax items of
$0.69, $0.38 and $0.50 in 2010, 2011 & 2012, respectively
3
3
Engine Segment
Mercury Marine positioned for sustained, industry-leading performance
Brands
Products and Services
by Category and Region
Mercury Marine
Outboard Engines
Mercury MerCruiser
2hp – 300hp (FourStrokes)
Mercury Diesel
75hp – 250hp (OptiMax®
Direct Fuel Injected)
Mariner
Mercury Racing
2hp – 250hp (Traditional
two-strokes for International sales)
MotorGuide
60hp – 350hp (Mercury Racing)
Quicksilver
Attwood
Sterndrive and Inboard Engines
Diversified Marine Products
135hp – 430hp
Kellogg Marine Supply
Land ‘N’ Sea
15%
42%
43%
520hp – 1650hp (Mercury Racing)
Diesel
60hp – 350hp
Electric Trolling Motors
2012 Revenue by Category
43% – P&A
42% – Engine (Outboard)
15% – Engine (Sterndrive/Inboard)
40 – 90 pounds of thrust
Parts & Accessories (P&A)
World-leading products that are
designed with you and your engine
in mind, including boat accessories,
service parts, oil and lubes and rigging
Advanced Propulsion Systems
• Joystick Piloting for Outboard,
Sterndrive and Pod systems
• SmartCraft® digital technology
• Advanced user-interface
products, including:
5% 3%
7%
9%
13%
63%
–– Information Displays
–– Gauges
–– Controls and Rigging
Non-Marine Market Capabilities
Aluminum casting, industrial propellers,
gears and shafts
4
Helping Active People Live Active Lives
2012 Revenue by Region
63% – U.S.
13% – Europe
9% – Asia Pacific
7% – Latin America
5% – Canada
3% – Africa & Middle East
Competitive Landscape
Manufacturing
Mercury Marine Advantages
Locations, Employees, Distribution
Global Competitors:
Engines:
• Outboard
• Fond du Lac, Wisconsin
History
–– Evinrude
• Suzhou, Peoples Republic of China
–– Honda
• Komagane, Japan
(joint venture with Tohatsu Motor)
–– Suzuki
1947 – Lightning 10hp Outboard
1956 – Mark 75 Outboard
1961 – Brunswick acquires Kiekhaefer
Corporation, predecessor of
Mercury Marine
–– Yamaha
Parts/assembly:
• St. Cloud, Florida
• Sterndrive/Inboard
1939 – Founded as Kiekhaefer Corporation
• Lowell, Michigan
1961 – MerCruiser® sterndrive engine-anddrive packages unveiled
• Verviers, Belgium
1996 – OptiMax® DFI Two-Stroke Outboard
Advantages:
• Juarez, Mexico
• Strong global brands with
leading market shares
2002 – SmartCraft® Technology
is introduced
Mercury Marine employees:
2004 – Verado®, industry’s first production
supercharged outboard
–– Volvo Penta
• Broadest, most comprehensive
product portfolio
More than 5,200 worldwide
–– 2hp – 350hp (Outboards)
Distribution:
–– 135hp – 1650hp (Sterndrives)
• Approximately 6,500
dealers worldwide
–– 300hp – 425hp (Inboards)
–– 60hp – 350hp (Diesel)
• Leading global distribution network
2007 – Zeus® propulsion system with
Joystick Piloting for Pods
2008 –Axius® propulsion system with
Joystick Piloting for Sterndrives
• Nearly 4,000 dealers/retailers
in the U.S.
• Focused on marine propulsion systems
2009 – 8.2L Sterndrive engine/drive
package is introduced
2012 – 150hp FourStroke, experiences one of
Mercury’s most successful launches ever
2013 – Joystick Piloting for Outboards
is introduced
• Global, low-cost producer
• Mercury Racing provides
proven technology
• Significant parts and accessories
and service provider:
Product Awards 2004 - 2013:
• Five MotorBoating magazine
“Best of” Awards
–– Land ‘N’ Sea and Attwood serve North
America as well as more than 60
additional countries in a cooperative
effort with Mercury Marine’s Latin
America and Caribbean divisions
• Five JD Power and
Associates® Awards
• Four IBEXSM Innovation Awards
• Two Field & Stream®
“Best of” Awards
Financial Profile
$ in millions
2011
2012
Change
$1,905
$1,989
+4%
Operating earnings
$229
$248
+8%
Operating margin1
12.0%
12.5%
+50bps
Revenue
1
1
Eco-technology expands with
introduction of Enertia® Eco-propeller
2011 – 2013 – Mercury initiates four expansion
projects to manufacturing areas, and
one expansion project to Product
Development and Engineering.
Consolidation of sterndrive/outboard
production to Wisconsin completed.
Excludes restructuring charges of $11 million in 2011 and $4 million in 2012
5
Boat Segment
Brunswick brands are the world leaders in pleasure boats
Brands
Brunswick Competes
Across Many Segments
Recreational Fiberglass
Pontoon and Fish
Propulsion: Sterndrive (S)/Inboard (I)/Outboard (O)
Propulsion: Outboard
Runabout
Cuddy
Deck
Cruisers
S,O
S
S,0
S3
Bayliner
Yachts
Pontoon
Freshwater
Saltwater
O
Boston Whaler
O
Crestliner
Cypress Cay
O
Harris FloteBote
O
O
Lowe
O
O
O
Lund
1
I
Meridian
O
Princecraft
O
Quicksilver
S,O
O
O
O
S,O
Rayglass2
Sea Ray
S
S
Uttern
O
O
S,O
S,I,O
I
Brunswick Commercial &
Government Products
5%
19%
4% 1%
8%
19%
40%
1
63%
2012 Revenue by Category
2012 Revenue by Region
41% – Fiberglass - Sterndrive/Inboard
40% – Aluminum
19% – Fiberglass - Outboard
63% – U.S.
19% – Canada
8% – Europe
5% – Asia Pacific
4% – Latin America
1% – Africa & Middle East
Lund also makes fiberglass fishing boats
Rayglass/Protector also makes rigid inflatable boats
2
Sold in Latin America only
3
6
41%
Helping Active People Live Active Lives
Competitive Landscape
Manufacturing
Brunswick Boat Advantages
Locations, Employees, Distribution
• Highly fragmented industry,
over 1,000 manufacturers
in U.S. alone
• Edgewater, Florida
History
• Palm Coast, Florida
1957 – Bayliner established, acquired by
Brunswick 1986
• Fort Wayne, Indiana
• Strong brands with leading
market shares
• New York Mills, Minnesota
• Broad product portfolio known
for quality and value
1958 – Boston Whaler founded, acquired
by Brunswick 1996
• Lebanon, Missouri
• Vonore, Tennessee
• Strong global dealer network
• Joinville, Santa Catarina, Brazil
• Leading product development
process and capabilities
• Princeville, Quebec, Canada
• Best in class service and support
• Auckland, New Zealand
1959 – Sea Ray established, acquired by
Brunswick 1986
• Reynosa, Mexico
1988 – 2004 – Brunswick acquires or
launches boat brands, including
Harris FloteBote and Lund
• Augustow, Poland1
• Vila Nova de Cerveira, Portugal
2012 – Sea Ray 370 Venture® sport cruiser
is 2012 “Boat of the Year”
Boat Group employees:
4,400 worldwide
Distribution:
More than 2,800 dealers worldwide
Global Competitors
Recreational Fiberglass
Pontoon and Fish
Runabout
Cuddy
Deck
Cruisers
Yachts
Pontoon
Aluminum
Freshwater
Fiberglass
Freshwater
Fiberglass
Saltwater
Tahoe
Jeanneau
Hurricane
Monterey
Beneteau
Bennington
Tracker
Ranger
Sea Hunt
Jeanneau
Beneteau
Tahoe
Jeanneau
Azimut
Tracker
Alumacraft
Nitro
Scout
Chaparral
Chaparral
Princess
Godfrey
Smoker
Skeeter
Grady White
Stingray
Cobalt
Quicksilver wins “Starter Boat of the
Year” in Europe; three years running
2013 – Bayliner introduces value priced
Element™ bowrider for about $12,999,
revamps deck boat line-up
Boston Whaler 230 Vantage®, Harris
FloteBote Crowne™ are innovation
award winners
Ft. Wayne pontoon operation opens
new plant to double factory space
New York Mills expansion
commences in Minnesota
Regal
Financial Profile
$ in millions
Revenue
Operating loss
2
Operating margin
2
1
Contract boat yard
2
2011
2012
Change
$1,008
$1,003
(1)%
$(19)
$(7)
+63%
-1.9%
-0.7%
+120bps
Excludes restructuring charges of $8 million in 2011 and $21 million in 2012
7
Fitness Segment
Life Fitness is the global leader in exercise equipment
Brands
Products and Services
by Category and Region
Life Fitness
Hammer Strength
High-end fitness equipment for
commercial and home use
Cardio Equipment
8%
11%
52%
• Treadmills
• Lifecycle® exercise bikes
• Elliptical cross trainers
• Functional trainers
• Summit™ trainers
29%
• Stairclimbers
• Lifescape™ software, attachable
monitors for entertainment, data display
• LFopen™ platform to seamlessly
integrate end users’ preferred fitness
apps and websites
Strength Equipment
• Motion Technology Selectorized™
equipment, which allows users to
obtain more proportionate results
and add more strength-training
variety to workouts
2012 Revenue by Category
52% – Commercial (Cardio)
29% – Commercial (Strength)
(81% – Commercial Equipment)
11% – Consumer
8% – Service
• Plate loaded
5%
• Benches and racks
5% 4%
13%
21%
52%
2012 Revenue by Region
52% – U.S.
21% – Europe
13% – Asia Pacific
5% – Canada
5% – Latin America
4% – Africa & Middle East
8
Helping Active People Live Active Lives
Competitive Landscape
Manufacturing
Life Fitness Advantages
Locations, Employees, Distribution
Global Competitors:
• Franklin Park, Illinois
• Technogym
• Falmouth, Kentucky
• Precor
• Ramsey, Minnesota
• Cybex
• Kiskoros, Hungary
History
1968 – Lifecycle® stationary
bike invented
Life Fitness employees:
1977 – Life Fitness founded, iconic
Lifecycle is first product
More than 1,800 worldwide
1997 – Brunswick purchases Life Fitness
• Johnson
Advantages:
• Recognized global brands
• Focus on user engagement,
biomechanics, innovation
and reliability
Distribution:
• Brands have leading market
share in diverse customer
segments such as health clubs,
hospitality, local and federal
government and home gyms
• Leader in innovation –
Internet connectivity, only
self-contained biomechanics lab
Commercial sales are handled
through the Life Fitness direct
sales force, domestic dealers
and international distributors.
Consumer products are available
at specialty retailers, select mass
merchants, sporting goods stores,
international distributors and the
Life Fitness website.
2001 – 500,000th Lifecycle® bike produced
2007 –Life Fitness delivers seamless
iPod® integration with exercise
equipment and launches all-new
Life Fitness® cardio line
2012 – Industry’s only open technology
platform launched
Lifescape™ feature offers
on-demand content, simulates
world’s top trails for training
Lifecycle® GX group cycling
bike introduced
Synrgy360™ group training
system unveiled
• Strong sales and
marketing organization
Financial Profile
$ in millions
2011
2012
Change
Revenue
$635
$636
+0%
Operating earnings
$94
$103
+10%
Operating margin
14.7%
16.2%
+150bps
Acquires Hammer Strength
9
Bowling & Billiards Segment
For over 165 years, Brunswick remains the leader
Brands
Products and Services
by Category and Region
Brunswick’s
Bowling centers
Brunswick Bowling
Bowling products (bowling balls,
pinsetters, scoring systems)
Brunswick Zone
Brunswick Zone XL
7%
59%
Billiards tables
Brunswick Billiards
Brunswick Contender
34%
2012 Revenue by Category
59% – Bowling Retail Operations
34% – Bowling Products
7% – Billiards
5%
4%
12%
79%
2012 Revenue by Region
79% – U.S.
12% – Europe
5% – Other
4% – Asia Pacific
10
Helping Active People Live Active Lives
Competitive Landscape
Manufacturing
Brunswick Advantages
Locations, Employees, Distribution
Global Competitors:
• Szekesfehervar, Hungary
History
–– Bowlmor AMF
• Reynosa, Mexico
–– QubicaAMF
• Nearly 90 bowling centers
clustered in 18 states and Canada
–– Olhausen Billiards
1895 – Helps found American Bowling
Congress to standardize game
and rules
–– Pyramid
–– Ebonite
Brunswick Bowling &
Billiards employees:
–– Kegel
–– Storm
More than 4,600 worldwide
Advantages:
Distribution:
Bowling retail highly
fragmented but:
• Most recognized and respected
brand in both bowling and
billiards industries
• Extensive product portfolio,
turn-key offering for
center operators
Bowling and billiards products are
sold through a variety of channels,
including distributors, dealers,
mass merchandisers, bowling
centers and other retailers as
well as the brands’ websites.
Financial Profile
2011
2012
Change
$325
$322
(1)%
Operating earnings
$26
$29
+13%
Operating margin
7.8%
9.0%
+120bps
1
1
1960 – Brunswick enters the bowling
retail business
2007 –Brunswick advances its popular
‘Zone’ concept with Brunswick
Zone® XL bowling centers
• Low-cost manufacturing
1
1956 – Brunswick launches the
automatic pinsetter, making
bowling a national rage
1995 – Brunswick introduces popular
Cosmic Bowling® concept
• Known for product
quality, innovation
Revenue
1906 – A revolutionary rubber bowling
ball, Brunswick’s Mineralite, is
introduced. The $20 ball trumps
the competition and boosts
bowling’s popularity
1967 – Brunswick introduces the
automatic scorer
• Retail bowling operations
maintain steady, strong
operating margins
$ in millions
1845 – Brunswick begins as a
billiards maker
2013 – Brunswick’sSM, a new concept
in bowling and entertainment,
introduced
Excludes restructuring charges of $2 million in 2011 and $1 million in 2012
11
Bringing people together since 1845
Helping Active People Live Active Lives