Fact Book

Brunswick Corporation
At-A-Glance
February 2016
Brunswick Corporation At-A-Glance
What We Do
Brunswick Corporation
World’s leading provider
of marine engines,
pleasure boats,
fitness equipment and
billiards products
Founded
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
2015 net sales were
approximately $4.1 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
91 million as of January 22, 2016.
Employees
Approximately 12,600 people
worldwide at December 31, 2015.
Website
www.brunswick.com
2
Financial Profile
19%
50%
31%
Continuing
Operations
2013
2014
2015
Revenue
$3.6 B
$3.8 B
$4.1 B
Operating Earnings2
$298 M
$361 M
$426 M
Operating Margin
2
8.3%
9.4%
10.4%
3
EPS, as adjusted
$2.47
$2.42
$2.93
Adjusted Effective
Tax Rate4
10.2%
32.5%
32.6%
2015 Revenue by Segment
50% – Engine1
31% – Boat
81% – Total Marine
19% – Fitness
Products and Services
7%
by Category and Region
4% 2%
8%
12%
Segment
U.S.
International
Engine
68%
32%
Boat
72%
28%
Fitness
54%
46%
Total
67%
33%
67%
Global Customer Base 2015
67% – U.S.
12% – Europe
8% – Asia Pacific
7% – Canada
4% – Latin America
2% – Africa & Middle East
1
Adjusted for marine eliminations
Excludes restructuring charges and pension settlement costs as applicable of
$16.5 million, $32.1 million and $94.7 million in 2013, 2014 and 2015, respectively
2
Excludes reversal of deferred tax asset valuation allowance reserves, restructuring
charges, debt losses and special tax items totaling ($5.60), $0.37 and $0.52 in
2013, 2014 and 2015, respectively
3
Tax provision, as adjusted, excludes benefits from: reversal of deferred tax
valuation allow reserves, special tax items, restructuring and pension settlement
charges and from losses on early extinguishment of debt totaling $574.3 million,
$17.6 million and $45.7 million in 2013, 2014 and 2015, respectively.
4
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
2.5hp – 350hp (FourStrokes)
Mercury Diesel
115hp – 250hp (OptiMax
Direct Fuel Injected)
Mercury SeaPro
Mercury Racing
2hp – 250hp (Traditional
two-strokes for International sales)
MotorGuide
60hp – 400hp (Mercury Racing)
Quicksilver
Attwood / Whale / Garelick
Diversified Marine Products
Sterndrive and Inboard Engines
135hp – 430hp
42%
47%
520hp – 1650hp (Mercury Racing)
Kellogg Marine Supply
2015 Revenue by Category
Land ‘N’ Sea
Diesel
BLA
115hp – 370hp
Bell Recreational Products
11%
®
Electric Trolling Motors
30 – 109 pounds of thrust
47% – P&A
42% – Engine (Outboard)
11% – Engine (Sterndrive/Inboard)
Parts & Accessories (P&A)
World-leading products that are
designed with boaters and their engines
in mind, including boat accessories;
service parts; oil and lubes; propellers;
controls and riggings; remanufactured
products; water/heating systems for
marine, RV and other applications; and
distribution services for P&A to marine,
RV and powersport industries
Advanced Propulsion Systems
4%
4% 3%
9%
12%
• Joystick Piloting for Outboard,
Sterndrive and Pod systems
68%
• SmartCraft digital technology
®
• Advanced user-interface
products, including:
–– Information Displays
–– Gauges
–– Controls and Rigging
• Advanced propeller technology
Non-Marine Market Capabilities
Aluminum casting, industrial propellers,
wire harnesses and product lifecycle
consulting services
4
2015 Revenue by Region
68% – U.S.
12% – Europe
9% – Asia Pacific
4% – Latin America
4% – Canada
3% – Africa & Middle East
Competitive Landscape
Manufacturing
Mercury Marine Advantages
Locations, Employees, Distribution
Global Competitors:
Engines:
• Outboard
• Fond du Lac, Wisconsin
History
–– Yamaha
• Suzhou, Peoples Republic of China
–– Suzuki
• Komagane, Japan
(joint venture with Tohatsu
Corporation)
–– Evinrude
–– Honda
1939 – Founded as Kiekhaefer Corporation
1961 – Brunswick acquires Kiekhaefer Corporation,
predecessor of Mercury Marine
MerCruiser® sterndrive engine-and-drive
packages unveiled
1996 – OptiMax® DFI Two-Stroke Outboard
–– Yanmar
–– Hyundai
Parts/assembly:
2002 –
SmartCraft® Technology is introduced
• St. Cloud, Florida
2004 –
Verado®, industry’s first production
supercharged outboard
• Lowell, Michigan
• Sterndrive/Inboard
• Juarez, Mexico
2007 / 2008 – Zeus® propulsion system with
Joystick Piloting for Pods; Axius® propulsion
system with Joystick Piloting for Sterndrives
• Bangor, Northern Ireland
2009 – 8.2L Sterndrive engine/drive package
Mercury Marine employees:
2012 – 150hp FourStroke experiences one of Mercury’s
most successful launches ever
• St. Paul Park, Minnesota
–– Volvo Penta
Advantages:
• Strong global brands with
leading market shares
• Broadest, most comprehensive
product portfolio
More than 5,500 worldwide
2013 – Joystick Piloting for Outboards is introduced
Eco-technology expands with introduction of
Enertia® Eco-propeller
–– 2hp – 400hp (Outboards)
Distribution:
–– 135hp – 1650hp (Sterndrives)
• More than 7,000 dealers and
distributors worldwide
• Nearly 4,000 dealers/retailers
in the U.S.
Consolidation of sterndrive/outboard
production in Wisconsin
2014 -
Mercury marks 75 years in business
Water/heating sytems manufacturer Whale
and P&A distibutor Bell RPG acquired
Mercury Marine named 2013 Wisconsin
Manufacturer of the Year
First sterndrive, purpose built for marine use
SeaPro® engines introduced for
commercial applications
Mercury Marine cast 2.5 millionth propeller;
–– 300hp – 425hp (Inboards)
–– 115hp – 370hp (Diesel)
• Leading global distribution network
• Focused on marine propulsion systems
• Mercury Racing technology
• Significant parts and accessories
and service provider:
–– Land ‘N’ Sea and Attwood serve
North America as well as nearly 80
additional countries
2011 – 2013 – Expansion projects to manufacturing
areas and Product Development & Engineering
Product Awards
• Five MotorBoating magazine “Best
of” Awards
• Five JD Power & Associates® Awards
• Five IBEXSM Innovation Awards
• Two Field & Stream® “Best
of” Awards
Financial Profile
manufactures 75,000th Verado® engine
2015 -
350hp and 400R outboard Verado introduced
6.2L, V8 sterndrive introduced in June
Australia’s BLA distributor and marine parts
maker Garelick join Mercury
$ in millions
2013
2014
2015
2015 vs. 2014
Change
Mercury debuts Forbes Top 100 Best
Employers List
Revenue
$2,088
$2,189
$2,314
+6%
Operating earnings
$284
$309
$350
+13%
Green Master Award Winner for fifth time:
2011, 12, 13, 14 and 15
Operating margin
13.6%
14.1%
15.1%
+100bps
Active Trim introduced – simplifies boat operation,
improves performance, decreases fuel costs
5
6
7
Boat Segment
Brunswick brands are the world leaders in pleasure boats
Brands
Brunswick Competes
Across Many Segments
Recreational Fiberglass
Pontoon and Fish
Runabout
Cuddy
Deck
Cruisers
S,O
S
S,0
S
Bayliner
Yachts
Pontoon
Freshwater
O
O
Boston Whaler
O
Crestliner
Cypress Cay
O
Harris
O
Lowe
O
O
O
O
Lund1
I
Meridian
O
Princecraft
Quicksilver
Rayglass
Saltwater
O
S,O
O
O
O
I,O
S,O
2
Sea Ray
Uttern
S,O
S
O
O
S,O
S,I
I
Brunswick Commercial &
Government Products3
Propulsion: Sterndrive (S)/Inboard (I)/Outboard (O)
4% 2%
8%
24%
1%
38%
13%
72%
38%
1
2015 Revenue by Category
2015 Revenue by Region
38% – Aluminum
38% – Fiberglass - Sterndrive/Inboard
24% – Fiberglass - Outboard
72% – U.S.
13% – Canada
8% – Europe
4% – Latin America
2% – Asia Pacific
1% – Africa & Middle East
Lund also makes fiberglass fishing boats
Rayglass/Protector also makes rigid inflatable boats
2
BCGP uses outboard and inboard propulsion
3
8
Competitive Landscape
Manufacturing
Brunswick Boat Advantages
Locations, Employees, Distribution
• Highly fragmented industry,
over 1,000 manufacturers
in U.S. alone
• Edgewater, Florida
History
• Merritt Island, Florida
1957 –
• Palm Coast, Florida
• Strong brands with leading
market shares
• Fort Wayne, Indiana
• Broad product portfolio known
for quality and value
Bayliner established, acquired by
Brunswick 1986
1958 – Boston Whaler founded, acquired by
Brunswick 1996
• New York Mills, Minnesota
• Lebanon, Missouri
1959 – Sea Ray established, acquired by
Brunswick 1986
• Strong global dealer network
• Vonore, Tennessee
• Leading product development
process and capabilities
• Joinville, Santa Catarina, Brazil
• Best in class service and support
• Reynosa, Mexico
2004 – 2005 – Brunswick acquires aluminum boat
brands, including Harris, Lund and Crestliner
• Princeville, Quebec, Canada
Product Awards
• Augustow, Poland1
2013 – Bayliner introduces value priced Element™
bowrider for $12,999, revamps deck boat
line-up
• Quicksilver wins “Starter Boat of
the Year” for third consecutive
time in 2012
• Vila Nova de Cerveira, Portugal
Sea Ray introduces popular 350SLX and
510 Sundancer
Boat Group employees:
Ft. Wayne pontoon operation opens new
plant to double factory space; New York Mills
expansion commences in Minnesota
Distribution:
2014 –
Sea Ray introduces L-Class luxury yachts
More than 2,850 dealers worldwide
Boston Whaler expands manufacturing space
Brunswick boat operations in Europe
introduce seven new Quicksilver models
2015 –
Boston Whaler named VMA Manufacturer of
the Year
2016 –
Crestliner celebrates 70 years in business
• Auckland, New Zealand
• Boston Whaler 230 Vantage,
Harris FloteBote Crowne™ 2013
innovation award winners
• Boston Whaler 420 Outrage 2015
Boat of the Year
More than 4,500 employees worldwide
Global Competitors
Recreational Fiberglass
Pontoon and Fish
Runabout
Cuddy
Deck
Cruisers
Yachts
Pontoon
Aluminum
Freshwater
Fiberglass
Freshwater
Fiberglass
Saltwater
Tahoe
Jeanneau
Hurricane
Monterey
Prestige
Bennington
Tracker
Ranger
Sea Hunt
Jeanneau
Beneteau
NauticStar
Jeanneau
Azimut
Tracker
Alumacraft
Scout
Chaparral
Chaparral
Princess
Forest River
Xpress
Grady White
Chaparral
Cobalt
Regal
Financial Profile
1
$ in millions
2013
2014
2015
2015 vs. 2014
Change
Revenue
$1,032
$1,136
$1,275
+12%
Operating
earnings (loss)2
$(6)
$19
$45
$27
Operating margin2
(0.6)%
1.6%
3.6%
+200bps
Contract manufacturers
2
Excludes restructuring charges of $16 million in 2013, $2 million in 2014, and
$8 million in 2015
9
Fitness Segment
Life Fitness is the global leader in commercial exercise equipment and billiards tables and products
Brands
Products and Services
by Category and Region
Life Fitness
Hammer Strength
Cybex
High-end fitness equipment for
commercial and home use
Largest U.S. manufacturer of billiards
tables and game room products
8%
12%
SCIFIT
InMovement
Cardio Equipment
Brunswick Billiards
• Treadmills
• Lifecycle® exercise bikes
• Elliptical cross trainers
29%
• Functional trainers
51%
• Stairclimbers
Strength Equipment
• Selectorized™ equipment
• Plate loaded
• Functional training systems
• Benches and racks
2015 Revenue by Category
51% – Commercial (Cardio)
29% – Commercial (Strength)
80% – (Commercial Equipment)
12% – Consumer and Billiards
8% – Service
Rehabilitation & Active Aging
• Tailored products to safely facilitate
rehabilitation and enable seniors to stay
active and healthy
4% 4%
7%
Productive Wellbeing™
• Products, supported by culture-change
services to keep people moving during
the workday
12%
Billiards
• Billiards tables
• Table tennis
19%
54%
• Foosball tables
• Rec room furniture and accessories
Technology
• LFopen™ platform seamlessly integrates
end users’ fitness apps and websites
• LFconnect™ website allows facilities and
exercisers to create a custom
workout experience
10
2015 Revenue by Region
54% – U.S.
19% – Europe
12% – Asia Pacific
7% – Latin America
4% – Canada
4% – Africa & Middle East
Competitive Landscape
Manufacturing
Life Fitness Advantages
Locations, Employees, Distribution
Global Competitors:
• Franklin Park, Illinois
• Technogym
• Falmouth, Kentucky
• Precor
• Medway, Massachusetts
• Johnson Health Tech
• Ramsey, Minnesota
History
1845 – Brunswick introduces first billiards table
1884 – Brunswick merges with rival to become
world’s largest billiards equipment operation
• Owatonna, Minnesota
1961 – Gold Crown™ billiards table debuts
Billiards:
• Tulsa, Oklahoma
• Olhausen Billiards
• Bristol, Wisconsin
1968 – Lifecycle® stationary bike invented
• American Heritage Billiards
• Kiskoros, Hungary
1977 –
• Legacy Billiards
Life Fitness employees:
• Diamond Billiard Products
Life Fitness founded, iconic Lifecycle is
first product
1997 – Brunswick purchases Life Fitness, acquires
Hammer Strength
More than 2,600 worldwide
2001 - 500,000th Lifecycle bike is produced
Advantages:
Distribution:
• Recognized global brands
• Focus on user engagement,
biomechanics, innovation and
reliability
• Brands have leading market
share in diverse customer
segments, including health clubs,
hospitality, education, local and
federal government
• In-house biomechanics lab
Commercial sales are handled
through the Life Fitness direct
sales force, domestic dealers and
international distributors. Consumer
fitness equipment and Billiards
products are available at specialty
retailers, select mass merchants,
sporting goods stores, international
distributors and the Life Fitness and
Brunswick Billiards websites.
• Strong sales and marketing
organization
2007 – Life Fitness provides seamless iPod®
integration with cardio fitness equipment
2012 – Life Fitness launches industry’s first open
technology platform
Lifecycle® GX group cycling bike introduced
Synrgy360™ group training system unveiled
2014 – Hammer Strength marks 25th year
Synrgy360™ moves outside with Synrgy360™
BlueSky
2015 – SCIFIT accquired
• Industry-leading distribution
2016 – Cybex accquired — Cybex had 2015 sales of
about $169 million
Financial Profile
$ in millions
2013
2014
2015
2015 vs. 2014
Change
Revenue
$716
$769
$795
+3%
Operating earnings
$108
$115
$117
+1%
Operating margin
15.1%
15.0%
14.7%
(30bps)
11
Bringing people together since 1845