BC - Earnings call transcript Q4 2021

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Operator

Good morning and welcome to Brunswick Corporation's Fourth Quarter and Full Year 2021 Earnings Conference Call. All participants will be in a listen-only mode until the question-and-answer period. Today's meeting will be recorded.

If you have any objections, you may disconnect at this time. I would now like to introduce Brent Dahl, Vice President of Investor Relations.

Brent Dahl

you us. thank and morning for joining Good With Foulkes, CFO. Brunswick's the call are Dave this morning CEO; me on and Ryan Gwillim,

we that this expectations. prepared remind our about from future include begin these would keep statements results Before to in could Please like materially mind certain remarks, forward-looking everyone actual our call, I during results. comments our will that with differ

please refer today's For to recent to details on and the SEC press consider, release. factors filings our

are documents these All our on of at brunswick.com. available website

we our Dave. will non-GAAP unaudited the the the During turn now are non-GAAP referring financial in information. will over of I in presentation, be financial consolidated the call to financial Reconciliations appendix provided to presentation sections certain to statements this of to accompanying GAAP reconciliation results. measures today's

Dave Foulkes

Thanks, morning, good Brent and everyone.

businesses well Our businesses foundation our sales and in years set more and XXXX, resilience strategic for in portfolio. importantly, the operating and We priorities come. our of all strength to our delivered growth record across and and marine-focused extremely demonstrating XXXX against earnings for executed the

shareholder Our durability outstanding investments and businesses, our other Boat Club Propulsion, in critical digital operational programs, profile, as continues enabling ACES, returns. earnings strong of generation, robust Parts and with technology capital portfolio Accessories in the strength also our challenging and Freedom to accelerated environment prove performance core and and including a delivering as well while

share. see with the and can in by we adjusted delivering XXXX billion a net of you As $X in guidance, $XX range record approaching anticipate another our sales year EPS

of update of of includes Ripl insights understanding share after the X,XXX of lightly The with of and more their season. experience gained seasoned of their X-star XXXX boating means of XX% of in provide their boaters prospect rated participation full was continue online and boating wanted boater with important, the our boating anticipated their vast their discussing XXXX their through buyers with obviously boat at a years speaks experience some new some buyers those now the from and of that excitement you to are making to out XX% a as in five to longevity which the surveyed our experience. boaters, survey of both stickiness terms lifestyle. on and second of which Before new I'll Equally majority to of this Of results, than level intention the boaters. our boat of in very or their boating behaviors new boat community X-stars highlights I newer consumer now X-star season, of segments. Brunswick's of feelings polling boating satisfaction part permanent happy current the segment boating boating season their expect to performance own which current XXXX new the boaters a year as

all retail share for for gains increased full capacity original of higher market year. in U.S. horsepower doubled with OEM systems XXX with aftermarket delivered XXXX. from needs. in channels integration XXXX, service outstanding anticipate and XXXX. Verado in delivered come will XX%, points customers XXXX, our OEM quarter in Mercury the Accessories to in additional also XXX significant XX XXX new horsepower. customers investment category business to more Parts in enable more our by with previously than by sales share and XXXX horsepower to OEM by effect XXX growing line grow and production We experiencing usage commercial, businesses announced boat more in more outboards boat each XX% repower top over increased in plan achieving it's Propulsion builders grew international, the Our basis top Connect customers for also engines and points basis gained fourth across XXX% it's of XX than VXX of new line Mercury different year, rapidly XXXX, elevated customers. from demand adding Strong ASG another production strong demand business than fueled also which with of

Battery Advanced Systems Navico results our quarter to with Navico, Group first full Additionally, enjoyed expectations. portfolio, contributing the SemahTronix strong with in it's RELiON and and each outpacing

elevated a and of versus supply Finally, levels, very to still chain low delivered of revenues end historically our strong just field business product increase year, build at a attainment retail production challenging saw for inventories constrain XX% remain hand the as plan levels the environment. at year. ability the in inventory. Boat We demand in original the continued over with sold on XX% XX Pipeline weeks our production

in executing Over boat an XX of territories of Freedom acquisition new X well their past largest over in XXXX, and memberships franchise and the was Brunswick clubs. as fleet than months, percentage boats with increasing XX,XXX locations front and operations also added now Boat X,XXX U.S. the a Freedom boats as Fanautic and one in busy network-wide M&A Europe's the of engines. the on XX Club more the Spain, operates of

like Next, business a basis, constant review of sales currency I region excluding would to our the by performance on acquisitions.

with the grew initial rebounded performance growth year retail were the prior in to up color Overall, growth the delivering in versus XXXX. XXXX shutdowns sales grew pandemic. after the business XXXX U.S. every Asia-Pacific sales table market, XX% of to significant and due XX%. elongated international Europe the stages while marine sales more domestic after sales posted slightly sales This regions provides all strongly comparing and recent XXXX of in in on and XX% achieving year strong XXXX, experiencing in Canada expected, growth XXXX, Sales unit. As versus Canada

outperforming XXXX. unit supply performance stronger discussed sales As U.S. to aluminum and anticipated, for full XXXX Brunswick's when retail were significantly experienced saltwater Mercury together with market The with freshwater fishing over of in overall unit the boat In sales disruptions compared third retail quarter XX% industry decline XXXX, higher declines. XXXX we environment. gains retail XXX-horsepower market, the a call, X% Mercury above during horsepower quarter the ahead an more than XX% remainder and has categories, roughly progressed still retail share our was significant products. outboard industry led but power anticipated reported than down which, unit the growth, as represents with in market, experienced the earnings saw fourth engine more in which of retail year XXXX chain X% industry. the inventory-constrained XXXX X% increase results of registrations while with main pronounced

are growth twice as outboard of unit is industry, high from comparing we market rates when Mercury's the resulting earlier rest XXXX gains other being as all growth by engine in very to result the positive. are sentiment leading to product registration Additionally, of that unit remain retail note a It's dealer the alluded significant not and call. to consumer in demand. XXXX, rate declining indicators, generation, driven a share and declines availability U.S. important lead

XXXX. our confidence to facilities mitigate of and This these price of businesses, we with For our ability retail net our example, XXXX the already year our as boats slots in our together XXXX sold. of factors us continuing the impact. of calendar inflation impact high increases enter significant are see the perspective slide on we production than manufacturing on XX% to give leaving all provides some All already sold a retail percentage strength take year more continue and model to out

we look our throughout the year exceeded material, back freight XXXX, inflation the pricing by on taken labor As our businesses. slightly actions and overall faced

and year in ability inflation accelerated half our second the was the the cover increases of However, cost increase in challenging. to

as concurrent our units business in have that increases As implemented The increase price year the first changeover XXXX, we from of the year. for usual that ahead timing. price the implemented be net pressures a increased anticipate pricing result, actions input actions of historical of these as well certain inflationary quarter our impact full to model the cover of costs first each quarter price and midyear will with means

inflationary keeping gain. ensure not eye to the a overall margins continue pricing the that to not to adjust our price to hard as we've the keen as so year necessary worked new impacted price we boaters on progresses, end-use environment as However, monitor will consumer, the still while the operating so and are negatively product to out

strong those plans. against many and related Freedom initiatives growth capacity, and ACES, we to to plan necessary have marketing sales on execute and we spending planned Boat Lastly, Club and

capital However, where keenly spending or adding into focused cost allowing we appropriate throughout XXXX capacity remain flow and bedrock $XXX growth. capital our ensure across ended new future generation, cash generated and us our strong in continued our million not capital flow. revenue meet with to form strategy the on unnecessary expenditures exciting We our products on system to the executed exceed $XXX meet successfully will We the year margin growth. cash cash will the year $XXX businesses free our of million earnings deployed with of and for million We objectives. which of and projects

also further We $X.X and our and Accessories Freedom billion revenue during the XXXX acquisitions, access will X shared Parts grow that totaling completed base in recurring businesses.

of kept completed financing increased retirement on the and even ninth for acquisition repurchases at gross of addition, our million of a we X.Xx Navico. In million leverage approximately share the dividend consecutive debt $XXX after The our $XXX year. of basis

financial call Ryan additional flow now year-end and credit for capabilities to performance. investment-grade I'll our total comments flexibility. with our liquidity Our strong cash generation cash continued balances, the on remains affording turn over

Ryan Gwillim

good Sales spending an sales for of prior and of higher quarter each When growth gains Dave fourth from to products, operating market and basis to XX% yet with quarter in strong increased fantastic out earnings earnings pricing impacted on Brunswick $X.XX margins compared benefited as-adjusted initiatives. morning, also by fourth was everyone. continued on increased a quarter global as year, due were volume on and record. highest share increased demand up we costs higher EPS by Thanks, and record another earnings X% adjusted with delivered EPS adjusted Operating XXXX. input segment XX.X%. our marine closed and net

net XX.X%, EPS year compared for XX% the strong $XXX very the XXXX. to conversion of activities XXXX. This we $X.XX inventory free themselves, is of $XX adjusted Our result elevated year a cash year since of a have which to planned and increased as of levels very of from cash period working investment also XX%. used of sales satisfy $XX delivered a XX% and the considering quarter when We free first our incremental flow higher generated leverage these when operating spending for operating capital to year of ownership. the a the million Navico million Despite working basis-point of of of the elevate and and capital flow production capital XXX outstanding we increase cash operating XXXX in robust needed XXXX in and speak million improvement full up for adjusted resulted results with margins during needs in costs compared needs, acquisition prior levels, start

growth. the business mix together and margins enabled levels. costs, segments; gains, XXXX inflation. of all delivered Operating market quarter quarter were lower Turning line product to XX earnings by more by Strong in primarily caused offset versus up than from of versus to our fourth drove XX% up manufacturing categories, top quarter were versus higher by benefits absorption but favorable XXXX. strong higher production and by sales and for increased XX% Propulsion as customer be Revenue QX pricing, versus were another material basis points XXXX which the QX our fourth XXXX favorable demand increased more yet share basis was with XXX points continue

and late and season earnings growth continued and favorable weather Accessories conditions demand in quarter. businesses in drove top enabled areas many the leveraged aftermarket which line Parts Our robust

this quarter. increased benefited earlier, in acquisition Group's Systems Advanced in In mentioned Revenues driving addition, increased and segment as X%. operating Navico particular, the activity XX% from results with Dave strong earnings

for P&A were Full constant costs. when line organic and of with the points to quarter by guidance, impact quarter grew the affected excluding down versus was distribution X% XXXX. fourth input at revenues in delivering the with basis and Adjusted year year. our XX% on versus fourth record of expected, growth, prior margin margins operating acquisitions XXXX a business acquisitions, acquisitions the margin a the of year XXX previous impact our of of Excluding and XX% third-party currency operating XX.X% quarter compared were and the operating as increased basis,

were at were XX% were line growth up up delivered stability quarter down up disruption, the when XXX Sales continued top labor Our operating and Boat XX to sales operating despite constraints inflation XXXX. strong basis with and of fourth XX% points the chain When adjusted compared adjusted basis quarter segment margins quarter. XXXX, supply and the of cost during compared fourth points. earnings margins and times were

point sales segment. freshwater, that in margin record, increases brands profile particular more X.X%, lower changes the earnings the year, of material to Boat volume for were quarter. inflation, continuing at led growth year. X% XXXX, Club customer at discount of retail and Increased margins the activity resulting and the manufacturing base. diverse lower Freedom a delivered due than accretive on increase quarter the sales the is increasingly were in mix, including Club Boat Freedom had XX% For strength Acceleration, acquisition full a be by adjusted our younger and our Boat it's XXX-basis businesses. segment with levels over aluminum and offset for it's cost together of while operating higher Business segment's with business in exceeding of Boat pontoon seven unfavorable slightly operating to Sales to revenue by pricing, membership margin which operating contributed a the attracting busiest one continues quarters in included inefficiencies

stronger we the of XX sales which in in dealer the quarter receiving to remarkable nearly quarter boats X,XXX given achievement X,XXX pipelines produced the the Despite production or slightly units quarter, our current boats of components continues of Despite shipping wholesale challenges, hand in we pipelines, XX-month quarter to than approximately fourth XXXX, during delays was basis. plan in production XXXX still to quarters. trailing fourth Supply wholesale headwinds, certain sold over of environment. certain the for original approximately resulting we retail XXXX. the chain on added third to XX% greater the including the a just in sold units completed a of subsequent boats on number weeks boat supply-constrained result measured deferral of Turning

XX% low be sale another at inventories for of than year XXXX. remain time in end that the However, at is dealer fewer with same to available XXXX last fewer units and year versus historically XX% going levels Brunswick. outstanding units believe for We units

navigating and on confident continue innovation. extremely we COVID-XX costs, are Next and industry the including headwinds, to elevated strategy continue our chain, we Although labor we remain that lead of executing freight certain focused supply in Wave the effects marine will and and growth

to planned year. is where to directional than anticipated excess cash the on low between which $XX.XX as also to for of the more of materially revenue in industry for EPS year, each operating we be upcoming business digit in be approximately pandemic-related year XXXX growth on first impacted drive $X.X spending versus $X.XX sale of to of Operating our and retail capital and unit generation growth. And to in issues with by will in anticipate operating following growth expenses the spending $XXX first the We're will growth continuity billion, constrained guidance the XX free Assuming marine remain of of EPS range XXXX. ACES percent adjusted growth EPS flow billion and points XXXX. and with with basis lastly, single given no the to elevated ability clarity quarter, the major low million initiatives. points a we're but quarter. basis providing growth U.S. margin with XX% providing in margin supply diluted million guidance We up of $XXX each mid-single-digit XX We $X XX the expansion XX adjusted anticipate quarter segment. other growth the over regarding of be up revenue for between anticipate

fantastic outlook all up year businesses. to for believe setting segment. our is XXXX to our We Moving a be by

impact in range acquisitions Propulsion share our for other product anticipate XXXX, mid- sales basis net net segment, costs, high market higher and we XXs the double-digit low percent Parts driven growth be versus to on priorities. the by increased year growth strategic technology operating up on XXXX. and sales our we excluding in For completed products, comparable the In slightly to and percent with partially Accessories unfavorable offset segment, the digits capacity, introductions, of high-single margins and new input by sales mix in a spending or increased anticipate by

We to costs the as grow are also cost margins implemented. realized pricing higher impact expect to slightly are and synergies actions acquisition of material mitigate

XX% segment robust We anticipate our retail with as Finally, inefficiencies growth as year. businesses half expected see Boat the a the in latter Boat is on expected very focus top to throughout line operating associated this and to the to disruptions of double-digit exceed improving business margins chain of with pipelines percent continues low to demand refill improve environment. year, operational supply the in fulfill performance

changes On rate a tax as cash with effective to federal well approximately expected the $XXX are activity between legislation, recent the working no million assuming of years Depreciation XX% federal increased reflecting taxes and we to due as material anticipating I that in full on will use and are rate. anticipate tax acquisition capital impact Freedom of should the amortization growth disruptions. expected and M&A year lower slightly to a higher capital accretion slightly capital against will certain the resulting during P&L Club. in of and inventory from prime protect a for conclude supply build reverse and of margin working the of ahead season our trend half first cash partially We we the retail Additionally, in update second Boat the continued flow spend in to and usage XXXX, the an This half than to XXXX. chain items year, $XXX with be be amortization anticipate of the we tax XXXX. million. continuing higher year is

strong strategy leveraging to a capital execute position. our in balanced XXXX, cash We expect very

even in investments projects cost and million the CapEx automation but have spend expansion repurchases million share for $XXX complete capital our planned in projects all announced million increases well plan resulting of our capacity We in the year, $XXX between XXXX, budget in million $XXX primarily We given to our between we $XXX for create spending approximately spend for will as to long-term for conditions to should to share January, in expenditure retire year. million that have more I market purchased $XX aggressive. recently our fund spend $XXX of of plan reduction note correction price to and $XX ability this new and already be product businesses. as of or expense obligations million million shares be up the have market or opportunities the million estimated interest with almost to approximately to We month. $XXX our more debt

continue expanding Lastly focus and Club. our Freedom including with we'll activity, to approach, on our past Consistent and in XXXX and business primarily Acceleration Accessories our similar units, to M&A XXXX, year. not Business Parts call I the does but throughout opportunities Dave to guidance now completion over expect of continue our to turn will assume M&A fully to the transactions comments. outlook any we provide the back Boat

Dave Foulkes

Ryan. XXXX XXXX. for to allowed priorities operational Very we've has strategic in Thanks, our out quickly to businesses focus us execution laid operating and the our transition solid by

Our from and for the expanding top be customers share. priority demand Propulsion segment existing outboard engine OEM to satisfying and new market continues

for in product that Day. upcoming and again will are top new Investor to will introductions invest that growth will Mercury at we future. discuss enable far continuing 'XX our propulsion into innovative in be and industry-leading line detail and the We big earnings years we new XXXX project solutions And more heavily products

accelerated capacity by second to expressed already the on supplied remain additional customers incremental us desire track this their who believe we have gain to be of And for allow will XXXX. Mercury. completion projects Our in half

global technology, optimizing in areas and the to global products model of on and strength systems Parts of leverage of it's focused it's Our our position battery strategy. distribution support digital connected operating advanced segment ACES and in Accessories remains

businesses additional efforts products, to new M&A large, The to to Parts operating retail plans, continue for are in we build business. will and it's help supply recurring margins, We our opportunities technology of more mitigate SemahTronix review this refilling as higher portion robust launching and on increasingly high-margin segment out activities pipelines keenly lens chain and integrated integration Navico, are future and focused focus capacity environment. expanding executing vertically on RELiON Boat expansion and to continuing our the systems on revenue Accessories become issues increasing to very it's focus

it's rapidly increasing of Freedom organic expand share XX,XXX continue Brunswick Finally, to now Freedom and in with membership will worldwide approaching the through and with products means members M&A an fleet.

early the by and for outboards. precise quarter product maneuvers. single initially to the system finding a a we launch including introduced power ways bring out We products strategy close boaters. virtually wanted morning, technology, updates. this XXX began Next I into showcase to all to megawatts provides a the that In new participating powered Mercury's offset targeted foot supports multiyear of pontoon needs energy. which The close be will center with we is in new record footprint that current January, a to distribution products earlier. Marine capacity for were the progress North du boating to our over Indianapolis, million products. feet. we P&A more while end Lac's VXX XXX,XXX Before X demand logistics few projected repurposed open Wave other CES manufacturing of Mercury global the Last estimated advanced intuitive Mercury's will soon our clean will square of Mercury support adding to of Mercury's by system power Vesper for be delivery docking Award. expansion announced location energy The with that our plans deliver Marine's meet the new grid announced XXXX. fully strategy. and the innovative comments and square to and our to will boats du new agreement our to Joystick we purchase in more with control will operational XXXX by In you improve Innovation American strategy, new purpose-built virtual a This year leave new delighted scale Mercury entered will we confidence Lac, needed Wisconsin located discussed global Piloting of that much agreement operations cascade Energy be of customers award-winning renewable majority we the engine week, for CES received will solar XX strategic costs. on Brunswick and premium innovative total And Fond facility ACES a This power through outboard to Mercury's electrical announced of experiences an facility Fond December, service distribution Indiana, reduced in capacity

a ceremony and the boat an We of Club franchise Boat record Lund in XXX site actions veterans best for other places Boats operating mid-December, capacity manufactured to our Freedom core a approximately to synergies in of expansion on Freedom for categories the XXXX included major Freedom six national which Boat Rhode operation work the XX% facility a fleet. will the in Reynosa, the facility to the for create ESG in In also total, Club increase XXXX. held announced in and we territory groundbreaking And work at we rapidly additional of jobs. create early Sea and and December needed acquisition project and Ray of received awards and Reynosa the DEI. states in Mexico on as Brunswick a the place at on commitments acquisitions diversity. manufactures are to women, expanding for as This Heyday, national we and fiberglass awards the for operate capacity Island's which best and our in level awards our Bayliner, a one increase year large by and manufacturing complement multiple culture. which received with services was for Northeast products, number These boats. in earlier

won Electronics world. a Consumer Award many Innovation around noted awards additional I Show the consecutive from earlier, innovation and we As second

We teams. also won our designs, great many our and, awards new course, and safety our leaders for of our products,

season In than at on awards innovation per more XXXX that for track we major meet with nominations shows. award early one we week in to XXXX, in are fact, averaged or XX boat exceed and

time very to heartfelt global and and want for always, Through that I to As welfare our thanks we in their a our plan we and to still prioritize population health ability the execute what for families while remain dedication, also our offer successfully of sacrifices employee efforts, communities. many challenging is employees. ensuring their during effort our strategic confident

will by which update an deliver synergies acquisition our our technology We'll of and exciting revenues billion our February questions. questions, and our business Before X. remind demonstrate The to Brunswick's growth the projections And we of sharing will in new that launch Miami power I look to XXXX $XX be to overall prerecorded and we similar many for and Day XXXX. Wave Boat like upcoming I'd Day. on our our we will open on everyone the Thank longer-term Investor Next XXXX to annual products format strategy, Show Monday, March including virtually reflecting the Investor you. vision now the hosting line forward take at exciting are on

Operator

question Andress Please Brett first Our with Instructions] go [Operator from KeyBanc. comes ahead.

Brett Andress

Good morning, guys.

of I to any be existing of waiting orders. basically, I that Mercury customers point think, or way new up expanded backlog capacity or existing there But some around your So you this guess, have, is by at OEM customer to, being fulfill put all the supplied used frame to Mercury? numbers at is

Dave Foulkes

group question. recently, customers. is range additional I the specific it XX And board. Yes, or customers the Brett, backlog course, substantial thanks tens of don't think, last for the I are if so. a the that but XX to be somewhere on customers or I'd of it into runs XX come months about over waiting know of We several of added, in

to I that we've think you'll see the probably onboarding recently seen. rates that will period, be of over ones a year similar couple

for backlogs Also, have elevated just we significant we well. yes, So have a backlog. customers existing as

utilized. that I will So think very well capacity be

Brett Andress

of price help some did And to Got out end expect much mean new also, XXXX in put pass and is us not like price And be But to XXXX? about numbers it increases? you in okay. then, how high pricing up here I the pass you're much thoughtful math But think passing you my boaters. in did on single it, in can how kind do price how sounds trying engines? much you boats? then like you digits. I

Dave Foulkes

about to Boats, In significantly of you're right aggregate. low kind mid-single. lower Yes, than it that, something that Propulsion, in like was

able year. went were job increase in we there. to, Propulsion particularly So I in The in, of a October think, last do in good Propulsion last in --

line probably this on our our we sometime more beginning So actually and of take more schedules. with I QX. mean will businesses we pricing year. taken of have won't in Propulsion the in some normal businesses until and at in some P&A But you're right pricing Boat

you saw I from generally elevated. a certainly inflation As control we inflation, but it think have the was presentation, good on

price we increases think, So the build I need to and early how mid-single-digit to moment, some wait and in XXXX and then range. they pressures in at early or mitigate midyear, generally we'll do I say the appropriate say, action. were take in what that we'll we'll the the Too would either see took inflationary

to behind inflationary we're not of the and environment a said, quite As dynamic. but get is you maintain too not approach, trying far ourselves very balanced get either ahead

we suppliers, X,XXX really -- might kind on it we have -- relatively even the are defer also increase, of pass are a it's want determines. -- it. of you mechanics you judging that's [indiscernible] single we more and if They negotiate might is boat, it, price the think of So in have But thousands we of to a complicated. suppliers. It's

or month might the not in on straightforward. making a a what quarter judgments is So, completely impact be aggregate

we XXXX increases and be full year in to QX cover So cost intend both with for clearly our it. But we'll price. about judicious

Brett Andress

Got it. you. Helpful, thank

Operator

Thank you.

question. Swartz next with comes Securities. state Please from Our question Truist your Mike

Mike Swartz

touch good morning. wanted guys, to Hey around OpEx. guidance the I and on commentary just

will increase. percentage I your revenue sales, a on XX up of OpEx XX basis be points a said large pretty as to you think

like I million million something $XXX to works think it $XXX out to year-over-year.

of just out could year? into maybe growth the that what's So base amount, you break what's of incremental versus kind investment business this kind of business

Ryan Gwillim

one. Yes, Ryan here. I'll take that

of So the it a first of is big obviously addition all, of Navico. chunk

the think, the of integrate assets increasing We reaching think, the kind customers The and is to as digital ASG. year and digital that's crucial. bit a raw inflate becoming and sales rest of, is time rest the businesses line the of of on I the little R&D, will obviously, more of Navico more our rest into spent on heavy we full so OpEx lot marketing And is on footprint. put obviously very a our work number on than heavier and and our which we Navico going simply

take we're it so conscious out work And your money did there. we're the in. we're type the a spending being to pretty hesitant what bit 'XX to system, of we're more stuff. kind not of kind lot whole typical back a we office is of 'XX very of little SG&A cost back Where in add That's after and adding

So And it's our would objectives. of all really focused given strategic you expect, on in it's that areas growth. the

Dave Foulkes

[indiscernible]. relative think I

Ryan Gwillim

percentage -- it's as of a Navico flat Yes. sales.

Mike Swartz

Okay. helpful. That's

Sorry about background. the the barking dog in

I think -- sorry, the year the for Just give in the pretty Could much quarter. a Boat with for you volume the given production sense you for guidance the think over just with terms ahead? you've every us XX%. guidance of XXXX, I said Boat that business in up

should thinking we about that? So how be

Ryan Gwillim

Yes.

XX,XXX Our and Group They've This story a want done the fantastic wholesale really on about folks. which plans think keeping of production this the job Boat good XX,XXX we about roll initiatives. obviously, about forward, is to testament right think, really the to in of you kind schedule. you their if also from a retail, is same when of we year, then production which we line with that's units. what units talked about capacity retail is year, announced And

top are XX-ish And revenue get and to then guidance percent anticipating overall things about a that ASP so Boat an on the for we in obviously, segment. to other units of and increase

Mike Swartz

Okay, that's you. helpful. Thank very

Operator

you. Thank

your Scott state comes Please CL with question next question. King. from Stember Our

Scott Stember

morning, taking guys. my And good question. for thanks Hi,

Dave Foulkes

Good morning.

Scott Stember

middle out, the looking And the dealer in the of absorbing is the group? then at Who it any maybe some guess, I let's further OEMs, who's coming put that market. through to back on line assume to of the price first be front event Just and we -- to that? does necessary? far start towards out part if as of that increases next people as Would the year, have price that point,

Dave Foulkes

share We new with we've anybody the that we're very out that of certainly price the no -- about of of gaining first market. increases. I we we being Yes. and the gained being happy with consumers judicious sign We're are also and see all, priced think, certainly

share a increases generally We burden on try full we generally, think bit. price and not product where and we policy through have adopted we I try put a to the retail sold haven't.

very I So healthy. absence our we of of discounting channel significant remain think with And the our can cannot partners. share of channel partners that with level, course, any

that, I the no we first So all, of that and anticipate anybody don't at moment. of see exiting evidence think

it's People with You strong. channel, from happy. boating we our that on retail share very participation, earlier could generally But see very around will are units. particularly sold stats the

Scott Stember

just then that's rate going narrative on it. the Got And interest around.

to has And you telegraphing impacted movements are we've that really right expect business seen any what big when guidance building impact obviously along the would pretty super be goes if path you in into the been your year? But is Fed rates. next what not Your for now?

Ryan Gwillim

actually us. immaterial Scott, very, Yes, for very it's

of debt We locked really most rates. that's our debt, of you into have know, term variable. preferential And as very kind is little

So it nonfactor. is almost a

may fact, be a it we positive actually the slight have. given In cash

like or So just does most even reminder, product, loan. for a it From they looks finance XX people, It consumer XX a their X, they mortgage years. a more no standpoint, finance more a issues. than car years, when

the consumer in to bumps even end don't would, So impact really if too prime you start much. rate, our

month normal a on $X, product. $XX a literally talking You're ASP

all, a productive in all environment. So pretty still

Scott Stember

Thank have. Got I it. That's you. all

Ryan Gwillim

Thank you.

Operator

Please with Our comes ahead. go Baird. from next question Craig Kennison

Craig Kennison

taking for my asked. have thanks been Many Hey, of questions. related channel the questions

Navico Brunswick? sort that, of to about acquisition part of on, Dave, opportunities So sort of is early what you you the ask that see and now I organization wanted,

Dave Foulkes

terms And We're bulls-eye you in for such with portfolio us. very acquisition; was happy more question. of it for even for us thank that very, opportunities offering integration a the expanding and our

of things the financial very talked is in experience And systems about, we that and last and which very of is can around integrated along slide positive. year -- early Connect happy one be good. very ASG to our earlier very Navico team deck can was Early very, performance you is Brunswick. is part the business The Our -- solution. all you which Marine come of integration rapidly. sonar that But the XX Navico, systems business added RV. of than all radar, That's be just the part the with growing systems in other across our customers now could more

was as earlier there displays. now announcement for might You product that is Simrad that have boats Aviara seen a Navico's big Mercury it's today, a exclusively customer taking press about

can of systems which eager see already integration synergies on the product think see with our can and from relationship, well. We're you customers a have commercial business lines operating in finding you we Navico. to well take integration So into I as already new

for commercial I couldn't on happier acquisition. and side. also is the nicely us developing that operational the It on honestly So about be extremely side

Craig Kennison

related us strategy, your the enter especially And then in context the the to GM also on market? to could electrification strategy, of update you decision

Dave Foulkes

Yes, sure.

things actual stated. are essentially strategy entering remains I that units couple things, is they're and said participation have but Our we and other people A the of a as the who of interesting previously think. There lot market small.

with out this, are of GM of lot work think marine, I electrification moment. still narrative how who've at sell some stages companies their in reality automotive that. bigger some than had the to like the in narrative of I Generally, history players think VXs a OEMs being into earlier measures they more trying the a

generator about in Marine Just installed on our we X,XXX of in replacement applications XXXX, our own electrification strategy, units and just RV.

business. propulsion be kind tip see on the side to the of around capacity spear, the of large which of lot at like, enter of Investor That's replacement will and begin batteries. our gensets we the more the a side if replacing building electric we're exciting, lithium-ion fact, for very genset with materiality at something in Day us Miami, you And you'll the So business. as propulsion electric

out for at at also our that and Investor Day. So Miami look

Craig Kennison

Great. Thank you.

Operator

Thank you.

with question Paribas next Exane. comes Our Please go from BNP your ahead Siew question. with Xian

Xian Siew

thanks to I inventory ask on guys, the question. dealer for levels. Hi just wanted

You in going kind it much of sound mentioned progress doesn't to there're still make to like you're lean. restock that. very XXXX

need operating So dealer with thinking Is I don't there what you inventory think guess, have through you how XXXX the to are? And to how been level back do 'XX? I you've inventories dealers pretty right opportunity? are levels been. get the about, mean levels the think for I it lean or about you anywhere

how that? you So thinking about are

Dave Foulkes

Yes.

a So XXXX We make not inventory significant year progress on you're to full with basis. do rebuilds right. during expect

quote but may global to on we hand weeks fractionally thing So really our will on up be materially One likely end not XXXX we also is up. note basis. a

hand. is weeks U.S. hand a bit inventories on like XX XX are on and more weeks global. the So Actually,

leaner. even So

you've the doing, So And through same we to XXXX. capacity hopefully, roughly and into and we'll will levels rebuild at we in retailing as add throughout be seen, think, a beyond. -- we which be wholesaling XXXX position we're -- inventories better as going

nobody an it of environment terms In the where moment. not what's the inventory, possible are get will levels. back historical inventory But right has of of at in we level that unusual we is kind to

build as and start dealer stores. into there a that there's inventory, to inventory think possibility soon will desire put inventories As hold will to we be to a

about dealers that mentioned smart inventory being what is One hold. we things of the earlier

And now in hold the high selling them we help high-running with to colors, them with content, what's that obviously to high-running help models, to will models a derivatives, running we So analytics model. want in the things on of understand make terms options. them marketplace able all option that are

So towards the might the on high-running time. I in more I hopefully, scenario build do probably up XX over weeks which see think what inventories move will do, of some a not we significantly models. is not inventory into hand

Ryan Gwillim

boats if could there sales capability that many more coming and produce take to grow. year factor is the they this Club the other to Brunswick we the Freedom had satisfy ability Boat the continue They them. to And

capacity that's going will also sales in this so those And well. as enable

Dave Foulkes

customer Brunswick fleet a will of basis, Freedom in think unit on Boats be that probably XXXX, think unit with -- I Freedom biggest range. by I the will X,XXX

Xian Siew

maybe that's another just retail And on then sales. helpful. it, one Got

first half? for half? the you just expectation single be you industry we versus year. in But are if think are cadence, Or you mentioned thinking wondering I about down do was for can -- maybe something we low the first potentially? the half that? Or how about digit Are flat you back could You how help with like

Dave Foulkes

very tell strong the that market. is you as could we I retail demand enter

any indication demand. no of raw in there's pullback So consumer

to will really think out extent. on supply I some chain the play the year based

the the solid think a we to But kind challenges. as I Obviously, year half. too But feel there's I we could say belief chain the supply which we're growth back think I in that back may it's more position mean think a in early towards moment. the in general the into improve half go more holistically have we year. of at

Xian Siew

Okay, thank you.

Operator

comes with your question. Kevin from Heenan state JPMorgan. Our Please question next

Kevin Heenan

my Hi, for taking question. good guys. morning Thanks

Dave Foulkes

morning. Good

Kevin Heenan

Just us I'm you shared target $XX billion. -- about of on with XX today long-term sorry, revenue the

deltas do your kind gap growth outlook the pass I the CAGR the bridging Feb by XXXX sustaining that $XX at relative this level where what you maybe out range. low guess and billion you of see gives of segment? think the the can between confidence event, multiyear? I we to targets XXXX double-digit, low-teen And in you the largest in laid

Dave Foulkes

organic all or wind the already acquisitions of growth I growth the or through majority want But -- completed to the there. Yes. target large think the across programmatic acquisitions is Day is I of really all of in the out don't take segments. Investor but our sales some XXXX the our is

And out. as We play you people are We'll others especially at match. products new the that our the be where adding not. story incredible secular back see are continuing gain to at see can't at moment, us is rate this really capacity Mercury introducing wind a share other

lot P&A a our performing on business Boat distribution just our operationally. that And side, that acquisitions of grow through then have Systems incredible there great obviously, which work benefit organically going we'll continue through well. the business, to too On and the in the see made we have, is we of full extraordinarily we've business, Integrated we'll

launching. growth and have than by mean Freedom inventory pipeline multiyear boats this of it Freedom and We obviously, have also, a set then Boat with the a very faster -- we'll But of be rate populate our growth of is to top if I really we we begin Club trend. on products the And populated that, Club exciting more actually Boat we rebuild portfolio substantially more of that Brunswick being new can Boats. market.

the people some of have we thought retail for that inside demand very boats under or Acceleration extent exciting some and very, And out proxy never fast. our demand, preview of this to Investor Business at Day. growing think our them taken you'll of see is news lot control. Business like So control year Acceleration things that put I effective a could we'll and be

but independent Day. parts trends more all I explain trends have across really secular at say of certainly the market are lot that they we the market. rely Investor So completely wouldn't don't the on a business There and we'll

Kevin Heenan

as just brief Great. a And follow-up.

to guys historically the operating leverage think, high of these low as You have targeted, I ramp on XXs. there investments? teens you line, Is some material that any to change

Dave Foulkes

not. is There

Kevin Heenan

Thanks very much.

Operator

with Please next our your Thank Altobello state Joe you. question James. question. from comes And Raymond

Joe Altobello

guys, morning. Hey good Thanks.

Dave Foulkes

morning. Good

Joe Altobello

sale look road engines we be Freedom today? the guess, the that the how -- Freedom business big with how if ecosystem, franchisees, total, Just and to and down big P&A of could for is at the including right, that boats And in you? I

Dave Foulkes

of total quote the synergies probably Freedom boat Boateka impact the that, We the seen at double platform. segment of the And would ecosystem, with extraordinary. as you Boat double the already moment, Freedom sales growth like Freedom will front, have it kind I the a as right direct rate But say. revenues pre-owned is building out including now but of is with percentage around something that digital

business. explain a this at see lot Investor will Day in more just potential such but this really We we

If look and at see Synergies a Growth very, we'll a certainly ACES Investor quickly a our -- -- shared -- very the will really being in as honest. to be by be grow nascent the in is our very rate large it business very the XXXX. building access ACES stage, and but to think we you material at overall really We're tell we Freedom what Day Freedom very but contributor. strategy, by is strong. XXXX, you

Joe Altobello

two of from you've to guys share a schools a One But of of on years. of understood. guess, share taking Mercury, Okay, here. perspective sort market And of last help. are lot a on low-hanging that you couple I is obviously, flip thought done job gotten great is capacity already. the have going there maybe fruit expansion there the in side, the

the share So should of we at forward? pace going gains about Mercury how think market

Dave Foulkes

that no as think be high we in have going should the at the But in strong said I XXs not reason we least previously we're the U.S. why see forward. pace

been out when gaining -- we've we've have at maxed a of we when almost been share fact, kind capacity. In of time

is is capacity I Mercury continue going that in that XXXX, along on mid-XX-ish high segment look XXs basis We though overall. new the say kind we XXX with basis. But adding our help to share should global products the on saltwater about in talk a would of U.S., still like in in at really share So U.S. a in the to range. us. the the

and have XXX we you've think, share basis points So around growing the world, new have products that plenty been years. have we the well. I products opportunity over of there -- as market then that last we suit seen, really And few

but of markets. there So a growth in mid-XXs numbers lot still the in the can probably you see global are the absolute

other but customers plenty both into we talked room not attention earlier, And domestically of that some and really those markets. So all domestic. lot those internationally, we to adding of seen that they're a focus momentum to of leverage tend about the what we've

international. are them of Some

So decline run share that and we see gains recently in seen. will of that we we've we to think Mercury have with to reason any the room that lots believe no

Joe Altobello

you. Thank

Operator

for our for I'll now Foulkes Dave session Thank day. the back remarks. to you. concludes turn some call That question-and-answer the concluding

Dave Foulkes

all really fantastic expansion another looking Obviously joining for segments. We Well, we're to our once growth, seen, in top you questions. strong growth of earnings and us again, forward year for XXXX, line them. appreciate all and across thank margin the great you've

we Investor I you replaced this will we've planned virtual the see engaging. Miami that in-person can I you, hope Although very it though. show, be event a at may assure our some Day with year, do Miami of

synergies. the across We solutions, our our integrated technology, will of be demonstrate our launching of power our multiple segments all new that products really

coming advancing see Miami strategy, including electrification. and our things in You together will of many so ACES course,

target March, of our we I also as update have that long-term the strategy those of on vectors all growth mentioned, in Next much. Thank you in that We'll XXXX. to very just we are So us Investor you billion $XX secular revenues early described Day. Wave some allowing and

Operator

you. conference Have Thank concludes now a all and day. today's disconnect. great That parties may

Brunswick (BC) 27 Jan 222021 Q4 Earnings call transcript