Baird 2024 Global Consumer, Technology & Services Conference
June 4, 2024
Forward Looking Statements
This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that forward-looking statements are inherently uncertain and involve potential risks and uncertainties. A number of factors could cause actual results to differ materially from these statements, including, but not limited to general economic uncertainty in key markets and a worsening of domestic and global economic conditions or low levels of economic growth; availability of financing for RV and marine dealers; competition and new product introductions by competitors; ability to innovate and commercialize new products; ability to manage our inventory to meet demand; risk related to cyclicality and seasonality of our business; risk related to independent dealers; risk related to dealer consolidation or the loss of a significant dealer; significant increase in repurchase obligations; ability to retain relationships with our suppliers and obtain components; business or production disruptions; inadequate management of dealer inventory levels; increased material and component costs, including availability and price of fuel and other raw materials; ability to integrate mergers and acquisitions; ability to attract and retain qualified personnel and changes in market compensation rates; exposure to warranty claims; ability to protect our information technology systems from data security, cyberattacks, and network disruption risks and the ability to successfully upgrade and evolve our information technology systems; ability to retain brand reputation and related exposure to product liability claims; governmental regulation, including for climate change; increased attention to environmental, social, and governance ("ESG") matters, and our ability to meet our commitments; impairment of goodwill and trade names; and risks related to our 2025 Convertible Notes, 2030 Convertible Notes, and Senior Secured Notes, including our ability to satisfy our obligations under these notes. Additional information concerning certain risks and uncertainties that could cause actual results to differ materially from that projected or suggested is contained in the Company's filings with the Securities and Exchange Commission ("SEC") over the last 12 months, copies of which are available from the SEC or from the Company upon request. We caution that the foregoing list of important factors is not complete. The company disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained in this presentation or to reflect any changes in the company's expectations after the date of this presentation or any change in events, conditions or circumstances on which any statement is based, except as required by law.
INDUSTRY AND MARKET DATA
In this presentation, we rely on and refer to information and statistics regarding market participants in the sectors in which we compete and other industry data. We obtained this information and statistics from third-party sources, including reports by market research firms. While such information is believed to be reliable, for the purposes used herein, we make no representation or warranty with respect to the accuracy of such information. Any and all trademarks and trade names referred to in this presentation are the property of their respective owners.
NON-GAAPFINANCIAL MEASURES This presentation includes financial information prepared in accordance with accounting principles generally accepted in the U.S. ("GAAP"), as well as certain adjusted or non-GAAP financial measures such as Adjusted diluted earnings per share ("EPS"), EBITDA, Adjusted EBITDA, pro forma Adjusted EBITDA, and free cash flow. Adjusted diluted earnings per share is defined as diluted earnings per share adjusted for after-tax items that impact the comparability of our results from period to period. EBITDA is defined as net income before interest expense, provision for income taxes, and depreciation and amortization expense. Adjusted EBITDA is defined as net income before interest expense, provision for income taxes, depreciation and amortization expense, and other pre-tax adjustments made in order to present comparable results from period to period, while pro forma Adjusted EBITDA further accounts for certain acquisition adjustments. Free cash flow is defined as net cash provided by operating activities less purchases of property, plant, and equipment. Examples of items excluded from Adjusted diluted earnings per share include acquisition-related costs, amortization, change in fair value of note receivable, contingent consideration fair value adjustment, the tax impact of the adjustments, the impact of call spread overlay, and loss on note repurchase. Examples of items excluded from Adjusted EBITDA include acquisition-related costs, contingent consideration fair value adjustment, litigation reserves (settlement/adjustment), restructuring, acquisition-related fair value inventory step- up, gain on sale of property, plant and equipment, postretirement health care benefit income, change in fair value of note receivable, loss on note repurchase, and non-operating income or loss. These non-GAAP financial measures, which are not calculated or presented in accordance with GAAP, have been provided as information supplemental and in addition to the financial measures presented in accordance with GAAP. Such non-GAAP financial measures should not be considered superior to, as a substitute for, or as an alternative to, and should be considered in conjunction with, the GAAP financial measures presented herein. The non-GAAP financial measures presented may differ from similar measures used by other companies. Please see tables at the end of this presentation for reconciliations of these non-GAAP measures to the nearest GAAP measure.
We have not reconciled the forward-looking Adjusted EBITDA margin range and Free Cash Flow range to the most directly comparable forward-looking GAAP measures because this cannot be done without unreasonable effort due to the lack of predictability regarding the various reconciling items such as provision for income taxes and depreciation and amortization.
We have included these non-GAAP performance measures as comparable measures to illustrate the effect of non-recurring transactions occurring during the year and improve comparability of our results from period to period. Management uses these non-GAAP financial measures (a) to evaluate our historical and prospective financial performance and trends as well as our performance relative to competitors and peers; (b) to measure operational profitability on a consistent basis; (c) in presentations to the members of our Board of Directors to enable our Board of Directors to have the same measurement basis of operating performance as is used by management in its assessments of performance and in forecasting and budgeting for our company; (d) to evaluate potential acquisitions; and (e) to ensure compliance with covenants and restricted activities under the terms of our credit facility and outstanding notes. We believe these non-GAAP financial measures are frequently used by securities analysts, investors and other interested parties to evaluate companies in our industry.
© 2024 Winnebago Industries 2
Overview
We help our customers explore the outdoor lifestyle, enabling mobile experiences as they travel, live, work and play
Quick Facts
$3.1B | Current Revenue 1 |
~6,120 | Highly Skilled |
Employees | |
Significant Transformation | ||
F16 | Current | |
Revenue | $1.0B | $3.1B |
RV Market Share2 | 3.3% | 11.4% |
Market Cap3 | $0.7B | $2.1B |
ProductsLocations
Class A - Gas & Diesel | Class B - Gas & Diesel | Class C - Gas & Diesel |
Travel Trailer | 5th Wheel | Specialty Vehicles |
Executive Office | ||
RV Production | ||
Boat Production | ||
Fiberglass Boats | Pontoon Boats | Mobile Power |
Battery Production |
1Current Revenue is F24 Q2 TTM | ||
2RV market share is TTM thru F16 and Jan 2024 TTM; per Statistical Surveys Inc. Data is based | © 2024 Winnebago Industries | 3 |
on the latest publicly available information and is often impacted by delays in reporting by various states. | ||
3Market cap: F16 as of 8/30/16 and current as of 02/23/24
Enterprise Strategic Priorities
Strengthen | Grow | Broaden | Drive | Utilize | |||||||||
An Inclusive, | Exceptional Outdoor | Reach with Outdoor | Operational Excellence | Technology and | |||||||||
High-Performance | Lifestyle Brands | Customers | and Portfolio Synergy | Information as | |||||||||
Culture | • | QIS* Driven | • | RV leadership | • | Flexible, dynamic | Catalysts | ||||||
• | Aligned to our | • | Customer-focused | expansion | operations | • | Digital capabilities | ||||||
purpose | Marine segment | • | Integrated CoEs** | deepening customer | |||||||||
innovation and | • | ||||||||||||
and channel | |||||||||||||
• | Building a world-class | service | penetration | ||||||||||
• | Leverage best | connections | |||||||||||
leadership team | |||||||||||||
• | Dealer partnerships | • | Strategic partnerships | practices and scale | • | Insights to action | |||||||
Accelerate Growth in Core
Pursue Profitable
Strategic Expansion
Integrate Doing Well
with Doing Good
- QIS - Quality, Innovation, Service
- CoEs - Centers of Excellence
© 2024 Winnebago Industries 4
Products & Brands Recognized as the Best
RV
MARINE
Most Recognized | Fastest Growing | Leader in Luxury | Most Recognized | Fastest Growing |
RV Brand | Towable Brand | Class A | Luxury Boat Brand | Pontoon Brand |
© 2024 Winnebago Industries 5
Diversified Portfolio Evolving for Growth
NET REVENUE
CONTRIBUTION BY SEGMENT
0.5% | |
9.2% | 13.8% |
90.4% | 42.7% |
43.5%
ADJUSTED EBITDA1
CONTRIBUTION BY SEGMENT
0.0%
2.5% | |
13.4% | |
Diversification has | |
expanded WGO's | |
addressable market | |
97.5% | and enhanced overall |
53.5% | profitability |
33.0% |
F16 | TTM Q2 F24 | F16 | TTM Q2 F24 | |||
$1.0B | $3.1B | $67.8M | $292.1M | |||
Motorhome RV | Towable RV | Marine/All Other2 | ||||
1 Non-GAAP measure; see reconciliation on slide 34 |
2 F16 and F24 Q2 Adjusted EBITDA excludes Corporate/All Other, see detail on slide 38 | © 2024 Winnebago Industries 6 |
Note: Percentages may not add due to rounding |
RV Industry Volumes
Pandemic Impact and Volatility (in 000s of units)
700 | ||||||
600 | 600 | |||||
574 | ||||||
505 | 524 | |||||
484 | 494 | 493 | ||||
500 | 472 | |||||
467 | ||||||
450 | ||||||
406 | 430 | |||||
381 | ||||||
400 | ||||||
313 | ||||||
300 |
200
100
-
CY 2017 | CY 2018 | CY 2019 | CY 2020 | CY 2021 | CY 2022 | CY 2023 |
Wholesale Shipments | Retail Sales |
Source: RV Industry Association / Statistical Surveys Inc
© 2024 Winnebago Industries 7
Interest in outdoor lifestyle stronger than ever1
89%
of respondents participated in outdoor activities in 2023
(up 29% since 2020)
86%
of respondents plan to be as active/more active
outdoors in 2024 vs LY
95%
of respondents participate in outdoor activities
during the summer
Consumers get significant benefits from the outdoors1
71%
of respondents strongly agree that outdoor activities
are beneficial to their health
Greatest benefits consumers cite
from outdoor activities:
- Improves physical health
- Improves mental health
- Reduces stress
1 Source: Winnebago Industries Consumer February Spotlight Survey, 2024, n=1,000 | © 2024 Winnebago Industries 8 |
Strong Market Share Performance
North American RV Market Share | Barletta U.S. Aluminum Pontoon Market |
Performance | Share Performance |
Source: Statistical Surveys Inc TTM thru Jan F24; represents unit retail volume market share. Data is based on the latest publicly available information and is often impacted by delays in reporting by various states. F24 data is January 2024 TTM.
Source: Statistical Surveys Inc TTM thru January 2024; represents US unit retail volume market share of the aluminum pontoon segment; Data is based on the latest publicly available information and is often impacted by delays in reporting by various states (F24 data is January 2024 TTM - 31 states reporting for F24 January).
© 2024 Winnebago Industries 9
Future Mid-Cycle Organic Growth Targets
F24 Q2 TTM | Mid-Cycle | Implied Growth | |
(at the midpoint) | |||
Financial Targets | |||
Net Revenue | $3.1B | $4.5-5.0B | 51% |
Gross Margin | 15.9% | 18.0-18.5% | 230 bps |
Adjusted EBITDA Margin | 8.7%1 | 11.0-11.5%2 | 255 bps |
Free Cash Flow | $225M1 | $325-375M2,3 | 56%2,3 |
F24 Q2 TTM | Mid-Cycle | Implied Growth | |
Non-Financial Targets | |||
North American RV Market Share | 11.4% | 13%+4 | 160+ bps |
U.S. Aluminum Pontoon Market Share | 7.9% | 13%4 | 510 bps |
Non-RV Revenue Mix, Organic | 13.8% | 15-20% | 120-620 bps |
Note: Numbers may not foot due to rounding.
- Non-GAAPmeasures; see reconciliations at the end of this presentation.
- The Company has not reconciled the forward-looking Adjusted EBITDA margin range and Free Cash Flow range to the most directly comparable forward-looking GAAP measures because this cannot be done without unreasonable effort due to the lack of predictability regarding the various reconciling items such as provision for income taxes and depreciation and amortization.
- Assumes a consistent tax rate and regulatory environment.
- Based on North American RV retail volume at a mid-cycle fiscal year range of 425,000-450,000 units and U.S. aluminum pontoon retail volume at a mid-cycle fiscal year range of 60,000-63,000 units
© 2024 Winnebago Industries 10
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Winnebago Industries Inc. published this content on 04 June 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 04 June 2024 12:49:06 UTC.