Brunswick (BC) Raymond James & Associates’ 46th Annual Institutional Investors Conference 2025 summary

Business Overview and Strategy

• Operates five main businesses with four reportable segments, focusing on propulsion, parts & accessories, technology, boats, and business acceleration, maintaining global leadership and a diversified portfolio spanning propulsion, engine parts, electronics, and boat segments.

• Holds leading market share in propulsion, marine distribution, and shared access models, with #1 share in U.S. and Canada outboard and sterndrive, Europe outboard, and the world’s largest boat club and marine parts distribution network.

• Continues to invest in innovation, launching over 100 new products in 2024 and earning 100+ industry awards for the third consecutive year.

• Business model emphasizes recurring revenue streams, aftermarket distribution, subscription services, and digital sales, with 40% of boat sales digitally assisted and 60,000+ Freedom Boat Club memberships.

• Demonstrates strong vertical integration, with over 50% in-sourced boat bill of materials and a product portfolio ranging from $1,000 to over $1M to access the broadest demographic.

Financial Performance and Guidance

• 2025 guidance projects $5.2B–$5.6B in revenue, 7.5%–9.0% operating margin, $3.50–$5.00 EPS, and $350M+ free cash flow, with Q1 2025 revenue expected at $1–$1.2B and Q1 EPS of $0.15–$0.25.

• Free cash flow conversion was strong at 92% in 2024 and is expected to improve in 2025.

• Operating expenses were reduced by nearly $70 million between 2023 and 2024, with $67M in adjusted operating expense reduction year-over-year.

• 13 consecutive years of dividend increases and $1.6B in share repurchases since 2019, returning 70% of net income to shareholders.

• 55% of 2024 adjusted operating earnings came from recurring revenue businesses tied to boating participation.

Market Trends and Operational Highlights

• U.S. new boat sales declined from 180,000 units pre-COVID to 140,000 in 2023 due to higher interest rates, but total U.S. recreational boat registrations remain steady at around 10 million.

• Boating participation is consistent, with 85–90% of owners expecting to remain in the market for 5+ years.

• Outperformed the market through share gains, including a 110bps U.S. outboard engine share gain in FY 2024 and significant share gains at major global shows.

• Integrated systems strategy increases share of wallet, with comprehensive bow-to-stern offerings representing up to 30% of COGS.

• 80% of cost of goods is U.S.-based, with less than 5% exposure to China and 85% of investments focused in the U.S.