brunswick corporation · a swiss immigrant woodworker in 1845, in cincinnati, ohio, to make...

Brunswick CorporationAt-A-Glance

February 2016

2

What We Do

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

Brunswick Corporation At-A-Glance

Brunswick Corporation

3

19%

4% 2%

Financial Profile

1Adjusted for marine eliminations

2Excludes 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

3Excludes 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

4Tax 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.

Products and Servicesby Category and Region

2015 Revenue by Segment

50% – Engine1

31% – Boat

81% – Total Marine

19% – Fitness

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 Margin2 8.3% 9.4% 10.4%

EPS, as adjusted3 $2.47 $2.42 $2.93

Adjusted Effective Tax Rate4 10.2% 32.5% 32.6%

12%

67%

8%

7%

Global Customer Base 2015

67% – U.S.

12% – Europe

8% – Asia Pacific

7% – Canada

4% – Latin America

2% – Africa & Middle East

Segment U.S. International

Engine 68% 32%

Boat 72% 28%

Fitness 54% 46%

Total 67% 33%

4

Brands Products and Servicesby Category and Region

Mercury Marine

Mercury MerCruiser

Mercury Diesel

Mercury SeaPro

Mercury Racing

MotorGuide

Quicksilver

Attwood / Whale / Garelick

Diversified Marine Products

Kellogg Marine Supply

Land ‘N’ Sea

BLA

Bell Recreational Products

Outboard Engines

2.5hp – 350hp (FourStrokes)

115hp – 250hp (OptiMax® Direct Fuel Injected)

2hp – 250hp (Traditional two-strokes for International sales)

60hp – 400hp (Mercury Racing)

Sterndrive and Inboard Engines

135hp – 430hp

520hp – 1650hp (Mercury Racing)

Diesel

115hp – 370hp

Electric Trolling Motors

30 – 109 pounds of thrust

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

• Joystick Piloting for Outboard, Sterndrive and Pod systems

• 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

Engine SegmentMercury Marine positioned for sustained, industry-leading performance

2015 Revenue by Category

47% – P&A

42% – Engine (Outboard)

11% – Engine (Sterndrive/Inboard)

11%

42% 47%

12%

68%

4%

9%

4%3%

2015 Revenue by Region

68% – U.S.

12% – Europe

9% – Asia Pacific


4% – Canada


5

Competitive LandscapeMercury Marine Advantages

ManufacturingLocations, Employees, Distribution

Global Competitors:

• Outboard

– Yamaha

– Suzuki

– Evinrude

– Honda

– Yanmar

– Hyundai

• Sterndrive/Inboard

– Volvo Penta

Advantages:

• Strong global brands with leading market shares

• Broadest, most comprehensive product portfolio

– 2hp – 400hp (Outboards)

– 135hp – 1650hp (Sterndrives)

– 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

Engines:

• Fond du Lac, Wisconsin

• Suzhou, Peoples Republic of China

• Komagane, Japan (joint venture with Tohatsu Corporation)

Parts/assembly:

• St. Cloud, Florida

• Lowell, Michigan

• St. Paul Park, Minnesota

• Juarez, Mexico

• Bangor, Northern Ireland

Mercury Marine employees:

More than 5,500 worldwide

Distribution:

• More than 7,000 dealers and distributors worldwide

• Nearly 4,000 dealers/retailers in the U.S.

Product Awards

• Five MotorBoating magazine “Best of” Awards

• Five JD Power & Associates® Awards

• Five IBEXSM Innovation Awards

• Two Field & Stream® “Best of” Awards

History

Financial Profile

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

2002 – SmartCraft® Technology is introduced

2004 – Verado®, industry’s first production

supercharged outboard

2007 / 2008 – Zeus® propulsion system with

Joystick Piloting for Pods; Axius® propulsion

system with Joystick Piloting for Sterndrives

2009 – 8.2L Sterndrive engine/drive package

2012 – 150hp FourStroke experiences one of Mercury’s

most successful launches ever

2013 – Joystick Piloting for Outboards is introduced

Eco-technology expands with introduction of

Enertia® Eco-propeller

2011 – 2013 – Expansion projects to manufacturing

areas and Product Development & Engineering

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;

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

Mercury debuts Forbes Top 100 Best

Employers List

Green Master Award Winner for fifth time:

2011, 12, 13, 14 and 15

Active Trim introduced – simplifies boat operation,

improves performance, decreases fuel costs

Financial Profile

$ in millions 2013 2014 20152015 vs. 2014

Change

Revenue $2,088 $2,189 $2,314 +6%

Operating earnings $284 $309 $350 +13%

Operating margin 13.6% 14.1% 15.1% +100bps

8

Recreational Fiberglass Pontoon and Fish

Runabout Cuddy Deck Cruisers Yachts Pontoon Freshwater Saltwater

Bayliner S,O S S,0 S O

Boston Whaler O

Crestliner O

Cypress Cay O

Harris O

Lowe O O O

Lund1 O

Meridian I

Princecraft O O O

Quicksilver O S,O O I,O

Rayglass2 S,O

Sea Ray S,O S S,O S,I I

Uttern O O

Brunswick Commercial & Government Products3

Brunswick CompetesAcross Many Segments

Brands

Boat SegmentBrunswick brands are the world leaders in pleasure boats

1 Lund also makes fiberglass fishing boats

2 Rayglass/Protector also makes rigid inflatable boats

3BCGP uses outboard and inboard propulsion

24%

38%

38%


38% – Aluminum

38% – Fiberglass - Sterndrive/Inboard

24% – Fiberglass - Outboard

8%

72%

13%

2%4% 1%


72% – U.S.

13% – Canada

8% – Europe


2% – Asia Pacific


Propulsion: Sterndrive (S)/Inboard (I)/Outboard (O)

9

Global Competitors

Competitive LandscapeBrunswick Boat Advantages


• Highly fragmented industry, over 1,000 manufacturers in U.S. alone

• Strong brands with leading market shares

• Broad product portfolio known for quality and value

• Strong global dealer network

• Leading product development process and capabilities

• Best in class service and support

Product Awards

• Quicksilver wins “Starter Boat of the Year” for third consecutive time in 2012

• Boston Whaler 230 Vantage, Harris FloteBote Crowne™ 2013 innovation award winners

• Boston Whaler 420 Outrage 2015 Boat of the Year

• Edgewater, Florida

• Merritt Island, Florida

• Palm Coast, Florida

• Fort Wayne, Indiana

• New York Mills, Minnesota

• Lebanon, Missouri

• Vonore, Tennessee

• Joinville, Santa Catarina, Brazil

• Princeville, Quebec, Canada

• Reynosa, Mexico

• Auckland, New Zealand

• Augustow, Poland1

• Vila Nova de Cerveira, Portugal

Boat Group employees:

More than 4,500 employees worldwide

Distribution:

More than 2,850 dealers worldwide

History

Recreational Fiberglass Pontoon and Fish

Runabout Cuddy Deck Cruisers Yachts PontoonAluminum 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 Chaparral Princess Forest River Xpress Grady White

Cobalt Regal

Financial Profile

1957 – Bayliner established, acquired by

Brunswick 1986

1958 – Boston Whaler founded, acquired by

Brunswick 1996

1959 – Sea Ray established, acquired by

Brunswick 1986

2004 – 2005 – Brunswick acquires aluminum boat

brands, including Harris, Lund and Crestliner

2013 – Bayliner introduces value priced Element™

bowrider for $12,999, revamps deck boat

line-up

Sea Ray introduces popular 350SLX and

510 Sundancer

Ft. Wayne pontoon operation opens new

plant to double factory space; New York Mills

expansion commences in Minnesota

2014 – Sea Ray introduces L-Class luxury yachts

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

$ in millions 2013 2014 20152015 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

1 Contract manufacturers 2 Excludes restructuring charges of $16 million in 2013, $2 million in 2014, and $8 million in 2015

10


51% – Commercial (Cardio)

29% – Commercial (Strength)

80% – (Commercial Equipment)

12% – Consumer and Billiards

8% – Service

Brands Products and Servicesby Category and Region

Life Fitness

Hammer Strength

Cybex

SCIFIT

InMovement

Brunswick Billiards

High-end fitness equipment for commercial and home use

Largest U.S. manufacturer of billiards tables and game room products

Cardio Equipment

• Treadmills

• Lifecycle® exercise bikes

• Elliptical cross trainers

• Functional trainers

• Stairclimbers

Strength Equipment

• Selectorized™ equipment

• Plate loaded

• Functional training systems

• Benches and racks

Rehabilitation & Active Aging

• Tailored products to safely facilitate rehabilitation and enable seniors to stay active and healthy

Productive Wellbeing™

• Products, supported by culture-change services to keep people moving during the workday

Billiards

• Billiards tables

• Table tennis

• 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

8%

51%

12%

29%

Fitness SegmentLife Fitness is the global leader in commercial exercise equipment and billiards tables and products

19% 54%

4%

12%

7%

4%


54% – U.S.

19% – Europe

12% – Asia Pacific


4% – Canada


11

Competitive LandscapeLife Fitness Advantages

Financial Profile


Global Competitors:

• Technogym

• Precor

• Johnson Health Tech

Billiards:

• Olhausen Billiards

• American Heritage Billiards

• Legacy Billiards

• Diamond Billiard Products

Advantages:

• 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

• Strong sales and marketing organization

• Industry-leading distribution

• Franklin Park, Illinois

• Falmouth, Kentucky

• Medway, Massachusetts

• Ramsey, Minnesota

• Owatonna, Minnesota

• Tulsa, Oklahoma

• Bristol, Wisconsin

• Kiskoros, Hungary

Life Fitness employees:

More than 2,600 worldwide

Distribution:

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.

History

Financial Profile

$ in millions 2013 2014 20152015 vs. 2014

Change

Revenue $716 $769 $795 +3%

Operating earnings $108 $115 $117 +1%

Operating margin 15.1% 15.0% 14.7% (30bps)

1845 – Brunswick introduces first billiards table

1884 – Brunswick merges with rival to become

world’s largest billiards equipment operation

1961 – Gold Crown™ billiards table debuts

1968 – Lifecycle® stationary bike invented

1977 – Life Fitness founded, iconic Lifecycle is

first product

1997 – Brunswick purchases Life Fitness, acquires

Hammer Strength

2001 - 500,000th Lifecycle bike is produced

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

2016 – Cybex accquired — Cybex had 2015 sales of

about $169 million

Bringing people together since 1845Bringing people together since 1845

brunswick corporation · a swiss immigrant woodworker in 1845, in cincinnati, ohio, to make...

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