Q4 2024 Earnings Conference Call In this presentation, Brunswick uses certain non-GAAP financial measures, which are numerical measures of a registrant's historical or future financial performance, financial position or cash flows that exclude amounts, or are subject to adjustments that have the effect of excluding amounts, that are included in the most directly comparable measure calculated and presented in accordance with GAAP in the statements of operations, balance sheets or statements of cash flows of ...

Financial Data and Key Metrics Changes - Brunswick Corporation reported a 15% decrease in net sales for Q4 2024 compared to Q4 2023, with adjusted operating margins at 4% and adjusted EPS of $0.24 [21][22] - For the full year, sales were down 18%, with adjusted operating margins of 9.5%, resulting in adjusted diluted EPS of $4.57, a decline of 48% [23] - The company generated a record $278 million in free cash flow for Q4, contributing to a full-year free cash flow conversion of 92% [22][23] Business Segment Data and Key Metrics Changes - The Propulsion business experienced a 24% decrease in sales due to inventory moderation efforts, although market share in outboard engines increased [24] - Engine Parts and Accessories saw slightly lower net sales in Q4 but achieved growth in earnings and operating margins for the full year, aided by operational efficiencies [10][25] - Navico Group's sales were flat year-over-year, with improved performance in the Aftermarket business offsetting declines in OEM orders [26] - The Boat business reported an 18% decrease in sales for Q4, consistent with lower planned production levels [28] Market Data and Key Metrics Changes - U.S. new boat retail sales ended 2024 down by high single-digit percentages compared to 2023, with Brunswick performing slightly better than the industry in premium segments [7][15] - The U.S. outboard engine industry retail units declined by 8% for the full year, with Brunswick's Mercury Marine gaining 110 basis points of market share [15][21] Company Strategy and Development Direction - Brunswick is focused on cost containment, capital strategy execution, and managing working capital, which resulted in a free cash flow conversion of 92% [8][30] - The company plans to continue investing in new products and technologies to support strategic growth initiatives while managing inventory levels [11][30] - Brunswick anticipates a cautious outlook for Q1 2025 but remains focused on delivering steady free cash flow and resilient earnings per share [31] Management's Comments on Operating Environment and Future Outlook - Management noted that interest rate relief since September could serve as a tailwind for 2025, despite ongoing uncertainties regarding tariffs [12][13] - The company is preparing for various scenarios regarding tariffs and has significantly reduced exposure to China [12][36] - Management expressed optimism about strong boating participation and interest in new products, despite elevated discounting levels [14][31] Other Important Information - Brunswick completed $200 million in share repurchases in 2024 and increased its dividend for the 12th consecutive year [30] - The company celebrated its 100th anniversary of being listed on the New York Stock Exchange [46] Q&A Session Summary Question: Can you help us unpack the $1.25 cost savings in the EPS bridge? - Management indicated that the savings come from a combination of run rate savings from staff reductions and operational efficiencies achieved through production optimization [50][54] Question: How much of the $1.25 cost savings is structural versus temporary? - Management estimated that the savings are roughly 50-50 between structural and temporary [58][59] Question: What factors could lead to the low and high ends of the guidance range? - The high end of the range assumes a market that outperforms flat, while the low end assumes a market decline and unfavorable FX rates [66][69] Question: What is the outlook for the first quarter? - Management expects Q1 to be similar to Q4, with continued improvement in wholesale ordering patterns as the year progresses [33][75] Question: How does the company plan to manage tariffs and FX impacts? - Management is actively working to mitigate tariff impacts through inventory staging and pricing strategies, while also monitoring foreign currency fluctuations [36][102] Question: What is the industry outlook for 2025? - Management anticipates a flat retail market but sees potential tailwinds from lower boat loan rates and improved consumer sentiment [109][111]

Core Insights - Brunswick Corporation reported record performance at major early-season trade and boat shows, particularly at the Dusseldorf Boat Show, which attracted over 200,000 attendees [1][2] Company Performance - At the Dusseldorf Boat Show, Sea Ray Boats achieved record unit sales, surpassing last year's figures by more than 20% [4] - Quicksilver Boats set a record for retail units sold, tripling sales compared to the 2024 event [4] - Mercury Marine maintained its leadership in outboard engine share in Europe, holding a 55% share across the show and nearly 70% for outboards of 150hp and above, both representing an increase of seven basis points from 2024 [4] Product Launches and Innovations - Sea Ray launched the all-new SDX 270 Surf at the Dusseldorf event, which received positive feedback from attendees and channel partners [4] - Navico Group showcased its technology, with over 80% of boats on display featuring Navico technology, including the debut of the Fathom system and CZone Mobile by an EMEA boatbuilder [4] Market Trends - Mercury Marine's outboard share in North America continues to grow, with nearly 50% of outboards displayed at the New York show and 48% and 45% in Minneapolis and Toronto, respectively, indicating a rise of almost seven basis points in Toronto compared to the previous year [2][4] - The strong performance at these trade shows reflects the enthusiasm for Brunswick's brands and products globally, highlighting the company's commitment to enhancing on-water experiences [2]

Core Insights - Brunswick reported revenue of $1.15 billion for the quarter ended December 2024, a decrease of 15.2% year-over-year, with EPS at $0.24 compared to $1.45 in the same quarter last year [1] - The revenue exceeded the Zacks Consensus Estimate of $1.04 billion by 10.57%, and the EPS also surpassed the consensus estimate of $0.18 by 33.33% [1] Financial Performance Metrics - Net Sales for Propulsion were $452.10 million, exceeding the average estimate of $382.34 million, but reflecting a year-over-year decline of 23.5% [4] - Net Sales for Engine Parts & Accessories were $226.20 million, slightly above the average estimate of $225.79 million, with a year-over-year decrease of 4.8% [4] - Net Sales for Boat were $348.30 million, surpassing the average estimate of $317.10 million, but down 18% year-over-year [4] - Net Sales for Segment Eliminations were -$66.80 million, compared to the average estimate of -$64.31 million, marking a year-over-year decline of 23.7% [4] - Net Sales for Navico Group were $195.10 million, above the average estimate of $188.82 million, with a slight year-over-year decrease of 0.6% [4] Operating Earnings - Adjusted Operating Earnings for Propulsion were $25.40 million, exceeding the average estimate of $23.08 million [4] - Adjusted Operating Earnings for Engine Parts & Accessories were $25.30 million, below the average estimate of $31.82 million [4] - Adjusted Operating Earnings for Navico Group were $12.90 million, below the average estimate of $15.80 million [4] - Adjusted Operating Earnings for Corporate/Other were -$27.40 million, better than the average estimate of -$28.86 million [4] - Adjusted Operating Earnings for Boat were $11 million, slightly above the average estimate of $10.89 million [4] Stock Performance - Brunswick's shares returned +5.4% over the past month, outperforming the Zacks S&P 500 composite's +1.2% change [3] - The stock currently holds a Zacks Rank 5 (Strong Sell), indicating potential underperformance relative to the broader market in the near term [3]

Core Viewpoint - Brunswick reported quarterly earnings of $0.24 per share, exceeding the Zacks Consensus Estimate of $0.18 per share, but down from $1.45 per share a year ago, indicating a significant decline in profitability [1] - The company achieved revenues of $1.15 billion for the quarter, surpassing the Zacks Consensus Estimate by 10.57%, but down from $1.36 billion year-over-year [2] Financial Performance - The earnings surprise for the quarter was 33.33%, while the previous quarter saw a slight miss with actual earnings of $1.17 per share against an expectation of $1.18 [1][2] - Over the last four quarters, Brunswick has surpassed consensus EPS estimates only once and has topped revenue estimates twice [2] Stock Performance - Brunswick shares have increased approximately 5.4% since the beginning of the year, outperforming the S&P 500's gain of 2.7% [3] - The current Zacks Rank for Brunswick is 5 (Strong Sell), indicating expectations of underperformance in the near future [6] Future Outlook - The consensus EPS estimate for the upcoming quarter is $0.95 on revenues of $1.25 billion, and for the current fiscal year, it is $4.61 on revenues of $5.18 billion [7] - The Leisure and Recreation Products industry, to which Brunswick belongs, is currently ranked in the bottom 23% of over 250 Zacks industries, suggesting a challenging environment for stock performance [8]

Financial Performance - Full-Year 2024 GAAP diluted EPS was $2.21, a decrease of 63.9% compared to FY 2023, while as adjusted diluted EPS was $4.57, down 48.1%[3] - Net sales for FY 2024 were $5,237.1 million, reflecting an 18.2% decline from FY 2023[3] - Fourth Quarter 2024 net sales were $1,154.9 million, down 15.2% from Q4 2023, with diluted EPS of $(1.07) on a GAAP basis and $0.24 as adjusted[4][11] - Operating loss for Q4 2024 was $(55.7) million, compared to operating earnings of $108.3 million in Q4 2023, representing a significant decline[34] - Net loss from continuing operations for Q4 2024 was $(71.2) million, compared to net earnings of $71.0 million in Q4 2023[34] - The diluted earnings per share for Q4 2024 was $(1.24), a decrease from $0.88 in Q4 2023[34] - Adjusted operating earnings for the total company for the twelve months ended December 31, 2024, were $495.4 million, a decrease of 43.0% from $869.3 million in 2023[40] - Brunswick Corporation's net earnings from continuing operations were $149.3 million in 2024, down from $432.6 million in 2023[46] Sales Performance - The total net sales for the twelve months ended December 31, 2024, were $5,237.1 million, down 18% from $6,401.4 million in 2023[34] - The Propulsion segment reported net sales of $452.1 million in Q4 2024, a decrease of 23.5% from $590.7 million in Q4 2023[37] - The Propulsion segment reported a 25.0% decline in net sales, totaling $2,074.2 million compared to $2,763.8 million in 2023[40] - The Boat segment experienced an 18.0% decline in net sales, falling to $348.3 million from $424.8 million year-over-year[42] - The Navico Group segment reported a net sales decrease of 0.6%, totaling $195.1 million compared to $196.2 million in 2023[41] - Engine Parts & Accessories Segment net sales decreased by 3.3% to $1,160.8 million in 2024 from $1,199.8 million in 2023[43] - Navico Group Segment net sales fell by 12.5% to $800.2 million in 2024 compared to $914.7 million in 2023[43] - Boat Segment net sales declined by 21.9% to $1,553.5 million in 2024 from $1,989.4 million in 2023[43] Cash Flow and Financial Position - Free cash flow conversion for FY 2024 was 92%, with net cash provided by operating activities totaling $449.5 million, down $295.7 million from the prior year[6][16] - The company reported cash and marketable securities of $286.7 million at the end of 2024, a decrease of $193.0 million from year-end 2023[16] - Free cash flow for 2024 was $284.3 million, down from $473.4 million in 2023, indicating a decrease in cash generation[46] - Total assets decreased to $5,677.7 million in 2024 from $6,230.5 million in 2023, reflecting a reduction in cash and cash equivalents[45] - The debt-to-capitalization rate increased to 55.3% in 2024 from 53.8% in 2023, indicating a higher leverage position[45] Future Outlook - Brunswick anticipates 2025 net sales between $5.2 billion and $5.6 billion, with adjusted diluted EPS projected in the range of $3.50 to $5.00[22] - The company plans for first quarter 2025 revenue of $1.0 to $1.2 billion, with adjusted diluted EPS between $0.15 and $0.25[22] Strategic Initiatives - Freedom Boat Club contributed approximately 12% of sales to the boat segment, continuing to grow membership and expand locations globally[10][15] - Brunswick's ongoing investments in new products and technologies are aimed at supporting strategic growth initiatives despite a challenging market environment[6][19] Operational Metrics - Research and development expenses for Q4 2024 were $39.1 million, down 8% from $42.4 million in Q4 2023[34] - The adjusted operating margin for the total company decreased to 9.5% from 13.6% in the previous year[40] - Brunswick Corporation's effective tax rate decreased to 17.3% for the year ended December 31, 2024, from 31.2% in 2023[34] Recognition and Charges - Brunswick was recognized as America's Best Large Employers for 2024 by Forbes Magazine for the sixth consecutive year[33] - The company reported a significant increase in restructuring, exit, and impairment charges, totaling $121.7 million for the year[47]

Core Viewpoint - Brunswick Corporation has released its fourth quarter and full year 2024 financial results, indicating a focus on innovation and leadership in the marine recreation industry [1]. Company Overview - Brunswick Corporation (NYSE: BC) is a global leader in marine recreation, offering technology-driven solutions and a diverse portfolio of over 60 industry-leading brands [5]. - The company operates in 26 countries with approximately 14,500 employees and has been recognized as America's Best Large Employers for six consecutive years by Forbes Magazine [5]. Financial Results Announcement - The financial results for the fourth quarter and full year 2024 were announced on January 30, 2025, with a conference call scheduled for the same day to discuss these results [1][2]. - The conference call will be hosted by key executives, including the CEO and CFO, and will be accessible via telephone and the internet [2][3]. Conference Call Details - Participants can join the conference call by dialing specific numbers provided for North America and international callers, with a replay available for a limited time after the call [3][4].

Core Viewpoint - Brunswick Corporation has released its fourth quarter and full year 2024 financial results, indicating a focus on innovation and leadership in the marine recreation industry [1]. Financial Results - The complete financial results press release is available on the company's website and will also be filed with the SEC [1]. Conference Call Details - A conference call to discuss the financial results will be held on January 30, 2025, at 10 a.m. CST, featuring key executives [2]. - Participants can join the call via telephone or listen online, with specific numbers provided for North America and international callers [3]. Replay Information - A replay of the conference call will be available until February 6, 2025, through designated phone numbers and on the company's investor website [4]. Company Overview - Brunswick Corporation is a leader in marine recreation, offering technology-driven solutions and a diverse portfolio of over 60 brands, including Mercury Marine and Boston Whaler [5]. - The company has approximately 14,500 employees across 26 countries and has received recognition as one of America's Best Large Employers for six consecutive years [5].

Core Viewpoint - Brunswick Exploration Inc. has initiated a 5,000-metre drill program on Globex Mining Enterprises Inc.'s Lac Escale (Mirage) royalty property in Quebec, which is expected to enhance the exploration potential of the area [1][2]. Group 1: Drill Program Details - The drilling will focus on several untested targets located east and west of the Central Zone corridor [2]. - In a second phase, Brunswick will target the extensions of the MR-3 and MR-6 discoveries, as well as a new mineralized dyke system located 4.5 km to the northeast [2]. Group 2: Financial Aspects - Globex retains a 3% Gross Metal Royalty on the Lac Escale claims and a $100,000 per year advance royalty starting from the fifth year of the agreement [1].

Core Viewpoint - Wall Street anticipates a year-over-year decline in Brunswick's earnings due to lower revenues, with actual results being crucial for near-term stock price movements [1][2]. Earnings Expectations - Brunswick is expected to report quarterly earnings of $0.18 per share, reflecting a significant year-over-year decrease of 87.6% [3]. - Revenue projections stand at $1.05 billion, which is a decline of 23.2% compared to the same quarter last year [3]. Estimate Revisions - The consensus EPS estimate has been revised down by 7.79% over the last 30 days, indicating a bearish sentiment among analysts regarding Brunswick's earnings prospects [4][10]. - The Most Accurate Estimate is lower than the Zacks Consensus Estimate, resulting in an Earnings ESP of -12.33% [10][11]. Earnings Surprise Prediction - The Zacks Earnings ESP model suggests that a positive or negative reading indicates the potential deviation of actual earnings from consensus estimates, with positive readings being more predictive of earnings beats [5][7]. - A combination of a positive Earnings ESP and a strong Zacks Rank (1-3) has shown a nearly 70% success rate in predicting earnings surprises [8]. Historical Performance - Brunswick has not been able to beat consensus EPS estimates in the last four quarters, with the most recent quarter showing a slight miss of -0.85% [12][13]. Conclusion - Brunswick does not appear to be a strong candidate for an earnings beat, and investors should consider other factors when making decisions regarding the stock ahead of the earnings release [16].