Feb 9, 2021

BrunswickOn January 28th in an investor call, Brunswick reported strong Q4 2020 earnings, a very positive growth outlook and the likelihood of merger and acquisition activity in 2021 / 2022.

"Our businesses executed extremely well against our operating and strategic priorities in 2020, demonstrating the strength and resilience of our marine-focused portfolio," said Brunswick Chief Executive Officer David Foulkes. "Despite the many challenges faced in 2020, including the significant disruptions to our global operations during the first-half of the year due to the pandemic, we expanded gross and operating margins, delivered an eleventh consecutive year of adjusted EPS growth, and generated record free cash flow. The transformational changes we have made to our business in recent years have reinforced our position as the market leader in the marine industry, and have positioned us to meet or exceed the financial targets laid out in our strategic plan.

In the fourth quarter, our propulsion business had significant top-line and earnings growth. Mercury Marine continues to increase propulsion market share by leveraging the strongest product lineup in the industry and accelerating growth in saltwater, repower, and international commercial markets. This growth, together with forging more than 70 new or enhanced OEM relationships in 2020, was enabled by manufacturing capacity added in 2018 and 2019, and will be further bolstered by exciting new product launches in the coming weeks. Our parts and accessories businesses delivered strong top-line growth and robust operating margins as a result of increased boating participation, which drove strong aftermarket sales, together with high demand for our full range of OEM systems and services as boat production increased across the industry during the second-half of the year.

Within our boat business, all brands contributed to the revenue and earnings growth in the quarter. Our premium boat brands remain market leaders in their categories, with a series of significant new product launches underway, and our value brands continue to offer attractive entry points to new and returning former boaters. The surge in retail demand resulted in historically low pipeline inventory levels, with 40 percent fewer boats in dealer inventory at the end of 2020 versus the end of 2019. Finally, Freedom Boat Club exceeded our expectations during 2020 by adding more than 40 new locations and almost 10,000 new memberships, while driving exceptionally strong synergy sales across our marine portfolio," Foulkes concluded.

2021 Outlook

"While we remain very cognizant of potential macroeconomic headwinds and pandemic- related uncertainties, our continued strong performance in a robust marine retail environment has created improved visibility into our substantial growth opportunities for 2021," said Foulkes. "Elevated production levels over time will be required to rebuild boat and engine pipelines, and together with significant upcoming new product offerings, increased boat and engine production capacity, expanded OEM partnerships within propulsion, and exceptionally strong boating participation, are anticipated to drive wholesale growth through 2021 and well beyond.

The progression of the pandemic remains very dynamic, and the resulting impact on our dealers, OEM partners, suppliers, and the macro-economy is difficult to fully predict. However, given the improved clarity on our ability to drive growth in 2021, we are providing the following guidance for the year, anticipating:

• U.S. marine industry retail unit demand to be up low-to-mid single digit percent versus 2020;
• Net sales between $4.75 billion and $5.0 billion, with strong growth in t the boat and propulsion segments, and solid increases in parts and accessories;
• Adjusted operating margin growth between 60 and 100 basis points;
• Operating expenses as a percent of sales to be lower than in 2020;
• Free cash flow in excess of $300 million; and
• Adjusted diluted EPS in the range of $6.00-$6.40.

This guidance assumes no major pandemic-related business continuity issues. In addition, as we have cautioned in past quarters, it cannot be overstated that the level of recovery of the global economy, continued stable channel operations, the ability to moderate labor and input costs, and the absence of significant disruption to our global operations and supply chain will be important factors in determining whether we ultimately perform in line with our targets. In addition, certain macroeconomic policy changes, including adjustments in statutory tax rates, may materially impact our financial results. Note that year over year comparisons of quarterly performance are likely to be very volatile throughout 2021 given the significant impact of the pandemic on our 2020 results.

Finally, I want to offer heartfelt thanks to our global employee population for all their hard work and sacrifices in this challenging year. Given their efforts, we are able to reiterate continued confidence in our ability to successfully execute our 2022 strategic plan while also ensuring that we continue to prioritize protecting the health and welfare of our employees in the COVID-19 environment. I look forward to sharing more information on our progress against our 2022 strategic goals and financial targets as we progress through the year, but will offer today that our current expectation for our 2022 EPS target is likely at or above $7.00 per share," Foulkes concluded.

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2022 AMI Conference & Expo, Feb 1-3, 2022| Daytona Beach

 

Association of Marina IndustriesSave the date for the 2022 AMI Conference & Expo in Daytona Beach, FL on February 1-3, 2022. Plan ahead and book your room at the host hotel to receive your discounted rates!

The Association of Marina Industries Conference & Expo is THE leading marina and boatyard conference. It is geared specifically toward marina and boatyard owners; operators and managers; as well as dock masters, harbormasters, boat builders and repairers, and industry consultants. 

 

 

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Boating Industry Canada News Week

 

Every Tuesday we publish a fresh Digest with informative articles pertaining to the Canadian boating and marine industry. Stay up to date with the latest products, research and industry developments.

Missed an Issue of Boating Industry Canada News Week? If you're looking for a specific issue, or simply want to catch up on previous issues, check out our Boating Industry Canada News Week Archives.

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Simrad AppThe latest Simrad® app debuted this week for the marine electronics leader celebrating its 75th anniversary this year. The updated app includes a premium offering complete with new mapping features, advanced functionality and mirroring and control of Simrad® multi-functional displays from your smartphone or tablet. It is available on both the Apple Store for iOS and Google Play for Android.

The app is free to download and offers a rich experience that includes free up-to-date nautical charts from C-MAP®, personal waypoints, routes and tracks, latest marine weather, personalization and much more. 

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Raritan sanitation hose has impressive bend radius

Rariton Sanitation HoseBetween the odor and working in confined spaces, replacing an onboard sanitation line is never a pleasant job. With Sani/Flex Odor Shield Marine Hose from Raritan Engineering, the task can be completed quicker and with fewer expletives. Incredibly strong, it has class-leading flexibility.

The 1.5" version of Sani/Flex Odor Shield has a bend radius of 3.15". The 1" model has an impressive 1.97" rating. Combined with its suppleness, it's super-easy to snake the hose around the tightest corners.

 

 

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