Brunswick reports record Q2 results
Aug 10, 2021
On July 29th, 2021 Brunswick Corporation reported their second quarter results.
“We delivered record results in the second quarter as a result of the continuing constructive demand environment, and our very strong operational performance and success in mitigating supply chain challenges and labor market tightness,” said Brunswick Chief Executive Officer David Foulkes. “Robust retail demand for our products in the first-half of the year has driven field inventory levels to the lowest level in decades, and we are progressing our efforts to efficiently increase capacity across most of our facilities to satisfy orders from our global customer base. The combination of strong demand and low inventory, together with continued strong boat usage through the prime boating season, which is driving high parts and accessories sales, provides enhanced visibility on our ability to deliver against our extremely favorable outlook for the remainder of 2021 and beyond.
Our propulsion business delivered another quarter of significant top-line, earnings, and margin growth, with strong market share gains in higher horsepower outboard engines, which will be further augmented by the recent release for sale of the V12 600 horsepower Verado that began shipping to customers in late June. Mercury Marine continues to leverage the strongest product lineup in the industry, the best customer experience, and operating excellence across its manufacturing facilities to drive success at retail and develop new OEM relationships. Given the surging demand in the current environment and new product launches in the coming years, Mercury is accelerating additional capacity investments at its primary manufacturing center in Fond du Lac, Wisconsin to maximize its ability to serve the market and continue to gain share.
Outstanding execution, robust aftermarket demand driven by elevated boating participation, and favorable weather conditions in many areas resulted in our parts and accessories businesses significantly over-driving expectations in the quarter. In addition, our Advanced Systems Group significantly bolstered its scale and product portfolio by announcing the signing of a definitive agreement to purchase Navico, which we believe will further strengthen our enterprise-wide ACES strategy and enhance our ability to provide complete, innovative digital solutions to consumers and comprehensive, integrated systems offerings to our OEM customers.
Our boat business posted its second consecutive quarter of double-digit adjusted operating margins despite significant supply chain uncertainty. We are delivering output consistent with our production plans for the year and the capacity initiatives announced in January remain on track; however, the stronger than expected retail demand drove second quarter pipeline inventory down to only 9 weeks on hand. Our Boat Group management team has developed a capital efficient investment plan to deliver an additional tranche of capacity by 2023 above previously announced expansion plans should this level of production be required to meet retail demand and refill the pipeline over a reasonable period. Finally, Freedom Boat Club continues to grow rapidly both organically and through acquisition, while continuing to attract a young and diverse customer base. Including the recent expansion into Spain through the acquisition of Fanautic Club, Freedom now has 314 global locations, over 44,000 memberships network wide and this summer will have approximately 4,000 boats in its overall fleet, with an increasing percentage of Brunswick boats and engines,” Foulkes concluded.
2021 Outlook
“2021 is shaping up to be another year of robust earnings and shareholder returns, with pronounced margin increases and substantial free cash flow generation resulting from our outstanding operating performance in a healthy marine market,” said Foulkes.
