Brunswick : Q4 2023 Earnings Presentation

2/1/2024

Q4 2023 Earnings

Conference Call

FEBRUARY 1, 2024

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BRUNSWICK CORPORATION - EARNINGS RELEASE

Forward-Looking Statements

Certain statements in this presentation are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on current expectations, estimates, and projections about Brunswick's business and by their nature address matters that are, to different degrees, uncertain. Words such as "may," "could," "should," "expect," "anticipate," "project," "position," "intend," "target," "plan," "seek," "estimate," "believe," "predict," "outlook," and similar expressions are intended to identify forward-looking statements. Forward-looking statements are not guarantees of future performance and involve certain risks and uncertainties that may cause actual results to differ materially from expectations as of the date of this presentation. These risks include, but are not limited to: the effect of adverse general economic conditions, including rising interest rates, and the amount of disposable income consumers have available for discretionary spending; changes in currency exchange rates; fiscal and monetary policy changes; adverse capital market conditions; competitive pricing pressures; higher energy and fuel costs; managing our manufacturing footprint and operations; loss of key customers; international business risks, geopolitical tensions or conflicts, sanctions, embargoes, or other regulations; actual or anticipated increases in costs, disruptions of supply, or defects in raw materials, parts, or components we purchase from third parties; supplier manufacturing constraints, increased demand for shipping carriers, and transportation disruptions; adverse weather conditions, climate change events and other catastrophic event risks; our ability to develop new and innovative products and services at a competitive price; our ability to meet demand in a rapidly changing environment; absorbing fixed costs in production; public health emergencies or pandemics, such as the coronavirus (COVID-19) pandemic; risks associated with joint ventures that do not operate solely for our benefit; our ability to successfully implement our strategic plan and growth initiatives; attracting and retaining skilled labor, implementing succession plans for key leadership, and executing organizational and leadership changes; our ability to integrate acquisitions and the risk for associated disruption to our business; our ability to identify, complete, and integrate targeted acquisitions; the risk that restructuring or strategic divestitures will not provide business benefits; maintaining effective distribution; dealers and customers being able to access adequate financing; inventory reductions by dealers, retailers, or independent boat builders; requirements for us to repurchase inventory; risks related to the Freedom Boat Club franchise business model; outages, breaches, or other cybersecurity events regarding our technology systems, which have affected and could further affect manufacturing and business operations and could result in lost or stolen information and associated remediation costs; our ability to protect our brands and intellectual property; changes to trade policy and tariffs; an impairment to the value of goodwill and other assets; product liability, warranty, and other claims risks; legal, environmental, and other regulatory compliance, including increased costs, fines, and reputational risks; changes in income tax legislation or enforcement; managing our share repurchases; and risks associated with certain divisive shareholder activist actions.

Additional risk factors are included in the Company's Annual Report on Form 10-K for 2022 and in subsequent Quarterly Reports on Form 10-Q.Forward-looking statements speak only as of the date on which they are made, and Brunswick does not undertake any obligation to update them to reflect events or circumstances after the date of this presentation.

Neha Clark - Senior Vice President Enterprise Finance

Brunswick Corporation, 26125 N. Riverwoods, Mettawa, IL 60045

Phone: [phone]

Email: [e-mail]

©2024 BRUNSWICK CO. CONFIDENTIAL AND ALL RIGHTS RESERVED. 2

Good morning and thank you for joining us. With me on the call this morning are Dave Foulkes, Brunswick's CEO, and Ryan Gwillim, CFO. Before we begin with our prepared remarks, I would like to remind everyone that during this call our comments will include certain forward‐looking statements about future results. Please keep in mind that our actual results could differ materially from these expectations. For details on these factors to consider, please refer to our recent SEC filings and today's press release. All of these documents are available on our website at Brunswick.com.

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Use of Non-GAAP Financial Information and Constant Currency Reporting

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 the registrant; or include amounts, or are subject to adjustments that have the effect of including amounts, that are excluded from the most directly comparable measure so calculated and presented.

Brunswick has used certain non-GAAP financial measures that are included in this presentation for several years, both in presenting its results to shareholders and the investment community and in its internal evaluation and management of its businesses. Brunswick's management believes that these measures and the information they provide are useful to investors because they permit investors to view Brunswick's performance using the same tools that Brunswick uses and to better evaluate Brunswick's ongoing business performance. In addition, in order to better align Brunswick's reported results with the internal metrics used by the Company's management to evaluate business performance as well as to provide better comparisons to prior periods and peer data, non-GAAP measures exclude the impact of purchase accounting amortization related to acquisitions, among other adjustments.

For additional information and reconciliations of GAAP to non-GAAP measures, please see Brunswick's Current Report on Form 8-K filed with the Securities and Exchange Commission on February 1, 2024, which is available at www.brunswick.com, and the Appendix to this presentation.

Brunswick does not provide forward-looking guidance for certain financial measures on a GAAP basis because it is unable to predict certain items contained in the GAAP measures without unreasonable efforts. These items may include restructuring, exit and impairment costs, special tax items, acquisition-related costs and certain other unusual adjustments.

For purposes of comparison, 2023 net sales growth is also shown using 2022 exchange rates for the comparative period to enhance the visibility of the underlying business trends, excluding the impact of translation arising from foreign currency exchange rate fluctuations. We refer to this as "constant currency" reporting.

©2024 BRUNSWICK CO. CONFIDENTIAL AND ALL RIGHTS RESERVED. 3

During our presentation, we will be referring to certain non‐GAAP financial information. Reconciliations of GAAP to non‐GAAP financial measures are provided in the appendix to this presentation and the reconciliation sections of the unaudited consolidated financial statements accompanying today's results. I will now turn the call over to Dave.

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Business

Overview -

Dave Foulkes,

CEO

©2024 BRUNSWICK CO. CONFIDENTIAL AND ALL RIGHTS RESERVED. 4

Thanks Neha, and good morning everyone.

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Resilient	$6.4B			$8.80			+50bps
Performance in	Net Sales			Adjusted1 EPS			Mercury U.S. Outboard
a Challenging	(-6.0% vs. 2022)			(-12.3% vs. 2022)			Market Share vs. 2022
Year
Full Year 2023	$275M			36.7			$473M
	Share Repurchases			U.S. Weeks on Hand			Free Cash Flow1
				(5,670 units lower than 2019)			(+146% vs. 2022)
1SEE THE APPENDIX TO THIS PRESENTATION AND TODAY'S FORM 8-K FOR RECONCILIATIONS TO GAAP FIGURES.	©2024 BRUNSWICK CO. CONFIDENTIAL AND ALL RIGHTS RESERVED. 5

Brunswick delivered another successful year in which we achieved the second highest sales and adjusted EPS in Company history, despite market headwinds. We also continued to gain market share, increase our operational efficiency, launch exceptional new products, actively control costs, and progress our strategic initiatives, including our ACES strategy.

Our full‐year net sales of $6.4 billion and adjusted earnings per share of $8.80 were slightly below our guidance range as wholesale customer ordering patterns softened late in the year. However, our diligent focus on cash‐generation resulted in outstanding free cash flow of $473 million and full‐year free cash flow conversion of 76%. In addition, we executed $275 million dollars of share repurchases.

Mercury Marine has continued to capture solid market share, with full‐year U.S. outboard retail share up 50 basis points versus prior year.

2023 U.S. new boat market unit retail sales are anticipated to finish in‐line with our estimates of down mid‐ to high‐single‐digits with Brunswick brands outperforming the market in many segments.

As we moved out of the core 2023 retail selling season, we worked closely with our marine channel partners to actively manage boat field inventory levels. We closed the year with 36.7 weeks on hand in the U.S., which is in‐line with our target and with historical norms.

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Segments Continue to Adapt and Execute Strongly

Propulsion
Engine Parts &		Navico Group	Boat1
	Accessories

• 50bps FY 2023 vs. FY 2022 outboard retail market share gain, and 150bps gain for outboards over 30hp
• >5,000 Avators produced since launch
• OEMs metering production and Q1 orders while monitoring early season consumer behavior

• Q4 2023 Products sales up 3% vs.	• Strong market reception to higher	• Q4 U.S. SSI main powerboat retail
prior year	margin new products	down 1% vs. prior year, full year in-
• Q4 2023 Distribution sales showing		line with expectations
• Aftermarket/retailer stocking trends
sequential improvement	continuing to improve	• Freedom Boat Club closing in on 60k
• Segment full year sales up 22% vs.	• Operating expense actions	memberships, and 600k annual trips
in 2023
2019	continuing to show benefit	• Freedom Boat Club now at 410+
		locations
1BOAT SEGMENT INCLUDES BUSINESS ACCELERATION	©2024 BRUNSWICK CO. CONFIDENTIAL AND ALL RIGHTS RESERVED. 6 6

I will turn now to some of the segment highlights for the quarter and full year.

Our propulsion business finished its second‐best year on record, leveraging more exciting new products, market share gains, and operational efficiencies to deliver consistent year‐over‐year operating margins, despite slightly lower sales and earnings, versus the historical highs in 2022. For the full‐year, Mercury gained 150 basis points of overall U.S. retail share for outboard engines over 30 horsepower, which account for the majority of Mercury's investment in recent years. In addition, over 5,000 Avator electric outboards were produced following the launch of the first model in early 2023.

Mercury saw slowing of OEM off‐season orders as the OEMs scaled back boat production to control field inventory going into the new year. We expect OEMs to remain cautious entering the first quarter of 2024 as they assess consumer sentiment at early‐season boat shows and monitor the macro environment.

Our engine parts and accessories business demonstrated steady performance in the quarter, reflecting a continued improving sequential trend. Sales in the Products portion of the business were up versus prior year for the second consecutive quarter and our Distribution business was only down slightly, with sequential improvement from the previous quarter. Overall segment sales were up 22 percent on a full year basis versus 2019.

Navico Group had a solid finish to the year, as an increased flow of new products and continued focus on cost control, business integration, and complexity reduction helped offset a softer marine OEM market in the quarter, and the considerably slower RV manufacturing environment.

Finally, our boat business delivered sales and earnings in the quarter consistent with expectations, while continuing to ensure healthy pipeline inventory levels entering 2024. Strong demand for premium products, together with market share gains in many categories, is helping to provide a stable baseline for 2024. Freedom Boat Club continues to grow and now has more than 410 locations. Members completed approximately 600 thousand trips in 2023, demonstrating the productivity of the model.

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External, Customer and Consumer Conditions

Macro Backdrop

Consumer Health

Dealer Sentiment

OEM Environment

• Inflation moderating and employment stable
• Cadence of anticipated 2024 Fed interest rate reductions top of mind
• Expansion of Middle-East conflict threatening logistics costs

• Good attendance and consumer interest at early-season boat shows
  - buying cycle longer as consumers look for promotions
• Early season boat retail sales ahead of 2023
• Boat purchase consideration also remains stable1

• Marine dealer sentiment overall steady with premium product dealers generally expressing more optimism
• Dealers conscious of clearing 2024 model year inventory and awaiting more data to support order-rate acceleration
• Interest rates remain a concern, although down 50bps from peak

• Marine OEMs reducing first quarter 2024 production to align with demand levels
• RV orders soft although anticipate some improvement into 2024
• Retailer environment and distribution channel stabilizing

1SOURCE: BRUNSWICK SENTIMENT PULSE TRACKER DEC 2023 (N=400)

©2024 BRUNSWICK CO. CONFIDENTIAL AND ALL RIGHTS RESERVED. 7

Shifting to external factors now, U.S. employment remains at healthy levels with inflation continuing to stabilize. The cadence of Fed and global central bank interest rate reductions will continue to be an important factor in the coming months.

Overall boat retail sales are trending slightly above 2023, but unit sales in the month of January are always a small contribution to the year. Global early‐season boat shows are generally encouraging, with good traffic, interested buyers, and healthy lead generation. Normalized inventory levels are allowing consumers to shop for the models of their choice and incentives continue to be important in stimulating interest and assisting dealers in closing sales. Our boat, engine and technology brands continue to perform well, with Mercury recording outboard share gains at the important Dusseldorf boat show, achieving overall share of 48 percent.

Dealers entered 2024 with healthy inventory and are cautious in their ordering entering the new year as they closely monitor boat shows and retail at the start of the season, as well as the economic trajectory.

We are pleased with interest in the recently launched Brunswick retail finance program with more than 25 percent of Brunswick boat dealers having already enrolled. The program provides an additional way to stimulate demand and convert leads, with an efficient online consumer finance approval process and the ability to introduce promotional financing. In addition, our investments in digital platforms continue to drive benefits across our brands with more than 1/3 of Boat Group's sales digitally assisted in 2023.

As expected, boat OEMs are carefully controlling boat production rates to align with anticipated retail in 2024, resulting in lower order rates for Mercury engines and Navico Group OEM products. The softness continues to be more prevalent in value products and low‐ to mid‐horsepower outboard engines, with premium product production and demand remaining more solid.

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Q4 2023

Revenue Mix1 &

Growth Rates

Q4'23 sales declined 15 percent on a constant currency basis, excluding acquisitions

Geographical Revenue Mix

	Canada,
		5%	Europe,
			12%
	U.S.	-16%	Asia Pacific,
	7%
U.S.,	Europe	-17%
69%	Canada	-38%
	Asia Pacific	-14%	Rest-of-World,
	Rest-of-World	+33%	7%

1ALL FIGURES SHOWN ON A CONSTANT CURRENCY BASIS, EXCLUDING ACQUISITIONS. MIX PERCENTAGES REFLECT

Q4 2023 NET SALES.

©2024 BRUNSWICK CO. CONFIDENTIAL AND ALL RIGHTS RESERVED. 8

Shifting now to a global view of revenue in the quarter, overall, we saw a 15 percent sales decline on a constant currency basis, excluding acquisitions.

On a full year basis, the U.S. market declined mid‐single digits versus 2022, roughly in line with Europe and Asia‐Pacific.

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U.S. Industry Retail and Pipeline Trends

Ending Q4 2023

• U.S. pipeline ended the year as expected at 36.7 weeks on hand and ~14k units
• Brunswick delivering full year retail sales better than industry

U.S. Industry Retail - Percentage Change in Retail Units

		Main Powerboat Segment								Outboard Engines
												1%
		-1%												-2%
				-6%
		Q4 2023		FY 2023						Q4 2023	FY 2023
		25				U.S. Pipeline and WOH	40
		20													35
thousands													30	Handon
15													25
		10													20
Unitsin													15	Weeks
5													10
														5
		0														0
		2018	2019		2020		2021	2022	2023
						Value				Premium			WOH

SOURCE: NMMA STATISTICAL SURVEYS, INC.: PRELIMINARY DATA IS SHOWN ON A COMPARATIVE BASIS USING STATES REPORTING	©2024 BRUNSWICK CO. CONFIDENTIAL AND ALL RIGHTS RESERVED. 9
TO DATE FOR 2023: 67.18% OF THE U.S. BOAT MARKET, COAST GUARD DATA THROUGH 12/2023.

U.S. new boat industry retail was slightly down in the fourth quarter versus 2022, with preliminary full‐year retail in‐line with expectations of down approximately 6 percent versus 2022.

Overall, for the full‐year, Brunswick performed slightly better than the industry, picking up share particularly through strong performance by our pontoon, premium fiberglass and tow brands, supported by planned promotions and marketing on select product‐lines.

Outboard engine industry retail units turned positive this period with the fourth quarter up one percent versus prior year, bringing full‐year unit retail to down two percent. Mercury continues to outperform the industry with fourth quarter share gains of 50 basis points in greater than 30 horsepower categories.

As we actively manage boat pipelines, we ended with inventory in‐line with expectations and historical norms with U.S. weeks on hand at 36.7 weeks and 14 thousand units versus 16 thousand units in 2019. International boat pipelines are slightly higher, which is normally the case.

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02

Financial

Overview -

Ryan Gwillim,

CFO

©2024 BRUNSWICK CO. CONFIDENTIAL AND ALL RIGHTS RESERVED. 10

I will now turn the call over to Ryan to provide additional comments on our financial performance and outlook.

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