Brunswick records second-straight profit in 2012
As weak demand in Europe and the decline of the sterndrive/inboard segment continued, Brunswick reported a 2012 net earning of $50 million – a number also driven down by the attempted sale of its Hatteras and Cabo brands.
In a conference call, Brunswick reported net sales of $829.8 million in the fourth quarter of 2012, which is a nearly 9-percent increase from 2011’s fourth quarter. For the year excluding the discontinued boat brands, operating earnings were $264.1 million, which is up from 2011’s $213.7 million.
Brunswick reported an annual profit for the second-straight year.
In the conference call, Brunswick CEO Dusty McCoy called the recovery experienced in 2012 unique due to it being largely driven by outboard-boat sales, while sterndrive vessels continued to decline.
Fiberglass sterndrive/inboard boats currently make up 41 percent of Brunswick’s product mix. The remaining are outboard fiberglass (19 percent) and aluminum (40 percent).
“We thought marine markets would grow proportionately across all segments,” McCoy said. “What is happening is unprecedented with it only growing in outboard, and we are adjusting to that … I am comfortable with how we are performing.”
Decreased demand in Europe, which represents 13 percent of its customer base, further drove down Brunswick’s earnings. Sales decreased by 15 percent in European markets during 2012.
More specifically, the boat segment in the United States increased 6 percent but decreased 47 percent in Europe. Factoring in the rest of the world’s 11-percent growth, boat sales were flat worldwide.
Aluminum models largely drove growth in boat sales, and the pipeline for such was up year over year. Weeks on hand for aluminum decreased in 2012, demonstrating strong market growth – something McCoy expects to continue in 2013.
Fiberglass sterndrive/inboard models larger than 24 feet were down in 2012, and McCoy said he expects this to continue into the first half of 2013. New models in the segment and Brunswick’s entry into the jet boat market are expected to help reverse the negative trend in sterndrive/inboard models, according to McCoy.
“We are feeling the green shoots. We are not seeing them yet, but we want to make sure we are position and those businesses are doing well when the recovery comes,” he said.
Brunswick’s marine engine segment increased 8 percent in 2012, while engine sales decreased by 14 percent in Europe.
Parts and accessories for the marine engine segment was one of the strongest revenue centers for the company, as Land ‘N’ Sea and Attwood had record sales and earnings in 2012.
