Brunswick: Outboards, boat sales grow on strong U.S. market

Brunswick executives reported on a strong 2015 and expressed confidence for the future in an earnings call Thursday.

(See the full earnings report here.)

“I hope you can sense the excitement that the entire management team has about the outstanding performance in 2015 and continued strong outlook for 2016 through 2018,” said Mark Schwabero, president and COO. “The management team is energized.”

Brunswick’s engine segment, which includes Mercury and the parts and accessories businesses, continues to see strong growth, Schwabero said.

Outboard sales continue to grow, especially in the saltwater, commercial and repower markets, as new engines introduced last year are driving market share gains. Sterndrive sales continue to be “challenged,” although Mercury’s market share is stable, Schwabero added.

Growth was especially strong in the United States, which makes up 67 percent of Brunswick’s marine business. Boat sales were up 25 percent over 2014 and overall marine segment sales increased 15 percent. Sales were up only 1 percent in Canada, but that beat the overall market decline of 10 percent for the year, said CEO Dusty McCoy.

“Ontario grew marginally, but was offset by double-digit declines in Quebec and oil-sensitive Alberta,” he said. “We expect the market to be down in 2016, but not as much as 2015. We expect to outperform the market.”

In Europe, sales were up 13 percent, with double-digit growth in Scandinavia offsetting declines in Russia and Eastern Europe.

The strong dollar is continuing to have an impact on the company’s operations, lowering sales by about 4 percent in 2015, resulting in a $36 million impact, said CFO Bill Metzger.

The company expects that to have about a 1 percent impact in 2016, Metzger said.

Overall, Brunswick is forecasting revenue growth of 9 to 11 percent in 2016, with mid- to high-single-digit growth in both engine and boat sales.

Dealer attitudes and financials are good heading into 2016, and boat show results have been positive as well so far, McCoy said.

McCoy, speaking on his final earnings call as chairman and CEO, also added that he feels the management team he is leaving behind is well-positioned to lead the company forward.

“I’m leaving the company in good hands,” said McCoy, who will be retiring later this year after more than a decade as CEO.



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