Strong sales for Brunswick Corporation’s 2023
Brunswick Corporation has reported its earnings for the fourth quarter, and full year, of 2023 and says that, despite a challenging market environment, its achieved the second-highest sales in its history.
The company saw net sales of $6.4 bn for the year and anticipates revenues between $6 and $6.2 bn for fiscal 2024.
“Brunswick delivered another successful year in which we achieved the second highest sales and adjusted earnings per share in company history, despite market headwinds,” says Dave Foulkes, CEO. “We also continued to gain market share, increase our operational efficiency, launch exceptional new products, actively control costs and progress our strategic initiatives.”
Foulkes says Mercury Marine has continued to capture solid market share and Brunswick brands are outperforming the market in many segments.
He notes that the company’s ‘propulsion’ business finished its second best year on record, by “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.
“Mercury saw slowing of OEM [original equipment manufacturers] 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,” says Foulkes.
Navico Group reports sales decrease
“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 [recreational vehicle – motorhome] manufacturing environment,” says Foulkes.
Ryan Gwillim, executive vice president and chief financial officer, says Navico Group reported a 17 per cent decrease in sales. “Despite an overall challenging 2023, Navico continues to make strides against its strategic priorities, including removing almost $20 million of structural cost, while improving its product development process and continuing to invest in market leading technologies and expand its customer base for integrated and connected solutions.”
Foulkes believes that Navico was absolutely the right asset for Brunswick to own.
“There was nothing like it in the marketplace and there still isn’t anything like it in the marketplace. It plays very strongly to our move from a boat to technology company. It really has some of the best technology assets in the business.
“Despite the fact that the financial performance is not what we’d originally anticipated at this time . . . it is actually doing well, extremely well, in a lot of those sub-segments of electronics,” he says.
“It continues to do well in producing unique solutions that nobody else can produce, like the Fathom system. We’re beginning to see a flow of new products that reflect our directions, like, the Ultrawide.
“So I think the asset is the right asset for us,” continues Foulkes. “We just bought it ahead of a market downturn. It’s about 30 per cent marine OEM, 10 or 12 per cent RV and specialty vehicles, and a little bit less than 60 per cent aftermarket. I think what we did not foresee . . . the destocking that is experienced over the past several years, . . . and also the really severe decline in RV manufacturing that it continues to experience. So those are the things that we have had to combat. . . . positives are strategic benefit and new products coming out. Some of the negatives are more associated with how the market has performed generally.”
Strong boat show presence
Global early‐season boat shows have been generally encouraging for Brunswick, with good traffic, interested buyers and healthy lead generation. “Normalised 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,” Foulkes says.
“Our boat, engine and technology brands continue to perform well, with Mercury recording outboard share gains at the important Dusseldorf boat show.
“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.
“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.
“Overall, for the full year, Brunswick performed slightly better than the industry, picking up share particularly through strong performance by our pontoon, premium fibreglass and tow brands, supported by planned promotions and marketing on select product lines.”
Dave Foulks
Brunswick continues to differentiate through a rapid flow of new products and technology. In just the first few weeks of 2024 the group launched over 15 new products across its brands and businesses.
‘Brunswick Corporation showcased resilience and strategic planning in the face of a challenging market. The company’s focus on cost control, market share gains, and new product development positions it to navigate the uncertain waters of the marine industry. Brunswick’s confidence in its inventory levels and strategic initiatives, including the Brunswick Retail Finance program and digital platforms, underscore its commitment to maintaining a strong market presence’, says Investing.com.
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