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MIAMI: Brunswick outlines its three-year growth plan

MIAMI - Even if the marine market remains flat, and Brunswick Corp. thinks it will, the industry giant believes it has a plan to succeed not only in 2012, but through 2014.

That’s the message chairman and chief executive Dustan McCoy and other high-ranking company officials delivered Thursday during a presentation for the financial community at the Miami International Boat Show.

“We believe in a flat marine market — we want to make that clear — in an economy that has not recovered around the world,” McCoy said. But he believes Brunswick can achieve compound annual growth rates in the mid-single digits for revenue and double digits for operating earnings.

He said the company aims to generate earnings of $2 to $2.45 a share in 2014 without restructuring.

The growth would come from market share gains, new products and services that expand Brunswick’s markets and the successful pursuit of regional opportunities around the globe.

“We remain committed to continue to grow global sales,” McCoy said. “We have the organization in place all around the world to do very well globally and we’re positioning ourselves for the long term to be a bigger global player.”

Brunswick Boat Group president Andrew Graves outlined some of the ways Brunswick is poised to grow internationally. He said the plant Brunswick is building in Brazil is targeted to start producing boats in the third quarter this year for that country’s market.

“Brazil is an exciting market for us because it’s an established market with a strong marine culture,” Graves said, estimating the value of that market at $500 million.

He said Brunswick is seeing strong sales growth in Europe in its Quicksilver brand of small runabouts and said the company has increased its manufacturing presence in Europe to build Sea Rays and Bayliners.

In China, Graves sees opportunities for sales of Sea Ray and Hatteras boats over 30 feet. As he spoke, he said, a 60-foot Hatteras motoryacht was in transit to a retail customer in China.

Graves also pointed to growth opportunities in aluminum fishing boats in Australia, Russia and Scandinavia, saying each of those regions offers a market of more than $100 million.

In the United States, he said, “we would suggest that demand has bottomed in the fiberglass markets and has recovered in the pontoon and aluminum fishboat markets.”

He said the boat group’s operations are sized for a return to retail sales of 200,000 to 225,000 boats and that the economy and participation trends will influence the timing of the industry’s recovery.

Graves pointed to figures that suggest pent-up demand is growing among boaters, even as they continue to find ways to be on the water. He said boating participation in 2010 reached 75 million in this country and represented the highest percentage of the population in a decade. Annual licenses and boat registrations have remained relatively flat for a decade, he said, and since 2005 used-boat sales have fallen less than 10 percent.

Boats built during the peak production years of the 1970s and 1980s are reaching obsolescence, he said, which he expects will put more pressure on the used-boat market in terms of increasing price and shrinking availability.

“That will ultimately drive consumers to consider and to purchase new boats,” he said.

— Jack Atzinger



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