Recreational Boating Industry Trends Stem to Stern II Dusty E. McCoy Chairman and CEO Brunswick Corporation May 15, 2012
1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011E Industry Volume U.S. Industry Retail Powerboats (1965 2011E) 600,000 500,000 Outboard Inboard / Sterndrive Total Power Boats 400,000 Last 6 Years 300,000 2006 291,900 200,000 100,000 1965-1991 Average 400,000 1992-2006 Average 309,000 2007 267,300 2008 203,000 2009 153,550-2010 138,830 Calendar Year 2011E 139,250 In 2011, outboard boats reflect modest recovery; inboard/sterndrive boats continued to decline Sources: NMMA, includes all 50 states and total sterndrive, inboard and outboard boats. Excludes jet boats. 2
U.S. Boating Participation History (1990 2011) No. of adults boating (in millions) % of adults boating 100 90 80 70 36.5% 36.1% 36.2% 36.3% 36.2% 35.6% 36.0% 35.8% 33.6% 32.3% 30.4% 30.5% 28.8% 29.2% 28.3% 33.4% 29.2% 28.9% 26.6% 26.0% 34.8% 32.4% 60 50 40 30 20 10 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2011 Reflects Highest Level of Participation Since 1997 Source: NMMA 3
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011E Thousand Units Market Demand Dynamics Remain Intact Pre-owned Sales and Annual Licenses Remain Stable 10,906 10,605 10,466 10,532 10,658 10,100E 10,389 10,521 10,340 10,230 10,397 10,161 1400 1200 1000 800 600 400 200 0 Used Boats New Boats Licenses Each 1% Change in Used/New Mix Equals Approx 8,000 to 9,000 Units New Boats 344 312 304 296 308 306 292 267 203 154 139 140 % New 29 27 26 26 27 27 26 25 22 16 16 16 Note: All data in thousand units Source: Pre-Owned Boat Market Study conducted for NMMA by Info-Link Technologies. 4
US Population (000) Total Boat Registrations (000) The 1970s and 1980s were very good to boating. And PWCs helped sustain this level of boat ownership through the1990s. US Boat Registrations vs. Population Including PWCs 350,000 15,000 14,000 300,000 13,000 12,000 250,000 200,000 The PWC Boom 11,000 10,000 9,000 8,000 150,000 100,000 The Boating Boom 7,000 6,000 5,000 YEAR Population Boat Registrations Source: Info-Link Technologies Inc. 5
US Population (000) Total Boat Registrations (000) But traditional boat ownership (non-pwc) has not kept up with the population. It has been relatively flat for the past 20 years. US Boat Registrations vs. Population Excluding PWCs 350,000 15,000 14,000 300,000 13,000 12,000 250,000 11,000 10,000 200,000 9,000 8,000 150,000 7,000 6,000 100,000 5,000 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 YEAR Population Boat Registrations Source: Info-Link Technologies Inc. 6
Boats have gotten older. Many of the boats built during the boom are still in use. In 1997 the average boat was 15 years old. Today the average boat is more than 20 years old, and getting older. Average Age Average Boat Age by Year 25 20 15 10 5 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Year Ending Source: Info-Link Technologies Inc. 7
Meanwhile, boat owners have gotten older. Today there are fewer owners in their 30s and more in their 50s and 60s. Age Distribution of Powerboat Owners 1998 vs 2011 16% 14% 12% 10% 8% 6% 4% 2% 0% <25 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-64 65-69 70-74 75+ Age Range 2011 1998 Source: Info-Link Technologies Inc. 8
This is especially evident among sailors. They tend to be loyal to the sport but grinding winches in your 70s gets old too. Age Distribution of Sailboat Owners 1998 vs 2011 20% 18% 16% 14% 12% 10% 8% 6% 4% 2% 0% <25 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-64 65-69 70-74 75+ Source: Info-Link Technologies Inc. Many of these people Age Range are still sailing 2011 1998 But sailing is physical so 9
Recreational Boating Participation 2010 Past boating participants and people who do not boat total about 150 million adults in the U.S. 36.5% 36.5% 32.4% 32.4% 31.1% 31.1% Current Participant Past Participant Non-Participant Current Participant Past Participant Non- Participant 10
Reasons Past Participants Have Not Boated in Past 12 Months More than 50% of reasons are non-monetary Don't know anyone w ho ow ns a boat Reduced income Time constraints 11.4% 11.1% 10.5% 32.4% Higher cost of living Sold my boat 11.5% 12.1% 22.6% No longer participate in boating-related activities Don't/no longer live near w ater Health reasons 14.2% 17.3% Lost interest Unemployed 14.7% 16.0% 16.2% 17.1% Lost my boating partner (friend) Change in w ork circumstances Cost of fuel for boat 11
Non-Participants Consideration of Boating Have you ever considered going recreational boating? 17.2% 23.9% 58.9% Yes No Not Sure 12
Reasons Why Some Do Not Consider Boating Why have you not considered going recreational boating? 75% of reasons are non-monetary No interest Don't know anyone who owns a boat Don't participate water-based recreational activities Afraid of the water 21.0% 6.0% 18.5% 8.7% 64.9% Health reasons 24.6% Did not boat as a child Time constraints Cost of boat maintenance 25.5% 39.9% Don't live near water Other reasons 30.1% 30.7% 39.6% Cost of fuel Cost of boating 13
Boating Participation Exposure to Boating as a Child Drives Adult Participation Childhood Boating Experience Current Participant Non - Participant 1.2% 1.2% 21.6% 36.9% 36.9% 21.6% 60.1% 9.3% 9.3% 29.4% 29.4% Boated as child and parents owned a boat Boated as child and parents did not own a boat 41.2% 41.2% 60.1% Boated as a child and parents owned a boat 1.2% 1.2% Did not boat as a child and parents owned a boat Did not boat as a child and parents did not own a boat Boated as a child and parents did not own a boat Did not boat as a child and parents owned a boat Did not boat as a child and parents did not own a boat 14
Boat Owner Demographics by Ethnicity 2010 Any Powerboat 3.4% 3.0% 2.1% 1.1% 1.1% 0.8% 90.0% White Black Asian or Pacific Islander Native American/Alaskan Native Mixed Racial Background Other Race Declined to Answer 15
Key Take Aways New boat sales are at historical lows Boats in use have started to decline after a 15 year up cycle Powerboat owner s average age is increasing Age of boats is increasing The primary boater demographic is shrinking as % of population Slow growth projected for next 2-4 years But-participation is up and growing Opportunity to convert 150 million people to boating participation 16
If You Think You Can or You Can t You re Right How can we work together to: Grow Participation Welcome more people to the boating lifestyle 17
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