Brunswick results reveal the Sea Ray effect
Excluding Sea Ray sales helps deliver 14% boat sales bump for Brunswick.
The impact of the impending sale of the Sea Ray boat brand is evident in the full-year financial results for Brunswick Corporation released last week.
For the year ending 31 December 2017, Brunswick reported net sales of US$1,103 million for its boat brands, an increase of US$139 million or 14% on the previous year (US$964 million). However, these figures exclude the net sales figures for the company's Sea Ray business which was put up for sale last year. As a result, Sea Ray is now treated as a discontinued brand and its sales are excluded from the latest figures, for both the 2016 and 2017 years.
With Sea Ray accounting for over a quarter of Brunswick total boat sales, the 2017 results highlight the impact that the brand has been having on the company's overall sales growth. Sea Ray recorded sales of US$387.6 million for the year but made an operating loss of US$17.2 million. If Sea Ray's sales are included in the overall boat sales for the year, the growth in this sector is trimmed to around 9%.
Overall, Brunswick reports reported net sales of US$4,510 million, up from $4,154 million in 2016 (excluding Sea Ray). The marine engine business which includes Mercury outboards saw net sales of US$2,632 million, a 7.8% increase on US$2,441 million in 2016.
“Our results in 2017 reflect the continued successful execution of our strategy by our business teams and our emphasis on creating and increasing shareholder value,” said Mark Schwabero, Brunswick chairman and CEO. “Our performance represents the eighth consecutive year of adjusted EPS [earnings per share] growth, with this record high EPS resulting from strong operating performance by our marine businesses.
“Our 2017 revenue increased by 9%, reflecting strong growth in all three of our primary boat categories and the outboard engine business, along with solid growth in our parts and accessories businesses.
“Overall demand in global marine markets was strong, as domestic markets continued to grow and international markets benefited from gains in Europe, Canada, and Asia-Pacific, as well as improving conditions in other regions.”
Brunswick also announced that it expects to incur an impairment loss between US$35 million and US$40 million in the sale of its Sea Ray brand as a result of “a write-down of long-lived assets” resulting from the difference between the business's net book value and its fair value.
