Investor Presentation June 5, 2017 www.thorindustries.com
FORWARD LOOKING STATEMENTS This presentation includes certain statements that are “forward looking” statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward looking statements are made based on management’s current expectations and beliefs regarding future and anticipated developments and their effects upon Thor, and inherently involve uncertainties and risks. These forward looking statements are not a guarantee of future performance. We cannot assure you that actual results will not differ from our expectations. Factors which could cause materially different results include, among others, raw material and commodity price fluctuations, raw material or chassis supply restrictions, the level of warranty claims incurred, legislative, regulatory and tax policy developments, the impact of rising interest rates on our operating results, the costs of compliance with increased governmental regulation, legal and compliance issues including those that may arise in conjunction with recent transactions, the potential impact of increased tax burdens on our dealers and retail consumers, lower consumer confidence and the level of discretionary consumer spending, interest rate fluctuations and the potential economic impact of rising interest rates on the general economy, restrictive lending practices, management changes, the success of new product introductions, the pace of obtaining and producing at new production facilities, the pace of acquisitions, the potential loss of existing customers of acquisitions, the integration of new acquisitions, our ability to retain key management personnel of acquired companies, the loss or reduction of sales to key dealers, the availability of delivery personnel, asset impairment charges, cost structure changes, competition, the impact of potential losses under repurchase agreements, the potential impact of the strengthening U.S. dollar on international demand, general economic, market and political conditions and the other risks and uncertainties discussed more fully in ITEM 1A of our Annual Report on Form 10-K for the year ended July 31, 2016 and Part II, Item 1A of our quarterly report on Form 10-Q for the period ending April 30, 2017. We disclaim any obligation or undertaking to disseminate any updates or revisions to any forward looking statements contained in this presentation or to reflect any change in our expectations after the date of this presentation or any change in events, conditions or circumstances on which any statement is based, except as required by law. 2
TABLE OF CONTENTS Current Industry Conditions – Page 4 Third Quarter 2017 Update – Page 8 Appendix: Financial and Market Data – Page 19 3
STRONG FUNDAMENTALS SUPPORT CONTINUED RV INDUSTRY GROWTH 40% = 129M 10% CONSUMERS IDENTIFY AS “ACTIVE FAMILY ADVENTURERS” OR “NATURE LOVERS” CAGR IN NEW RV Continued favorable MOST LIKELY GROUPS TO OWN UNIT SHIPMENTS OR RENT AN RV IN THE FUTURE ** macro environment SINCE 2010 * Low interest rates 38% = 49M 34% Stable fuel prices and wide availability Wide credit availability POTENTIAL FIRST-TIME BUYERS OF NEW RVS HAVE INVESTIGATED PURCHASE Favorable employment and SOLD IN 2016 OR VISITED AN RV SHOWROOM WERE TO FIRST wage trends OR DEALERSHIP in 2016 ** TIME BUYERS – 8 Strong consumer confidence IN 10 OF THOSE 16.6M NEW BUYERS WERE UNDER AGE 65 * POTENTIAL BUYERS WERE INTERESTED IN NEW RVS ** * Source: RVIA, RV Industry Power Breakfast Presentation, May 2017 ** Source: RVIA Go RVing Communications Study 2016 4
TRENDS DRIVING GROWTH: DEMOGRAPHICS YOUNGER CONSUMERS ARE INCREASING DIVERSITY AMONG CAMPERS * ATTRACTED TO THE RV LIFESTYLE * Latino, African American, Asian ▪ +3.4 MILLION new households and other ethnicities have started camping since 2014 represented 39% of new campers in 2016; 26% of all ▪ Gen X and Millennials helping to campers drive this growth – making up 72% RV camping viewed as an of campers in 2016 attractive way to spend time ▪ Younger campers looking for with families and friends affordable recreation experiences ▪ Interested in trying different MORE POTENTIAL RV BUYERS ** accommodations, including RVs POPULATION: DRIVERS: +159% 2X SINCE 1970 * Source: KOA 2017 North American Camping Report ** Source: RVIA, May 2017 5
TRENDS DRIVING GROWTH: LIFESTYLE Recreational sports Camping Wide variety of uses $887 billion spent on “outdoor 37.1 million North American Tailgating at spectator sports from economy” in 2016* households camp at least once a college and professional football, year, and 22% of them are RV auto racing and youth sports Trend toward getting more active campers** continues to grow and leading healthier life style Viewed as an affordable vacation Many other events, such as Youth sports leagues and option and a stress reducer equestrian events, pet and craft tournaments Availability of technology in RVs shows are also growing demand More people enjoying various makes them more attractive to for RVs recreational activities that support younger consumers Flexibility of using RVs makes RV sales growth Variety of RV price points and them ideal for shorter amenities creates opportunities to vacations/weekend getaways convert tent campers to RVs * Source: “The Outdoor Industry Economy” Outdoor Industry Association, 2017 ** Source: KOA 2017 North American Camping Report 6
HEALTH OF THE RV CHANNEL Dealer Inventory Levels Wholesale Financing: Retail Financing: Overall dealer inventory Credit broadly available Credit broadly available levels remain healthy Normal credit line utilization Lenders remain Total days in inventory disciplined on down New lenders have entered at dealers are stable payments and terms the market since the Average age of RV downturn ended Current delinquencies inventory on dealer lots ~1% vs. recession peak Lenders remain disciplined remains low of ~1.5% (overall with curtailments motivating consumer loan Used inventory levels dealers to focus on turning delinquencies peaked at remain low, supporting inventory ~3%)* trade-in values and demand for new RVs Sub-prime virtually non- existent * Source: RVIA Survey of Lenders’ Experiences 2015 7
THIRD QUARTER 2017 UPDATE 8
THIRD QUARTER KEY MESSAGES 13 th consecutive quarter of record revenues and record net income from continuing operations for the applicable quarter Strong growth in revenues, both organically and from acquisitions Double-digit organic sales growth in both segments – towables and motorized Consolidated Recreational Vehicle (RV) backlogs more than doubled to $2.36 billion versus 2016 third quarter of $1.06 billion, driven by continued strong consumer demand for our affordably priced travel trailers and motorhomes Continued strength in the RV Industry macro environment, health of the dealer channel and expanding consumer base give us reason for optimism on Thor’s future 9
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