To our shareholders
For 67 years, Polaris has proudly defined, re-defined and then raised the bar again with the products we design and experiences we create to help our customers THINK OUTSIDE. And that legacy continued in 2021.Read Full Letter
For 67 years, Polaris has proudly defined, re-defined and then raised the bar again with the products we design and experiences we create to help our customers THINK OUTSIDE. And that legacy continued in 2021.
The Polaris team, with a relentless customer focus, innovative spirit and focused execution, delivered another record-setting year. We topped new heights with sales of $8.2 billion and earnings per share of $9.13. Across off-road vehicles (ORV), snow, motorcycles and boats, market share gains continued on a global basis. Our Parts, Garments and Accessories (PG&A) and powersports aftermarket portfolio exceeded $1.5 billion in sales, a 24 percent increase for the year, and our international business also surpassed $1 billion up 34 percent over 2020, both Polaris firsts.
These numbers are, in part, a result of our efforts to invite broader and more diverse groups of people to THINK OUTSIDE and experience the riding lifestyle firsthand. Over the last two years, the number of new powersports customers coming into Polaris grew by 16 percent across our portfolio of brands.
Innovation flourished with the introduction of over 30 new vehicles and more than 500 new accessories last year. We launched several category-defining vehicles, illustrating our long history of innovation leadership: the long-awaited RZR Pro R and RZR Turbo R models reclaim our position atop the wide-open side-by-side category, while the introduction of the all-new electric RANGER XP Kinetic in December resulted in pre-orders selling out in a matter of hours.
Our focus on innovation extended beyond just our products. Our pre-sold order program helped us sidestep supply chain constraints to continue attracting and retaining customers. Our NorthStar dealer program, which incentivizes dealers to drive customer experience and operations enhancements, has led to measurable improvements in dealer performance, customer service and profitability. Polaris Adventures had more than 400,000 rides across 200 plus outfitter locations, and we launched Polaris Adventures Select, the industry's first membership program, in four states, with plans to expand in 2022 and beyond. With the vast majority of Polaris Adventures customers having never owned a Polaris vehicle, these entryway experiences make powersports more accessible and enable us to introduce even more people to Polaris.
To keep pace with global demand and to accommodate upcoming new product introductions, we added production capacity at our facilities in Monterrey and Indiana, as well as increased capacity in Wilmington to support PG&A distribution. Production of mid-size Indian motorcycles was also started in Vietnam to accommodate anticipated growth in the Asian and Australian markets.
We continue to put product quality and safety first with the announcement of a seasoned Polaris leader being appointed to the newly elevated role of Chief Product Excellence, Quality and Safety Officer.
The year was not without its challenges, as supply chain disruptions intensified, the labor market tightened and pressure on our dealer channel increased with inventory levels remaining at historic lows. Despite the headwind, the Polaris team navigated the challenging environment with agility, tenacity and focus. Our strategic sourcing initiative, which we kicked off in 2018, put us on the path of transforming our supplier relationships and has proven vital during this pandemic.
This past year, our management team and board took a step back to reflect on the growth we've accomplished, and re-ground ourselves on our path forward and what kind of company we want to be over the long term.
As the global leader in powersports, no one understands this industry, and its potential, better than Polaris. We see a clear opportunity to grow powersports and welcome in even more new customers, while continuing to exceed the expectations of those who have loved our brands for years with innovation and a continued focus on quality.
To best capitalize on this opportunity, we refined our strategy to refocus our investments on our current core segments — Off-Road, On-Road, Marine and Aftermarket — while also targeting improved productivity, expanded margins, and extending our global industry leadership position.
We've identified six objectives to bring this refined strategy to life:
- Best Customer Experience. We will provide our current and future customers with the best possible overall experience, including dealer interactions for service and delivery, the most desirable, most satisfying and trusted products and services in the industry, and providing a business model that encourages more diverse groups of people to experience the outdoors.
- Inspirational Brands. We will bring to life brands our owners are proud to be associated with, and excited to showcase and share with friends and family. Brands that continue to be viewed as authentic, unique, engaging, and just fun to experience and supports our THINK OUTSIDE mindset.
- Rider-Driven Innovation. We listen and learn directly from our customers to deliver products, experiences and services that matter most to them. Electrification, connected vehicles, Adventures, Adventures Select and RIDE COMMAND are just a few recent examples of the opportunity we have here.
- Agile and Efficient Operations. We take lean operations a step further by aligning processes, tools and people to deliver the most responsive customer-centric service levels in powersports while leveraging our scale to drive industry-leading productivity.
- Best Team, Best Culture. Our team and culture are what makes achieving our goals possible. We will hire, develop and retain the best people, constantly challenge them with new opportunities and high expectations, and reward those who achieve and exceed those expectations.
- Geared For Good. A core belief that as the global powersports leader, we have a responsibility to be good stewards for our industry, employees, riders, communities and the outdoors. Along with our unwavering commitment to Safety and Ethics Always, we remain more committed than ever to making a positive impact by being Geared For Good.
We expect 2022 to be another record year for Polaris, with strong revenues and net income growth. Challenges within the supply chain are expected to persist and the Polaris team stands ready to navigate through these challenges just as we did last year.
Combined with our newly refocused strategy, the opportunities for growth, continued consumer interest in the outdoors and value creation look very promising. We will continue to raise the bar through elevated experiences, inspirational brands and rider-driven innovations, backed by the best and brightest people in the industry.
With passion, innovation and leadership, Polaris will continue to set the standard for the future of powersports by powering passion and pioneering new possibilities for all those who play, work and THINK OUTSIDE.
At Polaris, we take great pride in our history as a category pioneer and current position as the global industry leader in powersports. But with leadership comes a responsibility to keep pushing the industry forward — and there are always more people in more places who could benefit from an invitation to THINK OUTSIDE.
That's why we've revised our strategy to stay even further out in front of our customers' needs. We will continue to raise the bar through elevated experiences, inspirational brands and rider-driven innovations, all backed by the best and brightest people in the industry. This is what leading from the front means for Polaris. It's a role we embrace to the fullest.
2021 Adjusted Results* - Total Company Sales
2021 Adjusted Results* - Total Company Gross Profit
2021 Adjusted Results* - Total Company Net Income
2021 Adjusted Results* - Total company EPS
2021 Total Company Sales
2021 Total Company Sales
2021 Total PG&A Sales
2021 Total International Sales
Explore our 2021 Segments and ProductsOff-Road Vehicles & Snowmobiles Motorcycles Global Adjacent Markets Aftermarket Boats
GLOBAL LEADER IN POWERSPORTS
Powering passion and pioneering new possibilities for all those who play, work and THINK OUTSIDE.
#1 Market Share in powersports
Sales Growth: Mid-Single Digits
EBITDA %: Mid-to High-Teens
EPS Growth: Double Digits
Strategic ObjectiveBest Customer Experience
Experiences Beyond Expectations
We want every interaction with Polaris to be amazing. At every touch point, we're continually challenging ourselves to create even better experiences for current and potential new customers — whether they're on a ride, at a dealership, on their mobile devices or elsewhere. And whether they own one of our vehicles or not.
Another Twist on Ridership Without Ownership
We expanded the concept of the Polaris Adventures network in 2021 by piloting Polaris Adventures Select in four U.S. states. The industry's first membership program, it offers access to the latest Polaris off-road vehicles, snowmobiles, Indian Motorcycles and Slingshot roadsters for a monthly fee.
With an NPS of 92+ to date, Polaris Adventures Select is delivering on the promise of bringing new customers to powersports, with more than 84 percent of Select members completely new to the industry. We will continue to expand the offering in targeted regions throughout 2022.
Enhanced Online Experiences
We made progress on several fronts to help keep riders riding and give customers a greater ability to manage their vehicle ownership experience with Polaris. Parts Reinvented, our customer-friendly, DIY parts shopping and planning website, is now available across all off-road, on-road and snow vehicle platforms offered since 1985. Since its launch, user sessions are up 63 percent with average order value up more than nine percent.
Polaris Customer Account, a centralized portal containing complete vehicle, riding, sales and service information for each customer, now has more than 1.2 million users, with logins and utilization up nearly 200 percent year over year. Among other features added to Polaris Account in 2021, we also launched online order tracking for our presold vehicles — an industry first — to further enhance the buying experience.
Technology-Enabled Dealer Service Excellence
New for 2021, Polaris developed a mobile app that equips dealers with instant, on-demand access to the insights and productivity features they need to serve customers with greater speed, accuracy and personalization. The app also offers detailed visibility into key content such as parts catalogs, vehicle service history, recalls, technical tips and repair manuals, all from the convenience of the dealer's mobile device. Since July 2021, more than 90 percent of North American dealers have downloaded the app and user feedback is extremely positive.
"Each Polaris VIN now has a 'digital twin' in our database where key component and process information is stored along with dealer and service history for the life of the vehicle. This is a real game-changer for dealers and service representatives in their efforts to understand a vehicle's history and effectively address rider needs to improve the ownership experience."Chris Wolf Chief Product Excellence, Quality and Safety Officer
Strategic ObjectiveInspirational Brands
Staying in Front of Our Customers
Leading from the front requires knowing our customers' needs best, often before they can articulate those needs themselves. That's why we're out there interacting with our current and future riders in authentic ways — so they can forge deeper connections with our brands as we deepen our understanding of how different groups experience powersports.
Through sponsored events, direct dialogue, social media, targeted marketing, public relations and advanced analytics, we're learning more every day about what inspires specific types of current and future customers. These insights provide instrumental guidance for our engineering and product development teams.
Getting Owners Together
We continue to organize riding events worldwide that allow Polaris fans to connect with one another and share unforgettable experiences on their vehicles. One key example is the Indian Motorcycle Riders Group (IMRG), which includes 90,000 members across 260 chapters in 37 countries. Approximately 25,000 IMRG members in North America participated in sponsored group rides, demo events and bike shows during 2021. We hosted a number of similar experiences for owners of off-road vehicles, sleds, boats and Slingshot roadsters.
Fostering Unique Partnerships
Many consumers first learn about Polaris from people they follow on social media. This could be close friends, outdoor influencers or some of pop culture's most influential brands and voices. We continue to partner with a broad list of people to share their personal stories about our brands all over the world. Notable partners from 2021 included Brantley Gilbert, Battlefield 2042, Cary Hart, Wild Gina, Richard Rawlings, Martha Stewart, Joshua Walker, Minnesota Vikings and countless others.
Bringing the Brand to New People
Polaris was proud to partner with International Female Ride Day® (IFRD) for its 15th-annual event, where women in more than 120 countries got on their powersports vehicles to celebrate female ridership. A significant number of our dealers sponsored local rides to recognize the event.
As part of our customer growth efforts, we've launched the Empowersports Women's Riding Council that allows us to learn from the unfiltered perspectives of 12 trailblazing women riders, adventurers and entrepreneurs. Other engagement activity included hosting a number of rides for members of key lifestyle publications, treating them to great riding experiences worthy of sharing with readers who may not be familiar with Polaris.
Advancing the Polaris Brand
We made a concerted effort in 2021 to reinvigorate the Polaris brand — and deepen our customers' connection with it — by celebrating this company's rich 66-year history and recent invitation to THINK OUTSIDE. Through branding, use of Polaris Blue, sound, tonality and more, this work has impacted everything from social posts to TV commercials to our Medina Headquarters lobby to catalogs and beyond.
Polaris in the Community
Giving back has been a cornerstone of the Polaris partnership with the Minnesota Vikings. 2021 was no different with the 'Beanies that Benefit' program. This program offered a limited-edition co-branded beanie for anyone who donated $20 which was then matched by the Polaris Foundation. The proceeds from the program went to MN-based charity, Every Meal, which focused on eliminating food insecurity for children throughout Minnesota. This program raised $66,000 for this important cause.
Strategic ObjectiveRider-Driven Innovation
More Groundbreaking Advances
The innovation gap continues to widen between Polaris and the rest of the field. Throughout 2021, we once again combined fresh thinking, technology leadership and direct user input with the latest digital advances to offer exciting new ways for customers to maximize their time outdoors.
Electrification with a Purpose
When we set out to design our first all-electric UTV, we wanted to take a class-leading workhorse and make it perform even better. The end result is the Polaris RANGER XP Kinetic, featuring a drivetrain with industry-leading horsepower and torque. Fewer moving parts reduce maintenance costs and increase uptime for greater productivity. Also – it's quiet – it can be used in the early morning near neighbors, on the farm near animals, and to and from hunting spots.
The Connected Off-Road Vehicle Arrives
The launch of the RANGER XP Kinetic marked the first fully connected vehicle in powersports. RIDE COMMAND+ builds upon our leading RIDE COMMAND platform by adding real-time remote vehicle monitoring, allowing customers to keep tabs on diagnostics, vehicle location and vehicle health from the convenience of the Polaris app, greatly simplifying ownership. On the RANGER XP Kinetic Ultimate, the built-in 7-inch infotainment screen powered by RIDE COMMAND+ relieves range anxiety by letting riders know remaining range, battery charge level and distance to charging station at a glance. Additional RIDE COMMAND+ connected capabilities – including highly valued security and safety features — will be delivered in 2022 via Polaris' connected over-the-air (OTA) capability.
New RZR Launches Fill Key Rider Segment Need
Off-road riding in rugged desert terrain calls for extreme power, strength and control from a side-by-side — forcing riders to spend thousands in the aftermarket. With the new RZR Pro R and RZR Turbo R, Polaris customers can hit the dunes right off the showroom floor. Both vehicles come standard with the extra engine capability and reinforced chassis and suspension systems these riders demanded. This was exciting news. On launch day, our RZR web pages received 129,000 visits — a 340% increase in visits over the previous entire year.
Rider-Driven Updates to an American Cruiser Classic
In 1921, Indian Motorcycle unveiled the iconic Indian Chief, one of the most influential motorcycles of all time. We honored this 100-year mark by introducing three reimagined models that preserve iconic American V-twin simplicity and attitude while subtly incorporating innovations that today's bikers value most. Examples include LED lighting, keyless ignition and a sleek, 4-1/2” round RIDE COMMAND display that replaces round analog dials.
Popular Pontoon Gets Customer-Driven Upgrade
The Godfrey AquaPatio pontoon has long been a customer favorite. In response to increased customer demand for more power, higher performance and a sportier profile from this trusted line, we launched the Godfrey AquaPatio Twin family in 2021. The redesigned versions include a new running surface, new deck construction, and powerful twin engines controlled by an intuitive joystick system for easy close-quarter maneuvering.
Exclusive Partnership with Global Leader in Off-Road Storage
We added 500 new customer-driven products to our Parts, Garments and Accessories (PG&A) line during 2021. One highlight was our collaboration with Rhino-Rack® to develop an exclusive, versatile line of premium storage solutions for Polaris RANGER and Polaris GENERAL vehicles. The line includes durable and easy-to-use roof racks, bed racks and other accessories to help users get more done or stay organized for the next adventure.
Just like the RANGER and GENERAL, Rhino-Rack storage and accessories are built to inspire confidence while exploring the trails, make work more efficient and elevate the experience outdoors.
Strategic ObjectiveAgile & Efficient Operations
Adapting to Thrive
As global supply chain challenges intensified throughout 2021, Polaris remained well positioned to manage the uncertainty and continue delivering for customers. Our longstanding strategic focus on optimizing operational agility, quality and efficiency — combined with our team's willingness to go the extra mile every day — paid off as we kept pace with demand and grew market share in extremely difficult conditions.
Quality and Safety Improvements Across the Board
Product safety and quality remains paramount at Polaris, and we continue to adopt new tools and processes to ensure the safest and most fulfilling experiences for our customers.
We apply advanced analytics to identify potential detractors and address them at the source. In addition, our product development teams use field data to understand customer usage patterns and use these insights to drive requirements for future products.
All of these measures are built on the safety-first culture that is foundational at Polaris. Safety shapes every strategic priority and extends to every customer, employee and manufacturing partner around the world.
"Because the supply chain got worse, we knew we had to get even better. That is exactly what we did." ‐ Ken Pucel, Executive Vice President of Global Operations, Engineering & Lean
Streamlined Supplier Base
Over the last several years, our strategic sourcing initiative has allowed us to narrow our supplier base to only the best and most committed partners, effectively removing the quality and responsiveness variables from our supply chain. This Lean-driven initiative has been essential to cushioning our quality, safety and delivery performance from the effects of the global pandemic and related logistical issues. It has also produced significant cost savings across the company.
Facilities opened, expanded and reopened
A series of manufacturing capacity adjustments in 2021 allowed us to better keep pace with soaring global demand. A $20 million investment in the Polaris Roseau plant will help us maintain peak production year-round instead of seasonally. Our Boats business added a second, 55,000-square-foot facility in Elkhart, Indiana to support the Bennington brand and reopened the formerly idled facility in Syracuse, Indiana for Godfrey and Hurricane production. We added 420,000 square feet to our off-road vehicle manufacturing capacity in Huntsville, Alabama. A 400,000 square-foot expansion is also underway at our Monterrey, Mexico plant to support new product production.
We created the Powertrain Center of Excellence at our Osceola, Wisconsin facility, working closely with Zero Manufacturing to expand our in-house electrification expertise. Our new parts manufacturing center in Monticello, Minnesota will keep other facilities supplied across the Polaris global network. Slated for completion in 2022, a 165,000-square-foot expansion to our East Regional PG&A Distribution Center in Wilmington, Ohio will leverage advanced automation to drive productivity and fulfillment speed to Polaris dealers in the eastern United States.
We also significantly ramped up production at our Poland manufacturing plant — an adjustment that was instrumental to our achieving record-setting sales outside of North America. In 2022, our Vietnam plant began manufacturing mid-size motorcycles in addition to parts for the first time.
Strategic ObjectiveBest Team, Best Culture
Finding the Best and Brightest in New Places
Polaris has always been focused on attracting and retaining the best team in our industry — a smart, energetic and passionate employee base that cares deeply about the riding lifestyle. Our supportive culture, technology leadership and global scale make us the ideal employer for individuals with a full array of skills, experience levels and backgrounds — whether they've ever been on a powersports vehicle or not.
That's why we've revised our talent acquisition strategy to ensure we share our story across a wider variety of communities. We're also focused on our inclusive culture to harness the innovation and perspective of a more diverse employee base.
"Polaris gives us increasing responsibility and ownership of work. I appreciate the high trust and responsibility placed on each employee."Nora R. R&D Platforms, Polaris Adventures
Building a Workforce to Resemble Our Customers
For us to best understand and deliver for an increasingly diverse base of customers, our internal teams should be as representative of those riders as possible. In 2021 we launched a variety of talent initiatives, internships, development programs and university engagements to connect with candidates from a wider range of ages, ethnicities, and socioeconomic and educational backgrounds. This work has enabled us to hire a more diverse employee base and will provide a foundation for our continued focus on diversity and inclusion.
Respect. Inclusion. Diversity. Equity. Together we commit to continuing to build a diverse and inclusive workplace.
Respect: A culture and the core of how we operate. We ensure an environment that fully welcomes and leverages all aspects of our diversity. All employees are valued, respected and heard.
Inclusion: A culture that drives a sense of belonging, connection and community.
Diversity: Workforce has a healthy mix of demographics.
Equity: We provide fair treatment, opportunity and advancement while striving to identify and eliminate barriers.
Key Engineering Talent Partnership Begins
The Society for Women Engineers (SWE) is the world's largest organization advocating for more women to pursue careers in engineering and technology. Polaris became a SWE corporate partner in 2021, participating in chapter meetings and the organization's annual conference to connect with this vast talent community that is critical to our success. We're exploring similar partnerships with other prominent organizations that advocate for historically underrepresented talent groups.
Development, Engagement and Recognition
Expectations for Polaris employees are as high as ever, and our pay for performance philosophy rewards employees commensurately. Our human capital management strategy drives deliberate succession planning, leveraging planful developmental assignments and leadership investment in employee growth.
In 2021, we continued to expand the tools available for professional development and advancement, including an enhanced focus on accelerating successor readiness. The Polaris leadership development curriculum supports building strong leaders across all levels of the company.
New Careers Website Launched
Polaris.com/en-us/Careers got a whole new look and feel in 2021, as we organized the content to not only help people quickly learn how they will fit in as employees, but also to showcase the multifaceted nature of work and career development opportunities at Polaris. The site includes direct quotes from several current employees in a variety of roles about what working for this company means to them.Explore the Site
Strategic ObjectiveGeared for Goodview corporate responsibility reports
Corporate Responsibility Leadership By Example
The Polaris focus on safe, responsible riding and sustainable use of land and resources is deeply ingrained in who we are. It is also vital to elevating industries, communities and quality of life for everyone and everything within our corporate ecosystem.
Geared For Good is central to our vision of fueling the passion of riders, workers and outdoor enthusiasts worldwide by empowering them to THINK OUTSIDE.
Today we remain more committed than ever to making a positive impact through our Geared For Good framework. We strive to maintain the highest levels of transparency as we make measurable progress toward our goals for becoming better stewards on behalf of our customers, our employees and the outdoors.
Optimized Rider Safety Information
One aspect of powersports industry leadership involves staying at the forefront of promoting safe riding and proper vehicle operation. In 2021 we conducted a thorough audit of all Polaris safety messaging, identifying and filling in content gaps while making everything more readable. We also launched the Polaris Product Safety and Training page — a centralized hub for easy access to this enhanced safety information.Safety and Training Page
Safety Advancement in the Field
Klim launched the first powersports-focused Avalanche Airbag Pak in 2020, designed to help riders float to the surface if buried in snow. To ensure the broadest range of riders is trained on avalanche safety, we have formed the Avalanche Alliance, which brings together a range of constituents aimed to raise awareness and improve backcountry safety for motorized vehicle users. In 2021 the Avalanche Alliance hosted nearly 20 seminars, hosted by professional backcountry riders, to educate riders on safety in avalanche-prone riding areas. The Avalanche Alliance has also funded technology infrastructure at several popular trailheads for backcountry snowmobilers to test their avalanche beacons before heading out.
Record-Setting Forest Conservation Support
In 2021 the Polaris Foundation launched a partnership with the National Forest Foundation (NFF), America's leading forestry conservation organization, including a $5 million commitment from Polaris, or $1 million annually for five years.
We proudly made this investment — the largest single private donation in company history — because the NFF mission to create personal and meaningful connections to natural spaces perfectly complements the Polaris purpose of inspiring people to THINK OUTSIDE. The gift will fund conservation projects ranging from responsible trail restoration and wildlife habitat improvement to watershed protection across the country.
To ensure we disclose all financially relevant sustainability information to stakeholders, we reported to the Sustainability Accounting Standards Board (SASB) for the second full year in 2021.
We also donated a total of $200,000 to 12 off-road and snowmobile organizations through our T.R.A.I.L.S. grant program to support the development, improvement and expansion of trails while also educating riders on safe and responsible riding practices.
Addressing the Technician Shortage
Amid all the recent growth in powersports participation, the supply of skilled technicians needed for vehicle service has fallen short of demand. We collaborated with Central Lakes College (CLC) in Brainerd, Minnesota and Power Lodge, the area's leading dealership, to pilot the Service Technician Education Program (STEP) that offers paid, on-the-job training for aspiring powersports technicians. CLC received a $1 million grant to establish STEP, with expansion plans to bridge the skills gap and create job opportunities in other rural areas and underserved communities.
Polaris was named to Fortune magazine's list of the World's Most Admired Companies 2021 for the first time in our history, which is a direct testament to the quality of our people. We received similar recognition from Newsweek magazine, Forbes magazine and LinkedIn. The Polaris Monterrey sales office was also voted by Great Place to Work as the #1 work environment in all of Mexico for a medium-size company.