STATE OF THE INDUSTRY

Presented to Wisconsin Marine Association

2 Source: USITC, SSI, RMRC

RECREATIONAL BOATING

95% of boats sold in the U.S. are made in the U.S.

97% of U.S boat manufacturers are family owned and operated

small businesses.

3

BOATING’S ECONOMIC IMPACT

$121.5 Billion annual Economic Impact

($37.5 Billion in direct sales)

Employs 472,593 direct

jobs

Sustains 34,833

businesses

Source: Infogroup, RMRC

# of Boats 613,516

# of Jobs 18,211

# of Businesses 798

Economic Impact

$4.8 Billion

Wisconsin

5

Healthy Economy

Job Creation

Consumer Spending

Housing Growth

Consumer Confidence

State of

the IndustryES

BOATING NEED TO GROW?

Source: BEA, Philadelphia Fed

REAL GDP

1.4%

-2%

-1%

0%

1%

2%

3%

4%

5%

2012 2013 2014 2015 2016 2017

Pe

rce

nt

Ch

an

ge

fro

m P

rece

din

g P

eri

od

Forecasts

REAL GDP

7

Source: BEA, SSI

GDP V. BOAT SALES

4Q-15, 0.7%

-30%

-25%

-20%

-15%

-10%

-5%

0%

5%

10%

15%

-9%

-7%

-5%

-3%

-1%

1%

3%

5%

7%

9%

1Q

-00

4Q

-00

3Q

-01

2Q

-02

1Q

-03

4Q

-03

3Q

-04

2Q

-05

1Q

-06

4Q

-06

3Q

-07

2Q

-08

1Q

-09

4Q

-09

3Q

-10

2Q

-11

1Q

-12

4Q

-12

3Q

-13

2Q

-14

1Q

-15

4Q

-15

Re

tail

Bo

at

Sa

les

, R

12

M Y

OY

Ch

an

ge

GDP Boats

Re

al G

DP, P

erc

en

t C

han

ge

fro

m P

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g P

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od

8

U.S. CONSUMER CONFIDENCE V. BOAT

SHIPMENTS

0

20

40

60

80

100

120

-

50

100

150

200

250

300

Co

nsu

mer

Co

nfi

de

nce R

12M

Ave

rag

e

R12M

Tra

dit

ion

al

Po

werb

oat

Wh

ole

sa

le

Sh

ipm

en

ts

Thousands

Boat Shipments Consumer Confidence

Source: NMMA, The Conference Board

9

-10

40

90

140

190

240

290

340

390

440

490

Feb -13

May Aug Nov Feb -14

May Aug Nov Feb -15

May Sept Dec

(Th

ou

sa

nd

s o

f E

mp

loye

es)

Nonfarm Payrolls

Manufacturing

200

MONTHLY CHANGES IN

EMPLOYMENT

Source: BLS

10

U.S. HOUSING STARTS V. BOAT

SALES

Source: U.S. Census Bureau, SSI

-

500

1,000

1,500

2,000

2,500

11/1

/2001

5/1

/20

02

11/1

/2002

5/1

/20

03

11/1

/2003

5/1

/20

04

11/1

/2004

5/1

/20

05

11/1

/2005

5/1

/20

06

11/1

/2006

5/1

/20

07

11/1

/2007

5/1

/2008

11/1

/2008

5/1

/20

09

11/1

/2009

5/1

/20

10

11/1

/2010

5/1

/20

11

11/1

/2011

5/1

/20

12

11/1

/2012

5/1

/20

13

11/1

/201

3

5/1

/20

14

11/1

/2014

5/1

/20

15

11/1

/2015

-

50

100

150

200

250

300

350

Housing Starts, SAAR R12M Retail Powerboat Sales

11

RV V. BOAT SALES

Source: SSI

-40%

-30%

-20%

-10%

0%

10%

20%

30%

1999Q2

2000Q3

2001Q4

2003Q1

2004Q2

2005Q3

2006Q4

2008Q1

2009Q2

2010Q3

2011Q4

2013Q1

2014Q2

2015Q3

R1

2M

Re

tail

Sale

s Y

OY

Ch

an

ge

Traditional Powerboats RVs

12

LIGHT VEHICLE V. BOAT SALES

Source: Autodata Corp., SSI

-40%

-30%

-20%

-10%

0%

10%

20%

30%

R1

2M

Re

tail

Sale

s Y

OY

Ch

an

ge

Traditional Powerboats

Light Vehicles

13

MOTORCYCLE V. BOAT SALES

-50%

-40%

-30%

-20%

-10%

0%

10%

20%

30%

2001Q4

2003Q1

2004Q2

2005Q3

2006Q4

2008Q1

2009Q2

2010Q3

2011Q4

2013Q1

2014Q2

2015Q3

R1

2M

Re

tail

Sale

s Y

OY

Ch

an

ge

Traditional Powerboats

Motorcycles

Source: MIC, SSI

14

2014 BOATING EXPENDITURES

IN BILLIONS OF DOLLARS

[CATEGORY NAME], [VALUE]

[CATEGORY NAME], [VALUE]

New Outboard Engine Sales,

$2.5

[CATEGORY NAME], [VALUE]

Aftermarket Accessory Sales,

$5.6

[CATEGORY NAME], [VALUE]

Source: NMMA

15

2014 REGISTRATIONS BY BOAT TYPE

(MILLIONS)

Outboard Boats, 7.3

Inboard Boats, 1.2

Sterndrive Boats, 1.4

PWCs, 1.0

Sailboats, 0.3

Other, 0.7

Source: USCG

16

OUTBOARD ENGINE RETAIL UNIT SALES

-3.3%

-8.7%

-17.6%

-20.4%

-1.0%

-0.2%

8.2%

8.2%

4.5%

8.7%

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

YOY Change

Source: NMMA

17 Source: USCG

Under 26' 95%

26' and larger

5%

2014 POWERBOAT REGISTRATIONS

BY SIZE

18 Source: USCG

40' and larger

1%

2014 Powerboat Registrations

1%

19

$27.7

$32.0

$34.2

$30.2

$33.8 $35.6

$37.6 $35.7

$32.3

$29.6 $29.1 $30.5

$32.6 $33.3 $35.4

$37.5

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

US

D (

Bill

ion

s)

$36B

U.S. RETAIL SPENDING ON BOATING

Source: NMMA

20

POWERBOAT, PWC, AND SAILBOAT

RETAIL UNIT SALES

408 394 366

279

207 188 190 202 206 227 241

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015*

Un

its

(T

hou

sa

nd

s)

* Projected Estimates

source: NMMA, SSI, MIC

BOUNCEBACK

0% 20% 40% 60% 80% 100%

Pontoon

Aluminum Outboard 26'+

Aluminum Outboard <26'

Fiberglass Outboard <26'

PWC

Jet Boat

Ski Boat

Fiberglass Outboard 26'+

Sterndrive Cruisers

Bass Boat

Deck Boat

Inboard 26'+

Inboard <26'

2014 Retail Sales as Percentage of Pre-recession Sales

source: SSI

22

GROWTH IN 2015

source: SSI

15.3%

5.2% 6.6% 9.3%

-6.4%

11.2%

27.5%

8.2%

-6.6%

-22.2%

11/1

5 Y

TD

YO

Y C

han

ge

- B

ellw

ehte

r R

eta

il S

ale

s

23

POWERBOAT, PWC, AND SAILBOAT

SALES NEW VERSUS PRE-OWNED

910 969 955 941

188 199 202 222

2011 2012 2013 2014

Th

ou

sa

nd

s

Preowned New

Source: SSI, Info-Link

BOAT OWNERSHIP IN 2014

82.9%

5.4% 5.3%

3.4% 3.0%

Boat Owners

11.8% 5.1%

63.8%

14.5%

4.8%

U.S. Population

African-American AsianCaucasian HispanicOther

Source: Foresight Research, U.S. Census Bureau

Industry is facing some headwinds

0%

2%

4%

6%

8%

10%

12%

14%

16%

<25 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-64 65-69 70-74 75+

Pe

rce

nta

ge o

f A

ll B

uye

rs

Age Range

Boat Owner Age Distribution - 1997

Source: Info-Link

Boat Owner Age Is Increasing

Source: Info-Link

0%

2%

4%

6%

8%

10%

12%

14%

16%

<25 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-64 65-69 70-74 75+

Pe

rce

nta

ge o

f A

ll B

uye

rs

Age Range

Boat Owner Age Distribution - 2013

Future Boaters?

Source: Info-Link

0%

2%

4%

6%

8%

10%

12%

14%

16%

<25 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-64 65-69 70-74 75+

Pe

rce

nta

ge o

f A

ll B

uye

rs

Age Range

Boat Owner Age Distribution - 1997 vs 2013 1997 Owners

2013 Owners

28

RISING STUDENT DEBT

Source: NY Fed Consumer Credit Panel/Equifax

The purpose of Discover

Boating is an industry-wide effort

to promote the boating lifestyle

and improve the boating

experience to increase

participation and ultimately sales

of marine products and services.

Our mission is to inspire

and excite,

share knowledge and

motivate people

to spend time on the

water.

32

WE SELL THE “ING”

33

THE CAMPAIGN

Our Stories of Discovery

videos were viewed

over 30 million times.

A 335% increase over 2014

and 44% increase over goal.

But it’s not just

the views that matter:

it’s the message, too.

Our message positively

influenced peoples’ perceptions

of boat ownership.

90% Of Social Anchors said the

work made them think

boating’s benefits are worth its

costs.

88% Of Social Anchors said the

work made them feel better

about

the boating lifestyle.

93% Social Anchors who said

our videos made them feel more

positive about boat ownership.

36

THEIR STORIES

31

ASHLEY RAE

WE WILL DELIVER OUR STORIES VIA

10,000 WEBSITES

Sites like:

SOCIAL

MEDIA

40

FACEBOOK

41

TWITTER

42

INSTAGRAM

PUBLIC RELATIONS

2,442 Stories

J

Jake Owen – Discover Boating Ambassador

DISCOVERBOATING.COM

DISCOVERBOATING.CA

FR.DISCOVERBOATING.CA

Record Year for Discover Boating Websites

5.3

Million

Visits

8.4

Million

Pages

Up 17% Up 51%

We are educating and

providing resources to

boaters.

Audience trends:

Visits from 25-34 year-olds increased by 48%

Visits from 35-44 year-olds increased by 26%

Visits from 45-54 year-olds still represent largest

segment

(FY15 versus FY14)

Top Pages:

Boat selector tool (12.6% of visits)

Stories of Discovery Videos (9.6% of visits)

Loan calculator (9.2% of visits)

Boat brands (5.6% of visits)

75% of

Discover Boating

web traffic is comprised

of new site visitors

21% of Discover Boating

website visitors choose to click

thru to connect directly to

stakeholder websites

Reach new audiences

who are not yet boaters,

and inspire them to

explore the boating

lifestyle

Create and leverage key

content like the

‘Get On the Water’

section of our website

EVOLUTION OF A

LEAD

The Discover Boating Lead System

Discover Boating LEAD Path

1. Integrated marketing campaign

drives consumers to

DiscoverBoating.com

2. Consumers visit Boat Selector

Tool or request a BGTB

3. Consumer opts into DBLS for

manufacturers & dealers contacting

them

4. DBLS notifies manufacturers &

dealers of their new leads

5. Manufacturers retrieve leads from

DBLS

6. Manufacturer contacts consumer

to nurture them

7. Consumer visits manufacturer

site to search dealer locator

8. Consumers visit local

dealership to shop

5. Manufacturers retrieve

leads from DBLS

6. Manufacturer passes lead

directly to dealer

7. Dealer reaches out to invite

consumer to dealership

8. Consumer visits

dealership

Discover Boating REFERRAL Path

Discover Boating in 2016

• Discover Boating is our best resource bringing in new consumers

• Refining metrics so they are more meaningful to stakeholders

• Consumers are choosing web referral path over lead path 250 to 1

• Further analysis to be done on the value of a web referral

• Research to understand gateways to boat ownership

• Research to optimize our approach to consumers life stages – emphasis on getting

consumers into boating

VIDEO VAULT: EDUCATIONAL HOW-TO’S

61