Within the SDG Engagement Equity capability, both attractive investment fundamentals and the potential for a constructive engagement programme are equal pre-requisites for investment. This is well-illustrated through our exposure to a global leader in recreational marine products, producing marine engines, parts and accessories, and recreational boats.
From an investment perspective, the company is comprised of three broadly equal segments: propulsion (engines), boats and parts and accessories, having offloaded its fitness business last year. In recent years, there has been substantial investment in diversifying the business with the expansion of its parts and accessories division, thereby reducing the company’s cyclicality. However, with consumer discretionary spend facing headwinds, this reduced cyclicality will soon be tested.
The company is a genuine market leader: one in every two boats is powered by its engine division, while the group contains three of the top four most recognisable boat brands in the US. As such, it has the potential to continue raising standards industry-wide, such as fuel efficiency. In addition, by extending its commitment to sustainability across the group, it can realise further efficiencies and brand enhancements.
Meanwhile, our SDG-aligned engagements with the company focus on:
A large majority of the US hourly workforce was furloughed because production was halted for about a month due to the coronavirus pandemic. However, there have been very few layoffs and no broad reductions in the workforce. The group was extremely transparent about the length of its production suspension, which in many locations in the US coincided with state ‘stay at home’ orders. During the furlough, the group maintained all of its health and welfare benefits, continued wages until it was able to obtain state/federal unemployment, and, even before the furloughs, it allowed staff to take paid annual leave to handle personal or family issues-related to the coronavirus.
To dive into the details of the company’s theory of change, our engagement progress to date and our next steps, read the full commentary here.
