State of the Industry 2018

Our panelists today Peter Houseworth, Info-Link Rodolfo Tomarchio, Boats Group Noel Lais, Spader Business Management

2018 Market Data Book Available at BoatingIndustry.com/market-data/ digital-downloads

State of the Industry September 12, 2018

Steady as she goes for the time being….. But always keep a weather eye out…

A quick look at results through June 2018

Generally consistent across the country

The segments that have led the way may be maturing Saltwater Fish Pontoon and Tow Boats

So far the distribution channel is healthy

Looking forward, larger numbers of lifelong boaters will begin to “retire”

2018 State of The Industry Thank you Tim!

2018 State of the Industry Market Data Report Boat Trader Consumer Trends YachtWorld Brokerage Sales I’m going to run through two topics today. First, some Consumer Trends we’re noticing on Boat Trader, and secondly YachtWorld brokerage sales.

Mobile is driving engagement 2017: 60% of listing views were from a mobile device 2018: 70% of listing views are from a mobile device Look for more mobile-first approaches to technology in the boating industry You may have read in Boating Industry earlier this year about our study with InfoLink. It was released this spring and showed that 1 out of every 5 leads submitted on Boat Trader convert into the sale of a boat, which is up more than 30% from the previous study. So, what are consumers doing before that purchase takes place? Well, last year, 60 percent of people looking at Boat Trader listings were doing so from a mobile device. And this year, nearly 70% of our visitors are using a mobile device. Given these trends, we recently soft-launched our new Boat Trader consumer app for both iPhone and Android, which has seen a positive reception organically. We believe mobile traffic will continue to take a larger share of listing views and overall activity as we implement all of the app’s features and begin to promote it. As we build products that create a best-in-class experience for consumers, we are also taking a mobile-first approach.

Brokerage Sales Overall sales slightly down (6%) Average value is higher, but hasn’t offset the loss in total value as-reported Average time to sell is 5 days shorter The growing engagement is yielding boat sales - let’s take a look at the brokerage market through the eyes of YachtWorld’s Soldboats database. These are from January to May as we provided in Boating Industry’s Annual Data Book. While 2018 (green) appears to be down - only by a few hundred boats - the number of days on market is also down. This reinforces the anecdotal feedback that I’m sure many of you have heard from dealers and brokers - that it’s hard to find enough inventory to meet the demand. Let’s take a deeper dive into each segment, which tells a similar story. Brokerage sales as reported in YachtWorld SoldBoats Database, Jan-May 2018

Brokerage Sales: Power 7% decrease in power boats sold 7% decrease in overall value of boats sold Average days to sale down 9 days Looking at power boats alone, there was a 7% decrease sales overall, and the decrease in total value matches that at 7%. While the average value per boat is up from 2017, the increase is only a couple hundred dollars, which is why the total value is still down. Brokerage sales as reported in YachtWorld SoldBoats Database, Jan-May 2018

Brokerage Sales: Sail Boats sold down 4% Value of sailboats is up 2% Average days to sale up 10 days In Sail, boats sold are down, but value is up 2%. The average price is up nearly $5,000 from last year, which is why the total value of boats sold is higher. We’re also seeing the time to sell for sailboats increase, which only happens in one other category... Brokerage sales as reported in YachtWorld SoldBoats Database, Jan-May 2018

By Boat Length: <26’ 7% decrease in volume sold 2% increase in value (average price is higher) 8 days longer to sell on average When we look by length group, you see that one other category where the average days to sale is actually higher than last year is with boats under 26 feet in length. This could be attributed to the average price per boat being higher, even though less boats were sold. As you can see, there was a 7% decrease in sales, but there was still a 2% increase in overall value. Brokerage sales as reported in YachtWorld SoldBoats Database, Jan-May 2018

By Boat Length: 26’ to 35’ 7% decline in boats sold 1% decline in overall value (average price increase) 9 less days to sell on average These next three length groups all share a similar story. Less boats were reported as sold, with a decrease in overall value. But, each of these boats are taking less time to sell. In this case with boats 26’-35’ the average price per boat is higher since there was only a 1% decline in value even though volume sold was down 7%. Brokerage sales as reported in YachtWorld SoldBoats Database, Jan-May 2018

By Boat Length: 36’ to 45’ 5% decrease in overall sales 3% decrease in overall value 6 days less to sell on average Same story with boats 36’ to 45’ Brokerage sales as reported in YachtWorld SoldBoats Database

By Boat Length: 46’ to 55’ 6% decrease in overall sales 3% decrease in overall value 3 days shorter to sell on average I promise these are all different graphs, but again, very similar story with boats 46’ to 55’ Brokerage sales as reported in YachtWorld SoldBoats Database

By Boat Length: 56’ to 79’ Only length group to see increase in total boats sold (up 1%) Most significant increase in total value (9%) 10 days shorter to sell on average (23% decrease) A story really begins to emerge when you look at this length group: Boats 56’ to 79’. This was only grouping that according to SoldBoats data, saw growth from 2017. The 23% decline in days to sale YOY also indicate a much higher demand for boats in this length group. Brokerage sales as reported in YachtWorld SoldBoats Database

Sold Boats by Age The reason for this can likely be found in YachtCloser’s data. By digging a little deeper, you can see that in 2017, 55% of the boats sold are 11+ years age and in 2018, it’s 49%. This is likely due to the recession in 2008. 10 years later, it’s still having an effect on the market. 500,000 new boats were being added each year prior to the recession, but between 2008-2012, that production was reduced to approximately 100K boats annually. The bigger boats hold their value better over time than smaller ones. Brokerage sales as reported in YachtCloser

Summary & Takeaways Mobile usage will continue to drive consumer behavior Days on market will continue to decrease Inventory availability affecting overall sales volume 2008 recession is still impacting the industry, particularly the age of available inventory So we showed enough bar graphs to probably make head straight to the nearest bar…. But there’s a few main points I want to pack up for you all to take away: Mobile usage will continue to drive consumer behavior. The saying “Content is King” is true, but the majority of people are consuming their content on their mobile devices, which makes Mobile the real King of Kings. Speaking of which, Apple just had a new announcement this afternoon to unveil it’s newest iPhones. Time to sell is going to continue to decrease. That’s an overall consumer trend, and as consumers have access to more information online, and the online shopping experience gets even more convenient, it’s only going to get faster. Overall inventory is low and cannot keep up with demand, which is why boat sales are down. Lower inventory is likely the result of fewer boats being built in response to the 2008 recession. This would show why larger boats in the 56’-79’ category are selling well and holding their value, whereas shorter length groups are in a slight decline.

Thank you. With that, thank you for your time

State of the Marine Industry Noel Lais, Vice President of Operations

2016 4.7% Growth 8.7% Decline

2017 17.1% Growth 15.3% Increase

Top 20% Most Profitable Dealers

2018 Year-to-Date

2018 Year-to-Date

2018 Year-to-Date

2018 Year-to-Date

Thank you 800.772.3377 www.spader.com info@spader.com

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