Yachting Art Magazine

The American group Brunswick Corporation, a global leader in recreational boating and parent company of Mercury Marine, has published mixed results for the third quarter of 2025, revealing both the resilience of its industrial activities and the growing weight of exceptional charges linked to its restructuring.

With consolidated quarterly revenue of $1.36 billion, up 6.8% year-on-year, Brunswick posted sustained growth across all of its divisions – propulsion, accessories, electronics and boat building. However, operating performance declined: adjusted operating income was £106 million, down 15%, and the adjusted operating margin was 7.8%, compared with 9.9% a year earlier. In accounting terms (GAAP), the group posted a net loss of $234 million, weighed down by more than $330 million in impairment and restructuring charges, particularly in the Navico Group division, whose intangible assets were significantly revalued downwards.

Mercury engines remain the industrial pillar

The propulsion division, centred on Mercury engines, remains the group's driving force. Its sales grew by 10% to $535 million, driven by continued demand for outboard engines and control equipment. Mercury now holds nearly 50% of the US outboard market, a leadership position consolidated by the tariff effect on imported Japanese engines. Despite this momentum, the division's adjusted operating profit fell by 15%, a direct consequence of higher production costs and the reintroduction of variable bonuses.

Accessories and electronics: cautious stability and heavy depreciation

Engine parts and accessories, another strategic pillar, grew by 8% to $364 million. The business continues to be driven by growth in the installed base and efficient logistics, with a 1.4 point gain in market share in US distribution. However, margins, which were previously close to 26%, fell to 22.7%, reflecting increased cost pressure.

The Navico Group, which specialises in on-board electronics (Simrad, B&G, Lowrance), recorded a symbolic increase of 1.5% in its turnover. Innovation – notably the autonomous AutoCaptain system – supports the group's technological image, but heavy asset depreciation has pushed the division into the red, highlighting the fragility of this strategic business unit.

The growing recreational boating division is reorganising its US production

The boating division – which includes brands such as Boston Whaler, Sea Ray and Bayliner – posted a 4% increase in sales to $360 million, helped by stable distributor inventories and the strong performance of the high-end segment, represented by the iconic Boston Whaler and Sea Ray brands. Adjusted operating income remains modest ($7 million), but the group is embarking on an industrial rationalisation programme: the Reynosa (Mexico) and Flagler Beach (Florida) sites will be closed by 2026 to reduce fixed costs and concentrate production on the most profitable US units.

Record cash generation

Despite the decline in profits, Brunswick significantly improved its operating cash flow to $451 million over nine months, compared with $137 million a year earlier. Free cash flow reached £355 million, already exceeding the total for 2024. Management is taking advantage of this to reduce debt by £200 million, buy back £70 million of its own shares and raise its annual cash flow forecast to over £425 million.

A cautious but stable outlook

For 2025 as a whole, Brunswick is maintaining its forecast of adjusted earnings per share of around £3.25 and total sales of close to £5.2 billion.

Although the US boating market is expected to decline by around 8% over the year, management is confident in the resilience of the group's integrated model, which is unique in the world, and in the expected gains from its industrial efficiency plans.

However, the outlook remains dependent on an uncertain business environment: persistent tariffs on imported products, fragile boating credit and the pace of economic recovery. The company is relying on its strong manufacturing base in the United States and its diversification into recurring revenues (parts, accessories, Freedom Boat Club) to cushion the cycles.

In short, the third quarter of 2025 illustrates Brunswick's paradoxical situation: solid industrial activity, supported by the reputation of Mercury and its premium brands, but profitability under pressure in a context of strategic reorganisation and accelerated industrial transition.