Hi, good afternoon. Thanks everyone for joining us, either here in sunny Miami or on our webcast. My name is Ryan Gwillim, Vice President of Finance. I'd like to welcome you to Brunswick Corporation's 2020 Investor Day. Few housekeeping items, as you would expect. The presentation today will contain certain forward-looking statements. You will be able to find information on it in the presentation, and remember that actual results may differ materially from expectations. We'll also be using a couple of non-GAAP measures throughout the presentation. Reconciliations from GAAP to non-GAAP can be found in the public filings that are listed in the presentation. So today, you will hear from some of our leaders. You'll hear from Dave Foulkes, who will talk about our overview and kind of a 2019 review.
You'll hear from Chris Drees, President of Mercury, who will talk about propulsion and parts and accessories. You'll also hear from Huw Bower, who will talk about our Boat Group, Brenna Preisser, who will talk Business Acceleration, and then last, but certainly not least, Bill Metzger will come up and give us a discussion on our financial performance. So with that, and no further ado, I'd like to welcome Dave Foulkes, CEO of Brunswick.
Thanks, Ryan. Welcome, everybody. It's great to see you all. Thank you for joining us at our 2020 Investor event here in Miami. We're looking forward to a wonderful show. We know you have very busy schedules, so thank you for taking time to come and see us. You know, 2019 was my first year as CEO. I got to see many of you, sometimes multiple times. I really appreciate those meetings. The feedback from those meetings really helps us with honing our narrative. So we come away from those meetings talking about the things that you've talked to us about. Those meetings are very, very important to us. So at this event every year, we get to do three things. We get to give you a much more in-depth view of our organization and our goals.
We get to index forward our three-year plan, so now we'll be covering the period from 2020 to 2022. And just as important as those, we get to introduce you to a broader cross-section of our leadership team, and I'll introduce some people as I go through. You know who's speaking, but there are other people in the room that I'll also introduce, who have key, key roles in the organization. And then, of course, afterwards, we have a reception, where you can meet those people as well. So, this time last year, we introduced our marine strategy, and, what you'll see today is an evolution of that strategy, but there's much more, much richer content, much more exciting content. And in 2019, we have spent a lot of time really bringing that strategy to life.
So you'll see a lot of similar frameworks, frameworks that you've seen before, but really brought to life with new content and I think some really exciting forward projections. I'm very, very proud of the Brunswick leadership team. They've executed beautifully in what you will know was, at least the beginning of 2019, quite a challenging environment. So, congratulations to the whole team. You set us up really well for 2020 and beyond. I think you know versions of this slide. This is our purpose statement, the purpose statement that we laid out in 2019: innovation and inspiration on the water, and that reflects the two lenses on our business. We're a marine technology company, and we're a marine lifestyle company.
And in a lot of ways, what we've done in the last 14 months is set up an operating model and foundational capabilities and momentum to bring this to life. And I think you'll see that as we go through my presentation, as we go through the divisional presentations. This is one of my very favorite slides. I know many of you either invest in or cover a number of companies in other verticals, sometimes in marine. I challenge you to think of another company that could put up a slide like this. I bet, I bet there isn't one. We are the leader in recreational marine, and we call ourselves an authentic leader because there are so many proof points around our leadership.
So, we'll go through these in a lot more detail as we go through the presentation, but we are the largest manufacturer of recreational boats in the world. We're the leader in marine propulsion. We have the largest marine parts and accessories business, and now there's more, one more world's first that we can add to that. We are the world's biggest boat club operator, and even since the earnings call, we have added more franchise locations, and I think Bren will give you an update, but it's, it's actually quite a bit more than than 210 already. We're very, very proud of our innovation capabilities, which we think are industry-leading, and we have a wonderful collection of marine service businesses. And here are some of the proof points.
In the US, recreational boat fleet of about 10 million units, roughly half are powered by Mercury. That is the source of our tremendous P&A annuity, which nobody else could possibly match. We own three of the four most recognized boat brands in the US: Boston Whaler, Sea Ray, and Bayliner. I mentioned more than 210 Freedom Boat Club locations now. When we say that we have technology that separates us from our competition, we really do, and we really protect it. We were awarded 225 patents in the last two years, protecting our technology. We're a global company. We have major facilities in 24 countries. We serve 170 markets. These are just some of our major facilities. We have sales offices, distributors in all countries. I think we have 16,000 points of sale.
So we have an incredible distribution network globally. But what I will tell you is that we do not take this for granted. We are not complacent at all about our leadership position. Everybody in Brunswick wakes up every day working out new ways to win and determined to continue to win. We know that we're facing a customer whose expectations have evolved, expectations for products and services and experiences. We think we are uniquely positioned in this industry to be able to satisfy that customer. Uniquely positioned to create a future for Marine, which is contemporary and presents compelling experiences, and is frictionless, and is relevant, and is high quality, and is inclusive. And as we go through our presentation, you'll see exactly how we're doing that with our products, and our services, and our experiences, and our technologies, and our new business models.
This slide will be very familiar to you. This is a kind of a segmentation, dimensioning, if you like, of the U.S. recreational boat market, which is by far the biggest in the world and the one on which we have the most data. This slide doesn't just show the dimensions of the U.S. recreational boat market, it shows how we are winning and how we will win in the future in each of those dimensions. So if we start with the 200,000 new boats sold annually in the U.S., we win in that space with our leading boat brands, our engine brands, our technology, our parts, and our services.
The 200,000 new boats get sold into a boat park of about 10 million units, and we win in that space with our leading parts and accessories businesses, with our leading distribution businesses, and with our leading service businesses. There are about 50 million people in the US who classify themselves as fishermen or anglers. They're a very important part of boating. More than half boats sold in the US are related to fishing. If you think about that, about 10,000 boats are tow and wake. More than a hundred thousand boats are related to fishing. We have leading brands in fishing in saltwater and in freshwater. Mercury is known as the brand of choice for fishing, but we're not satisfied with that.
We are forming relationships with young anglers through high school clubs, through college clubs, through investments in companies like Catch Co., which Brenna Preisser will talk about later, which is particularly relevant to the young and upcoming angler. The big number on there, the 140 million people, that's the number of people in the U.S. who have some form of boating experience every year. It's a huge number. Boating is integral to recreation in the U.S., and we are winning and will win in that space with our service models, with our connectivity solutions, and with our shared access solutions like Freedom Boat Club. Brenna will share with you some new data that we have from surveys of Boat Club members that shows how powerful that model will be in the future.
When we laid out our strategy in 2019, we set out 5 pillars that would form the foundation of our strategy. We haven't changed them at all. They're just as relevant now as they were a year ago. They're just as relevant to our core businesses as they are to our new and emerging businesses, and you will recognize them. They'll be referenced. They weave their way through our entire presentation and the way we do business. So exceptional products and brands you will see in our engine businesses, in our boat businesses, and our technology businesses. We are great operators. We are very high quality, but we are working harder and harder in both of those areas to continue to differentiate ourselves. Differentiate ourselves and provide a better customer experience, differentiate ourselves, and also improve our financial position.
We take great pride in being a good employer, the best employer in the industry, and a great partner to our supply base, to our communities, and our other stakeholders, and I'll talk about that a bit more later. Our innovation is notable, not just because it's different, but because it's customer-centric. Everything we work on is relevant to the customer. We want to improve the customer experience through innovation. And finally, we're doing a lot of work to make sure that the ways that people interact with us are frictionless and that we can meet people in whatever channel they want to meet us. And through those five pillars, we're delivering exceptional experiences, we're expanding participation, and we're leveraging our profitability across this unique marine platform. I want to look back a bit now on 2019....
and talk about some of it. It was a really pivotal year for us, as you know. We put in place some great foundations. We took some really important strategic actions in 2019. We have a new North Star and a new narrative, which I'll talk about. We completed some really important and strategic M&A. We put in place a new operating model, and we populated that model with great talent, talent that we developed internally and talent that we brought in to strengthen our bench. And then finally, we have much clearer, crisper, and more focused enterprise technology strategies and ESG strategies. So let me go a bit deeper into all of those. I think you all appreciate our more streamlined narrative and our new North Star.
I think it's important to us, if you're an investor, if you're an analyst, it's just as important if you work for our company. I tried to articulate it here, in as few words as I could. I wish it was fewer words. We are the largest recreational marine company with the leading brands. We have synergistic business segments that form a cycle-resistant platform, and we'll talk about that later. We are leveraging our scale to lead in technology and in digital transformation. We're expanding participation and engaging with the next generation of boater. And we have a lean, agile organization and operations with really clear goals, and we will lay those out for you today. And we are delivering that both organically and with M&A.
The M&A that we completed in 2019 included the completion of the integration of Power Products, the sale of our fitness businesses, and the acquisition of Freedom Boat Club. So it was a busy year last year. We have a new operating model, and we have enhanced talent development, both internally and externally. That new operating model includes two new divisions. It includes a new structure for our Boat Group, and it includes enhanced segment reporting, which we informed you about more recently, and Bill and I will talk about a bit later. I'd like to. I'll talk about all those in more detail, but I'd like to talk about talent development. We have populated our new operating model with the best talent. Just... I'll introduce a couple of people. Brett Dibkey is with us.
Brett, if you wouldn't mind standing up for a second. Brett will join us for Q&A and also will be at the reception. Brett joined us from Whirlpool, where he led their P&A businesses, a lot of their specialty product businesses, their e-commerce activities, and their innovation activities. So a tremendous background to be the leader of our new Advanced Systems Group. Neha Clark, would you mind standing up, Neha? Joined us from private equity and CPG, and she has already made a huge impression as the new CFO of, CFO of the Boat Group. John Reid, just a week or so into joining us from John Deere, where he was the head of their technology and innovation organization. He specializes in robotics and autonomy, and you can tell that's high on our agenda, too, so we're looking forward to having John contribute there.
But we've also been very balanced. We've developed internal talent. You already know, I think, Brenna Preisser, would you mind standing up, Brenna? Who is not only our CHRO, but our Head of Business Acceleration. And then Chris Drees, who has done a wonderful job, taking over as the President of Mercury Marine. So a really balanced talent strategy. We're delighted to strengthen in our bench. We're delighted to develop our internal talents as well. Let me talk about those two new operating divisions. They're tightening our focus on commercial opportunities while still allowing us to leverage our scale. So Business Acceleration is our home for emerging and disruptive business models, focusing a lot on service businesses and subscription businesses like Freedom Boat Club. We're also using Business Acceleration to invest in early-stage companies, and Brenna will talk about that, too, and engage the next generation of boaters.
And Brenna may talk about this, but some of you may have seen that Clayton Christensen, who was a professor at Harvard Business School and did some early work on disruptive models, always said, "If a big company wants to be disruptive, it needs to find a home for its disruptive business models." And this is our home for disruptive business models. And then our Advanced Systems Group is our focused growth platform for non-propulsion businesses, systems, and technologies. It's marine and, what I call, cross-vertical, so closer adjacencies. Around 20% of ASG's revenues are non-marine, typically, recreational vehicle, specialty vehicle-type businesses. We will continue to grow those businesses.
ASG will provide us with a sharper commercial focus in those areas, but still leverage scale and allow us to form centers of excellence, particularly in areas like electrification, which are important to us, but more broadly, relevant across a number of verticals. So this is what our business now looks like. Here are the four divisions: Mercury Marine, which covers propulsion, closely associated parts and accessories, and our distribution businesses. Advanced Systems, which includes the brands from Power Products and our Attwood Group. Boats, which we've recently reorganized into three subdivisions, if you like.... Sea Ray, Boston Whaler, the Aluminum Boat Group, which is all of our aluminum brands, and the Venture Group, which is all of our value fiberglass brands.
The important thing there is that we continue to retain a strong focus on the brands, but we are leveraging the full scale of our $1.5 billion boat group for improved operations, improved product development, digital marketing, all the capabilities that we can bring to the market as a competitive advantage. And Huw will talk about that a bit more. And then finally, business acceleration I just talked about, which includes Freedom, our marine financial, service businesses, our emerging businesses. On the bottom there, you can see the new segmentation, which Bill will touch on a bit. But essentially, what we wanted to do was give you more exposure to the middle part, which is our parts and accessories businesses. It's very important to us as an enterprise.
It's very important that you understand it, so you'll get increased transparency, visibility into those businesses with these new reporting segments. Remember those numbers, 1.7, 1.4, 1.3. There they are again on the right side in revenue. $1.3 billion of boats, 1.4 of aftermarket parts and accessories, 1.7 of OEM engines. This is what we used to look like in 2006. We're a really different business. Our boat business is much smaller. Our parts and accessories business has grown by 75%, and our propulsion business has grown by 20%. But the really stark comparison is not so much on the revenue side, it's on the earnings side, which is at the top.
So you see much, much higher earnings, but you also see 49% of our earnings comes from aftermarket parts, parts and accessories, and repower engines. Half of our total earnings comes from an extremely stable, non-cyclical portion of the marine market. And you can see that the earnings from engines has really increased, the earnings from boats has decreased. That leaves us a very, very stable organization through any kind of cycle. I'll talk about our enterprise technology strategy and our ESG strategy. These are long-term strategies, I think, much more progressive than we used to be. In terms of enterprise technology, you're aware of our ACES strategy: autonomy, connectivity, electrification, and shared access, and I'll talk about that a bit more in a second.
Supporting that strategy, we've established centers of excellence in a number of areas, but most recently in the Boat Group, and Huw will talk about that. And made key new technical hires, including John Reid, but many others. On ESG, we separated the roles of chairman and CEO, and our chairman, Manny Fernandez, is with us today and will be with us for the reception. We've recently been recognized for having three female board members, and we also declassified the board. For the first time, in March this year, we'll be issuing an enterprise sustainability strategy. Mercury Marine has done a lot of great work in that area, but we have spent 2019 working across the enterprise, so we're in a very solid position to issue that report in 2019.
Something I'm very proud of, we were recently recognized by Forbes Magazine as one of the best employers for diversity. But that is a real statement about where our business is and where it's going. A few of you saw us at the Consumer Electronics Show, which we really enjoyed exhibiting at. This is a view of our exhibit. It was packed. Hopefully, you saw some of the videos. Right in the foreground here is the Future Helm, what we call the Future Helm, which is kind of a view of what boating might look like in a few years' time. And we actually have that helm downstairs in the area where we're having the reception a little bit later, so you can play with that. But ACES is really...
ACES is not everything, but it's really important to us. ACES is autonomy and ADAS. ADAS is an automotive acronym for Advanced Driver Assistance Systems. It's everything from blind spot monitoring to lane departure warnings. We see equivalents of that happening in marine, and in fact, Huw will talk about something that we're launching at Miami that is an ADAS system. We have moved so far on connectivity. We have more connected boats than any manufacturer. All of our premium boats go out as connected products now. If you buy the boat, you get the app, and it includes remote monitoring and many other features. So we are well along on our connectivity strategy. We're moving very fast on electrification, and the acquisition of Power Products put us in an unrivaled position in the marine industry on electrification.
Huw, and actually Chris, will talk about our Fathom system that we introduced at CES. And then finally, you know we're moving fast in shared access through Freedom Boat Club and through many other initiatives. So we took a number of strategic actions that were key foundational actions in 2019, but we also took a number of actions that are really generating momentum for us in 2020 and will do beyond 2020. And those include new products and technologies and digital initiatives and added manufacturing capacity. They included right-sizing our organization, but at the same time, executing extremely well on a number of initiatives, including our capital strategy. So look at product technology and digital first. Last year, Mercury launched the 400-horsepower and 450-horsepower outboards.
There's a 450R right at the back of the room there. Take a look at that. It's a fantastic engine. We told you that we were gonna start launching all new core models for Boston Whaler, and in the last three months, we launched three of them: 325 Conquest, the 405 Conquest, and now in New York, the 280 Vantage. We launched the Fathom system. During the last year or so, we've migrated more than 70% of our IT infrastructure to the cloud. That is a huge achievement by our IT team in terms of modernizing our infrastructure, and we're doing a lot of work on modernizing and simplifying our ERP systems. We've also made huge investments in e-commerce and digital marketing, areas that most of our competitors can't compete with us in.
In terms of added manufacturing capacity, many of you are very familiar with the outboard manufacturing capacity additions that Chris will talk about. That gave us some great new opportunities to sell even more of our wonderful engines. But we also completed the expansion of our Boston Whaler facility. We repurposed a former yacht facility to make high-demand Sea Ray and other models. We're sold out on a lot of those models, so having more capacity was extremely helpful to us, and it allowed us to do more vertical integration than we had before. And then finally, we're in the process of doubling capacity, and will do over this year and next year, our European boat facility in Portugal, with almost no investment.
So that will add capacity that will help us on the boat side and the engine side in Europe over the next 18 months or so. We right-sized our organization in 2019 following the sale of Fitness. We took out 9% of our salaried staff across the enterprise, including a large number in corporate, but across the divisions as well. That and other actions led to $50 million of structural cost reductions. We felt the benefit of roughly half of that in 2019, and we'll feel the benefit of the remainder in 2020. We're a much more agile organization. You would think doing something that substantial would be really disruptive, but in fact, the team executed perfectly in 2019. Great margins, great earnings, really strong cash flow in a market in which at least the first half was pretty challenging.
At the same time, we executed on our capital strategy, which Bill will cover, including making investments in R&D and capacity, our share repurchases, debt reduction, dividend increases, and exiting our pension plans. A huge year both for making our organization more agile and for execution. We put in place foundational capabilities, and we've built momentum. Where are we gonna grow? Well, we've segmented some markets here into propulsion, P&A, boats, and services. We start with propulsion. Our market share there globally is about 30%. It is significantly more in the U.S., and Chris will talk about how we intend to expand it even more. ASPs are increasing. We're winning share, so we are going after share and margin in the propulsion market. The margins are strong in that market. In P&A, we own about 25% of that global market.
The margins are particularly strong, you know. We'll be going after that, both organically and through acquisitions. In boats, big effort on margin, getting our operating margins up above 10%, and Huw will explain how we're doing that. And focusing on margin there and really share in our premium boat brands. And then in services, we have a huge amount of white space. That is a fragmented market, many places that we can professionalize, and we are working through plenty of opportunities in that area. Shared access is just one of them. There are many opportunities to be margin accretive in marine services. During the course of this presentation, you will see a lot of metrics. It's very important that you do see those metrics. That's how you should measure us.
But I picked just a few here for you to keep top of mind as you go through the presentation. By 2022, we expect in the U.S. to have unit share in excess of 45%. If you looked at that on a dollar basis, it would be in excess of the 45%. We expect to grow our parts and accessories business by around $400 million, combination of organic and M&A, roughly half and half in this particular version. We expect to have our boat operating margins up around 11%. We expect Freedom Boat Club to grow from 210 locations to 325 locations. It's difficult to find a measure, single measure for the kind of experiences and the quality of experiences that we provide, but Net Promoter Score is a good one.
We expect to have our Net Promoter Score more than 70 across our businesses. That would be world-class everywhere. We expect to be the acknowledged leader, as I think we are now, in marine technology, particularly in the ACES, but also elsewhere. We expect to have more than 90% of our IT applications in the cloud and to lead in e-commerce and digital marketing, and we will progress forward with our One Brunswick strategy. So where does that lead us from a financial perspective? Bill will obviously cover this in a lot more detail, but this is what our EPS growth will look like as we follow this plan. 2019, we delivered $4.33, and in 2020, we're guiding to $5.10-$5.40.
By 2022, with our base plan, we expect our EPS to be in the range of $6.25-$7.25. So that would be a three-year CAGR of about 16%. But by the time we get to 2022 or even beyond or even before then, our gross leverage will be in a really good position. So we will have an opportunity to do something more substantial from a acquisition perspective and potentially from a share repurchase perspective. And some combination of that we've modeled in as around an additional $0.50, depending on how we use that capital by 2022. So the 2022 number, the base number here includes, moderate share repurchases and moderate acquisitions. The, the right side number includes using our significantly improved leverage for something more aggressive in share repurchases and acquisitions.
Both of them, I think, are very, very attractive, propositions for the future. So when I, made this statement in 2019, it was a bit of an aspirational statement. I do feel it's aspirational now, but I feel like we have a plan that will get us there. We do really intend to redefine the future of the marine business, and we think it's a very compelling future. We think we have a very compelling offering, and we think that we're uniquely positioned. So we'll move on to our divisional presentations now, and we'll start with, propulsion and P&A. I'd like to welcome to the stage Chris Drees, President of Mercury Marine.
Thanks, Dave. First, I want to walk through a little bit of history and some of the past performance of Mercury. As you can see, back since 2014, there's been really solid growth on the revenue line, above 7%, and the earnings CAGR above 11%. But one of the key aspects on the slide is continued investment in both R&D and CapEx. So though we don't really talk about our future plans for new products here, let me tell you, the pipeline is really full of innovative and great products coming to market in the near future. So as Dave indicated before, propulsion, we're gonna break it up a little bit, and the first section, I'm gonna talk about our base engine business in controls and rigging and propellers.
Within that, looking in the future performance, this is a lot like certainly the history, right? Good CAGR for revenue, 5%-7%. Earnings growth between 9% and 11%. This takes into account a lot of the new innovations that are coming out in the market in the future. As you can see, within Mercury and within our propulsion segment, it flows right in line with a lot of those strategic priorities Dave laid earlier: winning with product, optimizing our operations, and certainly valuing the engaging experience that make boating fun. So going into that, it all starts with extensive market research and a great voice of the customer to make sure the products they're releasing to market really hit the spot.
By the metrics down below, the group has been doing an awesome job because back this year, last year, in 2019, nearly 40% of our sales of parent product on the engine side were products released within the last three years. So our product line has never been as refreshed as it is today. Besides getting the product right and understanding exactly what we need to engineer, our product development and R&D capabilities are second to none in the industry. This is just a picture of our new NVH center, and when you get on the water, compare our engines and the noise and vibrations against some of the competition. It just doesn't happen by accident. These are some of the investments we're putting in place to ensure that we keep that leadership now and into the future.
So you tie great product definition with unmatched R&D, and then we pair it with really awesome world-class manufacturing. And we've had a revolution within Mercury over the last 5 years, where we virtually upgraded every part of our facility. And the last two pieces that are coming in are the expansion of our propeller facility, expanding production by over 60%, driving out costs. But the real exciting portion is in our V6 and V8 platform. We're expanding capacity since 2018 by over 50%, and with that expanding capacity, we're also driving costs out, and John and his team drove 25 points of increasing productivity. So the engineering tied with manufacturing, and what makes Mercury different is we're doing it in a very sustainable way.
The two of the pieces that are probably most proud of, we just received the award for the most sustainable process for the use of aluminum. If you look at the engine behind you, nearly all the aluminum in that engine is recycled. So we use recycled soda cans and other components to really make the base of our engine. That is really and the other point, we're a nine-time Green Masters designation. That means the state really recognizes us as a leader in sustainability, which is important to our core foundation. You know, I told this to the group yesterday, the controls and integrating the controls are just as important as the engine itself. We just bought a new car. My wife just bought a new car that the controls were extremely difficult to use.
Tough time turning the radio station on and off, tough time controlling the heat. Consequently, she's never gonna buy that same model of car again. That's similar in the boating industry. Our focus on joystick control and Active Trim makes that user experience all that much better. We tie an exceptional product with the right controls. It's an unmatched partnership. This brings us, when we have defined the right product, spectacular engineering, world-class manufacturing, done in a sustainable way, [to] it drives successes like the new V6 and V8 platform, quiet NVH, fuel economy, a lot of industry-leading firsts. This is a really solid platform for us to continue to grow in the future. One of the ways that we know we're winning in the marketplace, share continues to grow 3-4 points of share since 2018.
Along with that, new accounts, expanding into new customers we've never done business before, and of course, all the accolades, whether it be top product awards, innovation awards. But the one key thing about this product line, it's just not an individual product, it's a platform. And what we're able to do with that platform is attack other markets that, before we never really had that much access to. One, the commercial segment, where you could see since the launch of this, this has really been growing. The race engine in the back, you're gonna see a number of these on display in the marketplace, and it also allows us to go after the saltwater market, where there's an incredible opportunity for Mercury Marine.
So not only with the share, you could see coming forward some of the things that people have said over the last Fort Lauderdale and Miami Boat Shows, where Mercury continues to be a leader, and now is a leader in the saltwater market as well. You know, I left the quote blank for 2020, but I could fill it in. It’s gonna say, “Mercury continues its leadership in the high horsepower market at Miami.” And take a look, in particular, the number of 450s that you see on the water. I think you’re gonna be impressed. You know, it’s always the proof is once you get on the boat to really feel the differences.
So I invite everybody here, right outside the Mercury, the Mercury display on Pier 2, we have a lot of different boats in the water featuring all of our engine technologies. So if you have a chance, we'd recommend not only to come over to our booth, but certainly the boat group's stands to get on the water with the product to try it out. And it's interesting, a lot of the people that we have listed on the screen, 12 months ago, weren't even doing business with Mercury. That shows the power of some of the innovation and the new products that we've been launching and the acceptance in the marketplace. So with that, moving forward, we're following the, the Brunswick, certainly the ACES strategy. We're continue to work on autonomy, connectivity, but electrification will be a bigger, bigger part of our core development going forward.
Certainly, extending our lead in high horsepower outboards will as well. So with this, as Dave pointed to some of the key metrics, we're looking at U.S. share to be above 45 points by 2022, and share growing to over 30% in the rest of the world. So setting new standards with our product from performance, durability, and controls, we think we have the winning solution. Now, moving away from propulsion, we're gonna take a walk through our parts and accessory area. And when you talk about parts and accessory, it's really two pieces. It's the Mercury engine P&A distribution, and it's a combination of advanced systems run by Brett Dibkey, my colleague, and those two create the P&A segment. Within the segment, there's certainly a lot of headroom for us to continue to both grow organically and through M&A.
So with the $6 billion global parts and accessory market, there's a lot of opportunity left for us. When we look at the revenue and earnings growth of P&A, we have a mix of businesses within P&A, some very stable as our engine part business, and some growing at a much higher rate, such as, some of the businesses within advanced systems. So the revenue target's between 4% and 6%, earnings target's between 6% and 8%, but understand, this doesn't include any M&A. So any M&A opportunities, which is a key focus for us in this area going forward, will certainly be incremental to these. Along with what I mentioned before, the similar strategies within P&A fall right into what Dave explained before, delivering on the right products, the right connected products, expanding leadership and integration services, and our digital transformation will be key.
And I'll walk into that a little bit coming up. But all this, as I mentioned before, has helped reshape the whole customer experience. From the best connected products, integration services, and Dave mentioned channel presence, which I'll touch on a little bit, really differentiates our parts and accessories business from anywhere else. First, our connected systems. On the left, we really highlight CZone. CZone came with the Power Products acquisition, where all the disparate systems on the boat are controlled through one central interface, really, to make that connection to that consumer, to make that experience on the boat much, much more easier. In the past, people thought this was for yachts, right? This control systems were for the high-end boats. But what we've done, along with our engineering teams, we're able to drive this much down lower into the, into the marketplace.
Consequently, we just launched it with a Harris, and we found a 70% uptake with that system into the marketplace because we're able to cost reduce it, reduce it, ease installation, and make that experience much, much better for the consumer. Part of the way we're able to do this is we have an outstanding integration group, our Power Products system integrators, where they're able to take all these systems, consolidate, work with the OEM to design, configure, install, and really create a one broad system that works seamlessly within the boat. And this is how we're able to take these systems and drive out costs for the boat builders as well, getting into those entry-level brands, which should really drive the volume.
As a proof point, we're gonna have over 30 OEM platforms working with CZone in 2020, which is a huge, huge progress just from a year or two ago. Dave mentioned the new Fathom system. This is on display on the new SLX-R 400e at the show, and this, what it really does is replace onboard generation. Typically, generators run a lot more than the engines do on boats. So this is a way where we're replacing onboard generation with a Mastervolt battery system that really takes some of that ease and creates an experience on water like people haven't seen before. So if you get a chance, please check this out. It's on display at the show. The same system that we put in the SLX-R, we're also putting similar systems in adjacent markets, such as RV and specialty vehicles.
Here, where we partner with people like Airstream and Thor, we're leveraging all the infrastructure, our know-how on battery technology, not only in boats, but the similar systems right into RV and specialty vehicles. So this is a great source of growth for us moving in the future. Dave mentioned before, 16,000 points of retail locations. We signed a few more updated. We're up to 26,000 now, which is great. This is unprecedented in the marine industry. Through our relationships with dealers and our distribution span, we really have a great global access to our customer. Not only with that, our e-commerce sales will double by 2023. So I believe Brunswick has unprecedented market access to bring our parts, accessories, and products to market.
So I firmly believe going into the future, we certainly have the largest marine solutions portfolio, and I know we're well-positioned for growth in 2020 and beyond. So with that, I want to introduce Huw Bower. Huw and his team have done some tremendous work in the Boat Group, and so with that, Huw.
Thank you, Chris. Mm-hmm. It's a pleasure to be here, and Miami is the best place I can think of to launch a new product. Certainly, in the past few years, we have seen Miami launch pad be the launch pad for some of the best and most successful product that Boat has brought to market. This year is no exception. Dave mentioned the 405 Conquest. It was released in FLIBS, but it's making its debut here in Miami. BoatTest.com called it a game changer, and alongside that boat, we have a 325 Conquest, and we also have the 280 Vantage that Dave mentioned.
All those three boats have been released in the last three months, and every single one of them will be on display on the water with Boston Whaler’s portfolio of boats, that includes six other NMMA Innovation Award-winning boats. No other brand in the industry can turn up to Miami with six current models that have won innovation awards in the last few years. It's an exceptional portfolio. It's on display. It's off Pier 6, and I encourage you to come down and see the product. You'll also see Sea Ray. Sea Ray's off Pier 7. They're showcasing and debuting the brand new SLX-R 310 into the marketplace. Also on display will be, in a special unique tent, the new 400 SLX-RE edition. It is the most photographed boat in the world.
You saw a sneak preview of it with Dave's presentation. I encourage you to come and see it in person. It looks absolutely fabulous. I'd like to walk you through the product myself. The teams will be available to walk you through that product as well. I do have some members of the team here today. Nick Stickler, President of Boston Whaler, is here. He'll join us at the cocktail reception later on this afternoon. Steve Langlais, President of Sea Ray, is also here. He's joining us for the cocktail reception. You met Neha. Phil Greene, my Director of Strategy, is here, and Jeff Behan, who leads our commercial operations at Aluminum Boat Group, is also here. We are assembling a fabulous team of the most talented individuals in the industry at Boat Group. Please come and meet them. Please talk to them.
Their energy, their enthusiasm is infectious for the industry. Their insights are first-class, so take advantage of them being here today and come and have a chat with them. Miami is all about energy and in creating exciting experiences for consumers on a very large scale. As you'll see, creating exciting and awesome consumer experiences is something that's gonna feature much more significantly in our strategy going forward. You can tell I'm proud of the team. I really am. We've got a wonderful team, but I'm also pleased, exceptionally pleased with the financial performance we've driven over the last five years.
On average, we've added 100 basis points of margin improvement every year while driving continuous revenue growth, and that's even in spite of the retail reset we saw in 2019. We responded to that reset by cutting costs, aggressively managing costs around all aspects of our business, while maintaining critical strategic investments, namely in technology and digital capabilities. Our strong operations management focus is also clearly evident with how we managed our pipelines. We trimmed wholesale in the back half of the year in response to a weaker retail environment, and while this was a headwind in 2019, it's gonna be a fabulous tailwind as we get into 2020. Looking ahead, I have a huge amount of confidence in the plan we're presenting in the future and committed to delivering double-digit margins in Boat Group with a clear plan to hit that target in 2021.
What are the drivers of growth? The major drivers of growth are gonna be new product and the innovation that secures incremental share gain across the portfolio, improve productivity and quality across our network of facilities, and also a lift from high growth segments in the marketplace and a more normalized wholesale retail environment. We're gonna be releasing more and better product with higher levels of innovation than ever before. We'll be driving more continuous improvements into our operating facilities, and we'll be applying more focus than anybody else to create lifetime boaters through incredible experiences, and I'm gonna tell you how. Our strategy has always been underpinned by our iconic brands and the stunning product portfolios they bring to market. We'll continue to focus our investments in these areas, and you've already seen the consistent narrative around our investments in technology centers.
The output of these centers increases the rapid adoption of new product and accelerates our revenue momentum. It starts with our brands, and as Dave mentioned, we have three of the top four most recognized brands in the industry. We have five of the top ten, they're Boat Group brands. No one matches this iconic portfolio, this global portfolio of leading brands in the industry. When you combine leading brands, iconic brands, with the very best product development capabilities, you, you generate leading positions in saltwater fishing, you generate leading positions in recreational fiberglass, and you generate leading positions in aluminum fishing. What you don't see on this slide is our investments in disruptive brands that appeal to and create new consumers. If you look at the tow segment last year through the third quarter, that segment grew about 450 units in the course of the year.
Heyday accounted for over 25% of that growth. Our premium brand strategy, though, is what's gonna drive our success going forward, and it's foundational to maintaining our leadership positions in each one of these segments. Sea Ray, it's our flagship brand. We have generated a massive amount of momentum to the Sea Ray brand. Showcasing this brand and this product at CES puts it on a unique global stage. No other marine brand has that amount of appeal, that amount of visibility in the global arena, but it's just a small sampling of what is to come. In the past, Sea Ray has redefined segments. The Sundancer series created and defined value in the cruiser segment. The 350 SLX created the large runabout segment, and then the 400 SLX redefined that space.
Later this year, we'll be launching more, additional segment-defining, game-changing product into the marketplace, and it's the first of many new products that Sea Ray will be launching in conjunction with the tech center in Florida. We anticipate significant demand for Sea Ray product, and we're protecting for that demand with our dedicated team at the IMC, the Integrated Manufacturing Center that Dave mentioned. Sea Ray has a laser focus on driving effortless performance into boats. They have laser focus on elevating the experience of our consumers, both on the water and off the water, and it's resonating with consumers. We have been, and we will continue to consistently outperform this segment. Boston Whaler is a phenomenal brand, a global icon, and an undisputed legend and leader in the industry. The release of the 405 Conquest reinforces that leadership position.
But what's exciting is that we are just at the very beginning of one of the most intense periods of product reinvention cycles that Boston Whaler has ever undergone, and we're gonna have significantly more new product in the next six months. At the same time as pioneering new product, we're also pioneering our vertical integration capabilities at the IMC, driving quality, consistency, and margin expansion across the whole portfolio, as well as working on new service initiatives that redefine and elevate what our consumers experience through service. And finally, Lund. And you may say, "Why am I talking about Lund in a saltwater show?" Well, I don't spend nearly enough time talking about this brand. It is a, It is consistently one of our top-performing brands in our portfolio.
It's a bedrock of growth, it's a bedrock of profitability, and it's, and it's a strategically, massively important player in a segment that's important to Brunswick overall. They have an outstanding team. They have an outstanding portfolio. Their customer loyalty is phenomenal, and they continue to extend the power of their brand, to get and keep new consumers in the Lund family. As you're all aware, we launched the Boat Group Technology Center in the fall of last year, but we also have technology centers based out of our pontoon manufacturing center in Fort Wayne, Indiana, and we also have a fish boat technology center based out of our New York Mills manufacturing, facility. They're world-class hubs of engineering and design talent that propel our technology and our product leadership ahead of the competition.
When you aggregate the capabilities across the three locations, we have over 200 designers, engineers, and product technicians, all driving efficiency, speed, quality, and innovation, not only into our products but into our production processes as well. So what does this mean? What impact does it have? It means that at Boston Whaler, we have seven new products, new or refreshed products, coming to market before Q2 of 2021. At Sea Ray, we have eight new products coming out in the same time period. At Lund, we have nine new products, and across Boat Group as a whole, the entire portfolio will be launching 97 new products over the next 18 months. For context, we released 43 products over the last 12 months. So the pace of innovation, the pace of new product development, has picked up with the investment in these technology centers.
It's not just new product that we're bringing to market at increasing pace and increasing speed. It's commercializing new technologies. It's bringing to market new innovations that elevate the consumer experience on the boat and off the boat. You'll see our partnership with Mercury and Raymarine will result in our in the first commercially available assisted docking system for Boston Whaler later on this year. It is, it is here at the show. It's available on a 380 Outrage. It's a demo boat, so it means you can take it out. It's not land-locked in the marine display. It's down on the docks off Pier One, so please come down and have a look at this groundbreaking new technology. In addition, connectivity is a focus.
It's becoming a minimum expectation for our consumers, and not only does it bring peace of mind, it enables improvements in service and unlocks further partnership opportunities for us to collaborate with the Business Acceleration Group. We're also focused on driving solutions that feel niche today, but are on a path with real scale potential. In electrification, we're the first to bring digital switching to our pontoon portfolio, the Solstice line with Harris that Chris mentioned. We've also leveraged that Power Products relationship to deliver a commercialized e-power system, the Fathom system, and that system coming out of that, its presence at CES, has proven commercial demand or retail demand. We've also capitalized on the Freedom acquisition with rapid prototyping of new product designed for the share access, shared access community.
And finally, establishing these tech centers has enabled us to sharpen our focus on the next generation of boaters. Our job is to create new customers, create new boaters, and we have several exciting new products launching later this year. I'm not going to give you any further information today, but later this year, specific product focused on the millennial and the next generation will be coming to market. So I've talked a lot about product innovation. While that powers our growth, our top line revenue growth, we have to focus as well on building capabilities and quality, capacity, productivity across every single one of our facilities. And we do that by taking advantage of, as Dave mentioned, our unique position as the largest manufacturer of recreational boats in the world.
Being part of Brunswick gives us tremendous investment capability, and we've deployed that capability over the last 5 years, adding capacity at the Boston Whaler Edgewater facility, adding investments in automation in New York Mills, in Fort Wayne, where we've added both robotic welding as well as robotic riveting. Even in the process of making our workers' lives easier, safer, and more productive. The picture there you see is of an exoskeleton we deploy to our welders, which relieves stress, improves productivity and comfort in what is a highly manual and fairly arduous operation. The foundation for leveraging our scale, though, was laid in 2019 with two significant transformations, and Dave mentioned the first. It was the opening of the Integrated Manufacturing Center.
Not only does it provide excess capacity for the high-demand Sea Ray product, but it serves as a home for building high-value capabilities. Our five-axis mill is located on this, at this facility, on this campus, and that gives us unique large boat tooling and milling capabilities. Our new vertical integration teams are located on this campus. IMC is going to be a significant revenue and earnings generator for Boat Group, and this year alone, we will generate in excess of $40 million of revenue. The second transformation was the formation of the Brunswick Boat Group and the Aluminum Boat Group. Both were purposely designed to increase the impact that our leading functional experts have on our business.
Under both groups, we've taken proven operational leaders and given them direct accountability across multiple facilities to drive change, and the impact has been significant and swift. The pictures are of our Portugal facility, where we've seen a 30% increase in our capacity over the last six months alone and with only very minimal investment. Looking forward, we have ambitious goals around cost reduction with a target of 1.5% of net sales every single year. In order to achieve that goal, we need to standardize our processes. We need to deploy standard processes to drive improvements across every single facility across the network. A focus on quality at the Boat Group level has also driven incremental investments in new systems, and when we deploy systems that are easier to use and easier to deploy, we now have a higher penetration rate.
These systems are in place at every single one of our facilities across North America. But it's not just process and technology that drives this incremental improvement, there's a people element, too. And we're bringing on a VP of sourcing who will coordinate our engagement across our supply chain for the entire Boat Group network. Over the past six months, we've been working to prove the concept that centrally led sourcing generates real value, and it does. In the last six months, as I said, we've aggregated some of our aluminum spend and diversified our supply base in aluminum, and we've saved $2 million on an annual run rate. So that ensures that we not only get the best cost position, but we also, over the long term, have the right partners in an optimized marine supply chain.
Finally, we view sustainability initiatives as opportunities to further reduce waste and improve efficiency. I'm particularly proud of the fact that across Boat Group, we will, by the end of this year, have substituted 100% of our balsa cores in our laminate structures with 5 million recycled plastic bottles. It's not only good for our cost position, it's good for the environment, it strongly resonates with our consumers, and frankly, we think it's the right thing to do. So from our consumer's perspective, at almost every stage in that purchasing, and that ownership experience, there are opportunities to elevate, simplify, and streamline their experience.
And we firmly believe that by leading with experience, we'll not only differentiate and separate our brands from the competition, it'll set ourselves up to create customers and pull in and attract the next generation of boaters. So from the position of the consumer, the journey should be simple. We know people love boating. We are passionate about helping people discover the joys of boating and the joys of being on the water, and we know that journey starts long before they step foot on their first boat. So we're committed to demystify the purchase experience by making easy, transparent interactions through online, seamless online interactions. And we're focused on delivering an elevated, elevated ownership experience once they own that product. So I'll tell you how we're gonna tackle that.
First, we're applying focused investments in digital capabilities that will transform how we engage with consumers and personalize that purchase experience, and it starts with a focus team. We're standing up right now in Chicago, a digital marketing center of excellence that will support every single one of our brands in the touch points with their existing and future consumers. By centralizing and improving our advanced analytics capability, we'll drive 25% more leads into our dealer network. Handing those leads off to our dealer network requires better technology, and we're putting in place a digital backbone that connects every single one of our brands to their consumers, to the dealers. With six new brand websites this year, we'll drive a curated, personalized consumer experience while supporting the maturing, the maturation of our online sales capability. But at the end of the day, we're about experiences.
We're lifestyle brands, and we know at the brand level how to deliver unique experience events that delight and engage our passionate owners. I'm thinking of the Bimini events that Boston Whaler does on an annual basis, the Abaco events that have engaged over the last decade, hundreds of consumers, and taught them about the Whaler lifestyle and the Whaler approach to boating. I'm thinking about Sea Ray's Alchemy of Senses tour last year, that went across tens of different cities across North America and touched hundreds of consumers, elevating their experience with the Sea Ray brand. And of course, Lund engages with hundreds of anglers through the tournament trail every single fishing season. We want every boating experience to be as memorable and compelling as those curated interactions with our brands.
So our vision is connected vessels, enabling real-time remote diagnostics, remote control of systems on the boat, secure geo-fencing, and access to a suite of services that makes boating hassle-free and worry-free. If we do this, when we do this, we will create lifetime boaters. We'll create a sustainable, long-term growth trajectory for our businesses. So this is our mission statement of Boat Group, our vision and purpose. We have 4,500 people across the Boat Group portfolio. We are unified and aligned and excited to deliver this vision going forward. And the first step of making you and showing you how we can enact this vision is getting you down on the boats, meeting our teams, engaging with our teams at the show.
So I encourage you to come down, pier six, pier seven, Boston Whaler, and Sea Ray will be on display. Our teams will be ready to engage with you, and we look forward to showcasing the sort of technology we have built over the last few years. Thank you for your time. I look forward to spending time with you at the cocktail reception and, of course, on the water at the show. Let me introduce Brenna Preisser, who's itching to come up, President of our Business Acceleration Division.
Thank you. Okay. Can you hear me okay? I am itching to come up because I'm really excited to talk about and share what's going on in Business Acceleration. 2019 was an outstanding year for us. Not only did we form the team, but we also had the acquisition of Freedom Boat Club, which I'm going to spend time on today. That being said, I can say confidently that the best is yet to come. What Freedom has given us is optionality, but with the formation of the Business Acceleration team, we're able to plant seeds of growth that we'll be talking about over the next three to five years. What we know is that people love the water, and you saw Dave talk about earlier today, 140 million consumers who participate on the water.
We see that there is strong, untapped consumer and market potential. We conducted our own survey this year to validate consumer participation, a nationally representative survey, and what we found, not only did it validate the 140 million people who participate on the water, but when we asked consumers: Are you willing to spend time, effort, and money to participate? Nearly 50 million consumers said they were interested in either a rental experience or a club experience. It's also important to note that these consumers are diverse. They represent there's nearly 50%, both men and women, equally represented. This presents a huge opportunity for us. We also spoke earlier about the market opportunity. Nearly half of this opportunity is in pre-owned boats and then a highly fragmented service op market.
So as we begin to move into new business models and closer to the consumer, some of the opportunities and how we're going to participate in these markets will become clear. In business acceleration, we have a unique toolkit, and I'm going to spend most of the time today on Freedom Boat Club. I recognize that's newer, but I also want to mention we have a strong financial services business. It provides strong, stable earnings for Brunswick and synergies, not only for our partners today, but if I use the example with Freedom, we're able to provide our franchisees extended warranties as they're selling boats out of the fleet. We just announced that we'll be providing fleet financing for franchisees with our joint venture with Wells Fargo. Just one example of how we're creating synergy and creating value for our partners.
We also internally are innovating both internally and externally. I'll come back to TechNexus, our joint venture, later, which is a way that we invest in early-stage startup companies, but then also internally, we are innovating and incubating opportunities at our Loop Lab in downtown Chicago through a new business ventures team. In business acceleration, really, our mission is to do two things. One is to expand marine participation, and secondly, it is create meaningful and material value for our partners and our shareholders. We're going to do that by winning in shared access. Secondly, we're going to be creating growth laneways, and so some of the seeds that we're planting today are the opportunities that we're going to be talking about in the next two to three years. And finally, as you've heard woven throughout the conversation today, it's ultimately about enhancing the consumer experience.
So winning in shared access, I'm going to spend some time on the Freedom Boat Club model. What is the model? Freedom Boat Club is a subscription model. So as you think about from a consumer standpoint, there's a one-time monthly or upfront membership fee, and then you have an ongoing monthly membership due. Consumers can come and go at any time. If you also think about the membership dues and the franchise royalties, the revenue base on this business model is 75% recurring, which creates very powerful and a stable earnings profile. Today, we have 20,000 memberships. Later, you'll see a number that reflects for each membership, we have multiple members, and that's very powerful as you start to think about the consumer base that we can engage and create value from.
We are already, between the earnings call and today, we are already up to 213 clubs, and it just speaks to the power of having a motivated, well-capitalized franchise network who is equally focused on growing our business. And the 2,400 boats, which turn over about a third every year, create the synergy that we see in Boat Group. What's important, when we acquired Freedom in May of last year, virtually none of the boats or engine were Brunswick products. This all creates incremental value through this acquisition. The model... I want to make sure the leaders first, the leadership team, the Freedom leadership team, John Giglio team, they created a really strong business. The management team is still with us, fabulous partners, as we start to charter the next generation of growth.
While the model is very simple for our consumer, the business itself has a true competitive advantage. No one has the size and scale that we have as Freedom. In addition to that, reciprocity is really powerful. That means that if you are in a club in Chicago, and you also have a home in Florida, you have the ability to leverage the club wherever you live or vacation. It's experience-focused. Freedom does about 100 member events each year, on and off the water. Again, as you start to think about the value that can be created for this model. As you think about value for Brunswick, it's important to note there are two powerful business models. One, we have the company-operated locations, which provides really strong earnings growth. And as you think about, we're primarily in Southwest Florida.
We have an ability to leverage a management team, and so the membership dues are part of that earnings profile. In addition, the franchise network gives us the ability to scale quickly and provides that recurring revenue stream as you think about the royalties. A boat sold through the franchise network is like selling a boat through a dealer. So it's our ability to scale and pace to enter new markets is a great opportunity as you think about expanding our portfolio in this market. Through 2020, we see a revenue opportunity with boats and engine as we increase the proportion of our product in the model of $30 million. And we also want to highlight there is tremendous platform opportunity.
So our franchisees are both our partners, and they are also a customer as we think about creating services that they will pay for, and additional opportunities and synergies throughout Brunswick. A couple influencers of our financial outcomes. One will be how we grow, so the proportion of clubs, franchise clubs, company-operated clubs, will ultimately determine our earnings profile. Our membership growth. The number I get most excited about here is you think about the 50,000 consumers who we are highly engaged with today, and we have a tremendous opportunity as you think about additional services as a large base of an engaged community, and then also the fleet requirements, as we've mentioned earlier.
Through 2020, in plan, there's about $70 million of revenue from both clubs and the synergies and more opportunity as we continue to work in this model. This is my favorite slide, because every metric here represents an opportunity. First, the power of Freedom is attracting new participants. 43%... We recently conducted a study, a survey of current Freedom Boat Club members, 4,300 responded. 43% of our members did not previously own a boat, and we know for future relevancy in marine, we want people participating on the water. This is a model that gets people on the water. Also interesting, the 57% who did previously own a boat and then went into the club, many of these consumers would have been lapsed boaters.
Our ability, as you think about the tail end of the baby boom cycle, to connect with consumers at this life stage, creates a really powerful opportunity. On the other end of the spectrum, we know Freedom also is connecting with a younger consumer. If you consider age 40 and under, 50% of Freedom Boat Club participants are younger than the average new boat buyer. 92% of members never intended to buy a boat, so we're really not competing with the new boat market. This is about expanding participation in marine. Another important fact, if you think about shared access and boating compared to maybe some other shared access models, there is a mastery and proficiency required. Not anyone can just get on a boat and take the boat out. We train the 20,000, actually 30,000, growing to 50,000 members.
We train every member, and they have access to unlimited training. So as you think about developing future boaters, this is a very powerful model. You see the satisfaction rates. 60% of the members go boating at least 11 times annually. Freedom boats are used more than new boats on average, and so when you have the most powerful P&A business in the marine industry, you can begin to see the power of this model as we increase usage. And then finally, seeding future owners. So we also asked, how likely were you to buy a boat in the future? 5% said, "Definitely or highly likely." If you take this across our 20,000 members today, even if half of those members moved into Brunswick product, that represents about a $20 million opportunity.
So one of the—the power of Freedom is not only in the business model today, but the optionality that it gives us on other opportunities and in the future. In addition to Freedom, so in business acceleration, Freedom is our, call it our fifth gear opportunity. Value's clear. We're hitting the gas. We also have to be thinking about what are the growth opportunities over the next 2-3 years? And so we also are planting seeds for some of those first and second gear opportunities. Dave mentioned earlier, it's really important that we have activity that we may consider disruptive, that we're piloting really within our new business ventures group, that will be us planting the seeds of growth for the future. We've talked about most of these. I did want to highlight TechNexus.
TechNexus is a joint venture partner that we have. We have 8 investments today, early-stage startup investments. Just to give you an idea of why these are important to us, it gives us an opportunity to innovate a bit of arm's length, but also learn and consider who future partners may be. Catch Co. was the first digitally native created fishing brand, exclusively through YouTube, Facebook, and Instagram. I have a 13-year-old daughter. I will tell you that most of the brands she engages with were created online... Catch Co. has proven this model. They are in the industry. Their subscription business is part of their business, in addition to e-commerce, they have over 100,000 engaged consumers. So we're learning a lot. We're partnering with them.
As you start to think about Lund and Mercury, you can see the power of the partnerships as we combine these assets. Then Sea Machines is a different type of investment. Sea Machines is in commercial, autonomy, and that's an example. I'm really pleased that we have John Reid on the team, who will be engaging with us as we partner with Sea Machines and Mercury. Just an example of two of our investments, that allow us to get closer to disruptive and new technologies. Finally, for business acceleration, we'll leave you with, the best is yet to come. There is tremendous consumer and market opportunity. We have an incredible set of assets, to grow this business. There is a lot of enthusiasm around the Boat Club opportunity, but that's really only the beginning innings of what's possible.
We're excited for the future. With that, I'll introduce Bill Metzger, CFO.
Thank you. Thanks, Brenna. Good afternoon, everybody. Previous presentations provided some insight into the strength of our businesses, strategies, investments, and opportunities, as well as talked about the company's substantial breadth of capabilities. I'd like to spend the next few minutes or the last few minutes today, kind of walking through how all of that translates into our financial results, and ultimately share all the returns. But I think I'd like to start with what I consider to be some of the more relevant investment considerations that you've heard throughout the presentations and really spend some time reinforcing them. It starts with the marine market. It's healthy. It's supportive of growth.
Usage and participation are still extremely very strong across all demographics, and I think our initiatives to advance the consumer experience is only gonna make that stronger as we progress over the next few years. Just wanna remind everybody that the installed base of boats continues to age, providing a substantial upgrade and refresh opportunity. When you think about the influence of technology and things that are going on in boating, I think it provides a nice tailwind for us. While you don't necessarily reflect it, see it reflected in the unit growth numbers of this plan, I think it's gonna support longer term growth and should accelerate the transition from used to new boat purchases over the next several years. Dollar growth has been outpacing unit growth for quite some time, and I would expect that to continue into the future.
There are several trends contributing to this. I think the accelerating adoption of higher horsepower engines, as evidenced by the 450 in the back, increasing application of technology and emerging categories of our boats, like the large day boats and the offshore center console boats that Huw referenced earlier. Moving on to competitive position. It's extremely strong, and I think will continue to enable us to outperform the market. We are very well positioned in outboards to increase share in segments where we have traditionally under indexed. We talk about a lot about this on the road. Categories like saltwater, repower, and commercial are all places where we should gain share. Our P&A businesses have unmatched product breadth.
I think Chris's presentation touched on that quite a bit, with benefits from Mercury aftermarkets, well-established distribution and e-commerce capabilities, as well as the advanced systems business, led by Power Products and its share of very strong brands. In boats, we've earned, I think, leadership positions in key premium categories and possess a portfolio that enables us to serve a broad spectrum of consumers. And finally, business acceleration includes a unique group of businesses and capabilities, which are expanding our addressable market, along with a growing portfolio of investments in emerging companies, capabilities, and technologies. We've also built industry-leading capabilities, which help us strengthen our competitive position and support share gains and margin expansion. These include unmatched product development and manufacturing capabilities, which you've heard a lot about today, as well as strong focus on operational excellence, excellence in driving efficiencies throughout our businesses.
This all translates into a track record of strong execution and strong financial performance, which I'll discuss over the next few slides. As you're all aware, we've consistently provided longer term financial targets for our company. This is my fifth plan. This slide provides a high-level overview of our performance versus EPS targets over the last four plans. As you can see, we have consistently met or exceeded our EPS targets and produced growth well in excess of the market. Our EBIT growth performance in the first two plans, which was very strong, reflected a market that was growing mid-single digits, along with some residual benefits of some of the restructuring actions that were launched during the Great Recession. They also included and reflected early successes from new product launches.
As you move into the 2016-2018 plan period, it was still low double-digit growth, but our marine operations posted high-teens percentage increases. New product benefits continue to expand, while market growth rates pulled back slightly, but they're still very strong results. The EBIT growth in the 2018-2020 plan is low- to mid-teens in a market that is essentially flat to down modestly, after some of the weakness we saw in the first half of 2019. Again, we are producing growth in EBIT that is outpacing the market, including benefits from acquisitions. So moving on to the 2022 plan targets. Here's an overview of the targets for the three-year plan. Revenue growth, 6%-8%. Revenue at midpoint exceeds $5 billion.
Operating earnings at midpoint of $740 million, with margins centered around 14.5%. Strong EPS growth of 13%-19% or 16% at midpoint, and free cash flow improved substantially over the planning period, with a 2022 target of $425 million-$475 million. Moving on to revenue targets. Our growth expectations for the next three years reflect a view of the market that is mostly consistent with our current 2020 guidance. A flat to up slightly market in units. We anticipate dollar growth to outpace that result, and we expect to outperform the market as a result of product leadership, including investments in premium products, as well as marketing investments that our business leaders talked about in their presentations. Growth by segment.
Propulsion and boats are both expected to grow 5%-7%. For P&A, organic growth reflects the mix between the lower growth, but highly profitable aftermarket business and the higher growth opportunities within the advanced systems businesses, including power products. We have also sized the anticipated contribution of M&A to the P&A segment, which would raise the revenue growth target up to high single digits. Not only are we growing revenue at a healthy rate, but we are also expanding operating margins. Over the past two years, we have posted margin improvements of 150 basis points. New product successes, actions taken to right size our SG&A functions, and our focus on operational excellence have all contributed to this performance. Targeted operating margins in 2022 are 14%-15%, with all three segments providing projecting improvement.
I would point out that the boat segments will post double-digit margins during the planning period, consistent with what we, the discussions on our last earnings call. Drivers of margin improvement include benefits from cost management, efficiency efforts, ongoing benefits from new and recently introduced products, as well as volume gains. Tariff impacts are expected to remain consistent with 2020 over the three-year period. However, I'd like to point out, we will be actively exploring ways to offset and/or eliminate the tariff headwinds through structural supply chain or manufacturing initiatives. Our projected earnings leverage of high teens to low 20% balances our commitment to deliver profitable growth to shareholders and our desire to invest in the growth opportunities discussed earlier. This is also consistent with our planned management of operating expenses, which are expected to decline as a percentage of revenue.
Our free cash flow is projected to increase by approximately $200 million versus 2019, an 80% increase, with free cash flow conversion improving to approximately 85%. Our capital expenditures is projected to remain in the $200-$220 million range, including ongoing investments in new products and capacity, with most material investments in outboard engines and high-margin boat products. Our 2022 target run rate of capital spending is right in the middle of our 4%-4.5% long-term target. We are anticipating an increase in the cash tax rate as benefits from prior year pension contributions and tax credit carry forwards fall away, and unfavorable changes in the treatment of R&D expenditures transition into law.
This continues to be a source of potential variability year to year as tax legislation evolves both in the U.S. and abroad. So as I transition into a discussion of our capital strategy, I, I'd like to recap some of our more material actions in 2019, which Dave referenced to some of them earlier in his presentation. We enhanced our growth profile with key investments, including capacity and in new products, which are key drivers of some of the target, growth opportunities that we see reflected in this three-year plan. We completed the fitness sale midyear and fully deployed the proceeds by year-end, with $400 million of share repurchases and the completion of the Freedom Boat Club acquisition, this year.
If you think about it, in essence, we exited fitness, we bought back 9% of the company at a very attractive valuation, and we acquired a key strategic asset with the Freedom Boat Club acquisition. We also materially strengthened our financial position. Actions included completing the exit of our defined benefit plans, and we also addressed near-term maturities, leaving no material maturities until 2023. Free cash flow continues to provide the foundation for our capital allocation plan. Our strategy prioritizes growth, and there continues to be a healthy pipeline of opportunities to deploy capital through organic initiatives. We also continue to expand through M&A. Maintaining a strong ROIC is also a focus, with meaningful improvements expected versus 2019 levels of just over 20%.
Maintaining a strong financial position is also a top priority, with a focus on preserving our investment-grade credit rating through a cycle, as well as maintaining investment flexibility to capitalize on strategic M&A. Returning capital to shareholders will also be an important element of the strategy and will add to planned growth in earnings. Capital allocation is more heavily focused on growth, with over $1 billion of planned investment in both capital expenditures and R&D. We also are earmarking over $200 million of capital for bolt-on acquisitions. This plan also includes annual debt reduction of approximately $300 million over the planning period, or $100 million per year. Capital return to shareholders is projected to exceed $550 million, more heavily weighted towards share repurchases. This plan fully deploys our free cash flow.
We also have meaningful flexibility to adjust this allocation based on investment or shareholder return opportunities. Now for a few comments on acquisitions. We use this focused and structured approach in evaluating acquisition opportunities, which includes several criteria. There needs to be a strong fit with our strategy. The business needs to be in a market that we believe has healthy fundamentals, and we need to have the organizational capacity to integrate and effectively run and manage the business. The acquisition also needs to meet some important internal earnings and return benchmarks, which have been detailed here. Going forward, we would expect acquisition activity to contribute 1%-2% of growth in both sales and EPS, and we expect activity to be mostly focused on the P&A segment as we have opportunities to add complementary businesses, build technology capabilities, and fill in white spaces.
In addition to P&A, we will also be seeking attractive M&A targets in other parts of the portfolio, especially in situations where we can add businesses that advance our ACES strategy, drive meaningful synergies, or offer high growth opportunities. Potential bolt-on deals are generally in the $20 million-$50 million transaction range. Given our strong balance sheet, larger transactions are also possible, but not incorporated into the plan. A good example is the Power Products acquisition that we completed in 2018, where we used our strong balance sheet and investment capacity to complete a purchase of a large strategic asset that is becoming the foundation of our Advanced Systems Group. At the close of the Power Products acquisition, our long-term debt peaked at $1.2 billion, and our maturities due in 2023 stood at $950 million.
We made quite a bit of progress against lowering debt and lowering our short-term maturities in 2019. Our debt now stands at $1.1 billion, and our maturities in 2023 are just over $400 million. This includes a remaining $300 million of acquisition term financing, which has a minimum amortization of $35 million per year. Our plan assumes that all of this debt is repaid over the next 3 years without any prepayment costs. We believe this is a prudent use of capital, in the short term, but retain the flexibility to adjust the $200 million of discretionary prepayments depending on investment alternatives. I would also note that a portion of these obligations could be refinanced to extend our maturity profile if warranted.
We are targeting to maintain leverage at 1.5x or better on a gross basis, and expect to be in line with this target by the end of 2020. In addition, we believe that we have the capacity to flex this metric higher, if necessary, for select M&A opportunities, as noted earlier. As a result of the planned debt reductions, interest expense will trend lower after peaking in 2019, and we are targeting approximately $55 million-$60 million of interest expense in 2022. Since the beginning of 2014, we have returned over $1.2 billion of capital to shareholders through both share repurchases and dividends. Between 2014 and 2018, through a systematic share repurchase plan, we retired over 9 million shares with spending of $465 million.
These activities lowered our share count by almost 2% per year. In the middle of 2018, we suspended repurchases, pending the refinancing of acquisition debt and the completion of Fitness divestiture. In 2019, using most of the Fitness proceeds, we concentrated $400 million of share repurchases in the second half at a very attractive valuation. So in total, we've retired almost 16 million shares of the company since the beginning of 2014.... Our new three-year plan resumes the systematic approach to share repurchases, with targeted spending of between $80 million and $120 million per year. We anticipate a reduction in share count of approximately 1.5% per year in 2021 and 2022, versus our 2020 guidance of 79.5 million shares. This includes the impact of shares issued for equity compensation.
We have consistently increased dividends over each of the last eight years, with increases in the last five years averaging 14%. Our current payout is approximately 22% of 2019 earnings, and we will continue to look to increase the dividends as earnings and cash flows improve. We will also maintain the dividend at a level we believe we can maintain throughout an economic cycle, which is aided greatly by the strength of our aftermarket and other non-- our other recurring revenue opportunities. Dave touched on this earlier, I'm gonna add a few, more points to it, but our business portfolio, I think, has substantially changed, and we believe we are very well positioned to manage through economic cycles and much more favorably positioned than we were back in 2006.
This chart compares revenue and earnings mix of the marine businesses with the aftermarket activity split out. If you look at the aftermarket activity, substantially improved. If you look at the profitability of this business and you take the combination of interest expense, dividend, and corporate costs, the profitability of that business more than offsets and covers the cost of those three items, which has extremely favorable implications for our capital strategy. It's also important to note that the profit profile of our other businesses is much stronger as well, with greater levels of profitability generated from lower sales. This material improvement in margin reflects several factors, including the steps we took during the recession to streamline operations, reposition the portfolio, and our ongoing focus on cost discipline and benefits from new, higher-margin products.
By our estimates, our other businesses would be able to sustain run rate profitability and positive free cash flow if the markets declined back to 2008 levels. This growth business profile is well positioned to maintain solid levels of profitability and cash flow, even in challenging market conditions. This was tested a bit in 2019, when market conditions were different than anticipated, and we sustained healthy levels of profitability. Our EPS target for 2022 would represent the thirteenth consecutive year of growth and again exceed record levels. This performance reflects an annual increase in the pretax earnings at a mid-teens %, substantially outpacing revenue growth. An additional factor EPS includes our effective tax rate, which is consistent with our guidance for 2022, as I outlined on the recent earnings call.
This performance also incorporates the execution of our capital strategy, and as referenced earlier by Dave, there is also incremental value that could be delivered through more aggressive capital strategy actions, including incremental M&A or greater share repurchases. So in closing, I'd like to convey my confidence in the team's ability to execute this plan and capitalize on the unique and unmatched strengths of our marine portfolio. I'm in a pretty unique position. I've been with the company for 30 years, and I've been the CFO for seven, and I will tell you unequivocally that this, this company is much stronger than it was, and it's much stronger than it's ever been in my 30 years with the company. I think this is a very compelling plan. Impressive earnings growth, driven both by sales and margin.
It's healthy free cash flow with an improving free cash flow conversion, and we're investing heavily in the business with an attractive return, while still maintaining our strong balance sheet. In my view, our valuation does not reflect the strength or potential of our businesses. The marine market is healthy, and our competitive position is strong. We have yet to realize the full benefit of recent product introductions, and with more transformative product on the way in the next two years, we are positioned to perform well beyond the time frame of this plan. We have highlighted several times today our expanding P&A business and the cycle-resistant nature of the aftermarket business, which comprises almost a third of our revenue and almost half the segment earnings.
The new segment reporting that we introduced on the last earnings call should produce greater visibility into the performance of this business and should allow folks to value this business appropriately when they consider the overall value of the company. So in summary, we're well positioned to deliver attractive returns and believe we present a very compelling investment opportunity, especially given the strength of our businesses and management team. I would like to thank everybody personally for your interest in the company. I'd like to personally thank you for your support over the last several years, and now I would like to turn it over to Ryan, who will lead us through a short Q&A. So thank you.
You can leave, you can leave it.
Oh, this stays on.
Yep. I'd now like to invite the speakers back to the podium as well as Brett, if you could join us, please. Thank you, Bill.
...We have time for a few questions. If you have a question, please raise your hand, and someone will come and bring you a microphone. Garrick?
All right. Thank you. The new operating model, it seems to me to add complexity and overhead. Would that be accurate? And if it is, why should I not be concerned about it, or is it not accurate?
I'm sorry, it was complexity or-
Complexity and overhead.
Yeah, you shouldn't be concerned about it, neither of those two things. I think the important thing to think about is we were asking Mercury Marine to do an awful lot. At a time when they were introducing all this new product, expanding capacity, they were also being asked to focus on other opportunities that weren't related to propulsion. They were being asked to be the platform on which acquisitions would land. So we were adding a lot of complexity to that business. What we've done is actually decomplexify it. We have four places that acquisitions can land right now. We have a-- we, you saw we took out the, with the, with the four new divisions, we still took out $50 million of cost reduction.
The idea here is we leverage our scale, but we have a much clearer commercial focus for all of those divisions. So I think what you should take away are not the adjectives that you used. It is commercial focus, laser focus on commercial operations, and an even greater effort towards leveraging our scale across the entire enterprise.
Uh, Michael?
Yeah, just with regards to the, the outboard business, I think you said in your, your 2020 outlook, you are targeting over 45% share domestically for outboard engines. I guess, what does that incorporate in terms of the saltwater, the higher horsepower engines? And then, what does the plan contemplate in terms of competitive reaction as you continue to make progress there?
With the 45% reference to 2022, but if you look at the things that we're doing, in particular, adding the additional capacity in the V6 and V8, it's the new partnerships that we're adding that not only are gonna pull the V6 and V8 through, but also it's gonna pull the mid-range through as well. I think that's predominantly some of the key factors going into it, and we don't even, or we start to contemplate some of the new product launches we have on the horizon as well. So it's added capacity, additional pull-through, along with new products, and we're pretty comfortable with that estimate.
Seth?
Thank you. Sticking with the engines, so 45% domestically, 30% abroad. Can you just fill us in where you are today? What does that 45% look like as we sit here today?
We're in the low 40s, approximately.
Low forties?
Yep.
I would just point out that the dollar share increase will be much greater than what the unit share increase would be.
And then, I guess, if I could sneak one more in.
Yeah.
You talked about a flat to low single-digit retail environment. So if I think about the wholesale assumptions in this plan, does that mean it's principally driven by ASP?
Largely, and share.
Short term also in the rebalancing of retail.
Yes, that's correct.
Yeah.
We'll do Joe, and then we can do Craig.
Thanks. Just sticking with the engine theme for a second. You guys have talked about the synergies between Freedom and the Boat Group from fleet renewal, but what does that mean? What's the impact on the engine and maybe more importantly, the P&A businesses, from that cycle?
I can start. Predominantly, the entire Freedom fleet before acquisition was made up of Yamaha. So virtually, no engines on the back of the boats were Mercury. That's, I think, the first part. The second part is, it's opening up partnerships with new OEMs that we haven't done business for in the past. So I view this as a great leverage for Mercury to partner with some new OEMs in the marketplace and gain additional share.
I think the other thing I would say is that we have been very, very pleased with the rate at which Freedom adoption has gone. The franchisees have really embraced the product offering and the partnership with Brunswick. So if you think about the rate at which boats have been adopted, we already have several hundred orders for Brunswick boats. The rate of adoption of Mercury engines has probably been around three times that rate. The reason why it's higher is people can convert the boat brands that they already have from, for example, Yamaha to Mercury, faster than they can order a new boat. So the rate of adoption of Mercury product has been really strong, and the sooner we adopt Mercury product, the sooner we get we start the clock on the P&A annuity.
So I would say that we are more than excited about the rate of adoption in Freedom.
And just a follow-up for you, if I could, in terms of the commercialization of technology. You guys have done a great job on that front. How much dealer education is necessary? Because a lot of this stuff is fairly high tech for the dealer as well as the consumers. Is there a lot that has to go into that?
Yes. I mean, the technology is getting pulled through by dealers who are requesting this sort of technology on boats, by consumers who are requesting this technology on boats. But there's no doubt we have to support our dealer network and the sales capability, but there's strong demand being pulled through.
... Craig?
Thanks, Ryan. So Bill, I tend to share your view on valuation, and I think sometimes investors struggle with the downside math. Is there anything you can share with us regarding the decremental margin of the segments now that you have new segments?
You know, Craig, it's a conversation we have quite a bit. I think one reference point is 2019. You know, we ended up with a year that we thought the market was gonna be at mid-single digit. It was down mid-single digits. And in 2019, if you start to do some of the math on our ability to deal with a different market, you know, the decrementals on that were pretty consistent with what we report on the upside, which are high teens. You know, I think the more severe downturn, the decrementals get to be a bit more challenging, but our ability to flex our operations and cost structure, I think is pretty decent. I also believe that we think we've got some things that are a little bit more immune to general market.
Some of the investments we've made in higher horsepower engines, some of the larger product would do much better in that situation than just the broad market would.
James, you have-
Which is kind of what happened this year in 2019.
James, you had something?
I can just be involved. So, so much of last year was colored by, you know, the really bad weather in the first half, and then you had to react to that in the second half, and then here in the first half of 2020, it's gonna be lapping over that. So it kind of feels like there's a year and a half of sort of noise. I guess my question is, and I think I understand, Bill, that the guidance sort of beyond this year just assumes a pretty flattish retail environment. Correct me if I'm wrong, but I think more importantly, I guess the question would be, once we get past all of this noise, how does the industry feel right now? Does it feel like a flattish industry, up, down?
We've seen some positive data points as of late, but, you know, how do you think about that into 2021 and 2022? Thanks.
Well, I think a number of people can contribute to an answer, but I would say I was actually speaking with Nick Stickler earlier, who's the president of Boston Whaler, talking about the way that dealer sentiment looks going into this year. I think dealer sentiment, particularly in the saltwater markets here, is very strong. Everybody's very excited. They're excited about the Miami show. I think more generally, though, I think the fact that we have... We're six weeks into the year, most of the Great Lakes are not frozen. A lot of the lakes in Minnesota and other areas are not frozen, or last year they had 48 inches of ice on them. This year, I think people have high expectations for an earlier spring and earlier start to the boating season.
That, combined with, I think, the aggressive, right sizing of pipelines, has made all of our dealers feel a lot more comfortable. So I guess we have a broad, positive, constructive, segment, sentiment, I'm sorry, and we're looking forward to Miami in particular as a nice, signal there.
I'd add, you know, we've had a lot of boat show activity, and we follow that activity and track it year-over-year very closely. But, the sentiment from dealers is that we are seeing a lot of activity outside of boat shows. Earlier in the season, and perhaps last year, we saw it, but at dealerships, so that's another positive sentiment that we feel across the board.
Laura.
So, you were really surprised and I guess, pleased, with your Consumer Electronics Show display. You sold some boats. I read that. So does that actually... I mean, and here you're selling a boat in a place there's no water or anything. It's boats on an angle over there. But does that make you think about, are you approaching, you know, maybe you can do something with the way you sell boats? Is there-- Do you need modules at dealerships? Do you have-- Are you gonna be doing anything different? Is there some other way to make it more of a wow experience to sell boats to people?
Yeah, a great question. I think that we've a lot more capabilities already around the way that we can go to market. And I think the things like the Consumer Electronics Show presents new possibilities for us. There are certainly companies that are using more showrooms. Tesla does that, for example, which is an interesting possibility for us. I think we maybe did not also convey the fact that we expect e-commerce to be an extremely big part of our future in a number of ways going forward, not just in the P&A area, but also in the boat area.
If you move more heavily toward e-commerce, you typically need to supplement that with other assets that give the consumer a better way of kind of viscerally experiencing a boat. So I think we foresee a move to e-commerce, and with e-commerce, typically a requirement for more supplementary experience programs, if you like, that can include everything from CES to on-water displays. So you might expect to see us doing more experience events, for example, than we have historically done.
We have time for a couple more. Joe?
Thanks. Just one. First, a quick housekeeping. Bill, it looks like with your guiding to, you know, over $1 billion, maybe $1 billion and $1 million, in sort of cumulative free cash over this planning period. You just called out $400 million in debt repayment, you know, between $80 million roundabout on the dividend, $100 million in free cash. That's another like $540 million. So, are you basically earmarking a couple hundred million for M&A? Is that the way to think about it?
That's right.
Okay.
Correct.
Is there an updated sort of minimum cash that you think about in this new market?
No, it's pretty consistent with where we've been, kind of comfortable between 3 and 4, 3 and 3.50.
Okay.
350.
And then just, I don't know if this is Dave, you or Chris, but, you know, you're clearly showing a lot of cool and interesting technology. You know, building on some of the earlier questions, how—what does your research show about consumer willingness to pay? Because it seems like you're trying to sort of cascade this a little bit more broadly-
Mm-hmm.
through the portfolio. It's obviously, you know, I assume, pretty accretive margins. If you could do it, great, but, you know, at some point, it becomes sort of a push and pull between getting the technology broader but also still, you know, selling the products.
Yeah. So I think on the subject of technology, you know, just like other industries, we introduce technology on premium products typically. But I would say... Where's Nick Stickler? Nick, are you there? Proportion of your larger boats that have a joystick on them right now is probably-
Almost all of them.
Almost all of them. Yeah. So, when we're talking about larger boats, we're talking about, like, mid-30 feet and above, anything with 2 engines on it. So you can see that, you know, one of the ways that we differentiate new product from used product that's really helpful is with technology. Yes, because in a lot of cases, used products is our competition. And so there's a really, I think, healthy effect of new technology that becomes adopted, becomes a standard, so people won't even buy a product without it, helps us compete against the used market. And then, as we get scale and premium, we cascade it down, and you will see from us the application of joystick, for example. We'll be talking later in this year about moving that down to smaller boats.
The faster we can do it, the better. It creates a premium experience for every level of customer. I think if you get in a mid-range car, you get pretty much all the features that you get in a premium car now. It's really all about the trim and, you know, other things. That's what we expect to do for our consumers. We had tremendous pickup with when we introduced CZone in the Harris, because it's just a better experience.
Mm.
And it for us it's a differentiating experience. Eventually, these things become expectations. So for us, being first to market, pushing on the boundaries of technology, gives us that, you know, market-leading position, and that's why we're making these investments, and we're bringing these technologies forward. We think they're differentiating. We think they help us compete against the used market, and we expect this steady roll of introduce a premium, flow down to other models.
Just one other comment there.
Mm-hmm.
Similar to Active Trim, we believe Active Trim, a premium feature, we think one day that's going to be standard on all boats and all our engines. That's where you're improving the customer experience, at the same time, bringing in some innovation.
Kevin? Yeah. Microphone coming for you.
Hi. Talking about Freedom Boat Club, way beyond 2025 in the long run, where do you see the saturation point for how many locations? Or just ballpark, are we talking about high hundreds, low thousands, in the world, too?
Our, our current view would be the market would support, let's say, around 1,500. And today, Freedom is the largest. There is really no, you know, competitor the same size or scale. You know, our, our view could evolve that there could be more opportunity. Keep in mind, too, Freedom is just the one way to participate with the 50 million, and there are certainly other shared access models and adjacencies that we'd be interested in.
That's just the US number?
U.S. number. Yeah.
Just to follow up with that, does the parent being the manufacturer, does that give you guys a competitive advantage, being able to finance and get a $100,000 boat at the franchises where your other big competitors could not really afford that?
It does give us a competitive advantage, and I think it also, you know, on the other side, the Freedom Boat Club is also informing and I think in the future, some of our boat design, as you think about ease of use and winning with new consumers. So it is definitely a really great partnership, and I think we have an advantage.
So you'd see at the show, Bayliner introducing the Trophy product. The Trophy product, we went through rapid prototyping iterations as soon as we acquired Freedom with their leadership teams to put on features and aspects of that boat to make it resonate and hit the Freedom channel of full speed.
Last question is going to Mr. Conder.
Okay. I'll shift on Freedom back to the short end of the spectrum here. So, with the pull forward on the engines, the adoption rate, so that's great, getting the P&A annuity started. But does that give you a little blip positively in engines in the short run here, say, 20 or whatever?
Mm-hmm.
Then do you have a little bit of a lull kind of over the back part of the tail of the period, I guess, is one question. Just because they're not going to replace... After they do the big initial shift away from Yamaha to you all.
No. Well, you know, clearly, the incrementality over time is going to change a bit. But I think the really good thing is the rate of expansion of Freedom Boat Club is faster than we thought. When we bought it, I think we had 180 locations, and we're up at 213 already. So I think, you're right. You know, you could get to a point where you flush through to full adoption, and then over time, the incrementality reduces. But I think the really interesting part is the rate at which Freedom's expanding is so fast. That's gonna mitigate that to some extent.
I would just add that the P&A annuity is also really powerful. Boats in the Boat Club model are used 4 times as much as the average consumer boat.
Okay. And then, along that line, conversion rates at the boat shows, I know again, there's been mixed views across the industry, how shows have gone season to date, but it seems like conversion rates are up. Any commentary on that? And then lastly, Bill, could you go back to slide 107, where you were saying, "If we just do this with the P&A, we can cover our interest and CapEx and so forth, and the rest of our businesses could go down to '08 levels," I think you said? Just maybe reiterate that.
Yeah. So if you look at the aftermarket's P&A, you've got, call it $300 million of earnings coming from aftermarket. If you add up interest, you add up corporate expenses, you add up the dividend, that earning stream exceeds what we get from aftermarket. And so you think about planning, capital structure, debt levels. If you think about planning for dividends, it gives you a lot of flexibility, I think, to count on that as being an anchor for supporting those two important flows out to stakeholders. And then, if you look at the other side of the house, getting the break-even point of that business to a point where we can absorb quite a shock into the market, I think is the other pillar of that.
So market levels are down?
Yeah.
So when you say conversion, you mean engine conversion rate, or did you mean-
No, just in general, buyers coming in.
Oh, buyers coming in. Well, I think shows so far have been good, constructive, I think. But I think the thing that Huw mentioned, which is really important, is we're getting really strong leads. Buyers are coming in to shows with the intention to buy. And actually, one thing that makes us, that's very encouraging is the dealer traffic. Outside shows is strong with a lot of good sentiment and a lot of buying intent. So that's positive.
Okay. Thank you very much to the speakers. With that, we are wrapped up in this room. Thank you for joining us. I hope many of you will stay and join us for cocktail hour, which starts at 5:30 P.M. down in the wine room. There should be plenty of signs for you to find it. Again, thanks for attending. Thank you for those of you that are online, following us via the webcast, and we look forward to seeing you, not only at the show, but throughout the year this year. Thanks.
Thank you all very much.