Despite the uncertain economic context, BRP continues to gain market share and the recreational vehicle manufacturer intends to continue on its way.
Management stresses that demand for its products remains strong. CEO José Boisjoli talks about a promising future. “We are well positioned to generate solid growth in the years to come,” he said on the sidelines of BRP’s year-end performance presentation on Thursday.
If the release of new products should help BRP attract new enthusiasts, José Boisjoli presented statistics to justify his confidence and make people understand the position in which the company he leads finds itself.
“Our products are in a more premium category and appeal to a more affluent clientele, which insulates us from economic fluctuations,” he says.
“The household income of our customers is 35% higher today than before the pandemic. That’s an incredible statistic! “, he adds. “In addition, 66% of our US customers come from a household with an income greater than $100,000 per year. »
He points out that BRP has become in the last year the manufacturer that sells the most products by dealership in North America. “We notably overtook our Japanese and American competitors. This is the result of our expanded product line. »
José Boisjoli says becoming the best manufacturer in the industry for consumers and dealers was one of his goals nearly 20 years ago when BRP became independent after it was sold by Bombardier to investors including Bain, Caisse and members of the Bombardier and Beaudoin families. “This accomplishment is a very proud moment. I can say mission accomplished,” says the man who has been CEO of BRP since 2003.
The 65-year-old manager maintains that he is not yet ready to pass the torch. “There are plenty of challenges ahead. One of them is the energy transition,” he says.
“The automotive industry is moving into high gear with electrification. It’s a bit more complex for us. Our products are off-road for use in the forest, in the field, and on the water; places without access to refills. Some of the customers will go electric but some will stay with combustion vehicles for practical reasons. »
It was absolutely necessary to ask José Boisjoli if BRP is interested in buying or investing in its Quebec competitor Taiga, which is struggling with significant financial difficulties. “We didn’t consider it,” he said. “It’s a distraction because we have a plan and we’re following our plan,” he said.
You should know that the two companies use different technologies to electrify their products.
“We develop our own technologies. We now have 200 people in Valcourt dedicated to electrification. And we have a hundred more in Austria. We aim to hire 75 additional people in Valcourt this year. We’re going 100 miles an hour in there. We do our business and when you start a program, you shouldn’t get distracted,” says José Boisjoli.
BRP plans to electrify all of its existing products by the end of 2026, starting with snowmobiles.
The manufacturer of Ski-Doo snowmobiles and Sea-Doo personal watercraft ended its fiscal year strong. Adjusted earnings per share for November, December and January rose 28% to $3.85 from analysts’ forecast of $3.73.
Revenue for the quarter grew 31% to a record $3 billion. This is more than the 2.98 billion expected by investors.
For fiscal 2024, which began in the last few weeks, BRP management says it expects revenues to fluctuate between 10.9 and 11.2 billion, up 9 to 12% year-on-year, and that profits per share are between $12.25 and $12.75, up 2-6% from 2023.
The analyst consensus for fiscal 2024 was around revenue of $10.6 billion with earnings per share of $12.42.
“Fourth quarter results reflect strong execution despite ongoing disruptions, including supply chain issues (which management believes are gradually normalizing) and higher production costs,” commented analyst Sabahat Khan of RBC.
At Desjardins, Benoit Poirier mentions that expectations were possibly too conservative regarding the outlook for the coming months given the higher than expected forecasts recently posted by BRP peers.
