Brp, Inc. · TSX:DOO
Brp — Q1 FY21 Earnings Presentation
28 slides from Brp's earnings presentation, May 28, 2020
Slide 1: Quarterly Review: First Quarter Ended April 30, 2020
QUARTERLY REVIEW FIRST QUARTER ENDED APRIL 30, 2020
Slide 2: Forward-Looking Statements
Forward-Looking Statements Caution concerning forward-looking statements Certain statements in this presentation, including, but not limited to, statements relating to our expectations for FY21, financial outlook and related assumptions; our marine strategy realignment and planned investments and ex
Slide 3: Quarterly Review - José Boisjoli
JOSÉ BOISJOLI PRESIDENT PRESIDENT AND AND CHIEF CHIEF EXECUTIVE EXECUTIVE OFFICER OFFICER QUARTERLY REVIEW SECOND FIRST QUARTER QUARTER ENDED ENDED APRILJULY 31, 2018 30, 2020 QUARTERLY REVIEW First Quarter Ended April 30, 2020
Slide 4: FY21 Q1 Context
FY21 Q1 Context Context North American Retail Sales Evolution North American Powersports Year-over-Year Retail Growth The beginning of FY21 was marked by the impact of COVID-19 in Units, excluding snowmobile International markets › The virus initially hit China forcing our dealers to close their bus
Slide 5: Managing through the COVID-19 Situation
Managing through the COVID-19 Situation Key Initiatives Protecting our Financial Flexibility Proactively taken actions to ensure the health and safety of our employees and limit COVID-19 potential impact on our business FY21 OVERHEAD REDUCTION › Implemented strong safety measures including work from
Slide 6: Discontinuation of Outboard Engines Production
Discontinuation of Outboard Engines Production STRATEGIC RATIONALE The COVID-19 situation has forced us to review downward our short term growth assumptions and prioritize our investments Despite its innovative technology, our outboard engines competitive positioning has been eroding over the years
Slide 7: Maintaining Focus on our Marine Strategy
Maintaining Focus on our Marine Strategy Our Marine Strategy Supply Agreement with Mercury BUY Entered the North American Entered the North American Entered the International Fishing Market Pontoon Market Aluminum Boats Market Well-positioned with a Concurrently with the solid portfolio of reputable
Slide 8: Manufacturing Operations Update
Manufacturing Operations Update POWERSPORTS MANUFACTURING FOOTPRINT COUNTRY REGION PRODUCT LINES OPERATIONS STATUS[1] CANADA Valcourt Snowmobiles and 3WV IN PRODUCTION (Restarted on May 18, 2020) ATV, SSV, 3WV, PWC PRODUCTION RAMP-UP MEXICO Juarez and Querétaro and Engines (Started May 18, 2020) AUS
Slide 9: Delivering Best-in-class Dealer Value Proposition through COVID-19
Delivering Best-in-class Dealer Value Proposition through COVID-19 › Extended floorplan support until the end of June EASING THE FINANCIAL BURDEN › Adjusted PerforMAX targets until the end of July to account for potential reduced demand OF THE CRISIS › Proactively adjusted dealer orders › Eased coop
Slide 10: FY21 Q1: Positive Retail Performance in North America
FY21 Q1: Positive Retail Performance in North America North American Powersports Retail Growth by Product Line FY21 Q1 compared to FY20 Q1 BRP VS. GROWTH DECLINE BRP INDUSTRY INDUSTRY LOW-SINGLE TOTAL POWERSPORTS 4% DIGIT % LOW-SINGLE POWERSPORTS EXCL. SNOWMOBILES 10% DIGIT % LOW- HIGH-SINGLE SIDE-B
Slide 11: FY21 Q1 North American Retail Performance Drivers
FY21 Q1 North American Retail Performance Drivers BRP North American Powersports Retail Growth[1] BY COUNTRY BY DEALER STATUS[2] BY MARKET TYPE United States Canada Open Closed Rural Urban +24% +20% +14% -7% -14% -21% [1]Total Powersports excluding snowmobile [2]Based on dealers opened or closed as
Slide 12: Year-Round Products
Year-Round Products Highlights Revenues CA$ millions Year-Round Products revenues up 2% ◼ Primarily attributable to a strong start of quarter and a positive foreign exchange +2% rate variation, partially offset by the COVID-19 impact and higher sales programs Side-by-Side Vehicles (SSV) ◼ Ten months
Slide 13: Seasonal Products
Seasonal Products Highlights Revenues CA$ millions Seasonal Products revenues down 14% ◼ Primarily due to the COVID-19 pandemic, partially offset by a favourable foreign -14% exchange rate variation Snowmobile ◼ The North American snowmobile industry ended its 2020 season on March 30 $375.4 $322.6 w
Slide 14: Powersports PA&A and OEM Engines / Marine
Powersports PA&A and OEM Engines / Marine Powersports PA&A and OEM Engines Highlights Revenues CA$ millions Powersports PA&A and OEM Engines revenues down 15% ◼ Mainly attributable to COVID-19 with dealers closed or having -15% limited activities ◼ Parts sales are linked to dealers’ ability to servi
Slide 15: Financial Review - Sébastien Martel
JOSÉ BOISJOLI SÉBASTIEN MARTEL PRESIDENT CHIEF ANDOFFICER FINANCIAL CHIEF EXECUTIVE OFFICER QUARTERLY REVIEW SECOND FIRST QUARTER QUARTER ENDED ENDED APRILJULY 31, 2018 30, 2020 QUARTERLY REVIEW First Quarter Ended April 30, 2020
Slide 16: FY21 Q1 Financial Highlights
FY21 Q1 Financial Highlights Revenues Diluted Earnings per Share Normalized Diluted Earnings per Share[1] CA$ millions CA$ CA$ -8% -$2.83 -52% $0.25 ($2.58) $1,334 $1,230 $0.54 $0.26 FY20 Q1 FY21 Q1 FY20 Q1 FY21 Q1 FY20 Q1 FY21 Q1 Highlights vs. Last Year ◼ Revenues down 8% primarily driven by lower
Slide 17: FY21 Q1 - Revenues and Retail Sales by Geography
FY21 Q1 - Revenues and Retail Sales by Geography UNITED ASIA- LATIN CANADA EMEA STATES PACIFIC AMERICA REVENUES[1] REVENUES[1] REVENUES[1] REVENUES[1] REVENUES[1] +5% -13% -33% -6% -32% RETAIL[2] RETAIL[2] RETAIL[2] RETAIL[2] RETAIL[2] +14% -14% -4% -13% +22% [1]FY21 Q1 revenues variation vs. FY20 Q
Slide 18: FY21 Q1 - Gross Profit Margin Bridge
FY21 Q1 - Gross Profit Margin Bridge COVID-19 Impact (0.2%) (0.4%) (0.5%) 0.8% (3.1%) 22.5% 22.6% 19.1% FY20 Q1 Volume, Mix, Production Costs, Foreign FY21 Q1 Additional Fixed Costs FY21 Q1 Gross Profit Pricing and Depreciation and Exchange Gross Profit Costs net of Absorption and Inventory Gross Pr
Slide 19: FY21 Q1 - Net Income and Normalized Net Income Bridge
[1] FY21 Q1 - Net Income and Normalized Net Income Bridge Net Income Bridge Normalized Net Income[1] Bridge CA$ millions CA$ millions 24 7 (62) 25 35 (20) 53 (62) (171) 7 3 (226) 23 38 (61) (16) FY20 Q1 Volume, Mix, Production Operating Net Financing Foreign Impairment Foreign FY21 Q1 Net Income Pri
Slide 20: BRP North American Powersports Dealer Inventory
BRP North American Powersports Dealer Inventory Highlights Dealer Inventory Year-over-Year Bridge Units, Excluding Outboard Engines and Boats Dealer inventory[1] ended FY21 Q1 up 7% from FY20 Q1 level ◼ Increase primarily driven by: +7% ◼ 3WV due to weaker industry trends resulting from the COVID-19
Slide 21: FY21 Financial Outlook
FY21 Financial Outlook FY21 Total Company Revenues Expected Variation PERIOD VARIATION VS. SAME PERIOD IN FY20 KEY DRIVERS › Production suspension in most sites in early May followed by gradual ramp-up FY21 Q2 ABOUT 40% › Lower expected demand outside of United States › Discontinuation of outboard e
Slide 22: Closing Remarks
JOSÉ BOISJOLI CLOSING REMARKS PRESIDENT AND CHIEF EXECUTIVE OFFICER QUARTERLY REVIEW SECOND FIRST QUARTER QUARTER ENDED ENDED APRILJULY 31, 2018 30, 2020 QUARTERLY REVIEW First Quarter Ended April 30, 2020
Slide 23: FY21 Priorities and Beyond
FY21 Priorities and Beyond MANAGE THE CURRENT ENVIRONMENT › HEALTH AND SAFETY FIRST: Ensure a safe work environment for our employees › REMAIN AGILE: Operate a successful production ramp-up through our operations, suppliers and dealer network › MAINTAIN MARKET LEADERSHIP: Continue delivering best-in
Slide 24: Q&A Period
JOSÉPERIOD Q&A BOISJOLI PRESIDENT AND CHIEF EXECUTIVE OFFICER QUARTERLY REVIEW SECOND FIRST QUARTER QUARTER ENDED ENDED APRILJULY 31, 2018 30, 2020 QUARTERLY REVIEW First Quarter Ended April 30, 2020
Slide 25: Appendix
JOSÉ BOISJOLI APPENDIX PRESIDENT AND CHIEF EXECUTIVE OFFICER QUARTERLY REVIEW SECOND FIRST QUARTER QUARTER ENDED ENDED APRILJULY 31, 2018 30, 2020 QUARTERLY REVIEW First Quarter Ended April 30, 2020
Slide 26: FY21 Q1 - Financial Overview
FY21 Q1 - Financial Overview Q1 Comparison CA$ millions (Unaudited) FY21 FY20 Change Total Revenues $1,229.8 $1,333.7 ($103.9) Growth -7.8% Gross Profit $235.1 $300.6 ($65.5) As a % of revenues 19.1% 22.5% Operating Income ($127.3) $89.0 ($216.3) Normalized EBITDA[1] $123.0 $146.7 ($23.7) Growth -16
Slide 27: Reconciliation Tables
Reconciliation Tables Three-month periods ended CA$ millions (Unaudited) Apr. 30, 2020 Apr. 30, 2019 Net Income ($226.1) $23.8 Normalized Elements: Foreign Exchange Loss on Long-term Debt and Lease Liabilities 88.8 27.6 Transaction Costs and Other Related Expenses[1] 0.5 0.3 Restructuring and Relate
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