BRP Inc.

All participants, please stand by. Your conference is ready to begin. Good morning, ladies and gentlemen, and welcome to the BRP Inc.'s FY20 Fourth Quarter Results Conference Call. I would now like to turn the meeting over to Mr. Philippe Deschenes. Please go ahead, Mr. Deschenes.

Thank you, Mo. Good morning, and welcome to BRP Conference Call for the Fourth Quarter of Fiscal Year 2020. Joining me this morning are Josee Boisjoli, President and Chief Executive Officer, and Sebastien Martel, Chief Financial Officer. Before we move to the prepared remarks, I would like to remind everyone that certain forward-looking statements will be made during the call that are subject to a number of risks and uncertainties. I invite you to read BRP's FY20 earnings press release for a listing of these. Also during the call, reference will be made to supporting slides, and you can find the presentation on our website at brp.com under the investor relations section. So with that, I'll turn the call over to Josee. Thank you, Philippe.

Good morning, everyone, and thank you for joining us. This morning, we'll give you the Q4 and fiscal year 20 results. However, given how rapidly the situation with COVID-19 is evolving globally, it is difficult to predict its impact on our business. You will understand that we will continue to adjust our plan as things unfold. Let us start by reviewing the current situation. First, the employees of BRP are doing well. We have established clear policy on travel, events, and health, and will continue to update them as government response evolves. We have also adopted work-from-home practice where applicable. Second, I would like to thank all our employees, in particular our manufacturing workforce, who are taking extra care to apply special health protection measures. Third, we have had some challenges, but have not experienced any break in our supply chain to date. Fourth, as of today, all our manufacturing sites are operational, but we anticipate there will be line speed reduction or temporary closure to adapt to the demand. Fifth, most of our dealers around the world, with a few exceptions, are continuing their operation. And dealers are completely Spain and France for the moment. Interesting to note, in China, 26 out of our 33 dealers have reopened for business, and traffic is beginning to resume. As you can imagine, we are monitoring the situation closely and will continue to adapt. Before I move on to discuss fiscal year 20 results, I would like to remind everyone that our diversified manufacturing footprint, product portfolio, and market presence provide us a solid base to work upon. Let's start by looking at our financial results for the year on Flight 4. Our revenues were up 15% to reach $6.1 billion, primarily driven by strong growth in year-round products. Our normalized EBITDA was up 23%, to 804 million, resulting in a normalized earning per share that came in above our guidance range at $3.83, representing solid growth of 24% over last year. For the fourth straight year, we have been able to outpace the industry. Our North American PowerSport retail sales for the year were up 15% compared to an industry that was up mid-single digits. when excluding snowmobile or North American power sport retail sales were up 17% in an industry that was up mid single digit. This is a testament to our reputation for pushing technology and innovation to create market shaping product as well as our flawless execution and our strong dealer network. It's difficult to celebrate in time like this, but we achieved are 2020 objective one year in advance by delivering over $6 billion in revenue and over $3.50 in normalized EPS. I'm extremely proud of what BRP is becoming. I would like to thank all our employees. We have set a solid foundation together. Now let's move to our performance for the fourth quarter, starting with the look at global retail on slide seven. Our strong momentum continued into the fourth quarter as once again our power sport product lineup continued to drive strong consumer demand around the world. In North America, our retail was up 12% or 21% when excluding snowmobile. Latin America was up 19% driven by strong side-by-side and personal watercraft sales. We continued performing well in EMEA, which retailed up 7% even though the industry was down low single digit and in Asia Pacific where our retail was up 9% while the industry was up mid single digit. Looking at North American retail by product line on slide eight. Again, this quarter we've delivered solid growth across our PowerSport product portfolio. We continue to outperform the off-road industry with side-by-side retail growing above 30% for a second consecutive quarter and ETV Retail being up about 10%. Early in the season, three-wheel vehicle retail was up low single digit, continuing to grow despite lapping a very difficult compatible as our retail had tripled during last year's fourth quarter. Personal Watercraft performed well early in the season with retail up low team and we had a strong quarter for snowmobile with retail up mid-single digit in an industry that was down high single digit. Now let's turn to slide nine for the year-round product highlight. Revenue were up 18% driven by a higher volume of side-by-side sold. On the retail side, seven months into season 20, the side-by-side industry was up high single digit. The demand for Can-Am side-by-side was very strong and our retail was up low 30% season to date. Can-Am Side-by-Side was also performing well in international market with retail for the quarter up over 30% in Latin America and up over 40% in EMEA and Asia-Pacific. Turning to ATV, the North American ATV industry was also seven months into the season and retail overall was up low single digit. For the same period, Can-Am ATV was up low 10%, notably gaining share in the mid-CC segment. Caname TV was also performing very well in Europe and in Asia-Pacific with retail up high single-digit and low teen respectively. Now looking at the three-wheel vehicle. Early in Season 20, the North American three-wheel motorcycle industry was up low single-digit and Caname three-wheel vehicle retail was up low single-digit. We started shipping the new RT model in the last two weeks of the fourth quarter, and it is very well received by dealer and consumer. Turning to seasonal product on slide 10. Seasonal product revenue were down 6%, primarily driven by a lower volume of personal watercraft sold due to production timing. Looking at retail, starting with personal watercraft, we are currently at the end of the season in counter-season markets, and SIDU continued to experience solid growth, notably in Brazil, where retail was up in the mid-20% for the quarter. In Australia and New Zealand, our retail was up low single digit despite the negative impact from the wildfire problems. In North America, traction at the boat show was good and season to date, retail was up low 10%, both for the industry and for SIDU. Turning to snowmobile, 10 months into the season, the North American snowmobile industry was about flat compared to last year. Our Skidoo lineup continued to drive strong consumer demand, resulting in retail that was up about 10%, and we remain number one in North America in all the segments in which we are competing and have globally the highest market share in our history. Also, We recently held our dealer event where we introduced our Model Year 21 Ski-Doo and Lynx lineup. The most important use for our Model Year 21 Ski-Doo lineup was the introduction of the world's first factory-built two-stroke turbocharged engine that is available on the new Ski-Doo Summit 850. This is another great example of our ability to push technology and disrupt the industry. Continuing with the look at power sport, parts, accessories, and apparel at OEM and OEM engines. Revenue were up 6% in the quarter, driven by a higher volume of year-round product, parts, and accessories. Fiscal year 20 was an excellent year for our accessories business as we've delivered double-digit accessories revenue growth with all our power sport product line. Now looking at the marine category. Revenues were up 19% in the quarter, driven by the acquisition of Tailwater, and a higher volume of outboard engines sold. Looking at retail sales, seven months into season 20, the North American outboard engine industry was about flat, with Evinrude retail down 18%. Boat retail for Alumacraft, Manitou, and Quintrex was generally in line with the industry. For the marine business, we are following our buy-build-transform strategy, and I would like to remind you again that this is a mid- to long-term play. Overall, we had a very good result for fiscal year 20, and our momentum continued early into fiscal year 21. Exceptionally, this morning, we'll share some color on our fiscal year 21 retail. Our retail from February 1st to last Friday on March 13 was up 11% and 24% excluding snowmobiles for a good start of the year. However, in this current global uncertainty, we are proactively implementing measures to protect our financial flexibility and are monitoring closely the situation. In this context, will not issue a full year guidance for fiscal year 21 at this time. We believe that BRP will be well positioned when the economy bounce back. And with that, I will turn the call over to Sebastien and will return for closing remarks.