BRP Inc.

Good morning, ladies and gentlemen. Welcome to BRP Inc's FY 2022 fourth quarter results conference call. For participants who use the telephone line, it is recommended to turn off the sound on your device. I would now like to turn the meeting over to Mr. Philippe Deschenes. Please go ahead, Mr. Deschenes.

Thank you, Julian. Good morning and welcome to BRP's conference call for a fourth quarter and year-end results for fiscal 22. Joining me this morning are José Bourgelis, President and Chief Executive Officer, and Sébastien Marcel, 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 and that the actual results could differ from those implied in these statements. The forward-looking information is based on certain assumptions and is subject to risks and uncertainties, and I invite you to consult BRP's MD&A for a complete list 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 José. Thank you, Philippe. Good morning, everyone, and thank you for joining us. Please turn to slide four. I am very pleased with our fourth quarter performance, which concluded an exceptional year. We've delivered record annual financial results, reaching the highest revenue and profitability in our history. Our team continues to gain market share in our product line in the power sports industry, while managing through supply chain pressure, demonstrating solid execution once again. In fact, our manufacturing agility allows us to better serve our dealers and customers alike. Moreover, during the year, we've delivered capacity extension projects on time and on budget. Our new ULIS3 facility added about 50% of side-by-side capacity, and our Querétaro extension added about 30% of personal watercraft capacity. In addition, we strengthened our industry-leading product portfolio. We introduced several new market-shaping products in our product line, And the highlight of the year was the introduction of the CEDU switch, which extended our addressable market, positioning us well to continue to grow in the coming years. In short, we've delivered an exceptional year, despite the turbulence caused by supply chain disruption. Now let's turn to slide five for the key financial highlight of the year. We've delivered record financial results on both our top line and bottom line, hitting historic highs on several financial metrics. Our revenue ended the year at $7.6 billion, up 28% over fiscal year 21. This growth was driven by higher volume across all our product lines and favorable pricing. Likewise, our profitability reached new heights. Our normalized EBITDA was up 46% to $1.4 billion, representing a margin of 19.1%. And our diluted normalized earnings per share grew 84% to reach $9.92, ending above our guidance range of between $9 and $9.75. Turning to slide 6 for a look at our North American PowerSport retail performance and market share for the year. As you know, Fistel Year 22 was marked by continued consumer demand for our product. However, our low level of network inventory, coupled with the ongoing supply chain constraint, limited our ability to fully meet demand. Still in this context, our team allowed us to outpace the industry. Our retail was down 6% for the year compared to the industry, which was down mid-teen. As a result, we ended the year with about 30% market share, gaining about 3% points over fiscal year 21, and about 10 percentage points over the past six years. This solid performance is a testimony of our continued agility to meet consumer demand. Now turning to slide seven for a brief look at our Q4 retail performance. Our retail sales continue to be constrained by product availability in the fourth quarter. Still, we were able to outpace the industry in North America, representing over 70% of our revenue. We're also able to outpace the industry and gate market share in snowmobiles, as we prioritize the utilization of available components for that segment into for its peak retail season. Let me elaborate further on this on slide eight. Our modular design approach combined with our diversified product portfolio allow us to leverage common components across our different product line and according to seasonality. We have illustrated this on the slide. As you can observe, we have three models of gauge, the compact, the mid-range, and the high-end. which are utilized across our different product lines. In collaboration with our supplier, we can prioritize the type of gauge we needed and our team can then decide on which product line it will be installed, depending on seasonality. This modular approach is a competitive advantage. It provides additional flexibility to navigate the supply chain constraint, especially with the current limited availability of semiconductors. In Q4, we prioritize our snowmobile, and this allows us to outpace the industry in terms of total retail performance. Turning to consumer demand on slide nine. Consumer interest for power sport is not slowing down. The momentum with pre-season customer deposits for personal watercraft and snowmobile is continuing and reaching record levels. As of March 13 in North America, personal watercraft customer certificates for Season 22 are up over 25%, and snowmobile spring unit bookings for Season 23 are up over 100%. In addition, there are many signs pointing to sustain strong level of consumer interest in Parsport. There is a continued influx of new entrants. Website traffic remains elevated. And C2 Switch and Can-Am off-road vehicles are also seeing strong momentum with customer pre-orders. So all in all, we are well positioned to capitalize on continued interest in Parsport. Now, let's turn to slide 10 for a year-round product. Revenue were up 12% to $853 million in the fourth quarter. Let me provide a brief overview of our North American retail performance. Our retail slightly lagged the industry in Q4 for all our product lines, including side-by-side ETV and three-wheel vehicles, as it was limited by supply chain disruption and our decision to prioritize snowmobile production. However, season to date, side-by-side and ETV outpaced the industry. While it is still early in the season, three-wheel vehicle lagged the industry, also due to a change in production schedule favoring snowmobiles. All in all, we are pleased with the momentum we are seeing in all product lines, and are well positioned to continue to gain market share, driven by our strong lineups. A quick update on capacity extension projects in side-by-side vehicles. We have completed the ramp-up of UAS3, which provides us with 50% more capacity compared to fiscal year 21. In addition, remember that last quarter, we announced the start of the Phase 2 extension of UAS3, which plan to effectively double production capacity at that facility. The production ramp-up is forecast to start in the first quarter of fiscal year 24. With this additional production capacity, we are in a solid position to gain from the strong side-by-side demand. Turning to seasonal product on slide 11, seasonal product revenue were up 56% in Q4 to $1 billion. Let's start by looking at snowmobile. 11 months into its season 22, the North American snowmobile industry is down in the low 10%, while our snowmobile retail is up low single digit percent, significantly outpacing the industry. We reached a record high market share in North America in Q4, and this momentum continue in February. We are experiencing similar success in Europe, where we also reached record high market share in Scandinavia season to date. Turning to our model year 23 lineup. To sustain our momentum, we continue the pace of innovation and introduce an all-new REV Gen 5 platform available in trail and deep snow segments, as well as new models significantly designed for new entrants and younger riders. Early trend in spring unit booking are very strong, which is positioning us well for success in season 23. Turning to personal watercraft. While still very early in the season, the North American industry retail is down about 20%, while our CEDAW retail is down low 60% due to a lack of inventory in the network and our decision to prioritize snowmobile production. However, we have good traction in counter-seasonal market. Sea-dew is performing very well with over 10% stage point of market share gain in Australia and New Zealand so far this season, and retail up over 20% for the fourth quarter in Brazil. Many signs are pointing to positive momentum for personal watercraft business. the traction in counter-seasonal market, and the continued very strong level of customer pre-season certificates in North America. Continuing on slide 12, with a look at power sport part accessories and apparel in OEM engine. This segment experienced a similar trend as vehicle. Revenue were up 21% in Q4 and surpassed the $1 billion mark for the first time. This growth was driven by higher replacement parts revenue due to increased product usage combined with strong unit retail, which generated increased accessory sales. As you can see, our proprietary link ecosystem continues to be popular. Now turning to marine. Revenue were up 6% to $135 million in Q4. Looking at retail sales. Tellwater is in the core of its retail season in Australia and is performing very well with retail up 19% for the quarter and about 10% year-to-date. In North America, we are off-season, but our booking for season 22 are complete. In a sense, we will be running at maximum production capacity all year. We are pleased with the performance of our boat brand, but the next big leap will happen this summer when we introduce new model year 23 boats with the Project Go SandGen technology. With that, I will turn the call over to Sébastien.