BRP Inc.

Good morning, ladies and gentlemen. Welcome to the BRP Inc.' 's Fiscal Year 25 First Quarter Results Conference Call. For participants who use the telephone line, it is recommended to turn off the sound on your device. And I would like to turn the meeting over to Mr. Philippe Deschaines. Please go ahead, Mr. Deschaines.

Thank you, Sylvie. Good morning and welcome to BRP's Conference Call for the First Quarter of Fiscal Year 25. Joining me this morning are José Bocelli, 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 risk and uncertainty, 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 flights, 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 Joseph.

Thank you, Philippe. Good morning, everyone, and thank you for joining us. The first quarter of fiscal 25 play out essentially in line with our plan. Financial results were as expected and reflect our focus on managing network inventory to support our dealers. From a retail standpoint, our product portfolio performed relatively well despite softer market conditions. As the year continues to unfold, our dealers are very cautious with respect to inventory as uncertain economic conditions and high interest rates are impacting them more than anticipated. Moreover, many OEMs are turning to more aggressive promotional activity and dealer profitability is under pressure as they are selling at low margin to move inventory. On the marine side, the industry has been softer than expected since April, and dealers are taking a limited number of new boats. As you know, we have always been close to our dealers and proactive in taking market conditions. Therefore, in light of the current context, we are adjusting our production to further reduce dealer inventory. This is reflected in our updated guidance. Let's turn to slide four for key financial highlights. Revenue reached $2 billion, normalized EBITDA was $247 million, and normalized EPS was $0.95. all as expected and consistent with our planned volume reduction. As for retail, our North American transport sales were down 5%, in line with the industry, with a solid performance in year-round product, offset by softer trends in seasonal products, as you can see on slide 5. In fact, our year-round product retail was up 11%, with solid growth and market share gain across all product lines. Meanwhile, seasonal products were down, reflecting a soft end of season for snowmobiles due to unfavorable winter conditions, softer overall industry trend in marine, which also impacted the sea-dew switch, and a difficult compatible for personal watercraft as Q1 last year was unusually strong. Still, while the industry was down mid-10% versus last year, it was up about 10% versus pre-COVID. In summary, despite more challenging market conditions, we continue outpacing the industry across most product lines. Turning to slide six for an update on the global power support market. First, looking at geographical region. Canada remained relatively strong, with retail up 18% in the quarter, excluding snowmobile. The U.S., however, is softer, with retail down 4%, also excluding snowmobile. Latin America is continuing to show strength, with retail up 11%. EMEA and Asia-Pacific are still seeing softer demand, with retail down 13% and 2% respectively. From a consumer preference standpoint, we continue to see more traction globally for premium vehicles. In the off-road category, trends are more positive in the utility segment compared to recreational products. One element that has evolved during the quarter is that many OEMs have been more aggressive with promotion and pricing. We expect this trend to continue throughout the year. As I said earlier, our focus is on managing network inventory. In March, our objective was to reduce transport shipment by 10% to 15% by the end of the year. Now, with consumer remaining forces, a more competitive landscape, and the high cost of carrying inventory, dealer profitability is under pressure. Our revised plan calls for 15% to 20% reduction, and to accelerate depletion, we will limit Q2 shipment. In parallel for marine, we are also further reducing production until the end of the year. In addition, we are increasing promotional support for power sport and marine to accelerate inventory returns. Bottom line, we will support our dealers through this more challenging environment. This is a priority. Now let's turn to slide 8 for a more detailed look at year-round products. Revenue went down 13% to $1.2 billion, primarily due to reduced shipment. At retail, Can-Am side-by-side had its strongest Q1 ever. Retail was up 19%, primarily driven by solid growth in the utility category and in premium model, notably the defender cap. We are pleased with the sustained momentum of our side-by-side lineup as our numbers of units retailed during the first quarter has nearly doubled compared to pre-COVID level. ATV also had a solid quarter, reaching its highest quarterly market share ever, which retailed up high single-digit percentage. This performance was driven by the continued success of our new Outlander platform, which delivered market share gains in the mid-CC segment. Looking at three-wheel vehicles, Can-Am is off to a good season start, which retailed up low single-digit. These strong results are driven by the positive consumer reaction to the recent upgrade we made to our Spyder F3 and RT lineups. Turning to seasonal products on slide 9. Revenue went down 23% from last year to $535 million, probably reflecting reduced shipment. Looking at our retail performance, in Snowmobile, we've closed the North American season on March 31st. which retailed down high single digits, once again outpacing the industry and further increasing our record high market share. We also ended the season with the number one position in each segment in which we compete. In Scandinavia, the season had a late start, resulting in retail down low 10%, but we remain we maintain our industry-leading position with market share over 70%. This performance demonstrates the strength of our Ski-Doo and Lynx brands. Now looking at the upcoming season, we just completed our spring booking. While volume came in broadly in line with expectations, the mix is not as rich as anticipated. Looking at Ski-Doo products, Retail was down as we were facing a difficult comparable due to late shipment last year. However, from an historical perspective, retail is performing well with SEDU up about 18% from a typical pre-COVID first quarter. As for the SEDU switch, it also faced the same dynamic as personal watercraft with late shipment in Q1 of last year leading to a decrease in retail this year. Given software trends in the marine industry, increased promotional activity and high level of dealer inventory, we are also taking a more cautious stance with our Sea-Doo Switch business. As such, we have decided to reduce our shipment for the balance of the year. However, we remain confident in the long-term prospects for this business, especially with new products in the pipeline for the coming years. Moving to slide 10, with power support parts, accessories, and apparel, and OEM engine. Revenue were up 1% to $289 million, driven by higher volume and favorable pricing, offset by higher sales program. From a product standpoint, our parts and accessory business, or off-road, continued to increase, driven by the growing fleet of vehicles in use and the positive retail momentum. However, unfavorable winter conditions negatively impacted sales of parts and accessories for snow-related products. Moving to marine, revenue were down 58% to $50 million, driven by the lower volume of boat shipment. Looking at retail sales, Allumacraft retail was up in the low 20%, while Manitou retail was about flat. Our retail increase in North America was the result of good pre-sales at both shows. As for Quintet, retail was down low 10% in line with the industry trend. Although the marine industry has been challenging in recent quarter, this business is for us a long-term role play. With that, I turn the call over to Sébastien.