BRP Inc.

Good morning, ladies and gentlemen, and welcome to the BRP, Inc. Fiscal Year 2025 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 Deschaines. Please go ahead, sir.

Thank you, Sylvie. Good morning, and welcome to BRP's conference call for the fourth quarter of fiscal year 25. Joining me this morning are José Boisveli, President and Chief Executive Officer, and Sébastien 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 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 Sporting Flight, and you can find the presentation on our website at brp.com under the investor relations section. And as a reminder, note that following the announcement of the initiation of the sales process for our marine businesses, these businesses are now presented as discontinued operations. Therefore, all periods presented in these release reflect continuing operation only unless otherwise noted. So with that, I'll turn the call over to Joseph. Thank you, Philippe.

Good morning, everyone, and thank you for joining us. Although fiscal 25 brought its share of challenges, I am proud of our team's agility and dedication. We have always been known to be leaders, and this year was no different. In light of a difficult macroeconomic environment, softer industry, and continued pressure on consumer demand, we were the first OEM to proactively reduce production and shipments. Throughout the year, we remain focused on the disciplined execution of our inventory reduction plan to support our dealers and protect the value of our brand. As expected, this resulted in short-term market share losses. We have also continued positioning the business for long-term success. We have introduced several new models, entered new segments, and further improved operational efficiency by achieving over $200 million in lean savings for the year. Also, as you know, we have decided to sell our marine business. The process is currently following its course. We will update you in due time. Our strategy is to double down on our Parsport leadership position. will focus our effort and investment on our core activities and capitalize on attractive long-term growth opportunities. Now, let's turn to slide five for key financial highlight. We ended the year with $7.8 billion in revenue, normalized EBITDA of $1 billion, and normalized EPS of $4.68, all within our revised guidance range. We also achieved one of our key objectives by significantly reducing network inventory level, as you can see on slide six. Inventory was down 13% at the end of the year, or down 18% when excluding snowmobile, which saw softer than anticipated retail in the fourth quarter. With better snow condition in February, Snowmobile retail has improved, bringing our total North American power sport inventory reduction to 18%, in line with our objective of 15% to 20%. This solid performance shows our commitment to protecting our dealer value proposition and put us in a favorable position to capture market opportunity when the industry rebounds. Let's turn to slide 7 for an update on the global power sport market. The fourth quarter was consistent with the trend observed earlier in the year. In North America, our power sport retail was down 21%, essentially in line with our expectations. Excluding snowmobile, it was down 11%. From an international perspective, we continue to see softer demand in EMEA and Asia-Pacific, which retail down 11% and 10% respectively. Latin America continues to outperform other regions, which retail up 16%, driven by sustained momentum in ORV and personal watercraft. Turning to slide eight for a look at our North American retail performance by product line. ORV performed as expected during the quarter with our retail lagging the industry as we were less competitive in non-current unit due to our leaner inventory position. Meanwhile, snowmobile retail was softer than anticipated because of the late arrival of snowfall. retail peaked later in the season, with February and March better than planned, which should limit the shortfall for this season. As for three-wheeled personal autograph and pontoon, Q4 was the off-season, and there are no major trends to highlight as volumes were small. Let me circle back to ORV on slide 9. As you can see, the dynamic we've discussed last quarter continued in Q4, with the industry essentially being driven by discounted non-current units. Since we significantly reduced our network inventory, we had lower availability of non-current units and were less competitive in that market. However, we've gained further share in current units, which give us confidence that we will regain momentum when the inventory position of other OEMs normalize. Before reviewing quarterly results by product line, let's turn to slide 10 to take a step back and look at our progress made over the past few years. We became the number one OEM in power support in North America and we are a much stronger company than five years ago. In fact, we have gained six points of market share versus pre-COVID. Our ambitious ORV strategy paid off, leading to market share gain of 11 points in side-by-side and four points in ATV. We even extended our leadership position in personal watercraft and snowmobile with gain of two and nine points respectively. The only area where we lost some ground is in three-wheel vehicle as we face a tough compatible with pre-COVID being the first season of the RYCR. Even if fiscal 25 was a more difficult year, we continued applying the same formula that delivered these results. We pushed technology and introduced several key models across all our product lines to wow our consumers. We grew our addressable market with the launch of the Can-Am electric motorcycle. We expanded the rollout of our modular design, namely with the introduction of the new Hi-C CETV platform. And we stayed true to our performance and innovation heritage winning on the racetrack and being recognized by the industry with 17 design awards. With our momentum, we strongly believe that we are well positioned to benefit from a market rebound. Now, let's turn to slide 11 for a more detailed look at year-round products. Fourth quarter revenue were down 17% to $1.1 billion, primarily due to the reduced shipment to right-size our network inventory. At retail, Can-Am side-by-side was down about 10% due to the non-current unit dynamic compared to the industry, which was down low single-digit. Still, fiscal 25 was our second best year ever at retail. We continue to experience strong demand for high-end defender cabs gaining about two points of market share this year in the utility segment. BTV retail was also down about 10% for the same reason as side-by-side. However, we are well positioned with our new outlander platform and gained over two points of market share in the mid-CC category in fiscal 25. This platform was also introduced last August across our high CC model, a significant upgrade in ATV. Looking at three-wheel vehicle retail was down about 30% very early in the season. we remain optimistic about the upcoming season, given the positive response to the recently introduced Can-Am Canyon, which tapped into the growing adventure touring market. Turning to seasonal product on slide 12, revenue were down 29% to 678 million, primarily reflecting redo shipment. In counter seasonal market, It was peak season for personal watercraft and sea-dews had a low 10% decline in APAC, slightly outperforming the market that was down mid-10%. Meanwhile, we continued to grow in Latin America, which retail hopped low single-digit percentage. As for North America, we are in the off-season, but early indication from boat shows suggest more stable industry condition compared to last year. For snowmobile, retail was down low 30% in the quarter. When the season began, we had proportionally less non-current units than our competitors, resulting in market share loss in North America as of the end of January. In Scandinavia, we gained market share. We traded down high single-digit percentage compared to an industry that was down low 20%. We introduced our new model 2026 in mid-February, and we are currently in the booking process. We strengthened our lineup by expanding the REV Gen 5 platform to additional model, adding new feature and providing better connectivity. As this year was also challenging, we remain cautious with our upcoming production schedule to tightly manage inventory. Our new model, coupled with the fact that some players are exiting the industry, put us in a very good position to gain further share. Moving on slide 13, for part accessories and apparel and OEM engines. Revenue were down 1% to $293 million, primarily due to slower to lower shipment of P&A given softer industry trends. From a product standpoint, our ORV part business maintained its momentum, driven by ongoing usage of our growing vehicle fleet, while accessory sales have been softer in line with retail. With that, I turn the call over to Sébastien.