BRP Inc.

Good morning, ladies and gentlemen. Welcome to the BRP Inc.' 's FY26 first quarter results conference call. For participants who use the telephone lines, 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, Mr. Deschaines.

Thank you, Joelle. Good morning and welcome to BRP's conference call for the first quarter of fiscal year 26. Joining me this morning are José Boisjali, 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 result 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 BRT'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 Jose.

Thank you, Philippe. Good morning, everyone, and thank you for joining us. We've delivered a sound performance in our first quarter, which results in line with expectation as we continue to right-size network inventory level in seasonal product and execute on elements within our control. The operating environment remains challenging with significant macroeconomic uncertainty and a volatile tariff situation affecting consumer confidence. Still, driven by very solid snowmobile sales, we slightly outperformed the power sport North American industry at retail. Looking at the sales of our marine group, we made progress by announcing a definitive agreement for the sales of Tellwater and closing the sales of Alumecaraf. The process for Manitou is following its course. Now let's turn to slide four for key financial highlights. We ended the first quarter with revenue of $1.8 billion, normalized EBITDA of $201 million, normalized EPS of 47 cents, and strong free cash flow, generation of 162 million. As for retail, let's look at global trend on slide five. In North America, our passport retail held steady, reflecting a growth of 21% in Canada, fueled by a strong end of season for snowmobile, offset by a decline of 6% in the United States as we continue to see generally weaker industry trends. From an international perspective, demand remains soft in the EMEA and Asia-Pacific, which retailed down 22% and 13% respectively. Once again, Latin America outperformed other regions, which retailed up 18% driven by sustained momentum in ORV and personal watercraft. On a global scale, demand remains strong for high-end products compared to entry level. We also outperform in current units and underperform in non-current units due to our leaner inventory position. Turning to slide six for a look at our retail performance by product line in North America. As anticipated, our power sport retail held relatively steady compared to last year, surpassing the industry, which was down low single digits. Snowmobile retail was strong, up over 80%, driven by favorable snow conditions late in the winter. As for three-wheel vehicles, personal watercraft and switch pontoon, Retail was down early in the season due to the combination of softer industry trend and a late spring. Now let's turn to slide seven for a more detailed look at year-round products. Revenue were down 4% to $1.1 billion, probably driven by softer industry trends and higher sales program given the ongoing market dynamics. At retail, Can-Am side-by-side was down about 10% compared to the industry, which was down mid-single digit. We underperformed in non-current units, given our healthier inventory position compared to other OEMs. However, we continued to outperform in current units, gaining four points of market share in the quarter, driven by the sustained momentum of our newly introduced model. As for ATV, retail was down low single digit in line with the industry, but we had strong gain in the high CC segment fueled by our new outlander platform. Looking at three-wheel vehicle, we are very early in the season and retail was down high 20% in the quarter, reflecting industry softness in the late spring. A few words on two-wheel. As planned, we had our first shipment of Can-Am Pulse and Origin motorcycle to North America and Europe in the first quarter, continuing in the second quarter. We are organizing tours to get the media and consumer excited, and our dealers are also actively preparing demo rides. Turning to seasonal products on slide eight. Revenue were down 22% to $419 million, firmly reflecting reduced shipments as we continue focusing on right-sizing network inventory level. Looking at our retail performance, we flowed the North American snowmobile season down 18%, slightly lagging the industry. As I said earlier, favorable snow conditions late in the winter in North America stimulated demand. With our solid lineup and retail promotion, we outperformed the industry during the quarter, partially catching up on our plan for the season. In Scandinavia, it was a more difficult season and our retail was in line with the industry. More importantly, we remain by far number one worldwide with Ski-Doo and Link. The strong end of season in North America allow us to achieve a year-over-year network inventory reduction of 15%, healthier inventory level combined with our solid lineup resulted in strong spring pre-orders compared to last year. Pre-order are now back to a normal rate of approximately 30% of production already sold. All these elements put us in a better position for season 26. As for Sea-Doo products, retail was in line with our expectation in the first quarter, with personal watercraft down mid-single digit and the switch down low 20%. We also continue to grow in Latin America, with retail up mid-10%. The objective for this season is to right-size network inventory level, and so far we are on plan. Moving on to slide nine with power sport parts, accessories and apparel and OEM engine. Revenue were up 5% to $322 million, driven by a higher volume of snowmobile parts following the strong end of season, as well as the ongoing usage of our growing fleet of vehicles. Meanwhile, accessory sales have been softer, in line with retail trends. As with units, the inventory of PANE at dealer is getting back to more reasonable level. With that, I turn the call over to Sébastien.