Highlights for FY24 Q4
- Revenues of
$2,691.8 million , a decrease of$384.5 million or 12.5% compared to the same period last year, which was a record fourth quarter; - Net income of
$188.2 million , a decrease of$176.9 million or 48.5% compared to the same period last year; - Normalized EBITDA [1] of
$404.5 million , a decrease of$123.5 million or 23.4% compared to the same period last year; - Normalized diluted earnings per share [1] of
$2.46 , a decrease of$1.39 per share or 36.1% and diluted earnings per share of$2.46 , a decrease of$2.08 per share, or 45.8%, compared to the same period last year; - Continued outpacing the SSV industry with Can-Am retail sales increasing by more than 20% compared to the same period last year;
- The Company increased its quarterly dividend by 17% to
$0.21 .
Highlights for FY24
- Increased revenues by 3.3% compared to last year, reaching an all-time record high of
$10,367.0 million ; - Net income of
$744.5 million , a decrease of$120.9 million or 14.0% compared to last fiscal year; - Reached revised FY24 guidance with Normalized diluted earnings per share [1] of
$11.11 , a decrease of$0.94 per share or 7.8%. Diluted earnings per share of$9.47 ; - Continued to gain market share as North American Powersports retail sales increased by 8% compared to the same period last year, while the industry increased by 1%;
- Delivered record free cash flow of over a billion dollars, allowing for strong returns to shareholders with
$501.8 million deployed for share repurchases and dividend payments.
Fiscal 2025 full-year guidance
- The Company is planning to maintain its growth in market share in the Powersports industry and to reduce its network inventory, leading to a revenue guidance in the range of
$9.1 billion to$9.5 billion ; and - Normalized diluted earnings per share [1] expected in the range of
$7.25 to$8.25 .
"Fiscal 2024 was marked by market share gains in the North American Powersports industry, successful product launches and continued progress on our strategic initiatives, leading to record revenues and free cash flow. Our performance in the side-by-side category was very impressive, as we reached a market share of 30% one year ahead of plan. I sincerely thank our teams for their commitment to our success," said
"Our fourth quarter results ended within our guidance despite unfavourable winter conditions affecting our snow-related business. Heading into fiscal 2025, we are focused on proactively managing network inventory to maintain our dealer value proposition. We expect to strengthen our position as the OEM[2] of choice, driven by our diversified product portfolio, as well as our strong business fundamentals. We are also excited about the launch of our new electric Can-Am motorcycles later this year which should further expand our addressable market," concluded
[1] See « Non-IFRS Measures » section of this press release. |
[2] Original Equipment Manufacturer |
Financial Highlights | ||||||
Three-month periods ended | Twelve-month periods ended | |||||
(in millions of Canadian dollars, except per | 2024 | 2023 | 2024 | 2023 | 2022 | |
Revenues | ||||||
Gross Profit | 652.8 | 787.6 | 2,601.3 | 2,499.4 | 2,132.2 | |
Gross Profit (%) | 24.3 % | 25.6 % | 25.1 % | 24.9 % | 27.9 % | |
Normalized EBITDA[1] | 404.5 | 528.0 | 1,699.6 | 1,706.3 | 1,462.1 | |
Net income | 188.2 | 365.1 | 744.5 | 865.4 | 794.6 | |
Normalized net income[1] | 188.0 | 309.2 | 873.4 | 976.7 | 846.5 | |
Earnings per share - diluted | 2.46 | 4.54 | 9.47 | 10.67 | 9.31 | |
Normalized earnings per share – | 2.46 | 3.85 | 11.11 | 12.05 | 9.92 | |
Weighted average number of | 75,475,831 | 78,812,364 | 77,166,505 | 79,382,008 | 82,973,284 | |
Weighted average number of | 76,667,383 | 80,402,213 | 78,523,790 | 80,946,102 | 85,259,520 |
FISCAL YEAR 2025 GUIDANCE
The Company has established its FY25 guidance as follows, which supersedes all prior financial guidance statements made by the Company, including the long-term financial targets which were previously issued by the Company in connection with its strategic 5-year plan referred to as Mission 2025:
Financial Metric | FY24 | FY25 Guidance [4] vs FY24 |
Revenues | ||
Year-Round Products | Down 4% to 7% | |
Seasonal Products | 3,410.7 | Down 18% to 22% |
Powersports PA&A and OEM Engines | 1,184.6 | Down 2% to 5% |
Marine | 432.3 | Down 5% to Up 5% |
Total company revenues | 10,367.0 | |
Normalized EBITDA [1] | 1,699.6 | |
Normalized earnings per share – diluted [1] | ||
Net income | 744.5 |
Other assumptions for FY25 Guidance | |
• Depreciation Expense Adjusted: | |
• Net Financing Costs Adjusted: | |
• Effective tax rate [1] | ~25.5% to 26.0% (Compared to 23.6% in FY24) |
• Weighted average number of shares – diluted: | ~76.2M shares (Compared to 78.5M in FY24) |
• Capital Expenditures: |
FY25 Quarterly Outlook [4]¨
Given its focus on managing network inventory levels, the Company expects Q1 Fiscal 2025 Normalized EBITDA [1] to be down approximatively 35% versus the same three-month period last fiscal year.
[1] | See "Non-IFRS Measures" section of this press release. |
[3] | Effective tax rate based on Normalized Earnings before Normalized Income Tax. |
[4] | Please refer to the "Caution Concerning Forward-Looking Statements" and "Key assumptions" sections of this press release for a summary of important risk factors that could affect the above guidance and of the assumptions underlying this Fiscal Year 2025 guidance. |
FOURTH QUARTER RESULTS
The Company's three-month period ended
Revenues
Revenues decreased by
- Year-Round Products [5] (51% of Q4-FY24 revenues): Revenues from Year-Round Products increased by
$109.1 million , or 8.7%, to$1,363.9 million for the three-month period endedJanuary 31, 2024 , compared to$1,254 .8 million for the corresponding period endedJanuary 31, 2023 . The increase was primarily attributable to a favourable product mix due to the introduction of new models and higher volume of 3WV, due to timing of shipments between the third and fourth quarter of Fiscal 2024. The increase in revenues was partially offset by higher sales programs and a lower volume of ATV and SSV sold. The increase includes an unfavourable foreign exchange rate variation of$1 million . - Seasonal Products [5] (35% of Q4-FY24 revenues): Revenues from Seasonal Products decreased by
$366.9 million , or 27.8%, to$952.6 million for the three-month period endedJanuary 31, 2024 , compared to$1,319.5 million for the corresponding period endedJanuary 31, 2023 . The decrease was primarily attributable to a lower volume of products sold and higher sales programs, mainly on Snowmobile due to unfavourable winter conditions. The decrease in volume is mostly explained by late shipments in the three-month period endedJanuary 31, 2023 , compared to this year. The decrease was partially offset by favourable pricing across all product lines. The decrease also includes a favourable foreign exchange rate variation of$2 million . - Powersports PA&A and OEM Engines [5] (11% of Q4-FY24 revenues): Revenues from Powersports PA&A and OEM Engines decreased by
$87.3 million , or 23.1%, to$291.0 million for the three-month period endedJanuary 31, 2024 , compared to$378 .3 million for the corresponding period endedJanuary 31, 2023 . The decrease was attributable to a lower volume of PA&A sold, which was mainly attributable to lower dealer orders due to a higher level of stock remaining in dealer inventory and unfavourable winter conditions inNorth America , which impacted the Snowmobile riding season and the related PA&A revenues. The decrease also includes a favourable foreign exchange rate variation of$4 million . - Marine [5] (3% of Q4-FY24 revenues): Revenues from the Marine segment decreased by
$38.4 million , or 29.9%, to$90.1 million for the three-month period endedJanuary 31, 2024 , compared to$128.5 million for the corresponding period endedJanuary 31, 2023 . The decrease was primarily attributable to a lower volume of products sold, higher sales programs, and an unfavourable product mix. The decrease in volume is mainly explained by softer consumer demand in the industry. The decrease was partially offset by favourable pricing across most product lines. The decrease includes an unfavourable foreign exchange rate variation of$1 million .
[1] | See "Non-IFRS Measures" section of this press release. |
[5] | The inter-segment transactions are included in the analysis. |
North American Retail Sales
The Company's North American retail sales for Powersports Products decreased by 10% for the three-month period ended
- Year-Round Products: retail sales increased on a percentage basis in the low-teens range compared to the three-month period ended
January 31, 2023 . The Year-Round Products industry increased on a percentage basis in the mid-single digits over the same period. - Seasonal Products: retail sales decreased on a percentage basis in the low-twenties range, even when excluding Sea-Doo pontoon, compared to the three-month period ended
January 31, 2023 . The Seasonal Products industry decreased on a percentage basis in the high-teens range over the same period.
The Company's North American retail sales for Marine Products decreased by 14% compared to the three-month period ended
Gross profit
Gross profit decreased by
Operating expenses
Operating expenses increased by
[1] | See "Non-IFRS Measures" section of this press release. |
[5] | The inter-segment transactions are included in the analysis. |
Normalized EBITDA [1]
Normalized EBITDA [1] decreased by
Net Income
Net income decreased by
TWELVE-MONTH PERIOD ENDED
Revenues
Revenues increased by
Normalized EBITDA [1]
Normalized EBITDA [1] decreased by
Net Income
Net income decreased by
LIQUIDITY AND CAPITAL RESOURCES
The Company generated net cash flows from operating activities totaling
The Company invested
During the twelve-month period ended
[1] | See "Non-IFRS Measures" section of this press release. |
Dividend
On
CONFERENCE CALL AND WEBCAST PRESENTATION
Today at
The Company's fourth quarter FY24 webcast presentation is posted in the Quarterly Reports section of BRP's website.
About BRP
www.brp.com
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Ski-Doo, Lynx, Sea-Doo, Can-Am, Rotax, Alumacraft,
CAUTION CONCERNING FORWARD-LOOKING STATEMENTS
Certain statements in this press release, including, but not limited to, statements relating to the Company's Fiscal Year 2025, including financial guidance and related assumptions of the Company (including revenues, Normalized EBITDA, Effective Tax Rate, Normalized earnings per share, net income, depreciation expense, net financing costs adjusted, weighted average of the number of shares diluted and capital expenditures), statements relating to "Mission 2025", statements relating to the declaration and payment of dividends, statements about the Company's current and future plans, and other statements about the Company's prospects, expectations, anticipations, estimates and intentions, results, levels of activity, performance, objectives, targets, goals or achievements, priorities and strategies, including proactively managing network inventory, financial position, market position, including its ability to gain additional market share, capabilities, competitive strengths, beliefs, the prospects and trends of the industries in which the Company operates, the expected demand for the Company's products and services and sustainable growth, research and product development activities, including the expectation of regular flow of new product introductions, including the introduction of the new electric Can-Am motorcycles later this year, their projected design, characteristics, capacity or performance, expected scheduled entry to market and the anticipated impact of such product introductions, expected financial requirements and the availability of capital resources and liquidities or any other future events or developments and other statements that are not historical facts constitute forward-looking statements within the meaning of Canadian and
Forward-looking statements are presented for the purpose of assisting readers in understanding certain key elements of the Company's current objectives, goals, targets, strategic priorities, expectations and plans, and in obtaining a better understanding of the Company's business and anticipated operating environment. Readers are cautioned that such information may not be appropriate for other purposes; readers should not place undue reliance on forward-looking statements contained herein. Forward-looking statements, by their very nature, involve inherent risks and uncertainties and are based on a number of assumptions, both general and specific, as further described below.
Many factors could cause the Company's actual results, level of activity, performance or achievements or future events or developments to differ materially from those expressed or implied by the forward-looking statements, including, without limitation, the following factors, which are discussed in greater detail under the heading "Risk Factors" of the Company's MD&A for the fiscal year ended on
KEY ASSUMPTIONS
The Company made a number of economic, market and operational assumptions in preparing and making certain forward-looking statements contained in this press release, including without limitation the following assumptions: reasonable industry growth ranging from down to slightly up; market share will remain constant or moderately increase; slowing global economic growth; limited impact from the ongoing military conflict between
NON-IFRS MEASURES
This press release makes reference to certain non-IFRS measures. These measures are not recognized measures under IFRS, do not have a standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement those IFRS measures by providing further understanding of the Company's results of operations from management's perspective. Accordingly, they should not be considered in isolation nor as a substitute for analysis of the Company's financial information reported under IFRS. The Company uses non-IFRS measures including the following:
Non-IFRS | Definition | Reason for use | |
Normalized | Net income before financing costs, | Assist investors in determining the financial performance of the Company's | |
Normalized | Net income before normalized | In addition to the financial performance of operating activities, this measure | |
Normalized | Income tax expense adjusted to | Assist investors in determining the tax expense relating to the normalized | |
Normalized | Based on Normalized net income | Assist investors in determining the effective tax rate including the | |
Normalized | Calculated by dividing the
| Assist investors in determining the normalized financial performance of the | |
Free cash | Cash flows from operating activities | Assist investors in assessing the Company's liquidity generation abilities |
The Company believes non-IFRS measures are important supplemental measures of financial performance because they eliminate items that have less bearing on the Company's financial performance and thus highlight trends in its core business that may not otherwise be apparent when relying solely on IFRS measures. The Company also believes that securities analysts, investors and other interested parties frequently use non-IFRS measures in the evaluation of companies, many of which present similar metrics when reporting their results. Management also uses non-IFRS measures in order to facilitate financial performance comparisons from period to period, prepare annual operating budgets, assess the Company's ability to meet its future debt service, capital expenditure and working capital requirements and also as a component in the determination of the short-term incentive compensation for the Company's employees. Because other companies may calculate these non-IFRS measures differently than the Company does, these metrics are not comparable to similarly titled measures reported by other companies.
The Company refers the reader to the tables below for the reconciliations of the non-IFRS measures presented by the Company to the most directly comparable IFRS measure.
Reconciliation Tables
The following tables present the reconciliation of non-IFRS measures compared to their respective IFRS measures:
Three-month periods ended | Twelve-month periods ended | |||||
(in millions of Canadian dollars) | 2024 | 2023 | 2024 | 2023 | 2022 | |
Net income | ||||||
Normalized elements | ||||||
Foreign exchange (gain) loss on | (97.5) | (56.6) | 10.8 | 92.4 | (13.3) | |
Cybersecurity incident costs [2] | — | 2.2 | — | 25.5 | — | |
(Gain) loss on NCIB | — | — | (4.8) | (1.8) | 21.3 | |
Past service costs [3] | — | 4.3 | — | 4.3 | — | |
Impairment charge [4] | 116.3 | — | 116.3 | — | — | |
Costs related to business | 3.8 | 2.6 | 15.6 | 8.3 | 9.9 | |
Border crossing crisis [6] | — | — | 6.2 | — | — | |
Evinrude outboard engine exit | — | — | 15.0 | — | 0.4 | |
Gain on lease termination [8] | — | — | — | — | (8.7) | |
Transaction costs on long-term | 2.7 | 1.0 | 22.7 | 1.0 | 44.3 | |
Other elements [10] | 5.8 | (5.1) | 7.4 | (3.2) | 3.8 | |
Income tax adjustment [1] [11] | (31.3) | (4.3) | (60.3) | (15.2) | (5.8) | |
Normalized net income [1] | 188.0 | 309.2 | 873.4 | 976.7 | 846.5 | |
Normalized income tax expense [1] | 71.7 | 96.3 | 269.9 | 315.7 | 287.9 | |
Financing costs adjusted [1] | 47.2 | 36.5 | 186.4 | 113.9 | 63.4 | |
Financing income adjusted [1] | (2.9) | (1.4) | (11.8) | (4.2) | (3.8) | |
Depreciation expense adjusted [1] | 100.5 | 87.4 | 381.7 | 304.2 | 268.1 | |
Normalized EBITDA [1] |
[1] | See "Non-IFRS Measures" section. |
[2] | During Fiscal 2023, the Company incurred costs related to a cybersecurity incident. These costs are mainly comprised of recovery costs, idle costs such as direct labor during shutdown period, etc. |
[3] | Effective |
[4] | During the twelve-month period ended |
[5] | Transaction costs and depreciation of intangible assets related to business combinations. |
[6] | During Fiscal 2024, the Company incurred incremental transport and idle costs such as direct labor, which were related to mitigation strategies implemented to handle the border crossing slowdown between |
[7] | The Company incurred idle costs, other exit costs and impaired service parts inventory related to its Evinrude outboard engine production. |
[8] | During Fiscal 2022, the Company acquired its two leased facilities in |
[9] | Derecognition of unamortized transaction costs related to the repricing of Term Loan B-2 and refinancing of Term Loan B-1 in Fiscal 2024, and prepayment premium of |
[10] | Other elements include insurance recovery on destroyed equipment related to the |
[11] | Income tax adjustment is related to the income tax on Normalized elements subject to tax and for which income tax has been recognized and to the adjustment related to the impact of foreign currency translation from Mexican operations. |
The following table presents the reconciliation of items as included in the Normalized net income [1] and Normalized EBITDA [1] compared to respective IFRS measures as well as the Normalized EPS – basic and diluted [1] calculation.
(in millions of Canadian dollars, except per | Three-month periods ended | Twelve-month periods ended | ||||
2024 | 2023 | 2024 | 2023 | 2022 | ||
Depreciation expense reconciliation | ||||||
Depreciation expense | ||||||
Depreciation of intangible assets | (2.6) | (2.6) | (10.0) | (6.2) | (4.1) | |
Evinrude outboard engine wind-down [2] | — | — | — | — | (1.4) | |
Depreciation expense adjusted | ||||||
Income tax expense reconciliation | ||||||
Income tax expense | ||||||
Income tax adjustment [3] | 31.3 | 4.3 | 60.3 | 15.2 | 5.8 | |
Normalized income tax expense [1] | ||||||
Financing costs reconciliation | ||||||
Financing costs | ||||||
Transaction costs on long-term | (2.7) | (1.0) | (22.7) | (0.9) | (44.3) | |
Loss on NCIB | — | — | — | — | (21.3) | |
Other | — | — | (0.2) | — | 0.1 | |
Financing costs adjusted | ||||||
Financing income reconciliation | ||||||
Financing income | ||||||
Gain on NCIB | — | — | 4.8 | 1.8 | — | |
Financing income adjusted | ||||||
Normalized EPS - basic [1] calculation | ||||||
Normalized net income [1] | ||||||
Non-controlling interests | 0.3 | 0.2 | (1.1) | (1.5) | (0.7) | |
Weighted average number of shares | 75,475,831 | 78,812,364 | 77,166,505 | 79,382,008 | 82,973,284 | |
Normalized EPS - basic [1] | ||||||
Normalized EPS - diluted [1] calculation | ||||||
Normalized net income [1] | ||||||
Non-controlling interests | 0.3 | 0.2 | (1.1) | (1.5) | (0.7) | |
Weighted average number of shares | 76,667,383 | 80,402,213 | 78,523,790 | 80,946,102 | 85,259,520 | |
Normalized EPS - diluted [1] |
[1] | See "Non-IFRS Measures" section. |
[2] | The Company incurred costs related to the wind-down of the outboard engine production such as, but not limited to, idle costs and other exit costs. |
[3] | Income tax adjustment is related to the income tax on Normalized elements subject to tax and for which income tax has been recognized and to the adjustment related to the impact of foreign currency translation from Mexican operations. |
[4] | Derecognition of unamortized transaction costs related to the repricing of Term Loan B-2 and refinancing of Term Loan B-1 in Fiscal 2024, and prepayment premium of |
The following table presents the reconciliation of net cash flows generated from operating activities to free cash flow [1].
(in millions of Canadian dollars) | Twelve-month periods ended | ||
2024 | 2023 | ||
Net cash flows generated from operating activities | |||
Additions to property, plant and equipment | (548.4) | (601.0) | |
Additions to intangible assets | (37.4) | (58.4) | |
Free cash flow [1] |
[1] | See "Non-IFRS Measures" section. |
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