Highlights for FY23 Q4
- Revenues of
$3,076.3 million , an increase of$728.8 million or 31% compared to the same period last year, a record performance for a single quarter in the Company's history; - Retail sales up for Powersports products by 21% compared to the same period last year, and market share gains for SSV in
North America ; - Normalized diluted earnings per share [1] of
$3.85 , an increase of$0.85 per share or 28%, and diluted earnings per share of$4.54 , an increase of$2.04 per share or 82% compared to the same period last year; - Normalized EBITDA [1] of
$528.0 million , an increase of$111.6 million or 27% compared to the same period last year.
Highlights for FY23
- Increased revenues by 31% compared to last year, reaching an all-time record high of
$10,033.4 million ; - Outperformed our increased FY23 guidance with Normalized diluted earnings per share [1] of
$12.05 , an increase of$2.13 per share or 21%; - Achieved market share gains of over 5 percentage points in the North American Powersports industry;
- Provided strong returns to shareholders with
$356 million deployed for share repurchases and dividend payments; and - Continued to invest in future market-shaping products with the completion of 3 acquisitions, the creation of the
LVHA Group and the start of construction of the Can-Am electric two-wheel motorcycle production facility in Querétaro,Mexico .
Fiscal 2024 full-year guidance
- The Company is well positioned to continue its growth with revenues expected to increase in the range of 9% to 12% compared to fiscal year 2023; and
- Normalized diluted earnings per share [1] expected in the range of
$12.25 -$12.75 or resulting in an increase of 2% to 6% compared to fiscal 2023.
"We achieved record results for the year with revenues exceeding
"Heading into fiscal 2024, despite macro concerns, we expect to continue our growth and deliver Normalized EPS between
__________________________ | |
1 | See "Non-IFRS Measures" section of the press release. |
The Company has established its FY24 guidance as follows:
Financial Metric | FY23 | FY24 Guidance [2] vs FY23 |
Revenues | ||
Year-Round Products | Up 16% to 19% | |
Seasonal Products | 3,440.3 | Down 4% to Flat |
Powersports PA&A and OEM Engines | 1,276.4 | Up 3% to 7% |
Marine | 489.6 | Up 45% to 50% |
Total Company Revenues | 10,033.4 | Up 9% to 12% |
Normalized EBITDA [3] | 1,706.3 | Up 9% to 13% |
Effective Tax Rate [3][4] | 24.4 % | 24.5% to 25.5% |
Normalized Earnings per Share – Diluted [2] | ||
Net Income | 865.4 |
Other assumptions for FY24 Guidance | |
•Depreciation Expenses Adjusted | |
•Net Financing Costs Adjusted: | |
•Weighted average number of shares – diluted: | ~80.5M shares (Compared to 80.9M shares in FY23) |
•Capital Expenditures: |
_______________________________ | |
2 | Please refer to the "Caution Concerning Forward-Looking Statements" and "Key assumptions" sections of this press release for a summary of important risk factors |
3 | See "Non-IFRS Measures" section of the press release. |
4 | Effective tax rate based on Normalized Earnings before Normalized Income Tax. |
Financial Highlights | ||||||
Three-month periods ended | Twelve-month periods ended | |||||
(in millions of Canadian dollars, | 2023 | 2022 | 2023 | 2022 | 2021 | |
Revenues | ||||||
Gross Profit | 787.6 | 609.5 | 2,499.4 | 2,132.2 | 1,472.3 | |
Gross Profit (%) | 25.6 % | 26.0 % | 24.9 % | 27.9 % | 24.7 % | |
Normalized EBITDA [5] | 528.0 | 416.4 | 1,706.3 | 1,462.1 | 999.0 | |
Net income (loss) | 365.1 | 209.6 | 865.4 | 794.6 | 362.9 | |
Normalized net income [5] | 309.2 | 251.3 | 976.7 | 846.5 | 477.0 | |
Earnings per share - diluted | 4.54 | 2.50 | 10.67 | 9.31 | 4.10 | |
Normalized earnings per | 3.85 | 3.00 | 12.05 | 9.92 | 5.39 | |
Weighted average number of | 78,812,364 | 81,965,577 | 79,382,008 | 82,973,284 | 87,519,856 | |
Weighted average number of | 80,402,213 | 83,691,775 | 80,946,102 | 85,259,520 | 88,604,984 |
FOURTH QUARTER RESULTS
For the fourth quarter of Fiscal 2023, the Company continued to deliver strong financial results which contributed to exceed its previously announced Fiscal 2023 financial guidance. The demand for our products continued to be strong, as evidenced by the increase of 21% in the Company's North American retail sales for Powersports Products during the fourth quarter of Fiscal 2023 compared to the same period last year.
The increase in revenues for the three-month period ended
Revenues
Revenues increased by
- Year-Round Products [6] (41% of Q4-23 revenues): Revenues from Year-Round Products increased by
$401.7 million , or 47.1%, to$1,254.8 million for the three-month period endedJanuary 31, 2023 , compared to$853.1 million for the corresponding period endedJanuary 31, 2022 . The increase was due to a higher volume and favorable pricing across all product lines. The higher volume of SSV sold was driven by strong market demand and increased production capacity. The increase in ATV and 3WV volume was due to better product availability. The increase includes a favourable foreign exchange rate variation of$35 million . - Seasonal Products [7] (43% of Q4-23 revenues): Revenues from Seasonal Products increased by
$270.6 million , or 25.8%, to$1,319.5 million for the three-month period endedJanuary 31, 2023 , compared to$1,048.9 million for the corresponding period endedJanuary 31, 2022 . The increase was due to a higher volume of PWC sold along with favorable pricing across all product lines and the introduction of the Sea-Doo pontoon. The higher volume of PWC sold was driven by strong market demand and better product availability. These increases were partially offset by a decrease in the volume of snowmobiles sold resulting from the suspension of sales inRussia . The increase also includes a favourable foreign exchange rate variation of$17 million . - Powersports PA&A and OEM Engines [7] (12% of Q4-23 revenues): Revenues from Powersports PA&A and OEM Engines increased by
$67.6 million , or 21.8%, to$378.3 million for the three-month period endedJanuary 31, 2023 , compared to$310.7 million for the corresponding period endedJanuary 31, 2022 . The increase was due to a higher volume of PA&A coming from strong unit retail sales, combined with favourable pricing and the introduction of the Sea-Doo pontoon. The increase also includes a favourable foreign exchange rate variation of$15 million . - Marine [7] (4% of Q4-23 revenues): Revenues from the Marine segment decreased by
$10.5 million , or 7.6%, to$128.5 million for the three-month period endedJanuary 31, 2023 , compared to$139.0 million for the corresponding period endedJanuary 31, 2022 . The decrease was due to a lower volume of boats sold due to supply chain disruptions, which slowed down the introduction of new products, partially offset by favourable pricing in addition to a favourable mix of boats sold. The decrease includes a favourable foreign exchange rate variation of$6 million .
_______________________ | |
5 | See "Non-IFRS Measures" section of this press release. |
6 | The inter-segment transactions are included in the analysis. |
7 | The inter-segment transactions are included in the analysis. |
North American Retail Sales
The Company's North American retail sales for Powersports products increased by 21%, or 19% when excluding pontoons for the three-month period ended
- Year-Round Products: retail sales increased on a percentage basis in the mid-thirties range compared to the three-month period ended
January 31, 2022 . - Seasonal Products: retail sales increased on a percentage basis in the low-teens range compared to the three-month period ended
January 31, 2022 . - Marine: boat retail sales decreased by 57% compared to the three-month period ended
January 31, 2022 .
Gross profit
Gross profit increased by
Operating expenses
Operating expenses increased by
Normalized EBITDA [8]
Normalized EBITDA [8] increased by
Net Income
Net income increased by
Revenues
Revenues increased by
Normalized EBITDA [8]
Normalized EBITDA [8] increased by
Net Income
Net income increased by
________________________ | |
8 | See "Non-IFRS Measures" section of the press release. |
The Company generated net cash flows from operating activities totaling
The Company invested approximately
On
Dividend
On
Today at
The Company's fourth quarter FY23 webcast presentation is posted in the Quarterly Reports section of BRP's website.
www.brp.com
@BRPNews
Ski-Doo, Lynx, Sea-Doo, Can-Am, Rotax, Alumacraft,
Certain statements in this press release, including, but not limited to, statements relating to our Fiscal Year 2024, including financial guidance and outlook 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 the anticipated additional production capacity, 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, 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 consumer interest for the Company's products and services and sustainable growth, research and product development activities, including projected design, characteristics, capacity or performance of future products and their expected scheduled entry to market, 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 its Annual Information Form: the impact of adverse economic conditions including in the context of recent significant increases of interest and inflation rates; any decline in social acceptability of the Company and its products, including in connection with the broader adoption of electrical or low-emission products; fluctuations in foreign currency exchange rates; high levels of indebtedness; any unavailability of additional capital; any supply problems, termination or interruption of supply arrangements or increases in the cost of materials, including as a result of the military conflict between
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 the following: reasonable industry growth ranging from slightly down to slightly up, that is based on the assumption that supply chain disruptions continue to improve; market share will remain constant or moderately increase; stable global and North American economic conditions, a limited impact from the military conflict between
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, financing income, | To assist investors in determining the financial Other elements, such as restructuring and wind-down | |
Normalized net | Net income before normalized elements adjusted to | In addition to the financial performance of operating | |
Normalized | Income tax expense adjusted to reflect the tax effect | ||
Normalized | Based on Normalized net income before Normalized | ||
Normalized | Calculated by dividing the Normalized net income by | ||
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 aforementioned 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 table below for the reconciliations of the non-IFRS measures presented by the Company to the most directly comparable IFRS measure.
The following table presents the reconciliation of Net income to Normalized net income [1] and Normalized EBITDA [1].
Three-month periods ended | Twelve-month periods ended | |||||
(in millions of Canadian dollars) | 2023 | 2022 | 2023 | 2022 | 2021 | |
Net income | ||||||
Normalized elements | ||||||
Foreign exchange (gain) loss on | (56.6) | 48.4 | 92.4 | (13.3) | (121.8) | |
Cybersecurity incident costs [2] | 2.2 | — | 25.5 | — | — | |
(Gain) loss on NCIB | — | — | (1.8) | 21.3 | (12.2) | |
Past service costs [3] | 4.3 | — | 4.3 | — | — | |
Impairment charge | — | — | — | — | 177.1 | |
Costs related to business | 2.6 | 1.0 | 8.3 | 9.9 | 5.9 | |
Evinrude outboard engine wind- | — | (1.3) | — | 0.4 | 96.1 | |
Gain on disposal of property, | — | (8.7) | — | (8.7) | (12.7) | |
COVID-19 pandemic impact [7] | — | — | — | — | 10.6 | |
Transaction costs on long-term | 1.0 | — | 1.0 | 44.3 | 12.7 | |
Other elements [9] | (5.1) | 1.1 | (3.2) | 3.8 | 4.1 | |
Income tax adjustment [1] [10] | (4.3) | 1.2 | (15.2) | (5.8) | (45.7) | |
Normalized net income [1] | 309.2 | 251.3 | 976.7 | 846.5 | 477.0 | |
Normalized income tax expense [1] | 96.3 | 77.9 | 315.7 | 287.9 | 167.1 | |
Financing costs adjusted [1] | 36.5 | 14.0 | 113.9 | 63.4 | 107.3 | |
Financing income adjusted [1] | (1.4) | (0.3) | (4.2) | (3.8) | (7.6) | |
Depreciation expense adjusted [1] | 87.4 | 73.5 | 304.2 | 268.1 | 255.2 | |
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 |
[3] | Effective |
[4] | Transaction costs and depreciation of intangible assets related to business combinations. |
[5] | 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. |
[6] | During Fiscal 2022, the Company acquired its two leased facilities in |
[7] | Incremental costs associated with the COVID-19 pandemic such as, but not limited to, labour cost related to furloughs. |
[8] | During Fiscal 2022, the Company incurred a prepayment premium of |
[9] | Other elements include gain on litigation for Fiscal 2021, insurance recovery on destroyed equipment related to the |
[10] | Income tax adjustment is related to the income tax on Normalized elements subject to tax and for which income tax has been recognized, adjustment |
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.
(millions of Canadian dollars, except per | Three-month periods ended | Twelve-month periods ended | ||||
2023 | 2022 | 2023 | 2022 | 2021 | ||
Depreciation expense | ||||||
Depreciation expense | ||||||
Depreciation of intangible assets | 2.6 | 1.0 | 6.2 | 4.1 | 4.4 | |
Evinrude outboard engine wind-down [2] | — | — | — | 1.4 | 1.2 | |
Depreciation expense adjusted | ||||||
Income tax expense reconciliation | ||||||
Income tax expense | ||||||
Income tax adjustment [3] | (4.3) | 1.3 | (15.2) | (5.8) | (45.7) | |
Normalized income tax expense [1] | ||||||
Financing costs reconciliation | ||||||
Financing costs | ||||||
Transaction costs on long-term debt [4] | 1.0 | — | 1.0 | 44.3 | 12.7 | |
Loss on NCIB | — | — | — | 21.3 | — | |
Other | — | — | — | (0.1) | — | |
Financing costs adjusted | ||||||
Financing income reconciliation | ||||||
Financing income | ||||||
Gain on NCIB | — | — | (1.8) | — | (12.2) | |
Financing income adjusted | ||||||
Normalized EPS - basic [1] | ||||||
Normalized net income [1] | ||||||
Non-controlling interests | (0.2) | 0.2 | 1.5 | 0.7 | (0.5) | |
Weighted average number of | 78,812,364 | 81,965,577 | 79,382,008 | 82,973,284 | 87,519,856 | |
Normalized EPS - basic [1] | ||||||
Normalized EPS - diluted [1] | ||||||
Normalized net income [1] | ||||||
Non-controlling interests | (0.2) | 0.2 | 1.5 | 0.7 | (0.5) | |
Weighted average number of | 80,402,213 | 83,691,775 | 80,946,102 | 85,259,520 | 88,604,984 | |
Normalized EPS - diluted [1] |
[1] | See "Non-IFRS Measures" section. |
[2] | During Fiscal 2022, the Company incurred costs related to the wind-down of the outboard engine production such as, but not limited to, idle costs and |
[3] | Income tax adjustment is related to the income tax on Normalized elements subject to tax and for which income tax has been recognized, adjustment |
[4] | During Fiscal 2022, the Company incurred a prepayment premium of |
The following table presents the reconciliation of Net Cash Flows from Operating Activities to Free Cash Flow [1].
(millions of Canadian dollars) | Twelve-month periods ended | ||
2023 | 2022 | ||
Net cash flows generated from operating activities | |||
Additions to property, plant and equipment | 601.0 | 628.9 | |
Additions to intangible assets | 58.4 | 68.8 | |
Free cash flow [1] |
[1] | See "Non-IFRS Measures" section. |
View original content to download multimedia:https://www.prnewswire.com/news-releases/brp-reports-its-fourth-quarter-and-full-year-2023-results-301779478.html
SOURCE
© Canada Newswire, source