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MarketScreener Homepage  >  Equities  >  Toronto Stock Exchange  >  BRP Inc.    DOO   CA05577W2004

BRP INC.

(DOO)
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BRP : Investor Presentation Q1 FY21

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08/27/2020 | 07:12am EDT

QUARTERLY REVIEW

SECOND QUARTER ENDED JULY 31, 2020

Forward-Looking Statements

Caution concerning forward-looking statements

Certain statements in this presentation, including, but not limited to, including, but not limited to, statements relating to our Fiscal Year 2021 financial 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 and capital expenditures), statements relating to the plan to build a new production facility in Mexico and the moment when this proposed new facility will start operation, the Company's ability to achieve its Fiscal Year 2021 guidance, statements about the Company's current and future plans, including with respect to its marine strategy, its ability to address the COVID-19 pandemic 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, capabilities, competitive strengths, beliefs, the prospects and trends of the industries in which the Company operates, the expected growth in demand for products and services in the markets in which the Company competes, 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 United States securities laws. The words "may", "will", "would", "should", "could", "expects", "forecasts", "plans", "intends", "trends", "indications", "anticipates", "believes", "estimates", "outlook", "predicts", "projects", "likely" or "potential" or the negative or other variations of these words or other comparable words or phrases, are intended to identify forward-looking statements..

Forward-looking statements are presented for the purpose of assisting readers in understanding certain key elements of our current objectives, goals, targets, strategic priorities, expectations and plans, and in obtaining a better understanding of our 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, made by the Company in light of its experience and perception of historical trends, current conditions and expected future developments, as well as other factors that the Company believes are appropriate and reasonable in the circumstances, but there can be no assurance that such estimates and assumptions will prove to be correct or that the Company's business guidance, objectives, plans and strategic priorities will be achieved. 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 such as those resulting from the ongoing coronavirus (known as COVID-19) health crisis (including on consumer spending, the Company's operations and supply and distribution chains, the availability of credit and the Company's workforce); any decline in social acceptability of the Company's products; fluctuations in foreign currency exchange rates; high levels of indebtedness; any unavailability of additional capital; unfavourable weather conditions; seasonal sales fluctuations; any inability to comply with product safety, health, environmental and noise pollution laws; the Company's large fixed cost base; any inability of dealers and distributors to secure adequate access to capital; any supply problems, termination or interruption of supply arrangements or increases in the cost of materials; the Company's competition in product lines; the Company's inability to successfully execute its growth strategy; the Company's international sales and operations; any failure of information technology systems or security breach; any failure to maintain an effective system of internal control over financial reporting and to produce accurate and timely financial statements; any loss of members of the Company's management team or employees who possess specialized market knowledge and technical skills; any inability to maintain and enhance the Company's reputation and brands; any significant product liability claim; any significant product repair and/or replacement due to product warranty claims or product recalls; the Company's reliance on a network of independent dealers and distributors; the Company's inability to successfully manage inventory levels; any intellectual property infringement and litigation; the Company's inability to successfully execute its manufacturing strategy; increased freight and shipping costs or disruptions in transportation and shipping infrastructure; any failure to comply with covenants in financing and other material agreements; any changes in tax laws and unanticipated tax liabilities; any impairment in the carrying value of goodwill and trademarks; any deterioration in relationships with employees; pension plan liabilities; natural disasters; any failure to carry proper insurance coverage; volatility in the market price for BRP's subordinate voting shares; the Company's conduct of business through subsidiaries; the significant influence by Beaudier Inc. and 4338618 Canada Inc. (together the "Beaudier Group") and Bain Capital Luxembourg Investments S. à r. l. ("Bain Capital"); and future sales of BRP's shares by Beaudier Group, Bain Capital, directors, officers or senior management of the Company. These factors are not intended to represent a complete list of the factors that could affect the Company; however, these factors should be considered carefully. Unless otherwise stated, the forward-looking statements contained in this presentation are made as of the date of this presentation and the Company has no intention and undertakes no obligation to update or revise any forward-looking statements to reflect future events, changes in circumstances, or changes in beliefs, unless required by applicable securities regulations. In the event that the Company does update any forward-looking statements contained in this presentation, no inference should be made that the Company will make additional updates with respect to that statement, related matters or any other forward- looking statement. The forward-looking statements contained in this presentation are expressly qualified by this cautionary statement.

Key assumptions

The Company made a number of economic, market and operational assumptions in preparing and making certain forward-looking statements contained in this presentation, including the following: reasonable industry growth ranging from flat to double digit; market share that will remain constant or moderately increase; no further deterioration and a relatively rapid stabilization of global and North American economic conditions, including with respect to the ongoing COVID-19 health crisis; any increase in interest rates will be modest; currencies will remain at near current levels; inflation will remain in line with central bank expectations in countries where the Company is doing business; the Company's current margins excluding the impact of the wind-down of Evinrude outboard engines and COVID-19 will remain at current or improved levels; the supply base will remain able to support product development and planned production rates on commercially acceptable terms in a timely manner; there will be no significant changes in tax laws or free trade arrangements or treaties applicable to the Company; no trade barriers will be imposed amongst jurisdictions in which the Company carries operations; the absence of unusually adverse weather conditions, especially in peak seasons. BRP cautions that its assumptions may not materialize and that current economic conditions, including all of the current uncertainty resulting from the ongoing COVID-19 health crisis and its broader repercussions on the global economy, render such assumptions, although believed reasonable at the time they were made, subject to greater uncertainty.

All amounts in this presentation are expressed in Canadian dollars, unless otherwise indicated.

QUARTERLY REVIEW

2

Second Quarter Ended July 31, 2020

JOSÉ BOISJOLI

PRESIDENT AND CHIEF EXECUTIVE OFFICER

QUARTERLY REVIEW

SECOND QUARTER ENDED JULY 31, 2020

FY21 Q2 Financial Highlights

Revenues

Diluted Earnings per Share

Normalized Diluted Earnings per Share[1]

CA$ millions

CA$

CA$

-15%

+49%

+61%

$1,460

$1,233

FY20 Q2

FY21 Q2

Highlights vs. Last Year

$0.96

$1.43

FY20 Q2

FY21 Q2

$0.71$1.14

FY20 Q2

FY21 Q2

  • Revenues down 15% mainly due to lower shipments of Year-Round Products and Seasonal Products caused by the temporary suspension of production
  • Net income was up 35% to $126.1M and diluted loss per share was up 49% to $1.43
  • Normalized EBITDA[1] was up 28% to $214.3M and normalized diluted earnings per share[1] was up 61% to $1.14
  • North American BRP retail sales for Seasonal Products and Year-Round Products increased 40%

[1]For a reconciliation of net income to Normalized Net Income and Normalized EBITDA, see the reconciliation table in appendix

Delivered better than expected results driven by strong worldwide demand for our products

QUARTERLY REVIEW

4

Second Quarter Ended July 31, 2020

This is an excerpt of the original content. To continue reading it, access the original document here.

Disclaimer

BRP Inc. published this content on 27 August 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 27 August 2020 10:12:01 UTC


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Financials
Sales 2021 5 681 M 4 264 M 4 264 M
Net income 2021 133 M 99,5 M 99,5 M
Net Debt 2021 1 475 M 1 107 M 1 107 M
P/E ratio 2021 49,0x
Yield 2021 -
Capitalization 6 448 M 4 829 M 4 840 M
EV / Sales 2021 1,39x
EV / Sales 2022 1,24x
Nbr of Employees 12 600
Free-Float 46,3%
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Technical analysis trends BRP INC.
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Income Statement Evolution
Consensus
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Mean consensus OUTPERFORM
Number of Analysts 12
Average target price 78,08 CAD
Last Close Price 73,36 CAD
Spread / Highest target 20,0%
Spread / Average Target 6,44%
Spread / Lowest Target -29,1%
EPS Revisions
Managers
NameTitle
José Boisjoli Chairman, President & Chief Executive Officer
Sébastien Martel Chief Financial Officer
Joshua Bekenstein Non-Executive Director
Michael S. Hanley Lead Independent Director
Louis Laporte Non-Executive Director
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