Highlights
- Revenues of
$2,429 million , up 34% compared to the same period last year, a record for a first quarter in the Company's history; - Normalized EBITDA [1] of
$377 million , up 39% compared to the same period last year; - North American Powersports retail sales grew by 3% compared to the same period last year, once again outperforming the industry driven by market share gains in SSV and PWC;
- Normalized earnings per share – diluted [1] of
$2.38 , an increase of$0.72 per share or 43% and diluted earnings per share of$1.92 , an increase of$0.46 per share, or 32%, compared to the same period last year; and - Reaffirming full year-end guidance of revenues up 9% to 12% compared to Fiscal 2023, and Normalized earnings per share – diluted [1] between
$12.25 and$12.75 .
"Fiscal 2024 is off to a good start for BRP. We delivered a solid first-quarter performance with record revenue for that period and a 43% increase in Normalized EPS – diluted [1][2]. Once again, we outpaced the North American Powersports industry thanks to sustained consumer demand for our strong and well diversified product portfolio," said
"We recently celebrated our 10th anniversary as a publicly traded company, and we are proud of our achievements over that period. Our revenues tripled, Normalized EPS – diluted [1] [2] grew eightfold and our Powersports market share almost doubled. Moreover, we created significant value for shareholders with a 368% share price appreciation as of the anniversary date [3], and
"Driven by a regular flow of new product introductions, and with many others in their early stage of growth, the future is very promising for BRP. Over the short term, our focus is on executing and optimizing efficiencies, and we remain on pace to deliver on our financial guidance for this year," concluded
[1] See "Non-IFRS Measures" section of this press release
[2] Earnings per share is defined as "EPS"
[3] Share price increase calculated between Initial Public Offering and
[4] Calculated between Initial Public Offering and
Financial Highlights | Three-month periods ended | |
(in millions of Canadian dollars, except per share data and margin) | ||
Revenues | ||
Gross Profit | 623.5 | 454.4 |
Gross Profit (%) | 25.7 % | 25.1 % |
Normalized EBITDA [1] | 377.1 | 272.1 |
Net income | 154.5 | 121.0 |
Normalized net income [1] | 192.0 | 137.1 |
Earnings per share – diluted [2] | 1.92 | 1.46 |
Normalized earnings per share – diluted [1] | 2.38 | 1.66 |
Weighted average number of shares – diluted | 80,411,463 | 82,701,016 |
FISCAL YEAR 2024 UPDATED GUIDANCE & OUTLOOK
The FY24 guidance has been updated as follows:
Financial Metric | FY23 | FY24 Guidance [6] vs FY23 |
Revenues | (vs. Previous Guidance) | |
Year-Round Products | Up 16% to 19% | |
Seasonal Products | 3,440.3 | Down 2% to Up 1% (previously ''Down 4% to Flat") |
Powersports PA&A and OEM Engines | 1,276.4 | Up 3% to 7% |
Marine | 489.6 | Up 35% to 40% (previously ''Up 45% to 50%") |
Total Company Revenues | 10,033.4 | Up 9% to 12% |
Normalized EBITDA [1] | 1,706.3 | Up 9% to 13% |
Effective Tax Rate [1][5] | 24.4 % | 24.5% to 25.5% |
Normalized Earnings per Share – Diluted [1] [2] | ||
Net income | 865.4 | ~ |
Other assumptions for FY24 Guidance
• Depreciation Expenses: | ~ |
• Net Financing Costs Adjusted: | |
• Weighted average number of shares – diluted: | ~79.8M shares (previously ~80.5M) |
• Capital Expenditures: |
[1] See "Non-IFRS Measures" section of this press release
[2] Earnings per share is defined as "EPS"
[5] Effective tax rate based on Normalized Earnings before Normalized Income Tax.
[6] 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 2024 guidance.
FIRST QUARTER RESULTS
Strong deliveries, aided by improvements in the supply chain and inflationary environment, allowed the Company to deliver a solid first quarter, outperforming the results of the first quarter of Fiscal 2023. The demand for our products continued to be healthy, as evidenced by the increase of 3% in the Company's North American retail sales for Powersports Products during the first quarter of Fiscal 2024 compared to the same period last year.
The increase in revenues for the three-month period ended
Revenues
Revenues increased by
- Year-Round Products [7] (55% of Q1-24 revenues): Revenues from Year-Round Products increased by
$398.9 million , or 42.7%, to$1,333.3 million for the three-month period endedApril 30, 2023 , compared to$934.4 million for the corresponding period endedApril 30, 2022 . The increase was primarily attributable to a higher volume of SSV and 3WV sold due to additional capacity and due to supply chain issues experienced in the prior year that impacted product availability, as well as favourable pricing and product mix across all product lines, which was partially offset by higher sales programs. The increase includes a favourable foreign exchange rate variation of$63 million . - Seasonal Products [7] (28% of Q1-24 revenues): Revenues from Seasonal Products increased by
$283.2 million , or 69.3%, to$691.9 million for the three-month period endedApril 30, 2023 , compared to$408.7 million for the corresponding period endedApril 30, 2022 . The increase was primarily attributable to a higher volume of PWC sold, driven by strong market demand and due to supply chain issues experienced in the prior year which impacted product availability, as well as increased deliveries of the Sea-Doo pontoon. The increase was also attributable to favourable pricing across all product lines, partially offset by higher sales programs. The increase includes a favourable foreign exchange rate variation of$16 million . - Powersports PA&A and OEM Engines [7] (12% of Q1-24 revenues): Revenues from Powersports PA&A and OEM Engines decreased by
$58.7 million , or 17.1%, to$284.9 million for the three-month period endedApril 30, 2023 , compared to$343.6 million for the corresponding period endedApril 30, 2022 . The decrease in revenues was mainly attributable to a lower volume of sales. The decrease in sales volume was mainly attributable to higher sales of snowmobile PA&A last year driven by late unit deliveries in the season, and lower dealer orders. The decrease includes a favourable foreign exchange rate variation of$11 million . - Marine [7] (5% of Q1-24 revenues): Revenues from the Marine segment decreased by
$9 .9 million, or 7.5%, to$122.3 million for the three-month period endedApril 30, 2023 , compared to$132.2 million for the corresponding period endedApril 30, 2022 . The decrease in revenues from the Marine segment was mainly due to a lower volume of boats and PA&A sold as a result of supply chain disruptions and a longer production ramp-up related to the introduction of new products. The decrease was partially offset by a favourable product mix of boats sold, as well as higher pricing and a favourable foreign exchange rate variation of$5 million .
[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 3% for the three-month period ended
- Year-Round Products: retail sales decreased on a percentage basis in the low-single digits compared to the three-month period ended
April 30, 2022 . In comparison, the Year-Round Products industry recorded a decrease on a percentage basis in the high-single digits over the same period. - Seasonal Products: retail sales increased on a percentage basis in the mid-single digits compared to the three-month period ended
April 30, 2022 , when excluding pontoons. In comparison, the Seasonal Products industry recorded an increase on a percentage basis in the mid-single digits over the same period.
Marine Products retail sales decreased by 39% compared to the three-month period ended
Gross profit
Gross profit increased by
Operating expenses
Operating expenses increased by
Normalized EBITDA [1]
Normalized EBITDA [1] increased by
Net Income
Net income increased by
[1] See "Non-IFRS Measures" section of the press release
LIQUIDITY AND CAPITAL RESOURCES
The Company generated net cash flows from operating activities totaling
The Company invested
Dividend
On
CONFERENCE CALL AND WEBCAST PRESENTATION
Today at
The Company's first quarter FY24 webcast presentation is posted in the Quarterly Reports section of BRP's website.
About BRP
www.brp.com
@BRPNews
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 2024, including financial guidance and outlook and where it stands with respect to it, 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 , 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 sustained 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, 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 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
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 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
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 measures | Definition | Reason for use | |
Normalized EBITDA | Net income before financing costs, financing income, income tax expense (recovery), depreciation expense and normalized elements | Assist investors in determining the financial performance of the Company's operating activities on a consistent basis by excluding certain non-cash elements such as depreciation expense, impairment charge, foreign exchange gain or loss on the Company's long-term debt denominated in | |
Normalized net income | Net income before normalized elements adjusted to reflect the tax effect on these elements | In addition to the financial performance of operating activities, these measures consider the impact of investing activities, financing activities and income taxes on the Company's financial results. | |
Normalized income tax expense | Income tax expense adjusted to reflect the tax effect on normalized elements and to normalize specific tax elements | ||
Normalized effective tax rate | Based on Normalized net income before Normalized income tax expense | ||
Normalized earnings per share – basic & diluted | Calculated respectively by dividing the Normalized net income by the weighted average number of shares – basic and the weighted average number of shares – diluted | ||
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 | |||
(in millions of Canadian dollars) | 2023 | 2022 | |
Net income | |||
Normalized elements | |||
Foreign exchange loss on long-term debt and lease liabilities | 43.8 | 16.1 | |
Gain on NCIB [2] | — | (1.8) | |
Costs related to business combinations [3] | 4.9 | 1.1 | |
Other elements | 0.2 | 1.3 | |
Income tax adjustment [1] [4] | (11.4) | (0.6) | |
Normalized net income [1] | 192.0 | 137.1 | |
Normalized income tax expense [1] | 52.6 | 49.3 | |
Financing costs adjusted [1] | 44.1 | 16.5 | |
Financing income adjusted [1] | (1.5) | (1.0) | |
Depreciation expense adjusted [1] | 89.9 | 70.2 | |
Normalized EBITDA [1] |
[1] | See "Non-IFRS Measures" section. |
[2] | Normal Course Issuer Bid |
[3] | Transaction costs and depreciation of intangible assets related to business combinations. |
[4] | 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. |
(in millions of Canadian dollars, except per share data) | Three-month periods ended | ||
2023 | 2022 | ||
Depreciation expense reconciliation | |||
Depreciation expense | |||
Depreciation of intangible assets related to business combinations | 2.5 | 1.1 | |
Depreciation expense adjusted | |||
Income tax expense reconciliation | |||
Income tax expense | |||
Income tax adjustment [2] | (11.4) | (0.6) | |
Normalized income tax expense [1] | |||
Financing costs reconciliation | |||
Financing costs | |||
Transaction costs on long-term debt | 0.2 | — | |
Financing costs adjusted | |||
Financing income reconciliation | |||
Financing income | |||
Gain on NCIB [3] | — | (1.8) | |
Financing income adjusted | |||
Normalized EPS - basic [1] calculation | |||
Normalized net income [1] | |||
Non-controlling interests | 0.3 | 0.1 | |
Weighted average number of shares - basic | 78,856,822 | 81,075,819 | |
Normalized EPS - basic [1] | |||
Normalized EPS - diluted [1] calculation | |||
Normalized net income [1] | |||
Non-controlling interests | 0.3 | 0.1 | |
Weighted average number of shares - diluted | 80,411,463 | 82,701,016 | |
Normalized EPS - diluted [1] |
[1] | See "Non-IFRS Measures" section. |
[2] | Income tax adjustment is related to the income tax on Normalized elements subject to tax and for which income tax has been recognized. |
[3] | Normal Course Issuer Bid |
View original content to download multimedia:https://www.prnewswire.com/news-releases/brp-reports-fiscal-year-2024-first-quarter-results-301839490.html
SOURCE
© Canada Newswire, source