Summary of BRP's 2025 Analyst and Investor Day Company Overview - **Company**: BRP (Bombardier Recreational Products) - **Event**: 2025 Analyst and Investor Day - **Key Management Presentations**: José Boisjoli (President and CEO), José Perreault (Chief Marketing Officer), Sandy Scullion (President of Powersports), David Baker (VPGM North America), Steve Peltier (VPGM International), Thomas Uhr (CTO), Patrick Dussault (EVP Global Manufacturing), Sébastien Martel (CFO) [1][2][4] Strategic Plan: M28 - **Introduction of M28**: A new strategic plan aimed at capturing the full potential of the powersports market, following the previous M25 plan [5][25] - **Financial Targets**: - Revenue target of $12 billion and normalized EPS of $8 by fiscal year 2028 [7][30] - Growth in revenue of 7% CAGR and EPS growth of 33% CAGR [30][31] - **Focus Areas**: - Powersports market leadership, particularly in Off-Road Vehicles (ORV) [25][52] - International market expansion with a revenue target of $2.5 billion [27][53] Historical Context and Performance - **M25 Achievements**: - Revenue increased by 36% and normalized EBITDA by 32% since fiscal year 2020 [6] - Adjusted financial targets in June 2022 due to market conditions [7][8] - **Market Challenges**: - Experienced disruptions from COVID-19, supply chain issues, cyberattacks, and geopolitical tensions [10][11][12] - Inventory management strategy led to a 31% reduction in Powersports inventory in North America [12] Market Position and Competitive Landscape - **Market Share Growth**: - Increased market share from sub-10% to 25% in the off-road industry over the last decade [62][65] - Can-Am retail grew over 60% from fiscal 2019 to fiscal 2025, outperforming competitors [61] - **Dealer Relationships**: - Focus on dealer profitability and support, leading to improved dealer sentiment [50][52] - BRP is now the leading OEM in terms of units sold per dealer [21] Customer Insights - **Customer Base Expansion**: - Added 1 million unique customers since 2021, with a focus on engaging new entrants and conquesting from competitors [37][38] - Customer demographics have shifted, with an increase in wealth among customers [40][41] - **Brand Awareness**: - Significant improvements in brand awareness and customer perception, particularly in the ORV segment [42][43] Strategic Initiatives - **Powersports Focus**: - Aim to regain 30% market share in side-by-side vehicles and 25% in ATVs by fiscal year 2028 [27][52] - **International Growth**: - Targeting growth in emerging markets, particularly in South Asia and China [53] - **Customer Experience Enhancements**: - Initiatives to improve dealer and customer experience, including service excellence and ownership experience [54][55] Future Outlook - **Investment in R&D**: - Continued investment in R&D at approximately 5% of revenue to drive innovation [22] - **Defense and Specialized Vehicles**: - Exploring opportunities in defense and specialized vehicles, responding to increased global demand [34][35] Conclusion - **Overall Strategy**: - The M28 plan is positioned to leverage BRP's strengths in innovation, dealer relationships, and market presence to achieve ambitious growth targets in the powersports industry [25][30][31]

Financial Data and Key Metrics Changes - In Q1 2025, sales decreased by 12% due to reduced shipments to manage dealer inventory amidst a downturn in powersports [7][9] - Adjusted EPS was negative $0.90, aligning with the guidance range provided in January [9] - North American retail sales were down 7%, with better performance in the utility business compared to recreational products [9][10] - Gross profit margin decreased by 147 basis points, primarily due to promotions and economic downturn [38] Business Line Data and Key Metrics Changes - Off Road sales declined by 10% due to lower volume and higher promotions, although a favorable mix partially offset this [36][38] - On Road sales fell by 20%, impacted by a challenging motorcycle market and engine delivery timing issues [39] - Marine sales decreased by 7%, consistent with planned reductions in shipments, while the pontoon industry saw an 11% decline year-to-date [41] Market Data and Key Metrics Changes - International business sales dropped by 16% due to weak markets in both off-road and on-road segments [36] - Retail trends showed volatility, with significant month-to-month swings attributed to high inflation and interest rates [92] Company Strategy and Development Direction - The company has withdrawn its full-year guidance due to the fluid tariff environment and its impact on consumer spending [12] - A four-pronged tariff mitigation strategy has been implemented, focusing on supply chain adjustments, cost control, market reprioritization, and government advocacy [26] - The company aims to emerge stronger by maintaining close relationships with dealers and focusing on cash preservation [12][34] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenging environment but expressed confidence in the company's ability to navigate through it [6][34] - The CEO emphasized the importance of innovation and dealer partnerships in overcoming current market challenges [17][34] - Management noted that consumer reluctance to spend on discretionary items is affecting retail performance, with expectations for modestly lower retail demand [92] Other Important Information - The company has seen improvements in warranty claims, indicating better product quality and customer satisfaction [39][98] - The company is focused on reducing working capital and has achieved the highest Q1 operating free cash flow in nine years [32] Q&A Session Summary Question: What role will pricing play in tariff mitigation efforts? - Management indicated that pricing will remain stable through May, as raising prices in a recessionary environment is challenging [56] Question: Where does the company stand in terms of inventory cleanup? - Management believes they are in the later innings of the inventory cleanup process, with improvements noted across the industry [61] Question: What is the expected annualized impact from tariffs in 2026? - Management refrained from providing specific estimates for 2026, focusing instead on current year impacts and mitigation efforts [70] Question: How is the company planning shipment levels in light of retail demand? - The company plans to ship lower than retail to continue reducing dealer inventory, adjusting as market conditions evolve [102][104] Question: What actions are being taken to preserve cash? - Management is focused on cash preservation, reviewing CapEx budgets, and maintaining liquidity through discussions with lending partners [78][84]