BRP(US:DOOO)2022-03-25 19:07Financial Data and Key Metrics Changes - The company achieved record financial results for fiscal year 2022, with revenue reaching $7.6 billion, an increase of 28% compared to fiscal year 2021 [9] - Normalized EBITDA rose by 46% to $1.4 billion, representing a margin of 19.1% [10] - Diluted normalized earnings per share grew by 84% to $9.92, exceeding the guidance range [10][32] Business Line Data and Key Metrics Changes - Year-round products revenue increased by 12% to $853 million in Q4, despite supply chain disruptions [18] - Seasonal products revenue surged by 56% in Q4 to $1 billion, with snowmobile retail up low single-digit percent, outpacing the industry [21] - Powersports parts, accessories, and apparel revenue rose by 21% in Q4, surpassing $1 billion for the first time [26] Market Data and Key Metrics Changes - The company gained approximately 3 percentage points in market share in North America, ending the year with about 30% market share [12] - In Q4, the company outpaced the industry in snowmobiles, prioritizing component utilization for that segment [13] - Personal watercraft retail was down low-60% due to inventory shortages, but the company gained over 10 percentage points of market share in Australia and New Zealand [24] Company Strategy and Development Direction - The company is focused on expanding its product portfolio, introducing new market-shaping products like the Sea-Doo Switch [8] - Capacity expansion projects have been completed on time and on budget, increasing production capacity significantly [7][20] - The company plans to enter the electric motorcycle market with a new family of electric two-wheel motorcycles under the Can-Am brand, targeting a significant addressable market [50][51] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in sustaining strong consumer demand for powersports despite supply chain challenges [29] - The company anticipates continued growth in fiscal 2023, with revenue expected to increase by 24% to 29% [35] - Management acknowledged potential challenges in the first half of fiscal 2023 due to ongoing supply chain disruptions and inflationary pressures [42][55] Other Important Information - The company ended the year with a robust balance sheet, including $266 million in cash and a net leverage ratio of 1.2 times [32] - A 23% increase in the dividend per share was announced, along with a $250 million substantial issuer bid [49] - The company expects to continue utilizing a strategy of building substantially completed units and retrofitting them as components are received [42] Q&A Session Summary Question: Margin compression for fiscal 2023 - Management indicated a 200 basis point decline in margin, with volume expected to provide a 100 basis point increase, while inflation and inefficiencies contribute to the headwind [58] Question: Existing customer trends - Management noted that existing customers are increasingly willing to secure their purchases with preorders, with significant growth in preseason deposits for snowmobiles and personal watercraft [60] Question: Inventory restocking - Management estimated that the restocking opportunity is about a quarter's worth of wholesale revenue, expected to occur in fiscal year 2024 [65] Question: Electric motorcycle market size - The addressable market for the new electric motorcycle line is estimated at 600,000 units per year, primarily targeting the North American and European markets [66] Question: Geographic revenue allocation - The company does not expect a significant negative financial impact from exiting the Russian market, as units can be reallocated to other markets [98]