BRP releases 2017 financial results

BRP Inc. reported its financial results for the three- and twelve-month periods ended January 31, 2018, revealing the biggest revenue figures in the company’s history. All financial information is in Canadian dollars unless otherwise noted. 

“I am very pleased with our excellent year-end results; we set a strong growth objective and we surpassed it once again with record results,” said José Boisjoli, president and CEO. “Our plan was well-executed worldwide by our employees and yielded impressive results, in particular with our retail momentum that outpaced both the competition and the industries in all our markets.”

The results for the year, the strongest in BRP’s history, are partly based on the excellent worldwide momentum of its retail sales and the increased demand for its Can-Am side-by-side vehicles. For example, BRP’s global market share for this product has reached the No. 3 position in the past year, only seven years after our entry into the industry.

“Model year 2018 products, including two new Can-Am side-by-side platforms and a cutting-edge Sea-Doo platform, were well-received by our consumers, dealers and the media. We have also established a record year for accessory introductions, providing our consumers with the just-right parts, accessories and clothing, fully adapted and customized to their vehicle, to enhance their riding experience,” Boisjoli added. 

“For fiscal year 2019, we continue to aim for high-paced growth from the Year-Round and Seasonal product categories. To this end, our planned increase in capacity in both Juarez 2 and Queretaro manufacturing facilities will be a key enabler. In the current economic environment, I am confident that we are well-positioned to deliver our fiscal year 2019 guidance that calls for 5 to 8 percent revenue growth as well as 20 to 25 percent normalized EPS growth.”

Highlights for the Three- and Twelve-Month Periods Ended January 31, 2018

As expected, revenue decreased by $42.1 million, or 3.2 percent to $1,263.2 million for the three-month period ended January 31, 2018, compared with $1,305.3 million for the corresponding period ended January 31, 2017. The revenue decrease was mainly due to lower wholesale in Seasonal Products and an unfavourable foreign exchange rate variation of $14 million.

Gross profit decreased by $18.4 million, or 5.5 percent to $317.2 million for the three-month period ended January 31, 2018, compared with $335.6 million for the corresponding period ended January 31, 2017. The gross profit decrease includes an unfavourable foreign exchange rate variation of $1 million. Gross profit margin percentage decreased by 60 basis points to 25.1 percent from 25.7 percent for the three-month period ended January 31, 2017. The decrease was primarily due to higher production costs and higher sales program costs driven by the increase in retail sales, partially offset by a higher volume of products sold.

Revenues increased by $315.4 million, or 7.6 percent, to $4,486.9 million for the twelve-month period ended January 31, 2018, compared with $4,171.5 million for the corresponding period ended January 31, 2017. The revenue increase was primarily attributable to higher wholesale of Year-Round Products and Seasonal Products. The increase was partially offset by an unfavourable foreign exchange rate variation of $36 million.

Gross profit increased by $58.6 million, or 5.8 percent, to $1,067.5 million for the twelve-month period ended January 31, 2018, compared with $1,008.9 million for the corresponding period ended January 31, 2017. The gross profit increase includes an unfavourable foreign exchange rate variation of $11 million. Gross profit margin percentage decreased by 40 basis points to 23.8 percent from 24.2 percent for the twelve-month period ended January 31, 2017. The decrease was primarily due to higher production costs and higher sales program costs driven by the increase in retail sales, partially offset by a favourable product mix and a higher volume in SSV as well as general price increases.

QUARTERLY REVIEW BY CATEGORIES

Year-Round Products

Revenues from Year-Round Products increased by $11.5 million, or 2.2 percent, to $538.8 million for the three-month period ended January 31, 2018, compared with $527.3 million for the corresponding period ended January 31, 2017. The increase resulted mainly from a higher volume of SSV and Spyder vehicles sold, partially offset by an unfavourable product mix of SSV sold and by an unfavourable foreign exchange rate variation of $9 million.

Seasonal Products

Revenues from Seasonal Products decreased by $46.2 million, or 9.4 percent, to $443.3 million for the three-month period ended January 31, 2018, compared with $489.5 million for the corresponding period ended January 31, 2017. The decrease was driven by a lower volume of snowmobiles sold resulting from the late introduction of the REV Gen4 platform last year and from an unfavourable foreign exchange rate variation of $3 million. The decrease was partially offset by a higher volume of PWC sold due to industry growth.

Propulsion Systems

Revenues from Propulsion Systems decreased by $21.3 million, or 19.1 percent, to $90.2 million for the three-month period ended January 31, 2018, compared with $111.5 million for the corresponding period ended January 31, 2017. The decrease was mainly attributable to a lower volume of motorcycle engines sold and to a lower wholesale of outboard engines. The decrease was partially offset by a favourable foreign exchange rate variation of $1 million.

PAC (Parts, Accessories, Clothing and other services)
     
Revenues from PAC increased by $13.9 million, or 7.9 percent, to $190.9 million for the three-month period ended January 31, 2018, compared with $177.0 million for the corresponding period ended January 31, 2017. The increase was mainly attributable to a higher volume of SSV accessories, partially offset by an unfavourable foreign exchange rate variation of $3 million. Operating expenses remained relatively stable at $164.5 million for the three-month period ended January 31, 2018, compared with $168.2 million for the three-month period ended January 31, 2017.

Declaration of dividend

The Board of Directors approved a $0.01 increase for its quarterly dividend to $0.09 per subordinate and multiple voting share that will be paid on April 13, 2018 to shareholders of record as at the close of business on March 30, 2018. The payment of each quarterly dividend will remain subject to declaration of that dividend by the Board of Directors. The actual amount of each quarterly dividend, as well as each declaration date, record date and payment date, is subject to the discretion of the Board of Directors.