Q4 2024 BRP Inc Earnings Call

Operator: Good morning, ladies and gentlemen, and welcome to BRP Inc.'s FY24 fourth quarter results conference call. For participants who use the telephone line, it is recommended to turn off the sound on your device.

Good morning, ladies and gentlemen, and welcome to the P. R. P. Inks FY 'twenty four fourth quarter results conference call for participants who use the telephone line. It is recommended to turn off the sound on your device I would now like to turn the meeting over to Mr. Philip Just shine. Please go ahead Mr. Shane.

Operator: I would now like to turn the meeting over to Mr. Philippe Deschenes. Please go ahead, Mr. Deschenes. Thank you. Good morning, and welcome to BRFC's conference call for the fourth quarter of fiscal year 2020. Joining me this morning are Jose Boisjoli, President and Chief Executive Officer, and Sbastien Martel, Chief Financial Officer. Before we move to the prepared remarks, I would like to remind everyone that certain forward-looking statements will be made during the call and that actual results could differ from those implied in the statement. The forward-looking information is based on certain assumptions and is subject to risk and uncertainties, and I invite you to consult VRPs and DNA for a complete list of these. Also, during the call, reference will be made to supporting slides, and you can find the presentation on our website at brp.com under the investor relations section. So with that, I'll turn the call over to Jose.

Philip Just: Thank you good morning, and welcome to the Rfps conference call for the fourth quarter of fiscal year 'twenty four.

Philip Just: Joining me. This morning are so is it worth it.

Philip Just: President and Chief Executive Officer, and Sebastien Martel, Chief Financial Officer.

Philip Just: Before we move to the prepared remarks, I would like to remind everyone that sort of forward looking statements will be made during the call.

Philip Just: Actual results could differ from those implied in these statements.

Philip Just: Forward looking information displays on certain assumptions and is subject to risks and uncertainties and I invite you to consult erp's MD&A for a complete list of these.

Philip Just: Also during the call reference will be major supporting slides and you can find the presentation on our website that B R. P dot com under the Investor Relations section, so with that I'll turn the call over to Jonathan.

Philippe Deschenes: Thank you, Philippe. Good morning, everyone, and thank you for joining us. Fiscal 24 was marked by sudden market share gains, successful product launches, and continued progress on our key strategic initiatives. However, from a financial perspective, the year was more challenging than expected due to the macroeconomic environment. We adapted to the situation, and as you know, we have proactively reduced our shipment to dealers. Despite unfavorable winter conditions, which impacted our snow-related business, we've delivered EPS within our guidance range. Let's turn to slide four for the key financial highlights for the year. Revenue increased 3% to reach $10.4 billion, a record high for BRP. However, normalized EBITDA was stable at $1.7 billion, and normalized EPS was down 8% at $11.11.

Jonathan: Thank you good morning, everyone and thank you for joining us.

Jonathan: Fiscal 'twenty four was marked by solid market share gain successful product launches and continued progress on our key strategic initiatives.

Jonathan: From a financial perspective, the year was more challenging than expected due to macroeconomic and get on them.

Jonathan: We adapted to this situation and as you know we have proactively reduce our shipments to dealers.

Jonathan: Despite unfavorable winter condition, which impacted our snow related business with delivered EPS within our guidance range.

Jonathan: Let's turn to slide four for key financial highlights for the year.

Jonathan: Revenue increased 2% to reach 10.4 billion dollar a record high for B R. P M.

Jonathan: Normalized EBITDA was stable at $1 7 billion and normalized EPS was down 8% at $11 and 11 centers.

Jose Boisjoli: Our focus on cash management pays off as we delivered a record free cash flow of more than $1 billion for the year. As for retail, our North American bars for sales were up 8% for the year compared to an industry of about 1%. The strong power sport retail performance further strengthens our position as the number one OEM in the industry, as you can see on slide five. With this additional growth in fiscal 24, our retail now stands 35% higher than pre-COVID levels in an industry that has been flat. We added another 2% point of market share for the year, with gains across almost all product lines.

Jonathan: Our focus on cash management pay us as we've delivered a record free cash flow of more than $1 billion for the year.

Jonathan: As for retail our North American power sports sales were up 8% for the year compared to an industry of about 1%.

Jonathan: The strong power sport retail performance further strengthen our position as the number one OEM in the industry as you can see on slide five.

Jonathan: With this additional growth in fiscal 'twenty for a retail now stand at 35% higher than pre COVID-19 level in an industry that has been flat.

Jonathan: We had another two percentage point of market share for the year with gains across almost all product lines.

Jose Boisjoli: We have continued expanding our leadership position as the number one OEM in powersports and the only one retailing more units per dealer than during COVID. Our success comes from our ability to constantly innovate by bringing new products to market that drive consumer demand, and we are well positioned to sustain our momentum going forward. Turning to slide 6 for a closer look at our retail performance in the fourth quarter. Our North American Parsport retail was down 10%, as we were facing a tough competitor due to late shipment and retail of three-wheel vehicle, personal watercraft, and Sea-Doo pontoon in Q4 last year. And yet, this year's fourth quarter was our second strongest ever, even surpassing the COVID year, during which we had significantly depleted network inventory. Our performance was also impacted by unfavorable winter conditions, which led to a snowmobile decline in the high teens.

Jonathan: We have continue extending our leadership position as the number one OEM in power sport and the only one retailing more units per dealer then during COVID-19.

Jonathan: Our success comes from our ability to constantly innovate by bringing new product to market that drive consumer demand and we are well positioned to sustain our momentum going forward.

Jonathan: Turning to slide six for a closer look at our retail performance in the fourth quarter.

Jonathan: Our North American power sports retail was down 10% as.

Jonathan: As we were facing a tough comparable due to late shipments and retail of three week three wheel vehicle personal watercraft and sito pontoon in Q4 of last year.

Jonathan: And yet this year fourth quarter was our second strongest ever even surpassing the clothing, the Kobe a year during which we had significantly depleted network inventory.

Jonathan: Our performance was also impacted by unfavorable winter condition, which led to a snowmobile the decline in the high teen.

Jose Boisjoli: Excluding Snowmobile, our retail for the quarter was down only 2%. Still, despite a more challenging dynamic in Q4, we are satisfied with our performance for the year. When excluding snowmobiles, our retail was up 12% compared to the industry, up low single digits, driven by a very strong performance in off-road vehicles and Personal Watercraft and market share gains across most product lines. Turning to slide 7 for an update on global retail trends. As mentioned last quarter, we started to see gradual signs that the macroeconomic environment was affecting our industry, leading to softer market conditions, especially in EME and Asia-Pacific. The fourth quarter played essentially in line with this view, as we saw softer demand in EMEA and Asia-Pacific, which retailed down 5% and 25%, respectively. However, we had an excellent performance in Latin America, driven by the Brazilian and Mexican markets. Given these trends, we maintain a cautious approach going into fiscal year 2025. Our priority is to tightly manage network inventory to protect dealer profitability.

Jonathan: Excluding snowmobile our retail for the quarter was down only 2%.

Jonathan: Still despite a more challenging dynamic in Q4, we are satisfied with our performance for the year, when excluding snowmobile or retailer was up 12% compared to the industry up low single digits.

Jonathan: Given by a very strong performance in off road vehicles.

Jonathan: And personal watercraft and market share gains across most product lines.

Turning to slide seven for an update on global retail trend.

Jonathan: As I mentioned last quarter, we started to see gradual sign that the macroeconomic environment was affecting our industry, leading to softer market condition, especially in EMEA and Asia Pacific.

Jonathan: The fourth quarter fleet essentially in line with this view as we saw softer demand in EMEA and Asia Pacific with retail down five and 25% respectively.

Jonathan: However, we had an excellent performance in Latin America, driven by the Brazilian and Mexican markets.

Jonathan: Given these trends, we maintain a cautious approach entering fiscal year 'twenty five or.

Jonathan: Our priority is to tightly manage network inventory to protect dealer profitability.

Jose Boisjoli: Now let's turn to slide 8 for a year-round product. Revenue was up 9%, reaching $1.4 billion in Q4, primarily driven by a favorable product mix and a return to normal shipment pattern for three-wheel vehicles. At retail, Can-Am side-by-side had its strongest Q4 ever, being up a low 20%, primarily driven by solid growth in the utility category.

Jonathan: Now, let's turn to slide eight for year round product.

Jonathan: Revenue were up 9%, reaching $1 $4 billion in Q4, primarily driven by a favorable product mix and a return to a normal shipment pattern for three wheeled vehicle.

Jonathan: At retail can them side by side had its strongest Q4 ever being up low 20%, primarily driven by solid growth in the utility category.

Jose Boisjoli: Our performance is even more impressive as the first shipments of the new Mavic Air occur late in the season. This brand new platform has already made it smart by winning the King of the Hammer race in California two months ago, which would further stimulate consumer interest. This strong quarter concludes another exceptional year for our side-by-side business, where we grew retail at a heightened percentage base and gained significant market share, especially in the utility segment. Our share reached 30%, achieving this objective a year earlier than our five-year flat rate.

Jonathan: Our performance is even more impressive as the first shipment of the new Maverick are occur late in the season.

Jonathan: This brand new platform already made its mark by winning the King of the Hammer race in California, two months ago, which would further stimulate consumer interest.

Jonathan: This strong quarter concludes another exceptional year for our side by side business, where we grew retail at the high teen percentage base and gained significant market share, especially in the utility segment.

Jonathan: Our share reached 30%.

Jonathan: Giving the subjective a year earlier and our five year plan.

Jose Boisjoli: As for ATV, our retail was down low single digits as we lapping a very strong Q4 last year. That said, we are pleased with the success of our new Outlander platform, which gained four points of market share in the mid-sixties segment. For the year, we gained almost two points, surpassing the 20% mark for the first time ever, and getting closer to the number two position in the industry. Locating a three-wheel vehicle

Jonathan: As for HPV, our retail was down low single digit as we lapping a very strong Q4 last year.

Jonathan: That said, we are pleased with the success of our new <unk> platform, which gained four point of market in the mid Cc segment.

Jonathan: For the year, we gained almost two points, surpassing the 20% Mark for the first time ever and getting closer to the number two position in the industry.

Jonathan: Looking at three wheeled vehicles.

Jose Boisjoli: We are in the off-season, and Can-Am three-wheel retail was down high by 20%. The decline is probably due to a lapping and an unusually strong quarter of retail last year as we shipped units later than normal in the season. Still, given the interest of new entrants into the category, our strong lineup, and enhancements to our Spider F3 and RT models, we are well positioned to have a successful season. Turning to seasonal products on Flying Nine. Revenue was down 28% from last year to about $950 million, driven by a lower volume of products sold, resulting from a different timing of shipment compared to last year.

Jonathan: We are in the off season and can am three wheeled retail was down high 20%.

Jonathan: The decline is primarily due to lapping an unusually strong quarter of retail last year as we shipped unit later than normal in this season.

Jonathan: Still given the <unk> of new entrants for the category, our strong lineup and then cement to our Spider F. <unk> R. T models, we are well positioned to have a successful season.

Jonathan: Turning to seasonal product on slide nine.

Jonathan: Revenue are down 28% from last year to about $950 million driven by a lower volume of products sold resulting from a different timing of shipments compared to last year.

Jose Boisjoli: Looking at our retail performance, for Percival Watercraft, this was peak retail season in Contra's seasonal market, and Cedoo saw retail decline of mid-single digit in Australia due to the seasonality of the market. This was partially offset by impressive growth in the low 30% in Latin America, notably driven by the Brazil market.

Jonathan: Looking at our retail performance for.

Jonathan: For personal watercraft.

Jonathan: This was peak retail season in counter seasonal market and sea Doo sell retail decline of mid single digit in Australia due to market weakness.

Jonathan: This was partially offset by impressive growth in the low, 30% and Latin America, notably driven by the Brazil market.

Jose Boisjoli: As for North America, we are in the off-season, and retail was down, probably due to a difficult compatible given late unit shipment last year. However, from a historical perspective, retail is performing well, up double digits from the typical fourth quarter pre-COVID level. This trend also continues in February, which gives us confidence for the upcoming summer season. Looking at Snowmobile.

Jonathan: As for North America, we are in the season and retail was down primarily due to a difficult comparable given late units shipments last year.

However from an historical perspective retail is performing.

Jonathan: Performing well up double digit from typical fourth quarter pre COVID-19 level.

Jonathan: This trend also continue in February which gave us confidence for the upcoming summer season.

Jonathan: Looking at snowmobile.

Jose Boisjoli: As previously mentioned, fourth quarter retail was impacted by unfavorable winter conditions in North America, leading to a decline in the high-teen percentage range. I have been in the business for a long time and seen several challenging seasons, but it's the first time that I have seen such difficult conditions across North America. That said, looking at the historical trend, we know that the snowmobile industry is very resilient and typically bounces back following weaker seasons. We have a loyal and passionate customer base. Our Skidoo and Lynx brands are very strong and continue to outperform the industry with retail down low single digits for the season. Reflecting our commitment to bring innovation to market, we are strengthening our offering for model year 25 by introducing new features and technologies across the lineup. Furthermore, we have launched two new Ski-Do and Lynx electric models designed for multi-use applications, such as ski centers and recreational resorts.

Jonathan: As previously mentioned fourth quarter retail was impacted by unfavorable winter condition in North America.

Jonathan: Leading to decline in the high teen percentage range.

I have been in the business for a long time and saw several challenging season, but this is the first time that they see such difficult condition across North America.

Jonathan: That said looking at historical trend, we know that the snowmobile industry is very resilient and typically bounce back following weaker season.

Jonathan: We have a loyal and passionate customer base, our ski Doo and Lynx brands are very strong and continued to outperform the industry with retail down low single digit for the season.

Jonathan: Reflecting our commitment to bring innovation to market, we are strengthening our offering for model year 'twenty five by introducing new feature and technologies across the lineup.

Jonathan: Furthermore, we have launched two new ski Doo and Lynx electric models designed for multi use application such as key center and recreational resort.

Jose Boisjoli: These models will also be available to consumers. With the strength of our lineup and recent addition, we expect to remain the number one industry player. Moving on to slide 10, with power support parts, accessories, and apparel, and OEM engine. Revenue was down 23% to $291 million due to lower product shipments to reduce network inventory levels and lower demand for snow-related replacement parts.

Jonathan: These model will also be available to consumers.

Jonathan: With the strength of our lineup and risks. In addition, we expect to remain the number one industry player.

Jonathan: Moving on to slide 10, with power sport part accessories, and apparel and OEM engine.

Jonathan: Revenue were down 23% to $291 million due to lower product shipments to reduce network inventory level and lower demand for snow related replacement part.

Jose Boisjoli: Moving on to Marine, revenue was down 32% to $84 million due to lower volume of boat shipments as dealers continue to be cautious about taking on inventory given weaker demand trends. Looking at retail sales, we are in the off-season in North America, and Alumacraft retail was down about 20% while Manitou retail was about flat. As for Quinterect, retail was down about 10% in line with the industry.

Jonathan: Moving onto marine revenue were down 32% to $84 million due to lower volume of both shipments as dealers continue to be cautious about taking on inventory given the weaker demand trends.

Jonathan: Looking at retail sales.

Jonathan: We are in the off season in North America, and only make last detail was down about 20%, while many to retail was about flat.

Jonathan: As for <unk> retail was down about 10% in line with the industry.

Jose Boisjoli: Looking ahead, with softer demand in the boating sector, we are seeing more promotion across the industry. For this reason, we decided to be more conservative with our plan for fiscal year 25 in order to manage network inventory and preserve the value of our newly introduced employees. As such, we expect marine revenue to remain about flat for the year. We are pleased with the customer reception of the new Manitou boat and remain confident about the potential of our marine business for the coming year. With that, I turn the call over to Sibeth.

Jonathan: Looking ahead with softer demand in the boating sector, we are seeing more promotion across the industry.

Jonathan: For this reason, we decided to be more conservative with our plan for fiscal year 'twenty five.

Jonathan: In order to manage network inventory and preserve the value of our newly introduced book.

Jonathan: As such we expect marine revenue to remain about flat for the year.

We are pleased with the customer reception of the new money to boat and remain confident about the potential of our marine business for the coming years.

Jonathan: With that I'll turn the call over to Sebastian.

Sbastien Martel: Thank you, Jose, and good morning everyone. Our fourth quarter played out in a difficult context marked by an unfavorable winter, which impacted our snow-related products and softening consumer demand in international markets. Still, through it all, the team executed well to tightly manage shipments and network inventory levels, sustained solid market share gains side-by-side, and delivered bottom-line results that ended within our guidance. Looking at the numbers, revenues stood at $2.7 billion, representing a decrease of 12%, primarily due to lower shipments and higher sales programs, notably as adverse winter conditions affected our snow-related business and led to higher levels of promotion. We generated $653 million of gross profit with a margin of 24.3%, down 130 basis points from last year. This decline was primarily due to lower shipment volumes and higher sales program, partly offset by a richer mix of products, favorable pricing, and improved production. Moving further down the P&L, we generated normalized dividends for the quarter of $405 million, and normalized earnings per share of $2.46.

Sebastian: Thank you Jose and good morning, everyone. Our fourth quarter played out in a difficult context marked by unfavorable winter, which impacted our snow related products.

Sebastian: And softening consider as consumer demand and interest in international markets.

Sebastian: Still through it all the team executed well so tightly managed shipments of network inventory levels.

Sebastian: <unk> solid market share gains in side by side and delivered bottom line results that ended within our guidance range.

Sebastian: Looking at the numbers revenue stood at $2 7 billion, representing a decrease of 12% primarily due to lower shipments and higher sales program, notably as adverse winter conditions affected our snow related business.

Sebastian: To higher levels of promotions.

Sebastian: We generated $653 million of gross profit with a margin of 24, 3% down 130 basis points from last year.

Sebastian: This decline was primarily due to lower shipment volumes and higher sales program, partly offset by a richer mix of products favorable pricing and improved production costs.

Sebastian: Moving further down the P&L, we generated normalized EBITDA for the quarter of $405 million and normalized earnings per share of $2 46.

Sbastien Martel: For the year, we delivered normalized dividends of $1.7 billion, roughly flat to last year, and normalized earnings per share of $11.11, a decline of 8% from fiscal 2023, resulting from higher depreciation and financing. Success in our industry comes from innovation, solid cash generation, and diligent allocation of capital, and we strongly believe this is a core strength of BRP. In that vein, as you can see on slide 13, fiscal 24 was the strongest year ever, with over a billion dollars of free cash flow generation, representing a solid conversion ratio of over 60%. Furthermore, we continue to prioritize investments in the business by deploying over $580 million in capital.

Sebastian: For the year, we delivered normalized EBITDA of $1 $7 billion, roughly flat to last year and normalized earnings per share of 11, 11, a decline of 8% from fiscal 'twenty, three resulting from higher depreciation and financing costs.

Sebastian: Success in our industry comes from innovation solid cash generation and diligent allocation of capital and we strongly believe this is a core strength of ERP.

Sebastian: That vein as you can see on slide 13 fiscal 'twenty four were our strongest year ever with over $1 billion of free cash flow generation, representing a solid conversion ratio of over 60%.

Sebastian: Furthermore, we continue to prioritize investments in the business by deploying over $580 million in Capex.

Sbastien Martel: These investments primarily focus on high-return growth projects aimed at sustaining our market share growth momentum and expanding our addressable market. Our solid ROYC of 30% for the year reflects our unique ability to innovate and deliver industry-leading results on growth projects. Given our solid cash generation, we also returned over $500 million to our shareholders through a 13% increase in the dividend and by capitalizing on the dislocation in the value of our stock to repurchase about 6% of the shares altogether.

These investments primarily focused on high return growth projects aimed at sustaining our market share growth momentum and expanding our addressable markets are solid ROIC of 30% for the year reflects our unique ability to innovate and deliver industry leading results on projects giver.

Sebastian: Given our solid cash generation, we also returned over $500 million to our shareholders through a 13% increase in the dividend and by capitalizing on the dislocation and the value of our stock to repurchase about 6% of the shares outstanding.

Sbastien Martel: As our business is geared to generate solid free cash flow, we remain well-positioned to continue investing in the business, all the while sustaining strong returns of capital to our shareholders. Moving to an overview of our network inventory on slide 14, our dealer's inventory for the fourth quarter was up 36% from last year and up 30% from pre-COVID levels.

Sebastian: As our business is geared to generate solid free cash flow, we remain well positioned to continue investing in the business all the while sustaining trauma strong returns of capital to our shareholders moving.

Sebastian: Moving to an overview of our network inventory on slide 14.

Sebastian: Our dealers inventory for the fourth quarter was up 36% from last year and up 30% from pre COVID-19 levels.

Sbastien Martel: As we mentioned last quarter, despite the fact that we diligently improved our inventory returns over the years, our dealers are currently facing elevated inventory financing costs due to the increased dollar value of units and higher interest rates. To protect our dealer value proposition, we have decided to support them by aiming to reduce our network inventory levels by 10% to 15% this year. While there are opportunities for improvements across all product lines, the more pronounced decreases are expected to come from seasonal products and 3Wheel, as they end their respective seasons with higher levels of inventory than initially. From a cadence perspective, Q1 network inventory is expected to remain high compared to last year as it compares overall leaner inventory levels and will be impacted by snowmobile given weather-induced softer retail trends.

Sebastian: As we mentioned last quarter, despite that we diligently improved our inventory turns over the years. Our dealers are currently facing elevated inventory financing costs due to the increased dollar value of units and higher interest rates.

Sebastian: To protect our dealer value proposition, we have decided to support them by aiming to reduce our network inventory levels by 10% to 15% this year.

Sebastian: While there are opportunities for improvements across all product lines. The more pronounced decreases are expected to come from seasonal products and three wheel as we ended as they ended their respective seasons with higher levels of inventory than initially planned.

Sebastian: From a cadence perspective, Q1 network inventory is expected to remain high than last year as comps overall leaner inventory levels and will be impacted by snowmobile given the weather induced softer retail trends from there we expect a gradual improvement until year end.

Sbastien Martel: From there, we expect a gradual improvement until year-end. Now, moving to the guidance for Fiscal 25 on slide 15. We are entering Fiscal 25 with a solid lineup and an exciting pipeline of product introductions that are positioning us well to sustain our market share momentum in RRV and maintain our leadership position in seasonal products. From an operational standpoint, our manufacturing sites are running smoothly, the supply chain environment has normalized, and we expect to continue benefiting from our lean initiatives and the expansion of our modular design across our line. From my financial standpoint, our guidance essentially incorporates the global trends that developed during the second half of fiscal 24, and that we have shared with you during our last earnings call. Notably, softer consumer demand in certain international markets, and weaker industry trends in marine, limiting dealers' appetite to take on inventory in a more elevated promotional environment.

Sebastian: Now moving to the guidance for fiscal 'twenty five on slide 15, we are entering fiscal 'twenty five with a solid lineup and an exciting pipeline of product introductions that are sending us well to sustain our market share momentum in our R&D and maintain our leadership position in seasonal products.

Sebastian: From an operational standpoint, our manufacturing sites are running smoothly the supply chain environment has normalized and we expect to continue benefiting from our lean initiatives and the expansion of our modular design across our lineup.

Sebastian: From a financial standpoint, our guidance essentially incorporates the global trends that have developed during the second half of fiscal 'twenty four and that we have shared with you during our last earnings call, notably softer consumer demand in certain international markets weaker industry trends in marine limited limiting dealers appetite to take on inventory.

Sebastian: And a more elevated promotional environment.

Sbastien Martel: As previously mentioned, in this context, and in order to protect our dealer value proposition, we have decided to adopt a more cautious stance in our planning to reduce our shipments in fiscal 2020. Additionally, given the impact of unfavorable winters on our snowmobile retail business, we are planning to reduce our snowmobile production by about 30% for next season. Accounting for all these elements, we expect our revenues for the year to be down from last year and end between 9.1 and 9.5 billion dollars. In terms of profitability, we expect the headwinds from the reduction in volume to be partly offset by a richer product mix, favorable net pricing, and the aforementioned benefits of our cost improvement initiative. Furthermore, we are taking the necessary actions to right-size our operating structure in line with the expected revenue generation, limiting the pressure on our margin profile.

Sebastian: As previously mentioned in this context and in order to protect our dealer value proposition, we have decided to adopt a more cautious stance and are planning to reduce our shipments in fiscal 'twenty one.

Sebastian: Additionally, given the impact of unfavorable winter on our snowmobile retail we are planning to reduce our snowmobile production by about 30% for next season.

Mounting for all these elements, we expect our revenues for the year to be down from last year.

Sebastian: And between nine 1% nine 5 billion.

Sebastian: In terms of profitability, we expect the headwinds from the reduction in volume to be partly offset by a richer product mix favorable net pricing and the aforementioned benefits of our cost improvement initiatives.

Sebastian: Furthermore, we are taking the necessary actions to rightsize, our operating structure in line with the expected revenue generating generation limiting the pressure on our margin profile. As a result, we expect our normalized EBITDA and between $1 37 billion to $1 47 billion.

Sbastien Martel: As a result, we expect our normalized EBITDA to end between $1.37 billion and $1.47 billion, and our normalized diluted earnings per share to end between $7.25 and $8.25, including a headwind of about $0.90 coming from higher depreciation and financing costs, as well as higher taxes. Note that we are providing a wider than usual guidance range to account for the more than uncertain market environment, both in terms of consumer demand and promotional intensity, especially in the context of our aim of reducing network inventory. From a cash perspective, based on the above and following a prioritization exercise of our project portfolio, which led to CapEx optimization, we expect to generate in excess of $750 million of free cash flow for next year. As such, we expect to have the financial flexibility to continue providing strong returns of capital to shareholders, notably as we have announced a 17% increase in our dividend for fiscal 2020. To conclude, we have provided a summary of the key drivers bridging our Fiscal 24 results to the midpoint of our Fiscal 25 guidance.

Sebastian: And our normalized diluted earnings per share to between $7 25, and $8 25, including a headwind of about 90 coming from higher depreciation and financing costs as well as a higher tax rate note that we are providing a wider than usual guidance range to account for the more of an uncertain market environment.

Sebastian: Both in terms of consumer demand and promotional intensity, especially in the context of our aim of reducing network inventory levels.

Sebastian: From a cash perspective based on the above and following a prioritization exercise of our project portfolio, which led to Capex optimization, we expect to generate in excess of $750 million of free cash flow for next year.

Sebastian: Such we expect to have the financial flexibility to continue providing strong return of capital to shareholders, notably as we have announced a 17% increase of our dividend for fiscal 'twenty five.

Sebastian: To conclude we have provided a summary of the key drivers bridging our fiscal 'twenty four results to the midpoint of our fiscal 'twenty five guidance as you can see most of the decline in earnings is expected to come from volume and mix as a result of our objective of improving network inventory turn driving a net negative impact of $2.

Sbastien Martel: As you can see, most of the client earnings are expected to come from volume and mix as a result of our objective of improving network inventory return, driving a net negative impact of $2.50, and from a reduction in the shipments of snow-related products following a difficult season, representing an impact of $1.25. Note that we expect most of the net reduction in volume and, consequently, most of the decline in normalized EBITDA to happen in the first half of the year, with Q1 normalized EBITDA down 35%. While fiscal 25 is expected to be a transition year from a financial standpoint, at the midpoint of the guidance range, our normalized diluted EPS is expected to end above our original M25 target that we had launched in the fall of 2019 of $7.50. Additionally, Fiscal 25 is planned to be another year of exciting product introductions and continued progress and efficiency gains throughout the business. We strongly believe that the actions we are taking will position BRP for continued long-term success, and on that, I will turn the call over to Jose. Thank you, Sbastien.

Sebastian: <unk>.

Sebastian: And from a reduction in the shipments of snow related products following a difficult season, representing an impact of $1 25.

Sebastian: Note that we expect most of the net reduction in volume.

Sebastian: And consequently, most of the decline in normalized EBITDA to happen in the first half of the year with Q1 normalized EBITDA down 35%.

Sebastian: While fiscal 'twenty five is expected to be a transition year from a financial standpoint at the midpoint of the guidance range. Our normalized diluted EPS is expected to end above our original and 'twenty five target that we had launched in the fall of 2019 of $7 50.

Additionally, fiscal 'twenty five is planned to be another year of exciting product introductions and continued progress on efficiency gains throughout the business with.

Sebastian: We strongly believe that the actions we are taking well positioned ERP for continued long term success and on that I will turn the call over to Jose.

Sebastian: Sebastian.

Jose: While market condition as <unk> in the second half of fiscal 'twenty four we were proactive and quickly adapted to the new reality.

Jose Boisjoli: While market conditions softened in the second half of fiscal 24, we were proactive and quickly adapted to the new reality. As mentioned in November, we reduced our production volume in order to lower network inventory. And now, in light of our Q4 results, we are adjusting snowmobile production for next year and taking a more cautious approach for marines. We are known to be agile, and we never hesitate to reprioritize our investment to find the right balance between the short, mid, and long-term growth perspectives. At our EV plan, we have just launched two new electric snowmobile models, and we are looking forward to the upcoming launch of the Can-Am electric motorcycle at our dealer event in August.

Jose Boisjoli: As mentioned in November we have reduced our production volume in order to lower network inventory and now in light of our Q4 results. We are adjusting snowmobile production for next year and taking a more cautious approach for marine.

Jose Boisjoli: We are known to be agile and we never is at eight two <unk> our investments to find the right balance between the short mid and long term growth perspective.

Jose Boisjoli: Looking at our <unk> plant.

Jose Boisjoli: We have just launched two new electric snowmobile model and we are looking forward to the upcoming launch of <unk> electric motorcycle at our dealer event in August.

Jose Boisjoli: We remain committed to electrifying our product lines, but we have decided to delay some of our EV in production and will provide an update in due time.

Jose Boisjoli: We remain committed to electrifying our product lines, but we have decided to delay some of our EV introduction, and we'll provide an update in due time. In closing, I remain confident in our future. What we have in the pipeline is very exciting. As you know, the best part of my job is writing our products. I was at our test center in Florida two weeks ago and had the chance to try many future off-road, personal watercraft, and boat products, including some of our electric models.

Jose Boisjoli: In closing I remain confident in our future.

We have in the pipeline is very exciting.

Jose Boisjoli: As you know the best part of my job is riding our product.

Jose Boisjoli: At our test center in Florida, two weeks ago and had the chance to try many future off road personal watercraft and both products, including some of our electric models.

Jose Boisjoli: Again, I'm very impressed with the ability of our design and engineering team to come up with market-shaping products, and I look forward to introducing them to consumers. Innovation is at the core of our DNA and will continue to position the company for long-term success by pushing the boundaries of technology. Our diversified product portfolio is a significant advantage, while our agile manufacturing network allows us to respond quickly to evolving market conditions and still generate solid profitability. I want to thank our strong and resilient team for their hard work and dedication throughout the year.

Jose Boisjoli: Again, I'm very impressed with the ability of our design and engineering team to come up with market shaping product.

Jose Boisjoli: And I look forward to introducing them to consumer.

Innovation is at the core of our DNA and we will continue to position the company for long term success by pushing the boundaries of technology.

Jose Boisjoli: Our diversified product portfolio is a significant advantage, while our agile manufacturing network allow us to respond quickly to evolving market conditions and still generate solid profitability.

Jose Boisjoli: I want to thank our strong and resilient team for their hard work and dedication throughout the year I also acknowledge our dealer for their support in making us the number one OEM in the industry.

Operator: I also acknowledge our dealer for their support in making us the number one OEM in the industry, and we will continue to work in collaboration with them to further expand our leading position. On that note, I turn the call over to the operator for questions. Thank you, sir. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press star followed by one on your touchtone phone. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press star followed by two. If you're using a speakerphone, you will need to lift the handset first before pressing any key.

Jose Boisjoli: And we will continue to work in collaboration with them to further extend our leading position.

None: On that note I'll turn the call over to the operator for questions.

Operator: Thank you, Sir ladies and gentlemen, we will now begin the question and answer session should you have a question. Please press star followed by one on your Touchtone phone you will hear a prompt that Youre hand has been raised should you wish to decline from the polling process. Please press star followed by two.

Operator: If youre using a speakerphone you will need to lift the handset.

Operator: Pressing any keys.

Operator: Out of consideration to other callers on the line today.

Operator: Ask that you please limit yourself to one question.

Operator: Thank you.

Operator: And out of consideration to other callers on the line today, we ask that you please limit yourself to one question. Thank you. And your first question will be from Sabahat Khan at RBC Capital Markets. Please go ahead.

Operator: And your first question will be from <unk> Khan at RBC capital markets. Please go ahead.

Khan: Okay, great. Thanks, and good morning, I guess.

Khan: I think Joseph you made a comment about sort of <unk>.

Khan: Managing the business for short medium and long run. We obviously you have the guidance here for the upcoming 12 months, but a lot of the questions. We've been getting have been around kind of the medium term outlook for <unk>.

Sabahat Khan: Great. Thanks and good morning. I guess, I think Jose, you made a comment about sort of managing the business for the short, medium, and long run. You know, we obviously have the guidance here for the upcoming 12 months. But a lot of the questions we've been getting have been around kind of the medium-term outlook for BRP and the industry. Can you, maybe?

Khan: And the industry can you maybe.

Khan: US think through how you view call it calendar 'twenty five playing out and just your view of how the industry evolves beyond this year end.

Khan: Maybe address some of the questions that people have had around.

Khan: How are the current.

Khan: Our sales and earnings compared to what might be the new run rate for the company. So maybe just some perspective on the.

Jose Boisjoli: Help us think through how you view, call it calendar 25 playing out, and just your view of how the industry evolves beyond this year, and maybe address some of the questions that people have had around. We are sales and earnings compared to what might be the new run rate. So maybe just some perspective on your forward-looking reviews of BRPM.

Khan: Forward looking.

Khan: <unk> the industry.

None: Yes, good morning.

None: Just to give you a sense about the trend the retail trends in February and March so far and that will give you the number in North America with our snowmobile than retail is up mid single digits.

None: Very good growth still in the RV two wheel is doing well, what a graph and switch is down but we know it's lapping abnormal quarter last year.

Jose Boisjoli: Yeah, good morning, then. Just to give you a sense about the trend, the retail trend in February and March so far. And I will give you the number of people in North America without a snowmobile.

None: And just to give you a sense of our retail momentum in the beginning of the year. Our retail is about 50% above pre COVID-19 level, then very happy with the retail trend.

Jose Boisjoli: Then retail is up mid single digits. Very good growth is still in ORV. Three wheel is doing well.

None: This is for North America International basically no change soft in EMEA and APAC and very strong in Latam than this is the trend so far in February and March.

Jose Boisjoli: Watercraft and switch is down, but we know it had a slapping abnormal quarter last year. And just to give you a sense of our retail momentum in the beginning of the year, our retail is about 50% above pre-COVID levels. Then we're very happy with the retail trend. This is for North America. Internationally, basically no change. Soft in EMEA and APAC, and very strong in LATAM.

None: And as you remember.

None: D in 'twenty four overall, the North America industry railcar resilient with two RV in North America.

We saw softer international and Marine overall is softer than for fiscal year 2005. We are planning. This overall trend to continue then with planning North America to be down low single digit.

Jose Boisjoli: And this is the trend so far in February-March. And as you remember... In 2024, overall, the North American industry was resilient with ORV in North America. We saw softer international, and marine overall was softer.

None: Positive momentum for our <unk>, who will outperform snowmobile obviously.

None: Watercraft and marine and international law.

None: Lagging North America, then basically.

None: Continued the trend that we saw in Q4 and what we see in February March is continuing for the <unk>.

Sbastien Martel: Then for fiscal year 2025, we plan for this overall trend to continue. Then we're planning North America to be down low single digits, a positive momentum for ORV and 3Wheel who will outperform Snowmobile, obviously, Watercraft and Marine, and at International, we are lagging North America, continuing the trend that we saw in Q4 and what we see in February-March is continuing for the remaining of fiscal year 25 with a decline of down low single-digits in North America. Now, that being said, we have gained significant market share in the last few years, and our goal is still to continue to gain market share in the ORB business and maintain our solid leadership position in snowmobiles and watercraft and to enter a new market segment. That's overall what I would see for the retail trend. Yeah, maybe it's still early to call out what fiscal year 26 could be. Obviously, as Jose said, we've got great momentum, and I mean, we've had peak retail for Q4 and side-by-side. And so that is obviously exciting. But for me, fiscal 25 is a correction year.

None: Turning a fiscal year 'twenty five.

None: Downward of down low single digit in North America, now that being said.

None: We have gained significant market share in the last few years and our goal is to.

None: Failed to continue to gain market share in the RV business and maintain our solid leadership position on snowmobile and watercraft.

None: And continue to enter new market segments.

None: That's overall, what I would say for retail trend.

None: Yes, maybe it's still early to call out what what fiscal year 2006 could be obviously as you said, we've got great momentum in.

None: We've had peak retail for Q4 and side by side.

And so that obviously is exciting but for me fiscal 'twenty five as a correction year and if you look at slide 16 that we have in the in the deck that we shared with you today I mean, there's two elements that are for me are onetime elements that are hurting fiscal year 25, which is the adjustment.

None: Of inventory for $2 50.

None: And also the impact of snowmobile. So obviously, we're disappointed with the guidance that we have we'd like to come up with a higher guidance and if you take the midpoint of the range of $7 75.

None: If you add these two onetime items for me fiscal 'twenty five is almost more than $11 50 year than a 775.

None: We'll work we're doing what's right for the business, what's right for the industry, what's right for the dealers.

None: But obviously in the mid term, we anticipate that we will be producing results significantly higher than what we've announced today.

Sbastien Martel: And if you look at slide 16 that we have in the deck that we shared with you today, I mean, there are two elements that are, for me, one-time elements that are hurting fiscal year 25, which is the adjustment of inventory for $2.50 and also the impact of snowmobiles. So obviously, we're disappointed with the guidance that we have. We'd like to come up with higher guidance, and if you take the midpoint of the range of $7.75,

None: Great. Thanks, so much for that.

None: Thank you.

None: Next question will be from James Hardiman at Citi. Please go ahead.

James Hardiman: Hey, good morning.

James Hardiman: Really like sort of lay out of that slide 16, I think it tells us a lot maybe using that.

James Hardiman: Is it.

James Hardiman: Three months ago, you guys gave us your initial view on.

James Hardiman: Fiscal 'twenty five and I think most people landed on about $9 earnings per share number isn't as simple as to say that since then that $1 25 is really what's incremental.

Sbastien Martel: If you add these two one-time items, for me, fiscal 25 is almost more of an 1150 year than a 775. We're doing what's right for the business, what's right for the industry, and what's right for the dealers. But obviously, in the midterm, we anticipate that we will be producing results significantly higher than what we've announced today. Thanks so much.

James Hardiman: In terms of the impact from the snowmobile related products.

James Hardiman: Then.

James Hardiman: You talked about that to 50 also being one time ish.

James Hardiman: Do you have that just inventory drawdown or wouldn't there also be some sort of market related.

James Hardiman: Thank you. The next question will be from James Hardiman at Citi. Please go ahead. Hey, good morning. I really like the layout of slide 16.

James Hardiman: Demand weakness that ultimately gets worked into that $2 50 number as well just trying to make sure I understand how I should think about more of a normalized.

Sbastien Martel: I think it tells us a lot. So maybe using that, you know, three months ago, you guys gave us your initial view on fiscal 25. And I think most people landed on about a $9 earnings per share number. Is it as simple as to say that since then, that $1.25 is really what's incremental in terms of the impact from the snowmobile-related products? And then, you know, you talked about that $250,000 also being one-time.

James Hardiman: Earnings number in a year, where there isn't significant inventory drawdown.

None: Well on your first question, Yes, you are correct, what's changed versus when we talked last November is the snow season, and so that's the added headwind that we're seeing of $1 25.

None: I would say 25 is aside from snowmobile is in line with what our views that we had a few months ago and obviously in the $250 a combination of inventory, which is the big one makes.

Sbastien Martel: Is the entirety of that just inventory drawdown, or... there also be some sort of market-related, you know, demand weakness that ultimately gets worked into that 250 number as well? Just trying to make sure I understand how I should think about more of a normalized earnings number in a year where there isn't a significant inventory drawdown. Thanks. Yeah. Well, on your first question, yes, you're correct.

None: It makes us favorable thats going to help obviously market share gains as well.

None: But the bulk of the $2 50 is us being proactive in managing network inventory and protecting the DPP.

None: Maybe I would like to add why do we when we had the call in November we were ahead of our planning for the snowmobile retail and the momentum was good till Christmas time.

None: And really the retail falloff mid January about and you never really catch up than this is.

None: The main reason of our adjustments.

None: Got it that's really helpful. Thanks, guys.

None: Thank you.

None: Next question will be from Martin Landry at Stifel. Please go ahead.

Sbastien Martel: What's changed versus when we talked last November is the snow season. And so that's the added headwind that we're seeing of $1.25. So, If I would say $25 is, aside from Snowmobile, is in line with our views that we had a few months ago. And obviously, in the 250, there's a combination of inventory, which is the big one. If mix is favorable, that's going to help.

Martin Landry: Hi, good morning, guys.

Martin Landry: I would like to touch on the snowmobile inventory in the channel.

Martin Landry: What's the what's the retail increase in inventory for snowmobile year over year.

Martin Landry: How long do you think it's going to take to Russia.

Martin Landry: Rush out this success inventory.

None: Yes, good morning, Matt.

Sbastien Martel: Obviously, market share gains as well, but the bulk of the 250 was us being proactive in managing network inventory and protecting the DVP. Maybe we'd like to add, when we had the call in November, we were ahead of our planning for the snowmobile retail, and the momentum was good till Christmas time.

None: Just maybe to give you some some highlight on the snowmobile.

None: <unk>.

None: If you look at the depths of the last 15 years.

None: Basically.

None: We saw a few bad winter and dose 15 years, we say it.

None: We estimate that about three by the winter.

None: And what is interesting is the snowmobile is very resilient customer are passionate about it.

Jose Boisjoli: And really, retail sales fall off about mid-January, and it never really catches up. And this is the main reason for our adjustment. Got it. That's really helpful.

None: Except now to trailer more to go to find slope and Canada is about stable.

James Hardiman: Thanks, guys. Thank you. The next question will be from Martin Landry at CIFO. Please go ahead.

None: Maybe less writing in the U S retail in the east, but more in the west.

None: United States is slightly down, but if you look at the snowmobile business over the last 15 years <unk> between 95000 units in the 105000 units per seat per year.

Martin Landry: Hi, good morning guys. I would like to touch on the snowmobile inventory and the channel. What's the retail increase in inventory for snowmobiles year over year and how long do you think it's going to take to flush out this success in the marketplace? Martin. Just maybe to give you some highlights on the snowmobile season.

None: In Scandinavia.

None: In Europe and.

None: And you had up in Europe is mainly commercial it's about stable in the last 20 year at about 20000 Union then the point is after a bad year.

None: The industry typically have remained quite stable.

None: <unk> there is a lot of non current into the slide pipeline and there is a customer that.

Jose Boisjoli: You know, if you look at the data of the last 15 years, basically, we saw a few bad winters in those 15 years. We say, we estimate about three bad winters. And what is interesting is the snowmobile is very resilient.

None: We're happy to buy a new snowmobile.

None: A discount.

None: Then we had to have this.

None: This is by the winter it didn't affect us under wholesales, but obviously affected our sales program and our parts and accessories and apparel, but we are confident that next year the industry will remain quite stable.

Jose Boisjoli: Customers are passionate about it now. They accept to trailer more, to go find snow. And Canada is about stable, maybe less retail in the east, but more in the west. The United States is slightly down, but if you look at the snowmobile business over the last 15 years, it varied between 95,000 units and 105,000 units per year in Scandinavia and Europe. And in Europe, and Europe is mainly commercial, it's been about stable for the last 20 years at about 20,000 units. The point is, after a bad year, the industry typically remains quite stable because there is a lot of non-current into the pipeline, and there are customers that are happy to buy a new snowmobile at a discount. Then we had to have this bad winter.

None: Okay.

None: Okay. Thank you.

None: Thank you.

None: And next question will be from Joseph <unk> of Raymond James. Please go ahead.

None: Good morning. This is Martin on for Joe.

Martin Landry: Quick question about the revenue decline here.

Martin Landry: It's a little bit steeper in your implied three months ago was that primarily the delta I'm sorry is that primarily the snowmobiles and can you remind us of how big is that of.

Martin Landry: Sales in your snowmobile business.

None: Well, yes, youre right when we look at the seasonal products business.

Obviously impacted by snowmobile.

None: When we the impact of the production adjustment that we're doing the 30% that we talked is going to be about a $350 million impact on our topline.

Jose Boisjoli: It didn't affect us at wholesale but obviously affected our sales program and our parts and accessories and apparel. But we are confident that next year the industry will remain quite stable. Okay, thank you. Thank you, and the next question will be from Joseph Altobello at Raymond James. Please go ahead. Good morning. This is Martin on behalf of Joe.

None: Next year.

None: When you look at the other elements of that guidance.

None: We missed the P&A business was off guidance, that's driven by the softer snow season, where we sold less successories less parts as well because people were writing less.

None: And all the enough as well we sold less.

None: Winter accessories for RV business, such as track kits and clouds are going in front of the.

Joseph Altobello: A quick question about the revenue decline in your guidance. It's a little bit steeper than you implied three months ago. Was that primarily due to snowmobiles?

None: <unk> and the other business, where we missed the guidance with the marine business, where we are still seeing softness in the marine market as we've seen in the last two.

Sbastien Martel: And can you remind us of how big, as a set of sales, your snowmobile bill is? Well, yes, you're right. When we look at the seasonal products business, obviously impacted by snowmobiles, the impact of the production adjustment that we're doing, the 30% that we talked about, is going to be about a $350 million impact on our top line next year. When you look at the other elements of the guidance, where we missed the P&A business was off guidance. That's driven by the softer snow season where we sold less accessories and less parts as well because people were riding less. Oddly enough, as well, we sold fewer winter accessories for our ORV business, such as track kits and plows that go in front of the ORV.

None: At 12 months.

None: And dealers finished the season with more inventory and therefore, they are more hesitant, especially early in the season to take on additional inventory.

None: And so that's why the volume impact resulted in a shortfall on the on the guidance.

None: Got it thank you.

None: Yes.

None: Thank you next question will be from Robin Farley.

Robin Farley: At UBS. Please go ahead.

Robin Farley: Great. Thank you.

Robin Farley: Circling back to your inventory calls you mentioned you want to reduce it by 10% to 15% it sounds like that was mostly in the.

Robin Farley: Three wheel.

Robin Farley: Have you clarified what you.

Sbastien Martel: In the other business where we missed the guidance was the marine business, where we are still seeing softness in the marine market, as we've seen in the last, let's say, 12 months. Dealers finish the season with more inventory, and therefore, they are more hesitant, especially early in the season, to take on additional inventory. And so that's why the volume impact resulted in a shortfall in the guidance. Got it, thank you.

Robin Farley: Hope to do with side by side and ATV dealer inventory.

Robin Farley: And then also on the on the retail side, just specifically for the side by side and ATV.

Robin Farley: What assumption are you working on four industry retail as youre trying to manage whatever inventory target youre about to tell us.

Joseph Altobello: Thank you. The next question will be from Robin Farley at UPS. Please go ahead.

Robin Farley: Great, thank you. Just circling back to your inventory goals, you mentioned you wanted to reduce it by 10% to 15%. It sounds like that was mostly in the no and three wheel.

None: Thank you.

None: Well we.

None: The bulk of the decrease in the inventory is going to come from seasonal business So personal watercraft.

None: Dupont to and then also snowmobile.

Sbastien Martel: I don't know if you clarified what you hope to do with side-by-side and ATV dealer inventory. And then also, on the retail side, just specifically for the side-by-side and ATV, what assumption are you working on for industry retail as you're trying to manage whatever inventory target you're about to tell us for ORV? Thank you. Well, the bulk of the decrease in inventory is going to come from seasonal business. So, personal watercraft, a sea-dew pontoon, and also a snowmobile.

None: We will also be making greater adjustments on three wheel and in the.

None: On the RV side, obviously, we have a very good momentum on <unk> as you saw our retail performance in the fourth quarter was quite amazing.

None: And so yes, we will.

None: Just the inventory downward, but not as meaningful it will be in the probably in the low single digits adjustments or four R&D in terms of industries or was he gave a bit of color as well.

None: The industry is in good and good in good shape for side by side, obviously, there's been a lot of product innovation and that's driving good retail, but we are expecting a softer industry. This year than we had.

Sbastien Martel: We will also be making greater adjustments on three-wheel. And on the ORV side, obviously, we have very good momentum on ORV. As you saw, our retail performance in the fourth quarter was quite amazing. And so, yes, we will adjust the inventory downward, but not as meaningful. It will probably be in the low single-digits. As for the industry, Jose gave a bit of color as well.

None: But obviously market share gains will compensate and we expect retail to be up for side by side. This year.

None: Youre, saying industry RV retail has been good so far in the year, but you expect the full year to come in down year over year to.

None: To be softer than what we had in the last year, yes.

Sbastien Martel: The industry is in good shape for side-by-side. Obviously, there's been a lot of product innovation, and that's driving good retail, but we are expecting a softer industry this year than we had. But obviously, market share gains will compensate, and we expect retail to be up side-by-side. So you're saying industry ORV retail has been good so far this year, but you expect the full year to come in down year over year, to be softer than what we had in the last area. Okay, thank you very much.

None: Okay. Thank you very much thanks.

None: Thank you next question will be from Kevin Dukson at National Bank Financial. Please go ahead.

Kevin Dukson: Yes, thanks very much.

Kevin Dukson: My question is on capital allocation. So I just want to confirm that you had sort of indicated that you expect to generate something like $750 million in free cash flow.

In the year, so just wanted to confirm that number and.

Kevin Dukson: I mean thats the case, just wondering about your capital deployment decisions here.

Robin Farley: Thanks. Thank you. The next question will be from Cameron Doerksen at National Bank Financial. Please go ahead.

Kevin Dukson: Obviously you've done.

Cameron Doerksen: Yeah, thanks very much. My question is on capital allocation. I just want to confirm that you've sort of indicated that you expect to generate something like $750 million in free cash flow in the year. So I just want to confirm that number.

Kevin Dukson: <unk> done your debt.

Kevin Dukson: Just thoughts about and CIB substantial issuer bid it would seem to me that you would have some excess capital if you do indeed generate $750 million free cash.

None: Yes, yes for so for the record I confirm that did see 750 this morning.

Sbastien Martel: And assuming that's the case, I'm just wondering about capital deployment decisions here. Obviously, if you've redone your debt, thoughts about NCIB, and a substantial issuer bid, it would seem to me that you would have some excess. Yeah, so for the record, I confirm that I did say $750 this morning. Obviously, we will be generating strong EBITDA capex in the range of $500 million. So, obviously, that will allow us to generate solid free cash flow. I'm not expecting any headwind or tailwind from the working cap.

None: Obviously, we will be generating strong EBITDA.

None: Capex.

None: In the range of $500 million so obviously.

None: That will allow us to generate solid free cash flow I'm, not expecting any headwind or tailwind from working cap. There is still some opportunities, but with the management of the network inventory will probably see a bit more volatility on the working capital a little tailwind there, but nonetheless solid cash generation, which allows us to.

None: To continue providing good returns to shareholders as we have announced this morning, the dividend is increasing.

None: By 17% and we will certainly be.

Sbastien Martel: There are still some opportunities, but with the management of the network inventory, we'll probably see a bit more volatility in the working cap. So no tailwind there, but nonetheless, solid cash generation, which allows us to continue providing good returns to shareholders. As we announced this morning, the dividend is increasing by 17%.

None: Active on the CIB Thats our intention.

None: We still got over 2 million shares that we can buy under the NCI. So we.

None: Obviously, you want to deploy that capital towards that because we expect a certain dislocation in the share value in the current in the next few quarters.

None: Okay. Thanks very much.

None: Thank you next question will be from Craig Kennison of Baird. Please go ahead.

Sbastien Martel: And we will certainly be active in the NCIB. That's our intention. We still have over 2 million shares that we can buy under the NCIB. So we obviously want to deploy that capital towards that because we expect a certain dislocation in the share value in the current market in the next few quarters. Okay, thanks very much.

Craig Kennison: Hey, good morning, Thanks for taking my question Seth I think you mentioned some actions to address your overall cost structure in light of the difficult year.

Craig Kennison: I'm just wondering if you can help us quantify those actions and then maybe where they are targeting whether it's in cost of goods sold or.

Cameron Doerksen: Thank you. The next question will be from Craig Kennison at the Baird. Please go ahead. Hey, good morning.

Craig Kennison: Thanks for taking my question. Seb, I think you mentioned some actions to address your overall cost structure in light of the difficult year ahead. I'm just wondering if you can help us quantify those actions and then maybe where they're targeted, whether it's in the cost of goods sold or... in your SG&A line. Good morning, Craig.

Craig Kennison: And your SG&A line.

Good morning, Craig I will take the question.

None: As you know, we said to the investor over the years that when the slowdown happened we preferred to be ahead of the game and be very agile to adjust.

None: Like I said in my remarks.

None: And my.

None: My script, I mean, we prioritize mini programs into the company.

Jose Boisjoli: I will take the question. As you know, we have said to investors over the years that when a slowdown happens, we prefer to be ahead of the game and be very agile to readjust. And like I said in my remark. In my script, I mean, we reprioritized many programs into the company.

None: Then basically we feel that with the softer demand with better to be prudent in.

None: That being said.

None: Im very confident that we have everything in line to be able to continue to.

None: To gain market share.

None: In our key product line, but basically we've done an exercise to Reprioritise our project.

Jose Boisjoli: Then basically, we feel that with the softer demand, it's better to be prudent. That being said, I'm very confident that we have everything in line to be able to continue to gain market share in our key product line. But basically, we've done an exercise to reprioritize our project, and that's how we achieved lower OPEX than what was originally planned a few months ago. Thank you. Thank you. The next question will be from Jean Chiu at BNP Paribas. Please go ahead.

None: And we desktop we achieve lower opex than what was originated plan a few months ago.

Thank you.

None: Thank you.

None: Next question will be from Shaun <unk> BNP Paribas. Please go ahead.

Shaun: Hi, guys. Thanks for the question maybe also looking at Slide 16, you kind of mentioned pricing net of sales programs of 50 benefit I guess, given a kind of.

Shaun: The more cautious outlook for the consumer.

Jean Chiu: Hi guys. Thanks for the question. Maybe also looking at slide 16, you kind of mentioned pricing net-of-sales programs, the $0.50 benefit. I guess, you know, given a kind of cautious outlook for the consumer, potentially, you know, retail is down. What gives you the confidence on price?

Shaun: Centrally.

Retail is down what gives you the confidence on pricing.

None: While every obviously the inflation is still part of.

None: <unk> of the business and running the business and so we're seeing cost inflation happening. So we want to compensate that with some pricing we will not.

Sbastien Martel: Well, obviously, inflation is still part of business and running a business. And so we're seeing cost inflation happening. So we want to compensate for that with some pricing; we will not, uh, be as aggressive and we don't need to be as aggressive on pricing as we've been in the past; inflation is coming down, but every year we do adjust pricing upward. We do expect the promotional environment to be more competitive this year, and so we factor this in the guidance. We factored in a, this year we had a tailwind of about 200, So that's the next pricing and promotion. But again, we're not thinking that the environment is going to be like fiscal 24. We're expecting it to be more competitive, and there's more non-current inventory in the network that needs to be addressed. Got it, thanks. And maybe just one quick one, just on gross margin versus SG&A, how are you thinking about the EBITDA margin within the guidance? It sounds like it's mostly expensive leverage.

None: B as aggressively we don't need to be as aggressive on pricing as we've been in the past the inflation is coming down but every year, we do adjust pricing upward we do expect the promotional environment to be more competitive this year and so we factor this in the guidance.

None: We factored a this year, we had a tailwind of about 200 headwind of about 200 basis points coming from promotion. We expect another 50 basis points next year. So that's the net pricing and promotion, but again, we're not thinking that the environment is going to be late fiscal 'twenty four we're expecting it more competitive and.

None: Theres more non current inventory in the network that needs to be addressed as well.

None: Got it thanks, and then just one quick one just on gross margin versus SG&A, how you're thinking about within the guidance.

None: The EBITDA margin is it it sounds like it's mostly expense deleverage is that how we should think about it.

None: There are some expense deleverage to plan, but if I look at the lower end of that guidance range Youre, probably going to lose a 100 basis points of gross margin.

None: Probably coming from a bit more promotional and obviously the volume impact and at the higher end of the of the.

None: The guidance range I'd say gross margin flattish to what we had in fiscal year 'twenty four.

None: Great. Thanks.

Speaker Change: Thank you next question will be from Tristan Thomas Martin.

Sbastien Martel: Is that how we should think about it? There's some expense deleverage planned, but if I look at the lower end of the guidance range, you're probably going to lose 100 basis points of gross margin, probably coming from a bit more promotion and obviously the volume impact. And at the higher end of the guidance range, I'd say gross margin flattish to what we had in fiscal year 2020.

Speaker Change: Capital markets. Please go ahead.

Speaker Change: Good morning.

Speaker Change: Okay.

Speaker Change: A lot of talk about the snow headwinds as the potential of maybe a less snow warmer weather and an early start to season, a tailwind from some of your businesses.

Speaker Change: I mean I think.

Obviously, we're not the expert in the weather and it's not our job, but like I said in my answer a few minutes ago.

Speaker Change: When you look at this the mobile industry, it's quite stable and if you look at the last 15 years.

Jean Chiu: Thank you. The next question will be from Tristan Thomas Martin at BMO Capital Markets. Please go ahead.

Speaker Change: There was three bad snow season, and the industry was.

Tristan M. Thomas: Good morning. Well done. A lot of talk about the snow headwinds is about the potential of maybe less snow, warmer weather, and early starts of the season being a tailwind for some of your businesses. I mean, obviously, we're not experts in weather and it's not our job, but like I said in my answer a few minutes ago, you know, when you look at the snowmobile industry, it's quite stable. And if you look at the last 15 years, there have been three bad snow seasons, and the industry has been... quite stable between 95,000 and 105,000 units in North America and very flat in Scandinavia and in Europe at about 20,000 It's a bad winter, typically the following year, because of the non-current ratio available for consumers. The industry is quite stable. But it remained that way.

Speaker Change: Quite stable between 95, and 105000 units in North America, and very flat in Scandinavia and in Europe at about 20000 unit that for US. It's a bad winter typically the following year because of the non current ratio available for consumer the industry.

Speaker Change: Is quite stable.

Speaker Change: But it remains that.

Speaker Change: We are happy to be more diversified than 20 years ago, because obviously, we have more product line.

Speaker Change: But snowmobile remain a very good business for us and our dealers and we will go to a bad season and will bounce back after and then just to add on <unk> point, So and as you mentioned the beauty of our business is yes, we are diversified and so with a product is not going as good we are seeing an uptick in other products.

Speaker Change: And anecdotally, we have had some dealers say, what's my snowmobile business has slowed down significantly in the February March but consumers are walking in and buying RV product. Instead, so yes, we've seen some of that and again the beauty of being diversified.

Jose Boisjoli: We're happy to be more diversified than 20 years ago because, obviously, we have more product lines, but snowmobiles remain a very good business for us and our dealers, and we'll go through a bad season, and we'll bounce back afterward. And just to add to Jose's point, and as he mentioned, the beauty of our business is that, yes, we are diversified. And so if a product is not going as well, we are seeing an uptick in other products. And anecdotally, we've had some dealers say, you know what? My snowmobile business has slowed down significantly in February and March, but consumers are walking in and buying ORV products instead. So yes, we've seen some of that.

Got it thank you.

Speaker Change: Thank you next question will be from Brett Mcmahon.

Brett Mcmahon: Wolfe Research. Please go ahead.

Brett Mcmahon: Hey, guys. Just a quick question on the implied EBITDA margin I think it looks.

Brett Mcmahon: A little bit lower than what you guys had alluded to last quarter is that just a matter of incremental deleverage from the softer snow in marine performance or is there something else going on there.

None: It's mainly related to the <unk>.

None: The volume impact in the the revenue declines will yes, the snow impact is having.

None: A ripple effect on the overall margin, but nonetheless, we're still when you look at the guidance range, we're still looking to deliver EBITDA margin in the mid 15 percentage points, which is significantly higher than what we had versus pre COVID-19.

None: And so it's.

None: Still very strong performance financially on our side.

Sbastien Martel: And again, the beauty of being diversified. Got it. Thank you. Thank you. The next question will be from Fred Wightman at Wolf Research. Please go ahead.

None: And we still see opportunities.

None: As we get through these one time elements to continue improving our EBITDA margin down the road.

None: Okay, and then <unk> you talked about just from a cadence perspective, a softer first half with a stronger back half of the year are you guys assuming rate cuts in that outlook and can you maybe talk about how quickly you think potential rate cuts could start to either catalyze consumer demand or dealer orders at floorplan rates come down.

Frederick Wightman: Hey guys, just a quick question on the implied EBITDA margin. I think it looks a little bit lower than what you guys had alluded to last quarter. Is that just a matter of the incremental de-leverage from the softer snow and marine performance, or is there something else going on? It's mainly related to the volume impact and the revenue decline. So yeah, the snow impact is having a ripple effect on the overall margin. But nonetheless, when you look at the guidance range, we're still looking to deliver a margin in the mid-15 percentage points, which is significantly higher than what we had versus pre-COVID, and so it's still very strong performance financially on our side, and we still see opportunities as we get through these one-time elements to continue improving our EBITDA margin down the road.

None: We've always said that were not economic so were not were not predicting any rate cuts in our guidance. We've assumed the current rates as they are today.

None: They happened in the world that will be good news for our dealers good news for our consumers.

None: And.

None: Hopefully, we'll we'll benefit from it as well with with higher wholesale but currently no no rate cuts.

None: Great. Thank you.

Thank you next question will be from <unk>.

None: <unk>. Please go ahead.

None: Yes, so good morning.

None: Could you maybe provide more color on marine and then the impairment charge that was taken in the adjustment just wondering how much of the drag could be right now either in terms of EPS or all dilutive would it be in terms of EBITDA and just trying to gauge kind of the rebound we might see.

Frederick Wightman: Okay, and then, Seb, you talked about, just from a cadence perspective, a softer first half with a stronger second half of the year. Are you guys assuming rate cuts in that outlook, and can you maybe talk about how quickly you think potential rate cuts could start to either catalyze consumer demand or dealer orders if floor plan rates come down? We've always said that we're not economists, so we're not predicting any rate cuts in our guidance.

None: In terms of contribution going forward as you continue to grow that business beyond this fiscal year 'twenty five.

None: Well it would be the marine industry has had.

None: Struggles in the last in the.

None: The last year.

Sbastien Martel: We've assumed the current rates as they are today. If they happen, well, that'll be good news for our dealers, good news for our consumers, and hopefully, we'll benefit from it as well with higher wholesale. But currently, no, no rate cuts.

None: <unk>, obviously seen softer consumer demand and less demand from the dealer network.

None: Obviously impacted our profitability and we had our issues as well with the ramp up in the marine and with the new menu two boats, which obviously impacted profitability and that is what drove the impairment charge. We took this year. Obviously our plan is to bring the marine business to a much more profitable level.

Frederick Wightman: Great, thank you. Thank you. The next question will be from Benoit Poirier at Desjardins. Please go ahead.

None: And so I won't necessarily go into the details of the impact of that but we do when we when we look at how we've designed this bodes for a modular point of view and a more industrialized process of making these boats our expectation is that the marine business should drive.

Benoit Poirier: Yeah, so good morning. Could you maybe provide more color on marine even the impairment charge that was taken and the adjustment? Just wondering how much of a drag it could be right now either in terms of EPS or how diluted it would be in terms of EBITDA? And just trying to gauge the kind of rebound we might see in terms of contribution going forward as you continue to grow that business beyond fiscal year 25. Well, the marine industry has had its struggles in the last year. We've obviously seen softer consumer demand and less demand from the dealer network. That obviously impacted our profitability. And we had our issues as well with the ramp up in the marine business, with the new mini two boats, which obviously impacted profitability. And that is what drove the impairment charge we took this year. Obviously, our plan is to bring the marine business to a much more profitable level. And so I won't necessarily go into the details of the impact of that.

None: Similar returns in some of the product lines that we have in the power Sports group.

None: Okay. Thank you very much.

None: Thank you next question will be from Jamie Katz of Morningstar. Please go ahead.

Jaime Katz: Good morning, I, just wanted to clarify something on that last question. It sounds like the impairment with more focus on the cost structure of the marine business rather than what you guys think about is the long term revenue opportunity set is that right.

Jaime Katz: That's correct when we look at the overall results that we've delivered in the last few years the softness in the industry.

Jaime Katz: And the expectation for next year as well that obviously is below our initial expectation.

Jaime Katz: That's the main driver of the impairment.

Jaime Katz: Okay and then.

Jaime Katz: <unk>.

Jaime Katz: A lot of the expense deleverage that we're seeing this coming year is a function of sales decline. So if we get back to let's say a low single digit.

Sbastien Martel: But we do when we look at how we've designed this boat from a modular point of view and a more industrialized process of making these boats. Our expectation is that the marine business should drive similar returns as some of the product lines that we have in the power sport. Okay, thank you very much.

Jaime Katz: Top line growth rate and the following year, there is nothing really holding back expense leverage.

Jaime Katz: From.

Jaime Katz: From accruing and theoretically we should go back towards what is where is that the right way to think about it.

Well I mean, we're diligent in how we how we deploy our projects and where we increase our overhead.

Benoit Poirier: Thank you. The next question will be from Jaime Katz at Morningstar. Please go ahead.

Jaime Katz: And so.

Jaime Katz: Good morning. I just want to clarify something on that last question. It sounds like the impairment was more focused on the cost structure of the marine business rather than what you guys think about as the long-term revenue opportunity set. Is that right?

Jaime Katz: As the business.

Jaime Katz: The volumes comes back next year, and we increase revenue.

Jaime Katz: Yossi will we will have more flexibility in deciding which projects, we do and which projects. We don't we might well increase overhead costs, yes, but we'll be selective in where we decided to increase it.

None: Perfect. Thanks.

None: Thank you next question will be from Luke Hannan of Canaccord Genuity. Please go ahead.

Sbastien Martel: That's correct. When we look at the overall results that we've delivered in the last few years, the softest in the industry, and the expectation for next year as well, that obviously is below our initial expectations. And that's the main driver of the impact.

Luke Hannan: Thanks, Good morning, everyone, maybe just going back to the target to bring down our network inventory levels by 10% to 15% for the year is that a number that you'd established internally. What you felt like the dealers would be comfortable with or is that a back and forth. That's what the dealers felt.

Jaime Katz: Okay, and then a lot of the expense deleverage that we're seeing this coming year is a function of sales decline. So if we get back to, let's say, a low single-digit top-line growth rate in the following year, there's nothing really holding back from accruing, and you know, theoretically, we should go back to where we were. Is that the right way to think about it?

Luke Hannan: More comfort more comfortable operating with and the network going forward.

None: Yeah good morning.

None: No when we look at the inventory will look at it internally, we look at it that days of inventory and we want to have a good turn of inventory at the dealer level.

Sbastien Martel: Well, I mean, we're diligent in how we deploy our projects and where we increase our overhead. And so, as the business, as the volume comes back next year and we increase revenue, obviously, we'll have more flexibility in deciding which projects we do and which projects we don't. We might increase overhead costs, yes, but we'll be selective in where we decide to increase them. Perfect, thank you.

None: And we believe that we.

None: We had set a target to ourselves during the Covid time not to go back to the pre COVID-19 level.

None: And this is why we were proactive.

None: And on top of it you have the pressure of the high interest rates for the dealers.

None: We're working hand in hand, with the theaters to try to maximize obviously our business, but also their business and this is a decision with take we believe to protect value proposition of the dealers the money Theyre, making the margin you are making with our product. We believe it's the right thing to do to continue.

Luke Hannan: Thank you. The next question will be from Luke Hannan at Kennecourt Genuity. Please go ahead.

None: New to work hand in hand with them.

Jose Boisjoli: Thanks, good morning everyone. Maybe just going back to the target to bring down network inventory levels by. Is that a number that you had established internally, what you felt like the dealers would be comfortable with, or is that a back and forth, that's what the dealers felt? more comfortable operating with in the network. Good morning.

None: And continue to grow overall.

None: And then turnover target that we put together because we believe it's healthy for the dealer and us.

None: Got it.

None: Understood and maybe sort of a follow up to that then is just broadly speaking how is the we'll call. It the financial health of the dealer network as we stand today.

Jose Boisjoli: You know, when we look at inventory, we look at it internally; we look at it as days of inventory. And we want to have a good turn of inventory at the dealer level. And we believe that we have set a target for ourselves during the COVID time not to go back to the pre-COVID level.

None: The financial health of the node pork is very good.

None: The interest cost that they have to bear as an important cost, but its not the bulk of.

None: Whats driving their profitability, it's an important component, but not the bulk for them. It's obviously volume and as you see that retail is still going strong.

None: Specialty further side by side on Atvs.

Jose Boisjoli: And this is why we were proactive, and on top of it, you have the pressure of the high interest rate for the dealers. Then we worked hand in hand with the dealers to try to maximize, obviously, our business, but also their business. And this is a decision we've taken. We believe that to protect the value proposition of the dealers, you know, the money they're making, the margin they're making on our product, we believe it's the right thing to do to continue to work hand-on-hand with them and continue to grow overall, and it's an internal target that we put together because we believe it's good for the deodorant. Got it. And maybe sort of a follow-up to that, then, is just broadly... How is the, we'll call it, financial health of the dealer? The financial health of the network is very good.

None: And during Covid the dealers made a lot of money.

None: And so financially.

None: We're in a good situation the interest cost is higher because the value of the units are much higher.

None: Than pre Covid the mix of the products was more side by side.

None: <unk> switch pontoons, so from a dollar value per unit is much higher and so they see a much higher interest costs and thats why we want to be diligent, but we have no concerns and we work hand in hand, with our floor plan partners looking at dealer health.

None: That there is a high risk in that area.

None: Okay. Thank you very much.

None: Thank you next question will be from Brian Morrison of TD Securities. Please go ahead.

Sbastien Martel: The interest costs that they have to bear are an important cost, but it's not the bulk of what's driving their profitability. It's an important component, but it's not the whole picture for them. It's obviously volume. And as you see, retail is still going strong, especially for their side-by-side and ATVs. And during COVID, the dealers made a lot of money, and so financially, they're in a good situation. The interest cost is higher because the value of the units is much higher than pre-COVID.

Brian Morrison: Yes. Good morning, just maybe what are you seeing in terms of pricing from your competitors across your verticals in general because dealer inventory in dollars is up 60% sustained since the pandemic units I think you said, 30%. So that indicates very strong pricing over that time, which takes inflation to account but.

Brian Morrison: And as our competitors remaining disciplined right now is within your guidance I'm, just trying to reconcile price increases and market share gains and what's an increasingly competitive environment.

Jose Boisjoli: The mix of the products is more side-by-side, the C2 switch pontoon, so the dollar value per unit is much higher, and so they see a much higher interest cost, and that's why we want to be diligent. But we have no concerns, and we work hand in hand with our floor plan partners looking at dealer health, that there is a high risk in that area. Thank you very much. Thank you. The next question will be from Brian Morrison at TD Securities. Please go ahead.

Brian Morrison: It's obviously.

None: Yes, it's competitive and we've been in this business for well over 50 years. So we know this industry very well, we know how to operate within these dynamics, but.

None: But I'd say were still below pre COVID-19 levels.

None: There is discounting happening on non current inventory, there's discounting happening on current models, but it's obviously a factor of higher interest rates, where in order to stimulate retail do you want to offer certain promotions to bring the consumer in the store.

Brian Morrison: Yes, good morning. I just wanted to ask you maybe what you are seeing in terms of pricing from your competitors across your verticals, in general, because dealer inventory in dollars is up 60% since the pandemic. Units, I think you said 30%.

None: And give them a reason to buy the product and financing the interest rate.

None: By subsidizing. It is certainly something that is helping to move the needle so both us and other Oems are using this as a tool to <unk>.

None: Stimulate retail and it's working.

Sbastien Martel: So that indicates very strong pricing over that time, which takes inflation into account. But the question is, are competitors remaining disciplined right now? As within your guidance, I'm just trying to reconcile price increases and market share gains in what's an increasingly competitive environment. It's obviously, yes, it's competitive, and we've been in this business for well over 50 years, so we know this industry very well. We know how to operate within these dynamics, but I'd say we're still below pre-COVID levels.

None: So youre not seeing any competitive intensity heating up at this time.

None: Again, it's a healthy battle.

None: There is discounting that is happening, but nothing I think nobody nobody wants to buy market share.

None: And so I think there is.

None: There is a good level of promotional activity happening, but it is nothing nothing crazy.

None: Okay. Thank you.

Thank you next question will be from Mark Petrie at CIBC. Please go ahead.

Mark Robert Petrie: Hey, good morning, Thanks for all the comments, thus far I don't know, if youre able to or willing to but could you quantify or give us a sense of the materiality of the revenue contribution of the new product introductions in the second half of <unk>.

Mark Robert Petrie: Fiscal 'twenty five.

Mark Robert Petrie: Just as it related question I think Jay you mentioned you had planned to delay some of the innovation or introductions you had planned on.

Sbastien Martel: There is discounting happening on non-current inventory, and there is discounting happening on current models, but it's obviously a factor of higher interest rates where, in order to stimulate retail, you want to offer certain promotions to bring the consumer into the store and give them a reason to buy the product, and financing the interest rate by subsidizing it is certainly something that is helping to move the needle. So both us and other OEMs are using this as a tool to stimulate retail, and it's working. So you're not seeing any competitive intensity heating up at this time. Again, it's a healthy struggle.

Mark Robert Petrie: On electric vehicles I'm just curious the driver there is that is that an internal constraint or is that reflection of.

Mark Robert Petrie: Wanting to overburden the dealers at this time or what was the thought process behind that decision.

Mark Robert Petrie: Yes.

Jay: You nailed it in your last part of your question I mean, right now we.

Jay: Obviously, we've looked at all of the new product we are introducing.

Jay: And you need to understand that the dealer right now are focusing on reducing their inventory.

But many of them are catching up on the growth of risks in the year you know during COVID-19 the grew significantly.

Brian Morrison: There is discounting that's happening, but I think nobody wants to buy market share, and so I think there's a good level of promotional activity happening, but it's nothing. Thank you. Thank you. The next question will be from Mark Petrie at CIBC. Please go ahead.

Jay: Somebody else server shop is too crowded.

Jay: The new reality and the dealer are.

Jay: Our need to focus on their day to day operation and on our side, obviously like I said in a previous question. We are deeper our dice mini program and at the end of all this.

Mark Robert Petrie: Yeah, good morning. Thanks for all the comments so far. I don't know if you're able to or willing to, but could you quantify or give us a sense of the materiality of the revenue contribution of the new product introductions in the second half of fiscal 25? And just as a related question, I think Jose, you mentioned you had planned to delay some of the innovation or introductions you had planned for electric vehicles. I'm just curious, the driver there, is that an internal constraint, or is that a reflection of not wanting to overburden the dealers at this time? Or what was the thought process behind that decision?

Jay: When you look to be successful in our new product launch the dealer need to train as salespeople as service people in need some space in the showroom you need to invest in the new product line.

And when we look at the workload of the dealer and what was Rezoned Ebola that's why we decided to introduce in August that Ken M. Two wheel.

None: That is.

None: That is I think will be very successful.

None: And we decided to push the rise at a further date and obviously this morning, we don't want to go in too much detail, but basically this is what we've done it a question of balancing.

Jose Boisjoli: Thanks. Yeah, I think you nailed it in the last part of your question. I mean, right now, obviously, we've looked at all the new products we are introducing. And you need to understand that the dealers right now are focusing on reducing their inventory, but many of them are catching up on the growth of recent years. You know, during COVID, they grew significantly.

None: The workload of the dealers with.

None: Make sure that we have a successful intra.

None: And on the new product introductions that will every year, Mark where as you know you've been following us for an hour 10 years, we always have.

None: A lot of product news.

None: The intention this year.

Jose Boisjoli: In some areas, the service shop is too crowded for the new reality, and the dealers need to focus on their day-to-day operations. And on our side, obviously, like I said in the previous question, we reprioritize many programs. And at the end of all this, when you look to be successful in a new product launch, the dealer needs to train his salespeople, his service people. He needs some space in the showroom, and he needs to invest in the new product line. And when we looked at the workload of the dealer and what was reasonable, that's why we decided to introduce the Can-Am two-wheeler in August, which I think will be very successful.

None: The majority of the new products will be delivered in the fourth quarter.

None: And so thats why in the gating of the earnings this year, we're seeing a higher back half loaded earnings adjustment in inventory of course in each one, but obviously new product, especially in the fourth quarter. So.

None: That will hit the fourth quarter.

None: A lot of exciting stuff to come but as usual we'd like to keep.

None: Keep our cards close to our chest and will surprise the market.

None: In a few quarters.

Thanks for that.

None: Thank you.

None: We have no more questions at this time I will turn the call to Mr. <unk> to close the meeting.

None: <unk> and <unk>.

None: Thanks, everyone for joining us this morning and for your interest in VIP. We look forward to speaking with you again on May 31 for our first quarter conference call. Thanks, again, everyone and have a good day.

Jose Boisjoli: And we decided to push the rise at a later date. And, obviously, this morning, we don't want to go into much detail. But basically, this is what we've done. It's a question of balancing the workload of the dealers.

None: Thank you, Sir ladies and gentlemen, this does indeed conclude your conference call for today. Once again. Thank you for attending we ask that you. Please disconnect your lines.

Mark Robert Petrie: Make sure that we have a successful end. And on the new product introductions that will every year, Mark, we're and as you know, you've been following us for now 10 years, we always have a lot of product news. And that's the intention this year, that the majority of the new products will be delivered in the fourth quarter and so that's why in the gating of the earnings this year we're seeing a higher back half loaded earnings adjustment and inventory of course in h1 but obviously new product moves especially in the fourth quarter so that will hit the fourth quarter a lot of exciting stuff to come but as usual we like to keep our cards close to our chest and we'll surprise the market, a few quarters.

Okay.

None: Yes.

None: Okay.

None: Yes.

None: Yes.

None: Okay.

None: Yes.

None: Yes.

Mark Robert Petrie: Thanks for that. Thank you. We have no more questions at this time. I will turn the call over to Mr. Deschines to close the meeting. Thank you, Sylvia, and thanks, everyone, for joining us this morning and for your interest in BRP. We look forward to speaking with you again on May 31st for our first quarter conference call. Thanks again, everyone, and have a good day. Thank you, sir. Ladies and gentlemen, this does indeed conclude your conference call for today. Once again, thank you for attending. We ask that you please disconnect your lines.

None: Sure.

None: <unk>.

None: Sure.