Brp, Inc. · TSX:DOO
Brp — Investor Day (September 2016)
129 slides from Brp's investor day presentation, Sep 22, 2016
Slide 1: Analyst & Investor Meeting
ANALYST & INVESTOR MEETING CIUDAD JUÁREZ, MEXICO SEPTEMBER 22, 2016
Slide 2: Presentation Schedule
Presentation Schedule Strategic Priorities Update 10:00 – 10:30 José Boisjoli Marketing and PAC 10:30 – 10:45 Anne Bélec Marine Propulsion Systems 10:45 – 11:05 Alain Villemure 11:05 – 11:15 Break GSCE Overview and International 11:15 – 11:45 Sandy Scullion GSCE - North America 11:45 – 12:15 Bernard
Slide 3: Forward-Looking Statements
Forward-Looking Statements Certain statements in this presentation about the Company’s current and future plans, expectations and intentions, results, levels of activity, performance, goals or achievements or any other future events or developments constitute forward-looking statements. The words “m
Slide 4: Strategic Priorities Update
JOSÉ BOISJOLI PRESIDENT & CHIEF EXECUTIVE OFFICER STRATEGIC PRIORITIES UPDATE CIUDAD JUÁREZ, MEXICO | SEPTEMBER 22, 2016 BRP Inc. - Investor Day 2016 September 22, 2016 4
Slide 5: FY17 Recap
FY17 Recap Revenues Powersports Retail Sales CA$ millions Units 4% 8% $1,786.0 $1,710.2 FY16 H1 FY17 H1 FY16 H1 FY17 H1 OUR H1 NORMALIZED EBITDA IS IN-LINE WITH OUR EXPECTATIONS Normalized EBITDA by Half Year As a percentage of full fiscal year normalized EBITDA First Half Contribution Second Half C
Slide 6: Management Changes
Management Changes New head of the Global Sales and Consumer Experience (GSCE) division Sandy Scullion, Vice-President and General Manager of GSCE Previously head of the Western Europe, Middle-East and Africa (WEMEA) Over 20 years of experience with BRP Grouped the WEMEA, Scandinavia and Easte
Slide 7: Key Strategic Priorities Update
Key Strategic Priorities Update MAINTAINING OUR KEY STRATEGIC PRIORITIES GROWTH AGILITY LEAN ENTERPRISE Accelerate Can-Am Implement one-piece flow, a Implement new core growth modular approach and a more technologies and drive margin flexible supply chain to better improvement on new products Define
Slide 8: Strategic Priorities Scorecard: Growth by Product
Strategic Priorities Scorecard GROWTH PERFORMANCE VS. EXPECTATIONS ABOVE EXPECTATIONS IN-LINE WITH EXPECTATIONS BELOW EXPECTATIONS INDUSTRY BRP ALL-TERRAIN VEHICLES SIDE-BY-SIDE VEHICLES SPYDER SNOWMOBILES PERSONAL WATERCRAFT OUTBOARD ENGINES Thanks to our diversification, we are tracking with our p
Slide 9: Strategic Priorities Scorecard: Growth Initiatives
Strategic Priorities Scorecard GROWTH DEALER NETWORK OPTIMIZATION CAN-AM BRAND BUILDING AMBASSADORSHIP PROGRAM STRATEGIC PARTNERSHIP DIGITAL TRANSFORMATION We are making progress on multiple initiatives to support our growth plan BRP Inc. - Investor Day 2016 September 22, 2016 9
Slide 10: Strategic Priorities Scorecard: Can-Am Market Share
Strategic Priorities Scorecard Can-Am market share GROWTH Rest of the industry OUTLANDER MID-CC DEFENDER MAVERICK X3 Doubled market share in the Entered the largest SSV industry Starting from high-single digits % segment since its launch two segment in the first half of FY17 market share in the segm
Slide 11: Strategic Priorities Scorecard: Can-Am Spyder
Strategic Priorities Scorecard GROWTH CAN-AM SPYDER U.S. Motorcycle Industry Growth Over $18k Season-to-Date, Growth percentage TAKEAWAY FROM SEASON 2016 Under $18k Issues: Industry trends are shifting towards lower price motorcycles Less aggressive year-over-year sales programs hurt demand Fu
Slide 12: Define the Next Wave of Growth Framework
Strategic Priorities Scorecard GROWTH DEFINE THE NEXT WAVE OF GROWTH - FRAMEWORK Reinforce Expand New Growth the Core the Core Territories 1 In-house development Growth opportunities that Innovative are not part of New Growth Growth BRP’s core territories that opportunities that business but are are
Slide 13: Agility and Lean Enterprise Scorecard
Strategic Priorities Scorecard AGILITY AND LEAN ENTERPRISE KEY INITIATIVES Gross Margin TRADITIONAL PWC TRANSFER Gross Profit Margin TO QUERETARO Gross Profit Margin at Constant Fx STATUS: COMPLETED 26.0% JUAREZ 2 START OF PRODUCTION AND PRODUCT ROLL-OUT 25.0% STATUS: ON TRACK GUNSKIRCHEN 2020 PLAN
Slide 14: Gunskirchen 2020 Plan
GUNSKIRCHEN 2020 PLAN AGILITY AND LEAN ENTERPRISE “Implementing new technologies to create customer value and improve margin ” ROTAX TURBO IN-HOUSE TRACEABILITY / PLASMA COATING NEW ASSEMBLY LINE FABRICATION ONE-PIECE-FLOW Rotax is a key differentiator for BRP BRP Inc. - Investor Day 2016 September
Slide 15: Juarez 2020 Plan
JUAREZ 2020 PLAN AGILITY AND LEAN ENTERPRISE “Implementing the most efficient manufacturing system in the industry ” INSPIRED FROM THE AUTO INDUSTRY ESTABLISH PRODUCT DESIGN RULES Modular Architecture ONE-PIECE-FLOW FROM RAW MATERIAL TO FINISHED PRODUCTS FLEXIBLE/AGILE ASSEMBLY LINE State-of-the-art
Slide 16: Valcourt 2020 Plan
VALCOURT 2020 PLAN AGILITY AND LEAN ENTERPRISE “Right sizing our mature sites to improve efficiency ” FROM TWO ASSEMBLY INSOURCING RESET OUR LINES TO ONE LOGISTIC CENTER LABOR POLICY Ski-Doo and Spyder on the same assembly line Efficiency Flexibility Overhead Agility Efficiency Transportation costs
Slide 17: Our diversification is a key differentiator in the industry
Our diversification is a key differentiator in the industry DIVERSIFIED PRODUCT GEOGRAPHIC SALES COMPREHENSIVE PORTFOLIO DIVERSIFICATION MANUFACTURING FOOTPRINT Year-Round Products Seasonal Products CANADA INTERNATIONAL Can-Am ATV Ski-Doo Snowmobile 18% 38% 36% 31% Can-Am SSV Lynx Snowmobile Can-Am
Slide 18: Progressing towards our long-term objectives
Progressing towards our long-term objectives GROWTH AGILITY LEAN ENTERPRISE Accelerate Can-Am Implement one-piece flow, a Implement new core growth modular approach and a more technologies and drive margin flexible supply chain to better improvement on new products Define the next wave serve our con
Slide 19: Questions?
QUESTIONS? BRP Inc. - Investor Day 2016 September 22, 2016 19
Slide 20: Marketing and PAC Update
ANNE BÉLEC SVP - GLOBAL BRAND, COMMUNICATION AND PAC MARKETING AND PAC UPDATE CIUDAD JUÁREZ, MEXICO | SEPTEMBER 22, 2016 BRP Inc. - Investor Day 2016 September 22, 2016 20
Slide 21: Agenda
Agenda Marketing Initiatives Update PAC Update BRP Inc. - Investor Day 2016 September 22, 2016 21
Slide 22: Retail Performance Engine Fuelled by Consumer Insights
CONSUMER INSIGHTS Knowing the consumer inside out DIGITALLY DRIVEN Own the digital space BOLD AND BREAKTHROUGH WOW the consumer RETAIL PERFORMANCE ENGINE FUELLED BY CONSUMER INSIGHTS BRP Inc. - Investor Day 2016 September 22, 2016 22
Slide 23: Three key principles drive the BRP marketing function
Three key principles drive the BRP marketing function THREE KEY PRINCIPLES Seek and learn from Expertise best-in-class organizations Make choices by focusing Focus on best return on investment Test and when successful Scale we implement around the world We seek to adopt and deploy these principles i
Slide 24: Retail Performance Engine: Consumer Insights
CONSUMER INSIGHTS Knowing the consumer inside out DIGITALLY DRIVEN Own the digital space BOLD AND BREAKTHROUGH WOW the consumer RETAIL PERFORMANCE ENGINE FUELLED BY CONSUMER INSIGHTS BRP Inc. - Investor Day 2016 September 22, 2016 24
Slide 25: Consumer experience and insights are at the core
Consumer experience and insights are at the core of BRP’s product and go-to-market strategies CONSUMER INSIGHTS Tools: CRM database supported by Experian Market research + needs-based segmentation Media profile analysis (look-alike) Partnerships (e.g. Mossy Oak for Defender) Market Research
Slide 26: Retail Performance Engine: Digitally Driven
CONSUMER INSIGHTS Knowing the consumer inside out DIGITALLY DRIVEN Own the digital space BOLD AND BREAKTHROUGH WOW the consumer RETAIL PERFORMANCE ENGINE FUELLED BY CONSUMER INSIGHTS BRP Inc. - Investor Day 2016 September 22, 2016 26
Slide 27: BRP is rapidly building its expertise in digital
BRP is rapidly building its expertise in digital to efficiently reach its target consumers DIGITALLY DRIVEN Tools: Best-in-class Adobe web platform with responsive design Agile digital model to test and adapt on an ongoing basis Solid analytics software Benefits: Reach more consumers with re
Slide 28: Retail Performance Engine: Bold and Breakthrough
CONSUMER INSIGHTS Knowing the consumer inside out DIGITALLY DRIVEN Own the digital space BOLD AND BREAKTHROUGH WOW the consumer RETAIL PERFORMANCE ENGINE FUELLED BY CONSUMER INSIGHTS BRP Inc. - Investor Day 2016 September 22, 2016 28
Slide 29: Bold campaign supporting the Maverick X3 launch
BRP launched a bold comprehensive campaign to support the launch of the Maverick X3 BOLD AND BREAKTHROUGH High-profile product ambassadors: Ken Block BJ Baldwin Strong focus on US Southwest: Immersive dealer staff training Disruptive presence at dealerships with heavy exterior signage, premi
Slide 30: Can-Am NASCAR sponsorship
Can-Am NASCAR sponsorship: a great platform to reach our target consumers and increase brand awareness BOLD AND BREAKTHROUGH NASCAR: 4th most watched sport in the U.S. with 75M fans Prime audience for powersports On-site presence at 25 events: Lead generation and activation Title Sponsor of 4
Slide 31: Agenda
Agenda Marketing Initiatives Update PAC Update BRP Inc. - Investor Day 2016 September 22, 2016 31
Slide 32: PAC revenues have increased by 11% per year since FY13
PAC revenues have increased by 11% per year since FY13 due to strong growth in accessories PAC Revenues by Type PAC Revenues by Product Category CA$ millions Based on FY16 Revenues CLOTHING[1] ACCESSORIES CAGR PARTS 627.3 +11% 555.8 +4% 509.3 459.8 Propulsion Seasonal Systems +18% Products 23% Year-
Slide 33: PAC is a highly strategic component of BRP's business
PAC is a highly strategic component of BRP’s overall business Highest gross profit margin across all BRP product categories Contributes to consumer’s riding experience and lifestyle Customization opportunities complements their passion for the sport Can influence consumers’ vehicle selection
Slide 34: Product development strategy for accessories
BRP’s product development strategy for accessories has evolved significantly over the last years ~2011 ~2015 More co-development In-house sequential In-house parallel and/or co-branding with development development external partners Traditional approach followed PAC team involved much Leveragi
Slide 35: BRP Inc. - Investor Day 2016 September 22, 2016
BRP Inc. - Investor Day 2016 September 22, 2016 35
Slide 36: PAC go-to-market initiatives
Several PAC go-to-market initiatives have focused on supporting dealer merchandizing and PAC sales process PAC GO-TO-MARKET INITIATIVES Dedicated PAC N.A. sales team Integrated PAC marketing teams within vehicle marketing teams to better leverage resources and all marketing communications to pro
Slide 37: Marketing and PAC priorities aligned with corporate objectives
Marketing and PAC priorities aligned with long-term corporate objectives GROWTH AGILITY LEAN ENTERPRISE Accelerate Can-Am Implement one-piece flow, a Implement new core growth modular approach and a more technologies and drive margin flexible supply chain to better improvement on new products Define
Slide 38: Questions?
QUESTIONS? BRP Inc. - Investor Day 2016 September 22, 2016 38
Slide 39: Marine Propulsion Systems Update
ALAIN VILLEMURE VPGM - MARINE PROPULSION SYSTEMS MARINE PROPULSION SYSTEMS UPDATE CIUDAD JUÁREZ, MEXICO | SEPTEMBER 22, 2016 BRP Inc. - Investor Day 2016 September 22, 2016 39
Slide 40: Global outboard industry has grown 5% per year since 2010
Global outboard industry has grown on average by 5% per year since 2010 mostly driven by the N.A. market Worldwide outboard engines industry volume and BRP market share Units International markets North American markets 40% International market share North American market share 5% CAGR 35% 30% 25% 2
Slide 41: BRP N.A. market share decline driven by two factors
BRP N.A. market share decline mostly driven by two factors FACTOR 2: SHARE LOSS FACTOR 1: GROWTH OF THE PROPORTION OF PACKAGE UNITS IN SALT WATER MARKETS U.S. Outboard engines industry U.S. South Atlantic industry Units, Proportion of Package vs. Loose, 30HP+ Units Repower -1% 5% shift from Repower
Slide 42: U.S. market shifting towards larger engines
The U.S. market is shifting towards larger engines where the Evinrude E-TEC G2 has been deployed so far EVINRUDE E-TEC G2 DEPLOYEMENT G2 Platforms launched Announcement First deliveries 200 H.O. to 300 HP June 2014 Fall 2014 150 HP to 200 HP June 2016 Fall 2016 U.S. INDUSTRY BY HP SEGMENT U.S. Outbo
Slide 43: Three key strategic priorities of the MPS division
Three key strategic priorities of the MPS division Create market pull through steady introductions of E-TEC G2 family models Existing Develop Jet Propulsion Systems business Margin improvement through deployment New of the E-TEC G2 modularity BRP Inc. - Investor Day 2016 September 22, 2016 43
Slide 44: Three key strategic priorities of the MPS division
Three key strategic priorities of the MPS division Create market pull through steady introductions of E-TEC G2 family models Existing Develop Jet Propulsion Systems business Margin improvement through deployment New of the E-TEC G2 modularity BRP Inc. - Investor Day 2016 September 22, 2016 44
Slide 45: Main G2 achievements over the last 18 months
Main G2 achievements over the last 18 months 150 – 200 HP: Launched the second G2 platform, offering 4 different power levels Line-up 200 H.O. to 300 HP: G2 has replaced G1 as the highest volume platform for package sales to expansion OEMs and loose engine sales to dealers G1 repositioned to b
Slide 46: E-TEC G2: Differentiated performance, design and features
E-TEC G2: Differentiated performance, design and features to create consumer pull UNRIVALED AND CLEANEST PERFORMANCE ■ Up to 30% more torque and up to 15% better fuel economy vs leading four-stroke engines ■ Up to 75% lower emissions BOLD, BREAKTHROUGH DESIGN ■ Color-matching engine panels and graph
Slide 47: E-TEC G2: Consumer and dealer testimonials
E-TEC G2: Strong consumers and dealers testimonials “ I have the 250 HO on a 24 foot EL Pescador and on 2 foot chop I’m getting 67 mph, the motor is a monster and I will never have anything else. ” “ We have roughly 200 hrs on our Evinrude E-TEC 250HO G2s and we love them. Our performance numbers ar
Slide 48: Commitment to deploy three G2 platforms in 3 years
Last June we made a commitment to dealers to deploy three G2 platforms in 3 years The new 150 – 200 HP platform was the first of these three new platforms, which can be deployed 50% faster due to the engine’s modular design BRP Inc. - Investor Day 2016 September 22, 2016 48
Slide 49: New 150-200 HP G2 platform to reach more customers
The new 150-200 HP G2 platform is expected to allow us to reach more OEMs, dealers and consumers ■ The 150-200 HP segment is a very significant segment, allowing to cater to many more dealers and consumers ■ Having proven the G2 amongst 200+ HP will lend credibility to the new platform G2 now covers
Slide 50: Signed 17 new OEMs and 91 new N.A. dealers
We have signed 17 new OEMs and 91 new N.A. dealers over the last 18 months # of N.A. dealers Signed with NOT signed Evinrude with Evinrude 17 new OEMs Polar Kraft signed since Caravelle Boat April 2015 Group Sea Pro Boats 91 new N.A. dealers signed since April 2015 FY16 Apr FY16 Q2 FY16 Q3 FY16 Q4 F
Slide 51: Improving Evinrude distribution worldwide
BRP was also active to improve the distribution of Evinrude engines in other parts of the world Australia Western Europe BRP appointed Telwater, Australia’s largest Signed pan European agreements with aluminium boat manufacturer, as the two large and prestigious manufacturers of national distrib
Slide 52: Three key strategic priorities of the MPS division
Three key strategic priorities of the MPS division Create market pull through steady introductions of E-TEC G2 family models Existing Develop Jet Propulsion Systems business Margin improvement through deployment New of the E-TEC G2 modularity BRP Inc. - Investor Day 2016 September 22, 2016 52
Slide 53: U.S. jet boat segment grew 20% in the last year
U.S. jet boat segment has grown by 20% in the last year and JPS OEM partners are taking shares U.S. FIBERGLASS BOATS INDUSTRY EVOLUTION U.S. Retail sales of 16-25 feet fiberglass boats Units, excluding outboard engines powered boats, last-twelve-months ending March 31st Last year 1st year of retail
Slide 54: New power packs based on the 903 ACE engine
Two new power packs based on the 903 ACE engine open up potential for new OEM partners such as Williams New 903 ACE 1503 4-TEC HP range 60, 90 HP 150, 200, 250 HP Available with catalyst Yes Yes Single or twin-engine applications Yes Yes Scarab, Chaparral, OEM accounts Williams Glastron, Williams
Slide 55: Three key strategic priorities of the MPS division
Three key strategic priorities of the MPS division Create market pull through steady introductions of E-TEC G2 family models Existing Develop Jet Propulsion Systems business Margin improvement through deployment New of the E-TEC G2 modularity BRP Inc. - Investor Day 2016 September 22, 2016 55
Slide 56: E-TEC G2 modular design reduces parts count and capex
The new E-TEC G2 modular design has significantly reduced parts count, CAPEX and time to market 150 - 300 HP in 2016 150 – 300 HP in 2017 with G1 + G2 with G2 only 21 assemblies 4 assemblies 5 die castings One die casting 9 gear ratios 2 gear ratios Rotation (Std, CoRo) Rotation (Std
Slide 57: MPS division priorities aligned with corporate objectives
MPS division priorities aligned with long-term corporate objectives GROWTH AGILITY LEAN ENTERPRISE Accelerate Can-Am Implement one-piece flow, a Implement new core growth modular approach and a more technologies and drive margin flexible supply chain to better improvement on new products Define the
Slide 58: Questions?
QUESTIONS? BRP Inc. - Investor Day 2016 September 22, 2016 58
Slide 59: GSCE - International Update
SANDY SCULLION VPGM - GLOBAL SALES AND CONSUMER EXPERIENCE GSCE - INTERNATIONAL UPDATE CIUDAD JUÁREZ, MEXICO | SEPTEMBER 22, 2016 BRP Inc. - Investor Day 2016 September 22, 2016 59
Slide 60: Global Sales and Consumer Experience (GSCE)
Global Sales and Consumer Experience (GSCE) Responsibilities DIVISION HIGHLIGHTS FY16 Revenues by Product Category Year-Round Products Seasonal Products Countries under management Can-Am ATV Ski-Doo Snowmobile >100 38% 36% Can-Am SSV Lynx Snowmobile Can-Am Roadster Sea-Doo PWC 10% 16% Propulsion Sys
Slide 61: Background and Mandate
Background and Mandate BACKGROUND Over 20 years of experience with BRP Head of the Global PAC Business Unit for 9 years Head of the WEMEA division for 2 years MANDATE AS GSCE VPGM Deliver Can-Am growth Maintain and improve BRP leadership position in snowmobile and PWC Develop international market pr
Slide 62: Agenda
Agenda BRP international regions overview EMEA APAC LATAM BRP Inc. - Investor Day 2016 September 22, 2016 62
Slide 63: The International Regions
The International Regions Latin America (LATAM) Europe, Middle East and Africa (EMEA) Asia-Pacific (APAC) Three regions generating over $1B in revenues BRP Inc. - Investor Day 2016 September 22, 2016 63
Slide 64: International Sales Evolution
International Sales Evolution Revenues[1] Regional Split CA$ millions Based on FY16 Revenues[1] EMEA APAC CAGR LATAM 1,190 LATAM +7% 1,115 1,145 1,009 1,017 14% 853 23% APAC 63% EMEA FY11 FY12 FY13 FY14 FY15 FY16 [1] Revenues including Rotax Propulsion Systems external business Significant growth ov
Slide 65: Recent Evolution of the International Division
Recent Evolution of the International Division Build up of Dealer Direct Expansion through OMC markets and development of Grow markets acquisition “greenfield” international markets 2001 - 2005 2005 - 2016 2016 Creation of the international Region developed: Grow Powersports industry in division a
Slide 66: International division priorities aligned with corporate objectives
International division priorities aligned with corporate long-term objectives GROWTH AGILITY LEAN ENTERPRISE Accelerate Can-Am Implement one-piece flow, a Implement new core growth modular approach and a more technologies and drive margin flexible supply chain to better improvement on new products D
Slide 67: Agenda
Agenda BRP international regions overview EMEA APAC LATAM BRP Inc. - Investor Day 2016 September 22, 2016 67
Slide 68: EMEA Overview
EMEA Overview Revenues[1] Overview CA$ millions Region Dynamic Mature markets that can be developed by optimizing CAGR dealer network 745 748 Flat Strong market in Western Europe and Scandinavia, 739 offset by difficult economic conditions in Russia 131 -25% Eastern 191 BRP Dynamic 235 Europe
Slide 69: EMEA Main Industries
EMEA Main Industries INDUSTRY BRP SIZE POSITION DYNAMIC OFF-ROAD Climbing ranks in multiple markets BRP strong in Scandinavia, France and #2/3 Germany Opportunities for Can-Am Defender in UK and Can-Am Maverick X3 in Middle-East SNOWMOBILE Solid #1 position with both Ski-Doo and Lynx in all
Slide 70: Agenda
Agenda BRP international regions overview EMEA APAC LATAM BRP Inc. - Investor Day 2016 September 22, 2016 70
Slide 71: APAC Overview
APAC Overview Revenues Overview CA$ millions Region Dynamic Australia/NZ: A performance PWC market and utility CAGR ORV China: Promising prospect especially with entry level 275 +16% products +22% BRP Dynamic 220 203 Strong position in PWC in Australia/NZ and growing +22% in China China Gain
Slide 72: APAC Main Industries
APAC Main Industries INDUSTRY BRP SIZE POSITION DYNAMIC OFF-ROAD Australia and New Zealand is experiencing a shift of customers from ATV to SSV with #2/3 growth happening both in the utility and recreational riding Strong momentum with the Can-Am Defender PERSONAL WATERCRAFT Excellent performa
Slide 73: Strong Growth for Can-Am SSV in Australia/NZ
Strong Growth for Can-Am SSV in Australia/NZ CAN-AM DEFENDER STRONG GROWTH YEAR-TO-DATE Can-Am SSV retail in Australia/NZ Units >100% FY16 H1 FY17 H1 More than doubled SSV sales with the introduction of the Can-Am Defender Promising start for the Can-Am Defender in Australia BRP Inc. - Investor Day
Slide 74: China's Growing Powersports Industry
China’s Growing Powersports Industry ASIA POTENTIAL China Powersports Market Units LONG-TERM POTENTIAL 55% CAGR since 2010 China market specifics: Full potential of Powersport industry is relatively unknown Growing despite lack of developed playgrounds and major differences with traditional Powe
Slide 75: Agenda
Agenda BRP international regions overview EMEA APAC LATAM BRP Inc. - Investor Day 2016 September 22, 2016 75
Slide 76: Latin America Overview
Latin America Overview Revenues Overview CA$ millions Region Dynamic Economic downturn significantly affecting Brazil CAGR Mainly a PWC and ORV market for BRP BRP Dynamic 185 Strong positioning in ORV and PWC 167 167 Flat Mexico growing with highly dedicated dealers focusing on ORV -16% Braz
Slide 77: Latin America Main Industries
Latin America Main Industries INDUSTRY BRP SIZE POSITION DYNAMIC OFF-ROAD Good markets in Mexico, Brazil and Argentina Can-Am ATVs and SSVs are considered as #1/2 premium brands in Mexico and are renowned for very good quality and performance Very effective digital marketing campaigns driving
Slide 78: Closing Remarks
Closing Remarks Can-Am is experiencing substantial growth in international regions and is climbing ranks in terms of market position Dealer and distributor value proposition at the front and center of our go-to-market strategy Despite economic downturn in certain regions (mainly Brazil and Russia),
Slide 79: Questions?
QUESTIONS? BRP Inc. - Investor Day 2016 September 22, 2016 79
Slide 80: GSCE - North America Update
BERNARD GUY VP & RGM - NORTH AMERICA GSCE - NORTH AMERICA UPDATE CIUDAD JUÁREZ, MEXICO | SEPTEMBER 22, 2016 BRP Inc. - Investor Day 2016 September 22, 2016 80
Slide 81: GSCE North America Financial Performance
GSCE North America Financial Performance NORTH AMERICA North American Powersports Revenues, CA$ millions BRP LARGEST MARKET FY11 to FY16 CAGR Share of BRP Revenues[1] 16% 69% FY11 FY12 FY13 FY14 FY15 FY16 Market Share Estimated North American Powersports Market Share Evolution Share of Worldwide Pow
Slide 82: North America: Key Strategic Priorities
North America: Key Strategic Priorities Significantly increase our presence in the Year-Round Products and markets Maintain our market leadership and seize growth opportunities in Seasonal Products and markets Optimize our network coverage and win dealer engagement by offering the best Dealer Value
Slide 83: North America: Key Strategic Priorities
North America: Key Strategic Priorities Significantly increase our presence in the Year-Round Products and markets Maintain our market leadership and seize growth opportunities in Seasonal Products and markets Optimize our network coverage and win dealer engagement by offering the best Dealer Value
Slide 84: Off-Road Vehicles Update
OFF-ROAD VEHICLES UPDATE BRP Inc. - Investor Day 2016 September 22, 2016 84
Slide 85: BRP gained share in ORV market increasingly driven by SSV
BRP invested in the ORV business and gained share in a market increasingly driven by SSV North American ORV Industry Units, Season from July 1st to June 30th SSV Industry ATV Industry Can-Am Market Share S07 S08 S09 S10 S11 S12 S13 S14 S15 S16 SSV surpassing ATV with just over half of the ORV indust
Slide 86: N.A. ATV industry stable but Can-Am grew
The N.A. ATV industry has been fairly stable but Can-Am grew by strengthening its offering in key segments NORTH AMERICA ATV North America ATV Industry DYNAMIC Units, Season from July 1st to June 30th Industry: Flattish in recent years, however down mid-single digits % in season 2016, with demand
Slide 87: Can-Am position in Sport and Rec-Ute SSV segments
Can-Am built a solid position in the Sport and Rec-Ute segments and is now attacking the largest segment - the Utility SSV segment NORTH AMERICA SSV North America SSV Industry DYNAMIC Units, Season from July 1st to June 30th Industry: Steadily growing in the last 5 seasons, fueled mostly Sport by
Slide 88: Tapping into the largest SSV segments
BRP is tapping into the largest SSV industry segments with best-in-class vehicles CAN-AM DEFENDER Utility segment now about 60% of the industry – largest opportunity Defender availability ramped up in the 2nd half of season 2016 – sales tracking on plan – already our biggest seller Full deploy
Slide 89: Spyder Update
SPYDER UPDATE BRP Inc. - Investor Day 2016 September 22, 2016 89
Slide 90: N.A. motorcycle industry slightly up since 2011 floor
North American motorcycle industry slightly up since its season 2011 floor level but declining in season 2016 North American Motorcycle Industry Units, Season from November 1st to October 31st Motorcycle Industry Can-Am Market Share S08 S09 S10 S11 S12 S13 S14 S15 S16 Estimate BRP Inc. - Investor Da
Slide 91: N.A. motorcycle industry declining in season 2016
The N.A. motorcycle industry is declining so far in season 2016 especially in higher priced models NORTH AMERICA MOTORYCLES North America Motorcycle Industry DYNAMIC Units, Season from November 1st to October 31st Industry: N.A. motorcycle industry declining mid-single digits % in season 2016 – bu
Slide 92: North America: Key Strategic Priorities
North America: Key Strategic Priorities Significantly increase our presence in the Year-Round Products and markets Maintain our market leadership and seize growth opportunities in Seasonal Products and markets Optimize our network coverage and win dealer engagement by offering the best Dealer Value
Slide 93: Snowmobile Update
SNOWMOBILE UPDATE BRP Inc. - Investor Day 2016 September 22, 2016 93
Slide 94: Ski-Doo broke a 46-year-old market share record
In a season 2016 El Niño winter, the snowmobile industry declined, but Ski-Doo broke a 46-year-old market share record North American Snowmobile Industry Units, Season from April 1st to March 31st Snowmobile Industry Ski-Doo Market Share S07 S08 S09 S10 S11 S12 S13 S14 S15 S16 BRP has steadily grown
Slide 95: N.A. snowmobile industry growth by segment
N.A. industry growth in recent years driven by the Cross Country and the Crossover segments NORTH AMERICA SNOWMOBILE North America Snowmobile Industry DYNAMIC Units, Season from April 1st to March 31st Industry: Season 2016 was affected by a record warm El Nino Others winter Touring Utility Ski-Do
Slide 96: PWC Update
PWC UPDATE BRP Inc. - Investor Day 2016 September 22, 2016 96
Slide 97: Sea-Doo Spark successfully re-sparked the PWC industry
Sea-Doo Spark successfully re-sparked the PWC industry! North American PWC Industry Units, Season from October 1st to September 30th Sea-Doo Spark Traditional PWC Industry Sea-Doo Market Share S07 S08 S09 S10 S11 S12 S13 S14 S15 S16 Estimate Sea-Doo shattered a 24-year-old market share record in sea
Slide 98: PWC one of the fastest growing Powersports industries
PWC is one of the fastest growing Powersports industry in recent years NORTH AMERICA PWC North America PWC Industry DYNAMIC Units, Season from October 1st to September 30th Industry: While recent industry increase had been primarily attributable to Spark, season 2016 industry growth also Rec Lite
Slide 99: North America: Key Strategic Priorities
North America: Key Strategic Priorities Significantly increase our presence in the Year-Round Products and markets Maintain our market leadership and seize growth opportunities in Seasonal Products and markets Optimize our network coverage and win dealer engagement by offering the best Dealer Value
Slide 100: PerforMAX dealer growth and profitability
PerforMAX PMA DEALER GROWTH AND PROFITABILITY Order Management System BRP Inc. - Investor Day 2016 September 22, 2016 100
Slide 101: Strong brands and products
Strong brands and products OVERVIEW Providing growth and profitability potential to dealers Customer appeal commanding a price that yields superior dealer front end retained margins Strong product and brands are key for dealers to retain more margins on the front end BRP Inc. - Investor Day 2016 Sep
Slide 102: Respecting dealers' Primary Market Areas
Respecting our dealers’ Primary Market Areas (PMA) while optimizing network coverage OVERVIEW A dealer’s PMA is a territory drawn to include most of his customers based on drive time habits BRP opened more than 240 new dealers in North America in the past 3 years, while being very respectful of our
Slide 103: Respecting dealers' Primary Market Areas: FY17 projections
Respecting our dealers’ Primary Market Areas (PMA) while optimizing network coverage FY17-END PROJECTIONS NUMBER OF NEW 45-55 [1] DEALERS SIGNED IN FY17 TOTAL NUMBER OF ~270 [2] NEW DEALERS SIGNED BY FY17 END CAN-AM DEALER +31% NETWORK COVERAGE IMPROVEMENT OVER THE LAST 4 YEARS [1] Target was to sig
Slide 104: BRP Order Management System
BRP Order Management System helps dealers optimize their inventory levels OVERVIEW ORV OMS proposes a monthly recommended order based on a dealer’s inventory and future retail plan, with the objective to maintain a targeted forward days of inventory Adjusts wholesale down if retail did not materia
Slide 105: BRP Certification
BRP Certification proposes best business practices towards customer satisfaction OVERVIEW BRP Certification recognizes dealers who implement best practices in: Operational excellence Knowledge and competencies Customer focus Brand representation Dealers choose at which level they want to cer
Slide 106: PerforMAX rewards retail achievement
PerforMAX rewards retail achievement OVERVIEW When dealers achieve or exceed retail targets, BRP will achieve or overachieve in future wholesale PerforMAX is basically sharing future profit with our dealers in the form of a retail bonus paid on the back-end PerforMAX payments can be very significant
Slide 107: Winning in Dealership with best Dealer Value Proposition
Winning in Dealership by building the best Dealer Value Proposition in the industry OVERVIEW Whole system focused on dealer growth and profitability – which will result in BRP growth and profitability And it works! BRP Inc. - Investor Day 2016 September 22, 2016 107
Slide 108: Winning in Dealership: dealer margin improvement
ILLUSTRATIVE Winning in Dealership by building the best Dealer Value Proposition in the industry Higher PerforMAX Gold or bonus for Dealer Reduced Platinum retail Margin Less discounting Certification achievement Products inter-dealer to clear (and improved / over- and brands competition excess busi
Slide 109: North America: Key Strategic Priorities
North America: Key Strategic Priorities Significantly increase our presence in the Year-Round Products and markets Maintain our market leadership and seize growth opportunities in Seasonal Products and markets Optimize our network coverage and win dealer engagement by offering the best Dealer Value
Slide 110: Questions?
QUESTIONS? BRP Inc. - Investor Day 2016 September 22, 2016 110
Slide 111: Finance Update
SÉBASTIEN MARTEL CHIEF FINANCIAL OFFICER FINANCE UPDATE CIUDAD JUÁREZ, MEXICO | SEPTEMBER 22, 2016 BRP Inc. - Investor Day 2016 September 22, 2016 111
Slide 112: Agenda
Agenda Path to the 2020 Objective Capital Allocation Priorities Year-end guidance BRP Inc. - Investor Day 2016 September 22, 2016 112
Slide 113: Progressing towards our long-term objectives
Progressing towards our long-term objectives GROWTH AGILITY LEAN ENTERPRISE Accelerate Can-Am Implement one-piece flow, a Implement new core growth modular approach and a more technologies and drive margin flexible supply chain to better improvement on new products Define the next wave serve our con
Slide 114: Path to the 2020 Objective: Revenue Growth
Path to the 2020 Objective REVENUE GROWTH REINFORCE THE CORE EXPAND THE CA$ billions CORE AND NEW GROWTH TERRITORIES Continue the fast pace of Bring to market accessories introduction Refocus marketing efforts meaningful innovations and go-to-market strategy Maintain strong offering to benefit from
Slide 115: Path to the 2020 Objective: Margin Expansion
Path to the 2020 Objective MARGIN EXPANSION CAPACITY 2020 PLAN MANUFACTURING INITIATIVES Percentage of Revenues UTILIZATION Increase of ~200 to 300bps 23.9% FY16 Increased Volume Modular New Technologies LEAN FY21 Depreciation Increase Approach that bring value Manufacturing to consumers and Procure
Slide 116: Agenda
Agenda Path to the 2020 Objective Capital Allocation Priorities Year-end guidance BRP Inc. - Investor Day 2016 September 22, 2016 116
Slide 117: Capital Allocation Priorities
Capital Allocation Priorities Fuel our growth plan Return capital to shareholders BRP Inc. - Investor Day 2016 September 22, 2016 117
Slide 118: Fuel our Growth Plan
Fuel our Growth Plan PRIORITIES CAPEX CA$ millions CAPITAL EXPENDITURE Growth - Projects to support Year-Round Products growth and Can-Am expansion. Ex.: new platforms, tooling, etc. Project evaluated through a portfolio approach and using 211 190 - 205 DCF, IRR and ROIC to support investment deci
Slide 119: Improved our financial flexibility
Improved our financial flexibility to support our long- term objectives CREDIT FACILITIES UPDATE Total Long-Term Debt[1] CA$ millions TERM FACILITY Long-term debt Reimbursed US$92M Long-term debt assuming constant Fx on Term Loan Maturity: Extended from January 2019 to June 2023 1,147 Terms: 1
Slide 120: Return Capital to Shareholders
Return Capital to Shareholders SHARE REPURCHASE NCIB (Shares Repurchased) Shares, millions NORMAL COURSE ISSUER BID (NCIB) Conditions: Allowed to repurchase up to 10% of the public float for a 12 months period Daily repurchase capped at 25% of average daily 3.7 3.4 volume Remaining shares avai
Slide 121: Agenda
Agenda Path to the 2020 Objective Capital Allocation Priorities Year-end guidance BRP Inc. - Investor Day 2016 September 22, 2016 121
Slide 122: FY17 Full-Year Guidance
FY17 Full-Year Guidance - as at September 9, 2016 Financial Metric FY17 Guidance vs FY16 Revenues Year-Round Products Up 8% to 12% (increased from up 6% to 10%) Seasonal Products Flat to up 4% Propulsion Systems Up 5% to 10% PAC Up 3% to 8% (lowered from up 5% to 10%) Total Company Revenues Up 4% to
Slide 123: Key drivers of second half Normalized EBITDA growth
Key drivers of the second half Normalized EBITDA growth H1/H2 EXPECTED NORMALIZED EBITDA GENERATION Normalized EBITDA by Half Year As a percentage of full fiscal year normalized EBITDA First Half Contribution Second Half Contribution FY14 FY15 FY16 FY17 100% 50% 0% 50% 100% Q3 AND Q4 KEY GROWTH DRIV
Slide 124: Questions?
QUESTIONS? BRP Inc. - Investor Day 2016 September 22, 2016 124
Slide 125: Closing Remarks
JOSÉ BOISJOLI PRESIDENT & CHIEF EXECUTIVE OFFICER CLOSING REMARKS CIUDAD JUÁREZ, MEXICO | SEPTEMBER 22, 2016 BRP Inc. - Investor Day 2016 September 22, 2016 125
Slide 126: Focused on key strategic initiatives to deliver long-term objectives
Focused on our key strategic initiatives to allow us to deliver our long-term objectives GROWTH AGILITY LEAN ENTERPRISE Accelerate Can-Am Implement one-piece flow, a Implement new core growth modular approach and a more technologies and drive margin flexible supply chain to better improvement on new
Slide 127: Closing Remarks
Closing Remarks All of BRP’s employees are rallied around our key strategic priorities: Growth, Agility and Lean Enterprise Our initiatives are progressing as planned and we are starting to reap the benefits The diversification of our product portfolio, geographic sales and manufacturing footprint i
Slide 128: Questions?
QUESTIONS? BRP Inc. - Investor Day 2016 September 22, 2016 128
Slide 129: BRP Inc. - Investor Day 2016 September 22, 2016
BRP Inc. - Investor Day 2016 September 22, 2016 129