O N T H E
R I G H T P A T H
2019 ANNUAL REVIEW
For the year ended January 31, 2019
Y E L L O W -
B L O O D E D P E O P L E
For us, the world is one big opportunity, filled with possibility. There
are no boundaries to the road we travel or to our ambitions. Exploring
gives us new vantage points. Connecting with our passionate community
drives us to find new ways of doing things. We’re not afraid to measure
ourselves against others and take the lead, in both work and play.
O U R
V A L U E S
They make our culture unique, inform how we act, and drive what we make.
PASSION, to keep moving – Passion informs everything we do and is an integral part of
every value we have. If it’s not done with passion, it’s not BRP. It’s passion you can feel.
DRIVE, to deliver on our commitments – We say what we do. We do what we say. No excuses.
Only sheer determination. Relentless drive and love of the ride push us ahead. While we
live for the ride, we always arrive at destination.
INGENUITY, to defy conventions – We’re not afraid to see things differently. Constant
curiosity makes us the first to uncover new solutions. We question. We innovate.
We progress. Relentlessly.
TRUST, to build strong partnerships – We take care of our people like family. We act with
integrity. People can count on us like we count on them. It’s that simple.
3
O N T H E
R I G H T P A T H
Letter to shareholders for the year ended January 31, 2019 –
José Boisjoli
FY2019 was an exceptional year in every respect, with
strong financial results and record revenues once again.
For the third straight year, we significantly outpaced the
industry and introduced new products to an eager market.
Four years ago, we set out on an ambitious journey to
reach the $6 billion revenue1 mark and $3.501,2 diluted
normalized earnings per share by fiscal year 2021. With
only two years to go, our steady positive performance
and solid progress on our strategic priorities of Growth,
Agility and Lean enterprise have shown that we are,
without a doubt, on the right path.
GROWTH
Our strong performance is the result of our ability to create market-shaping
products. This past year, we maintained our high pace of innovation, and
have no intention of slowing down. We again introduced new products to
all our lineups, diversifying and expanding to meet the needs and desires
of more and more consumers. “Adventure by design” is not just a slogan, it
is our promise to our customers and our employees. As our newly expressed
brand purpose has been rolled out over the past year, we have seen our
employees motivated with more drive than ever to deliver on this promise
and ensure our continued growth.
1 See forward-looking information on p. 23
2 See Non-IFRS measures on p. 22-23
In snowmobiles, we continued to expand the Gen4 platform
for Ski-Doo and Lynx. The revolutionary FishPro for anglers
aims to expand the PWC market for Sea-Doo, as does the
Can-Am Ryker, for three-wheeled vehicles, giving the
market a taste of what is to come with its multitude of
customization options in the most accessible package.
In off-road vehicles, we delivered on our commitment to
introduce a new side-by-side platform every six months
with the launch of the Can-Am Maverick Sport and the
Maverick Sport Max, each targeting specific passions.
Our parts, accessories and clothing (PAC) program, as
well as our design program have hit a new peak, allowing
us to continue to add value to our principal products. We
introduced over 450 new accessories to complement our
different product lines and improve the riding experience
of our consumers last year. For example, we set a new
standard in performance and functionality with the Oxygen
helmet for Ski-Doo, and introduced a host of attachable
accessories with the LinQ system that can be used across
all powersports product lines.
We also further extended our product lines this year
when we acquired Alumacraft Boat in June. The Marine
Group was thus created, alongside the Powersports Group
that had been established in February. Evinrude and
Alumacraft were joined by Manitou pontoon boats in
August, creating a solid offering and foundation to expand
into new markets with the objective of transforming the
marine industry as we have done for powersports.
This ongoing and relentless rhythm continues to gain
the interest of consumers, and our focus on offering
the best value proposition for our dealers has garnered
excellent support from our network. Our product portfolio
continued to experience strong consumer demand globally,
driving retail growth of 9% in North America, 18% in
Latin America, 6% in EMEA and 12% in Asia-Pacific,
despite economic weakness in certain regions of the world,
such as the Middle East and countries like Argentina and
China. And opportunities remain to further capture market
share. Last year, for example, we opened our sales office
in Russia as a hub for our direct distribution and
expansion of our presence.
AGILITY
Our high pace of product innovation is also made
possible by our modular product design approach,
extended to all our product lines. As our SSV lineup
has expanded, sales have grown, and we instituted a
plan to double our production capacity at Juárez 2.
Phase 1 was completed during FY2019, giving us 30%
more capacity, and phase 2 is on track to be delivered
in FY2020, giving us an additional 50%. After also
adding capacity in Querétaro, we invested in a press for
manufacturing our hulls and decks, allowing us to be more
nimble and respond more rapidly to market demand.
LEAN
In August, we inaugurated our new modernized
manufacturing facility in Valcourt, streamlining
production from two assembly lines, one each for the
Can-Am Spyder and the Ski-Doo, to a single ultramodern
and flexible line for both products. We increased
efficiency and flexibility for innovation and for engineering,
and optimized manufacturing infrastructure and logistics.
BRP’s transformation will lead to a truly digital enterprise,
providing state-of-the-art processes and tools. It will
give our customers a premium experience at all levels,
from ideation to delivery, to absolute loyalty, and will
enable our employees to easily and efficiently support
that experience.
CORPORATE SOCIAL
RESPONSIBILITY
Our innovative, agile and lean approach has a knock-on
effect on our corporate social responsibility (CSR). The
Can-Am Ryker is our first vehicle developed with an eco
design concept. Our studies covered the product’s overall
lifecycle, and this resulted in a vehicle with increased
recyclability and significant weight reduction when
compared to the Can-Am Spyder F3 and RT.
CSR is everyone’s responsibility, and our employees
are particularly dedicated. Thanks to everyone’s hard
work, we are proud to say we have already reached a
good number of our 2020 goals related to donations
and social contributions, energy and waste management.
We are making good progress on others, with a 15%
improvement overall in health and safety incident rates
compared to the previous year, and several facilities
received awards for sustainability, some for the second
or third year in a row.
FINALLY…
In FY2019, we improved our financial flexibility in a
number of ways. We increased our Term Loan facility
by US$111 million, our revolving credit facilities by
CA$100 million, and obtained an almost two-year
extension in the maturity of these facilities as well as
a reduction in their pricing. Following the year-end,
we further increased our revolving credit facilities by
CA$125 million, extending its maturity by another year
and further improving the pricing grid. In September
of last year, we added the Nasdaq to our Toronto Stock
Exchange listing, under the ticker “DOOO”.
We also grew our workforce, reaching 12,500 employees
across the globe. As I have said before, what gives us
the greatest competitive strength is our people. They
deliver on our brand promise every single day through
their passion, drive and resourcefulness. And they are
the ones who are responsible for the achievements of the
past year, and who will take those achievements and build
on them, keeping the company on the path to success.
JOSÉ BOISJOLI
President and Chief Executive Officer
5
A D V E N T U R E
B Y D E S I G N
W E A R E D E F I N E D B Y O U R P A S S I O N ,
I N G E N U I T Y , T R U S T A N D D R I V E .
Global leader in the world of powersports vehicles and propulsion system
built over 75 years of ingenuity and intensive consumer focus.
A stand-alone company since 2003
8 ICONIC
BRANDS
Company overview
$5.2B
12,500+
ANNUAL
SALES
DRIVEN, RESOURCEFUL
EMPLOYEES WORLDWIDE
120+
COUNTRIES WHERE
OUR PRODUCTS ARE
AVAILABLE
TSX: DOO /
NASDAQ: DOOO
7
F I N A N C I A L
H I G H L I G H T S
F I S C A L Y E A R 2 0 1 9
REVENUE BASE
BY CATEGORY
At 31/01/19
REVENUE BASE
BY GEOGRAPHY
At 31/01/19
42.7%
YEAR-ROUND
PRODUCTS
34.4%
SEASONAL
PRODUCTS
13.5%
POWERSPORTS
PAC AND OEM
ENGINES
9.4%
MARINE
53.7%
UNITED STATES
30.2%
INTERNATIONAL
16.1%
CANADA
TOTAL
REVENUES
CA$ millions
At 31/01/19
CAGR* 10%
4
4
2
,
5
3
5
4
,
4
2
7
1
,
4
9
2
8
,
3
5
2
5
,
3
NET INCOME
CA$ millions
At 31/01/19
0
.
7
5
2
1
.
9
3
2
3
.
7
2
2
1
.
0
7
6
.
1
5
NORMALIZED
EBITDA1
CA$ millions
At 31/01/19
CAGR* 12%
9
.
5
5
6
2
.
6
3
5
7
.
2
0
5
0
.
0
6
4
3
.
1
2
4
15
16
17
182
19
15 16
17
182
19
15 16
17
182
19
SHARE PRICE
DOO MONTHLY CLOSING PRICE IN CA$
$44.99
FEBRUARY
2018
h
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b
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o
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b
m
e
c
e
D
$37.82
JANUARY
2019
DOO PERFORMANCE
OVER THE LAST YEARS
CA$
$100.00
$130.28
$115.24
$100.70
$122.28
$237.91
$177.94
BRP
S&P/TSX
$100.00
$107.56
$101.86
$72.19
$120.84
$125.28
$122.05
NORMALIZED
EARNINGS
PER SHARE
– DILUTED1
CA$
At 31/01/19
CAGR* 17%
0
1
.
3
7
2
.
2
6
9
.
1
5
6
.
1
1
7
.
1
EARNINGS
PER SHARE
– DILUTED1
CA$
At 31/01/19
CAGR* 40%
7
2
.
2
1
2
.
2
8
2
.
2
9
5
.
0
4
4
.
0
2013
2014
2015
2016
2017
2018
2019
15
16
17
182
19
15
16
17
182
19
1 See Non-IFRS measures section on p. 22-23.
2 Restated to reflect the adoption of IFRS 15 “Revenue from contracts with customers” and IFRS 9 “Financial instruments” standards as explained
in Note 31 of the audited consolidated financial statements for the year ended January 31, 2019.
* Compound Annual Growth Rate since 31 January 2015.
9
O U R
P R O D U C T
L I N E S
11
P O W E R S P O R T S
Y E A R - R O U N D P R O D U C T S
Year-round products balance out our portfolio. They extend the BRP experience: to work
as well as play, to many different parts of the world, and to different types of customers.
Our On-Road products are unique and game-changing. Our Off-Road products are
proving time and again that they are world class.
CAN-AM
The brand behind our year-round lineup has been introducing revolutionary products. Its firsts include the Spyder,
the two-seater ATV, and the Maverick X ds Turbo, the first side-by-side vehicle to come with a turbo straight from the
manufacturer. This year, On-Road saw another first to market with the Can-Am Ryker. And Off-Road continued to
dominate the performance category with the Maverick X3, securing first, second, third, and fourth place positions
in the grueling Dakar Rally.
Can-Am On-Road
» The Can-Am Ryker is disrupting the entire on-road
industry with its incredible entry-level affordability,
ease of riding, and customization.
Can-Am Off-Road
» New Can-Am Maverick Sport and Maverick Sport
MAX side-by-side vehicles bring thrilling performance
to 60-in trail class.
» Can-Am is #1 in market share for 3-wheel vehicles
in North America, and #7 worldwide for motorcycling
in general.
» Bold specialty packages introduced for SSV, designed
to overcome challenging terrain: mud X mr and
rock-crawling X rc.
» Expansion of Can-Am Rider Education: BRP now has
175 3-wheel vehicle school partners, where more
than 11,000 people have obtained their licence.
» Redesigned Outlander ATV heightens adventure with
top-tier performance, world-class handling, incredible
design, and friendlier price tag.
12
BRP – 2019 ANNUAL REVIEW MARKET
INDICATORS
GLOBAL SALES AT JANUARY 31, 2019
GLOBAL SALES VS FY20181
2,240.6
MILLIONS
CA$
23.8%
CSR
» Launch of Ryker – BRP’s first vehicle developed with an eco-design concept: When our team designed the Ryker, they worked to exceed the most stringent
emissions standards. Engineers paid attention to the environmental impact of vehicles by integrating eco-design principles into their design. In February 2019,
the team’s effort were recognized by the Ordre des Ingénieurs du Québec for its innovative approach.
1 Restated to reflect the adoption of IFRS 15 “Revenue from contracts with customers” and IFRS 9 “Financial instruments” standards as explained
in Note 31 of the audited consolidated financial statements for the year ended January 31, 2019.
13
P O W E R S P O R T S
S E A S O N A L P R O D U C T S
This is where it all began. These are the products that launched BRP, and they
will always hold an extra special place in our heart. For many of our engineers
and other employees, they are also the products we grew up on and continue to
ride. Our ongoing innovation in this category upholds our deep-rooted pride.
SKI-DOO
LYNX
SEA-DOO
The brand that gave birth to the BRP adventure,
Ski-Doo was the world’s first recreational snowmobile.
After creating an entirely new category, it has continued
to innovate for the past 60 years, giving families and
sports enthusiasts alike unprecedented access to winter
fun. This year was no exception:
» Introduction of a new turbocharged engine, new
600-cc direct injection 2-stroke engine, more Rev
Gen4 models and advanced helmets.
» Ski-Doo reached a record high market share in North
America (47.9% +1.3pp).
» Ski-Doo product introductions helped generate
growth in key segments: +12.5% in Utility segment
and +10.2% in Crossover.
» Ski-Doo had an unprecedented snowcross racing
season, leading most national championships
from grassroots all the way up to pro classes.
Europe’s best-selling snowmobile, especially adapted
to demanding Nordic conditions, Lynx has been helping
Scandinavians negotiate and embrace their harsh winters
since 1967:
» Launch of the Radien-X platform, very well received
by the market.
» Record high market share for Lynx in Scandinavia
– up from 34% to 34.5% – thanks to the outstanding
line-up and new platform.
» Record high wholesale volume for Lynx: growth
of +17.8%.
Another industry first, Sea-Doo celebrated its half
century in 2018. Since its launch, it has been regularly
redefining the watercraft industry, making it quieter,
cleaner and more personalized. This year, it set its sights
on a completely new type of user:
» #1 worldwide, with record high market share and
strong retail growth – total number of Sea-Doo 2018
models is 24.
» Global watercraft industry grew by 7% – compound
annual growth rate is 10% since launch of SPARK
in 2014.
» Sea-Doo’s position as innovation leader solidified
– SPARK showed continued growth thanks to the
strong momentum of the TRIXX package.
» We launched the revolutionary new three-seater
platform on GTX, WAKE PRO, and RXT models as
well as the groundbreaking and NMMA innovation
award-winning FISH PRO model.
14
BRP – 2019 ANNUAL REVIEW MARKET
INDICATORS
GLOBAL SALES AT JANUARY 31, 2019
GLOBAL SALES VS FY20181
1,803.5 MILLIONS
CA$
16.1%
CSR
SKI-DOO
LYNX
SEA-DOO
» Launch of the new 125HP Rotax 600R E-TEC
» Recycling rate of 99.98% at BRP Finland
engine, that delivers 30% more dynamic response
and five more HP than its predecessor – with
the same fuel and oil economy as the 600 H.O.
E-TEC.
– all-time best result, due to recycling of food
package plastic and improved collection
of combustible waste and energy waste.
» Sea-Doo celebrated and supported Earth Day by
launching Sea-Doo Clean Sea project – a shoreline/
island clean-up effort in two Florida locations:
Miami Marine Stadium in Miami and Maximo
Park in St. Petersburg. This clean-up effort was
to help keep waterways trash-free so that all can
enjoy the beauty of nature.
1 Restated to reflect the adoption of IFRS 15 “Revenue from contracts with customers” and IFRS 9 “Financial instruments” standards as explained
in Note 31 of the audited consolidated financial statements for the year ended January 31, 2019.
15
P O W E R S P O R T S P A C
A N D O E M E N G I N E S
Our parts, accessories and clothing (PAC), as well as our Rotax engines, are designed to
enhance the BRP experience for our customers. PAC also builds our brands, while Rotax,
manufactured in Austria and Mexico, multiplies our possibilities. These complementary
yet diversified product ranges contribute to stability in our profitability.
POWERSPORTS PAC
ROTAX
We sell a broad range of parts, accessories and clothing to
complement each of our product lines, providing a stable
revenue stream with high profit margins and increased brand
exposure. This year alone, we introduced over 450 new
accessories to complement our different product lines and
improve the riding experience of our consumers:
» International PAC sales grew 13.4% and now account for
approximately one third of all BRP PAC Sales.
» Off-Road Vehicles PAC sales grew almost 15% and now
account for approximately one third of all BRP PAC sales.
» Accessory line-up includes industry leading products like
the Ski-Doo/Lynx Oxygen Helmet, Can-Am Industry’s First
PowerFlip Windshield and Apache Backcountry Tracks,
BRP Audio-Portable System for Sea-Doo, and a Ryker
accessory line-up that allows for up to 75,000 unique
customization possibilities.
» We now offer more than 150 LinQ accessories covering our
five powersports product lines, and this number continues
to increase. LinQ is a tool-less system for near-instant
installation and removal of accessories.
The original power behind the first Ski-Doo, Rotax engines
form the heart of every BRP powersports vehicle, as well
as karts, light and ultralight aircraft. Over the past 50 years,
the Austria-based facility has developed over 350 engine
models, that contribute daily to the BRP experience in
multiple ways:
» In December, the 9-millionth Rotax engine came-off
the production line – it was the 1403, that really
gets the Can-Am Spyder F3 going and makes riders’
hearts beat faster.
» In the snowmobile segment, we are currently leading in
market share and on the race track with Pro, Pro Lite and
Women’s championships – previously released 600 E-TEC,
600RS E-TEC and 850 E-TEC are major contributors to
this success due to their power, throttle response, fuel
consumption and reliability.
» Awarded Best Powertrain for the Rotax 915 iS aircraft
engine by German aviation magazine “Aerokurier” at the
AERO Friedrichshafen, the largest tradeshow for general
aviation in Europe.
16
BRP – 2019 ANNUAL REVIEW MARKET
INDICATORS
GLOBAL SALES AT JANUARY 31, 2019
GLOBAL SALES VS FY20181
707.5 MILLIONS
CA$
7.2%
CSR
» Every year, about 20 young people start their apprenticeship at BRP-Rotax. They are trained in BRP-Rotax’s own apprentice shop, in the
RIC (Regional Innovation Centre). In July, BRP-Rotax apprenticeships marked 800 days accident-free.
1 Restated to reflect the adoption of IFRS 15 “Revenue from contracts with customers” and IFRS 9 “Financial instruments” standards as explained
in Note 31 of the audited consolidated financial statements for the year ended January 31, 2019.
17
M A R I N E
More and more, consumers buy their boats and engines as a package. Incorporating
renowned leisure craft experts, alongside our Evinrude outboard motors, in the new BRP
Marine group, was a logical move. Even more so when you know that people who enjoy
spending time on the water are highly likely to be powersports enthusiasts too.
EVINRUDE
ALUMACRAFT
MANITOU
The oldest brand in the BRP portfolio, Evinrude invented
the outboard motor. In its history of more than a century,
it has continued to push back the frontiers of on-water
propulsion, in mechanics, in power, in fuel efficiency, and
in protection of the environment. This year saw some of
those efforts recognized:
» Evinrude inducted into Space Technology Hall of
Fame for our role in commercializing high-strength,
wear-resistant aluminum alloy (NASA 398), using it
for our E-TEC engine, the most fuel-efficient outboard
engines on the market and first winner of the EPA
Clean Air Excellence Award.
» Evinrude E-TEC becomes the only full range of
two-stroke outboards certified by the Australian
emissions standards.
» Opening of BRP Evinrude Technology Institute to
enable the marine industry’s next generation of new
talent to develop the skills they need.
The first of 2018’s new additions to the BRP family,
the Alumacraft brand is built on nearly 75 years of
creating memories among friends and family, and
fishing. Its arrival signalled the creation of the Marine
group, and several initiatives began to cement the
relationship in the minds of market players:
» Re-launch of Shadow series of competitor deep-V
multi-species fishing boats, garnering great reviews
from dealers and consumers alike, and excitement
and orders at Boat Shows, as well as attempts by
competitors to mimic the iconic Alumacraft style.
» Factory rigging of Evinrude Motors, building on
the new relationship with BRP, provided dealers
with more piece of mind. Early response from
Alumacraft/Evinrude dealers has been positive,
with many Alumacraft dealers increasing their
purchase of Alumacraft/Evinrude packages and
many more dealers considering Evinrude as a strong
option for their Alumacraft boats going forward.
The newest member of the BRP family, Manitou has
upped the game in pontoon boats time and time again
over its more than three decades. Combining performance
with the comfort pontoons are known for, it refreshed
and streamlined during the year:
» Refreshed XT and LT model lineup with new interior
design, including a companion helm providing more
storage and cupholders, and new furniture upholstery
in refined, geometric style, with colour options
including bold black cool-touch vinyl and silver
powder-coat.
» Updated upholstery and helms for our Encore and
Oasis lineup, with simple design and contrasting
material textures for Oasis, and softer leather, quilting,
a hint of colour, and digital display standard for
improved luxury appeal for Encore.
» Our Billet Transom System became standard on all
dual-engine models, reducing weight, increasing
strength and durability, and better aligning engines
– this system is a combination of several components
machined to nest together, improving accuracy of
the part and efficiency in welding.
18
BRP – 2019 ANNUAL REVIEW MARKET
INDICATORS
GLOBAL SALES AT JANUARY 31, 2019
GLOBAL SALES VS FY20181
492.2 MILLIONS
CA$
14.8%
CSR
EVINRUDE
ALUMACRAFT
MANITOU
» Sturtevant facility received the Green Masters
Award and the Business Friend of the Environment
Award for a second year in a row.
» Alumacraft was recognized by the NMMA as
a Customer Service Index Award winner for
Excellence in Customer Satisfaction at the
Miami International Boat Show.
» Manitou has been recognized by the National
Marine Manufacturers Association (NMMA)
with an 18th consecutive CSI award for their
exceptional customer service.
1 Restated to reflect the adoption of IFRS 15 “Revenue from contracts with customers” and IFRS 9 “Financial instruments” standards as explained
in Note 31 of the audited consolidated financial statements for the year ended January 31, 2019.
19
C O R P O R A T E
S O C I A L
R E S P O N S I B I L I T Y
1
BRP aims to be recognized as a worldwide
sustainable innovation leader.
OUR CSR PROGRAM
IS BUILT ON SIX PILLARS
2
4
3
GOVERNANCE » ENVIRONMENT » EMPLOYEES » PRODUCT RESPONSIBILITY
SUPPLY CHAIN MANAGEMENT » ROLE IN THE COMMUNITY
FY2019
HIGHLIGHTS
» Our Valcourt facility received the Quebec Eastern Townships Environmental
Excellence Award in October 2018 for the installation of its new dust
extractor. It replaces 16 dust units with one variable unit, saving more than
175,000 m3 of natural gas and more than 900,000 kWh of electricity.
(picture 2)
» Our Mexican facilities received several awards, confirming their commitments
to sustainability efforts, involvement in the community and dedication to
improving health, education and well-being. (picture 4)
» In Mexico, BRP is ranked among the 30 best companies to work for, with
over 3,000 employees.
» For the third time, our Gunskirchen facility received the klima:aktiv Award
from the Ministry of Environment for its continuous efforts and investments
in energy efficiency. (picture 1)
» For the second time, our Gunskirchen facility also received the Upper
Austrian Gutesiegel Award for its outstanding promotion of health in the
workplace. (picture 3)
20
BRP – 2019 ANNUAL REVIEW F I N A N C I A L
S E C T I O N
21
RECONCILIATION TABLES
The following table presents the reconciliation of Net income
to Normalized net income1 and Normalized EBITDA1.
(in millions of Canadian dollars)
January 31, 2019
January 31, 2018
January 31, 2017
Twelve-month periods ended
Net income
Normalized elements
Foreign exchange (gain) loss on long-term debt
Transaction costs and other related expenses3
Restructuring and related costs (reversal)4
Loss on litigation5
Transaction costs on long-term debt
Pension plan past service gains
Depreciation of intangible assets related to business combinations
Other elements
Income tax adjustment
Normalized net income1
Normalized income tax expense1
Financing costs adjusted1,6
Financing income adjusted1,6
Depreciation expense adjusted1,7
Normalized EBITDA1
Weighted average number of shares – basic
Weighted average number of shares – diluted
Earnings per share – basic
Earnings per share – diluted
Normalized earnings per share – basic1
Normalized earnings per share – diluted1
$227.3
69.8
2.7
1.3
1.3
8.9
(1.4)
1.2
1.3
(3.8)
308.6
105.4
68.0
(2.2)
176.1
$655.9
98,291,845
99,588,888
$2.31
2.28
3.14
3.10
Restated2
$239.1
(53.3)
--
2.9
5.9
2.1
--
--
1.5
47.3
245.5
90.2
53.5
(2.2)
149.2
$536.2
106,961,014
107,917,087
$2.23
2.21
2.29
2.27
$257.0
(82.0)
--
(1.1)
70.7
--
(6.3)
--
2.7
(19.0)
222.0
89.1
60.0
(1.5)
133.1
$502.7
112,946,239
113,205,095
$2.28
2.27
1.97
1.96
1 See “Non-IFRS Measures” section.
2 Restated to reflect the adoption of IFRS 15 “Revenue from contracts with customers” and IFRS 9
“Financial instruments” standards as explained in Note 31 of the audited consolidated financial
statements for the year ended January 31, 2019.
3 Costs related to business combinations.
4 The Company is involved, from time to time, in restructuring and reorganization activities in order to gain
flexibility and improve efficiency. The costs related to these activities are mainly composed of severance costs
and retention salaries.
5 The Company is involved in patent infringement litigation cases with one of its competitors.
6 Adjusted for transaction costs on long-term debt and NCIB gains and losses in net income.
7 Adjusted for depreciation of intangible assets acquired through business combinations.
22
BRP – 2019 ANNUAL REVIEW INFORMATION FOR INVESTORS
Stock Exchange Information
BRP Inc. subordinate voting shares are traded on the Toronto Stock Exchange
under the symbol ‘’DOO’’ and on the Nasdaq Global Select Market under the
symbol ‘’DOOO’’.
Dividend Payments for FY2019
RECORD DATE
March 29, 2019
December 28, 2018
September 28, 2018
June 29, 2018
March 30, 2018
PAYABLE
April 12, 2019
January 11, 2019
October 12, 2018
July 13, 2018
April 13, 2018
AMOUNT
$0.10
$0.09
$0.09
$0.09
$0.09
Research Coverage1
BMO Capital Markets • Canaccord Genuity • CIBC World Markets • Citigroup
• Desjardins Securities • GMP Securities • Morningstar • National Bank Financial
• RBC Capital Markets • Robert W. Baird & Co. • UBS • Wells Fargo
1 Analyst coverage known to the Company as of March 31, 2019.
FORWARD-LOOKING STATEMENTS
Certain information included in this Annual Review, including, but not limited
to, statements relating to our Fiscal Year 2021 objectives (including revenues and
Normalized earnings per share), and other statements that are not historical facts,
are “forward-looking statements” within the meaning of Canadian securities laws.
Forward-looking statements are typically identified by the use of terminology such
as “may”, “will”, “would”, “should”, “could”, “expects”, “forecasts”, “plans”,
“intends”, “trends”, “indications”, “anticipates”, “believes”, “estimates”, “outlook”,
“predicts”, “projects”, “likely” or “potential” or the negative or other variations
of these words or other comparable words or phrases. Forward-looking statements,
by their very nature, involve inherent risks and uncertainties and are based on
several assumptions, both general and specific. BRP cautions that its assumptions
may not materialize and that current economic conditions render such assumptions,
although believed reasonable at the time they were made, subject to greater
uncertainty. Such forward-looking statements are not guarantees of future performance
and involve known and unknown risks, uncertainties and other factors which may
cause the actual results or performance of the Company or the powersports or
marine industry to be materially different from the outlook or any future results or
performance implied by such statements. Key assumptions used in determining
forward-looking information are set forth below.
Fiscal Year 2020 Tentative Earnings Calendar
First Quarter:
Second Quarter: Thursday, August 29, 2019
Third Quarter: Wednesday, November 27, 2019
Fourth Quarter: Friday, March 20, 2020
Thursday, May 30, 2019
Issued and Outstanding Shares
As of April 17, 2019, there were 42,541,023 Subordinate Voting Shares and
54,101,384 Multiple Voting Shares issued and outstanding, and no preferred
shares were issued and outstanding.
Annual Shareholders’ Meeting
The meeting will be held at 11 a.m. Eastern Time on May 30, 2019 at the
Laurent Beaudoin Centre for Design and Innovation, 754 rue St-Joseph, Valcourt,
Québec, J0E 2L0.
Information Requests
Analysts, shareholders and interested investment professionals may direct
their business-related inquiries to:
Investor Relations Department: BRP Inc., 726 St-Joseph, Valcourt, Québec,
Canada J0E 2L0, T +1 (450) 532-2211, ir@brp.com
Shareholder Services
For shareholder-related services, including estate change of name or address,
stock, transfers, settlement, lost stock certificates and duplicate mailings, please
contact the transfer agent at:
Computershare Investor Services Inc.: 100 University Ave., 8th Floor, Toronto,
Ontario, Canada M5J 2Y1, T +1 (866) 245-4053, investorcentre.com/service
For more information
To view the Company’s Annual Review and related financial information,
to learn more about the products, to download product brochures or to find
dealer locations, please visit the Company’s website at brp.com.
AN ONLINE VERSION OF THIS ANNUAL REVIEW
IS AVAILABLE AT BRP.COM
KEY ASSUMPTIONS
The Company made a number of economic and market assumptions in preparing its
Fiscal Year 2021 objectives financial guidance, including assumptions regarding
the performance of the economies in which it operates, market competition, tax
laws applicable to its operations and foreign exchange currency fluctuation. The
Company made a number of economic and market assumptions in preparing and
making forward-looking statements. The Company is assuming reasonable industry
growth ranging from flat to high-single digits, moderate market share gains in
Year-Round Products and Seasonal Products and constant market share for the
Marine segment. The Company is also assuming interest rates increase modestly,
currencies remain at near current levels and inflation remains in line with central
bank expectations in countries where the Company is doing business. In addition,
many factors could cause the Company’s actual results, level of activity, performance
or achievements or future events or developments to differ materially from those
expressed or implied by the forward-looking statements, including, without
limitation, the following factors, which are discussed in greater detail under the
heading “Risk Factors” in the Company’s most recent Annual Information Form
filed with the Canadian Securities Administrators (available at sedar.com) and on
Form 40-F with the Securities and Exchange Commission in the United States
(available at https://www.sec.gov/); impact of adverse economic conditions on
consumer spending; decline in social acceptability of the Company’s products;
fluctuations in foreign currency exchange rates; high levels of indebtedness;
unavailability of additional capital; unfavourable weather conditions; seasonal
sales fluctuations; inability to comply with product safety, health, environmental
and noise pollution laws; large fixed cost base; inability of dealers and distributors
to secure adequate access to capital; supply problems, termination or interruption
of supply arrangements or increases in the cost of materials; competition in
product lines; inability to successfully execute growth strategy; international sales
and operations; failure of information technology systems or security breach;
failure to maintain an effective system of internal control over financial reporting
and to produce accurate and timely financial statements; loss of members of
management team or employees who possess specialized market knowledge
and technical skills; inability to maintain and enhance reputation and brands;
significant product liability claim; significant product repair and/or replacement
due to product warranty claims or product recalls; reliance on a network of
independent dealers and distributors; inability to successfully manage inventory
levels; intellectual property infringement and litigation; inability to successfully
execute manufacturing strategy; covenants in financing and other material
agreements; changes in tax laws and unanticipated tax liabilities; deterioration
in relationships with employees; pension plan liabilities; natural disasters; failure
to carry proper insurance coverage; volatile market price for BRP’s subordinate
voting shares; conduct of business through subsidiaries; significant influence by
Beaudier Inc. and 4338618 Canada Inc. (together the “Beaudier Group”) and
Bain Capital Luxembourg Investments S. à r. l. (“Bain Capital”); and future sales
of BRP’s shares by Beaudier Group, Bain Capital, directors, officers or senior
management of the Company. These factors are not intended to represent a
complete list of the factors that could affect the Company; however, these factors
should be considered carefully.
The forward-looking statements contained in this Annual Review are made as of the
date of this Annual Review and BRP undertakes no obligation to update or revise
forward-looking statements to reflect future events, changes in circumstances, or
changes in beliefs, unless required by applicable Canadian securities laws. In the
event that BRP does update any forward-looking statement, no inference should
be made that BRP will make additional updates with respect to that statement,
related matters, or any other forward-looking statement.
NON-IFRS MEASURES
This Annual Review makes reference to certain non-IFRS measures. These measures
are not recognized measures under IFRS, do not have a standardized meaning
prescribed by IFRS and are therefore unlikely to be comparable to similar measures
presented by other companies. Rather, these measures are provided as additional
information to complement those IFRS measures by providing further understanding
of the Company’s results of operations from management’s perspective. Accordingly,
they should not be considered in isolation nor as a substitute for analysis of the
Company’s financial information reported under IFRS. The Company uses non-IFRS
measures including Normalized EBITDA, Normalized net income, Normalized
income tax expense, Normalized effective tax rate, Normalized basic earnings per
share and Normalized diluted earnings per share.
Normalized EBITDA is provided to assist investors in determining the financial
performance of the Company’s operating activities on a consistent basis by
excluding certain non-cash elements such as depreciation expense, impairment
charge and foreign exchange gain or loss on the Company’s long-term debt
denominated in U.S. dollars. Other elements, such as restructuring costs and
acquisition related-costs, may also be excluded from net income in the determination
of Normalized EBITDA as they are considered not being reflective of the operational
performance of the Company. Normalized net income, Normalized income tax
expense, Normalized effective tax rate, Normalized basic earnings per share and
Normalized diluted earnings per share, in addition to the financial performance of
operating activities, take into account the impact of investing activities, financing
activities and income taxes on the Company’s financial results.
The Company believes non-IFRS measures are important supplemental measures
of financial performance because they eliminate items that have less bearing on
the Company’s financial performance and thus highlight trends in its core business
that may not otherwise be apparent when relying solely on IFRS measures. The
Company also believes that securities analysts, investors and other interested
parties frequently use non-IFRS measures in the evaluation of companies, many
of which present similar metrics when reporting their results. Management also
uses non-IFRS measures in order to facilitate financial performance comparisons
from period to period, prepare annual operating budgets, assess the Company’s
ability to meet its future debt service, capital expenditure and working capital
requirements and, also, as a component in the determination of the short-term
incentive compensation for the Company’s employees. Because other companies
may calculate these non-IFRS measures differently than the Company does, these
metrics are not comparable to similarly titled measures reported by other companies.
Normalized EBITDA is defined as net income before financing costs, financing
income, income tax expense (recovery), depreciation expense and normalized
elements. Normalized net income is defined as net income before normalized
elements adjusted to reflect the tax effect on these elements. Normalized income
tax expense is defined as income tax expense adjusted to reflect the tax effect on
normalized elements and to normalize specific tax elements. Normalized effective
tax rate is based on Normalized net income before Normalized income tax expense.
Normalized earnings per share – basic and Normalized earnings per share –
diluted are calculated respectively by dividing the Normalized net income by the
weighted average number of shares – basic and the weighted average number of
shares – diluted. The Company refers the reader to the “Selected Consolidated
Financial Information” section of the MD&A for the reconciliations of Normalized
EBITDA and Normalized net income presented for the fiscal year ended January 31,
2019 by the Company to the most directly comparable IFRS measure.
POSITION
DU LOGO FSC
© BRP 2019. All rights reserved. ®, ™ and the BRP logo are trademarks of BRP or its affiliates.
† All other trademarks are the property of their respective owners.
Please ride responsibly.
The information contained in this Annual Review was established as of May 1, 2019.
Legal deposit Bibliothèque nationale du Québec 2019
Printed in Canada May 2019
CORPORATE
HEADQUARTERS
726 Saint-Joseph Street
Valcourt, Québec J0E 2L0
Canada
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