Cargo bikes, small light vans and scooters… In the not too distant future, these products could come out of the BRP factories. Looking beyond recreational vehicles, boats and electric motorcycles, the Quebec multinational isn’t closing doors. The company offered a taste of its strategy during its investor day on Wednesday.
Posted yesterday at 7:00am
plan for diversification
The novelties will not be limited to electric motorcycles, which will be offered in two years. The maker of Ski-Doo, Sea-Doo, and Can-Am is already eyeing other niches, including mobility services. The Valcourt company estimates these new markets, where it is not present, at 70 billion.
“These are different products than recreational vehicles, boats and motorcycles,” José Boisjoli, BRP’s President and CEO, told analysts attending the event. “I can only tell you that we are working on it. »
He refused to open up his game further, some questions are still open at this point. The investor presentation included a slide to illustrate the range of options, but the company declined to say which would be preferred. There will be electric models, Mr Boisjoli assures, without closing the door on internal combustion engines.
By the end of 2026, BRP aims to electrify its existing product line.
calm the game
The pandemic has greatly benefited BRP, which, like its peers, has seen skyrocketing demand for recreational vehicles valued by consumers who are restricted in their travels.
With interest rates rising and recession fears, some are wondering whether consumers will continue to have the spare budget to afford snowmobiles and other recreational vehicles. BRP reiterated that growth would continue. Why ? Mainly because the clientele is getting younger and more diverse, says BRP.
Citing data compiled by the company IMI, within 10 years women should make up 45% of BRP’s total clientele, compared to 22% today. The weight of 18-34 year olds is expected to increase from 25% to 55% over the same period.
According to IMI, recreational vehicles are also more popular with cultural communities. Additionally, inventories at retailers are down about 60% from pre-pandemic levels. There is no question of cutting back production in the short term.
“If there were a slowdown, we could continue to deliver,” said CFO Sébastien Martel. We wouldn’t have to slow down production. This would make it easier for us to weather a downturn, if there is one. »
Despite the uncertainty, BRP expects revenue to be between $12 billion and $12.5 billion by the end of fiscal 2025. Adjusted earnings per share will range between $13.50 and $14.50.
At the time its plan was unveiled, the recreational vehicle maker was projecting sales of at least $9.5 billion with normalized earnings per share of $7.50.
“In the short term, there is a lot of uncertainty about inflation, interest rates and gas prices, but medium and long-term indicators are positive,” says Mr. Boisjoli. All this gives us the certainty of achieving the plan’s objectives. »
The forecast was welcomed by analysts. Despite the current context, there is still “a lot of gas in the tank”, even if some fear a “profit spike”, estimates Scotiabank’s George Doumet.
“The upshot of this Investor Day is that we don’t expect that to happen this year. [ou l’année prochaine] ‘ he wrote in a note.
On the Toronto Stock Exchange, BRP shares closed at $82.93 on Wednesday, up $1.74, or 2.14%. Since the beginning of the year, the stock has lost around 24% in value. The stock had peaked around $130 last September.
- Number of dealers worldwide where BRP products are sold