Cyber ​​Attack Disruptions | The BRP plants expect to catch up

BRP’s factories will be working hard to make up for the production delay stemming from last month’s cyberattack, which also saw trade secrets stolen. That doesn’t stop the company from raising its guidance, however, as consumers continue to buy snowmobiles, personal watercraft, and other recreational products.

Posted at 10:11 am
Updated at 4:23 p.m

Julian Arsenal

Julian Arsenal
The press

On the occasion of the presentation of the second quarter results on Wednesday, the management of the Quebec multinational minimized the consequences of the six-day disruption at its 11 factories. The fact remains that the equivalent of “a week or two” of production was lost. The catch-up will be distributed through the fourth quarter of the fiscal year ended January 31.

“We do not expect any impact on our forecasts as we will make up some of the lost production through weekend work and overtime,” CFO Sébastien Martel said in a conference call with analysts.

The multinational Valcourt has not quantified the financial implications of this catch-up. Blinded by the strong financial results, analysts asked few questions about the cyber attack. BRP President and CEO José Boisjoli was unavailable for interviews and it was not possible to speak to a company representative — as has been the case since the announcement of the cyberattack, which was discovered on August 8.

Some additional details were offered by MM. Boisjoili and Martel. The investigations are still ongoing. The company behind Ski-Doo, Sea-Doo and CanAm has filed a lawsuit with its insurer.

Ransomware had allowed hackers to steal around 30 gigabytes of data from the hidden web (dark web). The press witnessed company executives’ personal data and trade secrets being stolen. The dealers were also unable to use the computer portal for weeks, through which they can order parts and plan the delivery of mobile homes to their customers. The situation is gradually normalizing.

“We can order parts for about two weeks,” explains Luc Marchand, president of Claude Ste-Marie Sports, in the southern suburbs of Montreal. “It’s progressive. Where it’s difficult is in the missing pieces. I have another personal watercraft that I cannot sell. I have not received many snowmobiles. »

More money in the coffers

Despite the rise in interest rates and fears of an economic slowdown — elements that could impact household spending on recreational vehicles — BRP doesn’t see demand slowing right now.

Pre-orders for snowmobiles are at an “extremely high” level, according to Mr. Boisjoli. He’s also observing improvements in the supply chain, particularly in the area of ​​semiconductors – components found in electronic chips that are essential to the operation of certain modules.

Delivery times are getting shorter and raw material prices are falling. This should allow BRP to increase its shipments to dealers where inventory is insufficient to meet demand. In the second quarter, retail sales in North America fell 16%. Mr. Boisjoli tempered that decline by revealing that growth in the current quarter was over 20%.

“This does not reflect a decline in consumer demand, but a limited product offering,” he said of dealer sales recorded in the second quarter.

In that regard, BRP expects its revenue growth for the fiscal year to fluctuate between 26% and 31%, compared to its prior range of 24% to 29%. Adjusted earnings per share are expected to be in the range of $11.30 to $11.65 compared to the previous guidance of $11.00 to $11.35.

National Bank Financial’s Cameron Doerksen is not overly concerned about the impact of a potential recession on BRP’s operations.

“We believe the company is well positioned to cope with a fall in demand,” the analyst wrote in a statement. We believe that the stock’s current valuation already reflects the likelihood of a recession. »

On the Bay Street floor Wednesday, BRP shares rose $8.11, or 9.1%, to close at $97.60.

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  • 20,000
    This is BRP’s global workforce.

    Source: brp

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