BRP Inc. (DOO) Earnings Call Transcript & Summary

Please note that today's discussion will include some forward-looking statements and that future results may differ from those implied in these statements. The forward-looking information is based on certain assumptions, risks and uncertainties. And I invite you to consult the forward-looking statement page of the presentation as well as our MD&A for more information on this. Turning to the agenda for today, José Boisjoli, our President and CEO, will kick it off with our M25 update. And his presentation will be followed by Anne-Marie LaBerge, our Chief Marketing Officer; Denys Lapointe, Chief Design Officer; Sandy Scullion, President, Powersports Group. And then we'll have a short break and come back with Karim Donnez, our President, Marine Group; Thomas Uhr, Chief Technology Officer; and Sébastien Martel, our CFO. José will then come back for closing remarks, and then we'll go into a general Q&A session. Note that we'll also have opportunity for a couple of questions after each presenters, and we'll bring microphone to anyone willing to ask questions during the presentation. Finally, note that unfortunately, Bernard, Denys and Thomas are not with us today. They had to isolate due to COVID, but we have prerecorded their presentation, and they will be with us for Q&A. So with that, I'll leave it to José.

Good morning, everyone. Sleep well? You should say yes. I'm happy to be here. It's unbelievable, but the last time we met for an Analyst and Investor Day was in 2019, then this is 2.5 years ago. And today, we're very enthusiastic about sharing with you our M25 update and our mid- to long-term strategy. Then my first part will be to do a summary of what have been achieved. But before that, I would like to remind to you what. [Audio Gap] '19 and this is basically the framework basically -- the framework that we had at the time for M25. Then the definition was setting the course for BRP 2.0. We had 4 pillars: growth, customer X -- experience, employee experience and lean. And we had priorities and goals for fiscal year '25. Then the first one was build on Can-Am momentum to bring the Can-Am revenue to $5 billion; make waves [ in Marine ] to $1 billion in revenue, including Evinrude engine; exceed customer expectation; fuel the BRP heartbeat, or employee BRP; perform to win, that was $300 million of cost savings before fiscal year '25; and pursue something bigger, sustain BRP beyond 2025. The pillar, the priorities and the goal that we had, and we had the financial target to reach $9.5 billion and $7.50 normalized EPS for fiscal year '25. For the presentation that we had in Florida, some of you told us that the financial objective was quite aggressive to adapt to the pandemic. First, we had to adapt our operation to the new reality. When the pandemic hit the world in March 2020, obviously, we had to implement COVID measure, and we had to change the way we're operating, but I would say that I'm very proud that we were able to contain the COVID and be able to maintain our operations ongoing despite all of this. We had to manage demand, which led to limited production availability. Versus fiscal year '20, the fiscal year '21 retail increased by 25% and fiscal year '22 by 18%. This depleted the inventory by 67% and 60%. And last but not least, obviously, we all know about the supply chain difficulty, a very volatile environment for all the OEMs. But despite all of this, we continue to progress on our key strategic priority. And here, I will give you a summary of what have been accomplished. First, we continue building on the momentum with our Can-Am side-by-side business. In Season '22 at April to date, we've gained 6 points of market share versus pre-COVID market share. And Can-Am is the fastest-growing brand since 2015 in the side-by-side business. We also unlocked the 3-wheel vehicle business potential, and we made progress on all the key KPIs for that new business, measuring the number of women who buy the vehicle, the customer under 55 and also our penetration into visible minority group. Basically, we doubled our revenue since the introduction of the Ryker in fiscal year '19. Our 2 mature products, well, snowmobile in Season '22 that ended in March passed the bar of 60% market share. And watercraft, Season '21 -- we are right now in Season '22, but last season, we passed the bar of 65% market share worldwide, record market share for 2 mature business worldwide. We continue our plan on the Marine business. We entered the Marine segment to continue to grow BRP. And our strategy was built on 3 phases; buy, build and transform. And Karim will give you later on an update on the strategy. But what I want to say this morning in introduction is we are right now on plan to deliver on the Marine strategy. A few words on the pontoon industry. And with the Sea-Doo Switch and the new Manitou with the Ghost, and some of you had the chance to try it yesterday, we are entering aggressively into the pontoon business. Switch is reported into the Powersports segment because it's sold into the Powersports dealer network. Manitou is reported on the Marine segment because it's sold to the Marine dealer network. But basically, for the customer, we're offering a complete lineup from 13 feet to 30 feet, different MSRP to make sure that we have product available for every customer out there. But we believe that we can be a leader into the pontoon industry. Another achievement, our Parts, Accessories and business. Our Parts, Accessories and business passed the $1 billion mark. And this is, obviously, the result of our fleet that is growing, but also our accessories with LinQ ecosystem that is growing. Now we continue into our marketing -- sorry. We continue evolving in our marketing capabilities. And if you look at the evolution from fiscal year '17 to '19 to '22, basically, we're going from traditional media to digital. And when you look on the right side of the slide, everything that we have accomplished in the last few years, 175 (sic) [ 170 ] website upgrades since 2016. We have right now 200 brand ambassador worldwide. We have the Uncharted Society, which is a group of rental operator now in North America that passed the bar of 75 rental operator that are promoting our product, and the Women of On-Road community that have reached 14,700 women that are basically talking about the product, then a lot of good things happening into promoting our brand. Now we passed the bar -- sorry about that -- sorry -- lean initiative. In the target we had in fiscal year -- lean initiative. In the target we had in fiscal year '19, it was saving $300 million and we have achieved this achievement so far. Then Thomas and Sébastien will give you an update on this. But overall, very happy about -- despite all the turbulence caused by COVID, we have achieved this. We'll give you a summary, and we have a new target in the M25. Now we passed the bar of 20,000 employees, and this we were able to do it maintaining our ENPS, Employee Net Promoter Score, and engagement score. Then very, very happy of passing the bar and be able to attract so many people to support our growth. Now we have also well -- positioned well BRP for the future with the EV, electric vehicle, strategy. In March 2021, each of our existing product line -- in March 2021, we have announced that each of our existing product line will offer an EV model by the end of 2026. This is a $300 million investment, plan is on track. And in March 2022, we announced the relaunch of the Can-Am motorcycle in EV version. That product will be available in summer 2024. Then BRP is well positioned for the EV technology evolution. And all of this is achieving a significant market share gain into the industry. Then since fiscal year '13, when you look at what we have accomplished, we've gained, in North America, 11-point market share, unbelievable. And if you look at the graph, look at the acceleration that we have accomplished in fiscal year '15. And in the last -- since fiscal year '13, basically, we've gained 14-point market share on snowmobile, we have the #1 position; on watercraft, we gained also 14-point market share, #1 position; on Can-Am side-by-side, 11-point market share, #2 position; on Can-Am ATV, 7-point market share, #3 position; and on Can-Am On-Road, we doubled our retail to be #1 into the 3-wheel vehicle business. And obviously, I'm biased, but there is no other OEMs that are better than us to gain market share into the industry. And we've delivered very strong financial results. If you look since fiscal year '13, basically, our revenue grew 13% a year; our normalized EBITDA, 17% CAGR; and our normalized EPS, 23% CAGR. Then when you look at all this, I'm very, very proud of what we have accomplished and how we passed through the COVID crisis. And I'm very proud of the employees of BRP. When you look at the agility, the creativity, the commitment, the resilience of our employees to make things happen is really remarkable. Then this is a summary of what has been accomplished in 2 -- those 2.5-year period time. Now let's move to what's next? Where are we going from here? And this is an update on the M25 plan. Then first, the priorities. Build on Can-Am momentum. The original M25 target was to reach $5 billion. Now we've set a new target for fiscal year '25 to reach $7 billion. Make waves in Marine. We maintain our target of $1 billion, but this is without the Evinrude engine, then more sales of boats. Exceed customer expectation, basically, we are on track. Fuel the BRP heartbeat, we are on track. Perform to win, $300 million cost saving have evolved to $400 million cost savings. Thomas will talk about it in a few minutes. And pursue something bigger, sustain BRP growth beyond 2025. Basically, we are on track, but you will see that our CSR plan is more ambitious than the one we had before, and I will talk about it in my closing remarks this morning. Then all of this to have the new revised framework, then the definition is the same, setting the course for BRP 2.0. The 4 pillars, growth, customer X, employee X and lean, have not changed. But obviously, we have adapt our priorities and our goal for fiscal year '25 with new targets. And why we are well positioned to deliver on this? First, we have solid lineup across all our product lines. I think we gaining market share year after year, this is a statement that is supported by the results. Third, attract white space with strong potential. We have new opportunity in the next 2 years. We have the Sea-Doo Switch. We have the new Alumacraft, Manitou and Quintrex with the Ghost engine. For the ones that have tried the new Manitou, I think you are now a believer. And we have the Can-Am 2-wheel electric that will be launched in summer '24. The increase in consumer interest. There is a lot of new entrants, and we operating today in a larger industry. Then every time you gain market share, it's more volume. Mid- to long-term favorable macro trends and here are a few words. Obviously, there is a lot of uncertainty about the short-term situation, the inflation, the interest rate, the gain in the gas price. But the mid to long term looks good. You will see this morning, Anne-Marie will give you an update on customer research we've done, the demographic evolution, the customer household income increase, the work-from-home phenomena. All of this is positive for our industry, and Anne-Marie will tell you more about it in a few minutes. Significant inventory replenishment opportunity. There is $1.4 billion of products to be replenished in the next, I would say, 24 months. Improved profitability profile. We believe that we can sustain, after the COVID period, a 17% normalized EBITDA margin, which is higher than what we had pre-COVID. And obviously, and I have the chance to visit our facility all the time, and I'm very, very proud of the state-of-the-art manufacturing footprint that we have all around the world. Then all of this make that we are confident about delivering our M25 target. And I have to say that we have an incredible management team. I mean you had the chance yesterday night to talk with the whole management team. And we have competent people at BRP at the top level. But if you go down into the organization, it's amazing, the competence that we have and the commitment that we have. The management committee is composed of 7 executives that have been there for a long time, 5 that are newer. Then it's a challenge between the new thing and also not making the mistake of the past. But altogether, it's 18 years of seniority in average for the whole management team. And all of this, we are confident to deliver our new financial target -- we are delivered -- we are confident to deliver our -- the new financial target. Basically, if you look at the revenue, this year, our guidance is $9.5 billion to $9.9 billion, and we're planning in fiscal year '25 to be at $12 billion to $12.5 billion. Normalized EPS this year, $11 to $11.35, and we're planning to deliver $13.5 to $14.5 EBIT -- normalized EPS return. Then this is, in a nutshell, our update of what have been accomplished and our new M25 plan. Then we have time to take maybe a few questions on this topic. Anyone has anything to ask? Too early? Robin? Just for the people on the line.

Just wanted to clarify, does that -- would that include anything with acquisitions or this would all be organic?

No. In our plans, we never put M&A and we never put share buyback. It's something that we do opportunistically and that do not include any of those. Is that right, Mr. CFO? Then anything else? Thank you. I would like to introduce Anne-Marie LaBerge, Chief Marketing Officer.

Thank you. Thank you. Okay. So apparently, we have some turbulence with the clicker this morning. And this is a perfect thing because I'm actually here to talk to you about turbulence. So we'll try to make this work. I'll stay here and maybe -- and I'll press slowly and give it -- the slides time to change. It's been a very interesting time. I've been a marketer, I feel, all of my life and the 2.5 -- the past 2.5 years have been the most interesting in all of my career. I think we've gone through quite a bit of turbulence on many fronts. Some of it was challenging. And some of it was actually positive. And today, I have the opportunity to talk to you about the positive side of the turbulence over the past 2.5 years. So 3 things I'm going to cover. First of all, we've talked at the quarterly discussion with you guys around the new entrants. I know from spending a few times with you guys yesterday that there's a lot of interest. So I'll talk to you about what's happening with new entrants at BRP. Then we'll talk about the outlook of the future. So what are we looking at, what do we feel is coming, how long will this last? So we've commissioned a research, and I want to share some of the results with you guys. And then the most important thing is whatever is going on, we want to make sure that BRP is getting more than its fair share and also that we are going to keep these customers. And I wanted to share with you how we are doubling down on our focus in customer experience. So you've probably seen this before. So this is BRP customer base. So from pre-COVID, we went from 19% new entrants to 30% new entrants. For fiscal '23 numbers right now, we're keeping the momentum. So we're not seeing a slowdown in new entrants coming into BRP. And also -- and I think it's, more importantly, the repurchase. The repurchasing is speaking to the enthusiasm of consumers into the category. And we are seeing that 50% (sic) [ 57% ] growth of repurchasing from pre-COVID to today. Also, and I think that some of you -- if we're looking at average revenue per household of customer base right now, it went up and it goes between $100 to $200. So average revenue per household of people in Powersports and Marine at about $150. So they're repurchasing, they're here to stay. We're still seeing new entrants with a really interesting average revenue. Here is by product category. So you will see that we are in pole position for On-Road, for Sea-Doo and also for Ski-Doo as far as capturing our fair share of new entrants. The amazing number of the 3-wheel vehicle, is a perfect storm, is the launch of Ryker, which increased access to new entrants at the same time as the situation with COVID. So when we launched Ryker and we said that we were going to open the aperture and increase access to new entrant, here is the proof that we've done our job, as we're seeing 71% new entrant in the category from 31% pre-COVID, but also prelaunch of Ryker. Diversification is absolutely important because we do want to broaden our customer base. I will talk about what we're seeing for the future. But right now, in our base, what we've seen from pre-COVID or 2019 to today, a 44% increase in women in our base; 47% are millennial and Gen Y as an increase; an increase of 53% with visible minority; and 40% in families. Some of it has happened organically, but I will tell you that most of it has happened intentionally from BRP, starting with the launch of Ryker and our On-Road business, where we're seeing an incredible growth into women and into visible minority. This intention and plan that we've seen on On-Road, we're now applying to all of our product line and we're seeing great success. So we're going to continue to accelerate the velocity into the entry of these to change the face of our typical customers. So you're asking yourself this question, we're asking ourselves this question, is this here to stay? So what we've done is we've commissioned IMI. I'm sure you're familiar with this, a huge global organization that specializes into marketing research. And we've commissioned the largest study that I've commissioned in my career. 43,000 people were surveyed both in North America and in Europe, so over 9 countries. And the 43,000 people, you'll hear me speak about intenders, okay? So the 43,000 people that were surveyed and that we'll see the data from are people that are either customers -- they're either participant, meaning that they've had -- they've participated in Powersports and Marine in the past and have the intention to do so again soon or what we call [indiscernible] with our people that never participated. But when were asked, are you very likely, likely or somewhat likely to participate in the next 10 years, they said yes. Now what's interesting with this research is IMI uses, and is for a francophone very hard to pronounce, volumetric predictive model. And what is that? So volumetric predictive model is based on a human fact that people don't say -- don't do what they say they will do. So if you ask me, Anne-Marie, would you like to buy Jimmy Choo shoes in the next year? I will say very likely, but the chances that I will do it are very slim. So what they do is they discount. So instead of taking for face value what most surveys that you would see, they discount and their discounting is on the realistic side at 99% and on the optimistic side at 95%. So the numbers that you will see have all been discounted. The other thing that's interesting when you hear me talk about baseline is we've commissioned a BRP industry forecast that you see on this slide, but we're also using the IMI CategoryPulse as a baseline of 120,000 surveys and IMI NextWave at 32,000 surveys. So first question was around market trends. Three things that we've seen in market trends. Number one, discretionary income, a tough word for me. So we're seeing that 30% of the intenders are saying that they will get a raise within the next 12 months. This is 2x more than their actual baseline. So I talked to you about average revenue per household, that is already high. So this is in line with this, but they're also very confident that they will get increased revenue within the next 12 months. 25% say that they will move into rural areas. So you know that ruralization is actually a global fact and due to COVID, but this is 2x more than their baseline. And the third thing, working from everywhere. So they're going to work from home, and this is 1.5 higher than baseline. And why does this matter? Because it answers 3 barriers to our industry. The number 1 is a cost barrier; the number 2 is a playground access barrier; and the number 3 is time barrier. Now the outlook of the future for customer demand. This is a very important slide because what this is telling us is of all the people that were surveyed, we see a growth in demand of 31%, and this is realistic over the next 9 years. So by 2031, in a realistic matter, they're seeing a growth in demand for Powersports and Marine at 31% and optimistic at 54%. If we're looking closer to us, the growth in demand in 2024, let's say, would be realistically 28% and optimistically 44%. And we talk a lot about diversity. So what will the baseline? So the first line is BRP. And on visible minorities, it is only for On-Road. But it's -- you're seeing the comparison. So we go today at BRP, our baseline for women, for example, is 22%, expected to go up to 37% in 5 years, for example. So for millennial and Gen Y, we'll go up by 6 to 10 years to 55%, and visible minorities to 38%. Now what is the motivation or intent to stay? So 3 things. Number one, so intenders are saying to us that there is an increase of 18% of intention to start participating in Powersports over the next 18 months. So from the people that have not participated in the past 12 months, so they've not owned a product or anything like this, they're saying, in the next 18 months, I want to start participating. We've seen a growth -- from baseline, a growth of 18%. Number two, 30% of owners are saying that they want to purchase a new product within the next 10 years. And number three, 30% to 50% of all of the customer base in Powersports and Marine in 10 years do not currently own and have never owned a product. Now what makes us optimistic? Because, clearly, it does. I've talked about new entrants are here to stay. So you've seen the numbers into increased customer demand by 31% by 2031. The intent to buy is strong among affluent group. So we've talked about average revenue per household. And also, their optimistic view around their financial condition in the future. There's also a new generation ahead, more visible minorities and, thank god, more women. And then a favorable market trend with ruralization and also working from home. So I said that BRP is doubling down on experience. You heard José talk about the fact that this is one of our pillars, customer experience. It mattered before, of course, the pandemic, but it matters even more today because we want to ensure that we can connect with this whole new customer base. Imagine that for years and years, we had 1 profile of customer. And now the face of our customers are completely changing. These people want to connect with us in a different way, and we need to make sure that we adapt to that. So we're going to do 4 things. Number 1 is meet our customers on their own terms. You'll meet Josee Perreault in a few minutes. You know that she's a woman who can take on a challenge and deliver on it, look what she's done with the On-Road business. She's now taking on the omnichannel. And it is absolutely critical that we can connect commercially with consumers totally seamlessly, how they want and where they want. And this is what we're working on at BRP. José talked about the numbers on our digital -- all of our digital platform. So we've invested a lot with [indiscernible] to ensure that the experience [indiscernible] is completely seamless. And then thirdly, on data. So we are getting really, really good at data management, at customer segmentation to ensure that we can talk to people when they want, how they want, but more importantly, with the information that they want. The second thing, and this is a big change in strategy. We're going to go from focusing on unit sale to customer lifetime value. So -- and the graph to the right is actually one of the reasons why we're doing this, but we know for a fact that from a new customer to a repurchaser, a repurchaser will spend 31% more dollars with -- at the time of purchase. But also because we do believe that there is a lot of value for BRP in ensuring that we follow our customers through their lifetime and ensuring that we can do commercial -- dealing with them throughout that lifetime and following that up and ensuring that we can upsell and cross-sell to them. So we're really applying this right now, and we're excited about the opportunities. Customer lifetime value is also one of the KPI for our CX pillar. So we're going to keep a close eye on this. This is a passion project of mine and of BRP, but it's tapping into the experience economy. So in 2019, we launched our incubator that is called BRP-X. We've done 10 pilots so far in BRP-X. The first baby that came out of our incubator is Uncharted Society, and that was launched in 2021. So it became -- it went from a pilot to a start-up. And I am super proud to say that after 1 year, we're EBITDA positive. And what it does, it's a marketplace. So I was talking about this passionately at dinner last night, but if you go and I invite you all to go and check Uncharted Society. So basically, we -- you can go and purchase a 4-day trip, riding side by side in the Grand Canyon or there's a lot of [ offering ] right now. We're in North America, and we have over 100 -- or we will have, by the end of the year, over 100 outfitter. We are launching in Europe next year. So we're seeing incredible potential in this. And then in the pilot, Uncharted Playgrounds. So out of the $6 billion value of TAM that I've put here for North America, more than half of that represents access to playgrounds. So we have been piloting and testing this. We started in Texas, we're now in 5 states. So it basically is an application that we've developed. And basically we foster, very much like an Airbnb or playground. So we basically foster the ability for people to find great place to go and play. So more to come on this one. And of course, I cannot talk about experience at BRP without talking about products. And I think that we have been the innovator in providing the ultimate experience. You guys have lived it yesterday, but it is absolutely part of our DNA. And I want to make sure that -- Denys allowed me to have 1 slide on product, and this is my slide, but I said to Denys, I cannot talk about -- sorry, I cannot talk about the incredible experience without talking about how we've broken paradigm on all of our product lines. And now because I'm in marketing, I had to end with a video, of course. And before we run the video, I think I'll have to click 1 more time, there's another really important transformation that we've done and it is the way that we engage with consumers. We used to be very much product-focused and our relationship with consumers were very rational, not emotional. And we do believe that people connect with humans and they connect with emotion. So we completely transform our narrative at BRP for all of our brands. And I think I said this for those of you who were here in 2019, and I said I talked about my Everest, which was a marketing transformation, and I said that the summit is when we can give the megaphone to all of our riders and consumers and let them tell the story. And then, of course, the first question my CFO is asking me is how much marketing dollars can we cut if you do this? But there is efficiency to be had for sure. And we've created media house in the past year. So we now have the ability to create our own media, our own content using and leveraging our 200 ambassadors worldwide in our communities. Last week in Montreal, we won a gold award at the Idéa Awards for the piece that we did ourselves, that is called Livin' the Land. We were super proud. It's a 3-piece series, and it's about off-road living. So there's way more to come on this, but it's giving us more agility, more ability to be able to connect and -- this short video is actually featuring all of our ambassadors, telling you how incredible and fun it is to ride Powersports and Marine. So we can run the video. [Presentation]

All right. Do I take a few questions? Yes.

I guess just a question about the sort of shift in focus from volume focus to customer lifetime value. I'm just sort of curious, what does that mean in terms of -- for the organization just in terms of either capabilities and how you think about that differently or resource allocation and then also how the dealers sort of come into that evolution?

Yes. And -- well, first of all, I want to make sure that I'm clear that we are still totally focused on selling units, okay? Because if you want to have the lifetime value, you need first a unit, then you lifetime value it. So that's an important point. It is a complete engine. And so we do need to have the tools -- the right tools in order to do this, which we have now and continue on developing. I think what Josee Perreault is doing on omnichannel is definitely an important key to this. So that's one thing. So I would say that right now, we have many tools to help us do this with a great potential for evolution and investing even more. So that's the first thing. The second thing is, to me, dealers have a more important than ever role into managing lifetime value of a customer. And the life after the purchase of a unit is managed in partnership with the dealers. So where does the customer go to have service, to have repair? It's at the dealership. And then our ability to connect with that customer directly, BRP to the customer, and then working on the dealer to make sure that this customer stays with us is absolutely critical. So I would say that there is a people component to this, there's a tool component to this and there's a process. Right now, between Josee Perreault, Sandy, Karim and myself, we represent the commercial side of things. And so we are totally working into making sure that we see -- that we're making that transformation. I don't know if I answered your question?

Yes. I wanted to focus a little bit on Uncharted Society. It seems pretty interesting. Can you talk a little bit about those 100,000 guests, how many went on to maybe purchase a new vehicle? And can you also talk a little bit about how scalable that business is over the next couple of years?

Okay. So on how many have purchased a new vehicle, it's -- the business has been there for a year only. So I won't disclose that number just yet because it's too soon. On the scalability, it is -- we found a business model, so when it was in incubator, we tested many different business models. We found one that works for BRP, and now we're ready to scale. So it is 100%, I would say, scalable. So right now, of course, the revenue comes, of course, for the -- with the sale of the unit to the outfitter but also with, as I said, us fostering or being the marketplace, so there's revenue that is made there and shared revenue there as well. So I think we're on with Denys Lapointe right now. Thank you.

Good morning, everyone. Sorry, I cannot be with you today, but I guess it's better this way. Innovation is a matter of survival. And whenever I speak with the financial analyst, I like to use this quote from Harvard Business School that more or less stipulates that profits are important. But just as important as profits, you have to have a growth story. And, I guess, the reason why they've invited me to speak with you today is to speak a little bit and give you a little bit more insight on the growth aspect. This being said, if you were to look at the Fortune 500 ranking from 5, 10, 20 years away, you would actually notice that -- and this is just factual information in this particular case, that some companies actually improve their story, some actually maintain their ranking. But unfortunately, some are being affected and disappear from the ranking. And we believe at BRP that one of the reasons is that many companies are often caught by surprise, surprised by a new paradigm that's being introduced. And, I guess, the best way for a company to have to live through these paradigm shifts is to actually work and reinvent the next paradigm ourselves. So at BRP, we've developed our own lexicon. And you can see here from invention, disruption, all the way to continuation, there are different levels of innovation or different levels of paradigm shifts and none of which have the same kind of impact. Obviously, to reinvent and disrupt, you need quite a bit of effort to get there. So what is different at BRP is that 25% of my staff is actually dedicated to the Type A and Type B, trying to identify the next paradigms. Also at BRP, we've learned from our mistakes in the past and from our success stories, and we've defined a design philosophy that is built of 3 pillars. First, the highly innovative. So we always try to come up with new innovative product architecture that disrupt the market. We build in a lot of functionality and little delights that will enhance the consumer journey. Treating with ergonomics and also HMI, human machine interface, is also a very important factor. And the third pillar is what we call "the wow factor." It's the -- it depends on the level of emotional content that we provide into our products so that people are somewhat drawn to our products. And we know that when we respect the 3 pillars of our design philosophy, we increase our chance of adding a commercial success. Now we also innovated at BRP by creating a stage-gate process. Everybody -- every great company has got the stage-gate process that goes from gate 0 to gate 6 or 7, whichever. And it usually takes 2 to 4 years to bring a new product to market. But doing so in the past, BRP has realized that whenever we had great ideas, whatever came gate 4, where we needed to have the full reliability demonstrated, many of those best ideas just got tossed away in order to make sure there is no risk introduced beyond at our start of production. So we innovated by creating what we call our advanced stage-gate process. And with this, we have -- we allow ourselves to loop back and really identify from ideas and prove that those ideas can really have some traction and resonate with our consumers. So many ideas, we'll basically spend 1 or 3 years trying to identify these disruptive ideas that will make into our regular stage-gate process. And as such, I will share a few examples in a few minutes. But we have 3 design and innovation centers. Our main studio is in Valcourt, Canada, dealing with several Powersports products and a few other things. We also have our Palm Bay, Florida studio, which you've been close to this morning -- exposed to this morning. And basically, within this center, we do all the Marine investigations as well as some of the Powersports investigations as it pertains to water. Now on the right-hand side, the Sophia Antipolis studio will be opening up in September of this year. And this group will be focusing on concepts aimed at mobility -- urban mobility and even the services. And I will show you a few examples of those investigations in the coming slides. Now my team has actually been working on different things. We're proud to say that we're being inspired by our founder with the invention of the snowmobiles. But later on, we invented the watercraft business and later after that, we also were -- we introduced a new industry with the Spyder launch in 2008. Sometimes, we're being asked to disrupt a specific segment. In this particular case, we've seen with the REV Gen1 in 2003; the Spark 2014, what this has done to the marketplace; the Maverick X3; the Ryker in 2019; the Fish Pro and the Switch, which we believe will be a major disruptive products in their own respective markets as well. And we also apply the same principle as it pertains to apparels, as it pertains to accessories with the LinQ accessory and all kinds of other accessories in their respective segments. Now obviously, what has this done to their respective markets? Well, in the case of the REV, we were plus 10 market share points in less than 4 years. In the case of the Sea-Doo Spark, the industry was up 95% since its intro. Same thing with Ryker, the industry up 85% since the introduction of the Ryker. And our accessory story was twofold over the last 5 years. So great achievements by introducing disruptive stories in the marketplace. Now my team is comprised of several individuals coming from the 4 corners of the world. At least 50% is actually from international. So I'm very, very proud to have built certainly one, if not the strongest, Powersports design team in the world. And now looking at what the folks have been investigating for the Powersports explorations. Obviously, we can expect side-by-side variants to fit in different segments, obviously, with some disruptive material as well. We are to introduce disruptive material for the on-water vehicles. We will look at entry-level segments. We're also contemplating applying the power pack -- the electric power pack that's been announced for 2-wheel variants into Powersports. So there's a lot to come, 3-wheels vehicles, ATV side of things as well. So expect quite a bit of novelty in our Powersports industry since it's at our core of everything we do. Moving on to our Marine investigations. Ever since the Ghost power pack intro, we will leverage the consumer benefits that the Ghost provides into several new products and variants. You can expect entry level in different segments, but you can also expect upscale variance. And on this, we will apply our design philosophy pillars. Ergonomics, HMI, all of this will be reviewed and will be state-of-the-art in all of our products moving forward. So a lot to come on our Marine side of things to create that growth. And on the next slide, perhaps more novel. This is -- as it pertains to mobility and services expirations. Obviously, with everything we're doing on the electric front, we will leverage our technical power pack. And we will be looking into 2 wheels, 3 wheels, 4 wheels, perhaps 6 wheels. All kinds of things that become more or less service or mobility. And you can imagine with the new studio in Sophia Antipolis in the south of France, every day a commute becomes insight to resolve and come up with new ideas as it becomes a fuel for our imagination in the future. So we've already started along these and we revealed some of the concepts in 2019 at our Las Vegas show. But stay tuned, there's a lot more to come as it pertains to this mobility and service explorations. Now this being said, even though our prime focus is to deliver utmost innovative products that either exceed our customer needs on a daily basis, it's always good when we get accolades from the trade from the design world. And obviously, we're very happy to have received over 150 international design and innovation awards from different design award competition, some of which are in Europe, some of which are in America, some of which are in Asia Pacific, Japan, Australia. And -- so we're really proud of these awards. This being said, I want to thank you for listening to me for these last 15 minutes. Thank you.

So Denys is with us to take any questions, if there is any question in the room.

On the 2 to 4 years for new product development that you mentioned, it seems like the clock speed of innovation has really picked up across the world. So I'm curious like what did that used to be? And then as BRP begins to leverage some of their more modular, scalable platforms, do you think that, that clock speed of innovation can quicken in the future?

Thank you for the question. Two years is minimal. Obviously, it's a very fast pace. What I can say is that it's always pending the level of innovation, like I shared with you the types of innovation. Obviously, to come up with something that is really disruptive, it's very tough to accomplish this in a 2-year time frame. So yes, we at BRP, we're very efficient at coming up with new ideas. But sometimes to get the new ideas, you get that -- you have to identify the proper insight from the consumer and that takes time. It's not so obvious. We have a metaphor in our advanced concept process that more or less stipulates that, "If it was so obvious, everybody would do it." So we need to identify things that are not so obvious. What will the consumers need in the future? And usually, that takes some time. But as soon as we have identified this insight, tend to come up with great ideas that will be disruptive. Those are -- that is a place where we're very efficient. Now this being said, the advanced concept is one thing. But as soon as we've identified that, the best case scenario is 2 years, as we've done for perhaps less innovative Type D and Type C areas. That's more or less what we can do in 2 years. Don't expect us to be faster than 2 years. It usually takes in average 3 years to come up with the new products. And you also have to remember that from a modular perspective, if you want to create modules that will enable us to have several variants in the future, that also takes time and proper planning. And perhaps my friend, Thomas, will elaborate a little bit more on that in his own presentation.

Page 55. A few things. When you look at the minus 1 to 3 years, 1 to 3 years in the pre-phase, you have the vision, you need to have the idea, you build a prototype and you validate. And I give you the example of the Sea-Doo Switch. The Sea-Doo Switch, we had the prototype -- a working prototype with an okay look. We've validated with customer in North America, and we've validated with a customer in Scandinavia, just to see how the product will be received. The things that are well received and not so well, we adapted the product. And that 3-year phase that we have before we start the new product development is super important. And it's not only drawing, it's building a prototype and do validation with the customers.

Good morning, Denys. Just to look at the electrification. Obviously, it's a new opportunity for BRP. Could you talk about the implication on the design side? What are the biggest challenge from a design standpoint, but also the opportunities that it open up for BRP on the design side with respect to electrification?

Well, one of the big advantage, I believe, is -- Benoit, I can only see your back, but I think I recognize your voice. One of the things that is great is the fact that we're designing everything together. So we're working closely with the electric engineers. We're working closely with Rotax. And -- so it enables us to really shape and really come up with the architecture that will enable us to apply these components in several applications. So I think it's a great opportunity, but the fact that we're designing everything ourselves within BRP and working closely together, design, engineering and product planning, it enables us to design it right and enable us to scale in different types of applications in the future. So a lot of flexibility for new product architectures.

It's Robin Farley. Sorry, we don't get to see you in person. I had a question on product development. It was a while where BRP was introducing a new side-by-side every 6 months. And then when we look at your sketches there for sort of some of the things in the conceptual stage, a lot of it seems very focused on On-Road and snow and Marine. I'm just curious how we should think about kind of the pace of innovation in side-by-side. Maybe it's not as much of a key focus as it has been kind of in the last 5 years or -- that's the question.

Thank you, Robin. I -- there's not a lot of sketches in this, but obviously, you heard José talk about the $5 billion being raised to $7 billion. So obviously, there's a lot going on in those segments with multiple variants in the future. So I will not elaborate. Perhaps Bernard or Thomas want to elaborate more, but there's a lot on our plate on the side-by-side coming forward in the future. And, perhaps, you can also expect us challenging certain -- or coming up with new disruptions in a few segments. So am I done? So next is Sandy Scullion. Thank you.

Thank you, Denys. Can you guys hear me?

Yes.

All right. Let's dive into the powersports. Again, this clicker, somebody help me. Perfect. All right. Diving into powersports, just to do a very quick recap on its size and who we are. As you know, we're dealing in 120 countries, 2,300 dealers, BRP dealers are behind all this and retailing last fiscal 350,000 units. And what that means in a global world industry for powersports, that would be excluding the 2-wheel business of the 1 million units. You have to realize that 1/3 of all the units being sold in our industry are BRP units. So that's -- we're quite proud of this. But even more proud in North America is where we're obviously investing the most with the product, but also in a marketing place for now. And in the last few years or since fiscal year '16, we have gained 10 points of market share for the entire portfolio of powersports product. And in international, it's been quite stable, growing only 1 point of market share, but the -- it's a quite different competitive landscape with much more Asian brands playing at a much lower entry level than we would even want to play in. And what that means in terms of the powersports industry, pre-COVID, COVID and probably what you're most interested in is how we project the next couple of years in terms of industry. As you can see in the graph, since -- between season '16 and season '19, the powersports industry was quite healthy. Obviously, boosted by the [ staycation ] and you see this peak going up in the middle of COVID, and this was all supported by [ dealer ] inventory, not by OEM capacity. And then when you see the curve going down, then that's the supply chain issue is actually hitting the inventories being emptied everywhere. And then we believe that by somewhere around the end of season '22, in the beginning of season '23 will be at the lowest level and then coming back to a more normal level. But if you draw -- if you isolate the COVID section in there and you draw a straight line from pre-COVID to what we estimate going forward, pretty much a straight line, right? So that's very encouraging in a sense where -- we believe that the estimation from season '23 and '25 are quite realistic, especially after what we saw -- what we've seen from Anne-Marie's presentation about the IMI surveys with the purchase and pensions. But what's even more important is what you see on the right. And this is pre-COVID inventory levels that are in our dealer network. And this is the level we have today, which would be the middle section. And what we plan to go forward with is not to build the inventory levels where they were. We're actually planning to lower these levels between 35% and 45%. And at that level, that means $1.4 billion of opportunity in front of us. Now -- and remember, the other additional point that is actually very encouraging with this slide is the fact that we're probably presold now a full quarter in advance, in average between our products. So if you count the presold units, the runway we have with the inventory rebuild and how we see the industry behaving in the next few months and years, it's actually very encouraging. What's also very exciting is the fact that we went from #4 to #1 in terms of OEM of choice. This is measured in the number of units per dealer. So you can imagine, we're pretty happy with this, and we were the only OEM in the industry actually gaining market share in every product line we had for the season for the fiscal '22, that would be last fiscal. And there's a pretty solid reason behind this, and we call that our value proposition. What you see on the left side, especially the gray portion of it, this is a retail or network transformation engine, right? This is a process that includes certification. This is us pushing our network to become better retailers. And the next step for us, and we started that about 2 years ago, is that focus on service, the CX of our Mission '25, focusing on enabling post rider's engagement, addressing the new entrants' expectations, but also elevating the networks competencies, skills, but also the capacity of our network to engage into even more service. And the reason that is important is because with that strong of our network, when we launch new products, we have better chances of succeeding and launching these products. And a good example is the Switch. As you all know, Switch is from the get-go was a great success. In terms of dealer demand, we basically have doubled the demand our initial capacity for the first season by March. This is before the season even starts for real. We were sold out or presold by about 70%, 75%. And so we believe that the business could grow up to $0.5 billion by fiscal '25. We also believe that, that business or Switch will grow the industry of pontoon. But together with Manitou by season '25, we have a strong belief that we'll be the #1 player in the pontoon industry. And again, relative to the strength of our network, you've heard about the launch of the EV 2-wheel. The opportunity for us here since the 2-wheel business is a much more urban business than the rural business, like the rest of our products, we are going to be expanding the network by about 250 dealers worldwide, and this will have a halo effect on the rest of our products as well. Now if we jump into the M25 priorities. So I'll focus a little bit on the Build on Can-Am momentum and cover some of the seasonal products as well. So for side-by-side, you've heard Denys and José talk about a $7 billion opportunity. Obviously, side-by-side is a big portion of that. So it is still our intention to grow the business to 30% market share. There is the continuation of the momentum we have both in ATV and 3-wheel that we'll be supporting. But the PA -- PA&A business is quite healthy and is being driven by the fast-growing fleet of the off-road business as well. So this will bring us to the $7 billion mark. Now if we do -- if we double-click on side-by-side, as you can see on the left side, this has been our performance since the last years from '15 to '22. We've basically tripled our market share or retail. And so the extension you see in the yellow bar, this is what we intend to go for fiscal '25. And this will be with the full capacity of Juárez 3, as you can also imagine. And on the right side, this has been our market share performance, 11 points in season '17, and the target remains at 30% for the side-by-side business. So what that means, the last couple of years, we did gain 8 points of market share for $1.1 billion of our opportunity and for the next few years, this is another 8 points of market share representing another $1 billion opportunity for side-by-side. Where is that going to happen? There's still some runway in a lot of segments. As you can imagine, the Ute-Rec segments or the Defender segment, you see our position right now. So still a lot of runway there. There's runway all the way by the way. But if you look at the right side of the slide, it mostly will happen on the nonpremium segments. So as you can see in the premium segments, we're already for some of them way over the 30% bar. So this is a question of focus from our network, from our product lineup focus and how we talk to our consumers. So I feel very confident that we'll be able to bring these segments -- sorry, to the 30% bar. And the recipe for that, and I don't know if you remember, we've talked about our Texas plan and how we're going to be focusing on the biggest side-by-side state opportunity we had back then. We had, obviously, much lower market share in the South of the U.S. and most specifically in Texas. This is the result today. We basically multiplied market share in Texas, all segments included, by 5, and we're actually over the average U.S. and Texas. So this is about taking that exact same recipe and then focusing on the other next opportunity states and go nationwide with such a plan. So we feel very excited with this. So all in all, obviously, with a strong base of our dealer network, but also the lineup we have in our hands, the winning in Texas, the underrepresented subsegments we have in a side-by-side, and we'll continue to invest in the products and obviously and growing that and not the least, the full capacity of Juárez 3 will bring there -- will bring us to the 30% market share. Now if we go to the 3-wheel business, José talked about it a bit, but this is a Ryker success story. This would be our market share since fiscal '19, 20 points of market share gain in the 3-wheel category. We're actually #5 now on 13 on the 2-wheel business and obviously, clear #1 in the 3-wheel industry. What you see on the right, you've seen that a couple of times today, but you can imagine that other OEMs would dream to have these KPIs in front of them. So this makes us very comfortable in the future growth of the 3-wheel business. If we touch snowmobile, as you can see on the right side, new market share heights and snowmobile never reached before. And you see on the -- sorry, on the left. And on the right side, the preorders of the last 2 seasons have been record high. This would represent the -- obviously, from the annual production, a good proportion of them is already presold. And we're just getting started. We just launched Lynx a couple of years ago in North America. It is positioned as a premium brand. And we understand that some of our competitors don't have the same pace of investment. And with Lynx, we can grow that business even more in North America. On the watercraft business, this is a Ryker success, not a record, but a Spark success story. And you see from season '13 to '21, that's the industry. So you can imagine that the Spark actually fuel the industry, and our intention is to continue to grow that business. And one element or one example of how we're going to do that is on the right side with the Fish Pro. This is a completely different category. And this will address or could be addressed by over 70 million participants or fishermen worldwide. So that's a pretty sizable opportunity. When you think about it, it's less expensive than a fishing boat, it takes also less space. And what's also -- well also very positive is the fact that we have a higher -- even higher percentage of new entrants than Spark with the Fish Pro. So with -- this will ensure the growth of the watercraft business even more. And on the PA&A side, we did hit $1 billion in fiscal '22. We're pretty proud of that. Obviously, a lot of this is driven by the fleet growing very fast, but also in how we're increasing every dollar per unit retail. And on the next slide, you see on the parts side, we've doubled that business in the last 4 years. In the last 2 years, we did invest a lot on the parts service portion of it, and we'll do that even more as you saw from the network transformation engine. And on the accessory side, we've got categories, like side-by-side and pontoons, that have significant attach rates. So that's a significant opportunity for us. So as we grow these 2 specific businesses, very fast, they will contribute to the accessory business. And obviously, on the apparel side and supported by what's coming in terms of the omnichannel and our e-commerce, we believe that is going to be a very positive outcome as well. Back to the service opportunity. You see on the left side, this would be the fleets or the fleet by year, and this is growing constantly. But what's even more exciting is what you see on the right side, that would be the retention rate. So our industry and BRP is significantly lower than the automotive, that would be a customer in a year [indiscernible] them going back to the dealer for service. So every point that we can increase of the retention rate equals $1 million of profit. So there's a lot to be done there. And that fits perfectly with the CX or how we treat our customers post service and how we engage our dealers and focusing more on that part of the business rather than just focusing on selling the units. So in summary, it's pretty simple. We are on track to become the #1 powersports company in North America. We still have large growth potential for watercraft or side-by-side, more specifically, but also 3-wheel, the parts and accessories business is accelerating and with what we have in our hands right now, this is going to continue. And post-COVID environment is creating opportunities that we are ready to seize. This has to do with the runway we have in front of us and all the presold unit also we have in front of us and the capacity we're actually investing in with Juárez 3, which is going to be full up and running by beginning of fiscal '24. On that, we'll go with questions.

Just a question on the dealer inventory, your sort of longer-term plan to have sort of permanently down 30% to 35% versus pre-COVID levels. I guess what's your degree of confidence that the rest of the industry is going to have a similar kind of discipline around network inventory?

I don't think anybody was very happy with the situation pre-COVID. And on the dealer side as well, dealers are making more money today, selling full MSRP, and certain of our categories are actually selling over MSRP. Going back to higher levels of inventory and starting to discount because they're going to be the first one feeling it by discounting. And the OEMs having that discipline of fueling supply close to equal to demand is going to be the challenge. And internally, we've made the right moves. We had 2 years behind us to prepare for that because this is a great opportunity for the industry. And we believe we have the plan in place to make sure that we calibrate this, and we come to a soft landing and to reach these levels of inventory.

This is Benoit. You talk about the market share gain in North America that was more pronounced as opposed outside of North America. You've been talking about the Asian brands that are getting maybe more traction outside of North America. Could you talk about how the customer is different outside of North America? Is it more sensitive, less focus on innovation. And I'm just wondering whether the launch of the nonpremium models is a response to better attack or attack the growth opportunities outside of North America?

Well, there's also a context around Asian brands where within the 2-year period of COVID, they seemed to be a little bit less affected by the supply chain. So that opened the door to some of these brands, also in North America, by the way. But you also have to realize that, take Europe as an example, the usage of an ATV or a side-by-side is mostly used on road. They are on-road legal. So in terms of the capacity of the units, if you use that unit for on-road, it will probably do a good job and lasts for a long time. But being used in a real off-road environment, then you need to raise the quality and you raise the reliability and the performance of these units. So -- and this is why in these different countries where you allowed to ride on road, well, that opened the door to lower entry-level brands in the market.

Okay. A quick question. I mean, if we just look at that first bullet point saying that you're on track to become the #1 powersports company. If we think back, historically, you talked about becoming the #2 player and then the dominant #2 player. I mean, is this a notable change in your intention of where you guys think you can go over the next few years? Or do you not view it as such?

We like to be #1 everywhere. So -- but when you think about it, the biggest industry outside of the 2-wheel business in North America is the side-by-side industry. We're a clear #2 right now. We have plans to become very close to the #1 with a 30% market share, and our intention is not to stop there. So this speaks to the momentum we have with all of our brands. And as you saw from both watercraft and snowmobile business, we're over 60% market share. So I mean this is more than in reach. If you go back 5, 6 years ago, with being so far away in the side-by-side business and even in the ATV business, this was not possible, but this is [ in retrain ].

Question over here, on the 30% market share. Like what are you assuming for industry growth within that? And then maybe as a follow-up on the dealer inventory question, you talked about a $1.4 billion restock opportunity. And then incremental revenue for the whole, I guess, powersports is $2 billion. So is that implying that there's something like $600 million in new orders? Is that like how do you split between the restock versus, I guess...

No, this is going to depend on how fast we do rebuild the inventory. Obviously, we don't know what we don't know in front of us, but still, we have that in our hands as an opportunity. If retail continues to pick up, as per IMI, as an example, while inventories will be lower than that, and we'll be retailing more units than the plan. So for us, I think it's a conservative way to look at how we project the industry. And as you saw, the -- what I showed you in terms of the industry is the whole powersports. We will see a dip in the industry on side-by-side as we speak. And coming into the next season, we will see capacity growing from pretty much all the OEMs, but also from us. But the projection in the next 2 years is basically in the same area of where we projected the industry pre-COVID between 4% and 6% a year. So it's not that significant.

Sandy, can you discuss your dealer footprint? Where might you be over penetrated in terms of product or geography, or where you might be under penetrated again, products and geography, and the opportunity at existing dealers to put even more product in those [ deals ]?

The North American network, I would say, today, is in a mature state. There's some phasing out and phasing in dealers, but it's not significant. And there's not a lot of open spots in North America. There are some adjustments. We will do with the Switch product since we launched it only last year. So there's a second phase to the Switch product. But for the rest of our business, how the math works as we grow market share, for example, in side-by-side, then we need to probably adjust some of the regions, but it's nothing significant in North America. The 2-wheel business with EV will be the trigger to more changes towards the urban areas, which were not super developed right now, both in North America and in Europe. But more specifically, in Europe, that's a bigger network development play than it would be in North America, if that helps.

Yes. Just one quick question on Slide 73 with your electrification progression. It looks like you have the Sea-Doo there as the next product to go electric. I'm wondering if that is the case? If so, why? And then is there any natural ceiling or pushback with respect to the market share you can get in PWC or snowmobiles, either from the dealers or choice?

Well, I don't know what you're seeing on the slide, but I don't think you're seeing a watercraft there. And if it was, it's -- you shouldn't take that as our next step in EV. It is not a watercraft. But we're also looking at growing the industry, right? As José said that we will be in every category of powersports with EV. This is not about only growing the market share or replacing or cannibalizing other products, this is about growing the industry with new types of customers that are looking for that, right? To your example, in watercraft, if that was the next product. There are many lakes in Europe, as an example, you can't ride watercraft. Well, that's a new market. This is not gaining market share against a competitor, right? And the EV would be allowed as an example. So EV for us is more than the technology transition. It opens up to a new customer base. I mean, the -- it is a relatively small industry. We believe we can grow it. To what extent? That's still to be known. But right now, we are focusing on the markets where the runway is right in front of us. This is where we're investing the most in the product side, on the manufacturing side in terms of capacity as well. And within that transition to EV, then we'll see what opens up, and we'll be there to react.

I guess if we look at Slide 78, you touched on this a little bit in your presentation. All of the market share gains and then some are coming from the nonpremium segments. In fact, it looks like you're expecting to lose some share on the premium end. What does that mean from a margin perspective? Are those products innately lower margin? Or could you get those margins up to where you are today?

And just to make a point here, we're not talking about entry-level products. We're talking about in the Defender, let's say, HD10. Well, dealers today, they have x number of units of allocation. So they'll focus their purchases on the Lone Star on a big -- on the full premium, fully packaged unit. And for some reason, they're not focusing on the entry-level packages, even though it's high HP and so on. And it's our job as well to get the dealers into that. But selling an X3 Turbo RR that is not fully equipped, it's still very good margin for BRP. So yes, you may imagine some margin erosion from the mix because of that. But the opportunity is so big that you'll gain in volume and obviously, we'll be able to leverage this with the accessorization afterwards and so on. And we're typically very creative and not losing too much margin in the process of a mix change.

So we're -- we have a short break of 15 minutes at the moment.

Thank you. [Break]

We are ready to restart the presentation, and our next presenter is Karim Donnez, President, Marine Group.

Thank you very much. Good morning, everyone. So let's talk about Marine and the opportunities we see in this industry. So a few years back, if you recalled José mentioned it in the intro, we put together the next wave of growth for BRP. Part of it was the Marine strategy, M25, which was the buy, build, transform. So in 2018, '19, we wanted to start by creating a critical mass that would allow us to deploy the strategy. We acquired in 2018 Manitou, Alumacraft and 2019 Quintrex in Australia. So since then, we've been at work to bring all of the design, innovation, technical expertise that BRP is known for into the Marine industry. We've strengthened the dealer network, and we've made sure that the manufacturing capabilities and capacity could follow and keep up with the pace of growth for the [ company ]. Now we're entering the third phase of our M25 Marine strategy, which is the transform. The intent is to redefine the boating experience. So we'll be introducing a new Manitou, a new Alumacraft and a new Quintrex, all powered by a brand-new Rotax Ghost outboard engine. The Rotax Ghost is an essential part of the strategy and here is why. When you ask a boater what he wants, a boater wants value, performance, ease of maintenance, a swimming platform and more space in the boat. Well, you check this project Ghost check all the boxes, in fact, enhances the value that you get for the package boat, enhances the space you get on the boat and in addition of this, you get the swimming platform that you can't get for an outboard engine. So it does overcome any engine drawback, sterndrive, inboard or outboard that's project Ghost. We've taken Ghost and we decided to apply Ghost to the new Manitou, a new Alumacraft and a new Quintrex. That would make for a fully integrated package boat that would go to market with a completely new design, a lot of new functionalities and the ease of customization. With all of these new boats, we intend to reach a first milestone of $1 billion of revenues by FY '25. Now when you look at the way we want to do it, at first half, Quintrex, we have some strong market share, and it's growing. We want to maintain and sustain the market share growth for Quintrex. For Alumacraft, we decided strategically to refocus on a richer mix, so premium boats. Now we want to go recapture market share with the new Alumacraft Ghost. And you see the large bar, which is made of Manitou is to go get market shares in all pontoon segments, and we'll deep dive a little bit into Manitou as we believe it is a very important part to reach the $1 billion milestone. So when you look at the way we've considered the new Manitou with Ghost project, we studied and José and Denys mentioned on how we do our studies and make sure that we get validation before we launch new products. So on the right-hand side, you see a product benchmark. That is actually an internal study, and it's always the same methodology we're using. So we use the same methodology for Switch and Manitou. So strong product benchmark and what we're looking at positive reaction. If we get more than 80%, it's very strong. Interest in our product, more than 60%, it's strong. Intent to visit a store 30% strong and wanting to learn more, 35%, is strong. What you see for Sea-Doo Switch was quite good, everything above benchmark. And actually, it was our best benchmark to date was Sea-Doo Switch, up until Manitou Ghost, which is [ now ] the new benchmark for us. And when you look at the positive reaction, 95% for the new Manitou with Ghost, like people really want to learn more. They are very interested in the product and want a visit our store just to get a feel for the experience. So if you're asking us why we feel quite strongly that the new Manitou with Ghost is an attractive value proposition, well, here is an answer. Now we talk about the full spectrum. And if you take any BRP customer, we want to make sure that there is an offering for anyone looking for a pontoon. It could be a small pontoon, a large pontoon, could be an affordable pontoon, could be a more expensive pontoon, BRP will have an offering for all of this to bring the full spectrum of the pontoon industry. With that, we would introduce new products every single year going forward, and that starts this year, this summer. With this new product introduction every year, we intend to take Manitou, which is low single digit right now. Actually, it was low single digit in 2019. The industry has been growing. We sell more units, but their market share remains stable. We intend to take this to 10% mark as a first big milestone for us. For Alumacraft, we intend to bring this to the low teen percentage, and for Quintrex from the high 50s to the low 60s in terms of percentage by FY '25. So quite a strong increase here. Now it's good to grow, but you want this to be a profitable growth, too. So 3 things we decided to put in place to ensure that it's a very profitable growth. First one, efficiency; second, capacity; and third one, making sure that the retail value proposition and the dealer value proposition is second to none. So you are well aware of the side-by-side modularity approach that we've deployed, and how and why we were able to introduce a new side-by-side every 6 months, where we've applied the same recipient to Marine and that's what you'll see. So we have a lot of commonalities between the different platforms on the transom, the engines, the layout, the length, and that would make for a very simple assembly in the factories as well. So that's about efficiency. Second, we've been investing in manufacturing capacity in Manitou, doubling the size of the plant right now, the capacity of the plant right now. And Alumacraft, we are actually getting ready to introduce the new Alumacraft with Ghost, which means we need more efficiency on site. We're investing heavily on this one, making sure we can industrialize most of the processes. Quintrex, same, optimization of the layout and making sure that we have new equipment to increase the production there. Third one, retail. So what you see here in terms of the size of the network, by FY '25 compared to the year of acquisition, we would have grown the network by 120% for Manitou, 60% for Alumacraft and plus 10% for Quintrex. If you recall, Quintrex is the market leader in Australia. So they have a good reach already. We feel like there are now opportunities for expansion, but the dealer network is quite strong already. So essentially, we're taking Manitou, Alumacraft, being really strong brands in the Midwest and make them everywhere in North America. With that comes revenues. So we expect every single of the boat brand to have doubled the revenue by FY '25. And you see that Manitou will be actually 4.6x the revenues that we had the year of acquisition by FY '25, 2.7x for Alumacraft and double for Quintrex. So our path to $1 billion revenue essentially is to bring innovation into the market and you had a prime example of it yesterday. We want to make sure that we drive market share, we industrialize the manufacturing footprint, and we improved the margin with the modularity approach. So we're going to redefine the boating experience. We're going to make sure we have increased capacity and that the network is set for growth as well. Stay tuned, global reveal will be in August for the new Manitou, new Alumacraft, new Quintrex with the Ghost -- Rotax Ghost technology. With that, I would open the floor for any questions or comments. Yes.

Can you talk about the decision to go with the 2-stroke engine versus 4 stroke and how you overcome the perceptions of 2-stroke that are out there in the market this year.

Yes. Thank you, Gerrick. So essentially, with this, first of all, we decided to go for Rotax ETEC, direct condition 2-stroke technology because it's the best technology out there. Second, that technology allows us to put the platform in the back of the boats that nobody can actually do with an outboard engine today. So bear in mind, we'll be selling the package both as well. It will be the most fuel efficient, the least maintenance for an outboard engine, emissions will be really, really good. So at the end of the day, we just feel like dual performance of the engine will be second to none. So we feel quite strongly about the package, both as it stands today. In terms of perception, well, the boat will be performing very well. We'll be selling the overall experience, and we believe that the benefits of the platform will overcome by far the conversation about the technology in the back. You're not buying an engine, you're buying a boat. Thank you.

Yes. So obviously, you've been talking about the capital intensity of your new Manitou, okay, that will bring really as standardization to the boating industry. I would be curious to know better about how fragmented is the competitors wondering whether they will follow in terms of capital investment. It seems that -- it's still a very fragmented industry. So I don't know about the $84 billion market, top 10 represent how much of the pipe. And also, you're well established in PwC aluminum fishing boat pontoon, but there's also other segments. Just wondering over time, if there is a path towards growing outside of those 3 core markets?

Yes. So I'll start with the first question, which is competition. I'll get back on a second about the industry and the same. So you have a couple of very strong players existing in a pontoon business today. Obviously, we intend to challenge this position, and we intend to become, as Sandy mentioned before, a key player in the pontoon industry. You have a lot of small players and you probably will be tougher for them to follow the pace of innovation and the capital intensity required to keep the market positioning. So we expect eventually this industry to consolidate very much like we've seen elsewhere. But yes, we know exactly who to watch, if that's your question.

In order to bring the innovation and engineering level to the -- to what we're doing with what you saw yesterday.

And that's part of the beauty of what was just announced a couple of weeks ago, having 1 CTO overlooking the entire portfolio of technical capabilities will help both marine and powersports. Now your second question, just in North America between the pontoon and the aluminum fishing, that's 50%, 5-0, 50% of the industry. So let's go get this fair share of market share in these 2 segments first. And then, of course, we're open to the rest of the world and the rest of the segments.

Hi, Karim. Congrats on those results in terms of increasing the revenue since acquisitions is pretty impressive. Can you talk about market share and brand awareness for Manitou and Alumacraft and now -- and how it was when you acquired the brands?

Yes. So Anne-Marie, please feel free to chime in if as you see fit. But essentially, the brand awareness alone of Manitou was not great for people not knowing the brand. But we did a study when we acquired the companies. It was up there with the leading brand in terms of reputation for people knowing the brand. So it was good when it was known, but it was not well known, if that makes sense. So we're working very hard and starting this summer, we'll be investing massively. We wanted the product first to showcase something that is a BRP product, we have it. Now we'll be investing massively in making sure that the world knows that Manitou exist, and if there is no comparison in terms of value proposition in the marketplace. So that's for Manitou. Alumacraft, extremely strong brand in the aluminum fishing as probably one of the top 3 actually in the U.S. right now, if you ask anyone about 3 brands in aluminum fishing, you get Alumacraft. So it's a bit of a different positioning. We see a ton of potential on the brand recognition for many times.

And is there any idea or intention to link these 2 brands to the BRP heritage or BRP name the Can-Am name, is there any way you can leverage your brand awareness in Sea-Doo and in the marine your other products to these guys or not the plan right now?

We have a couple of internal projects that cross saving and not saving and making sure that people would know actually that if I'm looking for an ATV Can-Am because there is a lot of cross-selling people having an ATV would have a fishing boat very often, making sure that they know that if I get a Can-Am, then I want on the Alumacraft, it's the same family, I get the link accessories across the brands as well. So we are working hard to leverage and make this known as we go.

BRP logo on the front and the back. I don't know if you noticed yesterday with the new Manitou, but the BRP logo was there. Then with the new product, the BRP logo was there.

Karim, just a 2-part question for you. Firstly, what has the dealer feedback being like for the new products, if they have had the opportunity to look at them? And secondly, could you just remind us if there is an overlap between pontoon and power sports in terms of deal network and the products that carry?

Yes. So on your first question, we have a dealer consult for all the brands, okay? So we have one for many come, et cetera, like we have for power sports. So we had a dealer meeting actually in Pampa in February, a dealer consulting meeting. The feedback actually José, Denys, Bernard came for this event. It was really important for us to get the feedback. We wanted to make sure they were pooled with the overall package, et cetera. The feedback was overwhelming. In fact, they were challenging our capacity to produce enough units to support the market and the demand that they are expecting from these units. So we had a couple of those dealers, they carry multiple brands. They started to be worried for the rest of the line that they carry, which is good news for us, I guess. On your second question, we see an amazing opportunity to have more and more BRP dealers, meaning that if you get a ton of products from BRP, we believe we make better dealers that would be actually be -- it's better for them, better business and better for BRP. So we see a lot of opportunities to grow the Alumacraft, the Quintrex and the Manitou into the existing BRP network, way it makes sense, doesn't always make sense. But we have a lot of runway. So we feel quite strong about it. The other question or comment. Okay. So with that, I believe Thomas is next.

Ladies and gentlemen, First of all, my apologies for not being with you in person, and thank you for following my brief presentation via video. We choose as a title, a form to win. And I will show you that this is exactly what we are doing. As José explained, we have improved our organization. Nevertheless, I want to give you some references to what was predicted in our previous Investor Day. There, I presented you that we have safety and quality as our priorities as well as a huge growth plan ahead. On health and safety, we came from a good above 1 to a very good 0.5 accidents per 200,000 hours worked. Our supplier quality is stabilizing around our long-term goal of 50 ppm. Also in warranty, we are stabilizing around our long-term target. All this while we have basically doubled our production volume. One of our advantages is our unique process for product creation and product life cycle management. For today's meeting, we want to take you a little bit into the kitchen with 3 examples. All 3 examples have something in common. They are based on a long-term strategy. A true product modularity and manufacturing footprint and a good supply chain you can rely on in crisis times, doesn't come in quickly. This is years of dedicated work. Let's have a look at product modularity first. On the left side, you see our sport utility Can-Am Defender. All variants from standard to long wheelbase 3 to 6 up, 4x4, 6x6 are using the same frame technology, the same fixtures and are produced on the same machinery and painted in the same system. On the assembly line, we are using the same pickup points and modules. With this family modularity, we can follow changes in the market demand relatively easy, and the engineering process of dairy weights is much faster and safer. We call this platform BM2 and the work on this started more than 10 years ago. On the right side, you see some examples of cross-product line modularity. All 4 products use the same engine, the same gauge and the same LinQ system. With this modularity, we reach automotive volumes that deliver cost and quality benefits. And in the case of LinQ, we offer with each new product, a whole universe on existing customer solutions. For example, our ACE advanced combustion engine family provides for more than 80% of shared or common parts to cover 2 cylinders, 3 cylinder and even turbo applications. So the combustion engine system itself is highly modular. This propulsion system module is then used across our product lines on water, on snow, on-road and off-road. On gauges, we used the same approach in the last 5 years, we standardize them from 2 technical platforms to 1. Also, we had more than 30 variants of gauges, today, it's less than half to cover our entire growing lineup. New technologies like e-propulsion are set up as cross-platform technologies from the get-go. I'm thrilled to show you our brand new high-voltage platform that is a very nice example for this strategy. With the availability of EV technology, we analyzed what needs to be engineered by ourselves and what we can buy from the market. And if so, we look where are the rather the innovation partners for this or where are the classical commodity suppliers. We define software, battery, inverter, electric engine and charger as critical components with respect to product performance, cost and customer experience. With this, we started investing into required know-how right away. The buildup and acquisition of additional know-how is ongoing and we start our rollout with Can-Am. Now where does this overarching modularity approach lead us? Based on our current modularity levels, we are targeting to double our platform and component modularity within the next 10 years. This means that new products such as the motorcycle and marine are fully integrated and existing products will go even deeper. We still have a runway to take modularity and respective efficiency and time savings to the next level. The windfall profit of this strategy in the crisis is that we could prioritize modules to products with a high dependency on seasonality, EG, getting gauges and engine controllers to snowmobiles as long as we have snow conditions while other product lines could catch up at a later point in time. On the supply chain side, we established a 2x3 approach. Our main cornerstones are resilience. The existing supply chain needs to be as robust as possible. And agility. We deploy our know-how to make changes where required. The quality of your supply chain is always a very important part in terms of innovation, quality, cost, but also time to market. In a strong demand situation like the powersport industry is in for some time now, the capability of suppliers to produce and deliver on time becomes super critical. If this gets superimposed by a pandemic, you really learn to value partners trying to keep their deliveries up in time. We have those partners, and we are grateful for this. We made more than 8,000 short-term engineering changes in the last year to follow available material and suppliers on the market. On the motor control unit for snowmobile, we faced missing semiconductors to complete the modules since we have both software and hardware competencies internally, we were able to adjust our printed circuit board assembly to available parts to secure production. Also, we rerouted our main supply routes completely while under full production. We added significant abound of material in our direct access. We changed supplies and spend a lot of money in chartering flights. At the end, it's all about resilience and agility. And when you look at the relative market share development in the last quarters, we did better as the competition and gained market share in all categories, as you can see on the right side. In the current situation, we are building as many products as we have parts available. The same counts for our competition. Who handles supply chain more efficiently wins the race. In the last 5 quarters, we have a track record to outperform the industry in retail crown by between 5% and 23%, which shows that we are doing not that bad in the management of the supply chain and manufacturing operations in this difficult situation. Speaking of manufacturing, let's set the crisis aside for a moment and look into global -- our global manufacturing strategy. We have set this up along 3 main drivers: resources, know-how and cost. With our global reach, we are able to get the best out of all 3 drivers through our manufacturing network. I will cover resources and cost in a second. On know-how, it is vital for us to ensure the needed education levels of our employees to handle our production processes, but also to enable production, innovation and collaboration with R&D in a direct collaboration with R&D. This is spearheaded by our Canadian and European facilities, where we have a tight integration of R&D, sourcing and production teams. That allows us to invest in selective technologies that make a difference. These centers of excellence develop leading-edge manufacturing technology tap into local high-tech suppliers know-how and roll out everything at scale to our entire manufacturing network. On the other hand, our Mexican footprint allows us to tap into a high degree of labor availability while leveraging attractive production cost levels. Over the last 2 decades, we built a high level of trust with our Mexican employees. This goes both ways, and we are focusing on employee engagement on development initiatives. We are convinced this is the key to the ongoing success of our operations in Mexico. Our manufacturing strategy was implemented with major expansion programs along our Mexican sites. We started with our Juárez 1 operation, small and humble in 2007. In 2013, we opened our Querétaro site. 2016, our second plant in Juárez that we extended 2018. And in 2021, we opened our third plant in Juárez. Next week, we are opening our machining plant in Querétaro. Next year, we will open the expansion of Juárez 3 and we will start electric motorcycles in Querétaro. By then, we will have more than 75% of our products coming out of Mexico. If you take a spotlight at 2 of our main criteria, you see just on labor availability and production cost difference that is justifying our approach. With then around 14,000 employees, we have a cost advantage that is leveling factor VII to what we have on other sites. You see leveraging strengths of each site in the different countries creates a very lean and agile production network. Another key ingredient to our current success and we are making sure this continues long term. To underline the reliability of our strategic planning, I would like to show you a slide that we presented in the 2019 Investor Day. We still confirm what we promised almost 3 years ago. And on top, we are increasing the target of our fiscal year '25 lean value contribution from $300 million to $400 million. To wrap up I want to show you a few details on our lean value program. First of all, it is supported by 5 main pillars. Later, Sébastien will have more financial details on all of them for you. My section provided you insight on 3 of the pillars. We already discussed a few highlights on our modularity and production cost plans. On the purchasing side, we focused more on the crisis, but there is way more to it. We are implementing multiple initiatives to further improve our platform margins through our design to quality and cost pipeline and artificial intelligence-driven costing and standardization. We still see a huge runway to further improve our material cost in the future. Aside from that, we are working on our existing potentials to source more near production sites to leverage cost and supply advantages while staying FDA compliant. On the other hand, we will increase the share of material we source in best cost countries to multiply the savings. As you can see, we are not stopping to push our operations to the next performance level. This is not only the outcome of a well-defined strategy but also requires goal-oriented day-to-day execution. We are proud of that we have achieved so far. And with a great team of workers, technicians, professionals and engineers in our back, we are confident that we will continue to perform to win also in the future. Thank you very much for your attention.

Any questions for Thomas? So we do not have any question at this time. So thank you, Thomas.

Thank you.

Thank you, Thomas Uhr. Just for everyone's benefit, Sébastien is also known as Seb to all of you, so. Earlier this morning, José covered our 10-year plan. And as you saw, it was obviously a very, very good result on a 10-year basis. However, when we look at our results over the last 4-year basis since we launched M25, just after fiscal year '19, we've also delivered exceptional results with strong revenue growth, 13% CAGR and also strong normalized EPS growth of almost 50%. And as you all know, this year, we are also calling for record results with, again, strong revenue growth in the range of 24% to 29%. And also very strong normalized EPS growth as well for this year. So expecting another very, very strong year in fiscal year '23. We also delivered strong financial results, but we're also a very good cash generator. And over the last several years, we've generated significant free cash flow, all the while investing significantly in the business as well and driving exceptional organic growth. And when the situation normalizes from a supply chain point of view, our expectation is that we will continue to be a very, very strong cash generator as well. With these exceptional results that we've had over the last several years and the strong cash generation, when you look at the return of capital, we've done where shareholders since fiscal year '16, we've returned over $2.6 billion of capital. And just since the beginning of the year, we've done over $300 million of share buybacks. We've increased our dividend by 23%. And you'll be happy to hear that we still have 2.8 million shares still available to be repurchased under our NCIB. From a balance sheet point of view, the management team's perspective, the Board's perspective has always been to maintain a strong balance sheet. And when you look at our balance sheet priorities, one, it's making sure we have access to liquidity to continue funding our growth; two, making sure we have the financial flexibility to manage through cycles. We like to have minimal short-term obligations, and we also want to maintain access to good credit conditions such as the covenant lite structure we have and also the low borrowing costs. When you look at our overall leverage performance since we IPO-ed, we IPO-ed just under 3x levered. We finished Q1 at 1.7x. And as recently as yesterday, we've announced that we've increased our revolving credit facility to $1.5 billion, therefore, ensuring that we maintain our financial flexibility. We've delivered obviously great results, but we've also improved our financial performance. Gross margins have improved over 400 basis points. Operating expenses as a percentage of revenue has also reduced by 220 basis points, resulting in a normalized EBITDA margin improvement of over 660 basis points. Now our ability to unlock lean value is also built into our M25 plan, and it's expected to drive better margins as well when you compare it to fiscal year '20. Overall, in the M25 plan, we expect 350 basis points of EBITDA margin improvement, one of them coming from a net improvement on sales program efficiency of 100 basis points. Thomas, Denys talked about product design, cost improvements. So the lean pillar from a manufacturing point of view is 100 basis points. We will maintain that operational leverage that we have from our support functions with 200 basis points. If you factor in some mixed elements, some inflationary pressure elements, the net improvement in the EBITDA margin will be at 350 basis points. So very strong improvement in overall profitability metrics. Now going into the plan. One of the reasons why I like this plan, it's a bottom-up plan. That means that we have actually people accountable to deliver on this commitment. Sandy and Karim walked you through the revenue drivers. And I know the reason why I like this plan is there are certain white space opportunities that we will be obviously tapping on in the next few years, but these white space opportunities will also provide growth after M25 and therefore, driving further growth after our mission. Now looking at the drivers of EPS goal to bring us to $13.50 to $14.50, obviously, volume growth will be profitable growth and therefore, resulting in EPS gains. We do expect a normalization of the sales programs and net impact positive of 100 basis points, but we are very favorable versus pre-COVID versus fiscal year '20 from about 300 basis points now, so net 100. The supply chain environment is turbulent. We are incurring additional costs. Thomas talked about additional freight costs, additional labor costs. And that by '25 is expected to normalize and provide a positive development. The lean initiatives, obviously, will pay off. And that will be offset in part by higher depreciation expense. Obviously, we will continue investing in the business, therefore, coming with higher depreciation expense versus where we are today. From a capital allocation priorities, no change to their strategy versus what we've communicated in the past. Obviously, fueling our growth is #1. So we'll continue investing in the business. You saw all the new products that we will be introducing or that we are working on, and we want to make sure that we are well positioned for life after M25 and obviously, returning capital to shareholders as part of our priorities. We'll continue executing opportunistically on share buybacks. We will modestly increase our dividend and our expectation is that we will continue running with levels of CapEx similar to what we are seeing in fiscal year '23 in the future. In conclusion, after today's presentation, BRP is a unique asset in the powersport, in the marine industry. We have a strong portfolio of large global businesses with high barriers to entry and what we are doing in the marine industry is increasing those barriers from a complexity point of view and from a resource point of view, financial and human as well. We do have industry-leading capabilities as we've highlighted this morning as well. And we've got compelling growth opportunities, not only from a market share perspective, but also from the white space opportunities that we are exploring. Our business model is efficient and scalable. We talked about the modularity platform. We talked about our footprint know-how that we have in Mexico, which is expandable. And lastly, we've been a disciplined allocator of capital, and we will continue doing so in the future as well. We've driven significant value to shareholders and our objective, José, myself and the rest of the management team to continue to strive to do that for the future. And with this, I will take your questions.

Just I guess an obvious question. Can you talk a little bit about the slope of the line to get to our M25 revenue and EPS, is that linear? Is it -- what are you factoring in there? Can you talk a little bit about -- once we get to fiscal '25, how the free cash flow looks like? Maybe just give us a sense of where you think working capital as a percentage of sales could land maybe the new CapEx number. We've obviously invested a lot in the business now. Is that going to continue? Just thoughts around free cash?

Yes. Obviously, this year, as you saw in the guidance, we're expecting strong revenue growth -- but next year as well, obviously, we've invested in capacity, which we're not fully leveraging today from a personal watercraft. We talked about a 30% increase in capacity, Juárez 3 came online last year, where will not be benefiting from this full capacity this year. Plus we have more capacity coming online early next quarter -- early next year. And obviously, we're investing in capacity projects as well in other product lines. So next year should also be a good growth year. And we have the inventory replenishment opportunity as well, which we believe will be happening more in fiscal year '24 versus fiscal year '23. In terms of CapEx investments, it will be sustained. Innovation is critical in our business. We understand that very clearly. And innovation is capital intensive, both from a tooling point of view, but also from a manufacturing process point of view. And so we are expecting to have high levels of sustained investments. And your third question. Working capital, yes, as you saw in the presentation, we've invested important amounts of money last year, almost $500 million in working capital. Q1 as well as intensive from a working cap point of view. This is driven from the supply chain situation. And as the situation comes back to a more normal level where raw material inventory goes down because obviously, with what we are experiencing, we want to make sure that we have the components when it's time to produce them. So we've increased safety stocks from a raw material point of view, we've increased as well our work in process inventory with retrofit. And so obviously, when that normalizes, it will be a tailwind of cash inflow from working cap. Is it going to happen in '24, some of it in '24 and some of it in '25 as well.

Sébastien, what assumptions have you used for retail sales, industry retail sales for the next 2 years and given the macroeconomic outlook?

Well, you saw the IMI survey that we did. And if you compare versus today, it would be -- the realistic is up 10% and the opportunistic, I think, is up over 30%. We use low single-digit industry growth assumption in our plan, so more conservative than what we saw in the survey. And from maybe your point on macroeconomic, obviously, I mean we're not economists. We run the business as we say -- as I often say, we can't run the business with one foot on the gas, one foot on the brake. We've got the financial flexibility and the wherewithal to face any slowdown if it were to happen. Nonetheless, I mean, the fundamentals of our business are super strong. And if a slowdown does happen, we'll manage through it. And we'll make sure that we continue to be well positioned to grow once the economy -- if it does slow down once it come back to make sure that we outperform the industry as we've done. Yes, Robin.

2 questions. One is, I know you still have some share repurchase that's authorized. But if we were thinking about -- is there a leverage target looking further out where we could think about what might be authorized in the future where you're comfortable getting to x percent leverage and we could figure out what we think that means for percent of share repurchase?

Well, when we IPO-ed, we were at 2.9x, and we were comfortable operating at that level. The reason why we are comfortable is the maturity of our instruments in the covenant lite and also the capacity that we have on the revolver. But obviously, we want to make sure that we have flexibility to be opportunistic if either it's buybacks or if an M&A were to happen. And so operating at 2x is an area where we like operating at.

Okay. Great. And then my other question was just on dealer margin, just BRP is sort of known right to pay dealers higher margins, you're growing a lot of share. Some other OEMs are reducing dealer margins, is there opportunity there for BRP too?

Well, we don't necessarily pay dealers more margin. They make more margins selling our products because of the whole ecosystem from a dealer concentration point of view, innovation that we bring to the market, therefore, not needing to discount. Obviously, it's -- we want everyone to win in the commercial space. The dealers we want them to make money. Obviously, we want BRP to make money. So it's a fine balance, and we adjust dealer margins as the industry evolves, but it's something we do pay close attention to, but dealers acknowledge that they are making more money selling our products, not because we're more generous to them from a financial point of view because we are very generous from a product design and product introduction point of view, that's why they love our brand.

Yes. Sébastien, obviously, a macro environment, very tough to predict. But what are the actions taken by BRP that make BRP more agile than the past and in case a downturn occurs in the powersport market?

Well, Sandy and Karim talked about it, José as well. Obviously, our product portfolio as an OEM, we are a leader in industry and it gives us a very strong position. And so we are one very diversified from a product line point of view, from a geography point of view as well. And usually, if a recession happens, sometimes not all the regions, all the product lines are impacted, the same way. We have seasonal businesses as well, winter, summer. So that diversification is obviously a huge asset that we have. We have obviously a cost advantage from a manufacturing point of view with a well-established base in Mexico. From a balance sheet point of view as well, we are -- we have that flexibility. As I mentioned, we've just increased the revolver. And also one other element is there's no inventory in the network. And so even though if there were to be a slowdown, obviously, we'd still need to provide inventory to the dealers because they have very little inventory to show for. And so that would not require us to stop production in order to manage output and manage dealer inventory, we'd be able to ease in more easily into an economic slowdown if it were to happen.

Just hoping you could maybe bridge the EBITDA margin outlook. You guys are calling for 350 basis points off of that 20 base doesn't seem to imply really any expansion from here. So given that you're expecting double-digit top line growth, you have another $100 million in lean cost saves, why aren't you expecting more sort of profitability improvement?

Well, we finished fiscal year '22 with a record EBITDA margin of 19%. And some of that was context related with COVID, where we had very low levels of sales program. And so we do expect a certain normalization of sales program. So that's going to be a headwind of about 200 basis points. So if we were to compare to where we are today, which, again, was a record year at '19, a benchmark in the industry. Coming back to 17%, which is our expectation for M25, it will still be very good performance on that front. So it's a number where we continue investing in the business, continuing investing in R&D and making sure that we fund the business for the years to come as well.

[indiscernible] Question, but maybe I'll follow up on that. Can you dimensionalize a little bit some of the either OpEx impact because I think on one of the slides before that EPS bridge, you sort of talked about OpEx down, but that was versus 2020. But from here, what are you assuming for either R&D or other inflationary costs? And then is there also -- in terms of the margin, some impact from like a variable contribution perspective on the units from some mix impacts with where some of the growth is coming?

Yes. Well, from an OpEx point of view, as a percentage of revenue, we expect it to be relatively flat to where we were in fiscal year '22. As I've mentioned, for us, R&D as a percentage of revenue will remain in the levels where we had it in fiscal year '22, it might even go a bit higher because we're investing on many fronts. And also from a volume point of view, yes, we are getting benefits. It's compensated somewhat from mix. We've experienced a very rich mix in fiscal year '22 and that's going to offset some of the volume benefits that we're seeing from a cost absorption.

You guys have not been overly acquisitive in the past, a few tuck-ins here and there. But I'm curious if you were to be more acquisitive going forward, what sort of areas would you focus on from a technology or a product standpoint?

I will -- actually, if you want, I'll ask Denys, who is our Vice President of Strategy and M&A, probably to answer that question and if you're.

One of the main focus we want to do is really around the technology in. So we want to make sure we buy a technology that is modular that we can put in all the products. That's been the #1 focus. And then we look at technology around omnichannel as well as one of the products I want to make sure as well I would say, 2 elements around that. These 2 segments is something we look at right.

Okay. Thank you very much. And with this, I will turn it over to José for final words.

Yes. Hello again. Then a few words to close the session this morning. Then why we believe all of this is achievable. And I would like to remind you some fundamental of our business. Then we have a diversified product portfolio. And when I look at all the product lines, very, very competitive, well positioned to continue to grow. Our global distribution network, when we come with a new product like the Sea-Doo Switch, very quickly, we have able to distribute in many, many countries. Global and modern manufacturing footprint, it's not about the factory itself, but it's the way we designed the product, the way we industrialize the product and the way we do it on the assembly line, we believe we are extremely competitive. Leader in innovation. You listened to Denys Lapointe this morning, and that was the goal of inviting the need to present to you is the way we do things. I think we have the credibility. We've gained market share. But if we enter a new business segment, we believe we have a big chance to win. Best-in-class dealer value proposition. You know we become -- we're becoming this year the #1 dealer in North America for the number of units per store, and this is a big thing, because we have today the mind share of the dealer network. They know that we are important in their store, and this is for us an advantage to work with them to continue to grow the business. And obviously, we have incredible people at BRP, and you have a proven management team. And this is why we believe our plan is achievable. We have gained a lot of market share in the last few years, and I was discussing with an investor in the corridor during the break, we like to win. We like to win. And when we say the next goal in side-by-side is 30%, I can assure you we won't stop there. This is the way we are built. This is what we like to do. And proof like we say, is in the pudding. Now a new way may be to present our future and where we're going. This is the powersport industry worldwide. Then this is an industry of $34 billion. This is ATV, side-by-side, 3-wheel, snowmobile and personal watercraft, including the PA&A. Then this is an industry of $34 billion worldwide, and we are slightly below 30%. Then when I hear investors saying you have no room to grow because you have high market share, this is where we can play. And when I look at the opportunity for powersport, more market share in side-by-side and ATV, the 3-wheel vehicle potential, did you know that in Quebec last year, the Spyder or the 3-wheel vehicle was the #1 brand sold in front of 2-wheel motorcycle, that's in Quebec. Obviously, you will see you're from Quebec, but there is a potential there. We're just starting to scratch the surface. The Sea-Doo Switch reinventing the pontoon category. The growth of our fleet that has a direct impact on part and accessory sales and production capacity, we're ready to extend our factory if we need to. Then this is Powersports. We're committed to that business. In 2018 and '19, we decided to reenter the Marine business because it's another way to grow for BRP. And if I click, look at the Marine business. If we take the boat and the PA&A but not the engine, not the outboard engine, this is a business of $36 billion, and we're just starting. And this is the reason why we invested in marine because this is a way to continue to grow in BRP, but also we believe we can change the way we do things in the boat business. And if I look at the opportunity, yesterday, you had the chance to try the new Manitou vehicles. Karim presented to you customer clinic result. But Alumacraft and Manitou will follow, and this is, like Karim said this morning about half of this industry. You can expect from lineup expansion, we have a lot of parts bin at BRP in terms of power, power train in terms of both. There is many things we can do in this huge market. You can expect more accessories, you can expect, obviously, dealer expansion and production capacity. And because of this picture, we believe that we are well positioned to deliver on our fiscal year '25 target, the new M25 update. But how do we look beyond that? How do we look beyond fiscal year '25. Then obviously, we won't stop in powersport, in Marine in fiscal year '25. But we've just announced in March 2022, the entry into the 2-wheel vehicle market. The part in the middle of $15 billion, this is motorcycle, 500cc and up, North America and Europe only. This is a $15 billion business. And with the first family of product we are entering, we're entering in a category of about 600,000 unit North America and Europe that represents $4.5 billion of that $15 billion. And we've told you that at the end of 2030, we hope to be north of $500 million in revenue, which is about 20% of that $4.5 billion, this is basically what we're targeting. But obviously, we are BRP. We won't stop on that small pie. We'll continue to come with other product lines or we might expand in other regions in North America and Europe, this is under investigation. And last but not least is this one. We are reaping right now in additional market that are not defined. And I won't be too explicit this morning, but it's other mobility product than powersport, marine or 2-wheel motorcycle and low-voltage EV product. There is many, many opportunity for us in those new product category. And the only thing I can tell you, we are working on this. Then when I look at all this, what we have accomplished, the know-how and that we have, we are extremely well positioned to drive growth short term with the left side, midterm, left and middle and long term, the whole page left, middle and right. And I want to say more on the others because -- we don't want to see too much this morning. But one thing I can tell you, we are already in motion to explore other idea than powersport, marine and also the motorcycle business. I want to come back on CSR. I've told you in the introduction that our new plan is an improved CSR program. And I just want you to know that, and I know it's very important for many investors that our plan meet ESG standard. But our new CSR program is based on 3 pillar. The first one is reduce the carbon footprint related to our product and operations. Then we have CO2. We have the number of electric vehicle vehicles sold in 2025 will be electric, then we have specific targets for product and operation. The second pillar ensure a positive and sustainable impact in community and the daily life of our employee. We want to be more inclusive. We want to attract more people at BRP but the right people and be more inclusive, we came out with our cause for community, ride-out intimidation. We want it to be different, and it's a big cause, but now we have a good plan for this. And the third pillar is continue to make sound strategic decisions, maintain high ethical standard and conduct operation in a sustainable manner. Then all of this is to create a better future for our employee, our dealer, our consumer and our stakeholders. Then if you want to know more about our new CSR program and take the time, please, we have a great plan just click on the picture, and you will have the complete access, you will have access to the complete report. Then in summary, we're well positioned to sustain our growth trajectory. Anne-Marie presented to you this morning the demographic trend and people behavior are favorable for the future strength of our industry. Maybe we're facing right now some uncertainty with the economy and the few thing. But when you look at the big picture, when you step back and you look at the big picture, we believe that the demographic trend, the people behavior is very favorable for our industry. We have the scale, the lineup, the dealer network and the production capacity to continue outpacing the industry. And in those meetings, you have access to the management team. I hope you appreciate the competency of our people. We have unique innovation capability and know-how that drove our success and we continue leveraging these trends as we're accelerating our investment in research and development. And very often, people approach us and say, we want to be innovator. But this is not something you operate in 2 years. It's something you create over time. It's about hiring the right people. It's about giving them the right tool, giving them reachable objectives that are stretched, but at the same time, giving them -- having a governance that permit innovation, that permits failure sometimes. And this is all the good thing and not so good thing we've done over the years that we have improved our recipe. We have multiple solid, short, midterm and long-term opportunity in our existing product line, but we're looking in new territory because we did grow BRP from $2 billion to $10 billion, but how we go from $10 billion to $20 billion, not tomorrow, but that's the seed that we're planting right now. And we have a team that are able obviously to focus and to deliver on our commitment. And last but not least, our purpose because a company needs our purpose. We exist to create the new way. We exist to create new ways to move people so that experience our measured in emotion rather than distance. We imagine the way you access your world. I am an engineer and we used to be very happy to sell nuts and bolts, but like Anne-Marie explained this morning, people now are looking for a motion for experience. And I think we're moving in the right direction. Then this is my conclusion. We have a fun business. As you can see, we're passionate about it. And I would like to thank you for your assistance this morning. Now we'll take 2 minutes. We'll bring the management team on stage for the people who are looking at video and we open up for questions to the whole team. [Break]

I wanted to ask about your comments at the end there, José, about new markets that BRP is not in. And first, I just wanted to clarify, did you say it? And you were saying things that it would not include rides like outside of Marine. Did you say including or excluding electric vehicle? I wasn't sure whether which one of those. And then my question about it is, is this something that would be with M&A or developed organically, just given yesterday that you expanded your liquidity? I just wondered if that was in our preparation.

Then it will definitely include electric vehicle because I think it's the new trend, and there is a lot of opportunity in the electrification of some product lines. I'm not saying no to combustion engine at all, but you can expect us to look at different mobility product and, obviously, including EV, which is a natural for mobility product. In terms of -- we've been successful doing our stuff internally. We have a recipe that worked well, and we've been able to reinvent the category. And I always remember when [indiscernible] held the switch the first time, he said, "I didn't know you could reinvent the pontoon," and we did. Then we have our own way to do things, but we don't say no to M&A or acquisition. But like [ Minh Thanh ] said this morning, we don't look at me-too product. if we enter a product category, we want to make it different. And when you -- when we acquired Alumacraft, Manitou and Quintrex, like Karim explained, we had the critical last word. We acquired 3 boat company, aluminum technology to create a critical mass, but the prototype of the pontoon with the Ghost was existing. And we knew that we want -- we acquired the 3 boat companies to redesign the [ boat ], the whole package. And this is a bit of our mindset. If we need -- if we do M&A, it's not to keep it as is.

Karim, you're going to launch the Manitou at the Club BRP in August. And looking back at the Switch pontoon, it's been a huge success selling '22 models pretty quickly. So you already said that the response from people has been overwhelming. So what have been the lessons learned from the Switch pontoon and make sure that BRP is properly equipped to meet the demand requirement for the upcoming Manitou launch?

Thanks, Benoit. So we've been starting working on capacity last fall, actually. So we started a second shift at Manitou immediately in -- I mean we were expecting that feedback. We're hoping for that feedback aspect in it. So we've ramped up the second shift last fall. It's fully on right now. We're expanding right on the facility. And starting in August, we'll be launching the new products, more than doubling the capacity we had before. So now if we get the success that we believe we deserve, obviously, we continue looking at other opportunities to continue increase capacity.

I just wanted to ask about the dealer network. And I know that this has been a long journey and sort of raising the bar in terms of ability to execute and sort of deliver that customer experience that you talked about. From today, what are sort of the biggest barriers to executing on the expansion that you're talking about? And I guess, specifically, just from a capacity perspective, I don't know how the right way to answer or sort of frame this question, but what percentage of the network would be at a standard that you would hope for in order to support your growth? And then what does that evolution look like over the next number of years?

I can start. There's always -- I mean as I explained in terms of the network transformation engine, we keep raising the bar on a yearly basis with new criteria. So there's always the 25% of the dealers that are top notch, and then there's the middle section and the bottom 25% that we need to continue investing and raising and getting their engagement into the brand. There's basically 2 areas, I believe, that we need to invest the most in the future, starting from now. The service aspect, I talked about, this is absolutely key in terms of postpurchase customer experience. And we understand the industry not to be at par with the automotive right now, but there are great lessons from the automotive that we are taking right now and engaging and converting these dealers into much better retailers service-wise. That has implications as well internally if we want to capitalize on the service parts business, service merchandising, and there's a lot of stuff we can do there to increase customer retention, as I showed you. That's one of the biggest opportunity we have in PA&A. The other place we need to invest with the dealers is they're not super digital-savvy. We understand most of the leads that we get in the ecosystem comes from the network. So being able to connect this to our data, to our systems, to our marketing place, it will be key in the future, but there's a lot of education. There's systems involvement in there. And obviously, what we want to do with the omnichannel strategy, which José can talk, this is crucial. We need to connect with our network, and the network needs to raise the bar in terms of their digital savviness. That would be the 2 big areas that we need to focus on.

Yes. And I guess just a follow-up. I mean, obviously, you have the credibility with the dealers with regards to product definitely. Do you feel like they're responsive to those sort of 2 areas of growth? Do they agree that those are areas where they need to raise the bar?

Absolutely. On the service side, we started a program 2 years ago called quality service, and we're engaging in field forces to actually do the full assessment of their service capability. We're charging the dealers for this, and we've got over 400 dealers right now in North America that are engaged in the process, and we're going to follow through on this. And obviously, we have a couple of pilots at International as well, but that's a big [ player ]. And on the digital side, I mean, nobody is hiding behind. I mean it's a fact dealers realize that they need to get on the bandwagon. And so it's quite an easy sell, I would say.

Just maybe Josee Perreault joined us 5 years ago. She was -- she took the challenge to turn around 3-wheel, and now she has a new mandate to deliver the omnichannel strategy for BRP. Maybe you explain your plan?

Yes. I think I can add to Sandy's point. Right now, when we survey our new entrants, everybody -- most of the majority of our new entrants say that they want the ability to buy our products online. So we can do this as an OEM, obviously, but our partner, our dealers are the biggest partner in there. So our challenge right now is to up the game with our dealers and have them -- to have increased their ability to shop online and offer our products online. So we created a subcouncil for the omnichannel transformation ahead of us, and they're very much into us helping them get to that journey and offer a seamless experience to our consumers. Our consumers don't care if they shop through our dealers or us. At the end of the day, it's BRP. So our objective is to offer the seamless experience, and we need our dealers. And right now, they're on board with that.

I wanted to go back to electrification because, obviously, there's a lot of exciting opportunities, new areas. You showed a target that in a little bit more than a decade, you want half your units electric from effectively 0 right now, right? And so like in many respects, electrification is easier, I think, but I think the execution of it can be very, very difficult, especially if you look at industries that have already tried to electrify. And I think the challenge we've seen, right, is a move from what's traditionally been mechanical engineers that you've hired to more software engineers. So can you talk a little bit about that investment and that path in the journey to be able to execute upon electrification? And then secondarily, the world is trying to decarbonize, right? And we've all felt the pain of semiconductor shortages now, but it's very likely there's going to be battery shortages in the future. So what have you done from a supply chain perspective because light vehicles and energy storage systems are in much greater volumes than powersports. So how are you going about being able to secure supply to be able to hit those goals?

Thomas, you are in the call. Did you heard the question? Can you take it? Are you okay?

Yes. I take the question. I hope I can answer it to a certain satisfaction level because this is forward-looking, and therefore, I can only open a little bit. But first of all, I don't agree with your comment that you have mechanical engineers that you have to transform. We are doing, since 8 years now, all our engine software ourself, and we have a software department set up to do this in-house. We have -- we did our own motor controllers. I think it's now 12 years ago, and it was -- and I brought the example in my little presentation on -- for snowmobiles for our 2 strokes, because we had the design and the knowledge in-house, we were able to switch semiconductors to available ones on the market. So it's not that we are coming out of the stone age and we have only mechanical engineering on board. And being a mechanical engineer myself, also to build a bridge for the mechanical engineers, there is not one mechanical engineer on a reasonable university on this world getting educated without a significant portion of electric competencies. But to your question or to get experts with experience, so one thing is we hire also from universities, we hire directly, and we are hiring with a focus on electric, electronic and mechatronics. And we are doing this for quite some time now. And the other thing is that we're also transforming internally. So we are growing our software departments. We are growing our electrical and mechatronic design departments as we speak. This is another, let's say, internal process. And as Minh Thanh pointed out, we are also looking very closely where it makes sense from an M&A perspective to gather additional know-how in the future. This is not that we can't do it ourselves. It's just to accelerate this know-how building process because your question is at a very sensitive point. If you don't have the know-how to create the products and if you don't understand the product and the components in these products, you will not have a successful product. And therefore, it is our tradition, and we do this the same here on electric -- electronic. We need to understand what we are designing, and we do understand. So you're absolutely right, there is a process in place, and it will not stop in the next 5 years to have more and more competencies on board in terms of electronic, digital and mechatronics. So this is -- yes, we feel at the moment with what we have onboard in order to design our electric 2-wheel product, we accomplished our targets that we have. We have an advantage with our setup in sites. We are here in Canada where I am today. But at the same time, we have our R&D center in Austria, in Gunskirchen where we are tapping in on a lot of resources on talented electric and electronic engineers with universities around that are working on these topics and also bringing new students into this. So this is growing very fast as we speak. And I think we are pretty well set up in order to manage this. And your initial statement that we want -- in more or less 10 years, that we want to have half of our production being with electrical products, there is -- this is a big commitment, which we have to deliver, and it will not only be the 2-wheeler. I mean I'm not saying it's not -- it wouldn't be possible, but I think there is more necessary than a 2-wheeler. And as José opened up a little bit and you saw some of the some of the drawings in Denys' presentation. Trust me, there is more on the drawing board right now than just a 2-wheeler with respect to that.

If I could just go back to [ Mark's ] questions on the dealer network. Given the current breadth of products you have and the increasing breadth that you have and the investments you're making in your dealer, does it make sense, at some point, to move some of your multiline dealers to sort of exclusive dealers like you do have in Canada?

Very good question. In the past years, being in a multiline dealer actually helped us because the traffic was always -- was already there coming from the other brands. But we believe we have a strong-enough dealer proposition, not to force the dealers in any corner to ask for special exclusivity. It's more the idea of building stores within the store mentality, so you can actually live the brands within the store because as soon as you get into that discussion with the dealer, obviously, you're affecting his portfolio and his ability to grow and maybe compensate in certain areas. But there is no formal plan in driving exclusivity. We do it organically by being a better OEM of choice so that they choose BRP because there's more ROI in selling our products.

But maybe if I can add, I give you the example of the Switch. We came out with the Switch in February '20 and with -- '21, sorry. And we said to the dealer, if you want to carry the Switch, we need so much faith. And either the dealer had it, either he had to rebuild the store or either had to kick another brand then, but we don't give a new product line to a dealer without asking or legitimately the right amount of exposure.

Maybe I can add [indiscernible]. When you saw the new management yesterday and you had a competitor in front of the site, I'm very comfortable having anyone walking into a store. Looking at the 2 boats will help us actually most likely right now in the U.S. with the great awareness and -- that we have in the market share for many. So it's actually a benefit today for the Marine business.

I had a follow-up question for Karim on Marine segment. Obviously, some ambitious targets in terms of market share where you want to be. But can you talk a little bit about the footprint -- the manufacturing footprint in terms of getting there? Is it going to be a U.S.-only product manufacturing in the U.S.? Can you talk a little bit about how you envision the capacity in the network?

Yes. So as of today, we're making the most of what we have in hands, which are Lansing for Manitou, Saint Peter in Minnesota for Alumacraft. We have Sturtevant for Switch and for Ghost, and we have Coomera in Australia for Quintrex. So we're making the most out of it, so explaining why it makes sense. For the next wave of capacity increase, obviously, we'll tap into the knowledge and the know-how BRP where it makes sense for different segments as well. So we expect to have a need for more capacity down the road and will go where it makes the most sense for BRP and for the dealers.

Maybe just a follow-up to that, José. To reach your goal of $12 billion in revenues, can you achieve that with your existing capacity footprint? Or do you need to add to your capacity?

This year, our factory will run at about 85% of capacity. Juárez 3 Phase 2 will come in operation beginning of fiscal year '24. And Marine -- in my 85%, Marine is not included because we're doubling Manitou. Then we are -- we believe we're very close to be able to deliver the $12 billion.

Okay. Maybe the question is for Thomas. Could you -- obviously, electrification will be a big growth vector for BRP. Could you talk about -- a bit about the sourcing of battery cells, which remain pretty critical right now? If you could expand a bit, that would be great.

Yes. Thank you. I was hoping I get around this because this is, for sure, one of the most critical topics for the whole EV industry. And I mean you -- I guess you all follow this, the discussions that are going on in automotive on that. What we learned, and this is confirmed what we see today in the crisis mode that we have where we have on products where we never thought that we will run out of this product where we had difficulties to source this. So what we learned, and we will apply this on the battery side as well. First of all, you need to have a multi-sourcing for the things that you need. This is one thing that we learned and which we will apply wherever possible. The second thing that we learned is you need to understand your commodities that you buy. And in case of emergency, you need to be able to change them, which means for batteries -- and I'm not trying to avoid your question here. In terms of batteries, this means we need to be in the design. So what we are not planning to do is a battery designed coming from the outside. And we are -- as long as we get it, we are happy. And if something goes wrong or we need to change something, we are dependent completely on a supplier. This is, for us, not something that we can imagine for the future. So it's -- then you need to -- when it comes to -- when you go a little bit more into the details, so battery design, we want to be either doing it ourself like we are doing it for the high-voltage system, or we want to do it with a partner, but we are involved in the development so that we have influence and we can react if needed. When we're going from the battery to the cell, it gets even more complicated. The last presentation that I did on the Board was prepared for a 2-hour discussion on that. I don't think you want to have this here. But when it gets into battery and the cells itself, on the batteries, it gets really complicated because you have here national influences that will see -- I'm giving you an example in [ battery ], you have a lot of cells coming out of the China region, which is maybe not a reliable source depending on how the world economy is developing for the future. So you don't want to rely completely there. At the same time, we have the opportunity that in Canada, specifically in Quebec, we have a huge amount of base material that you need in order to have successful cell production. So this is something that we could imagine to lever in the future to make sure that we have access to what most likely will become tight, at least, for a certain period of time until worldwide production capacities are ramping up in the right speed. So there are multiple strategies. It's not one strategy. There is not the solution to it, but you need to have the right partners. You need to have contracts in place that secure your supply for the right time. You need to understand what you're buying so that you can react if things are changing. And if you can combine this with access or guarantees that you have in order to get the rare earth and the materials that you need for cell production or for magnet production, this can be an advantage as well. What is very clear, if you compare BRP with all our super ambitious plans that we have, how we want to grow electric vehicles, we will still be a very small player if you compare ourselves to the automotive ones. So the other thing we need to look into is alliances, what are the right partners and how can we make sure that we are not getting lost somewhere between the big ones fighting for the resources. But I think we are -- so far, we found a rather smart way, and this is what we are trying to do in the future as well. So I'm not too worried. A lot of the high-flying plans on the EV side, they will not come on some of the industry announcements that you see. And so I think there will be with a little bit ups and downs. We will see also there. We will see a balanced market at one point in time then. I'm not sure if this is answering your question.

I realize this is a short-term oriented question and what should be a more medium- or longer-term outlook-type discussion. But José, you alluded to macro pressures and choppiness a few different times, touched on inflation, touched on sort of the pressure the consumer is going. Are you guys seeing anything in the marketplace today at retail that gives you pulse about the powersport consumer in terms of whatever that might be, retail financing applications or door swings? Or are you seeing anything that gives you pulse for the consumer today right now?

I mean I will let Sandy to complete and Sébastien on the financing. But like we've said in Q1, what, 2 weeks ago, 2, 3 weeks ago, we didn't see any sign and maybe go from there.

Again, we're following -- is the mic working?

Yes.

We're following our preorder sales, which we have on all our products, and this is continuing on a strong base. In certain regions, there is a little bit of a slowdown of some traffic, but that's related to the fact that we are pretty much closing all the valves on the lead generation because of the lack of availability of products. But we're all out to hear any signs from all the categories, but I can't tell you today that we're seeing this. And anecdotally, I was speaking to dealers earlier last week, telling me that even the rate of financing at retail is actually lower. People come with cash in their hands and probably utilizing their line of credits, which have increased with the value of their houses or so on, but there's no warnings from anywhere we see today showing that there's a wall building in front of us.

I'd just like to add a statistic to that. So if you're looking at our share of search in Google, we're still way north of 50% for all category compared to pre-COVID. And this is with no bottom funnel advertising. So we're not trying to push anyone to store or to our website, and with this, we're seeing an average of 50% increase still all the way up to 100% for off-road of search for specifically. And these are branded words for BRP. So that is a great demonstration of interest for the category.

Thank you. So we have no further questions at this time. So thank you for participating to our Investor Day. This was it and the webcast. Thank you.

Thank you very much.

Thank you, everyone.