Good morning, ladies and gentlemen. Welcome to the BRP Inc.'s FY 2023 fourth quarter results conference call. For participants who use a telephone line, it is recommended turn off the sound on your device. I would now like to turn the meeting over to Mr. Philippe Deschênes. Please go ahead, Mr. Deschênes. Thank you, Julie. Good morning, and welcome to BRP's conference call for the fourth quarter of fiscal year 2023. Joining me this morning are José Boisjoli, President and Chief Executive Officer, and Sébastien Martel, Chief Financial Officer. Before we move to the prepared remarks, I would like to remind everyone that certain forward-looking statements will be made during the call and that actual results could differ from those implied in these statements. The forward-looking information is based on certain assumptions and is subject to risks and uncertainties, and I invite you to consult BRP's MD&A for a complete list of these. Also, during the call, reference will be made to supporting slides, and you can find the presentation on our website at brp.com under the Investor Relations section. With that, I'll turn the call over to José. Thank you, Philippe. Good morning, everyone, and thank you for joining us. Please turn to slide four. I am very pleased with our Q4 performance, which was our strongest quarter ever. It allowed BRP to conclude fiscal year 2023 with record sales, normalized EBITDA, and normalized EPS. It was a very dynamic year, marked by our ability to respond to continued strong demand for our innovative products while showing tremendous resilience by working through supply chain pressure and a cyber incident. Our teams once again demonstrated its incredible agility. We adapted to evolving market conditions and executed diligently in a challenging environment. As a result, we've delivered solid retail growth and outpaced competition by recording an exceptional 5 percentage point market share gain in North American powersport industry. During the year, we continued positioning the business for long-term success. We accelerated investment in product development, completed our Side-by-Side capacity expansion project at Juárez III, introduced multiple market-shaping products, notably our new award-winning pontoon generation, and completed three strategic acquisitions. As you can see, it was a very busy year. Let's turn to slide five for key financial highlights of the year. We've delivered record results on both top and bottom lines. Revenues increased 31% from the previous year, surpassing the CAD 10 billion mark for the first time in our history. This was driven by higher volume and favorable pricing across the portfolio. Normalized EBITDA grew 17% to CAD 1.7 billion, representing a very strong EBITDA margin of 17%. Normalized EPS increased 21% to reach CAD 12.05, above the higher end of our guidance. For retail, our North American powersports sales were up 6% for the year or 5% excluding the Sea-Doo Switch Pontoon, compared to a decrease of about 10% for the industry. We ended the year on a strong note, as you can see with our outstanding fourth quarter retail performance on slide six. In Q4, our North American retail sales were up 21% or 19% excluding the Switch compared to a low single-digit industry decline. Our performance was also very strong in other markets, with retail up 36% in EMEA, 32% in Latin America, and 16% in Asia Pacific. In addition to strong demand, the solid performance was driven by our strategy to produce incomplete units that were retrofitted at our plant or by dealers when missing components were received. As the supply chain improved in the second half of the year, we were able to rapidly convert units to retail, allowing us to significantly outpace the industry in Q3 and Q4. You can see this outperformance on slide seven. We ended the year with nearly 35% market share in the North American powersports industry, representing a 5 percentage point increase for the year and a 15 percentage point gain since fiscal year 2016. Our performance was very solid across the product portfolio, with important gain in off-road and snowmobile. We also maintained our leading position in three-wheel and personal watercraft despite shipping model 22 units past the peak retail season. This performance was driven by sustained strong consumer demand across our portfolio, which demonstrate the strength of our lineups. On this topic, let's turn to slide eight. In calendar 2022, we won 16 product awards, one of the best years for BRP. The Sea-Doo Switch and the new Manitou pontoons were notably recognized in multiple competitions. Just a few weeks ago, our new Rotax S outboard engine with Stealth Technology won the Outboard Engine Innovation Award at the Miami Boat Show. On top of these product achievements, BRP was named Brand of the Year by Strategy Magazine. We celebrated a 100 year of success for Rotax, we've launched a new corporate social responsibility plan with ambitious target. I'm proud of these milestones that show that our innovation mindset is not just applied to product, but also across all areas of our business. With these achievements, we gain further traction with dealer as shown on slide nine. Our success stems from our ability to constantly innovate as we bring new product to market that drive consumer demand, and by our unique value proposition, which drive dealer to sell our product to maximize their profitability. To such initiative, we have attracted the best dealer and gained floor space in their showroom. Early in fiscal year 2023, for the first time ever, we become the number one OEM in term of average retail unit per dealer, a position that we further extended in the second half of the year. Achieving this number one position was a great moment of pride for me. When BRP was launched almost 20 years ago, becoming the best OEM in the industry for consumers and dealer was one of my objectives. I can say mission accomplished. Turning to slide 10 for a quick update on consumer interest. Like everyone else, we monitor the ongoing macro concern based on our indicator, consumer interest for our product remains healthy. We've delivered our strongest Q4 ever in term of retail with growth across all our product lines. In looking at demand indicator, the trend remained positive. Traffic at trade shows and at dealership continue to trend positively. Early season 2024 snowmobile booking is trending as expected. The influx of new entrants remain high. Website visit and Google search for our brands remain higher than pre-COVID levels. We are monitoring the used vehicle market and value segments that are slowing down. Retail trend also seems to indicate a return to more seasonal patterns. Some OEMs and dealers are beginning to offer incentives on certain models. In general, consumer interest for our industry and more particularly for our product remains healthy. Let's turn to slide 11 for year-round product. Revenue were up 47% reaching CAD 1.3 billion in Q4, driven by strong shipment across all product lines. Retail sales, Can-Am Side-by-Side and it had its strongest Q4 ever, benefiting from additional production capacity at Juárez III and from an improving supply chain. Our retail was up high 30% in the quarter and season to date, significantly outpacing the industry. I will get back to this category in a few moments. As for ATV, retail was up low 20% in the quarter, driven by the momentum of the Can-Am brand and improved product availability. Looking ahead, we just introduced an all-new platform for our Outlander mid-cc lineup. This long-awaited platform is our most significant upgrade in ATV in almost 10 years. It offer more performance, comfort, storage, and ease of ownership for the category at a competitive price. Moreover, we introduce specific pro package that cater to a more utilitarian consumer base for which demand tends to be less cyclical. With this new platform, we strongly believe that Can-Am is very well positioned to gain market share in the mid-cc category, which represent more than 50% of the ATV industry. Looking at three-wheel vehicle. Although we are in the slow part of the retail season, Can-Am retail was up over 150% in Q4, driven by improved product availability following late shipment of model year 2022. We are pleased with the retail trend for three-wheel, and we are well positioned for the upcoming season. On slide 12, let me come back to Side-by-Side vehicle, which has been a key growth area in recent years. We have been growing retail and gaining market share at a fast pace since introducing the Defender in 2015. During that period, our annual retail volume has increased by almost four times. The Can-Am brand has gained traction with consumer as we experience a significant boost in brand awareness over the past years. Their perception of the brand is also improving. As you can see on the right side of the slide, despite rapid growth and solid momentum, we still have plenty of market share gain opportunities, especially in the utility segment. We believe our strong lineup and added production capacity will support our growth in that profitable business. Turning to seasonal product on slide 13. Seasonal product revenue were up 26% from last year, reaching CAD 1.3 billion. Driven by higher volume of personal watercraft and the introduction of the Sea-Doo Switch. Looking at the retail. Our retail of personal watercraft in the quarter was up over 300% driven by late deliveries of model year 2022 product, most of which were pre-sold to consumers. The trend is also very good in counter-seasonal market, with season to date retail up about 10% in Asia Pacific and mid 20% in Latin America. As for snowmobile, with most of the season behind us, we are pleased with our performance as our retail is up low single digits, outpacing the industry, which is about flat. With this achievement, our global market share now exceeds the 65% mark. Turning to our recent snowmobile news. For model year 2024, we further strengthen our lineup by expanding the REV Gen5 platform to more models and introducing new key technologies, notably the industry first water injection system for high-performance model. These additions were well received and early trend in spring unit booking are as expected, which is promising for season 24. We introduced our initial electric model, the Ski-Doo Grand Touring and Lynx Adventure Electric. For the first year, these snowmobile are designed exclusively for guide tour operators. These are the first electric model to be introduced following our commitment made two years ago to launch electric models in each product line by 2026. We are proud of this first step, which is a testimony of our market leadership. Snowmobile industry experts have tested the product and they were impressed by our technology, the riding experience and the fit for the segment. You can expect more product introduction along these lines in the coming years. Moving on slide 14 with Powersport Parts, Accessories and Apparel and OEM engines. Revenue were up 22% to CAD 378 million for the quarter, driven by our growing product portfolio. In our parts and accessories growth strategy, every new product is designed to be highly customizable with our accessory portfolio. For example, the recently introduced Can-Am Outlander platform is compatible with 125 LinQ accessories. We are pleased with the performance of this highly profitable business segment. Moving to Marine on slide 16. As mentioned last quarter, Marine was the last business unit to restart operations after the cyber incident, and combined with some supply chain issue, it impacted production ramp up for the new Manitou into Q4. As a result, revenue were down 8% compared to last year, ending the quarter at CAD 124 million. Looking at retail sales. In North America, Q4 is off-season for boating, with typically less than 10% of the annual retail. While our retail performance suffer primarily due to the supply chain factor, we remain positive about our plan and prospect for that business, as evidenced by the announcement of the new facility in Mexico. As for Australia, retail was down about 20% in the quarter in line with the industry. We are excited about the future of our marine business. For instance, our recently introduced Manitou Pontoon and Rotax S outboard engine with stealth technology continue to win recognition from the media and the industry, consumer demand is very promising. With that, I turn the call over to Sébastien. Thank you, José. Good morning, everyone. We completed fiscal 2023 with another record quarter as we continue to experience solid customer demand for our products and demonstrated strong execution in delivering our production plan. Looking at the numbers, our revenues for the quarter were up 31% versus last year, passing the CAD 3 billion mark in a quarter for the first time ever. We generated CAD 788 million of gross profit, representing a margin of 25.6%, slightly down in comparison to last year's level, primarily due to inefficiencies related to the ramp-up of production of the new Manitou pontoons and some overhead investments. Worth noting, however, for the first time in many quarters, the pricing actions that we took over the last few months offset the inflationary costs that we were subject to. We expect this trend to continue into next year. Continuing down the P&L, we generated record normalized EBITDA for the quarter of CAD 528 million, representing a margin of 17.2%, and our normalized net income reached CAD 309 million, resulting in a normalized earnings per share of CAD 3.85 for the quarter, ahead of expectations and resulting in a full year normalized diluted EPS that came in above our guidance range. Supported by these strong results, we ended the year with a robust balance sheet with over CAD 200 million of cash and a healthy net leverage ratio of 1.5x, providing ample flexibility for further investments in the business and capital discipline. One thing I want to highlight about our financial performance is the structural improvements we delivered in the recent years that significantly enhanced our normalized EBITDA margin profile. You can see this on slide 18. In fact, our normalized EBITDA margin is up 370 basis points over the last three years, primarily driven by sustainable improvements such as the wind down of the Evinrude outboard engine business, which helped by about 60 basis points. The positive impact generated by volume mix and cost improvements coming from our volume growth, especially as we leverage our Mexican manufacturing footprint. Our richer product mix, notably driven by the growth of our SSV business and the development of our modular design across more models. These elements helped our margin by about 110 basis points, and we gain about 300 points coming from a more efficient operating structure driven by our ability to leverage our marketing, R&D and administrative spend across more product lines of a meaningful size. For instance, we gain efficiency in R&D by being able to develop technologies, components and engines that will be leveraged across multiple product lines. All of this unlocked by our modular design approach. We do the same on marketing by leveraging our website technology, CRM, dealer events, and our teams across multiple brands. We gain about 470 basis points driven by these structural improvements, bringing our normalized EBITDA margin to about 18%. There were also elements that were more temporary in nature that impacted our margin over the last three years. Notably, the lower sales program driven by the low product availability in the network and the tight supply chain environment, which drove higher inflation and turbulence costs, especially in fiscal 2023. The net of these temporary elements was a negative impact of about 100 basis points. As these temporary elements normalized over time, the structural changes will mean that we will be well positioned to continue delivering strong normalized EBITDA margin of at least 17% in the coming years. Moving to slide 19 for an update of our network inventory situation. Driven by the better utilization of our production capacity and the improved supply chain environment, we have been able to continue increasing our throughput in Q4, allowing us to further replenish our dealers inventory. As a result, we have seen a healthy increase of 66% in product availability at the dealership driven by SSV, ATV and snowmobile. When you account for a slightly higher than usual inventory for three-wheel and personal watercraft for this time of the year due to the late shipments of model year 22 units in the fall, our overall network inventory is up 130% from last year's level. Still, given our significant market share gains over the last few years, our network inventory remains below optimal levels. As unit availability continues to improve across our product lines over the next quarter, we will be in even better position to serve our dealers and customers and support our market share momentum. Moving to the guidance, starting with a bit of context on slide 20. As we build our guidance for fiscal 2024, we are cognizant of the environment in which we operate with inflation remaining above historical levels and higher interest rates. While it is difficult to forecast how these factors will evolve throughout the year and how they will impact the industry, based on our current environment, we expect our industry to remain about stable when compared to fiscal 2023, representing a decline of low single digits from pre-COVID levels. Despite all the momentum we have with new entrants and the fact that we were not able to fully meet customer demand over the last year due to limited product availability. Still, in this context, we are well positioned to continue to grow as we enter the year with significant momentum. We've gained 5 percentage points of market share in fiscal 2023, driven by the robust demand for our product lineup, especially in Side-by-Side. We have strong momentum with our dealers, driven by a unique dealer value proposition, which led us to reach the number one position in the industry in terms of number of units per dealer. We have key new products such as the Sea-Doo Switch and the Manitou pontoons that have won multiple awards and are still in the early stage of their growth phase. We have demonstrated our ability to adapt and execute in a challenging environment to outperform the industry, all the while maintaining strong margins. As such, we are well positioned to continue our growth trajectory in fiscal 2024 with expected revenue growth of 9%-12%, driven by continued market share gains in year-round products as we further gain traction with the Can-Am, benefit from our increased production capacity for Side-by-Side, leverage our new mid-cc platform for ATV and sustain our momentum with Ryker. We expect our growth to be supported by the first full year of production of the Sea-Doo Switch and the Manitou pontoons, and by the continuing momentum in PA&A, driven by a growing fleet of units and usage and the continued innovation in our extensive lineup of accessories. To put things in perspective, while some may perceive fiscal 2024 to be less predictable than typical, we are comfortable with our guidance given that the full year impact of price increases we did last year is expected to contribute to our revenue growth by low-to-mid single digits. As usual, we have been conservative in our assumption for the upcoming snowmobile and personal watercraft season. Over 50% of our expected revenue for the year are coming from more predictable sources such as utility products, new introduced models, and P&A. We also have a strong pipeline of exciting products coming out this year for which initial shipments to the network are expected to support our growth. On the margin side, our guidance assumes a normalization of the supply chain environment. As such, we expect the following impact on the normalized EBITDA margin. A reduction in turbulence costs for a benefit of 150 basis points. A positive impact from pricing net of inflation for about 100 basis points, which will be offset to a return of sales program for about 200 basis points and a slight increase in OpEx as a percentage of revenue for about 50 basis points. As a result, we plan to deliver normalized EBITDA growth of 9%-13% and to maintain our strong normalized EBITDA margin of 17%. Continuing down the P&L, the increase in our normalized EPS is expected to lag normalized EBITDA growth due to higher depreciation and interest expense. The increase in both expenses is expected to represent an incremental CAD 1.35 per share. Still, we believe the fundamentals of our business continue to be very strong, as demonstrated by our expectation of solid growth in normalized EBITDA, providing us with the means to offset these elements over time. Moreover, fiscal 2024 is expected to be a solid year in terms of cash generation, driven by a strong normalized EBITDA and the expectation for solid positive working capital contribution as we reverse some of the investments we made in fiscal 2023. In fact, we are very well positioned with the flexibility we have to consider multiple capital allocation options in fiscal 2024. Turning to slide 21 for capital allocation priorities. For fiscal 2024, our priorities remain to continue investing in growth projects and to return capital to shareholders. As such, we expect to allocate between CAD 750 million-CAD 800 million to CapEx, focusing our investments on growth projects that have attractive expected returns. Our ability to identify and execute on these projects is at the core of our success and is what is allowing us to outperform our industry, as you can see from the chart, which shows our track record of delivering very high return on invested capital. Furthermore, we plan on continuing to provide strong returns to our shareholders in fiscal 2024, and as such, we have announced the increase of our dividend by 12.5%, and we are planning to be active with share buybacks as we still have 3.5 million shares available under our current NCIB program. Note, however, that our guidance does not factor in any share repurchases. Now to wrap things up, a summary of our guidance on slide 22. As mentioned, we expect fiscal 2024 to be another solid year for BRP, with revenue growth of 9%-12% and normalized EBITDA growth of 9%-13%, sustaining our strong normalized EBITDA margin of 17%. Our normalized EPS is expected to end between CAD 12.25 and CAD 12.75, representing a growth of more than 300% over the last three years and making continued progress towards our M25 objective of reaching CAD 13.50-CAD 14.50 of normalized EPS by fiscal year 2025. Finally, while we expect to deliver solid quarters throughout the year, note that a stronger growth is expected to come in H1, notably with Q1 EPS up between 40% and 50% as we are lapping a quarter that was significantly impacted by supply chain challenges last year. On that, I will return the call back to José. Thank you, Sébastien. I am very proud of our team achievement in fiscal year 2023. We are now looking forward to a promising future, and we are well positioned to deliver solid growth in the years ahead. In fiscal year 2024, we will continue to progress on our strategic initiative. We are confident that our investment in innovation and R&D will lead to further market share gain in the marine and powersport industry, more particularly in Side-by-Side vehicles supported by additional production capacity. Furthermore, in the past two years, we prioritized output over efficiency. With the supply chain stabilizing, we are focusing again on execution and efficiency. Over the midterm, we remain on track to deliver our M25 objectives. Looking beyond, we are maintaining our focus on the three addressable market that we have presented last June at our Investor Day. We are committed to growing sustainably as we make further progress on our journey towards electrifying our product lines. In conclusion, I want to thank all our key contributors to our success. This includes all BRP employees whose dedication, resilience, and constant effort are second to none. I also acknowledge the strong support of our dealers and suppliers who help us get to market the industry-leading products that forge our reputation. On that note, I turn the call over to operator for the questions. Thank you. Ladies and gentlemen, should you have a question, please press the star followed by the one on your touchtone phone. Please limit yourself to one question and one follow-up. If you'd like to withdraw your question, please press the star followed by the two. If you're using a speakerphone, please lift the handset before pressing any keys. One moment please for your first question. Your first question comes from Mark Petrie from CIBC. Please go ahead. Hey, good morning. hoping that you could just shed, some more light in terms of. In terms of the commentary with regards to consumer demand, and I guess specifically those areas where you are monitoring and momentum in used units and value segments, as well as some OEMs and dealers returning to more typical levels of in-incentives. If you could just share a little bit more detail on that, it'd be helpful, please. Good morning, Mark. On consumer demand, obviously, like I said in my intro, and I will try to give you a bit more color. There is many, many positive. Our Q4 retail was up, high numbers. The traffic at shows and dealers are still good, and better than what some were expecting. Our snowmobile booking with dealers is as expected. Our preorder sales, and we're looking at the trend on a daily basis, is tracking to pre-COVID numbers, then very strong. On snowmobile, about a third of our production typically is pre-sold to consumers. Our website traffic and Google search are, again, above pre-COVID numbers. Now, on other element that we're watching, the used market has slowed down. Uh, obviously dealers still own, uh, used unit that, uh, were trade at high value, and the dealer are a tendency to maintain, uh, their pricing right now than the retail has slowed down on the used unit. The seasonal pattern is coming back to a more normal, uh, I would say, pattern. And, uh, some OEM and dealer started to give some incentive. Then when you look at all this, uh, there is a lot of mixed signal, uh, in the industry, but we feel confident that we can continue to grow despite that macroeconomic, uh, situation. And if I could add, you know, uh, the unemployment, uh, rate are still, uh, very low, uh, compared to, uh, many years ago. And also access to credit, uh, is, is pretty good. Okay. Thanks. Actually, yeah, I wanted to follow up on that, on that last point you mentioned, José. I mean, you know, in wake of some of the recent developments in the U.S. around liquidity and access to credit, I'm just curious to hear your perspectives on the availability of financing for your customers and any views on that in 2023 or maybe any recent conversations with some of your finance partners that you could pass along. Thanks. Good morning, Mark. If I look at the Q4 numbers, they were in line with what we were seeing in Q2 and Q3. No slowdown in terms of availability. What we are seeing quarter to date is that the actual number of applications is going up significantly. People are curious and assessing what the credit market is. Overall, the closure rate, the take rate is higher than what we've seen pre-COVID. One interesting trend that we see is that, yes, obviously interest rates are higher, so the cost is higher. What we've seen is that people have extended the financing terms. Instead of doing a 54 months, they'll go to a 60 months. We're seeing that trend across all of the product lines. Some of them are shopping for a monthly payment, and the way to achieve their monthly payment with higher interest rates is to extend the financing term. FICO scores are still trending, higher than pre-COVID as well. Yeah. Excellent. Okay. Well, thank you for all the comments, and congratulations on a great year and the market share wins. Thank you, Mark. Your next question comes from Robin Farley from UBS. Please go ahead. Great. Thanks. I also had questions on your mentions of what competitors are doing with sales programs. Would you describe the types of programs out there as being just typical what they were to pre-COVID or maybe even not quite that aggressive? I wonder if you could characterize it. Also, are you seeing that from some of the newer entrants in the market, or is it really more the sort of more entrenched OEMs maybe responding to some of the newer entrants from a market share incursion perspective? Thanks. Good morning, Robin. Obviously it's a very wide question. I would say programs are not as aggressive as they were pre-COVID, but more than last year, obviously. I would say it depend of the dealers and the OEM, but I would say it's about maybe halfway to what they were pre-COVID. We don't see more program from some of the new OEM that are more present in North America. You're saying you're not seeing it from the newer entrants? Sorry, I just wanted to make sure I understood. No, we don't see it. Okay, great. Thanks. Just for my follow-up question, can you just remind us on your Side-by-Side capacity, with Juárez III, kind of what, how ramped up are you and what additional capacity you would have sort of by the end of the year or any other, you know, future planned additions? Just kind of remind us of your capacity. Thanks. Yeah. On the Side-by-Side, on Juárez III, if you, if you remember, Juárez III phase l was having 50% more capacity, and Juárez III phase ll was another 50%. Basically, compared to with Juárez II and Juárez III together, we have double the capacity than we had with Juárez II. Right now, it's up and running. Yeah, we've had five phases of capacity growth for side-by-side, Robin, in the last several years or since we've been more targeted on side-by-side. Every time we've added capacity, dealers have given us the floor space, and we've obviously gained market share. This new capacity obviously coming online is another great opportunity to continue growing. I, and I know the facility is done, but is it fair to say that you're not, you still have room to go in terms of actually utilizing all the capacity that is available in that, in the, in this new phase? Is that fair to say that that's still kind of incremental? Absolutely. We were probably running at, in fiscal 2023 at, with the supply chain constraints, at 80% capacity. The plan this year is to run now this, with this new capacity, probably running between 80% and 85%. We'll have more, more room to grow, if the market share is there. Okay, great. Thank you. Your next question comes from James Hardiman from Citigroup. Please go ahead. Hi, this is Sean Wagner on for James Hardiman. I guess going back to sort of the market share thing, now that shipments in the powersports industry are a little more normalized across the industry, how confident are you in your ability to protect particularly those side-by-side share gains? What's the risk of competitors being more aggressive than they are even now, on pricing and promotions to regain that lost share? Yeah. First, the industry is still healthy, and we gain share with the strength of our product. Obviously, that's the basis, but also with our momentum with the dealers. We will continue to bring new product to the pipeline. We're investing a lot in R&D and particularly on Side-by-Side. We are confident to continue to grow our market share with our product innovation and the momentum that we have with the dealers, plus the capacity that we just added. Okay. I guess to follow up on that, obviously you've spoken about momentum and utility being a main driver for 2024, new products as well. Your biggest competitor, I guess, has also identified those same two drivers, particularly sort of increased shipments from them, due to sort of their supply chain issues, improving. I mean, is there room for both of those to happen, or is it just a matter of you have confidence in your business and your products and the execution that you've had and that we'll see how it shakes out from there? I mean, it's our confidence in our execution. You know, last year, we were quite aggressive to run production at high rate with the producing unit with missing parts that we either retrofit ourselves or the dealer will retrofitting it. I think it gave us a head start versus our competition. This is mainly one reason why we've gained so much share last year for all our product lines. We continue on this in the sense that now supply chain is stabilizing, but we have the production capacity. Again, we have very competitive lineups, very innovative, competitive lineups. We have the dealer momentum. When you put all this together, we're confident that we can continue to grow. Okay. Can you quickly remind us sort of what level of market share you would need to take with that expanded production capacity to be margin neutral given the higher overhead? Well, it's obviously, if you saw in the margin bridge that I gave on the call, our expectation is, yes, volume is going to increase. We're gonna see a positive coming from pricing. We're gonna see a positive coming from reduction in turbulence. We are gonna invest in sales program this year, plan is to be about up 50 basis points on gross margin, and also a higher investment in OpEx and in OpEx by 50 basis points. From an EBITDA margin point of view, neutral. Yes, we are expanding the plans, but these costs are absorbed with the additional volume that we'll be producing. Okay. Thank you very much. Thank you, Sean. Your next question comes from Martin Landry from Stifel GMP. Please go ahead. Hi. Good morning. My first question is on the industry and your guidance. It looks like from what I read on your slides, the North American powersport industry was down low single digits in 2022 in North America. I think in your guidance, you expect stable industry growth in 2023. Am I reading this correctly that you're expecting some sort of an improvement, year-over-year in the industry in North America, this year? No. What we said, Martin, in the prepared remarks was a flat industry. That industry was actually so flat year-over-year. That would be down versus pre-COVID, down single digits. Flat industry is the assumption. Okay. I know it's a tough question to answer, but what gives you a confidence that given, you know, the macroeconomic environment, that we're not gonna see the industry decline this year? Yeah. First, if you look at the dynamic, I mean, you see the demand, and I just answered to the first question about the consumer demand, but also give you some other data. The new end trend is still about 40% up versus pre-COVID. 70% of those people are saying that they are there to stay into the industry, and those customer are more wealthy, healthy. Basically, the household income of our customers is today 35% higher than they were pre-COVID. This is an incredible numbers. On top, when you look at our, you know that we are more high-end than entry-level. When we look at our customers, a third of the population in U.S. earn household income below $100,000. Our customers, 2/3 are above that $100,000. New customer, higher household income, and we are more high-end obviously than low-end than some of our competitor. I think we're well-positioned into the industry, to continue to grow. Okay. That's helpful. Thank you. Thank you, Martin. Your next question comes from Xian Siew from BNP Paribas. Please go ahead. Hi, guys. Thanks for the question. Maybe following up a little bit on that. You guys are a flat industry for calendar 2023. Can you help us think about how much share you think you can gain? Is it, you gained five points of share this year, 2022. Is it the same level again in 2023? Are there any kind of different areas we should be thinking about? I I mean, you highlight utility, but are there other kind of areas, where you should be gaining more share? Good, good morning. The first thing is from a share growth perspective on the seasonal product business, though we're not expecting share growth. We are planning for conservative industry, which would be down versus pre-COVID. We're already at 60% and above market share for these products around the world. On that segment, we're not expecting any market share gains. On year-round products business, if you were to look at where is the growth coming from, just maintaining our market share and Side- by-S ide, the market share that we've gained in fiscal 2023, would bring 7% revenue growth. The pricing impact is a 4% revenue growth. Obviously, we will not stop at the market share that we have in 2023. Our expectation is to gain further market share, and that could be another 5%-10% revenue growth driven from those those gains. As we said, obviously, we have a solid lineup, but we also have exciting product introductions that are coming this year, which will obviously help further fuel market share gains and growth in that business. Okay. Got it. Thanks. Then maybe on the OpEx deleverage, you mentioned 50 basis points. Maybe can you just talk about some of those investments? Is it just the fixed costs from the increased capacity, or are you investing more in kind of sales and marketing or R&D? Some color there would be helpful. Well, as you saw on our on our return on capital slide that we showed this morning, obviously we have a solid track record, and that doesn't come by magic. It comes through investments and obviously talented people. We'll continue investing in R&D, continue investing in marketing in order to drive future growth for this business. We're in this business for the long term, and that's been the secret of our success, and we're continuing that. As we grow the business, we expand into new segments, obviously it comes with higher investments. Okay. Thanks, guys. Good luck. Your next question comes from Craig Kennison from Baird. Please go ahead. Hey, good morning, thanks for taking my question. Slide presentation has been great, thanks for that as well. I guess I wanted to ask about first-time buyers. José, you mentioned that that metric had stayed strong. I'm curious if you've been able to track first-time buyers from early in the pandemic purchase cycle and whether you've seen any behavior trends evolve in terms of, you know, trade-in cycles or their willingness or desire to upgrade. Yeah. Good morning, Craig. Obviously, we're doing a lot more data. We're looking a lot more research about this on the quarterly basis. Basically before COVID, and we've said that number before, new end trend, our product sold to new end trend was about 20%. Now, like I say, in fiscal year 2021, 2022, it was slightly above 50%, and now it's 42%, and it's very, very healthy. What is interesting is the intent to stay in the industry have increased. Now it's at 70%. The other factor is the household income that we're watching carefully. I think that explain also Reason why access to credit remain high. When you combine all this together, I know there is a lot of macroeconomic concern and the macro environment, but we feel quite good where we stand in the industry. Thanks. I wonder if I could just follow up and ask about the health of your dealer network. Clearly you've gained share at dealers, and you're now the most significant brand in many of those dealers. Just maybe comment on the health of those dealers, given that, you know, they face tighter margin and, you know, some rising costs in terms of floor plan expense. I mean, overall, we were at the dealer meeting for snowmobile and the new ATV a month and a half ago now. The dynamic is excellent. Dealer like OEM that push, we introduce again on snowmobile a lot of novelties, the electric snowmobile. We see that transition to this new technology coming in. We see the first product reaching to the market. They were very impressed with the new ATV. Like I said in my remark, we were like more than 10 years since we invested in this. We've revamped that new platform. When they look all of this, how dynamic we are and how pushing we are, they're making more money with our product line. The relationship we have with our dealers is at the highest I never saw. When you sell this, we feel happy obviously. They would like to keep the margin that we had in the peak of the demand during the COVID. They are realistic that this time is probably passed and it will come back. I hope it won't be to what it was pre-COVID, but an in-between of pre-COVID and what we had last year. Great. Thank you. Thank you, Craig. Your next question comes from Jonathan Goldman from Scotiabank. Please go ahead. Hey, good morning, guys. Good morning. I just wanted to circle back to the macro, I guess, seems to be the topic du jour. Some investors and at least myself, are looking to an analog to compare the current environment to past cycles. You guys obviously have a much larger sample size with the company and with the industry. Maybe looking at, you know, where we are right now and obviously a lot of uncertainty, but in formulating your guidance, how does the current environment compare to past cycles? Maybe what ways has the industry changed? You know, obviously the GFC was an extreme event, but even cycles before that, any changes structurally in the industry would be helpful. Like we said in the remark, we see some slowdown into the used market, but I think this is a temporary thing. Everyone is on the fence right now to maintain high value or high cost. I think when the spring will come, some dealer will start to reduce their MSRP for used and this will come back to a more normal level. The other thing is a lot of OEMs and dealers talk about the slowdown into the entry level. We have the Spark and the Ryker, which is pre-orders, is a bit lower than on the high-end watercraft and high-end three-wheel vehicle, but it's still higher than pre-COVID on the pre-orders. We are not much into the entry-level segment. Most of our product line, we're selling high-end product with better margin for the dealer and us, and I believe we will be less affected than the others. When I look all this, I think overall we are in a good position. If I would just add, obviously the unemployment rates are still very healthy, and that's obviously people have a job and that is good for our business and that has been the biggest indicator of a, of a slowdown when the unemployment rates go up. As a business, BRP obviously, if I were to look versus other cycles that we've had, we are a very different business, much more diversified from a product line point of view, from a geographic point of view as well, and from a manufacturing effectiveness. Our cost structure is not the same with the Mexican manufacturing footprint. I'd say a much more resilient business than we were 10 years ago. That obviously is a, is a big plus if we were to face a certain economic slowdown. No, I appreciate that. That's very helpful. Maybe one more for you, Sébastien, on the working cap. I think last quarter you mentioned you'd start to see some unwind of the build up, that CAD 500 million in the second half this year. Has that timeline or a quantum, I think you obviously said you wouldn't get the full CAD 500 million. Has that quantum changed since the last call? The timing of it has not changed. Obviously as like said in the past, we've invested a lot in working capital last year due to the supply chain turbulence and having more raw material inventory as a buffer and having some retrofit units. In terms of overall opportunities, I'm looking for this year, obviously with our growing business, you see from our guidance that we're expecting to grow again this year. It is gonna require some investment in working cap, but I do expect that we will recover some of the investments we made last year. It's north of CAD 400 million cash benefit that I'm expecting to see this year coming from better management of working cap. Just to clarify that the CAD 400 gross before investments with a growing top line? That will be a net. Okay. Perfectly. Thanks very much, guys. Thank you. Your next question comes from Fred Wightman from Wolfe Research. Please go ahead. Hey, guys. I just wanted to come back to the EBITDA margin bridge. It sounds like you're baking in 200 basis points of incremental headwinds from promos next year versus this year. I think that that was a 300 basis point tailwind. What gives you the confidence that you'll be able to hold on to some of that favorability, especially just inventories normalizing and competitors starting to promote again? We're not, obviously we're already a few months in the new year, and yes, there's a bit of promotion, but we're not seeing the levels of promotion that we've seen in the past. What we are seeing as promotion is much more targeted towards interest rates or, we'll call it subsidizing interest rates for retail financing. What we're seeing now, in providing some contingency for the end of the year, we believe that holding at least 100 basis points of sales program saving is certainly feasible. Also we've got more sophisticated in how we manage programs over the last few years, and that sophistication is helping us to be much more targeted. When you're targeted, you get some savings because you're not spreading the money in regions that is not needed. That's another reason why we are confident in that ability of protecting 100 basis points. Makes sense. Then just to come back to the used commentary, it sounds like you guys are expecting used pricing to come down as we move into the spring. I know that trade-in values maybe aren't quite as important in ORV as some other vehicle categories, but do you think that that is gonna result in more negative equity and potentially impact the trade-in cycle as we move through the spring or not? I think this will go very fast. At the minute that the dealer will start to reduce their MSRP, I think the trade-in will restart at a faster pace. Yeah. The trade-in is kind of protected as well. There's been a very high pricing increase that have been done over the last two, three years, something like 14%, 15%, 16% in some product lines. Some of the used value will be protected by those increases in MSRP as well. Yes, they are very high. Today, the used values, there will be a normalization happening, but because of those price increases, I'm not seeing a significant devaluation in used values that would be equal to what it was pre-COVID. Okay. Thank you. Your next question comes from Joe Altobello from Raymond James. Please go ahead. Thanks. Hey, guys. good morning. I guess first question is on inventory. I'm trying to figure out how much below optimal your network inventory situation is. I think you mentioned it's about 8% below where it was in fiscal 2020. You know, given your retail growth, where should it be? Or maybe asked another way, you know, where are dealer turns today, and where should they be? It seems like there's still a channel fill opportunity. Any color you can provide there would be helpful. Thank you. If we give you... This data is at the end of Q4. If we give you so some colors. On the ATV side, we're about 20% in units. We're about 20% below COVID, pre-COVID. In days, because we've been growing so much during the COVID, during the last two years, we're, in days, we're - 40% versus pre-COVID. On Side-by-Side, we're somewhat equal in units, but we're still a number of days 50% because then when we look at the growth we had, you just need more inventory to fuel the retail. For watercraft and three-wheel, we're slightly above pre-COVID volume because of the model year 2022. The pre-order for watercraft is like four times pre-COVID numbers and three-wheel, three times pre-COVID number on a slow. Season 2023 will end at the end of March. We believe we'll be at about the pre-COVID volume. Our booking with dealers on plan and the tracking for pre-order to consumer is also tracking to more normal. When we look at all this, we feel confident that we are in the right position with inventory by product line. In term of refilling the pipeline should be done by the end of Q1. Yeah. Absolutely. Thank you. Very helpful. Maybe just a follow-up on M 25. You mentioned earlier, you know, you're tracking well there. Is that still, you know, even with the higher interest expense and higher depreciation, I think you mentioned it's CAD 1.35 a share, are we still looking at a CAD 14 number in fiscal 2025 EPS? Yeah. Obviously, we have solid momentum. We have exciting product news coming out, this year, next year. We're in line to deliver on our M 25 commitment of CAD 1,350-CAD 1,450 EPS in fiscal 2025. Okay. Great. Thank you, guys. Thank you. Thank you. Your next question comes from Jaime Katz from Morningstar. Please go ahead. Hey, good morning. I have just one, quick one. I know it was mentioned in the prepared documents that there were still production inefficiencies and higher production costs. I'm curious how you guys expect that to play out over the course of the year, given that the halves could be sort of lumpy, lapping the introduction of the Switch and then also, you know, the closures or the... Slower, manufacturing maybe at certain points, in fiscal 2023. I guess how does the expense leverage or pressure sort of play out over the course of the year? Well, we've seen some favorable results in the fourth quarter coming from the turbulence. Y ear-over-year, that was favorable. That's expected to continue in Q1 because Q1 last year was the more challenging quarter from a supply chain point of view. We're expecting some benefits to materialize this quarter already. The back half theoretically could be much weaker on the top line. Maybe there is a little bit more pressure, at least from a growth perspective. There could be a bit of pressure, but overall, we're expecting solid quarters throughout the year. Again, depending on how the end of the year materializes. There's obviously gonna be a big benefit coming from lower turbulence in all of fiscal 2024. Thank you. Your next question comes from Derek Dley from Canaccord Genuity. Please go ahead. Yeah. Hi. Thanks. Just a clarification on you keep mentioning flat industry, is that volumes you're referring to? On top of that, you're expecting to get the low single to mid-single digit benefit from pricing? I'm sorry, I didn't hear fully your question, Derek. Yeah. Sorry. Just on the flat industry, expectation that you have, is that volumes that you're referring to? Yeah. Yeah. Yeah. Yes. Yes. There'll be a bit. Okay. Okay, good. Just coming back to the cash flow statement a little bit, the incremental CapEx this year, the CAD 750 million-CAD 800 million, given that the business has gotten bigger, and it seems like you have a material innovation pipeline, is that level sort of what we should expect as a new normal for the next few years? Yes, it's the, should be the new normal. Okay. Thank you very much. Thank you. Thanks. Your next question comes from Cameron Doerksen from National Bank Financial. Please go ahead. Yeah, thanks. Good morning. Just wanted to follow up on the, I guess, the working capital. You mentioned the CAD 400 million tailwind. Seb, can you give us any kinda sense as to when we might see some of that unwind? I'm just wondering if that's more of a second half of the year, or is that something we might see in the next couple quarters? Yeah. Good, good morning. Obviously, as I said, we've invested in keeping some unfinished inventory on the books last year and also higher raw material, as we wanted to have greater safety stock to adjust for any unforeseen changes in supplier capacity. We will still run with some buffer in H1. My expectation is that the benefit of the working capital will happen in the second half of the year, once we work with our suppliers, stabilize their production and adjust their capacity as well to ship. Obviously, the logistics is improving. That's why we're seeing an H2 benefit happening with that. That, that's helpful. Just on, I guess, sort of, I guess, debt and interest expense, I mean, obviously you've had this big investment in working capital, so, you've had to, you know, borrow more money here, to fund that. I mean, the, you know, the free cash flow profile still looks, you know, quite strong for at least the next couple of years. I'm just wondering what can you do, I guess, to, you know, to reduce debt and by extension, reduce your interest expense? Because I think your guidance assumes a fairly healthy increase in net interest expense. Well, from a balance sheet point of view first, I mean, we are at a healthy point. I mean, our leverage is 1.5 x at the end of the year, so it's a healthy leverage. Obviously, we've experienced higher interest costs coming from the adjustments in the base rate. We have the advantage that some of our debt is hedged, overall, we're assuming an average LIBOR of 5.6%. Even if the rates was to go up an extra 1%, it'd probably have an impact of, let's say, $5 million on the P&L. The priority is not to deleverage. At some point interest rates will come back down. Obviously we have strong EBITDA growth, which is allowing us to offset more than the increase in interest expense and depreciation that we're seeing. Right. From a capital deployment priority, I guess what you're saying is that maybe NCIB is a higher priority item than deleveraging? Absolutely. The returns are much higher to do NCIB. We plan on being active on the NCIB this year, as we have in the past years as well. It's a much better return of capital to shareholders than paying down debt. Okay. Makes sense. Thanks very much. Thank you. Your next question comes from Brian Morrison from TD Securities. Please go ahead. Thanks. Good morning. I wanna follow up on Cameron's question. With your financial guide and your reversal of working capital, that's $1 billion of free cash flow. The last two years you've done an SIB. What's the trigger point historically to proceed with this form of return as opposed to a NCIB? Obviously we've been active in both in terms of NCIB and SIB. NCIB, there's a certain maximum you can do in a 12-month period, the current NCIB, the maximum shares we can buy back is 3.5 million shares. As you said, our expectation is for solid free cash flow. We've always executed opportunistically on the NCIB. Obviously, today our multiples are low when you compare it to historical averages. Any option is on the table, but we plan on being active with buybacks this year. Okay. I just as you reiterated, your M25 targets valuations probably flipped to 2025. Any granularity on the details there? Has there been any change to your CAD 7 billion in year round and your CAD 1 billion on Marine? It looks like your EBITDA margin is a bit higher than your high 16% earlier. Any granularity on changes within that guidance? No, no material change. Obviously, the plan is what we communicated about six months ago, in June at the Investor Day. The good news is some of the momentum we were planning to have over the three-year period up to 2025 happened more quickly in Side-by-Side, giving us the confidence that we can achieve our 2025 targets with the more rapid momentum we saw in certain product lines. Obviously from a dealer value proposition point of view, dealers like doing business with us and they see that we're bringing new business to them. Just if you look in the last few months, we've announced the Switch. That's a brand new product line for them. We announced the Sea-Doo Rise as well. It gets a lot of market and excitement, so everything is lining up from a product line dealer point of view for us to be able to deliver on our commitment. Any increase to your CAD 500 million target on the Switch? No, not for now. Thanks very much. Thanks. Your next question comes from Sabahat Khan from RBC Capital Markets. Please go ahead. Great. Thanks, and good morning. Just a quick question, I guess on the Marine progress. Obviously a big growth number you're giving for next year, but it seems like you called out some supply chain issues. Maybe you can share some color on what specific kind of parts or areas you're having issues and maybe the cadence of this ballpark 50% growth that you're pointing to for this year. Yeah, good morning. Obviously, I mean, I won't go into detail, because it's between us and suppliers, I won't go into detail. Basically, it's a brand new platform and we were quite innovative the way we designed the product to obviously reduce costs and give to the customers some features. With one supplier particularly, it's more difficult than what obviously we had planned. We are in the middle of resolving it. We believe that things will improve in H 1. Okay, great. Just a quick one on kind of the Powersports PNA side. You know, there's a view out there that, you know, sales of this segment could go up during a downturn as maybe people spend on, you know, lower cost periphery items. If there is a macro slowdown, is there some sort of that sort of expectation built into your number here for the guidance for fiscal 2024? How are you thinking about the evolution of that segment, you know, through the cycle, at least over the next year and a half? Obviously, you're right that when there is a slowdown, it is a business that is more sustainable because people are still riding and are still need to maintain and repair their vehicles. Again, in our assumption, we're not building a, we're not building an assumption for an economic slowdown in the guidance. The growth is obviously coming from a higher number of units that are out there being used by our customers and also, the introduction of new models like the Can-Am, ATV that we're on, that we've just launched obviously has a high accessory attachment rate to it, and that's obviously gonna drive accessory sales up. That's where the growth is coming from with pricing as well. Great. Thanks very much. Thank you. There are no further questions at this time. I will turn the call back over to Mr. Philippe Deschênes to close the meeting. Thank you, Julie. Thanks everyone for joining us this morning and for your interest in BRP. We look forward to speaking with you again for our Q1 earnings call. Thanks again, everyone, have a good day. Ladies and gentlemen, this concludes your conference call for today. We thank you for joining, and you may now disconnect. Thank you.