BRP's Competitive Advantage to Endure for Longer Duration, Evidencing a Wide Moat

Fiscal 2024 (ending January) should be another banner year for BRP's sales given resilient consumer demand despite only modest backfill of units remaining at its dealers. Thanks to a team that remains focused on its long-term product and operational priorities, we believe the firm should continue to maintain strong competitive positioning. BRP's strategic priorities focus on market share growth, lean operations, and cultivating an engaged workforce, all while honing in on evolving customer demands. With manufacturing facilities located near demand (for example, personal watercraft in Mexico) and timely spend to increase facility capacity as needed, BRP should continue to capture efficiencies from its plants. Firmwide centers of expertise and excellence allow BRP to manufacture optimally, improving utilization and allowing it to bring products to market quickly, ensuring a continually relevant and in-demand product lineup (with electric vehicle offerings in all segments by 2026). Because BRP is exposed to many customer segments, we don’t believe acquisitions are required for expansion. However, we think entry into white-space categories (like motorcycles) and small acquisitions, particularly in parts and accessories or marine, are possible and could support margin improvement.