Two years after launching our 2020 plan — and nearly halfway through that plan — we remain steadily focused on its achievement. All employees worldwide are completely aligned with our strategic priorities. This resulted in the flawless execution I witnessed this past year, and the record results I’m proud to share with you.
Revenues for the year increased by 9% to pass the $4 billion mark for the first time, due in part to good sales of Can-Am off-road vehicles and Sea-Doo watercraft. Our Normalized EBITDA* also increased by 9%, resulting in record normalized diluted earnings per share* (EPS) of $1.96, an increase of $0.25 or 15% per share compared to the same period last year, and all this, within challenging market conditions.
I can see and feel the result of our focus. We have talented people everywhere and they are motivated to deliver the plan. Beyond that, it is clear to me that our diversification strategy is also a key contributor: diversification in our product lines, well-balanced in our portfolio, with vehicles for every season; in our global sales network across 107 countries, and in our world-class manufacturing footprint in five countries around the world. In addition, we continue to innovate to keep an edge over our competitors.
While we are continuously adjusting our plan based on past learning and business realities, the ultimate objective of reaching the $6 billion mark and $3.50 EPS by FY 2021 through 10% revenue CAGR and 15% normalized EPS CAGR remains the same.
¹ See Non-IFRS measures section in Shareholder Information.
CREATE A STRONG PIPELINE OF NEW GROWTH OPPORTUNITIES
IMPLEMENT A MORE FLEXIBLE SUPPLY CHAIN TO IMPROVE CONSUMER EXPERIENCE AND REDUCE WORKING CAPITAL
RELENTLESS PURSUIT OF EPS IMPROVEMENT THROUGH ORGANIZATIONAL EXCELLENCE AND A LEAN MINDSET ACROSS BRP
Our growth is driven by the Can-Am brand, in particular the side-by-side vehicles such as the Defender and Maverick X3 models. These vehicles, addressing new markets, have significantly contributed to our excellent financial results in 2016, despite the X3 being introduced only in August.
An important element of our growth strategy is the expansion of our dealer network. We had aimed to sign on 200 to 300 new dealers and I’m pleased that we have succeeded in that goal. At the same time, we can see an important momentum among our worldwide dealers. Our Dealer Value Proposition, including the product lines and incentive programs, is being well received and creating exceptional engagement in the network. I’m very happy with the constitution of the network, and I’m confident that each dealer can have a successful business.
An important element of our growth strategy is the expansion of our dealer network. We had targeted to sign on 200 to 300 new dealers and I’m pleased that we have succeeded in that goal.
NEW POWERSPORTS DEALERS ADDED IN NORTH AMERICA
NEW EVINRUDE DEALERS ADDED IN NORTH AMERICA
NEW EVINRUDE BOAT BUILDERS ADDED IN NORTH AMERICA
SIDE-BY-SIDE AND SPYDER COVERAGE IN NORTH AMERICA OVER THE PAST FOUR YEARS
In 2016, we introduced several more vehicles designed and built along the modularity principles of BM2, adapted from the automobile industry. These provide greater flexibility in the design, manufacturing and assembly of our vehicles, which allows us to offer an unprecedented number of new vehicles in a very short period of time.
I’ve always insisted that our strategic priorities apply not only to our products, but also to our administrative processes. An excellent example this year is the management cockpit, which is a new way of holding our management committee meetings that is proving to be a strong alignment tool for all members of my team, helping us to focus on what’s important, act and react rapidly as needed, and consistently communicate key performance indicators.
The modular approach of BM2 provide greater flexibility in the design, manufacturing and assembly of our vehicles, which allows us to offer an unprecedented number of new vehicles in a very short period of time.
In December 2015, BRP announced a $118 million investment in its Valcourt manufacturing site. The first phase of this five-year project is now complete and we can already see important cost reductions attributable in part to better material flow, inventory reduction, decreased set-up times, and new technologies that reduce our manufacturing costs and create value for our customers.
At our Gunskirchen site, the 2020 plan allowed us to reduce the number of assembly lines from five to two, to introduce new technologies such as plasma coating, and to begin the in-house fabrication of turbo-charged systems, enabling us to better design powerful and fuel-efficient engines.
Finally, our state-of-the-art Juárez 2 manufacturing facility in Mexico completed its scheduled ramp-up during 2016. This plant allows for the exceptional growth of our side-by-side vehicles, as well as our ability to launch a new SSV every six months. The one-piece flow system instituted there enables us to keep only 8 hours of inventory at all times, which is an important efficiency gain.
We can already see important cost reductions attributable in part to better material flow, inventory reduction, decreased set-up times, and new technologies that reduce our manufacturing costs and create value for our customers.
We outperformed. Period.
I cannot overstate how proud I am of all of our employees. The flawless execution, focused approach to our strategic priorities and projects, and our commitment to reaching our stated objectives are truly exceptional. What’s more, our workplace safety rate keeps improving, reaching a record performance for the third year in a row.
We concluded an extremely good year, with record financial results, award-winning products celebrated by both dealers and consumers, and an engaged worldwide workforce. The powersports environment has been competitive, this past year in particular. BRP has maintained its sustained focus on its strategic priorities and succeeded in reaching its objective despite a challenging business environment.
I am convinced that this focus, along with our diversification strategy and our passion for innovation, is the key to our success. We said we were going to outperform, and we did.
BRP is on a roll! I hope you can feel it too.
President and Chief Executive Officer