Quebec business icon Laurent Beaudoin is stepping down as chairman of BRP Inc. as the maker of Ski-Doo snowmobiles and Sea-Doo watercraft continues to outpace rivals amid uncertainty about the strength of the power sports market.
Mr. Beaudoin, 80, will cede the chairmanship to BRP’s chief executive officer, José Boisjoli, while current board member Michael Hanley will become lead director, the company said Tuesday. Mr. Beaudoin’s son Pierre will join the BRP board, a regulatory filing shows. The changes are expected to take effect at the annual meeting of investors next month.
BRP shares rose 3.5 per cent to close at $43.08 in trading Tuesday on the Toronto Stock Exchange. They’ve lost 39 per cent since hitting a 52-week high of $71.11 last September.
The transition highlights the extent to which BRP’s controlling shareholders – U.S. private equity firm Bain Capital and the family of company founder Joseph-Armand Bombardier – have faith in Mr. Boisjoli. The two shareholders together hold roughly 80 per cent of BRP’s voting power.
Mr. Boisjoli, 61, grew up riding motorized dirt bikes not far from BRP headquarters in Valcourt, Que. He was a senior executive for four years at BRP before being named CEO when the company was spun off from from Bombardier in 2003. While Bombardier labours through a turnaround after massive aircraft development costs nearly forced it into bankruptcy, Mr. Boisjoli has rebuilt the power sports equipment manufacturer into one of the industry’s top performers.
BRP profit for the year ended Jan. 31, 2019, was $227-million, or $3.10 a share, on revenue of $5.24-billion. The company expanded North American sales by 9 per cent from the prior 12-month period as more customers were drawn to its side-by-side off-road vehicles and personal watercraft. It is forecasting fiscal 2020 earnings-per-share of between $3.50 and $3.70.
“The stock appears to be already pricing in an economic slowdown,” National Bank of Canada analyst Cameron Doerksen said in a note published March 22. “Although we believe some macro-concern is warranted, the data we track continues to be supportive of the power sports market,” he said.
There is “no evidence” of an imminent drop in demand for BRP products in particular, Mr. Doerksen said. The company continues to take share from rivals, increasing sales 9 per cent in the fourth quarter while the industry as a whole saw no growth, he said.
Mr. Beaudoin expressed confidence the company would continue to deliver strong results and evolve with Mr. Boisjoli as chairman and CEO. Although he is stepping down from active duty, Mr. Beaudoin says he will remain a mentor and adviser to the management team. The move comes roughly a year after he left Bombardier, which he transformed into a global manufacturing giant.
Nicolas Van Praet