Workers are seen on the assembly line making snowmobiles at the BRP plant in Valcourt, Que., October, 2020. The company is setting up a dedicated team with its own resources to focus on defence and specialized vehicles after a surge in interest in their products from many countries in recent months, BRP’s CEO said.Christinne Muschi/The Globe and Mail
BRP Inc. DOO-T, the Canadian maker of Ski-Doo snowmobiles and Sea-Doo watercraft, is aiming to boost its little-known defence business after a sudden wave of interest from North Atlantic Treaty Organization countries.
As geopolitical risk climbs worldwide with armed conflict and regional instability, the company intends to bolster its small military equipment unit with a view to scaling it up in the years ahead. A dedicated team with its own resources is being set up to focus on defence and specialized vehicles, reporting to Thomas Uhr, chief technology Officer.
“We’ve been approached by many, many countries in the last few months because our products are considered light mobility,” BRP chief executive officer José Boisjoli told analysts during the company’s investor day Thursday. He declined to provide specifics on the financial opportunity.
“We’re just starting,” Mr. Boisjoli said. “You will hear about it more and more in the next few weeks or months because it’s something that we are more and more involved in.”
It’s not a new business line. BRP has been selling a small volume of snowmobiles and all-terrain vehicles to military forces for the past 15 years, Mr. Boisjoli said. The company also makes multifuel engines for the U.S. Army on occasion while its side-by-side off-road vehicles are used by the Red Cross.
As Canada and its allies boost their defence spending, BRP’s once-sleepy business is budding to life. Prime Minister Mark Carney’s government alone has committed the country to the biggest increase in military spending since the Second World War, more than doubling the existing defence budget to between $110-billion and $150-billion by 2035.
From established players to startups, Ottawa’s massive defence spending is set to transform the industry
Opinion: Canada must move from defence procurement to defence production
That in turn justifies a more meaningful investment in BRP’s defence business, said company spokeswoman Emilie Proulx. The focus now is “to build the foundations for future growth,” she said.
BRP is searching for a new CEO after Mr. Boisjoli said in May he’ll retire by the end of January. His replacement will have to navigate a volatile business environment as U.S. President Donald Trump’s trade policies have knock-on effects on both sales and the supply chain.
Under Mr. Boisjoli’s watch, BRP has diversified its product lineup by pushing hard into non-seasonal side-by-side vehicles, hired thousands more employees and boosted annual profit above $700-million. The company now has a market capitalization of $6.8-billion after a strong stock run-up over the summer and holds a roughly one-third share of the global powersports market.
Valcourt, Que.-based BRP is targeting earnings per share of about $8 on revenues of $9.5-billion for its fiscal 2028, which ends Jan. 31 of that year. It plans to add 100 dealers to its network over that time.
link
