Even the best CEOs often stick close to one point on a spectrum. There are the finance whizzes, who concentrate on ratios and balance sheets. The product specialists, who are obsessed with the design and operating performance of their companies’ offerings. And the gregarious sales and marketing types who know how to get employees, dealers, customers and just about anyone in between pumped up.
Spend a few hours with BRP Inc. CEO José Boisjoli in the company’s hometown of Valcourt, Que., where Joseph-Armand Bombardier started manufacturing and selling snowmobiles in 1937, and you realize that Boisjoli covers all those bases—and more. BRP is the acronym for Bombardier Recreational Products, the venerable maker of Ski-Doos and Sea-Doos that global transportation giant Bombardier Inc. sold off in 2003 to concentrate on its then huge plane and train manufacturing businesses, and the year it put Boisjoli in charge of its offspring.
But there’s been quite a reversal of fortunes since then. Bombardier has sold off much of its operations, and its 2022 revenue of $11.1 billion was less than half of what it was in 2004, the year after it sold BRP. By contrast, BRP’s revenue surged by 31% for its 2023 fiscal year ended this past Jan. 31 and cracked $10 billion—almost as much as its old parent, and 4.6 times greater than its first year.
At BRP headquarters in Valcourt, the corporate Boisjoli, a wiry and animated 66-year-old dressed in a stylishly skinny blue suit and open-necked dress shirt, starts in the boardroom. He wants to give an investor-style slide presentation of highlights from BRP’s first 20 years. The two-storey red brick and concrete building was Bombardier’s first manufacturing plant in the 1940s. Boisjoli points to a corner office that belonged to Joseph-Armand. “I didn’t want to take it,” he says with a smile. “Too much pressure.”
The highlights are impressive indeed. There’s the growth in revenue, earnings, total employees (up to about 23,000 from 7,500) and BRP’s stock market capitalization since it went public in 2013 (up 8.5 times at the end of BRP’s fiscal second quarter this year). It started with two product lines, snowmobiles and personal watercraft (Ski-Doos and Sea-Doos), and has added six more: pontoon boats, fishing boats, three-wheelers, all-terrain vehicles and side-by-side vehicles. Brands include Lynx snowmobiles, Can-Am On-Road and Off-Road vehicles, Rotax engines made in Austria, Manitou pontoons and Quintrex, Australia’s leading aluminum boat maker.
But Boisjoli, who’s an engineer, is also a powersports enthusiast, and he waxes lyrically about weekends spent tearing around the countryside on motorized vehicles in the summer or winter with fellow aficionados. “Saturday night, you talk about what happened during the day—it was too hot, too cold, we hit water. There is a story around the experience,” he says. “I think at BRP we have done a very good job going from selling the nuts and bolts to selling the experience.”
That attachment is a powerful force that transcends borders. In 2003, BRP already sold vehicles in 70 countries, although Boisjoli says it was mainly North America and a bit of Europe. The company is now up to more than 130, through about 3,000 dealers. The United States and Canada still account for the biggest share, but a quarter of all sales are now overseas and growing fast. And the company has 14 plants in Canada, the U.S., Austria, Finland, Mexico, Australia and Germany.
There certainly have been daunting challenges over the past two decades—the 2008-09 financial crisis and the COVID-19 pandemic, in particular. But Boisjoli and his team made some deft choices to get through them. Their passion for power- sports has been a big factor, too.
“The business side? There’s a ton of CEOs who get that,” says Rob Strauss, who’s run Rob’s Performance Motorsports in Johnson Creek, Wis., about halfway between Milwaukee and the state capital of Madison, since 1982. He first met Boisjoli at the annual World Championship Snowmobile Derby in northern Wisconsin in 1998, when Boisjoli was head of Ski-Doo and Sea-Doo for Bombardier. Today, Strauss says, Boisjoli still has a “sweaty-palms performance enthusiasm” for powersports and an almost unerring long-term vision.
“Without that vision, the past 20 years could have been quite different,” Strauss says. And one of the biggest tests for Boisjoli and BRP came right at the beginning.
One night in April 2003, Boisjoli was asked to stay after 5 p.m. at Bombardier’s headquarters in Montreal. Executives told him they’d decided to put the recreational products division up for sale, and he was to go to Valcourt the next day and explain that to the 2,000 employees at the historic Bombardier plant and offices there. They also told him to stick to a script of financial jargon they provided.
“I was in shock, because nobody was expecting this,” says Boisjoli. Things did not start well at the local hockey arena the next day (BRP owns that arena, as well as a golf course, billiards hall, swimming pool and other community facilities). “There was no reaction. It was like talking to a wall,” he says. So, Boisjoli went off-script and declared that it was “an opportunity to prove to the world that we can be successful by ourselves.”
That August, a sale was announced. BRP fetched $1.23 billion, with the new company 50% owned by Boston-based private equity giant Bain Capital, 35% by the Beaudoin-Bombardier family (Joseph-Armand’s descendants) and 15% by the Caisse de dépôt et placement du Québec.
The first official day of business for BRP was Dec. 18, 2003, and Boisjoli moved fast. In 2004, he relocated the headquarters to Valcourt from a Montreal suburb. “When people are closer to the operation, they make better decisions than on the 15th floor in a city,” he says.
Valcourt is also a convenient destination for executives and factory employees. About an hour-and-a-half’s drive east of Montreal, the town is less than 45 minutes away from Drummondville (where Boisjoli and his family live), Sherbrooke, Bromont and Granby.
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There’s a feeling and focus in the air, as well. BRP’s engineering centre, plus a design and innovation centre, are next to its head office. The company’s sprawling factory complex in the middle of town, where it makes snowmobiles seven months a year and the three-wheeled Can-Am Spyder roadster (two wheels in the front, one in the back) for five months, is a five-minute drive south. “I’m not tempted to go there every day, but I go often,” says Boisjoli.
Joseph-Armand’s original factory on the site is still a sliver in the new facility, with historic black-and-white photos in large windows that overlook today’s assembly lines. Just north of the factory is the Museum of Ingenuity J. Armand Bombardier, owned by a family foundation. On the site is the original garage in which he developed snowmobiles, now converted to an exhibit space. In total, about 4,000 people work for BRP in Valcourt in a town with a population of only about 2,000.
Like many people in rural areas, Boisjoli grew up with a love of powersports. He was born on a farm in Wickham, Que., south of Drummondville. “I had my first snowmobile at 10 and my first motocross at 14.” He earned an engineering degree at the University of Sherbrooke in 1982 and joined Bombardier in 1989.
After relocating BRP back to Valcourt, Boisjoli moved to diversify its product line, dealer network and manufacturing footprint. All-terrain vehicles (ATVs), which the company had produced since the 1990s, were a logical choice, and in 2006, BRP resurrected the Can-Am brand (used for motocross from 1973 to 1987) and affixed it to its line of ATVs. Larger, two-passenger side-by-side utility terrain vehicles (UTVs) also made sense, and BRP entered that market in 2010 with the Can-Am Commander.
But even after the return to Valcourt, he moved much of BRP’s manufacturing to low-cost Mexico—the ATVs in particular. The company opened its first plant in Juárez in 2007, and now has three there and one in Querétaro. Benoit Poirier, an analyst with Desjardins Securities in Montreal, says 75% of BRP’s throughput is now assembled in Mexico.
Throughout its first decade, BRP also continued to develop the revolutionary REV chassis for Ski-Doos, introduced in 2003, which moved the steering column closer to the front of the vehicle, creating a whole new riding experience.
The steady stream of new products reflected Boisjoli’s belief in continuing to invest in research and development, even through tough times like the financial crisis. In total, BRP has spent approximately $3.4 billion on R&D through its 20-year history.
For its first 10 years, BRP was a private company with Bain as its largest shareholder. PE firms sometimes have a reputation for being tough guys—moving in, encouraging managers to slash costs and then trying to exit at a profit within three to seven years. But the Bain-BRP relationship is now 20 years old, and it’s an almost textbook case of how a PE firm can help strengthen a company.
BRP director Joshua Bekenstein was a co-founder of Bain in 1984, a managing director and was named co-chair in 2016. He stepped down at the end of 2022 and says he’s now “transitioning out” as a senior adviser. He helped arrange two substantial Bain investments in Quebec: BRP and Dollarama Inc. (in 2004). He still sits on both boards. In BRP’s case, “we didn’t have a 20-year plan when we invested,” Bekenstein says. “But this is a great company that continues to grow really well.”
Nevertheless, since BRP went public in 2013, the three original investors have sold shares, and they’ve taken a more hands-off role. Bain is down to 20%, the Beaudoin-Bombardier family at 28%, the Caisse at 6%, BRP insiders at 2% and the public float at 44%. Bekenstein says he and other directors let Boisjoli and the managers make decisions. “We’re informed and aware of everything that goes on, but we’re not driving it.”
As pleased as people inside and outside the company are with BRP and Boisjoli, however, they were all knocked for a loop by the biggest crisis to date: the pandemic.
“I talk to dealers all over the U.S.,” says Rob Strauss in Wisconsin, “and they were the craziest years of my 41 in the business.”
In 2020, many powersports dealers and manufacturers shut down for months at a stretch. “We were absolutely bleeding cash on a daily basis,” Strauss says. Then there were global supply chain bottlenecks in 2021. Factories and showrooms were open again, but it was very difficult for manufacturers to get key components for their vehicles.
Yet, an unprecedented turnaround soon followed, he says. “COVID brought so many people who were new to the business. It brought people together. We started to grow at a pace that was out of control.”
The view of the world from Valcourt was similar. BRP’s manufacturing operations were shut down in April and May of 2020, and even June in some locations. So product shipments—which counted toward sales—were down. But retail demand still grew every quarter. The company finished its 2021 fiscal year the following January at $6 billion in revenue, just $100 million less than the previous year, and BRP earned a $363-million profit. And demand continued to soar as manufacturers struggled to keep up.
Boisjoli and his team made two excellent decisions as bottlenecks emerged. First, they kept running factories at almost full speed. But the manufacture of parts and systems like front shock absorbers and luggage cases was delayed. So they decided to ship vehicles to customers with some components missing and deliver them later. “We gained six points in North American power-sports market share in one year,” he says. He’s also impressed at the purchasing power of many new customers. Over the past four years, the average household income of buyers has soared from US$115,000 to US$165,000.
Indeed, Boisjoli and analysts who follow BRP say there’s still room to grow in several market segments, and in countries around the world. Desjardins Securities’ Poirier says BRP dominates snowmobile and personal watercraft sales in North America with 60%-plus market share, but it’s still behind in side-by-sides at 30%. He thinks BRP could hit 40% within a few years.
Powersports vehicles are still a discretionary purchase, Poirier says, compared to, say, consumer staples. But he says making a quality product helps. In North America, Europe and Australia, BRP has won market share by sticking to the premium segment. In China, the company has moved more cautiously, and Poirier says that’s probably wise. Many competing Asian producers flood the market with low-cost value offerings.
There’s also the shift to electric vehicles, and here again, Boisjoli appears to be moving early and deftly. In 2021, BRP announced a five-year electrification strategy. It will invest $300 million over five years. The company is aiming to have at least one electric product on each of its eight platforms by 2027. But Boisjoli also notes that, unlike the automobile sector, there are no government regulations in powersports yet. Even so, he says BRP “cannot ignore” the trend.
Personally, Boisjoli remains passionate about powersports and says he has no plans to retire any time soon. “He’s still riding his motorbikes and snowmobiles,” Poirier says. “He has people who could take over, but I don’t think he’s there yet.”
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