Joe Altobello: And just one last one, if I could. The renewal of the NCIB, the timing of that, is that impacted at all by the fact that the Canadian tax on buybacks goes into effect January 1? Or is that not in your thinking?
Sébastien Martel: Well, obviously, we don’t like the tax. We don’t think that — we think that the government missed the mark in putting the tax in play but it’s not impacting our decision whether or not to do buybacks. So 2% tax that they’re putting in place, if you look at what we’ve done in terms of investments over the last 5 years. And that tax is meant to stimulate companies to do investments in the business. But if you see the amount of CapEx we’ve done, the R&D we’ve done over the last 5 years, it’s not because we’ve done buybacks but it has held us back. And so no, not related to anything on timing.
Operator: Next question will be from Benoit Poirier at Desjardin Capital Markets.
Benoit Poirier: Just to come back on the promotional activities, could you mention maybe quantify more color about the impact in the quarter and whether next year you’re going to be trending in line with pre-pandemic level or above in order to maintain dealer inventory at a good level?
Sébastien Martel: For the quarter, the promotional environment was a headwind of 100 basis points in the quarter versus last year. You might recall that when we issued guidance, we said we expect promotional environment to be a headwind of 200 basis points. We got a positive tailwind of during [indiscernible]. The expectation is that we would keep a 100 basis points this year. Year-to-date, we’re running at 190 basis points. So we’re still within our expectations or our assumptions. And I expect the end of the year will probably end at 200 basis points. For next year, again, given that we are diligent in managing inventory, I think that’s going to help us in being less promotional and making sure that we focused on dealer profitability. And as you know, dealers are making more money selling our products. And we think that is what’s going to be driving our retail performance more than discounting non-current units.
Benoit Poirier: Okay. Perfect. And just in terms of capital deployment, you end up the quarter with a leverage of 1.4. I would be curious to get more color about whether you still expect some working capital reversal in Q4? And how does the market softening impact capital deployment with respect to a potential SIB sub product launches or any opportunity maybe to look more closely at M&A over the next 12 or 24 months given the softening market environment?
Sébastien Martel: Those are few followings on that question. But obviously, given the production cuts we’ve done, it is going to impact the tailwind that we were expecting from working cap that we were expecting $400 million. So we’ll probably be short of that but still, we’re expecting a tailwind in the fourth quarter. We’ll be generating over $1 billion of free cash flow this year. And so some of that went through the NCIB. We — as you saw, we just reinitiated our NCIB and so we’ll be opportunistic on that area as well. And as we said, our priority is to continue to invest in the business with OpEx — with CapEx, sorry, because we’re obviously very focused on growing this business and we’ve been successful doing so and we’ll continue focusing on that.
And as for the M&A, again, we’ve always been opportunistic. If it happens, we’ll obviously consider it if it’s strategic to our business. Certainly something that we look at but we’re not necessarily in the market looking for M&A activity today.
Operator: Next question will be from Xian Siew at BNP Paribas.
Xian Siew: Maybe given the kind of softer demand, can you talk about the cost base and how you can kind of maybe places where you can kind of cut the cost to kind of protect the margin. Any thoughts on that?
Sébastien Martel: Yes. Well, it always varies on how soft the market is. First thing we want to be strategic on what we look at when we address costs. We want to be flexible as well. But we want to protect the business for the long term. And so the last thing we want is cut purposelessly in activities such as R&D and key marketing activities that will hurt the business in the long term. But we want to be tactical as well and address short-term headwinds that we might see in the business. So there is room to adjust our cost structure in the short term, yet plan for the long term as well.
Xian Siew: Okay. Got it. And then I think you kind of talked about expectation a little bit for industry retail going into next year. But maybe can you think about the different geographies. Obviously, international is softer in October, does that kind of trend where North America kind of outperforming international continuing to next year, do you think?
José Boisjoli: Well, if you look to our results in Q1, Q2 and Q3, I mean, we saw some weakness since the beginning of the year in EMEA and APAC. It’s a market that fluctuated a lot in the last three quarters. Now obviously, at the end — at the tail end of Q3, it was worse than what we were expecting. United States is still okay but there is some key economic data that we’re following that we need to be cautious. The unemployment rate is still low at 3.9%. The inflation in U.S. at the end of October, the inflation is going down 3.2% at the end of October, the closer to the target of 2. Consumer confidence decline in July — since July from 71% to 61%. And the credit card balance is record high, then there is a sign that the U.S. is also softening. And this combined to the international market, particularly EMEA and APAC. And again, the two conflict in the world, that’s why we prefer to be prudent.
Operator: Next question will be from Jonathan Goldman at Scotiabank.
Jonathan Goldman: On the retail trend, I was wondering if you can discuss the cadence of retail, how it’s trended in November? Did you see the pace of declines accelerate versus October or show any moderation or any color on the cadence would be helpful.
Sébastien Martel: Well, on the — we don’t have industry numbers yet for November but our retail is still up but we expect the industry to be down in November.
Jonathan Goldman: Okay. Perfect. And then second, on the competitive dynamics, the presentation calls out elevated discounting by competitors on new model year units. Do you have a sense if that’s largely a reflection of the worsening industry or weaker consumer or maybe something specific to a competitor strategy, maybe a share gain approach?
