Bom­bardier ex­pects 2019 rev­enue of $18B (U.S.)

Stockwatch Daily - - INDUSTRIALS & MATERIALS - Mr. Alain Belle­mare re­ports

BOM­BARDIER INC. has re­leased its 2019 busi­ness unit guid­ance and has con­firmed that it re­mains on track to achieve its 2020 fi­nan­cial ob­jec­tives. The 2019 guid­ance re­flects the an­tic­i­pated clos­ing of the sale of both busi­ness air­craft’s flight and tech­ni­cal train­ing ac­tiv­i­ties and the Q Se­ries air­craft pro­gram as of Sept. 30, 2019. All amounts in this press re­lease are in U.S. dol­lars un­less other­wise in­di­cated.

For 2019, Bom­bardier is tar­get­ing rev­enues of $18-bil­lion or more, rep­re­sent­ing a year-over-year in­crease of ap­prox­i­mately 10 per cent over 2018 guid­ance. This growth is ex­pected to be driven by: the en­try-into-ser­vice of the Global 7500 air­craft, which is sold out through 2021; ex­e­cu­tion on Bom­bardier’s strong $34-bil­lion rail back­log, which cov­ers more than 80 per cent of trans­porta­tion’s tar­geted 2019 and 2020 rev­enues; and an in­creased fo­cus on af­ter­mar­ket ser­vices across the port­fo­lio. Af­ter­mar­ket rev­enues are es­ti­mated to grow from ap­prox­i­mately $3.5-bil­lion in 2018 to ap­prox­i­mately $4.0-bil­lion in 2020 as the com­pany con­tin­ues to op­ti­mize its af­ter­mar­ket and ser­vices op­er­a­tions, lever­ag­ing its large in­stalled base which in­cludes over 100,000 rail­cars, more than 4,700 busi­ness jets and ap­prox­i­mately 1,250 re­gional jets.

Prof­itabil­ity is an­tic­i­pated to grow faster than the topline, and is ex­pected to be driven by solid con­ver­sion on rev­enue growth and the strate­gic re­shap­ing of com­mer­cial air­craft. EBITDA (earn­ings be­fore in­ter­est, taxes, de­pre­ci­a­tion and amor­ti­za­tion) be­fore spe­cial items is tar­geted to grow by ap­prox­i­mately 30 per cent over 2018 guid­ance to a range of $1.65-bil­lion to $1.80-bil­lion, while EBIT (earn­ings be­fore in­ter­est and tax) be­fore spe­cial items is tar­geted to in­crease by ap­prox­i­mately 20 per cent over 2018 guid­ance to a range of $1.15-bil­lion to $1.25-bil­lion.

From a free cash flow per­spec­tive, 2019 is ex­pected to mark the tran­si­tion from a heavy in­vest­ment cy­cle to a strong growth and cash gen­er­a­tion cy­cle. Sus­tain­able cap­i­tal ex­pen­di­tures are pro­jected to de­crease to ap­prox­i­mately $800-mil­lion or less on an an­nu­al­ized ba­sis, which rep­re­sents a de­crease of ap­prox­i­mately 50 per cent from the pre­vi­ous five-year av­er­age.

On a nor­mal­ized ba­sis, be­fore one-time items, Bom­bardier es­ti­mates free cash flow in a range of $250-mil­lion to $500-mil­lion for 2019. One-time items that are ex­pected to im­pact free cash flow in 2019 in­clude: a $250-mil­lion charge for the pre­vi­ously an­nounced re­struc­tur­ing; and a work­ing cap­i­tal con­tin­gency of $250-mil­lion largely as­so­ci­ated with the in­tense ramp-up of the Global 7500 pro­gram. Free cash flow in­clud­ing these one-time items is tar­geted to be break-even plus or mi­nus $250-mil­lion, re­sult­ing in an es­ti­mated cash on hand ex­ceed­ing $3.0-bil­lion by year-end.

Along with an­nounc­ing its

2019 busi­ness unit guid­ance, Bom­bardier reaf­firmed its 2020 ob­jec­tives of rev­enues in ex­cess of $20-bil­lion, EBITDA be­fore spe­cial items over $2.25-bil­lion, EBIT be­fore spe­cial items over $1.6-bil­lion and free cash flow be­tween $750-mil­lion and $1-bil­lion. In ad­di­tion to gen­er­at­ing strong cash flow from op­er­a­tions, Bom­bardier an­tic­i­pates end­ing 2020 with strong liq­uid­ity, in­clud­ing more than $3.5-bil­lion of cash on hand and a sig­nif­i­cantly im­proved lever­age ra­tio.

“Three years into our turn­around plan and Bom­bardier is a much stronger com­pany,” said Alain Belle­mare, pres­i­dent and chief ex­ec­u­tive of­fi­cer, Bom­bardier. “We are con­fi­dent in achiev­ing our 2020 ob­jec­tives and see tremen­dous op­por­tu­ni­ties beyond 2020. As we con­tinue to ex­e­cute our turn­around plan, we are build­ing a com­pany with great prod­ucts, strong back­logs and an ef­fi­cient cost struc­ture, ca­pa­ble of de­liv­er­ing su­pe­rior fi­nan­cial per­for­mance well into the fu­ture.”

The com­pany will pro­vide an up­date on its turn­around plan and dis­cuss its 2019 guid­ance and 2020 ob­jec­tives at its an­nual in­vestor day later this af­ter­noon. A live we­b­cast of Bom­bardier’s in­vestor day, along with the cor­re­spond­ing pre­sen­ta­tion, will be avail­able at the com­pany’s web­site. The we­b­cast will be­gin at 2 p.m. Eastern Stan­dard Time on Thurs­day, Dec. 6, 2018, and will be avail­able on the same web­site af­ter­ward.

(See BBD.B Ta­ble 1 on page 34)

About Bom­bardier Inc.

With over 69,500 em­ploy­ees across four busi­ness seg­ments, Bom­bardier is a global leader in the trans­porta­tion in­dus­try, creat­ing in­no­va­tive and game-chang­ing planes and trains. The com­pany’s prod­ucts and ser­vices pro­vide world-class trans­porta­tion ex­pe­ri­ences that set new stan­dards in pas­sen­ger com­fort, en­ergy ef­fi­ciency, re­li­a­bil­ity and safety.

Head­quar­tered in Mon­treal, Canada, Bom­bardier has pro­duc­tion and en­gi­neer­ing sites in 28 coun­tries across the seg­ments of trans­porta­tion, busi­ness air­craft, com­mer­cial air­craft, and aerostruc­tures and en­gi­neer­ing ser­vices. In the fis­cal year ended Dec. 31, 2017, Bom­bardier posted rev­enues of $16.2-bil­lion (U.S.).

We seek Safe Har­bor.

Pierre Beau­doin, Alain Belle­mare, Joanne Bis­son­nette, J R An­dre Bom­bardier, Martha Finn Brooks, Jean-Louis Fon­taine, Diane Giard, Au­gust W Hen­ningsen, Pierre Mar­couiller, Dou­glas R Ober­hel­man, Vikram Pan­dit, Car­los E Repre­sas, Antony N Tyler, Beatrice Weder di Mauro

(BBD) Shares: 2,124,668,878

Newspapers in English

Newspapers from Canada

© PressReader. All rights reserved.