Bombardier will host its 2023 Investor Day this morning. Éric Martel, Bombardier’s President and CEO, along with Paul Sislian, Executive Vice President, Aftermarket Services & Strategy, and Bart Demosky, Executive Vice President and Chief Financial Officer, will present an overview of the company’s solid progress made and new opportunities for diversified growth.
“In 2021, we laid the foundation for a stronger, more resilient and predictable Bombardier by 2025,” said Martel.
Halfway down the road, we can say we are delivering on that promise.
“All of Bombardier’s strategic priorities are on track or ahead of plan.
We are therefore proud to announce today that we are confidently raising the bar.
The future is bright for Bombardier. While we are carefully monitoring the current market situation, we know that we have all the ingredients in place to remain a driving force in the industry.
Our financial performance allows us to secure our vision for the future, and enable our exceptional, dedicated and passionate teams to lead the way toward more sustainable aviation.”
Updated 2025 objectives reflect strong execution and confidence in business fundamentals
Based on strong business execution and fundamentals, Bombardier will announce today that it is updating its 2025 objectives(1).
The company is now targeting more than $9 billion in annual revenue by 2025, with an adjusted EBITDA(2) of more than $1,625 million, and a healthy adjusted EBITDA margin(3) of approximately 18%.
Bombardier also expects to generate significant free cash flow(2) in the coming years, to the tune of more than $900 million per year by 2025 and will continue to de-lever its business, now expecting to reach a net leverage ratio(3)(4) in the range of 2.0x to 2.5x.
|Initial 2025 objectives(1)||Updated 2025 objectives(1)|
|Revenues||~$7.5 billion||˃$9 billion|
|Adjusted EBITDA(2)||~$1,500 million||˃$1,625 million|
|Adjusted EBITDA margin(3)||~20%||~18%|
|Free cash flow(2)||>$500 million||>$900 million|
|Net leverage ratio(3)(4)||~3.0x||2.0x – 2.5x|
Consistent progress on all key objectives since 2020
Between 2020 and 2022, Bombardier’s revenues(5) grew 23%, to $6.9 billion. The expanded aftermarket business was an important contributor, with revenues increasing by more than 50% in the same period.
The company more than quadrupled its profitability to $930 million in adjusted EBITDA(2), and generated $835 million in free cash flow(2) over the last two years.
In terms of deleveraging, Bombardier kept up its opportunistic and proactive approach and has reduced its total debt by $4.5 billion, when including this year’s debt-related transactions, a 45% reduction compared to 2020.
This also resulted in credit rating upgrades from both S&P and Moody’s in 2022.
Stronger balance sheet and robust cash generation
Bombardier will continue to focus on strengthening its balance sheet, optimizing its liquidity requirements, and improving its leverage level.
The company is revising its net leverage ratio(3)(4) objective to a range of 2.0x – 2.5x by 2025, from the previous approximately 3.0x target, which would be approaching investment grade credit levels.
On the back of improved business fundamentals, Bombardier now expects to generate more than $900 million per year in free cash flow(2) by 2025.
As its leaders will explain during Investor Day, this gives Bombardier ample flexibility and sets it up for significant capital allocation optionality in the future.
Maintaining the leadership position in the industry
With continued strong demand in the medium and large business jet categories, Bombardier is well positioned with its industry-leading Challenger and Global platforms.
Over the past two years, the company introduced the new Global 8000, an evolution of the industry flagship Global 7500 aircraft, further solidifying Bombardier’s leadership position in the large jet segment.
Bombardier also upgraded its best-selling Challenger 300 family with the Challenger 3500, an addition that has maintained Bombardier as the leader of the super mid-size market.
Thanks to its outstanding portfolio, Bombardier had the highest number of deliveries among business jet manufacturers for the last two years, as reported by the General Aviation Manufacturers Association (GAMA).
Bombardier maintains its strong focus on sustainability and takes concrete steps to manufacture and service aircraft with the smallest possible environmental impact on the path toward its goal of a 25% reduction in greenhouse gas emissions by 2025, relative to 2019 levels.
This has been a clear priority for its research and development teams through programs like the EcoJet research project, unveiled in 2022, and was also behind the company’s decision to cover all its flight operations with sustainable aviation fuel (SAF), using the Book and Claim system, from 2023 onwards.