Bombardier announced today its financial results for the third quarter of 2022, marked by solid revenues, a significant improvement in adjusted EBITDA, continued positive free cash flow generation and a growing backlog that reflects strong order activity.
The company also continued to reduce debt, with a further $100 million(5) reduction through cash on balance sheet. Order activity continued to be strong, marked with an increase in backlog and a unit book-to-bill of 1.3.
“Our performance in the third quarter of 2022 demonstrated that our fundamentals are very strong, especially when it comes to profitability, free cash flow, liquidity, as well as continued and steady debt reduction from our balance sheet,” said Éric Martel, President and Chief Executive Officer of Bombardier.
“We are progressing steadily and confidently toward our long-term objectives.”
Solid Financial Performance from Operations in Third Quarter of 2022
Revenues were at $1.5 billion in the third quarter of 2022, with full-year deliveries on track for more than 120 aircraft.
These include a 20% year-over-year increase in aftermarket revenues, which rose to $372 million, thanks to increase in flight hours, but also to the expansion of Bombardier’s service centres in strategic locations around the world.
“Our most recent service centre inauguration in Florida strongly emphasizes the important contribution of the growing aftermarket business to our bottom line,” said Martel.
“With the addition and expansions this year of our service centres and one more inauguration event to come in the United Kingdom this month, we have increased our service centre footprint by no less than 1 million square feet.”
The company has also seen an impressive margin expansion over the quarter, with adjusted EBITDA rising to $210 million, which represents a 48% year-over-year improvement.
Adjusted EBITDA margins rose 460 bps year-over-year, from 9.8% to 14.4%.
The main drivers behind this are the margin expansion of the Global 7500, as well as continued progress on cost structure.
Backlog rose to $15 billion in the third quarter of 2022, an increase by $300 million since the end of the second quarter 2022.
“While our team has certainly been opportunistic and made the most of the market momentum this quarter, we continue to focus on things we can control, which keeps us well equipped to face any market conditions that may be ahead of us,” said Martel.
Continued Liquidity Improvement
Free cash flow(2) was at $52 million in the third quarter of 2022, on track to meet the revised guidance(1) of greater than $515 million for the year announced in the previous quarter.
The company also announced a new 5-year committed secured revolving credit facility of $300 million subsequent to the quarter end.
“This syndicated revolver is another significant step we have made to continue strengthening our balance sheet,” said Bart Demosky, Executive Vice President and Chief Financial Officer of Bombardier.
“The incremental liquidity will further enhance our financial position and increase our operating flexibility.”