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Bombardier Confirms Outstanding Performance for 2022. Targets Third Consecutive Year of Steady Growth

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Bombardier  unveiled today its fourth quarter and full-year 2022 financial results, confirming an outstanding financial performance that exceeded guidance. The company also presented its 2023 guidance and announced that it will provide a further update on the execution toward its 2025 strategic objectives at a virtual Investor Day on March 23, 2023.

“The 2022 results we are presenting today are a resoundingly positive culmination of a strong year, and a testament to the team’s effort to execute in the fourth quarter. We exceeded commitments across the board, be it on deliveries, our growing aftermarket business and profitability,” said Éric Martel, Bombardier’s President and Chief Executive Officer.

“We are also proud of the fantastic job our team did on deleveraging, with $1.1 billion dollars of debt retired in 2022 thanks to cash from our balance sheet and operations. This puts us ahead of our plan and gives us the flexibility to be even more proactive and opportunistic going forward.”

2022 Results Beat Guidance on Key Metrics

Bombardier exceeded its year-end targets on all guided metrics, beating the numbers presented in August 2022 when the company updated its 2022 guidance. The company reported $6.9 billion in revenues, an increase of 14% year-over-year. The increase comes on the back of higher deliveries and a favourable aircraft mix, but also a significant contribution from aftermarket services, which grew 22% year-over-year to reach $1.5 billion in 2022.

In terms of profitability, the company reported an adjusted EBITDA of $930 million, a 45% increase year-over-year and well over the guidance of greater than $825 million. The growing contribution of the Global 7500, cost structure improvements, higher aftermarket contribution and a better aircraft mix were among the key factors in this substantial increase. The company also beat guidance on the full-year reported EBIT, which was at $538 million.

The earnings growth, along with the strong order intake, drew an impressive performance on free cash flow generation of $735 million from continuing operations for 2022, which exceeded the updated 2022 guidance and represents a significant improvement of $635 million year-over-year.

The company made the most of the strong demand and competitive product portfolio, and avoided pitfalls related to the pressures on the supply chain to deliver 123 aircraft, 49 of which were delivered in the fourth quarter of 2022. The healthy backlog, which increased $2.6 billion year-over-year to reach $14.8 billion, and a 1.4 full-year unit book-to-bill, reflect continued favourable medium- and long-term industry fundamentals and confirm that Bombardier has the right product mix to continue being the leading force in its categories.

The strong performance allowed the company to overperform on another key strategic objective: debt reduction. Over the course of 2022, Bombardier repaid $1.1 billion of debt with cash from balance sheet and operations. The drop in interest costs coming from debt reduction, along with rapid growth in profitability and the recognition of significant tax attributes on balance sheet also led to positive EPS.

2023 Outlook

Bombardier also unveiled today its outlook on guided metrics for 2023. Revenues are expected to be greater than $7.6 billion, driven mainly by increase in deliveries, which are expected to be greater than 138 units. The continued and steady growth of aftermarket services, which the company continued to ramp up in 2022 through a significant expansion of the service centre network and recruitment of skilled technicians, is also to be an important driver in 2023.

The company expects to continue outpacing revenue growth as it expands its margins. An increase in adjusted EBITDA to greater than $1,125 million is expected, representing a 21% increase versus 2022, driven by margin conversion of the incremental revenues, positive tailwinds from the Global 7500 pricing and the near completion of the company’s cost reduction plan. Adjusted EBIT(2) is expected to grow to greater than $695 million, an increase of 36% year-over-year.

Bombardier also expects continued positive free cash flow generation, which is expected to be greater than $250 million​ in 2023, including one-time payments related to residual value guarantees estimated at approximately $125 million, and net additions to PP&E and intangible assets around $350 million.

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