- Raised 2022 full-year guidance on free cash flow(1), now expected to be greater than
- $515 million for the year vs greater than $50 million, based on stronger working capital performance and increased interest cost savings from accelerated deleveraging; reaffirmed guidanceon aircraft deliveries, revenues and profitability metrics(2).
- Revenues of $1.6 billion for the second quarter reflect 28 aircraft deliveries and a 22% year-over-year aftermarket revenue increase to $359 million.
- Adjusted EBITDA(1) for the second quarter rose to $201 million, a 41% year-over-year improvement driven by continued progress on strategic priorities. Adjusted EBITDA margin(3) rose 350 bps year-over-year to 12.9%. Reported EBIT from continuing operations for the second quarter was $101 million.
- Strong free cash flow(1) generation of $341 million from continuing operations for the second quarter of 2022, representing an improvement of $250 million year-over-year and tracking ahead of plan. Reported cash flow from operating activities for the second quarter was $422 million and net additions to PP&E and intangible assets were $81 million.
- Strong order intake resulted in second quarter unit book-to-bill(4) of 1.8 and 37% year-over-year increase in order backlog to $14.7 billion.
- Balance sheet strengthening through progress on deleveraging with $373 million debt reduction during the second quarter of 2022 using cash on hand. Adjusted liquidity(1) stands strong at $1.8 billion with cash and cash equivalents of $1.4 billion.
- Moody’s Investors Service upgraded Bombardier’s corporate family and senior unsecured notes rating to B3. Outlook maintained as stable.
- Successful launch of the Global 8000 business jet at the European Business Aviation Convention and Exhibition (EBACE) 2022, setting new standards in speed, range, and comfort.
All amounts in this press release are in U.S. dollars unless otherwise indicated.
Amounts in tables are in millions, unless otherwise indicated.
Bombardier (TSX: BBD.B) announced today strong financial results for the second quarter of 2022, marked by continued steady demand for new aircraft, strong aftermarket performance, robust free cash flow generation, and one of the industry’s highest backlogs. Bombardier raised its full-year guidance on free cash flow, now expected to be better than the previously communicated target, and reaffirmed guidance on aircraft deliveries, revenues and profitability metrics.
“It’s been a fantastic second quarter for us – strong demand for business jets has carried through and our team has converted opportunities to grow our backlog significantly,” said Éric Martel, President and Chief Executive Officer. “Our performance on free cash flow has demonstrated that we have set the right foundation to be cash positive and deliver on our commitments. We have also strengthened our balance sheet to further enhance our resilience and predictability.”
“Leading business indicators and market demand are still driving in a positive direction, giving us confidence that we can achieve our objectives,” added Martel. “Supply chain pressure is contributing to keeping our aircraft delivery ramp up at a conservative and steady pace, in line with our 2025 projections.”
Solid Second Quarter 2022 Financial Performance
Bombardier’s order backlog rose by 37% year-over-year to $14.7 billion, with a unit book-to-bill(4) of 1.8 for the second quarter, indicating continued high demand and strong order intake. Revenues of $1.6 billion for the second quarter reflect 28 aircraft deliveries and a 22% year-over-year aftermarket revenue increase to $359 million.
This past quarter saw Bombardier continue its margin expansion and reach an adjusted EBITDA of $201 million. Driven by continued progress on strategic priorities, this represents a 41% increase year-over-year.
Following the strong performance in the first half of 2022, Bombardier is revising its original 2022 free cash flow(1) guidance to greater than $515 million from greater than $50 million due to stronger working capital performance and increased interest cost savings from accelerated deleveraging. The company reaffirms its original guidance on aircraft deliveries to exceed 120 units, revenues to exceed $6.5 billion, adjusted EBIT and adjusted EBITDA to greater than $375 million and greater than $825 million respectively.
Following the first half results, as well as actions towards debt repayments, the company’s adjusted liquidity remains strong at approximately $1.8 billion, which includes cash and cash equivalents of $1.4 billion as well as $0.4 billion of cash collateral supporting various bank guarantees which is included in restricted cash in the Interim consolidated statement of financial position as at June 30, 2022.
In regard to debt reduction, Bombardier paid off $373 million of debt in the second quarter of 2022, which brings Bombardier’s year-to-date debt repayment up to $773 million using cash on hand.
“Our ability to execute our plan was externally recognized, most notably with Moody’s upgrade to our credit rating,” said Martel. “I am particularly proud of this achievement as it underscores that we are making the right financial decisions around order backlog, margin expansion, free cash flow generation, and debt repayment.”
Service Facility Expansions on Track
Bombardier aftermarket services business continues to grow steadily, with planned expansions to the company’s services infrastructure advancing as planned, including this year’s first inauguration of the newly enhanced service centre in Singapore, which took place on June 30, 2022. The company is in the process of expanding its service facilities in London-Biggin Hill, U.K., as well as Miami, Florida. To add to this, it is inaugurating a brand new site in Melbourne, Australia later this year.
“We stand well placed with our services infrastructure expansion. The network’s stable and recurring revenues continue to have a positive impact on our financial performance and contribute towards accelerating our debt reduction strategy,” added Martel.
Achieved Product Development Milestones
In May 2022, Bombardier unveiled updates and enhancements on its ongoing Global 8000 aircraft development. During the first public presentation of the aircraft at EBACE in Geneva, the company announced that the jet is expected to enter into service in 2025 and provided updated aircraft specifications. The new jet, which is the world’s fastest and longest-range purpose-built business aircraft, will now boast an industry-leading range of 8,000 nautical miles, an industry-leading top speed of Mach 0.94 and the only true, four-zone cabin for an aircraft with this range. The introduction of the new Global 8000 aircraft has been a carefully planned investment that further strengthens Bombardier’s impressive portfolio of industry-defining business jets. Development to date has been included in previously disclosed investment figures. All further development costs will be included in Bombardier’s net additions to PP&E and intangibles, which remains in line with its 2025 objectives.
Flight testing and certification activities for the Challenger 3500 aircraft continue to progress on schedule, with the launch customer aircraft on track for entry into service in the third quarter of 2022. The aircraft’s Autothrottle System received Transport Canada Certification in April 2022. In May 2022, Bombardier published an Environmental Product Declaration (EPD) for the jet. Following Bombardier’s recent groundwork on making the Global 7500 aircraft the first business jet ever to receive an EPD, the Challenger 3500 aircraft is the first business jet in the super mid-size segment with such a declaration.
About Bombardier
Bombardier is a global leader in aviation, focused on designing, manufacturing, and servicing the world’s most exceptional business jets. Bombardier’s Challenger and Global aircraft families are renowned for their
cutting-edge innovation, cabin design, performance, and reliability. Bombardier has a worldwide fleet of approximately 5,000 aircraft in service with a wide variety of multinational corporations, charter and fractional ownership providers, governments, and private individuals. Bombardier aircraft are also trusted around the world in special-mission roles.
Headquartered in Montréal, Québec, Bombardier operates aerostructure, assembly and completion facilities in Canada, the United States and Mexico. The company’s robust customer support network includes facilities in strategic locations in the United States and Canada, as well as in the United Kingdom, Germany, France, Switzerland, Italy, Austria, the UAE, Singapore, China, and an Australian facility opening in 2022.