Bombardier reported this week its financial results for the first quarter of 2023, reflecting continued progress on all business fundamentals and performance on track toward reaching 2023 full-year guidance.
“Bombardier has delivered a very strong first quarter,” said รric Martel, President and Chief Executive Officer, of Bombardier. “Our robust performance adds to our extremely positive track record from the past two years and confirms we are on the right trajectory. With a very healthy, positive adjusted net income, further debt reduction, continued margin expansion, and ramped-up production to reach our guidance(1) of more than 138 deliveries this year, we are forging ahead towards the upgraded 2025 targets we presented during our Investor Day last month.”
Key highlights.....
Bombardier reports first quarter 2023 revenues of $1.5 billion, up 17% year-over-year, driven by improved delivery mix and continued strong aftermarket revenues of $424 million; aircraft deliveries on track towards full-year guidance(1) of greater than 138.Adjusted EBITDA(2) rose to $212 million, up 27% year-over-year thanks to stronger aircraft margins and aftermarket growth, reported EBIT reached $140 million. Reported net income(4) and adjusted net income(2) surged to $302 million and $113 million respectively. First quarter 2023 adjusted Earnings per share (EPS)(3) turns positive at $1.06 and diluted EPS(4) of $2.98.Free cash flow usage(2)(4) of $247 million driven by working capital build in inventories for 2023 deliveries and continued investments supporting completion of a new facility at Toronto Pearson International Airport. Available liquidity(2) stands strong at $1.4 billion at quarter end. Reported cash flow usage from operating activities(4) for the quarter was $162 million and net additions to PP&E and intangible assets(4) for the quarter were $85 million. Cash and cash equivalents as at March 31, 2023 were $1.1 billion.First quarter of 2023 ended with stable backlog(5) at $14.8 billion, reflecting steady demand profile and unit book-to-bill(6) of 0.9.First quarter 2023 marked by continued strong progress on debt reduction with a repayment of approximately $400 million from cash on balance sheet; market confidence with Moody’s Investors Service upgrade of Bombardier’s corporate family and Senior unsecured notes rating to B2; outlook maintained as stable.
Bombardier reported a strong start to 2023, with first-quarter revenues up 17% year-over-year at $1.5 billion, compared to $1.2 billion in the same quarter last year. The positive trend was reflected in profitability, with adjusted EBITDA(2) up 27%, driven by stronger aircraft margins, mainly on large-cabin aircraft, and aftermarket growth. Adjusted EBITDA margin(3) rose 120 basis points year-over-year to 14.6%. The adjusted EBIT(2) totalled $138 million in the first quarter of 2023, up 89% compared to the same quarter last year. The company also reported an adjusted net income(2) of $113 million, compared with a $69 million loss over the same period last year. First quarter of 2023 adjusted EPS(3) was $1.06 compared to a loss of $0.80 per share for the same quarter of 2022.
The positive trend in deliveries has continued in the first quarter of 2023, with deliveries (excluding Learjet, which is no longer in production) up 22% year-over-year. This is consistent with the company’s overall guidance(1) of increasing deliveries by more than 15% in 2023. The backlog(5) remained stable at $14.8 billion, while the unit book-to-bill(6) was at 0.9.
The expected ramp-up in production to build inventory, as well as strategic investments, such as the new Global production facility at the Pearson Airport in Toronto set to open at the end of 2023, have led to some predicted free cash flow usage(2)(4) this year, as well as a higher CAPEX spend and the payment related to the incentive-based compensation plan for employees across Bombardier’s sites.
Bombardier’s aftermarket business continues its positive performance and contribution to the company’s bottom line with $424 million in revenues in the first quarter of 2023, up 17% year-over-year.
Steady Progress on Debt Reduction Contributes to Increased Market Confidence
The company also continued to execute on debt reduction, one of its key promises since restructuring in 2020. Bombardier has successfully repaid approximately $400 million of debt in the first quarter of 2023, which played a major role in the recent upgrade of Bombardier’s corporate family and Senior unsecured notes rating to B2 by Moody’s Investors Service. With available liquidity(2) very strong at $1.4 billion, towards the upper end of the targeted range shared during its Investor Day in March, the company will remain opportunistic with the debt capital markets in the future.
(1) Forward-looking statement. See the forward-looking statements disclaimer herein, and see the forward-looking statements assumptions on which the 2023 guidance is based in the Management Discussion & Analysis of the Corporation’s financial report for the fiscal year ended December 31, 2022 for further details on our 2023 guidance.
(2) Non-GAAP financial measure. A non-GAAP financial measure is not a standardized financial measure under the financial reporting framework used to prepare our financial statements and might not be comparable to similar financial measures used by other issuers. Refer to the Non-GAAP and other financial measures section of this press release and to the Non-GAAP and other financial measures section in the Management Discussion & Analysis of the Corporation’s financial report for the quarter ended March 31, 2023 (Q1-2023 MD&A), for definitions of these metrics and reconciliations to the most comparable IFRS measures.
(3) Non-GAAP financial ratio. A non-GAAP financial ratio is not a standardized financial measure under the financial reporting framework used to prepare our financial statements and might not be comparable to similar financial measures used by other issuers. Refer to the section entitled Caution regarding non-GAAP and other financial measures of this press release and to the Non-GAAP and other financial measures section in the Q1-2023 MD&A for definitions of these metrics and reconciliations to the most comparable IFRS measures.
(4) Only from continuing operations.
(5) Represents order backlog for both manufacturing and services.
(6) Defined as net new aircraft orders in units over aircraft deliveries in units.
