Bombardier Reports Positive Adjusted Net Income, Grows Revenues and Expands Profit Margins in First Quarter of 2023

• 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.
  

_{All amounts in this press release are in U.S. dollars, unless otherwise indicated.
Amounts in tables are in millions except per share amounts, unless otherwise indicated.}

MONTRÉAL, April 27, 2023 (GLOBE NEWSWIRE) -- Bombardier (BBD.B TO) reported today 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 Éric Martel, President and Chief Executive Officer, 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.”

Positive Net Income and Continued Robust Performance on Business Fundamentals Mark First Quarter of 2023
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⁾ totaled $138 million in the first quarter of 2023, up 89% compared to the same quarter last year. The company also reported the 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.

SELECTED RESULTS

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About Bombardier

Bombardier (BBD-B.TO) 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 government and military special-mission roles leveraging Bombardier Defense’s proven expertise. 

Headquartered in Greater Montréal, Québec, Bombardier operates aerostructure, assembly and completion facilities in Canada, the United States and Mexico. The company’s robust customer support network services the Learjet, Challenger and Global families of aircraft, and 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 Australia. 

For corporate news and information, including Bombardier’s Environmental, Social and Governance report, as well as the company’s plans to cover all its flight operations with Sustainable Aviation Fuel (SAF) utilizing the Book and Claim system visit bombardier.com. Learn more about Bombardier’s industry-leading products and customer service network at businessaircraft.bombardier.com. Follow us on Twitter @Bombardier.

Bombardier, Global, Global 7500, Challenger and Learjet are registered trademarks of Bombardier Inc. or its subsidiaries.

For information

The Management’s Discussion and Analysis and the Interim Consolidated Financial Statements are available at ir.bombardier.com.

CAUTION REGARDING NON-GAAP AND OTHER FINANCIAL MEASURES

This press release is based on reported earnings in accordance with IFRS and on the following non-GAAP and other financial measures:

Non-GAAP and other financial measures are measures mainly derived from the consolidated financial statements but are not standardized financial measures under the financial reporting framework used to prepare our financial statements. Therefore, these might not be comparable to similar non-GAAP and other financial measures used by other issuers. The exclusion of certain items from non-GAAP or other financial measures does not imply that these items are necessarily non-recurring.

Adjusted EBIT
Adjusted EBIT is defined as the EBIT excluding special items⁽¹⁾ which comprise items that do not reflect our core performance or where their separate presentation will assist users in understanding our results for the period. Management uses adjusted EBIT for purposes of evaluating underlying business performance. Management believes presentation of this non-GAAP operating earnings measure in addition to IFRS measures provides users of our Financial Report with enhanced understanding of our results and related trends and increases the transparency and clarity of the core results of our business. For these reasons, a significant number of users of the MD&A analyze our results based on this financial measure. Management believes this measure helps users of the MD&A to better analyze results, enabling better comparability of our results from one period to another and with peers.

⁽¹⁾ Refer to the Consolidated results of operations section in the Q1-2023 MD&A for details regarding special items.

Adjusted EBITDA
Adjusted EBITDA is defined as the EBIT excluding special items⁽¹⁾, amortization and impairment charges on PP&E and intangible assets. Management uses adjusted EBITDA for purposes of evaluating underlying business performance. Management believes this non-GAAP operating earnings measure in addition to IFRS measures provides users of our Financial Report with enhanced understanding of our results and related trends and increases the transparency and clarity of the core results of our business, since it excludes the effects of items that are usually associated with investing or financing activities and items that do not reflect our core performance or where their exclusion will assist users in understanding our results for the period. For these reasons, a significant number of users of the MD&A analyze our results based on this financial measure. Management believes this measure helps users of the MD&A to better analyze results, enabling better comparability of our results from one period to another and with peers.

Adjusted net income (loss)
Adjusted net income (loss) is defined as the net income (loss) from continuing operations adjusted for certain specific items that are significant but are not, based on management’s judgment, reflective of the Corporation’s underlying operations. These include adjustments to EBIT related to special items⁽¹⁾, net financing expense (income) and other adjusting items for the period. Management uses adjusted net income (loss) for purposes of evaluating underlying business performance. Management believes this non-GAAP earnings measure in addition to IFRS measures provides users of our Financial Report with enhanced understanding of our results and related trends and increase the transparency and clarity of the core results of our business. Adjusted net income (loss) excludes items that do not reflect our core performance or where their exclusion will assist users in understanding our results for the period. For these reasons, a significant number of users of the MD&A analyze our results based on this financial measure. Management believes this measure helps users of the MD&A to better analyze results, enabling better comparability of our results from one period to another and with peers.

Free cash flow (usage)
Free cash flow is defined as cash flows from operating activities - continued operations less net additions to PP&E and intangible assets. Management believes that this non-GAAP cash flow measure provides investors with an important perspective on the Corporation’s generation of cash available for shareholders, debt repayment, and acquisitions after making the capital investments required to support ongoing business operations and long-term value creation. This non-GAAP cash flow measure does not represent the residual cash flow available for discretionary expenditures as it excludes certain mandatory expenditures such as repayment of maturing debt. Management uses free cash flow as a measure to assess both business performance and overall liquidity generation.

Available liquidity
Available liquidity is defined as cash and cash equivalents plus undrawn amounts under credit facilities. Management believes that this non-GAAP financial measure provides investors with an important perspective on the Corporation’s ability to meet expected liquidity requirements, including the support of product development initiatives and to ensure financial flexibility. This measure does not have any standardized meaning prescribed by IFRS and therefore, may not be comparable to similar measures presented by other companies.

Adjusted liquidity
Adjusted liquidity is defined as cash and cash equivalents, plus certain restricted cash supporting various bank guarantees. Management believes that this non-GAAP financial measure is a useful measure because it includes items in its results that management believes is a better reflection of the Corporation’s liquidity. This measure does not have any standardized meaning prescribed by IFRS and therefore, may not be comparable to similar measures presented by other companies.

(1) Refer to the Consolidated results of operations section in the Q1-2023 MD&A for details regarding special items.

Adjusted EPS
Adjusted EPS is defined as the adjusted net income (loss) attributable to equity shareholders of Bombardier Inc., divided by the weighted-average diluted number of common shares for the period. Management uses adjusted EPS for purposes of evaluating underlying business performance. Management believes this non-GAAP financial ratio in addition to IFRS measures provides users of our Financial Report with enhanced understanding of our results and related trends and increases the transparency and clarity of the core results of our business. Adjusted EPS excludes items that do not reflect our core performance or where their exclusion will assist users in understanding our results for the period. For these reasons, a significant number of users of the MD&A analyze our results based on this financial measure. Management believes this measure helps users of the MD&A to better analyze results, enabling better comparability of our results from one period to another and with peers.

Adjusted EBIT margin
Adjusted EBIT margin is defined as the adjusted EBIT expressed as a percentage of total revenues. Management uses adjusted EBIT margin for purposes of evaluating underlying business performance. Management believes this non-GAAP financial ratio in addition to IFRS measures provides users of our Financial Report with enhanced understanding of our results and related trends and increase the transparency and clarity of the core results of our business. Adjusted EBIT margin excludes items that do not reflect our core performance or where their exclusion will assist users in understanding our results for the period. For these reasons, a significant number of users of the MD&A analyze our results based on this financial measure. Management believes this measure helps users of the MD&A to better analyze results, enabling better comparability of our results from one period to another and with peers.

Adjusted EBITDA margin
Adjusted EBITDA margin is defined as the adjusted EBITDA expressed as a percentage of total revenues. Management uses adjusted EBITDA margin for purposes of evaluating underlying business performance. Management believes this non-GAAP financial ratio in addition to IFRS measures provides users of our Financial Report with enhanced understanding of our results and related trends and increase the transparency and clarity of the core results of our business. Adjusted EBITDA margin excludes items that do not reflect our core performance or where their exclusion will assist users in understanding our results for the period. For these reasons, a significant number of users of the MD&A analyze our results based on this financial measure. Management believes this measure helps users of the MD&A to better analyze results, enabling better comparability of our results from one period to another and with peers.

FORWARD-LOOKING STATEMENTS

This press release includes forward-looking statements, which may involve, but are not limited to: statements with respect to our objectives, anticipations and outlook or guidance in respect of various financial and global metrics and sources of contribution thereto, targets, goals, priorities, market and strategies, financial position, financial performance, market position, capabilities, competitive strengths, credit ratings, beliefs, prospects, plans, expectations, anticipations, estimates and intentions; general economic and business outlook, prospects and trends of an industry; customer value; expected demand for products and services; growth strategy; product development, including projected design, characteristics, capacity or performance; expected or scheduled entry-into-service of products and services, orders, deliveries, testing, lead times, certifications and execution of orders in general; competitive position; expectations regarding revenue and backlog mix; the expected impact of the legislative and regulatory environment and legal proceedings; strength of capital profile and balance sheet, creditworthiness, available liquidities and capital resources, expected financial requirements, and ongoing review of strategic and financial alternatives; the introduction of productivity enhancements, operational efficiencies, cost reduction and restructuring initiatives, and anticipated costs, intended benefits and timing thereof; the ability to continue business transition to growth cycle and cash generation; expectations, objectives and strategies regarding debt repayment, refinancing of maturities and interest cost reduction; compliance with restrictive debt covenants; expectations regarding the declaration and payment of dividends on our preferred shares; intentions and objectives for our programs, assets and operations; expectations regarding the availability of government assistance programs; both the repercussions of the COVID-19 pandemic and the impact of the ongoing military conflict between Ukraine and Russia on the foregoing and the effectiveness of plans and measures we have implemented in response thereto; and expectations regarding the strength of the market, inflationary and supply chain pressures, and ongoing economic recovery in the aftermath of the COVID-19 pandemic.

Forward-looking statements can generally be identified by the use of forward-looking terminology such as “may”, “will”, “shall”, “can”, “expect”, “estimate”, “intend”, “anticipate”, “plan”, “foresee”, “believe”, “continue”, “maintain” or “align”, the negative of these terms, variations of them or similar terminology. Forward-looking statements are presented for the purpose of assisting investors and others in understanding certain key elements of our current objectives, strategic priorities, expectations, guidance, outlook and plans, and in obtaining a better understanding of our business and anticipated operating environment. Readers are cautioned that such information may not be appropriate for other purposes.

By their nature, forward-looking statements require management to make assumptions and are subject to important known and unknown risks and uncertainties, which may cause our actual results in future periods to differ materially from forecast results set forth in forward-looking statements. While management considers these assumptions to be reasonable and appropriate based on information currently available, there is risk that they may not be accurate. The assumptions underlying the forward-looking statements made in this press release include the following material assumptions: growth of the business aviation market and the Corporation’s share of such market; proper identification of recurring cost savings and executing on our cost reduction plan; optimization of our real estate portfolio, including through the sale or other transactions in respect of real estate assets on favorable terms; and access to working capital facilities on market terms. For additional information, including with respect to other assumptions underlying the forward-looking statements made in this press release, refer to the Forward-looking statements - Assumptions section of the MD&A of the Corporation’s financial report for the first quarter ended March 31, 2023. Given the impact of the changing circumstances surrounding both the repercussions of the COVID-19 pandemic and the ongoing military conflict between Ukraine and Russia, including because of the emergence of COVID-19 variants and the imposition of financial and economic sanctions and export control limitations, and the related response from the Corporation, governments (federal, provincial and municipal, both domestic, foreign and multinational inter-governmental organizations), regulatory authorities, businesses, suppliers, customers, counterparties and third-party service providers, there is inherently more uncertainty associated with the Corporation’s assumptions as compared to prior years.

Certain factors that could cause actual results to differ materially from those anticipated in the forward-looking statements include, but are not limited to: risks associated with general economic conditions; operational risks (such as risks related to development of new business; order backlog; deployment and execution of our strategy, including cost reductions and working capital improvements and manufacturing and productivity enhancement initiatives; developing new products and services; the certification of products and services; pressures on cash flows and capital expenditures, including due to seasonality and cyclicality; doing business with partners; product performance warranty and casualty claim losses; environmental, health and safety concerns and regulations; dependence on limited number of contracts, customers and suppliers, including supply chain risks; human resources including the global availability of a skilled workforce; reliance on information systems (including technology vulnerabilities, cybersecurity threats and privacy breaches); reliance on and protection of intellectual property rights; reputation risks; adequacy of insurance coverage; risk management; and tax matters); financing risks (such as risks related to liquidity and access to capital markets; substantial debt and interest payment requirements, including execution of debt management and interest cost reduction strategies; restrictive and financial debt covenants; retirement benefit plan risk; exposure to credit risk; and reliance on government support); risks related to regulatory and legal proceedings; business environment risks (such as risks associated with the financial condition of business aircraft customers; trade policy; increased competition; political instability; financial and economic sanctions and export control limitations; global climate change; and force majeure events); market risks (such as foreign currency fluctuations; changing interest rates; increases in commodity prices; and inflation rate fluctuations); and other unforeseen adverse events. For more details, see the Risks and uncertainties section in Other in the MD&A of the Corporation’s financial report for the first quarter ended March 31, 2023 and in the MD&A of our financial report for the fiscal year ended December 31, 2022. Any one or more of the foregoing factors may be exacerbated by the repercussions of the COVID-19 pandemic and the ongoing military conflict between Ukraine and Russia, and may have a significantly more severe impact on the Corporation’s business, results of operations and financial condition than in the absence of such events.

Readers are cautioned that the foregoing list of factors that may affect future growth, results and performance is not exhaustive and undue reliance should not be placed on forward-looking statements. Other risks and uncertainties not presently known to us or that we presently believe are not material could also cause actual results or events to differ materially from those expressed or implied in our forward-looking statements. The forward-looking statements set forth herein reflect management’s expectations as at the date of this report and are subject to change after such date. Unless otherwise required by applicable securities laws, we expressly disclaim any intention, and assume no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. The forward-looking statements contained in this press release are expressly qualified by this cautionary statement.