Bombardier has unveiled its full-year 2022 financial results today, confirming an “outstanding” financial performance that exceeded guidance.
The Canadian business jet manufacturer also presented its 2023 guidance and announced that it will provide a further update on the execution of its 2025 strategic objectives at a virtual investor day in March 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 CEO in the release of results.
“We are also proud of the fantastic job our team did on deleveraging, with $1.1bn 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.”
Healthy 2022 results
Bombardier exceeded its year-end targets on all guided metrics, beating the numbers presented in its 2022 guidance last year.
The company reported $6.9bn in revenue, a year-on-year (YoY) increase of 14%. This comes on the back of higher deliveries and a “favourable aircraft mix”, but also a significant contribution from aftermarket services, which grew at 22% YoY to reach $1.5bn in 2022.
Bombardier reported an adjusted EBITDA of $930m, up 45% YoY and well over the guidance stated last year ($825m). The company also beat guidance on the full-year reported EBIT, which was at $538m.
“No matter how you measure our company, our products, or our people; Bombardier has delivered excellent results and met – or exceeded – commitment across the board,” Martel boasted on an earnings call today.
Earnings growth, along with the strong order intake, drew an “impressive performance” on free cash flow generation of $735m from continuing operations for 2022, which significantly improved YoY by $635m.
|Free Cash Flow||$100m||$735m|
The company delivered 123 aircraft, 49 of which were delivered in the fourth quarter of 2022; meaning almost 40% of the yearly units total delivered were in one quarter.
Backlogs for business jets have increased over the last two years, with sustained demand shown since the height of Covid-19.
Bombardier’s backlog, which increased $2.6bn YoY to reach $14.8bn and a 1.4 full-year unit book-to-bill “confirms that Bombardier has the right product mix to continue being the leading force in its categories”, according to the financial statement. Martel stated on the call that the backlog is “super solid”.
The strong financial performance also allowed Bombardier to overperform on debt reduction, repaying $1.1bn of debt with cash over the last year.
“We have a clear and repeatable ability to generate free cash going forward. The Bombardier team will continue to prioritise retiring debt, or opportunistically refinancing maturities. We have made significant moves towards this and in turn lowered the cost of what remains,” Martel told analysts.
Bombardier bullish on 2023
Bombardier also unveiled its outlook on guided metrics for 2023 today. Revenue is expected to be over $7.6bn.
“We have successfully ramped up to deliver the growth we have been forecasting for this year. Bombardier is now expecting to deliver more than 138 units in 2023. This will represent an increase of at least 15% in our deliveries vs 2022, excluding Learjet,” Martel explained.
The company says this growth will be driven mainly by an increase in deliveries (over 138 units). The continued and steady growth of aftermarket services, which the company continued to ramp up in 2022 is stated as a key driver.
Bombardier expects to continue outpacing revenue growth in the next year. It expects an increase in adjusted EBITDA to over $1.1bn, representing a 21% increase compared to 2022. Adjusted EBIT is expected to grow to over $695m, an increase YoY of 36%.
|2022 FULL-YEAR RESULTS||2023 GUIDANCE|
|Aircraft deliveries (in units)||123||>138|
|Free cash flow||$735m||>$250m|
“Our vastly improved debt and leverage profile provided another benefit as our credit ratings were raised by both Moody’s and S&P last summer,” Bart Demosky, Bombardier’s executive vice president and CFO explained on today’s earnings call.
Bombardier also expects continued positive free cash flow generation, over $250m in 2023, including one-time payments related to residual value guarantees estimated at approximately $125m and net additions to PP&E and “intangible assets” of around $350m.
“I’m also happy to say that the $400m of restricted cash we have held on the balance sheet for the last two years has been released and is now sitting in our bank account, available for us to use,” Demosky added.
In December, Bombardier broke ground on its new service centre at Abu Dhabi International Airport (AUH) in the UAE, planned to open in 2025 and is expected to help the company increase its aftermarket revenues.