Bombardier Ups revenue 2025, profitability targets
Bombardier, continuing to meet financial targets in its resuscitation plan, has raised its 2025 targets, now aiming for more than $9 billion in revenue by 2025 as it plans to deliver 150 planes annually by then. The $9 billion represents an improvement over the $7.5 billion target set in 2021 when Bombardier became a pure business aviation company and the $6.9 billion achieved in 2022. The increase in deliveries will be an increase from 120 in 2022 and an expected 138 in 2023.
Along with the revenue, Bombardier has set more aggressive profitability targets and expects adjusted EBITDA of more than $1.625 billion, up from an initial target of $1.5 billion.
“In 2021, we laid the foundations for a stronger, more sustainable and more predictable Bombardier company by 2025. At the halfway mark, we can say we are delivering on that promise,” said Bombardier President and CEO Eric Martel. “All of Bombardier’s strategic priorities are on track or ahead of schedule. Therefore, we are proud to announce today that we are confidently raising the bar.”
The improved results are fueled by long-term plans to increase aftermarket revenue, and Bombardier executives said at an investor day on Thursday that they are on track to achieve $2 billion in annual contribution from the business by 2025. A 50 percent jump from 2020 and up from $1.5 billion in 2022. This was facilitated by a dramatic expansion of the aftermarket, which included the opening of new or expanded centers in Miami, Melbourne, London and Singapore, among other activities.
The growth of the certified pre-owned program and the defense business are also contributing to the increase in revenues. However, Martel noted that Bombardier expects these businesses to grow significantly between 2025 and 2030, including the potential to bring $1 billion to defense by the end of the decade. In terms of certified pre-owned aircraft, Bombardier sees around 460 of its jets in the pre-owned market each year, providing solid growth opportunity.
In terms of improving profitability, Martel believes the Global 7500 will be a key driver in the next few years, but the company expects higher profitability for all its aircraft.
Another key target Bombardier has raised is free cash flow, expecting it to reach $900 million by 2025. This will allow for “optional capital allocations,” according to executive vice president and chief financial officer Bart Demosky, including options for new aircraft and mergers and acquisitions. activity — further easing of one’s debt burden or return to the shareholder.
This gives Bombardier more flexibility, which has kept research and development costs down in the past few years.
“We’re going to have the same discipline,” Martel said of the additional free cash flow. “We’re going to put every option on the table … and look at every dollar that we have.” Decisions will be made from a purely financial perspective of what is best for the shareholder and for the long-term growth of the company.
That allows for a 45 percent reduction in gross debt to $5.6 billion in 2022 and a sharp drop in the net leverage ratio (prime debt minus unrestricted cash) from 41.5 times in 2020 to 4.6 times last year . This decline led to improved credit ratings, lower borrowing costs, and lower interest payments.
Also speaking to reporters Thursday, Martel called Investor Day “an important milestone,” pointing out skeptics of the original plan and expressing confidence in the company’s trajectory. He acknowledged uncertainty in the economy and supply chain, but said he was comfortable with the short-term outlook in light of its financial performance. “We are well equipped because we have made the company stronger.”
https://www.ainonline.com/aviation-news/business-aviation/2023-03-23/bombardier-ups-2025-revenue-profitability-goals Bombardier Ups revenue 2025, profitability targets