Bombardier Inc. Class A · TSX:BBD.A
Bombardier Inc. Class A — NBAA 2007
37 slides from Bombardier Inc. Class A's conference presentation, Sep 25, 2007
Slide 1: Bombardier Aerospace NBAA 2007 Investor Presentation
Bombardier Aerospace NBAA 2007 Investor Presentation
Slide 2: Forward-looking statements
Forward-looking statements This presentation includes forward-looking statements. Forward-looking statements generally can be identified by the use of forward-looking terminology such as “may”, “will”, “expect”, “intend”, “anticipate”, “plan”, “foresee”, “believe” or “continue” or the negatives of t
Slide 3: Aerospace has seen revenue growth in all of its business segments
Bombardier Aerospace has seen revenue growth in all of its business segments AEROSPACE REVENUE BREAKDOWN BY BUSINESS % of total revenues by business unit Six-month period ended July 31, 2006 Six-month period ended July 31, 2007 Other Other 11.2% 12.7% Flexjet & Flexjet & Services Business A/C Relati
Slide 4: Profitability has also improved, with margins reflecting our steady progress
Profitability has also improved, with margins reflecting our steady progress Six month periods ended: Fiscal years ended: (US$ Millions) July 31, 2007 July 31, 2006 Jan 31, 2007 Jan 31, 2006 Revenues Business 2,121 1,842 3,858 3,330 Regional 1,089 954 2,122 2,690 Other(1) 1,260 1,056 2,250 2,067 Tot
Slide 5: Strong order intake has pushed aircraft order backlog to a record US$17.2B
Strong order intake in the first half of FY07 has pushed the aircraft order backlog to a record high US$ 17.2B BOMBARDIER AIRCRAFT PROGRAMS ORDER BACKLOG Aircraft programs order backlog in US$ Billions (January 31, 2000 – July 31, 2007) US$ 20B +41% US$ 17.2B US$ 15B US$ 14.5B US$ 12.2B US$ 10B US$
Slide 6: Aerospace is stronger everywhere and well-positioned to take advantage of market
Bombardier Aerospace is stronger everywhere and well- positioned to take advantage of current market environment Stronger Everywhere Well-Positioned Moving Forward Market strength persists Strong backlog Business Significant growth in Bombardier’s Product developments to build on success of
Slide 7: Aerospace – Business Aircraft
Bombardier Aerospace – Business Aircraft NBAA 2007 Investor Presentation
Slide 8: Agenda
Agenda Bombardier is the market leader Business aircraft market drivers remain strong Bombardier is positioned to build its leadership going forward 8
Slide 9: Business Aircraft portfolio is centred on three families
Bombardier’s Business Aircraft portfolio is centred on three families LEARJET FAMILY Learjet 40 XR Learjet 45 XR Learjet 60 XR CHALLENGER FAMILY Challenger 300 Challenger 605 Challenger 850 GLOBAL FAMILY Bombardier Global 5000 Global Express XRS Bombardier’s portfolio covers 97% of market revenues 9
Slide 10: New Global Vision cockpit makes the family even stronger
New Global Vision cockpit makes the family even stronger New flight deck with enhanced functionality Four 15.1” screens provide increased display area New styling for improved ergonomics and improved comfort 10 Source: Rockwell Collins, Inc.
Slide 11: Bombardier is in position to be the market leader for a fourth consecutive year
Bombardier is in position to be the Business Aircraft market leader for a fourth consecutive year REVENUE MARKET SHARE % Estimated Market Share, Total Deliveries, Calendar Year 2004-June 2007 $10.4 B $13.2 B $16.5 B $8.8 B Other 6% 8% 9% 12% 10% 6% 10% 8% Hawker Beechcraft 25% 24% Gulfstream 23% 22%
Slide 12: Agenda
Agenda Bombardier is the market leader Business aircraft market drivers remain strong Bombardier is positioned to build its leadership going forward 12
Slide 13: Business aircraft market indicators suggest a positive market outlook
Business aircraft market indicators suggest a positive market outlook PRIMARY MARKET DRIVERS OUTLOOK Driver, Market Direction and Justification OEM Backlogs in the segments in which Bombardier competes 1. OEM Backlogs are at approximately 30 months. 2. US Economic Mild growth slowdown expected i
Slide 14: US economy should see a mild growth slowdown but remain stable
US economy should see a mild growth slowdown but remain stable over the coming years SELECTED U.S. ECONOMIC GROWTH INDICATORS %, Real GDP & Corp. Profits YoY change, Interest rates, Calendar year 2002-2018 Real GDP (YOY%) Corp. Profits (YOY%) Actual Forecast 16.1% Actual Forecast 5.3% 5.1% 5.4% 4.5%
Slide 15: International orders now account for 50%
International orders now account for 50% INTERNATIONAL (NON-US) ORDERS GROWTH IN DELIVERIES BY REGIONS AS % OF WORLDWIDE MARKET ORDERS %, Total units, 2005-06 vs. 2003-04, Traditional deliveries only %, Estimated, Calendar Year 2002-2006 Growth %: Total Units: 2005-2006 vs. 2003-2004 2005-2006 China
Slide 16: Used fleet is stable and residual values strengthening
Used fleet is stable and residual values strengthening USED AIRCRAFT INVENTORY 5-YR RESIDUAL VALUE AS % OF FLEET AS % OF ORIGINAL B&CA PRICE %, Calendar Year 1997-June 2007 %, Calendar Year 1997-June 2007 17.1% 16.9% 96% 96% 15.2% 91% 94% 14.0% 13.9% 86% 86% 86% 80% 83% 12.0% 11.9% 11.3% 74% 75% 10.
Slide 17: Buyer intentions confirm sustained customer interest
Buyer intentions confirm sustained customer interest U.B.S. BUSINESS JET MARKET CONDITIONS INDEX Survey score, 2003-2007 >50: Improving market conditions 68 65 65 67 64 64 61 63 63 64 61 58 59 54 55 56 47 39 Q1-03 Q2-03 Q3-03 Q4-03 Q1-04 Q2-04 Q3-04 Q4-04 Q1-05 Q2-05 Q3-05 Q4-05 Q1-06 Q2-06 Q3-06 Q4
Slide 18: Forecast shows market is reaching a new plateau
Bombardier Forecast shows market is reaching a new plateau BUSINESS JET DELIVERY UNIT FORECAST BUSINESS JET MARKET REVENUE FORECAST Units, Calendar year 2006-2016 Current US$B; Calendar Year 2006-2016 30 2000 1800 VLJ revenue 25 1600 1400 20 VLJ units 1200 1000 15 800 10 2001 peak: $12.0B 600 2000 p
Slide 19: Aerospace has published its first-ever Business Aircraft Market Forecast
Bombardier Aerospace has published its first-ever Business Aircraft Market Forecast Includes analysis of economic growth, industry trends and market drivers Thorough explanation of econometric model and results Forecast broken down by segment, giving total unit deliveries and revenues over the
Slide 20: Agenda
Agenda Bombardier is the market leader Business aircraft market drivers remain strong Bombardier is positioned to build its leadership going forward 20
Slide 21: Record Business Aircraft deliveries in FY07, and order intake remains strong
Bombardier saw record Business Aircraft deliveries in FY07, and order intake remains strong Book-to-Bill = 1.3 Net Orders = 274 (vs. Book-to-Bill of 1.1 BOMBARDIER BUSINESS AIRCRAFT DELIVERIES and 219 net orders Units, Fiscal Year 2000 – Q2 2008 in first half of FY06) Previous Record 212 203 197 Boo
Slide 22: Strong backlog balanced with controlled increases in production
Bombardier has balanced its strong backlog with continuous and controlled increases in its production GROWTH IN PRODUCTION TOTAL BOOK-TO-BILL Deliveries by OEM, Total Market, Calendar Year 2004 - 2006 Book-to-Bill by OEM, Calendar year 2004-2006 350 3.0 300 2004 2005 2.5 250 2006 2.0 200 Units Ratio
Slide 23: However, strong order intake has still increased backlogs
However, strong order intake has still increased backlogs BOMBARDIER BUSINESS AIRCRAFT FINANCIAL BACKLOG # of months backlog by product family (As of end of July 2007) Target range: Global 12-18 27 Target range: Challenger 9-12 17 Target range: Learjet 6-9 11 23 Source: Bombardier Business Aircraft,
Slide 24: Diverse customer base will decrease sensitivity to the US economy
Bombardier’s diverse customer base will decrease its sensitivity to the US economy BOMBARDIER NON-US DELIVERIES AS % OF TOTAL Traditional Demand, Fiscal Year 2003 – Q2 2008 56% 51% 52% 49% 39% 38% Over the first half of FY08, 78% of traditional orders were from non-US customers FY03 FY04 FY05 FY06 F
Slide 25: Business Aircraft is working to build its leadership going forward
Bombardier Business Aircraft is working to build its leadership going forward Improvement Initiatives Lean Manufacturing Operational Efficiency Achieving Excellence Low-Cost Manufacturing Base Meeting Contractual Improving On-Time-Deliveries Committments Reduction of Open Delivery Items (O
Slide 26: Lean Manufacturing is improving the efficiency of all our operations
Lean Manufacturing is improving the efficiency Operational Efficiency of all our operations Kaizen blitzes at all sites 18% cycle time reduction targeted for first year Lear 40/45 fuselage Lean implementation at Belfast site Challenger 605 U-Lean Line has reduced completion hours by 40% over t
Slide 27: Continues to build a low cost manufacturing base in emerging countries
Bombardier continues to build a low cost Operational Efficiency manufacturing base in emerging countries Electrical harnesses Challenger 300, Global Express ~33% Structures assembly cost reduction(1) Challenger 850 centre fuselage ~11% cost reduction(1) 27 (1) Forecasted unit cost reduction no later
Slide 28: Better meeting contractual commitments as operations improve
Meeting Bombardier is better meeting contractual Contractual commitments as operations improve Commitments ON-TIME DELIVERIES – Challenger 605 OPEN DELIVERY ITEMS (ODI)– Global XRS Days between contract date and actual delivery, ODI value per aircraft, 15 a/c running average, 15 a/c running average,
Slide 29: Innovative support services to improve Customer Satisfaction
Bombardier continues to build innovative support Customer Satisfaction services to improve Customer Satisfaction Aircraft-on-Ground (AOG) support • Established, integrated state-of-the art Customer Response Centers (CRC) Parts Express • Only manufacturer with the capability to dispatch multiple
Slide 30: Parts Express delivery service using Flexjet
We have implemented a Parts Express delivery Customer Satisfaction service using Flexjet 30
Slide 31: Summary
Summary Bombardier is the Business Aircraft market leader The Business Aircraft market drivers remain strong and forecasts show deliveries increasing through 2010 Bombardier Business Aircraft continues to improve operational efficiency, better meet contractual commitments and see signs of incr
Slide 32: Aerospace – Flexjet
Bombardier Aerospace – Flexjet NBAA 2007 Investor Presentation
Slide 33: Flexjet is a world-class fractional jet business
Bombardier Flexjet is a world-class fractional jet business Established in 1995 Offers: • Flexjet fractional ownership • Flexjet 25 jet card • Flexjet One aircraft management World’s largest operator of Bombardier business jets • 52 Learjet aircraft (Learjet 40, 45, 60) • 38 Challenger aircraf
Slide 34: Flexjet's growth outpaces the market
Flexjet’s growth outpaces the market FLEXJET SHARES SOLD AND MARKET SHARE % Market Share(1), # Shares Sold (FY04 – FY07) 18% 16% 13% 10% 311 Flexjet Shares Sold Market Share 280 206 134 FY04 FY05 FY06 FY07 Since FY04, the market(1) has grown by 32% Flexjet sales have grown by 133% Flexjet market sha
Slide 35: Best-ever operational performance and high customer satisfaction
Flexjet is seeing its best-ever operational performance and high levels of customer satisfaction FLEXJET OWNER DISPATCH RELIABILITY % dispatch reliability (FY04 – FY08 YTD) 97.6% 97.3% Continuously improving dispatch reliability 96.7% 96.4% Best-ever operational performance - Lowest deadhead 95.
Slide 36: Flexjet has grown in its journey to profitability
Flexjet has grown in its journey to profitability Superior customer satisfaction Sole source for Learjet and Challenger aircraft Young, simplified fleet Best-in-class operating performance Quality culture Innovative program features 36
Slide 37: Bombardier Aerospace NBAA 2007
Bombardier Aerospace NBAA 2007 Investor Presentation