Bombardier Inc. Class A · TSX:BBD.A
Bombardier Inc. Class A — Investor Day (March 2023)
38 slides from Bombardier Inc. Class A's investor day presentation, Mar 23, 2023
Slide 1: Investor Day 2023
BOMBARDIER Investor Day 2023
Slide 2: Caution Regarding Forward-looking Statements
Caution Regarding Forward-looking Statements This presentation 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 contributi
Slide 3: Caution Regarding Non-GAAP and Other Financial Measures
Caution Regarding Non-GAAP and Other Financial Measures Non-GAAP and other financial measures are measures mainly derived from the Corporation’s consolidated financial statements but are not standardized financial measures under the financial reporting framework used to prepare our financial statem
Slide 4: Presenters
Presenters ÉRIC MARTEL PRESIDENT AND CHIEF EXECUTIVE OFFICER PAUL SISLIAN EXECUTIVE VICE PRESIDENT, BOMBARDIER AFTERMARKET SERVICES & STRATEGY BART DEMOSKY EXECUTIVE VICE PRESIDENT AND CHIEF FINANCIAL OFFICER 4
Slide 5: Bombardier Overview Agenda
1 Bombardier Overview Agenda 2 Strategic Overview 3 Financial Overview 5
Slide 6: Building resilience through consistent financial performance
Building resilience through consistent financial performance Aircraft Manufacturing & Other1 2020 RESULTS 2022 RESULTS � vs. 2020 ACHIEVEMENTS Aftermarket 18% 22% +23% Maturing REVENUES Revenue growth $5.6B2 $6.9B (Incl. +50% Global 7500 aftermarket) 82% 78% contribution > 4.6x EBITDA3 $200M $930M I
Slide 7: Positioned for a strong future
Positioned for a strong future Announcement of Global 8000 Entry-into-service of Launch of Bombardier Defense Challenger 3500 Launch of Certified Pre-Owned Unprecedented service center State-of-the-art Global assembly aircraft program expansions facility in Toronto Note: Refer to our disclosure on f
Slide 8: Deeply committed to sustainability
Deeply committed to sustainability • EcoJet blended-wing research project • First in industry to use Sustainable Aviation Fuel (SAF) for 100% of its flight operations1 • Environmental Product Declarations for Global 7500 and Challenger 3500 NEXT ESG REPORT TO BE PUBLISHED IN MAY 2023 1. At blend rat
Slide 9: Business Aviation has seen a structural shift in demand
Business Aviation has seen a structural shift in demand INDUSTRY REVENUES FORECAST1 [$B, 2022-2025] Increased desire for safety, 11% CAGR convenience and privacy for Medium & Large ~23.5 2.4 ~18.0 Significant growth in the number Light 2.7 4.6 of high-net-worth individuals Medium 3.8 Bombardier 16
Slide 10: Bombardier portfolio competing and winning in the Medium and Large categories
Bombardier portfolio competing and winning in the Medium and Large categories GLOBAL 8000 FLAGSHIP OF A NEW AREA GLOBAL 7500 GLOBAL 6500 MORE THAN 1,000 DELIVERIES GLOBAL 5500 PLATFORM OF CHOICE FOR DEFENSE CUSTOMERS MOST DELIVERED BUSINESS JET FAMILY CHALLENGER 650 OF ALL TIME CHALLENGER 3500 LATE
Slide 11: Bombardier backlog has grown significantly
Bombardier backlog has grown significantly BOMBARDIER BACKLOG¹ [$B, 2020-2022] 4.1 +38% 14.8 12.2 10.7 2020 2021 2022 1. Bombardier Backlog includes aircraft manufacturing, aftermarket & Defense engineering & modifications services. Note: Chart data may not be to scale. Note: Refer to our disclosur
Slide 12: Demand and portfolio strength drive a solid delivery outlook
Demand and portfolio strength drive a solid delivery outlook BOMBARDIER DELIVERIES [UNITS, 2020-2022, 2023 GUIDANCE, 2025 OBJECTIVE] ~150 >138 120 103 110 2020 2021 2022 2023 Guidance 2025 Objective Note: Challenger and Global aircraft, excluding Learjet aircraft. Note: Chart data may not be to scal
Slide 13: 2025 objectives updated to reflect strong execution, business confidence
2025 objectives updated to reflect strong execution, business confidence Aircraft Manufacturing INITIAL UPDATED 2025 OBJECTIVES 2025 OBJECTIVES & Other1 Aftermarket ~27% 22% • Significant cash flow REVENUES ~$7.5B >$9B generation ~73% 78% EBITDA2 ~$1,500M >$1,625M • Credit metrics approaching inves
Slide 14: Tailwinds will continue to provide momentum, offsetting headwinds
Tailwinds will continue to provide momentum, offsetting headwinds TAILWINDS HEADWINDS High inflation, rising interest rates, $ Strong backlog environment recession potential Flight Utilization 21%1 above 2019 levels Supply chain disruptions + Low pre-owned aircraft inventory Geopolitical tensions ha
Slide 15: Strategic Priorities
Strategic Priorities MAINTAIN LEADERSHIP MATERIALLY GROW OUR AFTERMARKET FINISH REPAIR OF POSITION IN THE MEDIUM DEFENSE BUSINESS EXPANSION AND BALANCE SHEET AND LARGE CATEGORIES CERTIFIED PRE-OWNED GROWTH Note: Refer to our disclosure on forward-looking statements at the beginning of this presentat
Slide 16: Bombardier Overview Agenda
1 Bombardier Overview Agenda 2 Strategic Overview 3 Financial Overview 16
Slide 17: Bombardier has a strong market share across the globe
Bombardier has a strong market share across the globe MAINTAIN LEADERSHIP POSITION IN THE MEDIUM AND LARGE CATEGORY CIS Worldwide installed base of Medium & Large aircraft TOTAL FLEET: 132 EUROPE TOTAL FLEET: 1,203 38% NORTHERN AMERICA TOTAL FLEET: 5,946 43% MIDDLE EAST TOTAL FLEET: 270 32% GREATER
Slide 18: Innovation is core to Bombardier's DNA
Innovation is core to Bombardier’s DNA MAINTAIN LEADERSHIP POSITION IN THE MEDIUM AND LARGE CATEGORY CHALLENGER 350 CHALLENGER 3500 CHALLENGER 605 CHALLENGER 650 GLOBAL 5500 GLOBAL 6500 GLOBAL 7500 GLOBAL 8000 Note: Non-exhaustive list of Bombardier’s investments. Note: Refer to our disclosure on f
Slide 19: Retaining market leadership by focusing on enablers of innovation
Retaining market leadership by focusing on enablers of innovation MAINTAIN LEADERSHIP POSITION IN THE MEDIUM AND LARGE CATEGORY TALENTED PEOPLE INTELLECTUAL PROPERTY PARTNERS OPERATIONAL EXCELLENCE BALANCE SHEET Note: Refer to our disclosure on forward-looking statements at the beginning of this pre
Slide 20: Bombardier's platforms are well positioned for the Defense market
Bombardier’s platforms are well positioned for the Defense market MATERIALLY GROW OUR DEFENSE BUSINESS • Bombardier Defense created to proactively and strategically pursue opportunities BATTLEFIELD AIRBORNE COMMUNICATIONS NODE (BACN) • Now headquartered in Wichita, Bombardier Defense is longstanding
Slide 21: Bombardier Defense is focused on strategic markets representing ~3,000 active aircraft
Bombardier Defense is focused on strategic markets representing MATERIALLY GROW OUR ~3,000 active aircraft DEFENSE BUSINESS Value proposition • Proven and established platforms Head of State /VVIP Maritime Patrol • Long flight time • High-altitude performance • Low operating costs • Complete and fle
Slide 22: ~375 aircraft demand expected over the next 10 years in identified markets
~375 aircraft demand expected over the next 10 years MATERIALLY GROW OUR in identified markets DEFENSE BUSINESS 10-YEAR MARKET FORECAST [Aircraft Deliveries, 2023-2032] ~45 ~375 ~25 ~125 ~80 ~100 Market Head of State /VVIP Maritime Surveillance /ISR Command Other1 segments Patrol and Control 1. Vari
Slide 23: Defense program requirements extend through the entire life cycle of an aircraft
Defense program requirements extend through the entire MATERIALLY GROW OUR life cycle of an aircraft DEFENSE BUSINESS PROGRAM DEVELOPMENT PROGRAM DELIVERY OPERATIONS & SUSTAINMENT + Engineering services Green aircraft delivery Aircraft modifications Aircraft MRO MRO: Maintenance, Repair, and Overhau
Slide 24: Bombardier Defense can triple its revenues in the 2nd half of this decade
Bombardier Defense can triple its revenues in the 2nd half MATERIALLY GROW OUR of this decadethrough dedicated focus DEFENSE BUSINESS BOMBARDIER DEFENSE POTENTIAL REVENUES Priorities > $1.0B Dedicated structure Engineering services, modifications & aftermarket Focused sales effort Aircraft Engine
Slide 25: On track toward meeting ambitious Aftermarket growth objectives
On track toward meeting ambitious Aftermarket growth objectives AFTERMARKET EXPANSION AND CERTIFIED PRE-OWNED GROWTH TOTAL SIZE OF BOMBARDIER AFTERMARKET REVENUES 2022 Achievements [$B, 2020-2022, 2025] London Bombardier Capture EXPANSION Paris NEW LINE Third-party Capture STATION 4.0 3.7 Singapore
Slide 26: Four key enablers to drive Aftermarket growth
Four key enablers to drive Aftermarket growth AFTERMARKET EXPANSION AND CERTIFIED PRE-OWNED GROWTH 1 2 3 4 OPERATIONALIZATION CUSTOMER GOING DIGITAL PARTS AND OPTIMIZATION SATISFACTION AVAILABILITY OF FOOTPRINT Note: Refer to our disclosure on forward-looking statements at the beginning of this pres
Slide 27: Certified Pre-Owned Aircraft program has shown initial signs of success
Certified Pre-Owned Aircraft program has shown initial signs AFTERMARKET EXPANSION of success AND CERTIFIED PRE-OWNED GROWTH ~460 Annual Pre-Owned transactions on (5-year average) Bombardier aircraft ~10% Bombardier Certified Pre-Owned Aircraft over FMV on average capturing stronger value BEFORE AFT
Slide 28: Customer service obsessed through our engaged workforce
Customer service obsessed through our engaged workforce Note: Refer to our disclosure on forward-looking statements at the beginning of this presentation. 28
Slide 29: Bombardier Overview Agenda
1 Bombardier Overview Agenda 2 Strategic Overview 3 Financial Overview 29
Slide 30: Positioned to create significant value
Positioned to create significant value Achievements since 2020 Value creation drivers by 2025 Structurally positive net income & cash generation Ability to generate significant cash flow Significantly improved credit metrics Credit metrics approaching investment-grade levels Resilient and diversifie
Slide 31: Clear path to updated 2025 objectives
Clear path to updated 2025 objectives 2022 UPDATED RESULTS 2025 OBJECTIVES $6.9B Revenues >$9.0B Adjusted $930M EBITDA1 >$1,625M Adjusted 13.5% EBITDA Margin2 ~18% $735M FCF1 >$900M 4.6x Net Leverage2 2.0x - 2.5x 1. Adjusted EBITDA and free cash flow (FCF) are non-GAAP financial measures. A non-GAAP
Slide 32: Building on fundamentals to reach more than $9 billion in revenues
Building on fundamentals to reach more than $9 billion in revenues REVENUE GROWTH > $9.0B [2022 - 2025] Aftermarket $6.9B Aircraft Manufacturing & Other1 2022 2025 RESULTS OBJECTIVE 1. Represents revenues from sale of new aircraft, specialized aircraft solutions, and pre-owned aircraft. Also includ
Slide 33: Meaningful earnings growth ahead
Meaningful earnings growth ahead EBITDA1 GROWTH [2022 - 2025] > $1,625M D&A2 Cost Pricing Net ~500M of Inflation Strategic Aftermarket Reduction Investments & Growth Other Volume Revenue $930M Conversion Global 7500 2022 2025 RESULTS OBJECTIVE 1. Adjusted EBITDA is a non-GAAP financial measure. A n
Slide 34: Significant cash generation leading to capital allocation optionality beyond 2025
Significant cash generation leading to capital allocation optionality beyond 2025 $1,625M $200M - $300M $300M - $400M Investments >$900M Interest Net Change Cash Taxes on LTD2 & in Working Leases Capital 2025 EBITDA1 2025 FCF1 OBJECTIVE OBJECTIVE 1. Adjusted EBITDA and free cash flow (FCF) are non-G
Slide 35: Continuing to improve leverage and optimize liquidity
Continuing to improve leverage and optimize liquidity FINISH REPAIR OF BALANCE SHEET Net Leverage 1 Liquidity Evolution 2 Priorities Net leverage approaching Improving liquidity requirements investment-grade levels $2.1B Reduce cash on hand 7.7x $1.9B Targeted range $1.5B 4.6x Targeted range $1.0B D
Slide 36: Continued focus on proactive management of debt maturities
Continued focus on proactive management of debt maturities FINISH REPAIR OF BALANCE SHEET MATURITY PROFILE 1,892 $M, MARCH 2023 $5.6B TOTAL DEBT 1,311 750 750 510 381 2021 - 2024 2025 2026 2027 2028 2029 2030 - 2033 2034 Maintain Build manageable Remain highly Continue to be comfortable debt and mo
Slide 37: Investment Thesis
Investment Thesis Robust FCF Established market Diversified revenue Resilient by Strong balance generation & leader streams design sheet capital allocation flexibility Note: Refer to our disclosure on forward-looking statements at the beginning of this presentation. 37
Slide 38: BOMBARDIER
BOMBARDIER Exceptional by design