Bombardier Inc. Class A · TSX:BBD.A
Bombardier Inc. Class A — Investor Day (March 2021)
68 slides from Bombardier Inc. Class A's investor day presentation, Mar 4, 2021
Slide 1: Our Path Forward: Bombardier Investor Day
Our Path Forward Bombardier Investor Day March 4, 2021
Slide 2: Presenters Today
Presenters Today Jean-Christophe Gallagher Éric Martel Bart Demosky Executive Vice President President and Executive Vice President and Services, Support, and Chief Executive Officer Chief Financial Officer Corporate Strategy 2
Slide 3: 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 the Corporation's objectives, anticipations and outlook or guidance in respect of various financial and global metrics and sources
Slide 4: Caution Regarding Non-GAAP Measures
Caution Regarding Non-GAAP Measures Certain financial measures in this presentation are non-GAAP measures, including Adjusted EBITDA and FCF. Management believes that providing certain non-GAAP financial measures provides enhanced understanding of the Corporation’s current and estimated future resul
Slide 5: Bombardier, a world leader in Business Aviation
Bombardier, a world leader in Business Aviation Bringing the same exceptional performance that has defined our 5 5 5 aircraft to every aspect of the company PRIVATE AND CONFIDENTIAL. © Bombardier Inc. or its subsidiaries. All rights reserved.
Slide 6: Focused, nimble and responsive to our customers
Photo taken before COVID-19 Focused, nimble and responsive to our customers 6
Slide 7: Fully refreshed portfolio and strong $10.7B backlog
Fully refreshed portfolio and strong $10.7B backlog 7
Slide 8: Portfolio well-suited for special missions
Portfolio well-suited for special missions 8
Slide 9: Market outlook based on gradual economic recovery
Market outlook based on gradual economic recovery Industry Deliveries [Units, 2015 –2025F] Large Medium Light 800 -20% 607 602 570 600 542 505 514 479 490 188 187 151 152 155 400 182 183 222 183 149 173 165 121 124 200 197 208 188 210 242 176 183 0 2015 2016 2017 2018 2019 2020 2021F 2022F 2023F 202
Slide 10: Unlocking the value of our portfolio
Unlocking the value of our portfolio 2020 2025 Objective AIRCRAFT MANUFACTURING2 AFTERMARKET 18% ~27% REVENUES $5.6B1 ~$7.5B >5% CAGR ~73% 82% EBITDA3 $200M ~$1.5B ~50% CAGR <5% EBITDA margin ~20% EBITDA margin Reaching positive FCF FCF3 ($1.9B) >$500M in 2022 1. Business aircraft revenues only 2. R
Slide 11: 2021: A transition year with focus on 4 key areas
INCREASING GLOBAL 7500 LEARNING AFTERMARKET DELEVERAGING PRODUCTIVITY AND CURVE IMPROVEMENT GROWTH BALANCE SHEET COST REDUCTION 2021: A transition year with focus on 4 key areas 11 1111
Slide 12: Global 7500 ramping up on plan
Global 7500 Global 7500 ramping up on plan, and delivering on all commitments 7,400+ hours 3,400+ cycles 99.7% dispatch reliability 45+ AC in the fleet 12
Slide 13: Global 7500 to drive profitability
Global 7500 to drive profitability Global 7500 Unit Cost ~-40% Material ~-20% Labor Aircraft #1 Aircraft #50 Aircraft #100+ Today Key Drivers Labor productivity | Engineering standardization | Contractually committed material cost 13 13 Note: Refer to our disclosure on forward-looking statements at
Slide 14: $400M in recurring cost savings by 2023
$400M in recurring cost savings by 2023 Cost Savings Breakdown Under Development In Execution $400M $75M $50M $125M $325M $150M Labor productivity Indirect Manufacturing footprint Run Rate savings spend 14 Note: Refer to our disclosure on forward-looking statements at the beginning of this presentat
Slide 15: Gaining share in a growing market
Total size of Bombardier aftermarket $4.0B $3.2B Third Party Capture Bombardier Capture $2.0B $1.2B 2019 2025F 15 Gaining share in a growing market Note: Refer to our disclosure on forward-looking statements at the beginning of this presentation.
Slide 16: Deleveraging the balance sheet: a key priority
Deleveraging the balance sheet: a key priority Debt Reduction Operating Performance Cash ~3x > $3B ~$1.5B FCF1 Net Released EBITDA Positive leverage 2 Deployable from Balance In 2025 Starting in 2022 by 2025 Cash in 2021 Sheet > $500M in 2025 1. FCF,1. non-GAAP FCF, non-GAAPfinancial measures. finan
Slide 17: Global wealth growth shows untapped demand for private air travel
Global wealth growth shows significant untapped demand for private air travel Global Wealth Growth: High Net Worth Individuals Evolution1 Business Jet Adoption [Number of individuals with wealth >$30M, 2015-2019] [Pre-pandemic rates, 2015-2019] Business Aviation ~10% fleet growth2 290,720 255,810 26
Slide 18: Pandemic highlighted safety and security of private air travel
Pandemic highlighted safety and security of private air travel “This is a great growth “Because of the inherent “We expect to see continued opportunity for our business safety afforded by private demand for business flights and and the industry as a whole, and aviation in a Covid-19 world, an increa
Slide 19: Pioneer in sustainability for business aviation
Pioneer in sustainability for business aviation Track Record of Sustainable Investing Ambitious Goals that Place ESG at Core of our Business 25% reduction in greenhouse gas emissions by 2025 Led the definition of CO2 target for Business Aviation Commitment on Climate Change (BACCC) including 50% CO2
Slide 20: Agenda
Agenda Bombardier Overview & Strategic Outlook Financial Overview Aircraft Portfolio Deep Dive Aftermarket Growth Q&A 20
Slide 21: Building a more resilient business to reach its full potential
Building a more resilient business to reach its full potential ▪ Diversifying revenue portfolio ▪ Focusing on higher margin revenue streams ▪ Increasing operational and financial flexibility ▪ Disciplined and strategic capital deployment ▪ De-risking the business model Financial performance by harve
Slide 22: Significant earnings growth drives FCF generation
Significant earnings growth drives FCF generation 2025 Objectives ~$7.5B ~$1.5B >$500M ~3x REVENUES EBITDA FCF Net Leverage2 1 1 >5% CAGR 2020-2025 ~50% CAGR 2020-2025 Reaching positive FCF >$250M interest cost savings by in 2022 2025, mostly achieved in 2021 1. Adjusted EBITDA and FCF, non-GAAP fin
Slide 23: Revenue growth from new aircraft delivery recovery & aftermarket expansion
Revenue growth from new aircraft delivery recovery & aftermarket expansion Revenue Growth [2020 –2025F] >5% ~$7.5B CAGR ~$1.0B 1 $5.6B ~$1.0B 2020 Aircraft Market Recovery Aftermarket Expansion Strategy 2025 Actuals Objective 1. Business aircraft revenues only 23 Note: Refer to our disclosure on for
Slide 24: Significant EBITDA acceleration by executing on what we control
Significant EBITDA acceleration by executing on what we control EBITDA1 Growth [2020 – 2025F] ~20% EBITDA margin ~50% Amortization CAGR ~$450M ~$1.5B 2024-25 $400M 2021-23 2023 2022 2021 2024-25 2022-23 2021 $200M 2020 Maturing the Global Cost Reduction Aftermarket Earnings Conversion 2025 Actuals 7
Slide 25: Global 7500 plan is biggest EBITDA contributor until 2025
1 Executing on the Global 7500 plan is our biggest EBITDA contributor until 2025 Global 7500 EBITDA Contribution [2018 – 2025F] EBITDA1 contribution 2018 2019 2020 2021F 2025F Deliveries 1 11 35 35 - 40 1. Adjusted EBITDA, non-GAAP financial measures. For further information on non-GAAP financial me
Slide 26: $400M recurring cost reduction plan fully completed by 2023
2 $400M recurring cost reduction plan fully completed by 2023 Cost Reduction Annual EBITDA1 Benefits [2021F – 2023F] $400M Under Development Mfg. Footprint $75M Indirect Spend ~30% manufacturing footprint reduction Labor $50M $250M $125M ~10% reduction in indirect spend $100M ~1,000 FTE reduction $1
Slide 27: Aftermarket expansion strategy – strong business case with short payback
3 Aftermarket expansion strategy – strong business case with short payback Startup Investment ▪ Leased building, with construction costs assumed by builder / lessor ▪ Limited tooling ▪ Payback period: cash positive within 2 years Low capital intensity – costs scalable based on demand 27
Slide 28: Earnings growth + capital discipline = strong FCF growth
Earnings growth + capital discipline = strong FCF growth Free Cash Flow Conversion [2025F] Reaching ~$1.5B positive FCF in 2022 > $0.5B 2025 EBITDA1 CAPEX Net Change in Cash Taxes Interest 2025 FCF 1 Objective Working Capital Objective 1. Adjusted EBITDA and FCF, non-GAAP financial measures. For fur
Slide 29: Cash deployment in 2021, initially focused on nearest maturities
Cash deployment in 2021, initially focused on nearest maturities Debt Maturity Outlook [2021 - 2034] PRIORITIES $2.0B $1.5B Initial area of focus 3+ year maturity runway $1.3B $1.2B Secured Financing repaid Feb. 19 $1.0B $1.0B $0.8B Optimized liquidity $0.5B $0.5B $0.3B $0.1B Opportunistic refinanci
Slide 30: Healing the balance sheet through cash deployment and financial performance
2025 Objectives FINANCIAL DE-RISKING THE GRADUALLY IMPROVING PERFORMANCE BUSINESS MODEL CREDIT METRICS Healing the balance sheet through cash deployment and financial performance 30 30
Slide 31: Agenda
Agenda Bombardier Overview & Strategic Outlook Financial Overview Aircraft Portfolio Deep Dive Aftermarket Growth Q&A 31
Slide 32: Bombardier's revenue is one-third of total market
Bombardier’s revenue is one-third of total market Estimated Industry Revenues for New Aircraft Deliveries [$B, 2015 – 2020, 2025F] +25% 20 15 10 5 34% 32% 28% 32% 32% 28% 29% 0 2015 2016 2017 2018 2019 2020 2025F Bombardier Deliveries 166 138 122 125 130 103 130 – 135 excl. Learjet Rest of the Marke
Slide 33: Large and Medium categories represent ~90% of industry revenues and profit pools
Large and Medium categories represent ~90% of revenues and profit pools in the industry 2020 Industry Revenues for New Aircraft Deliveries [Market size by category] Large Medium Light Strategic focus on medium and large categories 33 Source: GAMA, B&CA magazine and internal Bombardier analysis. Excl
Slide 34: Fully refreshed and highly competitive portfolio
Fully refreshed and highly competitive portfolio is well positioned to capture market upturn Estimated Price Global 7500 $75M Global 6500 LARGE Global 6000 Global 5500 Global 5000 $40M Challenger 650 MEDIUM Challenger 350 $20M 34
Slide 35: Global 7500
Global 7500 The industry flagship 35
Slide 36: Award winner – Global 7500 aircraft
99.7% Award winner – Dispatch Global 7500 aircraft reliability1 “ ” The Global 7500 jet’s design makes it the largest business jet with the short-field performance and steep approach capabilities allowing it to operate out of demanding airfields such as Gstaad’s Saanen airport or London City Airport
Slide 37: Industry's pioneer four-zone cabin
Industry’s pioneer four-zone cabin No compromises 37
Slide 38: The Nuage seat
The first meaningful change in the The Nuage seat operation and design of a business aircraft seat in 30 years 38 38
Slide 39: Total performance
1 2 3 The Global 7500 aircraft The Global 7500 aircraft The Global 7500 aircraft can flies farther flies faster operate from shorter airfields Tucson Distance travelled 8,152 nm Singapore Los New Angeles York 3 hours, 54 min Landing at Saanen airport (LSGK) Total performance In real-world conditions
Slide 40: Global 5500 & Global 6500
Global 5500 & Global 6500 Quintessentially Global 40
Slide 41: Global 5500 & Global 6500
1 2 3 4 Widest cabin Longest range Smoothest ride Clearest vision Global 5500 & Global 6500 Best in class performance 41
Slide 42: Widest cabin in its class
Global 5500 Competitor A products Competitor B products Global 6500 6 ft 2 in 6 ft 2 in 6 ft 1 in 6 ft 6 in 6 ft 1 in 6 ft 2 in 7 ft 11 in 7 ft 7 in 7 ft 7 in Global 5500 and Global 6500 Widest cabin in its class 42
Slide 43: Longest range
Longest range From New York Global 5500 Global 6500 Assumptions ISA+15ºC takeoff temperature Global 5500: 8 passengers, 3 crew (225 lb. each) Global 6500: 8 passengers, 4 crew (225 lb. each) M 0.85 cruise speed 3% airways allowance ISA conditions en route 85% Boeing annual winds NBAA IFR (200 NM) fu
Slide 44: A trusted platform
A trusted platform Global aircraft’s proven reliability ` 99.82% Global 6500 dispatch reliability1 99.73% Closest competitor dispatch reliability1 44 1. From Bombardier fleet reliability monitoring system and internal Bombardier analysis.
Slide 45: Challenger 650
Challenger 650 Best-selling is a sure bet 45
Slide 46: Global cross-section for under $30M
Global cross-section for under $30M 46
Slide 47: Most reliable by design
99.91% Dispatch reliability1 Most reliable by design Serving the most demanding operations 47 1. From Bombardier fleet reliability monitoring system and internal Bombardier analysis.
Slide 48: Challenger 350
Challenger 350 Best-selling by design 48
Slide 49: Recent product enhancements
1 2 3 4 5 Quietest super Flight deck Enhanced High speed Enhanced cabin mid-size cabin enhancements performance Ka-band management connectivity system Recent product enhancements The best super mid-size platform 49
Slide 50: Unmatched reliability
Unmatched reliability For every missed trip ` on the Challenger 350 aircraft, miss two on the closest competitor 99.86% Challenger 350 dispatch reliability1 99.76% Closest competitor dispatch reliability1 50 1. From Bombardier fleet reliability monitoring system and internal Bombardier analysis.
Slide 51: Challenger 350 market leader
Challenger 350 330+ market leader deliveries since 2015 G280 Legacy 500 / Praetor 600 Longitude ~160 deliveries since 2015 ~105 deliveries since 2015 ~30 deliveries since Entry-Into-Service Source: GAMA up to Q4-2020 51
Slide 52: The #1 brand in Business Aviation
The #1 brand in Business Aviation 1 2 3 Industry leading Strong and loyal Demonstrated reliability portfolio customer base and service support 52
Slide 53: Agenda
Agenda Bombardier Overview & Strategic Outlook Financial Overview Aircraft Portfolio Deep Dive Aftermarket Growth Q&A 53
Slide 54: Bombardier Aftermarket size expected to grow to $4B by 2025
Bombardier Aftermarket size expected to grow to $4B by 2025 Bombardier Aftermarket Market Size Bombardier Fleet Utilization [2019-2025F] [Monthly Flight Hours] +4% $4.0B 100K CAGR 90K $3.2B 80K -19% $2.0B 70K 60K $2.0B 50K 40K 30K $2.0B (50%) 20K $1.2B (38%) 10K 2019 2025F Jan-20 Mar-20 May-20 Jul-2
Slide 55: Aftermarket business has a proven and executable growth strategy
Our Aftermarket business has a proven and executable growth strategy Aftermarket Revenues Aftermarket Margins [$B, 2015 – 2020, 2025F] [$M, 2015 – 2020, 2025F] Actuals Actuals Forecast Forecast CAGR % CAGR % +8% 2.0 Objective +9% Objective +13% 1.2 +20% 1.1 1.0 ~1.0 0.8 0.7 2015 2016 2017 2018 2019
Slide 56: Bring Your Jet Home
Bring Your Jet Home The OEM experience for our customers 56
Slide 57: More capacity, improved productivity, new capabilities
More capacity, improved productivity, new capabilities 1.5X the capacity 2X the hours applied on Bombardier Fleet New capabilities in component repair, engine, maintenance, interiors, paint, others Growing maintenance infrastructure as a parts channeling strategy 57
Slide 58: Expanding global infrastructures
Expanding Expandingglobal globalinfrastructures infrastructurestotoget getcloser closertotoour ourcustomers 58 US MRT service points are referred to as Line Station on this map only for ease of reference. New service center and Line Station expansions since 2017
Slide 59: Berlin service center
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Slide 61: BOMBARDIER
BOMBARDIER
Slide 62: Essendon Fields
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Slide 63: Miami
Miami 202? BOMBARDIER
Slide 64: Digital Aircraft with Ecosystem of Apps
Digital Aircraft with Ecosystem of Apps Enabled by Bombardier Big Data ii | BOMBARDIER
Slide 65: Smart Link Plus
Real-time data anytime, anywhere Aug 1, 2020 @ 16:59:00 322C01 NOSE DOOR Aug 1, 2020 @ 16:24:00 —> FUEL XFER ON | My Aircraft Smart Link Plus
Slide 66: Expanding into new opportunities across the aircraft lifecycle
Expanding into new opportunities across the aircraft lifecycle 66
Slide 67: Transforming Bombardier into a more stable and resilient business
Transforming Bombardier into a more stable and resilient business Bombardier Consolidated Revenues [2020 - 2025] 2020 2025 Objective 18% ~27% > 5% CAGR $5.6B 1 ~$7.5B ~73% 82% AIRCRAFT MANUFACTURING2 AFTERMARKET 1. Business aircraft revenues only 67 2. Represents revenues from sale of new aircraft,
Slide 68: BOMBARDIER
BOMBARDIER Exception