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Home » Business News

Bombardier Announces Financial Results for the First Quarter Ended March 31, 2015…

Submitted by on May 13, 2015 – 6:00 am |


Alain Bellemare, President and Chief Executive Officer, Bombardier Inc.Bombardier today reported its financial results for the first quarter ended March 31, 2015. Revenues totalled $4.4 billion for the quarter, compared to $4.4 billion for the same period last fiscal year.

For the first quarter ended March 31, 2015, earnings before financing expense, financing income and income taxes (EBIT) totalled $228 million, or 5.2% of revenues, compared to $207 million or 4.8% for the same period last fiscal year. EBIT before special items totalled $237 million, or 5.4% of revenues, compared to $219 million or 5.0% for the same period last fiscal year.

Net income totalled $100 million, or diluted earnings per share (EPS) of $0.05, compared to $115 million or $0.06 for the same period the previous year. On an adjusted basis, net income amounted to $170 million, or EPS of $0.09, for the first quarter ended March 31, 2015, compared to $151 million, or $0.08, for the same period the previous year.

For the three-month period ended March 31, 2015, free cash flow usage (cash flows from operating activities less net additions to property, plant and equipment (PP&E) and intangible assets) amounted to $745 million, compared to a usage of $915 million for the same period last year. As at March 31, 2015, available short-term capital resources of $6.0 billion included cash and cash equivalents of $4.7 billion, compared to $3.8 billion and $2.5 billion, respectively as at December 31, 2014. The overall backlog was at $65.8 billion as at March 31, 2015, compared to $69.1 billion as at December 31, 2014.

During the first quarter, as part of the financing plan announced last February, the Corporation closed an $868 million public offering of equity and issued a $2.25 billion aggregate amount of unsecured Senior Notes, both oversubscribed. Of this amount, $750 million of Senior Notes due in 2016 were redeemed in advance on April 29, 2015.

In the financial report for the fiscal year ended December 31, 2014, Bombardier provided liquidity guidance for the fiscal year ended December 31, 2015 for each business segment. In the context of the new organizational structure, the Corporation conducted a benchmark analysis of disclosure. Following this analysis, management decided to change its liquidity guidance by business segment to a consolidated one. Consequently, the segmented liquidity guidance has been withdrawn and will be replaced with consolidated liquidity guidance at a future date.

In Business Aircraft, the market has seen some softness in certain regions, particularly in Latin America, China and Russia, which resulted in a lower order intake. Accordingly, the Corporation is planning to adjust production rates in line with demand and the management team is currently assessing the resulting impact on the workforce.

The Corporation has been proactively reviewing its strategic options for its rail business, given the ongoing industry consolidation. Bombardier is announcing today that it is preparing for an initial public offering (IPO) of a minority stake in Bombardier Transportation. When completed, the IPO is expected to crystallize the full value of Bombardier Transportation and further strengthen the Corporation’s financial position, while preserving flexibility should it wish to participate in future rail equipment industry consolidation. The IPO is currently expected to take place in the fourth quarter of this year, subject to market conditions, with the primary listing venue likely to be Germany, where the business segment is headquartered. After the IPO, Bombardier Transportation will continue to be controlled by Bombardier Inc. and consolidated in its financial results.

“The past few months have been very busy and much has been accomplished”, said Alain Bellemare, President and Chief Executive Officer, Bombardier Inc. “The first quarter results were generally positive, with revenues, EBIT and deliveries mostly on target. We’ve successfully completed two components of our financing plan which brought our liquidity up to $6 billion.”

“We also announced this morning Swiss International Air Lines, a division of Lufthansa, as our first customer to take delivery and operate theCS100 aircraft. Lufthansa is a world-class airline with tremendous experience in introducing new aircraft. The CSeries development program is progressing well, as the first CS300 FTV made its inaugural flight last February. Moreover, we’ve added strong leaders to Commercial Aircraft’s management team with the appointment of Fred Cromer as President and Colin Bole as the new head of sales. Both have deep commercial aerospace knowledge and expertise. Finally, we are announcing today that we are preparing for an initial public offering of a minority stake in Bombardier Transportation. Let me be very clear, Bombardier Transportation is not for sale. We like this business and it will remain part of Bombardier Inc.,” he added.

“After three months in the job, I recognize we have challenges and a lot of work to do. But as you can see, we are moving fast and taking significant actions to improve performance. Bombardier is a great company, with talented and passionate employees, innovative products, and strong potential. We are taking all the right steps to create value for our customers and shareholders,” concluded Mr. Bellemare.

SEGMENTED RESULTS AND HIGHLIGHTS

Business Aircraft

Results of the quarter

Three-month periods ended March 31

2015

2014

Variance

Revenues

$

1,537

$

1,474

4

%

Aircraft deliveries (in units)

45

43

2

Net orders (in units)

19

46

(27

)

Book-to-bill ratio(1)

0.4

1.1

nmf

EBIT

$

96

$

90

7

%

EBIT margin

6.2

%

6.1

%

10 bps

EBIT before special items(2)

$

107

$

100

7

%

EBIT margin before special items(2)

7.0

%

6.8

%

20 bps

EBITDA before special items(2)

$

149

$

130

15

%

EBITDA margin before special items(2)

9.7

%

8.8

%

90 bps

Net additions to PP&E and intangible assets

$

159

$

275

(42

)%

As at

March 31,
2015

December 31,
2014

Order backlog (in billions of dollars)

$

23.4

$

24.0

(3

)%

bps: basis points; nmf: information not meaningful

(1)

Defined as net orders received over aircraft deliveries, in units.

(2)

See Caution regarding Non-GAAP measures at the end of this press release.

  • In January 2015, Bombardier decided to pause the Learjet 85 aircraft program resulting in a workforce reduction of 1,000 employees at the sites in Querétaro, Mexico and Wichita, United States and a severance provision of approximately $13 million was recorded as a special item during the first quarter of 2015.
  • The first Challenger 650 production aircraft successfully completed its first flight.
  • The assembly of the first Global 7000/8000 flight test vehicle (FTV) is progressing.
  • In April, the Corporation announced the appointment of Peter Likoray as Senior Vice President of Sales.

Commercial Aircraft

Results of the quarter

Three-month periods ended March 31

2015

2014

Variance

Revenues

$

673

$

479

41

%

Aircraft deliveries (in units)

23

13

10

Net orders (in units)

25

45

(20

)

Book-to-bill ratio(1)

1.1

3.5

nmf

EBIT

$

(9

)

$

5

nmf

EBIT margin

(1.3

)%

1.0

%

(230) bps

EBIT before special items(2)

$

(10

)

$

3

nmf

EBIT margin before special items(2)

(1.5

)%

0.6

%

(210) bps

EBITDA before special items(2)

$

18

$

23

(22

)%

EBITDA margin before special items(2)

2.7

%

4.8

%

(210) bps

Net additions to PP&E and intangible assets

$

194

$

197

(2

)%

As at

March 31,
2015

December 31,
2014

Order backlog (in billions of dollars)

$

12.5

$

12.5

%

bps: basis points; nmf: information not meaningful

(1)

Defined as net orders received over aircraft deliveries, in units.

(2)

See Caution regarding Non-GAAP measures at the end of this press release.

  • The maiden flights of the first CS300 FTV and of the fifth CS100 FTV, fitted with a full interior, were successfully completed. There are now six FTVs in the flight test program and approximately 50% of the planned flight test hours have been logged to date.
  • A firm purchase agreement was signed with Chorus Aviation Inc., the parent company of Jazz Aviation LP for 13 Q400 NextGen aircraft, valued at approximately $424 million based on list price, with options for an additional 10, and a purchase agreement was signed with Mesa Airlines, for 7 CRJ900 NextGen aircraft, valued at approximately $326 million, based on list price.
  • flymojo, a new airline in Malaysia, signed a letter of intent for 20 CS100 aircraft with options for an additional 20 CS100 aircraft. Based on the list price, a firm order would be valued at approximately $1.5 billion, and could increase to $2.9 billion, should flymojo exercise all its options.
  • In April, Bombardier announced the appointment of Fred Cromer as President, Commercial Aircraft and Colin Bole as Senior Vice President, Sales and Asset Management, Commercial Aircraft
  • Today, announcement of Swiss International Air Lines (SWISS) as the first airline to take delivery and operate the CSeries aircraft when theCS100 enters into service in the first half of 2016.

Aerostructures and Engineering Services

Results of the quarter

Three-month periods ended March 31

2015

2014

Variance

Revenues

$

471

$

470

%

External order intake

130

133

(2

)%

External book-to-bill ratio(1)

0.9

1.0

nmf

EBIT

$

42

$

16

163

%

EBIT margin

8.9

%

3.4

%

550 bps

EBIT before special items(2)

$

41

$

20

105

%

EBIT margin before special items(2)

8.7

%

4.3

%

440 bps

EBITDA before special items(2)

$

53

$

33

61

%

EBITDA margin before special items(2)

11.3

%

7.0

%

430 bps

Net additions to PP&E and intangible assets

$

14

$

12

17

%

bps: basis points; nmf: information not meaningful

(1)

Defined as new orders over revenues.

(2)

See Caution regarding Non-GAAP measures at the end of this press release.

Bombardier Transportation

Results of the quarter

Three-month periods ended March 31

2015

2014

Variance

Revenues

$

2,041

$

2,267

(10

)%

Order intake (in billions of dollars)

$

1.2

$

8.0

(85

)%

Book-to-bill ratio(1)

0.6

3.5

nmf

EBIT

$

118

$

128

(8

)%

EBIT margin

5.8

%

5.6

%

20 bps

EBITDA(2)

$

144

$

157

(8

)%

EBITDA margin(2)

7.1

%

6.9

%

20 bps

Net additions to PP&E and intangible assets

$

12

$

16

(25

)%

As at

March 31, 2015

December 31, 2014

Order backlog (in billions of dollars)

$

29.8

$

32.5

(8

)%

bps: basis points; nmf: information not meaningful

(1)

Defined as new orders over revenues.

(2)

See Caution regarding Non-GAAP measures at the end of this press release.

  • Bombardier-Sifang Transportation, a Chinese entity in which Bombardier holds a 50% interest, delivered the first ZEFIRO 380 very high speed train to its customer, Shanghai Railway Bureau.
  • In April, the V300ZEFIRO Italy very high speed train received homologation and successfully completed its maiden trip from Milan to Rome.
  • Bombardier Transportation signed an agreement with the New United Group (NUG) to establish a joint venture for Signalling and rail control in China. The new company will focus on rail transportation communication, signalling and integrated monitoring systems for the Chinese mass transit and light rail markets, and be introducing moving-block signalling technology for metro applications.

Reconciliation of segment to consolidated results

Three-month periods
ended March 31

2015

2014(1)

Revenues

Business Aircraft

$

1,537

$

1,474

Commercial Aircraft

673

479

Aerostructures and Engineering Services

471

470

Transportation

2,041

2,267

Corporate and eliminations

(325

)

(336

)

$

4,397

$

4,354

EBIT before special items(2)

Business Aircraft

$

107

$

100

Commercial Aircraft

(10

)

3

Aerostructures and Engineering Services

41

20

Transportation

118

128

Corporate and eliminations

(19

)

(32

)

$

237

$

219

Special Items

Business Aircraft

$

11

$

10

Commercial Aircraft

(1

)

(2

)

Aerostructures and Engineering Services

(1

)

4

$

9

$

12

EBIT

Business Aircraft

$

96

$

90

Commercial Aircraft

(9

)

5

Aerostructures and Engineering Services

42

16

Transportation

118

128

Corporate and eliminations

(19

)

(32

)

$

228

$

207

Supplemental information

Adjusted net income(2)

$

170

$

151

Adjusted EPS(2)

$

0.09

$

0.08

Free cash flow usage(2)

$

(745

)

$

(915

)

(1)

Financial results for the year ending December 31, 2014 have been reclassified to conform with current period presentation. See the 2015 first quarter MD&A for further information.

(2)

See Caution regarding Non-GAAP measures at the end of this press release.


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