My take on the eventsInvestor Day highlights.
-LTD down to $5.67B today. Could be LTD free by 2030, if that's their objective. But they remain steadfast to reducing LTD to around $3.5B for 2025, with around $250M of Interest payments annually. To me that's acomfortable level.
-No Taxes payable till thend of 2030 because of losses.
-Deeply focussed on repairing Balance Sheet by 2025.
-Capex will remain in the $300M range from 2023 till 2025.
-M&A's if required technology in Defense or Supply chain is possible. But not until 2025
-They are market leader in Business Aviation everywhere in the world. Both in Sales & Service. Although I think that the US is still for Gulfstream. I'm sure they take over as production increases.
-They wanna optimize Liquidity by reducing cash on hand to $1B by 2025.
-They want to grab $1B of defense spending on the 375 Aeroplains world wide demand by 2025.
-They have a good portion of the 450 a year Pre-ownd market (PRO), and are striving for a bigger portion, although they are not chasing bad deals.
Financial METRICS Guidence for 2025
-$9B in Revs
-EBITDA of $1.65B by 2025
-$300M in Interest on LTD
-$900M of FCF
-2-2.5x net leverage.
-Credit Rating objective is to get as close to INVESTMENT GRADE as possible.
-Margins expected in 2025, of 18% to 20%
-B2B is expected at 1 from now till 2025
-Backlog is comfortable at around 15 to 18 months going forward. They don't want to increase it because they want to deliver quickly to the costomer.
-No need for significant Aeroplane sales for profitability
-Digital transformation on the way as well. Technology is important. Some CAPEX there.
Future Achivements Projected
-CP-Owned & defense for $1B in Revs with 20% Margins
-B2B is stable & should stay at 1 in the Long Run.
-Supply chain Issues less problematic now, but still not at ZERO.
-Still hiring employees for growth areas.
-Margins should grow, but depending on INFLATION. Still remains a high Margin business.
-Company is doing some Share re-purchases on the open market.
-Huge demand for Challenger 3500 & other CL series. Huge demand for Global Series.
-Remaining focussed on LTD, Capex reductions, & Increasing after market & Defense Revs.
-NO cancellations so far in this Economic climate.
-No need to launch new programs. No competitor preasure.
-Service side is phenominal with the 5,000 Planess out there, & Revs growing with Inventory discipline, & Capex reduction coming at an end by 2023.
Overall Conclusion for me.
They are finally getting realistic with their Guidence projections on Income. They have more clarity on Growth. They are more realistic & conservative on Backlog & profitability with current Margins. Realistic on M&A's, which shows me that they are getting GROUNDED as a company, and are getting more BORING. Boring to me is great. So Bombardier, just keep churning the profits & clean the Balance Sheet from now till 2025. Nice presentation.