Bombardier Inc. T.BBD.A

Alternate Symbol(s): BDRAF | BDRBF | BOMBF | T.BBD.B | T.BBD.P.B | T.BBD.P.C | T.BBD.P.D | BDRPF | BDRXF

Industrials Aerospace & Defense

Bombardier Inc. is focused on designing, manufacturing, and servicing business jets. The Company has a fleet of approximately 5,000 aircraft in service with a wide variety of multinational corporations, charter and fractional ownership providers, governments, and private individuals. The Company designs, develops, manufactures and markets two families of business jets (Challenger and Global), spanning from the mid-size to large categories. The Company also provides aftermarket support for both of these aircraft, as well as for the Learjet family of aircraft. The Company's robust customer support network services the Learjet, Challenger, and Global families of aircraft, and includes facilities in strategic locations in the United States and Canada, as well as in the United Kingdom, Germany, France, Switzerland, Italy, Austria, The United Arab Emirates, Singapore, China and Australia. Its jets include Challenger 300, Challenger 350, Challenger 3500, Global 5000, Global 5500, Global 6000.

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Bombardier Inc.

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Post by Tempo1on Apr 25, 2024 9:17am

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Post# 36006788

Desjadins: expect a positive trading reaction

Flash report

BBD hits bookings out of the park—we expect a positive trading reaction

Total revenue came in at US$1,281m in 1Q24, below consensus of US$1,503m and our estimate of US $1,477m. Adjusted EBITDA was US$205m (16.0% margin), below consensus of US$225m (15.0%) and our forecast of US$210m (14.2%), and adjusted EBIT was US$142m (11.1% margin), below consensus of US$148m but above our forecast of US$133m. Finally, FCF (investors’ main focus) of -US$387m came in below consensus of -US$345m but above our forecast of -US$468m.

We expect a positive trading reaction this morning given the stronger-than-expected bookings in the quarter, despite the slight miss on financials due to lower deliveries and a change in mix to Challengers (we calculate that the book-to-bill ratio would still have been 1.4x if BBD had delivered the consensus number of jets in the quarter). For FCF, we believe the Street was expecting far worse than where consensus was sitting, so the slight miss will likely not be seen as a concern by investors, in our view. For EBITDA, the margin outperformed despite the slight miss due to lower deliveries—this should be the focus. The conference call (8am EDT; dial-in 514-316-5035) will be key for monitoring the (1) debt repayment strategy; and (2) level of customer booking activity in the market.

BBD delivered 20 jets in 1Q (8 Globals and 12 Challengers vs 22 units in 1Q23), slightly below consensus of 23 and our estimate of 22. The backlog ended 1Q at US$14.9b, up sequentially from US$14.2b (excludes the 200+ order options from large operators). This represents a book-to-bill of 1.6x based on net new aircraft orders over aircraft deliveries in unit terms (vs 0.9x in 4Q23 and 0.9x in 1Q23). We calculate that the book-to-bill in terms of sales and bookings was 1.9x in the quarter (for a better comparison with Gulfstream, where 1Q book-to-bill was 1.2x). Adjusted net debt/TTM EBITDA came in at 3.6x, up sequentially from 3.3x last quarter (we expected 3.6x). As of March 31, pro forma liquidity was ~US$1.4b and pro forma net debt was ~US$4.4b. Following the end of the quarter, BBD continued to make progress on debt reduction, with a US$100m redemption which closed on April 15.

On a segmented basis, bizjet manufacturing generated sales of US$804m (-22% yoy), below consensus of US$956m (we expected US$1,010m), and aftermarket generated sales of US$477m (13% yoy; we expected US$466m). Most importantly, BBD maintained its 2024 guidance—revenue US$8.4–8.6b, adjusted EBITDA US$1,300–1,350m, adjusted EBIT US$850–900m, FCF US$100–400m and deliveries 150–155 units.