Bombardier Inc. T.BBD.A

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

Industrials Aerospace & Defense

Bombardier Inc. is a Canada-based manufacturer of business aircraft with a global network of service centers. The Company is focused on designing, manufacturing and servicing business jets. The Company has a worldwide fleet of more than 5,000 aircraft in service with a variety of multinational corporations, charter and fractional ownership providers, governments and private individuals. It operates aerostructure, assembly and completion facilities in Canada, the United States and Mexico. Its 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, Austria, the United Arab Emirates, Singapore, China and Australia. The Company's jets include Challenger 350, Challenger 3500, Challenger 650, Global 5500, Global 6500, Global 7500 and Global 8000.

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Bombardier Inc.

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Post by Tempo1on Nov 02, 2023 8:55am

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Post# 35713052

TD First look: Positive

Event

Bombardier reported Q3/23 Adjusted EBITDA of $285 million, compared to our forecast of $245 million and consensus of $262 million.

Impact: POSITIVE

We believe that stronger-than-forecast Q3/23 EBITDA, positive FCF and unchanged full year guidance (which we believe has upside) should be viewed positively by investors. Total revenue growth of 28%, delivery growth of 24%, 11% aftermarket revenue growth and unchanged 2023 delivery guidance (implies 12% full-year growth) is encouraging. Q3/23 FCF and unchanged guidance in particular should help alleviate investor concerns that have been weighing on the share price.

Revenue of $1.86 billion increased 28% y/y (TD/consensus: $1.72 billion/$1.74 billion). Deliveries increased to 31 aircraft (TD: 31), with two fewer large aircraft and two more medium aircraft than estimated. Services revenue increased 11% y/y to $414 million (TD: $391 million).

Adjusted EBITDA margin increased 100 bps y/y to 15.4% (TD/consensus: 14.2%/15.1%) was due to Global 7500 margins, volume, aftermarket growth, and cost management. Orders: Book-to-bill (units) of 1.1x demonstrates the expected moderation from the strong levels of the past two years, and compares to GD's 1.3x in Aerospace and Cessna's 1.4x (biased higher due to delivery delays).

Backlog decreased $200 million sequentially to $14.7 billion, but remains strong, and supportive of our expectations for delivery growth through at least 2025. While supportive of the outlook, we don't believe the book-to-bill is strong enough to help alleviate those investors concerned about the cycle. We view the book-to-bill as an expected normalization

Free cash flow was $80 million (TD: $19 million). The difference was primarily due to contract liabilities and trade payables, partially offset by capex and inventory.

Balance Sheet: Trailing 4-quarter Adjusted net debt-to-Adjusted EBITDA declined sequentially to 4.1x (TD: 4.3x) from 4.5x. The company has $1.2 billion of liquidity, of which $1.0 billion is cash equivalents.

Guidance: No change to full year guidance of >138 deliveries (TD: 138), revenue > $7.6 billion (TD: $7.88 billion), Adjusted EBITDA >$1.125 billion (TD: $1.18 billion), Adjusted EBIT >$695 million (TD: $745 million), and FCF >$250 million (TD: $293 million).