RBC: Q4/22 results in line ; 2023 guide likely conservativeSentiment: Neutral
Our early take on the Q4 report: Q4 results had been pre-released last month and focus therefore was on the 2023 guide – which we characterize as largely in line (and likely conservative). Deliveries are forecasted at 138 vs consensus 141 (RBC: 141). This slightly lower delivery forecast results in slightly lower revenue, EBIT and EBITDA – and again, likely has embedded in it a degree of conservatism. FCF guidance of >$250MM may receive some attention as it is below consensus $448MM (RBC: $409MM); but we flag that mgmt's 2022 guide started the year at >$50MM and ultimately came in at $735MM – underlying the company's conservative approach to guidance. The company also announced that it will update its 2025 estimates during its investor day in March – we are expecting a meaningful increase to the company's 2025 guidance at that event.
Q4/22 results are in line with pre-release. BBD reported full-year results this morning consistent with pre-released results last month. The company reported EBITDA of $352MM, up 68% Y/Y, driven by greater 7500 contribution, cost savings, higher aftermarket revenues, and a favourable aircraft mix. We highlight additional key items in Exhibit 1 comparing the actuals to our and consensus estimates for the quarter.
2023 outlook is largely in line with consensus; likely conservative. BBD today released its formal guidance for 2023, with the provided metrics in line to slightly below consensus, which we view as conservative and therefore neutral to sentiment (see Exhibit 2). The company expects the aftermarket ramp-up in 2022 to be an important revenue driver in 2023. EBITDA is expected to grow to >$1,125MM (21% Y/Y) driven by higher margins, 7500 positive pricing + cost reductions. FCF is expected to be $250MM, brought lower by one-time payments for residual value guarantees of $125MM and capex spend of $350MM (in line with our $300MM).