CIBCEQUITY RESEARCH
January 17, 2025 Earnings Update
BOMBARDIER INC.
2024 Deliveries Come In Light According To Aviation Week
Our Conclusion
Aviation Week released its December business jet delivery figures with BBD
delivering 144 units in 2024 versus our expectations of 152 and the
company’s guidance of 150-155. We have adjusted our estimates to reflect
this update. While we see a risk to BBD coming in below its 2024 EBITDA
target and its 2025 free cash flow (FCF) target (we have a sub-1x book-to-bill
ratio this year), as well as acknowledging the risk of U.S. tariffs on Canadian
exports impacting order activity, on balance we maintain a favourable view
on the company. Our positive bias is anchored by our expectations that BBD
will see a step up in FCF in 2025 and beyond, its backlog is two years deep,
and it is trading at an undemanding valuation. We keep our Outperformer
with our price target moving down C$1 to C$126.
Key Points
BBD Delivered 33 Aircraft In December: AWIN released its December
business jet delivery numbers. Worldwide business jet deliveries totaled 143
versus 154 the prior year. BBD delivered the most business aircraft at 33 in
December (plus one military aircraft), followed by Gulfstream with 28
deliveries, Embraer at 27 deliveries and Cirrus at 16 deliveries. BBD
delivered 16 Challenger 3500s, seven Challenger 7500s, four Global 6500s,
four Global 5500, one Challenger 650, and one Global 6000.
Q4/24 And Full-year Deliveries: During Q4/24, BBD delivered 55 aircraft,
consisting of 25 Challenger 3500s, 14 Global 7500s, six Global 6500s, five
Global 5500s, four Challenger 650s, and one Global 6000 model. This brings
BBD’s full-year deliveries to 144 aircraft. BBD was previously guiding to 150-
155 deliveries in 2024 and our expectation was for 152 deliveries.
Business Aviation Flight Activity – Q4/24 Flattish Y/Y And Q/Q:
According to Radarbox, business jet traffic was down 1% Q/Q and down 1%
compared to Q4/23, but was trending 22% above 2019 levels. In the U.S.
(the biggest business jet market), business jet activity was up 5% Q/Q and
up 3% compared to Q4/23. U.S. business jet traffic in the quarter was 24%
above its respective 2019 level. BBD aircraft activity in the quarter was up
2% Q/Q but down 1% compared to Q4/23