Bombardier reported on Thursday their financial results for the first quarter of 2023, reflecting continued progress on all business fundamentals and performance on track toward reaching 2023 full-year guidance.
“Bombardier has delivered a very strong first quarter,” said Éric Martel, President and Chief Executive Officer, Bombardier.
“Our robust performance adds to our extremely positive track record from the past two years and confirms we are on the right trajectory.
With a very healthy, positive adjusted net income, further debt reduction, continued margin expansion, and ramped up production to reach our guidance of more than 138 deliveries this year, we are forging ahead towards the upgraded 2025 targets we presented during our Investor Day last month.”
Positive Net Income and Continued Robust Performance on Business Fundamentals Mark First Quarter of 2023
Bombardier reported a strong start to 2023, with first quarter revenues up 17% year-over-year at $1.5 billion, compared to $1.2 billion in the same quarter last year.
The positive trend was reflected in profitability, with adjusted EBITDA up 27%, driven by stronger aircraft margins, mainly on large-cabin aircraft, and aftermarket growth. Adjusted EBITDA margin rose 120 basis points year-over-year to 14.6%. The adjusted EBIT totaled $138 million in the first quarter of 2023, up 89% compared to the same quarter last year.
The company also reported the adjusted net income of $113 million, compared with a $69 million loss over the same period last year. First quarter of 2023 adjusted EPS was $1.06 compared to a loss of $0.80 per share for the same quarter of 2022.
The positive trend in deliveries has continued in the first quarter of 2023, with deliveries (excluding Learjet, which is no longer in production) up 22% year-over-year. This is consistent with the company’s overall guidance of increasing deliveries by more than 15% in 2023. The backlog remained stable at $14.8 billion, while the unit book-to-bill was at 0.9.
The expected ramp up in production to build inventory, as well as strategic investments, such as the new Global production facility at the Pearson airport in Toronto set to open at the end of 2023, have led to some predicted free cash flow usage this year, as well as a higher CAPEX spend and the payment related to the incentive-based compensation plan for employees across Bombardier’s sites.
Bombardier’s aftermarket business continues its positive performance and contribution to the company’s bottom line with $424 million in revenues in the first quarter of 2023, up 17% year-over-year.
Steady Progress on Debt Reduction Contributes to Increased Market Confidence
The company also continued to execute on debt reduction, one of its key promises since restructuring in 2020. Bombardier has successfully repaid approximately $400 million of debt in the first quarter of 2023, which played a major role in the recent upgrade of Bombardier’s corporate family and Senior unsecured notes rating to B2 by Moody’s Investors Service.
With available liquidity very strong at $1.4 billion, towards the upper end of the targeted range shared during its Investor Day in March, the company will remain opportunistic with the debt capital markets in the future.
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