Bombardier Announces Financial Results for the Fourth Quarter and the Year Ended December 31, 2015
(firmenpresse) - MONTREAL, QUEBEC -- (Marketwired) -- 02/17/16 -- Bombardier Inc. (TSX: BBD.A)(TSX: BBD.B)(OTCQX: BDRBF)
(All amounts in this press release are in U.S. dollars unless otherwise indicated. This press release contains both IFRS and non-GAAP measures. Non-GAAP measures are defined and reconciled to the most comparable IFRS measures in the Corporation's MD&A. See Caution regarding non-GAAP measures at the end of this press release.)
Bombardier today (TSX: BBD.A)(TSX: BBD.B)(OTCQX: BDRBF) reported its financial results for the fourth quarter and the year ended December 31, 2015.
Selected results
"We are turning Bombardier around to make this great company stronger and more competitive," said Alain Bellemare, President and Chief Executive Officer. "Over the past year, we renewed our leadership team and developed a clear plan to significantly improve our performance. We de-risked major development programs and stabilized the company, securing our liquidity position and taking a series of actions to rebuild margins."
"With the certification of the CS100 aircraft, we also reached the last key milestone before the entry-into-service of the C Series, while ramping up to full production. And today, with the signing of Air Canada for the leading-edge CS300 aircraft, we add a major international airline customer based in North America to complement our orders in both Europe and Asia. Air Canada's commitment is a strong endorsement of this outstanding aircraft. It will create significant value for Air Canada and its customers and will become a catalyst for future orders in North America and around the world," added Mr. Bellemare.
For 2016, the company expects to generate between $16.5 billion and $17.5 billion in revenues, with EBIT margin improvements across Transportation, Business Aircraft and Aerostructures, while Commercial Aircraft ramps up the C Series program. EBIT is expected to be within a range of $200 million to $400 million, while free cash flow usage materially improves, at $1.0 billion to $1.3 billion for the year.
Air Canada signs for up to 75 C Series aircraft
Bombardier and Air Canada announced today that the parties have signed a Letter of Intent (LOI) for the sale and purchase of 45 CS300 aircraft with options for an additional 30 CS300 aircraft, including conversion rights to the CS100 aircraft. Upon execution of a firm purchase agreement, Air Canada will become the first mainline, international network carrier based in North America for the C Series family of aircraft. The all-new aircraft will start delivering in 2019.
Based on the list price of the CS300 aircraft, a firm order would be valued at approximately $3.8 billion. With this significant agreement, Bombardier has now received orders and commitments for a total of 678 C Series aircraft.
Global workforce optimization
Bombardier announced today that it will take steps to optimize its workforce with a combination of a manpower reduction and strategic hiring throughout 2016 and 2017. As the company evolves over the next two years, its global workforce will be reduced by a targeted 7,000 production and non-production employees, including 2,000 contractors. This reduction will be partially offset by hiring in certain growth areas, notably to support the ramp-up of strategic programs and projects worldwide, such as the C Series. These adjustments will enable Bombardier to resize its organization in line with current business needs and to increase its competitiveness.
The decision to optimize the organization is based on an in-depth review of the company carried out over the past year:
In parallel, Bombardier intends to hire in certain growth areas:
"Throughout 2016 and 2017, we will adapt our global manpower to current market conditions, while hiring to support growing segments, such as the C Series," said Mr. Bellemare. "These adjustments are always difficult. They are important to ensure that, with our 64,000 employees worldwide, we continue to create superior value for our customers, be more competitive, and deliver improved financial performance," he added.
Impacted positions are mostly based in Canada and Europe, where the company's aerospace and rail transportation activities are concentrated. Bombardier will support affected employees and will provide them with resources to help them manage through their transition.
The reductions will begin in the coming weeks and will be implemented over a period of two years. Throughout 2016, on a full year basis, Bombardier expects to record $250 million to $300 million in restructuring charges that will be reported as special items when accrued.
The table below presents an overview of targeted workforce reductions by business segment.
"Bombardier is in a better place today and we are on the path to greater profitability. We are engaged in a rigorous process that will increase our earnings power and cash flow generation over the next five years. And with today's landmark commitment from Air Canada for up to 75 CS300 aircraft, we are building positive momentum to successfully compete. The C Series is the best aircraft in the 100- to 150-seat class segment. Its innovative all-new design makes it the lowest operating costs, greatest cabin comfort and the most environmentally-friendly aircraft in the industry. We now have a clear plan in place and are applying disciplined execution to make Bombardier stronger," concluded Mr. Bellemare.
Share consolidation
Bombardier also announced today that it plans to present a proposal to its shareholders for a consolidation (also known as a "reverse stock split") of its issued and unissued Class A shares (multiple voting) (the "Class A shares"), and Class B shares (subordinate voting) (the "Class B subordinate voting shares"), at its annual and special meeting planned for spring 2016 (the "Share Consolidation"). The consolidation ratio will be selected by Bombardier's Board of Directors from within a range of ratios, subject to shareholder approval, which would be expected, at that time, to result in an initial post-consolidation share price in the range of $10 Cdn to $20 Cdn per Class A share or Class B subordinate voting share. Assuming receipt of shareholder and Toronto Stock Exchange approvals, the Share Consolidation, if any, would be completed at such time as the Board of Directors shall deem appropriate.
Bombardier believes that a higher share price resulting from the proposed consolidation would heighten the interest of the financial community as it would broaden the pool of investors that may consider or may be able to invest in Bombardier.
Implementation of the Share Consolidation is subject to a number of conditions, including but not limited to, Toronto Stock Exchange and shareholder approval, and subject to the Board of Directors' authority, notwithstanding approval of the Share Consolidation by shareholders, to determine in its discretion not to proceed with the Share Consolidation, without further approval or action by, or prior notice to, shareholders. There can be no assurance that the Share Consolidation will be implemented as proposed or at all, or as to the timing thereof, or that the Share Consolidation will result in the contemplated initial post-consolidation share price of Class A shares or Class B subordinate voting shares.
SEGMENTED RESULTS AND HIGHLIGHTS
Business Aircraft
Commercial Aircraft
Aerostructures and Engineering Services
Bombardier Transportation
Reconciliation of segment to consolidated results
Bombardier Inc. uses its website as a channel of distribution for material company information. Financial and other material information regarding Bombardier Inc. is routinely posted on its website and accessible at bombardier.com. Investors are hereby notified information about regular dividends declared and paid by Bombardier is only made available through its website, unless otherwise required by applicable securities laws.
About Bombardier
Bombardier is the world's largest manufacturer of both planes and trains. Looking far ahead while delivering today, Bombardier is evolving mobility worldwide by answering the call for more efficient, sustainable and enjoyable transportation everywhere. Our vehicles, services and, most of all, our employees are what make us a global leader in transportation.
Bombardier is headquartered in Montreal, Canada. Our shares are traded on the Toronto Stock Exchange (BBD) and we are listed on the Dow Jones Sustainability North America Index. In the fiscal year ended December 31, 2015, we posted revenues of $18.2 billion. News and information are available at bombardier.com or follow us on Twitter (at)Bombardier.
Bombardier, Challenger, Challenger 650, CS100, CS300, C Series, Global, Global 7000, Global 8000, INNOVIA, Learjet, Learjet 85 and The Evolution of Mobility are trademarks of Bombardier Inc. or its subsidiaries.
Readers are strongly advised to view a more detailed discussion of our results by segment in our Management's Discussion and Analysis and consolidated financial statements which are posted on our website at ir.bombardier.com.
FORWARD-LOOKING STATEMENTS
This press release includes forward-looking statements, which may involve, but are not limited to: statements with respect to the Corporation's objectives, guidance, targets, goals, priorities, market and strategies, financial position, beliefs, prospects, plans, expectations, anticipations, estimates and intentions; general economic and business outlook, prospects and trends of an industry; expected growth in demand for products and services; product development, including projected design, characteristics, capacity or performance; expected or scheduled entry-into-service of products and services, orders, deliveries, testing, lead times, certifications and project execution in general; competitive position; the expected impact of the legislative and regulatory environment and legal proceedings on the Corporation's business and operations; available liquidities and ongoing review of strategic and financial alternatives; the completion of the investment by the Government of Quebec in the C Series aircraft program (the C Series Investment) and the use of proceeds therefrom; the use of proceeds from the private placement of a minority stake in Transportation to the CDPQ (the CDPQ Investment and, with the C Series Investment, the Investments); the effects of the Investments on the range of options available to us, including regarding our participation in future industry consolidation; the capital and governance structure of the Transportation segment following the CDPQ Investment, and of the Commercial Aircraft segment following the C Series Investment; the impact and expected benefits of the Investments on our operations, infrastructure, opportunities, financial condition, access to capital and overall strategy; and the impact of the sale of equity on our balance sheet and liquidity position. The implementation of the Share Consolidation is subject to a number of conditions, including but not limited to, Toronto Stock Exchange approval and shareholder approval, and subject to the Board of Directors' authority, notwithstanding approval of the Share Consolidation by shareholders, to determine in its discretion not to proceed with the Share Consolidation, without further approval or action by, or prior notice to, shareholders. There can be no assurance that the Share Consolidation will be implemented as proposed or at all, or as to the timing thereof, or that the Share Consolidation will result in the contemplated initial post-consolidation share price of Class A Shares or Class B Subordinate Voting Shares.
Forward-looking statements can generally be identified by the use of forward-looking terminology such as "may", "will", "expect", "intend", "anticipate", "plan", "foresee", "believe", "continue", "maintain" or "align", the negative of these terms, variations of them or similar terminology. By their nature, forward-looking statements require management to make assumptions and are subject to important known and unknown risks and uncertainties, which may cause actual results in future periods to differ materially from forecast results. While management considers their assumptions to be reasonable and appropriate based on information currently available, there is risk that they may not be accurate.
Certain factors that could cause actual results to differ materially from those anticipated in the forward-looking statements include, but are not limited to, risks associated with general economic conditions, risks associated with our business environment (such as risks associated with the financial condition of the airline industry, of business aircraft customers, and of the rail industry; trade policy; increased competition; political instability and force majeure), operational risks (such as risks related to developing new products and services; development of new business; the certification and homologation of products and services; fixed-price commitments and production and project execution; pressures on cash flows based on project-cycle fluctuations and seasonality; our ability to successfully implement our strategy and transformation plan; doing business with partners; product performance warranty and casualty claim losses; regulatory and legal proceedings; the environment; dependence on certain customers and suppliers; human resources; reliance on information systems; reliance on and protection of intellectual property rights; and adequacy of insurance coverage), financing risks (such as risks related to liquidity and access to capital markets, retirement benefit plan risk, exposure to credit risk, certain restrictive debt covenants, financing support provided for the benefit of certain customers and reliance on government support), market risks (such as risks related to foreign currency fluctuations, changing interest rates, decreases in residual values, increases in commodity prices and inflation rate fluctuations). For more details, see the Risks and uncertainties section in Other in the Management's Discussion and Analysis (MD&A) of the Corporation's financial report for the fiscal year ended December 31, 2015. Certain important assumptions by management in making forward-looking statements include, but are not limited to: that ongoing due diligence investigations by the Government of Quebec will not identify any materially adverse facts or circumstances; the satisfaction of all conditions to the completion of the C Series Investment, including the receipt of any required third party, regulatory and other approvals. For additional information with respect to the assumptions underlying the forward-looking statements made in this press release, refer to the Guidance and forward-looking statements sections in the Corporation's financial report for the fiscal year ended December 31, 2015. There can be no assurance that the C Series Investment will be undertaken or completed in whole or in part, or of the timing, size and proceeds of any such transaction, which will depend on a number of factors.
Readers are cautioned that the foregoing list of factors that may affect future growth, results and performance is not exhaustive and undue reliance should not be placed on forward-looking statements. The forward-looking statements set forth herein reflect management's expectations as at the date of this press release and are subject to change after such date. Unless otherwise required by applicable securities laws, the Corporation expressly disclaims any intention, and assumes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. The forward-looking statements contained in this press release are expressly qualified by this cautionary statement.
CAUTION REGARDING NON-GAAP MEASURES
This press release is based on reported earnings in accordance with International Financial Reporting Standards (IFRS). Reference to generally accepted accounting principles (GAAP) means IFRS, unless indicated otherwise. This press release is also based on non- GAAP financial measures including EBITDA, EBIT before special items and EBITDA before special items, adjusted net income, adjusted earnings per share and free cash flow. These non-GAAP measures are mainly derived from the consolidated financial statements but do not have standardized meanings prescribed by IFRS; therefore, others using these terms may define them differently. Management believes that providing certain non-GAAP performance measures, in addition to IFRS measures, provides users of our consolidated financial statements with enhanced understanding of results and related trends and increases the transparency and clarity of the core results of our business. Refer to the Non-GAAP financial measures and Liquidity and capital resources sections in Overview and each reporting segments' Analysis of results sections in the Corporation's MD&A for definitions of these metrics and reconciliations to the most comparable IFRS measures.
Contacts:
Bombardier Inc.
Isabelle Rondeau
Director, Communications
+514 861 9481
Bombardier Inc.
Patrick Ghoche
Vice President, Investor Relations
+514 861 5727
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Datum: 17.02.2016 - 11:00 Uhr
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