Bombardier (TSX: BBD.B) today reported its fourth quarter and full year 2018 results, highlighting solid margin growth, improved cash flows and continued progress executing its turnaround plan. The successful entry-into-service of the Global 7500 business jet in the fourth quarter also marked the completion of Bombardier’s heavy investment cycle, a key milestone in the company’s turnaround plan.
“2018 was a year of solid progress,” said Alain Bellemare, President and Chief Executive Officer, Bombardier Inc. “We continued to strengthen our business and set a strong foundation for growth. A foundation that includes a refreshed portfolio of best-in-class products, industry-leading backlogs and a more streamlined cost structure, all of which gives us a clear path to achieve our 2020 objectives.”
“As we begin the fourth year of our turnaround journey, Bombardier is a much stronger company,” continued Bellemare. “Our major program risks are retired, our heavy investment cycle is behind us and our franchises are well positioned for growth. For 2019, we are focused on flawless execution of our rail projects, the ramp-up of the Global 7500 and entry-into-service of the Global 5500 and Global 6500. We will also continue to drive financial performance through disciplined capital allocation and improved productivity and efficiency across the organization.”
Bombardier’s 2018 consolidated revenues reached $16.2 billion, reflecting 3% average year-over-year growth across Transportation, Business Aircraft and Aerostructures, excluding currency impact. Book-to-bill ratios(2) at Transportation and Business Aircraft both equaled 1.1 for the year, demonstrating strong demand for Bombardier’s products and services. Bombardier’s consolidated backlog reached $53.1 billion at the end of 2018, supporting future growth targets.
EBIT before special items continued to improve in 2018, increasing 42% year-over-year from $725 million to more than $1.0 billion, the top-end of the company’s guidance. The 6.3% EBIT margin before special items in 2018 represents a strong 330 bps increase since the start of the turnaround plan in 2015, well above the 5-6% range originally targeted. On a reported basis, EBIT increased 235% year-over-year to $1.0 billion, representing a margin of 6.2%.
Bombardier generated $1.0 billion of free cash flow in the fourth quarter of 2018. Full year free cash flow generation equaled $182 million, at the high end of the company’s revised guidance. This amount includes aggregate net proceeds of approximately $750 million from the sale of the Downsview property and the monetization of royalties associated with the previously announced CAE transaction. Cash flows from operating activities amounted to $597 million for the full year, and to $1.3 billion in the fourth quarter. Bombardier ended the year in a solid cash position, with $3.2 billion in cash and cash equivalents.
Bombardier Transportation is a global mobility solution provider leading the way with the rail industry’s broadest portfolio. It covers the full spectrum of solutions, ranging from trains to sub-systems and signalling to complete turnkey transport systems, e-mobility technology and data-driven maintenance services. Combining technology and performance with empathy, Bombardier Transportation continuously breaks new ground in sustainable mobility by providing integrated solutions that create substantial benefits for operators, passengers and the environment. Headquartered in Berlin, Germany, Bombardier Transportation employs around 40,650 people and its products and services operate in over 60 countries.
With over 68,000 employees across four business segments, Bombardier is a global leader in the transportation industry, creating innovative and game-changing planes and trains. Our products and services provide world-class transportation experiences that set new standards in passenger comfort, energy efficiency, reliability and safety.
Headquartered in Montreal, Canada, Bombardier has production and engineering sites in 28 countries across the segments of Transportation, Business Aircraft, Commercial Aircraft and Aerostructures and Engineering Services. Bombardier shares are traded on the Toronto Stock Exchange (BBD). In the fiscal year ended December 31, 2018, Bombardier posted revenues of $16.2 billion US. News and information are available at or follow us on Twitter .
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