Bombardier deliveries dipped by two units to 25 in the third quarter, but a 20 percent jump in aftermarket business kept revenues even at $1.5 billion from the same three-month period a year ago. At the same time, Bombardier maintained a book-to-bill of 1.3:1, growing backlog in the quarter by $300 million to $15 billion.
The Canadian manufacturer shipped two fewer Globals for a total of 13 in the quarter, but Challenger deliveries increased by four to a dozen. Meanwhile, the year-over-year delivery comparison continues to reflect the ending of Learjet production with four handed over in third-quarter 2021 versus none in the most recent quarter.
Despite what president and CEO Éric Martel described as a seasonally lighter third quarter, Bombardier anticipates a stronger fourth quarter with at least 47 deliveries and in line with its guidance of at least 120 deliveries for the year. Plans remain on track to ramp up production by 15 to 20 percent next year.
Keeping an eye on the supply chain—which Martel said was not without challenges—Bombardier is “well equipped to face any market condition ahead of us,” he maintained. Not only has it prepared to meet production needs, but with a two-year backlog across its lines, the company can maintain targets should a recession set in, according to Martel. He said the company has “good visibility on what we have to achieve to meet our commitment” and added this includes the planned production boost.
In the aftermarket, Bombardier brought in $372 million in the quarter, a number that the company partially attributes to increased flight hours but also to the concerted effort to expand its network with new facilities. In fact, Martel participated in its third quarter analyst call from Miami where it had opened its newest, and now largest standalone center—spanning 300,00 sq ft—at Miami-Opa Locka Executive Airport on Monday. It will next open an expansion at London Biggin Hill Airport in a few weeks.
Meanwhile, Bombardier continued to reduce its net debt, shaving off nearly $500 million from the beginning of the year to $4.5 billion—a tally that the company had initially thought it would reach in 2025. Martel stressed that debt reduction remains its top priority.
He also was encouraged by the 48 percent jump in adjusted EBITDA to $210 million in the third quarter.
Despite a string of quarters with book-to-bills well beyond 1:1, the company anticipates it to settle back to 1:1 as production ramps. This is a level that the company had originally factored into its guidance earlier this year with plans of “keeping the backlog you have,” Martel said, noting that while Bombardier has enjoyed a book-to-bill greater than that this year, this is “how we’re planning our business ahead.”
However, he acknowledged the potential of it eroding further should a major recession set in but reiterated that the company has prepared for such a scenario between the backlog it’s built, the reduction of debt, and the growth of its services business.
Source: ainonline.com
