Year-Over-Year Revenue Growth Continues

Bombardier, the Canadian company that set out to build snowmobiles in 1934 and today presides over a $25-billion Aerospace empire, made public its Q2 2023 earnings on 03 August. The news was good.

Bombardier president and CEO Éric Martel stated: “Bombardier delivered a very strong second quarter. Our team successfully navigated a highly-dynamic business environment that saw sustained demand for new and pre-owned jets, as well as steady service growth, all while supply chain pressure persisted. We continue to progress on our positive trajectory by delivering remarkable growth in profitability, propelled by a strong adjusted EBITDA [Earnings Before Interest, Taxes, Depreciation, and Amortization] increase and margin expansion, as well as a positive adjusted net income and earnings per share. Thanks to our team’s tremendous work, we boosted our revenues this quarter by eight-percent year-over-year, driven in part by an exceptional 19-percent year-over-year aftermarket revenue increase."

Bombardier reported $1.7-billion in revenues, an eight-percent year-over-year increase, driven by strong deliveries and higher aftermarket revenues. With 29 deliveries, Bombardier delivered one more aircraft than the same quarter last year and has a solid line of sight to reach the overall 2023 guidance of greater than 138 deliveries. The company’s aftermarket business continued its stellar performance in the second quarter 2023, generating $428-million in revenue, an impressive 19-percent increase compared to the same quarter last year.

Backlog rose to $14.9-billion in the second quarter of 2023, an increase of $0.1-billion since the end of the previous quarter, supported by a 1.1x unit book-to-bill ratio.

Total adjusted EBITDA for the quarter was $275-million, representing an adjusted EBITDA margin of 16.4-percent and a significant 350 basis point margin expansion over the same quarter last year. Rising margins across all platforms, growth of aftermarket business, and disciplined operations are driving these metrics forward. The adjusted EBIT totaled $190-million, up 84-percent compared with the same period of 2022.

The company once more reported positive adjusted net income in second-quarter 2023; it reached $80-million, compared to a loss of $38-million in the same quarter last year. Reported net income was $10-million. The adjusted EPS was positive as well, at $0.72.

The $222-million free cash flow usage in second-quarter 2023 was in line with expectations. It includes the non-recurring payments of $104-million on residual value guarantees to the now divested commercial aviation business, CAPEX [Capital Expenditures] spending to support the completion of the new Global Aircraft Manufacturing Centre at the Toronto Pearson Airport (YYZ), set to open this year, and working capital build to support higher deliveries in the second half of the year.

FMI: www.bombardier.com