The FINANCIAL — Bombardier on December 14 released its 2017 guidance and confirmed that its turnaround plan is on track.
The announcement came ahead of Bombardier’s Investor Day event, where the Company will provide an update on its business outlook, highlight its 2016 accomplishments and reaffirm both its 2018 free cash flow breakeven goal and its 2020 revenue target of $25 billion.
“The strong momentum achieved in 2016 will continue into 2017,” said Alain Bellemare, President and Chief Executive Officer, Bombardier Inc. “Our turnaround plan is in full motion and the early benefits can be seen in our 2016 results. We’ve set a strong foundation for growth, and our focus in 2017 will be on unleashing the value of our portfolio and creating shareholder value through solid execution.”
Bombardier is targeting consolidated EBIT before special items in the range of $530 million – $630 million for 2017, which represents a year-over-year improvement of approximately 50% at the mid-point of the range. This targeted profit growth will primarily be driven by transformation initiatives already in place, including the previously announced restructuring actions. In 2017, the company expects to spend $250 million – $300 million on restructuring to further improve efficiency, reduce costs and optimize its operations. This charge will be categorized as a special item, according to Bombardier.
Bombardier also anticipates a significant improvement in its free cash flow usage for 2017, which is targeted to be in the range of $750 million to $1.0 billion, representing a year-over-year improvement of more than $400 million at the mid-point of the range. Consolidated revenue is expected to grow by low single digits, driven by growth in the rail business and the ramp up of the C Series aircraft program.
“As we look ahead to 2017, we are confident in our strategy, our turnaround plan and in our ability to achieve our operational and financial goals,” Mr. Bellemare continued. “We have successfully completed the de-risking phase of our turnaround plan and have positioned the Company to accelerate revenue, earnings and free cash flow growth in line with our plan.”
Along with releasing its 2017 guidance, Bombardier also affirmed its 2016 guidance, as revised with the announcement of its third quarter 2016 results.