The FINANCIAL — Bombardier on December 14 released its 2018 guidance and confirmed that its five-year turnaround plan remains on track. The Company also affirmed its 2017 guidance, as revised with the announcement of its third quarter 2017 results.
“As we approach the half-way point of our five-year turnaround plan, we continue to meet our commitments and build a strong foundation for generating sustainable profit growth,” said Alain Bellemare, President and Chief Executive Officer, Bombardier Inc. “We remain very much on track to achieve our 2017 guidance, our 2018 free cash flow goal, and see a clear path to deliver on our 2020 objectives.”
For 2018, Bombardier is targeting revenues in the range of $17.0 billion to $17.5 billion, which represents a year-over-year increase of approximately $1.0 billion over 2017 guidance, at the mid-point of the range. This growth is expected to be driven by the ramp-up of key projects at Bombardier Transportation and higher C Series aircraft deliveries, according to Bombardier.
With the Company’s transformation efforts driving stronger performance across the portfolio, EBITDA before special items for 2018 is anticipated to be in the range of $1.15 billion to $1.25 billion. For the same year, EBIT before special items is anticipated to be between $800 million and $900 million, representing an improvement of approximately 20% over 2017 guidance, at the mid-point of the range, assuming the adoption of IFRS 15 standards.
Bombardier is targeting to achieve free cash flow breakeven in 2018, plus or minus $150 million, mainly driven by improving working capital investments and lower development costs as the Company’s heavy investment cycle comes to an end with the Global 7000 expected to enter service in the second half of 2018. Breakeven free cash flow represents an improvement of approximately $1.0 billion over Bombardier’s 2017 guidance.
“There is tremendous value in the Bombardier portfolio and we are confident that we have the right strategy and team to fully unleash this value for our customers and shareholders,” Mr. Bellemare continued. As we close out 2017, we remain focused on execution and driving transformation across the portfolio to achieve our 2020 objectives.”
Over the next three years, the Company’s objective is to grow revenues by $4.0 billion, which represents a 7% compound annual growth rate. Over the same period, Bombardier’s objective is to more than double EBITDA before special items to more than $2.25 billion, and to achieve EBIT before special items in excess of 8%, or $1.6 billion. The Company also aims to deliver free cash flow of $750 million to $1.0 billion by 2020.