Bombardier Provides C Series Program Updates
- C Series approaching 400 revenue-generating flights, meeting all performance metrics
- 2016 C Series delivery schedule adjusted to reflect Pratt & Whitney engine delays
- As a result, consolidated FCF usage guidance range adjusted to $1.15B to $1.45B from $1.0B to $1.3B
- Consolidated revenue and EBIT guidance reaffirmed
Bombardier made a number of announcements today regarding the first six weeks of operations and the 2016 delivery schedule for its C Series aircraft. The Company confirmed that the two CS100 aircraft in service with SWISS have collectively flown nearly 400 revenue-generating flights, and accumulated almost 600 flight hours.
"We are very pleased with the performance of the C Series during its entry-into-service with our launch customer SWISS," said Fred Cromer, President, Bombardier Commercial Aircraft. "The aircraft is meeting all expectations and clearly demonstrating that it is the best performing and most efficient aircraft in the 100- to 150-seat class."
A third CS100 aircraft is scheduled to be delivered to SWISS next month, and the CS300 - the larger C Series variant - is expected to enter service with airBaltic in the fourth quarter. For the full year, the Company has adjusted its C Series delivery forecast from 15 to 7 aircraft as a result of engine delivery delays by its supplier Pratt & Whitney.
"The C Series engine is performing very well in service. We are working very closely with Pratt & Whitney to quickly address this supplier ramp-up issue and to ensure we have a strong supplier base to support our long-term growth objectives," said Mr. Cromer. "We are very confident in our production ramp-up plan, including our ability to meet our production goal of 90 to 120 aircraft per year by 2020."
The C Series program continues to meet its program milestones and gain traction in the market. Including significant orders from Air Canada and Delta earlier this year, the Company has more than 300 firm orders and up to 800 orders including options and commitments. With the certification of the CS300 and the CS100's entry-into-service, the C Series program has transitioned from the development phase into production ramp-up. Last week, Bombardier also announced that it has received the second and last $500 million installment of the Government of Quebec's investment in the C Series aircraft program, further strengthening its liquidity position.
The C Series delivery adjustment announced today will result in lower revenues at Bombardier Commercial Aircraft for the year without affecting EBIT materially. On a consolidated basis, 2016 revenues and EBIT guidance are reaffirmed. As a result of the delay, the Company now expects to be close to the lower end of the $16.5 to $17.5 billion revenue guidance range, and free cash flow usage is expected to be in the range of $1.15 to $1.45 billion. EBIT is expected to be at the upper end of the $200 to $400 million range.
The company expects to end the year with a strong liquidity position and remains on track to achieve both its 2018 cash flow neutral goal and its 2020 turn-around plan objectives.
This press release includes forward-looking statements, which may involve, but are not limited to: statements with respect to the Corporation's objectives, guidance, targets, goals, priorities, market and strategies, financial position, beliefs, prospects, plans, expectations, anticipations, estimates and intentions; general economic and business outlook, prospects and trends of an industry; expected growth in demand for products and services; product development, including projected design, characteristics, capacity or performance; expected or scheduled entry-into-service of products and services, orders, deliveries, testing, lead times, certifications and project execution in general; competitive position; the expected impact of the legislative and regulatory environment and legal proceedings on the Corporation's business and operations; available liquidities and ongoing review of strategic and financial alternatives; the effects of the C Series Investment and of the private placement of a minority stake in Transportation to the Caisse de depot et placement du Quebec (the CDPQ Investment and, with the C Series Investment, the Investments) on the range of options available to us, including regarding our participation in future industry consolidation; the capital and governance structure of the Transportation segment following the CDPQ Investment, and of the Commercial Aircraft segment following the C Series Investment; the impact and expected benefits of the Investments on our operations, infrastructure, opportunities, financial condition, access to capital and overall strategy and the impact of the sale of equity on our balance sheet and liquidity position.
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Certain factors that could cause actual results to differ materially from those anticipated in the forward-looking statements include, but are not limited to, risks associated with general economic conditions, risks associated with our business environment (such as risks associated with the financial condition of the airline industry, of business aircraft customers, and of the rail industry; trade policy; increased competition; political instability and force majeure), operational risks (such as risks related to developing new products and services; development of new business; the certification and homologation of products and services; fixed-price commitments and production and project execution; pressures on cash flows based on project-cycle fluctuations and seasonality; our ability to successfully implement our strategy and transformation plan; doing business with partners; product performance warranty and casualty claim losses; regulatory and legal proceedings; the environment; dependence on certain customers and suppliers; human resources; reliance on information systems; reliance on and protection of intellectual property rights; and adequacy of insurance coverage), financing risks (such as risks related to liquidity and access to capital markets; retirement benefit plan risk; exposure to credit risk; existing debt and interest payment requirements; certain restrictive debt covenants; financing support provided for the benefit of certain customers; and reliance on government support) and market risks (such as risks related to foreign currency fluctuations; changing interest rates; decreases in residual values; increases in commodity prices; and inflation rate fluctuations). For more details, see the Risks and uncertainties section in Other in the Management's Discussion and Analysis (MD&A) of the Corporation's financial report for the fiscal year ended December 31, 2015. For additional information with respect to the assumptions underlying the forward-looking statements made in this press release, refer to the Guidance and forward-looking statements sections in the MD&A of the Corporation's financial report for the fiscal year ended December 31, 2015.
Readers are cautioned that the foregoing list of factors that may affect future growth, results and performance is not exhaustive and undue reliance should not be placed on forward-looking statements. The forward-looking statements set forth herein reflect management's expectations as at the date of this press release and are subject to change after such date. Unless otherwise required by applicable securities laws, the Corporation expressly disclaims any intention, and assumes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. The forward-looking statements contained in this press release are expressly qualified by this cautionary statement.
Bombardier is the world's leading manufacturer of both planes and trains. Looking far ahead while delivering today, Bombardier is evolving mobility worldwide by answering the call for more efficient, sustainable and enjoyable transportation everywhere. Our vehicles, services and, most of all, our employees are what make us a global leader in transportation.
Bombardier is headquartered in Montreal, Canada. Our shares are traded on the Toronto Stock Exchange (BBD) and we are listed on the Dow Jones Sustainability North America Index. In the fiscal year ended December 31, 2015, we posted revenues of $18.2 billion. News and information are available at bombardier.com or follow us on Twitter @Bombardier.
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