Bombardier Pauses its Learjet 85 Program and Revises its 2014 Guidance
(firmenpresse) - MONTREAL, QUEBEC -- (Marketwired) -- 01/15/15 -- Bombardier Inc. (TSX: BBD.A)(TSX: BBD.B)(OTCQX: BDRBF)
(All amounts in this press release are in U.S. dollars unless otherwise indicated. This press release contains both IFRS and non-GAAP measures. See Caution regarding non-GAAP measures at the end of this press release.)
Bombardier Inc. announced today the pause of its Learjet 85 business aircraft program. The pause is due to weak demand for the Learjet 85 aircraft and follows a downward revision of Bombardier''s business aircraft market forecast. This reflects the continued weakness of the Light aircraft category since the economic downturn. As a result, the Company will record a pre-tax special charge in the fourth quarter of 2014 of approximately $1.4 billion mainly related to the impairment of the Learjet 85 development costs. Additionally, Bombardier will reduce its workforce by approximately 1,000 employees at its sites in Queretaro, Mexico, and Wichita, United States. A severance provision of approximately $25 million will be recorded as a special item during the first quarter of 2015.
"Bombardier constantly monitors its product strategy and development priorities," said Pierre Beaudoin, President and Chief Executive Officer, Bombardier Inc. "Given the weakness of the market, we made the difficult decision to pause the Learjet 85 program at this time. We will focus our resources on our two other clean-sheet aircraft programs under development, CSeries and Global 7000/8000, for which we see tremendous market potential. Both programs are progressing well."
Bombardier''s Wichita and Queretaro sites remain critical facilities in key markets. Wichita is a multifaceted facility and is the location of final assembly activities for the Learjet 70 and Learjet 75 aircraft, the Bombardier Flight Test Center as well as a Service Center. In addition to contributing to many of Bombardier''s aircraft programs, the Queretaro site recently completed its Global 7000/8000 aft fuselage manufacturing building.
Furthermore, following a review of preliminary results compiled by Bombardier for the fiscal year ended December 31, 2014, it has become clear that certain financial guidance previously provided will not be met. Based on these preliminary results, Bombardier is updating its guidance for 2014.
Earnings before financing expenses, financing income and income taxes (EBIT) before special items(1) at Aerospace (BA) is expected to be approximately 4% compared with a previous guidance of 5%. The variation is mainly due to increased provisions for credit and residual value guarantees, pricing pressure on new aircraft sold, as well as a decrease in fair value of used aircraft. EBIT before special items(1) at Transportation (BT) is expected to be approximately 5% compared to a previous guidance of 6%. This variation is mainly due to revised escalation assumptions for some contracts which impacted estimated future revenues.
Cash flow from operating activities at Aerospace is expected to be approximately $800 million while net additions to property, plant and equipment (PP&E) and intangible assets are expected to be approximately $1.8 billion, compared with a previous guidance for cash flow from operating activities between $1.2 billion and $1.6 billion and net additions to PP&E and intangible assets between $1.6 billion and $1.9 billion. The variation in Aerospace''s cash flow from operating activities is mainly due to a lower level of customer advances, a lower EBIT and an increase in used aircraft inventory. Free cash flow(1) for Transportation is expected to be slightly positive compared with a previous guidance of free cash flow generally in line with EBIT. This variation is mainly due to a different cash flow profile in some contracts and a lower level of advances on options in relation to framework contract agreements. As of December 31, 2014, available short-term capital resources were approximately $3.8 billion, including cash and cash equivalents of approximately $2.4 billion.
Aerospace exceeded its delivery targets with a total of approximately 290 aircraft (204 business, 84 commercial and two amphibious aircraft), compared with a guidance of 200 business and 80 commercial aircraft deliveries. This represents a 22% increase compared with the deliveries of 238 aircraft for the previous year (180 business, 55 commercial and three amphibious aircraft).
Transportation revenues (excluding currency impacts) are expected to increase by approximately 9% in 2014, compared with a guidance of revenue growth in the mid-single digits, with a book-to-bill ratio of approximately 1.3 compared with a guidance in excess of 1.0.
Summary of Guidance for 2014
About Bombardier
Bombardier is the world''s only 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 World and North America Indices. In the fiscal year ended December 31, 2013, we posted revenues of $18.2 billion. News and information are available at bombardier.com or follow us on Twitter (at)Bombardier.
Bombardier, CSeries, Global, Global 7000, Global 8000, Learjet, Learjet 70, Learjet 75, Learjet 85, and The Evolution of Mobility are trademarks of Bombardier Inc. or its subsidiaries.
Note to editors
A conference call intended for investors and financial analysts will be held today at 10:00 a.m., Montreal time, with Pierre Beaudoin, President and Chief Executive Officer, Bombardier Inc. and Pierre Alary, Senior Vice President and Chief Financial Officer, Bombardier Inc. to discuss the above.
A question period intended for the media will take place at the end of this same conference call. To participate, media representatives need simply identify themselves when they register for the call.
This conference call will be broadcast live on the Internet at the following address:
Media representatives wishing to listen in on the call will be able to do so by dialing one of the following conference call numbers:
FORWARD-LOOKING STATEMENTS
This press release includes forward-looking statements, which may involve, but are not limited to: statements with respect to our objectives, guidance, targets, goals, priorities, our 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; our competitive position; and the expected impact of the legislative and regulatory environment and legal proceedings on our business and operations. Forward-looking statements generally can be identified by the use of forward-looking terminology such as "may", "will", "expect", "intend", "anticipate", "plan", "foresee", "believe", "continue", "maintain" or "align", the negative of these terms, variations of them or similar terminology. By their nature, forward-looking statements require us to make assumptions and are subject to important known and unknown risks and uncertainties, which may cause our actual results in future periods to differ materially from forecasted results. While we consider our assumptions to be reasonable and appropriate based on information currently available, there is a risk that they may not be accurate. For additional information with respect to the assumptions underlying the forward-looking statements made in this press release refer to the respective Guidance and forward-looking statements sections in Overview, Aerospace and Transportation sections in the Management''s Discussion and Analysis ("MD&A") in the Corporation''s financial report for the fiscal year ended December 31, 2013.
Certain factors that could cause actual results to differ materially from those anticipated in the forward-looking statements include risks associated with general economic conditions, risks associated with our business environment (such as risks associated with the financial condition of the airline industry and rail industry, political instability and force majeure), operational risks (such as risks related to developing new products and services; fixed-price commitments and production and project execution; 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), financing risks (such as risks related to liquidity and access to capital markets, retirement benefit plan risk, exposure to credit risk, 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 and increases in commodity prices). For more details, see the Risks and uncertainties section in Other in the MD&A of the Corporation''s financial report for the fiscal year ended December 31, 2013. 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 our expectations as at the date of this press release and are subject to change after such date. Unless otherwise required by applicable securities laws, we expressly disclaim any intention, and assume 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.
CAUTION REGARDING NON-GAAP MEASURES
This press release contains figures prepared in accordance with International Financial Reporting Standards (IFRS) as well as non-GAAP financial measures. Reference to generally accepted accounting principles (GAAP) means IFRS, unless indicated otherwise. Non-GAAP financial measures are mainly derived from the consolidated financial statements, but do not have a standardized meaning prescribed by IFRS; therefore, others using similarly-named financial measures may calculate them differently. Management believes that providing these non-GAAP financial measures, in addition to IFRS measures, provides users of our financial reports with enhanced understanding of our results and related trends and increases transparency and clarity into the core results of our business. Reconciliations of these non-GAAP financial measures to the most comparable IFRS measures will be included in the Management''s Discussion and Analysis for the fiscal year ended December 31, 2014, to be released on February 12, 2015.
Contacts:
Isabelle Rondeau
Director, Communications
Bombardier Inc.
+514 861 9481
Shirley Chenier
Senior Director, Investor Relations
Bombardier Inc.
+514 861 9481
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Datum: 15.01.2015 - 07:24 Uhr
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