Bombardier turnaround 'on track'; 'strong momentum' to continue into 2017

Bombardier stated (14-Dec-2016) ts turnaround plan is "on track", stating its 2016 accomplishments and reaffirm both its 2018 free cash flow breakeven goal and its 2020 revenue target of USD25 billion. Bombardier president and CEO Alain Bellemare stated: "The strong momentum achieved in 2016 will continue into 2017... 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." Mr Bellemare added: "We are confident in our strategy, our turnaround plan and in our ability to achieve our operational and financial goals... 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." Details include:

• EBIT: Bombardier is targeting consolidated EBIT before special items in the range of USD530 million-USD630 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;
• Revenue growth: Forecast at low singe digit growth in 2017;
• Restructuring costs: In 2017, the company expects to spend USD250 million-USD300 million on restructuring to further improve efficiency, reduce costs and optimize its operations. This charge will be categorised as a special item;
• Cash flow usage: Bombardier anticipates a significant improvement in its free cash flow usage for 2017, which is targeted to be in the range of USD750 million to USD1.0 billion, representing a year-over-year improvement of more than USD400 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 programme

The commercial aircraft guidance for 2017 is as follows:

• Revenue: Revenues of approximately USD2.9 billion;
• EBIT margin: EBIT before special items of approximately (USD400 million);
• Deliveries: Approximately 80-85 deliveries. [more - original PR]