Aviation News – Bombardier today confirmed that it has a \u201cclear line of sight\u201d to meeting its 2025 objectives of 150 deliveries and $9 billion in revenues. Speaking during the company\u2019s Investor Day at its new aircraft assembly plant at Toronto Pearson International Airport, president and CEO \u00c9ric Martel also confirmed that an order announced in December from an undisclosed customer for a dozen Challenger 3500s, valued at $326.4 million, was in fact from fractional owner provider NetJets and included 232 Challenger 3500 options that could push the value of the deal up to $6 billion, based on list prices. Deliveries on that order are set to begin next year.<\/p>\n
As for its Investor Day, Martel outlined a plan to grow organically on all fronts\u2014from delivery growth next year to expanding the market in services, defense, and its Certified Pre-Owned (CPO) program.<\/p>\n
These are all contributing to Bombardier\u2019s 2025 objectives, he said. When Bombardier became a pure-play business aviation company in 2021, it laid out goals of reaching $7.5 billion in revenues by 2025. Last year, the company boosted that plan to $9 billion as deliveries grew from 114 in 2020 to 138 last year, and an anticipated 150 in 2025.<\/p>\n
In the long term, the company further believes it can bring in even more revenue on the services, defense, and CPO front: services is set to achieve $2 billion this year and grow to $2.8 billion, defense has the potential to reach $1 billion to $1.5 billion, and even CPO could become a $500 million to $1 billion program by 2030.<\/p>\n
In terms of deliveries, Martel said the company remains in strong niches with a 2.8% compound annual growth rate (CAGR) for revenues in those sectors anticipated over the span from 2019 to 2030. Also, Bombardier has built a healthy backlog of 14.9 billion. But Bombardier is not forecasting significant delivery growth beyond 2025. Instead, Martel said, the company growth will be balanced.<\/p>\n
On the defense front, Bombardier sees a demand for some 375 aircraft representing up to $40 billion in spending over the next 10 years. \u201cThat\u2019s a huge market\u2026profitable market to tap into for use. We believe we\u2019re going to be successful capturing a lot of that market,\u201d Martel said, noting that he was recently in Washington, D.C., and received strong interest in such applications.<\/p>\n
As for services, Martel noted that the company has a fleet of 5,000 that is growing by a net of about 100 aircraft a year. The mix, however, is changing, with more of the smaller Learjets leaving and more lucrative larger aircraft entering. In addition, with the 1 million-sq-ft expansion of its facilities and capacity in recent years, the company has upped its market share from 31% of the business to 46%, and Martel thinks that can grow to as much as 70%.<\/p>\n
CPO, meanwhile, is \u201ca new stream that we didn’t have before\u201d but one that is capturing new customers within the Bombardier ecosystem, he said.<\/p>\n
Martel also outlined plans for future investments, keeping in line with its strategy of building on its existing product line such as the unveiling of the Global 8000 and Challenger 3500. While Bombardier has not pointed to where such development may be, the Challenger 650 may be poised for a refresh since it entered the market in 2015.\u00a0 Martel noted that the 650 \u201cis still an airplane that our customer base loves\u201d and that deliveries have been increasing in the past few years.<\/p>\n
Martel also opened the discussion to acquisitions in the future as the company continues to improve its balance sheet and deleverages\u2014since 2021, its net leverage ratio has shrunk from 7.7 in 2021 to 3.3 last year, and the company\u2019s goal will be to whittle that down to 2 to 2.5 in 2025.<\/p>\n
The acquisitions will remain in the business aviation realm, explained Bart Demosky, executive v-p and CFO. Likely targets could come in areas that support services, defense, or CPO areas. Martel added there are multiple opportunities available.<\/p>\n
\u201cSince starting our turnaround plan in 2020, our teams have delivered textbook-worthy results on all fronts, consistently meeting or surpassing many of our objectives. Bombardier is well on track to meet its 2025 objectives thanks to everyone\u2019s collective focus on executing our plan flexibly, creatively, and passionately,\u201d said Martel. \u201cAs we now look toward the second half of what has already been a historic decade for the company, we are focused on creating even more value for shareholders by building on a predictable and resilient foundation. Bombardier will have room to grow organically, as well as to deploy capital strategically.\u201d<\/p>\n
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