Bombardier has reported its fourth quarter and full year 2017 results, highlighting solid financial and operational performance across the company.
"Bombardier closed out the second full year of its five-year turnaround plan with very strong performance," said Alain Bellemare, President and Chief Executive Officer, Bombardier Inc. "Because of this solid performance, we begin 2018 with great momentum. Our operational transformation is in full motion; our growth programs - including the Global 7000 - are on track and we have a clear line of sight to our 2020 objectives."
In 2017, Bombardier's full-year EBIT before special items grew 57% year-over-year, from $427 million to $672 million, while EBITDA before special items reached close to $1 billion. Full year EBIT margins exceeded guidance at Transportation, Business Aircraft and Aerostructures. Before special items, EBIT margins were 8.4% at Transportation and Business Aircraft; and 10.0% at Aerostructures. Consolidated revenues for the year were $16.2 billion, in line with our guidance.
Free cash flow performance for 2017 was better than guidance by more than $200 million, with a usage of $786 million. This over performance allowed Bombardier to end the year with a $3.1 billion cash balance and well positioned to achieve cash flow breakeven in 2018, a key objective of the Company's turnaround plan.
"2018 will be a pivotal year for Bombardier," Bellemare continued. "We are moving out of our investment cycle and into a strong growth cycle. Our focus is on flawless execution: bringing the Global 7000 into service; delivering on our major rail projects; and closing the Airbus partnership following regulatory approvals later this year."
Business Aircraft's 2017 financial performance met or exceeded guidance delivering 140 aircraft. Revenues were $5.0 billion with EBIT margins before special items of 8.4%.
For the fourth quarter, deliveries reached 44 units, including a strong mix of Challenger and Global family aircraft, representing 29 and 13 deliveries respectively.
Bombardier confirmed that the company was moving ahead and making progress obtaining regulatory approvals for the announced partnership with Airbus for the C Series aircraft. “We expect to obtain all approvals for the partnership in 2018, and in the meantime, we are conducting site visits and planning for the operation of the U.S. final assembly line in Mobile, Alabama, and working on other integration streams, consistent with antitrust law.”
The manufacturer also referred to the January 26, 2018, decision by the U.S. International Trade Commission to reject Boeing's attempt to have tariffs imposed on C Series aircraft, which Bombardier says clears “the path for us to support Delta this year as we work to close our partnership with Airbus.”
Bombardier delivered 73 aircraft during the year, within the overall guidance range, including 30 Q400, 26 CRJ, and 17 C Series aircraft. This includes 22 aircraft in the fourth quarter, in line with the previous year.
The first two CS300 aircraft were delivered to Korean Air Lines, the program's Asian launch customer, in the final week of December 2017, and supported their preparation for commercial service, which began in January 2018.
Commercial Aircraft's financial performance for 2017 was marked by the continued production ramp-up of the C Series aircraft program, says Bombardier. Engine delivery delays from Pratt & Whitney impacted C Series aircraft deliveries, particularly in the fourth quarter. While revenues reached $2.4 billion, in line with our guidance, the EBIT loss before special items at $377 million compared favorably relative to expectations.