Bombardier Turnaround Plan Improves Financial Performance
Bombardier Regio 2N Train © Bombardier Transportation
Bombardier reported its third quarter 2016 results and highlighted solid performance executing its turnaround plan.
With strong year-to-date performance, Bombardier reaffirmed its guidance and announced that it expects to finish the year at the high end of its EBIT guidance, with better operating margins at each of its business units and with significantly improved year-over-year cash performance. For the third consecutive quarter, EBIT margins before special items at Transportation, Business Aircraft, and Aerostructures and Engineering Services have exceeded 6%, showing early benefits of the Company’s turnaround plan.
Alain Bellemare, President and Chief Executive Officer, Bombardier Inc said:
“We continue to gain momentum as we execute our turnaround plan and transform our company.”
“In the third quarter, we again delivered on our financial commitments, we achieved our program milestones and we continued to take the hard actions necessary to improve productivity, reduce costs and optimize our operations.”
“As we close out 2016, we are confident in our strategy, our turnaround plan and in our ability to achieve our 2020 goals,” Bellemare continued. “We remain focused on improving operational efficiency, flawlessly ramping-up our new programs and maintaining a disciplined and proactive approach to deliver value to customers and shareholders in any market environment.”
- Our operational transformation is gaining traction. During the three-month period ended September 30, 2016, the EBIT margin before special items further improved to 7.9%, for an EBIT margin before special items of 6.7% for the nine-month period.
- Based on results to date, we are increasing profitability guidance(1) for the year to above 6.5% and revising Transportation’s full year revenue guidance for 2016 to approximately $8.0 billion.(2)
- InnoTrans, the world’s largest fair for transport technology, was held in September 2016 in Berlin, Germany. As an innovation driver, we launched new state-of-the-art mobility solutions such as our TALENT 3 and introduced our MOVIA Maxx platform concept and OPTIFLO signalling system.
- In September 2016, we signed contracts with Angel Trains and Abellio Greater Anglia in the U.K. to supply 665 AVENTRA vehicles and maintenance services for Abellio’s East Anglia rail franchise. The contracts are valued at a total of approximately $1.2 billion, leading to a book-to-bill ratio(7) of 1.6 for the quarter.
- In September 2016, we signed a strategic agreement with the Chinese rolling stock manufacturer, China Railway Rolling Stock Corporation (CRRC), to expand and deepen our relationship. The agreement establishes a framework to leverage our complementary strengths for selected projects in order to provide additional value to customers, better serve the growing global rail transportation equipment market and support mutual long-term growth objectives. Areas of potential future cooperation include Chinese and international market development and shared manufacturing resources.
Bombardier also announced that it will hold an Investor Day meeting on Thursday, December 15, 2016. Hosted by Alain Bellemare, the meeting will include disclosure of guidance for 2017 and presentations by the Company’s business segment leaders.
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