Bombardier’s revenues climbed by 16 percent year-over-year in 2023, topping $8 billion, as it scaled deliveries to 138 Challenger and Global business jets, the company reported this morning. Further, the Montreal-headquartered aircraft manufacturer expects deliveries to take another step up to between 150 and 155 in 2024, returning to levels not seen since 2016.
However, Bombardier expects most of that growth to come from its super-midsize Challenger 3500s this year, with Global deliveries remaining stable. Bombardier president and CEO Éric Martel said this is purely a function of balancing production in the face of supply-chain uncertainties.
“While we have everything in place to achieve our objective, I want to highlight that our delivery profile for the year is largely set by the pace at which we receive parts from our supplier,” Martel said. “We are in an environment where we continue to play the cards we are dealt versus planning an ideal production schedule.”
As such, Bombardier projected revenues to grow to between $8.4 billion and $8.6 billion on the year, with aftermarket also helping that bump. Meanwhile, Global deliveries are anticipated to expand in 2025.
As for 2023, deliveries were up by 15 units on the year, with Challenger shipments increasing by 13, to 63, and Globals by five, to 75. However, 2022 totals also included three shipments from the now-discontinued Learjet line.
Deliveries were in line with guidance of greater than 138 deliveries thanks to 56 shipments in the fourth quarter alone. Bombardier handed over 32 Globals in the last quarter, compared with 29 a year earlier, and 24 Challengers, compared with 20 a year earlier.
Bombardier had built inventory during the year to ensure it could meet its delivery goals despite supply chain issues. Similarly, the company plans to rebuild inventory in the first half of the year with deliveries expected to be heavier in the back half of 2024.
While deliveries increased, Bombardier maintained a book-to-bill of 1:1 during the year. Backlog, however, dipped from $14.8 billion at the end of 2022 to $14.2 billion in 2023. Martel said the backlog, which extends between 18 to 24 months across its product lines, makes us “very predictable for the future.”
Further, Martel was optimistic about solid sales continuing this year, despite headwinds involving conflicts in the Middle East and Eastern Europe. “We do foresee quite a bit of activity right now on all of our platforms. Looking at our prospect list and people we’ve talked to, [activity] has remained strong.” Customers are not disappearing, he said, but added that they may be taking more time.
The spool-up in Global deliveries in 2025 also would coincide with planned market entry to the Global 7500 follow-on, the Mach 0.94, 8,000-nm Global 8000. Martel said development has remained on track for certification and initial deliveries next year. “We are flying the airplane a lot,” he said. While the aircraft has generated substantial interest from customers, Bombardier is offering a retrofit option for the 7500, which he said is keeping activity solid on that aircraft even as the new version is in the wings.
Meanwhile, the company continued to expand its aftermarket revenues and market share as it bears fruits from significant investments that added one million in service center space over the past half-dozen years. Aftermarket brought in $1.75 billion, up 16 percent from a year earlier and 75 percent since 2020. Bombardier anticipates this to continue to grow as it works toward its goal of $2 billion in aftermarket in 2025.
Overall, its EBITDA grew by 32 percent in 2023 to $1.23 billion, and net income turned from a $148 million loss in 2022 to a $445 million profit this year. At the same time, the company continues to strengthen its underlying financial foundations, with plans to shave off another $1 billion in debt over the next two years. It has pushed out maturities for 30 months.