Bombardier announces financial results for the first quarter ended April 30, 2011
- Consolidated revenues of $4.7 billion, compared to $4.3 billion last fiscal year
- EBIT of $312 million, or 6.7% of revenues, compared to $279 million, or 6.5%, last fiscal year
- Net income of $220 million, or diluted EPS of $0.12, compared to $195 million, or diluted EPS of $0.11, last fiscal year
- Free cash flow usage of $409 million, compared to a usage of $217 million last fiscal year
- Cash position of $3.9 billion as at April 30, 2011, compared to $4.2 billion as at January 31, 2011
- Backlog of $55.1 billion as at April 30, 2011, compared to $52.7 billion as at January 31, 2011
- In May 2011, renewal of BT’s letter of credit facility for €3.4 billion (approximately $4.9 billion), resulting in the release of an amount of €404 million ($577 million) of invested collateral
Bombardier today released its financial results for the first quarter ended April 30, 2011. This is the first interim reporting under IFRS*. Revenues reached $4.7 billion, a 9% increase, compared to $4.3 billion last fiscal year. Earnings before financing income, financing expense and income taxes (EBIT) totalled $312 million, compared to $279 million last fiscal year, representing an EBIT margin of 6.7% for the first quarter ended April 30, 2011, compared to 6.5% for the corresponding period last fiscal year.
Net income reached $220 million, compared to $195 million for the same period last fiscal year. Diluted earnings per share (EPS) was $0.12 for the three-month period ended April 30, 2011, compared to diluted EPS of $0.11 for the same period last fiscal year. The overall backlog reached $55.1 billion, compared to $52.7 billion as at January 31, 2011.
Free cash flow (cash flows from operating activities less net additions to property, plant and equipment (PP&E) and intangible assets) usage totalled $409 million, compared to a usage of $217 million for the same period last fiscal year. The cash position stood at $3.9 billion as at April 30, 2011, compared to $4.2 billion as at January 31, 2011.
“Overall, both groups had a good performance during the first quarter with increased revenues and EBIT, translating into higher net income and EPS,” said Pierre Beaudoin, President and Chief Executive Officer, Bombardier Inc.
“Bombardier Aerospace has started to benefit from a stronger business aircraft market, especially at the high end. And once again, our state-of-the-art business aircraft product offering has paid off, as illustrated by the increased level of new orders this quarter,” said Pierre Beaudoin. “Our commercial aircraft segment, although slower to recover, is seeing an improved level of interest from customers.”
“Bombardier Transportation continues to do well, posting good results again this quarter. Last year’s high order intake is starting to translate into increased revenues year-over-year and the group is making steady progress towards its EBIT margin target of 8%.”
“We have the best product portfolio of our industries, our balance sheet is strong and our impressive backlog of $55.1 billion gives us great visibility on revenues for the next few years,” concluded Mr. Beaudoin.
On May 27, 2011, Bombardier renewed Bombardier Transportation’s letter of credit facility for €3.4 billion (approximately $4.9 billion), at a better rate and without collateral, enabling the Corporation to release an amount of €404 million ($577 million) of the invested collateral related to the previous facility.
Bombardier Aerospace
At Bombardier Aerospace, revenues totalled $2.2 billion, compared to $2 billion for the first quarter last fiscal year, while EBIT reached $141 million, or 6.4% of revenues, compared to $133 million, or 6.8% last fiscal year. Free cash flow usage of $168 million compares to a usage of $205 million for the same period last year. Bombardier Aerospace delivered 61 aircraft for the first quarter ended April 30, 2011, compared to 56 last fiscal year and received 86 net orders, compared to 61 for the same period last fiscal year. Its backlog increased by 10% reaching $21.1 billion, compared to $19.2 billion as at January 31, 2011.
Business jet indicators, although mixed, are generally showing a positive trend. The May 2011 General Aviation Manufacturers Association (GAMA) shipment report clearly showed Bombardier Aerospace as the market leader in the business aircraft market categories in which it competes, in both revenues (40%) and units delivered (39%), during the first three months of calendar year 2011. The group continued to experience an increasing level of business aircraft orders with 77 net orders, including an order from NetJets Inc. for 50 aircraft of the Global family, for a value of $2.8 billion based on list prices, compared to 6 for the same period last fiscal year.
On the commercial aircraft front, there has been an increase in deliveries from 16 aircraft for the first quarter ended April 30, 2010 to 23 for the first quarter of the current fiscal year. Although there has been a recovery for mainlines, the recovery is slower for regional airlines. The price of oil is expected to drive airlines to accelerate the retirement of older, less efficient aircraft, increasing the demand for new-technology, more fuel-efficient aircraft, which positions us well with our portfolio of new aircraft.
Bombardier Transportation
For the first quarter ended April 30, 2011, Bombardier Transportation’s revenues totalled $2.5 billion, compared to $2.3 billion last fiscal year. EBIT reached $171 million, or 6.9% of revenues, for the first quarter ended April 30, 2011, compared to $146 million, or 6.3%, for the same period last fiscal year. Free cash flow usage of $168 million compares to a usage of $34 million last fiscal year. Bombardier Transportation reported new orders worth $1.2 billion for the first quarter, representing a book-to-bill ratio of 0.5, compared to $2.9 billion, a book-to-bill ratio of 1.2, for the same period last fiscal year. The order backlog stood at $34 billion as at April 30, 2011, compared to $33.5 billion as at January 31, 2011.
Among the most important orders received during the first quarter ended April 30, 2011, Bombardier Transportation concluded an agreement with the Government of South Australia for the supply and maintenance of 22 Bombardier 25kV 3 car electric trains valued at approximately $278 million.
Subsequent to the end of the first quarter, the group signed a framework agreement with Siemens AG to be a partner to develop and supply important components for up to 300 ICx high speed trains for Deutsche Bahn AG (DB AG) of Germany. A first firm order for a total of 130 trains valued at approximately $1.8 billion was obtained under this agreement. DB AG is planning to place an additional order with Siemens AG for a further 90 trains. The combined order volume of 220 trains would be worth approximately $3 billion to Bombardier.
Also after the end of the quarter, a nine-year framework agreement was signed with DB Regio AG for 200 TRAXX diesel locomotives with multi-engine propulsion, estimated at $867 million. A formal order for the first 20 locomotives, valued at $90 million, was signed at the same time.
*Comparative figures have been restated to comply with IFRS.
Financial Highlights
PDF version
FINANCIAL RESULTS FOR THE FIRST QUARTER ENDED APRIL 30, 2011
ANALYSIS OF RESULTS
Consolidated results
Consolidated revenues totalled $4.7 billion for the first quarter ended April 30, 2011, compared to $4.3 billion for the same period last year.
For the first quarter ended April 30, 2011, EBIT reached $312 million, or 6.7% of revenues, compared to $279 million, or 6.5%, for the same period the previous year.
Net financing expense amounted to $36 million for the first quarter of the current fiscal year, compared to $43 million for the corresponding period last fiscal year. The $7-million decrease is mainly due to lower net financing expense related to pension plans and higher interest income on cash and cash equivalents, partially offset by a gain on repurchase of long-term debt in March 2010.
The effective income tax rate was 20.3% for the three-month period ended April 30, 2011, compared to the statutory income tax rate of 28.4%. The lower effective tax rate is mainly due to the positive impact of the recognition of income tax benefits related to operating losses and temporary differences, partially offset by permanent differences.
Net income amounted to $220 million, or diluted EPS of $0.12, for the first quarter ended April 30, 2011, compared to $195 million, or diluted EPS of $0.11, for the same period the previous year.
For the three-month period ended April 30, 2011, free cash flow usage totalled $409 million, compared to a usage of $217 million for the corresponding period the previous year.
As at April 30, 2011, Bombardier’s order backlog reached $55.1 billion, compared to $52.7 billion as at January 31, 2011.
Bombardier Aerospace
- Revenues of $2.2 billion
- EBIT of $141 million, or 6.4% of revenues
- Free cash flow usage of $168 million
- Order backlog of $21.1 billion
- NetJets order for up to 120 aircraft of the Global family
Bombardier Aerospace’s revenues amounted to $2.2 billion for the three-month period ended April 30, 2011, compared to $2 billion for the same period the previous year. This increase is mainly due to higher deliveries of commercial aircraft and a favourable mix in business aircraft.
For the first quarter ended April 30, 2011, EBIT reached $141 million, or 6.4% of revenues, compared to $133 million, or 6.8%, for the same period the previous year. The 0.4 percentage-point decrease is mainly due to lower liquidated damage payments from customers upon cancellation of orders and the mix between business and commercial aircraft deliveries; partially offset by lower research and development (R&D) expenses mainly due to lower amortization of program tooling, higher absorption of selling, general and administrative (SG&A) expenses, and a favourable mix of business aircraft deliveries.
Free cash flow usage totalled $168 million for the first quarter ended April 30, 2011, compared to a usage of $205 million for the same period last fiscal year. This $37-million improvement was mainly due to a positive period-over-period variation in net change in non-cash balances related to operations, partially offset by higher net additions to PP&E and intangible assets, due to our significant investments in new products.
For the quarter ended April 30, 2011, aircraft deliveries totalled 61 units, compared to 56 for the same period the previous year. The 61 deliveries consisted of 37 business aircraft, 23 commercial aircraft and 1 amphibious aircraft (39 business, 16 commercial and 1 amphibious aircraft for the corresponding period last fiscal year).
Bombardier Aerospace received 86 net orders during the quarter ended April 30, 2011, compared to 61 during the corresponding period the previous year. The 86 net orders consisted of 77 net orders for business aircraft, 5 orders for commercial aircraft and 4 orders for amphibious aircraft (6 net orders for business aircraft and 55 net orders for commercial aircraft for the same period last fiscal year).
The most significant order received during the first quarter ended April 30, 2011 was from NetJets Inc. for 30 Global 5000 and Global 6000 aircraft and 20 Global 7000 and Global 8000 aircraft, with options for an additional 70 aircraft of the Global family. Based on list prices, the value of the firm order is $2.8 billion, which could increase to $6.7 billion, if all options are exercised. This is the largest business aircraft order in Bombardier’s history.
Bombardier Aerospace’s firm order backlog reached $21.1 billion as at April 30, 2011, compared to $19.2 billion as at January 31, 2011. The 10% increase is mainly due an increase in large business aircraft orders, partially offset by a lower order backlog for regional aircraft.
Bombardier Transportation
- Revenues of $2.5 billion
- EBIT of $171 million, or 6.9% of revenues
- Free cash flow usage of $168 million
- New order intake totalling $1.2 billion (book-to-bill ratio of 0.5)
- Order backlog of $34 billion
Bombardier Transportation’s revenues amounted to $2.5 billion for the three-month period ended April 30, 2011, compared to $2.3 billion for the corresponding period last year. The increase is mainly due to higher activities in rolling stock, especially in metro cars in Europe due to ramp-up of production on existing contracts; in intercity, high speed and very high speed trains in Asia and Europe due to ramp-up of production on new contracts; and in propulsion and controls, mainly in China. This was partially offset by lower activities in rolling stock due to phasing out of existing contracts ahead of ramping-up of production on new contracts in locomotives and in light rail vehicles in Europe, and in mass transit in North America. The increase also reflects a positive currency impact.
For the first quarter ended April 30, 2011, EBIT totalled $171 million, or 6.9% of revenues, compared to $146 million, or 6.3%, for the same quarter the previous year. The 0.6 percentage-point increase is mainly due to better overall contract execution and higher absorption of SG&A and R&D expenses, partially offset by net losses related to foreign exchange fluctuations and certain financial instruments carried at fair value.
Free cash flow usage for the quarter ended April 30, 2011 totalled $168 million, compared to a usage of $34 million for the same period last fiscal year. The $134-million decrease is mainly due to a negative period-over-period variation in net change in non-cash balances related to operations, partially offset by a higher earnings before financing income, financing expense, income taxes and depreciation and amortization.
The order intake for the first quarter ended April 30, 2011 was $1.2 billion, reflecting a book-to-bill ratio of 0.5, compared to $2.9 billion, a book-to-bill ratio of 1.2, for the same period last fiscal year. This decrease is mainly due to lower order intake in rolling stock in Europe, partially offset by higher order intake in rolling stock in Asia-Pacific and a positive currency impact.
Bombardier Transportation’s backlog stood at $34 billion as at April 30, 2011, compared to $33.5 billion as at January 31, 2011. The $0.5-billion increase is due to the strengthening of most foreign currencies versus the U.S. dollar as at April 30, 2011 compared to January 31, 2011, mainly the euro and pound sterling, partially offset by higher revenues recorded than order intake.
Bombardier Transportation received the following major orders during the first quarter ended April 2011: an order for the supply and maintenance of 66 cars of 25kV electric trains from the Government of South Australia, for a value of approximately $278 million, and an order from Metrolinx for the supply of 50 BiLevel commuter rail cars to be delivered to GO Transit in Toronto, valued at approximately $128 million.
DIVIDENDS ON COMMON SHARES
Class A and Class B Shares
A quarterly dividend of $0.025 Cdn per share on Class A Shares (Multiple Voting) and of $0.025 Cdn per share on Class B Shares (Subordinate Voting) is payable on July 31, 2011 to the shareholders of record at the close of business on July 15, 2011.
Holders of Class B Shares (Subordinate Voting) of record at the close of business on July 15, 2011 also have a right to a priority dividend of $0.000390625 Cdn.
DIVIDENDS ON PREFERRED SHARES
Series 2 Preferred Shares
A monthly dividend of $0.0625 Cdn per share on Series 2 Preferred Shares has been paid on April 15 and on May 15, 2011.
Series 3 Preferred Shares
A quarterly dividend of $0.32919 Cdn per share on Series 3 Preferred Shares is payable on July 31, 2011 to the shareholders of record at the close of business on July 15, 2011.
Series 4 Preferred Shares
A quarterly dividend of $0.390625 Cdn per share on Series 4 Preferred Shares is payable on July 31, 2011 to the shareholders of record at the close of business on July 15, 2011.
About Bombardier
A world-leading manufacturer of innovative transportation solutions, from commercial aircraft and business jets to rail transportation equipment, systems and services, Bombardier Inc. is a global corporation headquartered in Canada. Its revenues for the fiscal year ended January 31, 2011, were $17.7 billion, and its shares are traded on the Toronto Stock Exchange (BBD). Bombardier is listed as an index component to the Dow Jones Sustainability World and North America indexes. News and information are available at www.bombardier.com or follow us on Twitter @BombardierInc.
