FILE PHOTO: Cessna employee works on an engine of a Cessna business jet at the assembly line in their manufacturing plant in Wichita, Kansas March 12, 2013. REUTERS/Jeff Tuttle
(Reuters) – Cessna business jet maker Textron Inc reported a higher-than-expected quarterly profit on Wednesday, benefiting from robust aircraft deliveries, sending its share up 1.6 percent in early trading.
Business jet demand has been growing steadily in the United States, the world’s biggest market, on the back of an expanding economy and rising corporate profits.
Textron said it delivered 44 jets in the first quarter ended March 30, up from 36 last year. Commercial turboprop deliveries rose to 44 aircraft from 29 last year.
“We think this quarter has pretty much ticked all the boxes for Textron. Aviation growth has continued, with a positive book to bill in the quarter,” Vertical Research Partners analyst Robert Stallard said.
Textron has faced delays in final certification of its newest super mid-size Longitude jet, which is expected to contribute a ‘big chunk’ to the company’s revenue growth in 2019.
Analysts have warned that the certification delays from the U.S. Federal Aviation Administration due to partial government shutdown followed by the regulator’s intense focus on re-certifying Boeing Co’s 737 MAX aircraft might impact sales growth at the company in the short.
Though the aviation business was among the drivers for a profit beat, Textron’s revenue missed Wall Street estimates, hurt by lower sales in its systems unit, which makes tactical armored patrol vehicles.
Textron re-affirmed its full-year profit outlook range of $3.55 to $3.75 per share.
Sales in the company’s aviation business, its biggest, rose 12.3 percent to $1.13 billion in the first quarter, while sales in the systems unit fell more than 20 percent to $307 million.
The company’s net income fell to $179 million in the quarter ended March 30 from $189 million a year earlier.
Textron earned 76 cents per share, above analysts’ average estimate of 68 cents, according to Refinitiv data.
Textron’s revenue fell 5.7 percent to $3.11 billion, below analysts’ estimates of $3.17 billion.
(Reporting by Divya R and Ankit Ajmera in Bengaluru; Editing by Maju Samuel)
Bombardier Commercial Aircraft today celebrated the delivery of the
first of two Q400 aircraft ordered by Qazaq Air JSC of Kazakhstan
(“Qazaq Air”) in 2017. The order followed Qazaq Air’s successful launch
of domestic service in Kazakhstan in July 2015, using three leased Q400
aircraft.
Qazaq Air’s Acting Chief Executive Officer, Adel Dauletbek and the
airline’s Head of Public Relations, Sergey Khetsuriani, joined the
airline’s flight and acceptance crew during a special delivery ceremony
at Bombardier’s Toronto site where the Q400 aircraft is manufactured.
H.E. Akylbek Kamaldinov, Ambassador of Kazakhstan to Canada was in
attendance as well as Bombardier Commercial Aircraft’s team which
included Ross Mitchell, Vice President, Commercial Operations and Mark
Gilbert, Director, Sales.
“We are delighted with the performance of our fleet of Q400
turboprops and are excited to welcome the additional aircraft into our
operation,” said Mr. Dauletbek. “With our larger fleet, our customers
will benefit from the expansion of our route network within Kazakhstan,
as well as to nearby cities in the Central Asian region.”
“We congratulate Qazaq Air on the growth of its operations and
expansion of its network,” said Mr. Mitchell. “The Q400 aircraft
continues to prove itself in some of the most challenging locations
around the world. The aircraft’s speed, range and fuel efficiency, and
especially its certification for operations down to -54°C make it ideal
for operations on Qazaq Air’s long routes in the Kazakh market.”
About Qazaq Air
Qazaq Air is a young, dynamically growing regional airline in
Kazakhstan, 100 per cent of which is owned by “Samruk-Kazyna” Sovereign
Welfare Fund.
About Q400 Aircraft
Designed as a modern, 21st-century turboprop, the Q400 aircraft is the most recent development in the Q Series family of aircraft. It provides unmatched performance, operational flexibility and passenger comfort. In addition to the standard single-class configuration, Q400 aircraft are available with an optional dual-class interior for enhanced passenger comfort; in an optional extra-capacity configuration offering up to 90 seats for higher-density markets; and in a cargo-passenger combi configuration.
Toronto, March 29, 2019 – Bombardier
Commercial Aircraft announced today that a customer, who has requested
to remain unidentified at this time, has signed an order to acquire six
new Q400 aircraft.
Based on the list price of the Q400 aircraft, the firm order is valued at approximately US$ 202 million.
“The Q400 aircraft offers the perfect balance of passenger comfort
and operating economics while maintaining its unmatched range and speed
advantage versus other turboprops,” said Fred Cromer, President,
Bombardier Commercial Aircraft. “The demand for turboprop aircraft
worldwide is tremendous and the Q Series aircraft are ideally positioned
to meet the needs of regional airlines as they offer a unique ability
to serve diverse and challenging environments. The Q400 offers the
lowest seat costs amongst turboprops, with an enhanced passenger
experience and a proven 99.5 per cent reliability.”
About Bombardier
With over 68,000 employees across
four business segments, Bombardier is a global leader in the
transportation industry, creating innovative and game-changing planes
and trains. Our products and services provide world-class transportation
experiences that set new standards in passenger comfort, energy
efficiency, reliability and safety.
Headquartered in Montreal, Canada, Bombardier has production and engineering sites in 28 countries across the segments of Transportation, Business Aircraft, Commercial Aircraft and Aerostructures and Engineering Services. Bombardier shares are traded on the Toronto Stock Exchange (BBD). In the fiscal year ended December 31, 2018, Bombardier posted revenues of $16.2 billion US. The company is recognized on the 2019 Global 100 Most Sustainable Corporations in the World Index. News and information are available at bombardier.com or follow us on Twitter @Bombardier.
SINGAPORE/ADDIS ABABA (Reuters) – Boeing Co said it invited more than 200 airline pilots, technical leaders and regulators for an information session on Wednesday as it looks to return the 737 MAX to commercial service.
The meeting is a sign that Boeing’s planned software patch is nearing completion, though it will still need regulatory approval.
Over the weekend, Ethiopian Airlines executives had questioned whether Boeing had told pilots enough about “aggressive” software that pushes the plane’s nose down, a focus of investigation into a deadly crash in Ethiopia this month that led to the global grounding of 737 MAX jets.
The informational session in Renton, Washington on Wednesday is part of a plan to reach all current and many future 737 MAX operators and their home regulators to discuss software and training updates to the jet, Boeing said in a statement.
Garuda Indonesia, which on Friday said it planned to cancel its order for 49 737 MAX jets citing a loss of passenger trust after the crashes, was invited to the briefing, CEO Ari Askhara told Reuters on Monday.
“We were informed on Friday, but because it is short notice we can’t send a pilot there,” he said, adding the airline had requested a webinar with Boeing but that idea had been rejected.
A Boeing spokeswoman said the Wednesday event was one of a series of in-person information sessions.
“We have been scheduling and will continue to arrange additional meetings to communicate with all current and many future MAX customers and operators,” she said.
Garuda has only one 737 MAX and had been reconsidering its order before the Ethiopian crash, as has fellow Indonesian carrier Lion Air, which experienced a deadly crash in October.
Singapore Airlines Ltd said on Monday its offshoot SilkAir, which operates the 737 MAX, had received the invitation to the Wednesday event and would send representatives.
Korean Air Lines Co Ltd, which before the grounding had been due to receive its first 737 MAX in April, said it planned to send pilots to Renton.
The 737 MAX is Boeing’s best-selling plane, with orders worth more than $500 billion at list prices.
Teams from the three U.S. airlines that own 737 MAX jets participated in a session in Renton reviewing a planned software upgrade on Saturday.
A U.S. official briefed on the matter Saturday said the Federal Aviation Administration (FAA) has not yet signed off on the software upgrade and training but the goal is to review them in coming weeks and approve them by April.
It remained unclear whether the software upgrade, called “design changes” by the FAA, will resolve concerns stemming from the ongoing investigation into the March 10 Ethiopian Airlines crash, which killed all 157 on board.
“After the crash it came to our attention that the system is aggressive,” Yohannes Hailemariam, vice president for flight operations at Ethiopian, told local reporters speaking in the Amharic language.
“It gives a message of stalling and it takes immediate action which is faster than the action which pilots were briefed to take by Boeing,” said Yohannes, himself a pilot with over 30 years of experience, including flying Boeing’s 777 and 787.
The U.S. official said planned changes included 15 minutes of training to help pilots deactivate the anti-stall system known as MCAS in the event of faulty sensor data or other issues. It also included some self-guided instruction, the official added.
American Airlines said Sunday it will extend flight cancellations through April 24 because of the grounding of the 737 MAX and cut some additional flights.
(Reporting by Jamie Freed in Singapore and Jason Neely in Addis Ababa; additional reporting by Cindy Silviana in Jakarta, Heekyong Yang in Seoul, Tracy Rucinski in Chicago and David Shepardson in Washington; Editing by Chris Reese and Michael Perry)
Paulo Cesar de Souza e Silva concludes his tenure at the end of April and will support the transition process of the company as Senior Advisor of the Board of Directors.
São Paulo, Brazil, March 18, 2019 – Embraer, following shareholder approval of the transaction with Boeing, announces that the current President and CEO of the company, Paulo Cesar de Souza e Silva, concludes a successful professional cycle with the company on April 22, 2019 which is the end of his current two year elected term.
“Paulo Cesar idealized the partnership with Boeing and led the negotiation process of the transaction that will bring Embraer and Brazil to a much more competitive and prominent level in the global aviation industry,” said Alexandre Silva, Chairman of the Board.
For 22 years at Embraer, Paulo Cesar came from the financial market to structure the company’s sales financing area. For six years he was President and CEO of Commercial Aviation and in 2013 launched the E2 Program, the medium-sized commercial jets considered today to be the most efficient in the market.
In 2016, Paulo Cesar became President and CEO of the Embraer Group, with a mission to make the company more efficient, competitive and better prepared to face structural changes in the global aviation market.
His administration established three key initiatives focused on value creation and the sustainability of the company. The first was the transaction with Boeing. The second was the creation of the Passion for Excellence program, a structural transformation project focused on reducing costs and increasing operational efficiency, generating significant annual recurring savings. The third was the creation of EmbraerX, responsible for disruptive innovation and the development of opportunities for the future, such as eVTOL (electric vertical take-off and landing vehicle), a project that will revolutionize urban transport in partnership with Uber.
“Without the support of the Board and Embraer’s 18,000 employees and colleagues, none of our achievements would have been possible”, noted Paulo Cesar. “We are challenged to remain at the forefront of engineering and operations. In Executive Aviation and Defense, and with the KC 390 joint venture with Boeing, we will expand our international competitiveness and everything indicates that we will have another 50 years of success ahead.” And he added: “I am sure that the new leadership of the company will find fertile ground ahead to expand and consolidate Embraer.”
Paulo Cesar was invited to be a Senior Advisor to the Board, with the task of facilitating the integration of the future President and CEO and advising the Board on the monitoring of assets and resources segregation, an integral part of the process of concluding the partnership with Boeing. As it was reported, 96.8% of Embraer’s shareholders approved an agreement with the North American company last February, which should be concluded after obtaining all approvals of the Regulatory and Competitive Agencies in Brazil and abroad.
Embraer also informs that the future President and CEO, to be elected for the next term, will be recruited externally and announced on or before the Ordinary General Assembly on April 22nd.
Follow us on Twitter: @Embraer
About Embraer
Embraer is a global company headquartered in Brazil with businesses in commercial and executive aviation, defense & security. The company designs, develops, manufactures and markets aircraft and systems, providing customer support and services. Since it was founded in 1969, Embraer has delivered more than 8,000 aircraft. About every 10 seconds an aircraft manufactured by Embraer takes off somewhere in the world, transporting over 145 million passengers a year.
Embraer is the leading manufacturer of commercial jets up to 150 seats. The company maintains industrial units, offices, service and parts distribution centers, among other activities, across the Americas, Africa, Asia and Europe.
Boeing CFO Greg Smith (left), Boeing CEO Dennis Muilenburg (center), and Embraer CEO Paulo Cesar Silva
Austin, TX, USA, March 06, 2019 – Austin’s South By Southwest (SXSW) festival is the stage of EmbraerX’s first Prototype Room, a space for connection between technology, accessibility, collaboration and creativity. By showing its collaborative ecosystem mind approach, EmbraerX aims the enhancement of urban air mobility acceptance in a human-centric experience.
The Prototype Room will feature a series of interactive experiences for people to know, understand and imagine the Flying Vehicle and Urban Air Mobility. The proposal is to invite the public to know and interact with EmbraerX from their projects and ideas more audacious and revolutionary.
All this technologies and activities developed by partner companies that are part of the EmbraerX collaborative ecosystem will take place at Hilton Austin Downtown hotel, room, 602, March 8-13.
“The industry needs to build a collaborative ecosystem to reinvent mobility. But it will only be possible, if we ignite people’s imagination and show we are not offering product, but a social transformation. SXSW is an obvious stage to spread this message by demonstrating Embraer moves toward to the future of urban air mobility and accessibility”, said Antonio Campello, CEO of EmbraerX.
This year the Tech Industry & Enterprise Track is presented by Embraer. This interactive track has focuses on the forward-thinking innovation of today and what we project to be trending tomorrow. Executives and leaders from a variety of industries will be gathered to discuss the evolving landscape of technology driven services. Session topics include new developments from established organizations; technology ecosystems from around the world; strategic B2B practices; and the changing nature of tech-based services within industries.
EmbraerX team will be also attending the panel Mobility, Reimagined: Co-Designing at the Hilton Austin Downtown hotel New Futures, on March 12, at 9:30am, at room 400. The panel will explore how people and technologies will interact in the new age of smart cities and autonomous vehicles. In this opportunity, the Company will address its vision on a truly build safe future-forward transportation for all, which users will be the first to benefit from these new technologies and revolutionary services, what will be the implications on mobility and the design of new frictionless technologies.
EmbraerX, a wholly owned Embraer subsidiary, exists to build disruptive businesses, considering that transportation will probably be disrupted by the exponential growth of new technologies as well as the development of new business models.
Embraer has existing partnerships with dozens of universities and research centers and also co-creates with customers and aerospace companies around the world, in truly collaborative knowledge networks, based upon open innovation concepts, with shared achievements, budgets and risks. The company 50-year successful history is a representation and endorsement of what is being built for the future. eVTOL.
Embraer is part of the Uber Elevate Network, sharing the vision that on-demand aviation has the potential to radically improve urban mobility, improving the quality of life for people who live in congested urban communities.
Urban air mobility can be leveraged by using the eVTOL (electrical Vertical Take Off and Landing). However, the entire ecosystem has to be developed, which demands a significant integration among ride-sharing platform, aircraft manufacturer, infrastructure for vertiports, air traffic management, certification authorities, etc.
As the leading manufacturer of commercial jets with up to 150 seats and a major player in business aviation, in addition its important role in defense and security, Embraer is one of the most experienced partners in this space and Uber recognizes and values Embraer’s ability to bring affordable, yet advanced flight systems to much smaller aircraft.
SAO
PAULO (Reuters) – Brazilian planemaker Embraer said on Tuesday a key
shareholder meeting to vote on the sale of 80 percent of its commercial
aviation business to Boeing Co could proceed as scheduled on Tuesday,
after it got an injunction overturned.
A
federal judge had suspended the meeting on Friday at the request of a
union representing some Embraer workers which had lobbied against the
deal, partly on concerns Boeing would slash jobs if the tie-up was
approved.
Shares in Embraer surged 3 percent in early Sao Paulo trading on news the meeting would take place.
Last-minute
legal twists are common in Brazil, and Embraer had already overturned
several injunctions that temporarily blocked the deal.
Under
the proposed terms, Boeing will pay $4.2 billion to control Embraer’s
most profitable division, its commercial aviation business.
The
deal will provide a cash influx that the Brazilian planemaker has
defended as crucial to its survival as increased competition between
Boeing and Airbus squeezes out smaller rivals.
“The
potential operation with Boeing will save Embraer,” lawyers for the
Brazilian planemaker said in July in a court filing as it battled an
earlier challenge to the deal.
But
critics say the arrangement will leave Embraer weaker and financially
dependent on its two remaining divisions, executive jets and defense,
both of which have posted losses in recent quarters.
Foreign shareholders, who own a tiny slice of the company, overwhelmingly voted to approve the deal.
Brazil’s
securities regulator late on Monday denied a separate request filed by
minority shareholders to suspend the shareholder meeting.
Embraer’s
union has vowed to protest the meeting, which will be held at the
planemaker’s headquarters in the city of Sao Jose dos Campos. The
union’s plans prompted Embraer to seek legal restrictions of its own.
A
judge sided with Embraer last week, allowing Brazil’s military police
to safeguard the planemaker’s premises while the meeting takes place.
The
deal has already been approved by Brazil’s government, which holds veto
power over important business decisions at Embraer, which was a state
company until its privatization in the 1990s.
(Reporting by Marcelo Rochabrun in Sao Paulo; Additional reporting by Gram Slattery in Rio de Janeiro; Editing by Jason Neely, Keith Weir and Bernadette Baum)
BREMEN,
Germany (Reuters) – Ariane 6, Europe’s next-generation space rocket, is
expected to win its first two commercial launch orders in coming weeks,
company officials said, a key milestone as the European launcher vies
for orders against Elon Musk’s U.S. competitor SpaceX.
Operator
Arianespace faces increased competition from SpaceX and Blue Origin,
owned by Amazon CEO Jeff Bezos. Japan and India also pose a growing
challenge.
Ariane
6 has three institutional orders in hand from the European Commission
and France and is close to signing deals with two commercial customers,
said Mathias Spude, spokesman for ArianeGroup, a joint venture of Airbus
and Safran, that is the majority stakeholder in Arianespace.
ArianeGroup
has invested 400 million euros (£347 million) of its own funds in the
3.4-billion-euro development of Ariane 6 – a project key to ensuring
Europe’s independent access to space and a market valued at over $1
trillion by 2040.
Manufacturers
say the rocket will be more versatile than Ariane 5, able to carry out
missions from placing as many as 90 small satellites in low-earth orbit
to taking classic spy satellites to far higher perches in geostationary
orbit.
But
the business case depends on drumming up enough commercial business to
augment the 5-6 institutional launches expected in Europe annually in
coming years, about a quarter of those planned in the United States.
European governments also face industry pressure to use Ariane 6 even if they could get cheaper rides using SpaceX.
“Europe
continues to need its own access to space – the market of the future,”
said Matthias Wachter with the BDI German Federation of Industry. “It
doesn’t make sense to use European tax money to develop our own rocket
but then launch satellites with competitors from the United States or
Asia.”
Ariane
6, due for a first launch in 2020, was designed to save significant
costs compared to Ariane 5, but industry experts say it will still cost
around 70 million euros per launch – well above the rate offered by
SpaceX, which uses reusable rocket technology and can count on larger
U.S. orders.
Ariane
6’s designers insist innovative production techniques will favour the
European launcher when the commercial market recovers from a recent
slump.
“When
it wakes up … we will be on the market with a rocket that is 40
percent cheaper, and will continue to reduce costs after that,” Spude
told Reuters at the Ariane 6 production site.
Still,
experts say SpaceX is widely credited with jolting the overall market
with a keen focus on cutting costs, forcing Europe to shake up its
launch industry.
(Reporting by Andrea Shalal, Editing by Tim Hepher)
-EBIT before special items(1) up 42% year-over-year to more than $1.0B on revenues of $16.2B for the year; EBIT increased 235% year-over-year to $1.0B
-2018 EBIT margin before special items(1) up 180 bps year-over-year to 6.3%; EBIT margin of 6.2%
-Full year free cash flow(1) of $182M, comprising proceeds from certain transactions, including $1.0B of cash generation in the fourth quarter; full year cash flows from operating activities of $597M
-Strong backlog growth at Business Aircraft and Transportation, with full year book-to-bill ratios(2) of 1.1 at both segments, and a consolidated backlog of $53.1B
-2019 guidance affirmed, clear path to achieve 2020 objectives
Bombardier (TSX: BBD.B) today reported its fourth quarter and full year 2018 results, highlighting solid margin growth, improved cash flows and continued progress executing its turnaround plan. The successful entry-into-service of the Global 7500 business jet in the fourth quarter also marked the completion of Bombardier’s heavy investment cycle, a key milestone in the company’s turnaround plan.
“2018 was a year of solid progress,” said Alain Bellemare, President and Chief Executive Officer, Bombardier Inc. “We continued to strengthen our business and set a strong foundation for growth. A foundation that includes a refreshed portfolio of best-in-class products, industry-leading backlogs and a more streamlined cost structure, all of which gives us a clear path to achieve our 2020 objectives.”
“As we begin the fourth year of our turnaround journey, Bombardier is a much stronger company,” continued Bellemare. “Our major program risks are retired, our heavy investment cycle is behind us and our franchises are well positioned for growth. For 2019, we are focused on flawless execution of our rail projects, the ramp-up of the Global 7500 and entry-into-service of the Global 5500 and Global 6500. We will also continue to drive financial performance through disciplined capital allocation and improved productivity and efficiency across the organization.”
Bombardier’s 2018 consolidated revenues reached $16.2 billion, reflecting 3% average year-over-year growth across Transportation, Business Aircraft and Aerostructures, excluding currency impact. Book-to-bill ratios(2) at Transportation and Business Aircraft both equaled 1.1 for the year, demonstrating strong demand for Bombardier’s products and services. Bombardier’s consolidated backlog reached $53.1 billion at the end of 2018, supporting future growth targets.
EBIT before special items continued to improve in 2018, increasing 42% year-over-year from $725 million to more than $1.0 billion, the top-end of the company’s guidance. The 6.3% EBIT margin before special items in 2018 represents a strong 330 bps increase since the start of the turnaround plan in 2015, well above the 5-6% range originally targeted. On a reported basis, EBIT increased 235% year-over-year to $1.0 billion, representing a margin of 6.2%.
Bombardier generated $1.0 billion of free cash flow in the fourth quarter of 2018. Full year free cash flow generation equaled $182 million, at the high end of the company’s revised guidance. This amount includes aggregate net proceeds of approximately $750 million from the sale of the Downsview property and the monetization of royalties associated with the previously announced CAE transaction. Cash flows from operating activities amounted to $597 million for the full year, and to $1.3 billion in the fourth quarter. Bombardier ended the year in a solid cash position, with $3.2 billion in cash and cash equivalents.
Selected results
SEGMENTED RESULTS AND HIGHLIGHTS
Business Aircraft
Business Aircraft achieved a historical milestone in December 2018 with the on plan service entry of the largest and longest range industry flagship Global 7500 aircraft. With a strong backlog and unsurpassed performance in its category, the Global 7500 is expected to be Business Aircraft’s key growth driver for years to come.
Revenues, EBIT before special items and deliveries were in line with guidance for 2018.
The segment achieved industry leading deliveries at 137 aircraft for 2018, including 42 Global, 83 Challenger and 12 Learjet.
Continued progress on the aftermarket strategy drove a 14.3% revenue increase year-over-year. Further expansion of our service network was also announced with the groundbreaking for a new centre in Miami, Florida to service U.S. and Latin American customers.
During the year, Business Aircraft unveiled the new Global 5500 and Global 6500 aircraft featuring an all-new Rolls-Royce engine and a newly optimized wing, increasing the aircraft range and fuel burn performance. With flight testing at advanced stages, these performance-leading aircraft are expected to enter into service at the end of 2019.
Commercial Aircraft
In 2018, Commercial Aircraft significantly reshaped its portfolio, focusing on the CRJ Series program and its aftermarket business, while also participating in the growth of the A220 through its partnership with Airbus:
The C Series Partnership (CSALP) with Airbus closed on July 1, 2018, bringing together two complementary product lines and the benefit of Airbus’ global reach, creating significant value potential for the newly rebranded A220.
A definitive agreement was reached with Longview Aircraft Company of Canada Limited for the sale of the Q Series aircraft program assets, including aftermarket operations and assets, for gross proceeds of approximately $300 million, on November 7, 2018. The transaction is expected to close by the second half of 2019, subject to customary closing conditions and regulatory approvals. Net proceeds for this transaction are expected at approximately $250 million net of fees, liabilities and normal closing adjustments.
Revenues and aircraft deliveries for 2018 were in line with guidance on the basis of the deconsolidation of CSALP results from Commercial Aircraft since July 1, 2018.
EBIT loss before special items(11) was $157 million reflecting for the most part losses on the C Series program in the first half of the year and the post-closing CSALP equity pickup. EBIT loss of $755 million includes a $616 million pre-tax accounting charge related to the closing of the CSALP transaction.
Commercial Aircraft continues to actively participate in the regional aircraft market with the established scope-compliant CRJ Series aircraft, with a focus on reducing costs and increasing volumes while optimizing the aftermarket for the large installed base in service around the world today. As the focus is to return the program to profitability, Bombardier also announced in 2018 it is exploring strategic options for the program.
Aerostructures and Engineering Services
Aerostructures and Engineering Services is positioned as a key supplier on early life cycle growth programs, including the new A220 and Global 7500 aircraft, expected to drive sustainable growth.
In 2018, the segment revenues grew 21% year-over-year to $2.0 billion in line with guidance.
Focused execution during the ramp-up of these programs and a one-time favorable item (approximately 50 bps) associated with the closing of the C Series Partnership have enabled to deliver 9.6% EBIT before special items, above its guidance. EBIT margin for the segment was 7.5%.
On February 6, 2019, the Corporation acquired the Global 7500 aircraft wing program operations and assets from Triumph Group Inc., for a nominal cash consideration. This transaction is expected to strengthen Bombardier’s position as a leading aerostructures manufacturer, to enable the company to leverage its extensive technical expertise to support the ramp-up of the Global 7500 aircraft, and to enhance its long-term success. Bombardier will continue to operate the production line and integrate the employees currently supporting the program at Triumph’s Red Oak, Texas facility.
On February 7, 2019, Paul Sislian was appointed President, Aerostructures and Engineering Services. Paul brings more than 20 years of aerospace and industrial experience, including serving most recently as Chief Operating Officer for Bombardier Business Aircraft.
Transportation
On February 7, 2019, Danny Di Perna was appointed President, Bombardier Transportation. Danny brings more than 30 years of industrial experience to this new role. He has a proven record of success leading complex industrial projects and organizations, driving operational efficiency and improving quality. Most recently, Danny led Bombardier’s Aerostructures and Engineering Services segment.
In 2018, Transportation recorded orders totaling $9.9 billion, fueled by a $3.3 billion order intake in the fourth quarter. Book-to-bill(2) reached 1.5 for the fourth quarter, resulting in a 1.1 ratio for the full year, continuing to position the segment for growth in revenues and profitability, supported by strong industry fundamentals.
Order intake for the year reflects project wins across geographies, with notable contract awards in Europe, led by SNCF’s repeat order in France, in Asia led by the Singapore Metro contract, and North America with Airport and Mass transit mobility solutions for Phoenix and Los Angeles.
The backlog reached $34.5 billion as at December 31, 2018. The backlog growth (excluding currency fluctuations) was supported by a stronger mix of platform projects and increasing signalling and service contract orders, consistent with Transportation’s strategy to increase speed-to-market; provide customers with end-to-end solutions; de-risk project execution while also growing margins.
Subsequent to the fourth quarter, in January 2019, Transportation was awarded a contract to supply 113 new generation passenger rail cars valued at $669 million with options for up to 886 additional cars, by the New Jersey Transit Corporation.
Financial performance for 2018 positions Transportation to reach 2019 guidance:
Revenues grew 4% year-over-year to $8.9 billion, in line with guidance, supported by a favourable currency impact in the first half of the year (2% growth excluding currency impact). Services and signalling grew to over 34% of revenues for the year, as increasing focus turns to integrated customer solutions.
EBIT before special items grew to $750 million for the year, representing an 8.4% margin (EBIT of $774 million, or 8.7% margin). Fourth quarter margins before special items were 7.7% (10.9% EBIT margin), as a result of contract estimate adjustments largely associated with a legacy project, resulting in full year margins before special items, slightly below the 8.5% guidance.
As discussed at the Company’s December 2018 Investor Day, Transportation continues to advance a number of legacy projects. The Company has plans in place and is taking actions to finalize system integration, obtain homologation and align delivery schedules with customers. Bombardier expects to substantially complete deliveries on most of these projects and significantly recover working capital through 2019.
As the portfolio continues to improve, Transportation anticipates growing EBIT margins before special items to approximately 9% for 2019, in line with guidance.
CDPQ Investment in BT Holdco
The Company also announced that Transportation’s results in 2018 did not reach the performance targets underlying Caisse de dépôt et placement du Québec’s (CDPQ) investment in BT Holdco. Accordingly, for the 12-month period starting on February 12, 2019, Bombardier’s percentage of ownership on conversion of CDPQ’s shares will decrease by 2.5%, returning to the original 70%; and the preference return entitlement rate on liquidation of its shares will increase from 7.5% to 9.5% for this period. Any dividends paid by BT Holdco to its shareholders during this period will be distributed on the basis of each shareholder’s percentage of ownership upon conversion, being 70% for Bombardier and 30% for CDPQ. These adjustments will become effective once the audited consolidated financial statements of BT Holdco are duly approved by its board of directors.
Headquartered in Montréal, Canada, Bombardier has production and engineering sites in 28 countries across the segments of Transportation, Business Aircraft, Commercial Aircraft and Aerostructures and Engineering Services. Bombardier shares are traded on the Toronto Stock Exchange (BBD). In the fiscal year ended December 31, 2018, Bombardier posted revenues of $16.2 billion. News and information are available at bombardier.com or follow us on Twitter @Bombardier.
CHICAGO and PARIS, Feb. 13, 2019 /PRNewswire/
— Boeing [NYSE: BA] and Safran [EPA: SAF] today announce the name of
their 50-50 joint venture to design, build and service Auxiliary Power
Units (APUs): Initium Aerospace.
From its Latin roots, initium means ‘the beginning’ or ‘to start.’
This is what an APU is and does when it provides the power to start the
main aircraft engines and systems on the ground and, if necessary, in
flight. Initium Aerospace starts with Boeing’s customer and airplane
knowledge and Safran’s experience designing and producing complex
propulsion systems.
“This is an exciting milestone as we bring together the best of both
companies to design and build an advanced APU that will create more
lifecycle value for our customers,” said Stan Deal,
president and CEO, Boeing Global Services. “This is further proof that
Boeing is making strategic investments that strengthen our vertical
capabilities and continue to expand our services portfolio.”
The creation of Initium Aerospace follows the regulatory and
antitrust approvals the joint venture received last November, after an
agreement was reached in June.
“I would like to congratulate everybody at Boeing and Safran who
contributed to the creation of this new joint venture,” said Philippe
Petitcolin, CEO of Safran. “Initium Aerospace is swiftly capitalizing on
the vast expertise of both partners to provide state-of-the-art APUs
and innovative solutions to customers. Safran is proud and totally
invested in supporting Boeing’s growth and operators expectations. We
look forward to presenting the first demonstrator engine to the market.”
The initial team consists of employees from the two parent companies and is led by Etienne Boisseau, CEO of Initium Aerospace. Initial work is being done in San Diego, California,
where they are focused on the next-generation APU design as well as
collaborating with teams across Boeing and Safran on engineering and
production.
Safran is an international high-technology group, operating
in the aircraft propulsion and equipment, space and defense markets.
Safran has a global presence, with more than 58,000 employees and sales
of 16.5 billion euros in 2017. Working
alone or in partnership, Safran holds world or European leadership
positions in its core markets. Safran undertakes Research &
Development programs to meet fast-changing market requirements, with
total R&D expenditures of around 1.4 billion euros in 2017. Safran is listed on the Euronext Paris stock exchange, and is part of the CAC 40 and Euro Stoxx 50 indices.
In February 2018, Safran took
control of Zodiac Aerospace, significantly expanding its aircraft
equipment activities. Zodiac Aerospace has 32,500 employees and
generated sales of 5.1 billion euros for its fiscal year ended August 31, 2017.
Boeing is
the world’s largest aerospace company and leading manufacturer of
commercial airplanes and defense, space and security systems. Boeing is
also the world leader in combined commercial airlines and government
services with customers in more than 150 countries. The company’s
products and tailored services include commercial and military aircraft,
satellites, weapons, electronic and defense systems, launch systems,
advanced information and communication systems, and performance-based
logistics and training. Boeing employs approximately 150,000 people
across the United States and in more than 65 countries.
Forward-Looking Information Is Subject to Risk and Uncertainty
Certain statements in this release may be “forward-looking” within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding the expected timetable for completing the transaction, future business prospects, and benefits and synergies of the transaction, as well as any other statement that does not directly relate to any historical or current fact. Forward-looking statements are based on current assumptions about future events that may not prove to be accurate. These statements are not guarantees and are subject to risks, uncertainties and changes in circumstances that are difficult to predict. Many factors could cause actual results to differ materially from these forward-looking statements. As a result, these statements speak only as of the date they are made and we undertake no obligation to update or revise any forward-looking statement, except as required by law. Specific factors that could cause actual results to differ materially from these forward-looking statements include the effect of global economic conditions, the ability of the parties to consummate the transaction and receive antitrust clearance, and other important factors disclosed previously and from time to time in reports filed by Boeing and Safran with their respective agencies.
