De Havilland Aircraft of Canada Ltd said it had obtained 34 more orders and purchase agreements for its Dash 8-400 plane at last months Dubai Airshow, as it revives the recently acquired turboprop business from Bombardier Inc.
Aurora, a subsidiary of Aeroflot-Rossiyskiye Avialinii PAO , signed a letter of intent to purchase up to five Dash 8-400 aircraft, while the Republic of Ghana agreed to buy six aircraft during the Dubai Airshow, which ran between Nov. 17-21.
ACIA Aero Capital Ltd also signed a conditional purchase agreement to buy three Dash 8-400 aircraft, the company said in a separate statement.
Longview Aviation Capital closed its deal for the Q400 turboprop aircraft program from Canada’s Bombardier this year and revived its previous model name – Dash 8 – under a restored corporate brand of De Havilland Aircraft of Canada.
On Monday, De Havilland landed an order for 20 Dash 8-400 turboprops from lessor Palma Holding at the ongoing Dubai Airshow.
(Reporting by Dominic Roshan K.L. in Bengaluru; Editing by Rashmi Aich)
PARIS, June 18, 2019––Longview Aviation Capital (“Longview”) and its subsidiary Viking Air Limited, a global leader of utility aircraft, support and services and manufacturer of the world-renowned Twin Otter, today announced a seven aircraft sales contract for six new-production CL-515 aircraft and one CL-415EAF.
The CL-515 is a newly developed, technically advanced multi-mission aerial firefighting aircraft – the next generation of the CANADAIR CL-415, the aviation industry’s benchmark amphibious aircraft and the backbone of firefighting missions around the globe. With enhanced firefighting capabilities, and the flexibility to support a wide range of critical mission operations, the CL-515 will be a vitally important strategic asset to fleets around the world.
The Republic of Indonesia’s Ministry of Defense has agreed to purchase six all-new CL-515 aircraft, four of which will be delivered in “First Responder” multi-mission configuration, and two delivered in optimized aerial firefighter configuration. The purchase agreement also includes one CANADAIR CL-415EAF “Enhanced Aerial Firefighter” aircraft converted from a CANADAIR CL-215 to EAF standard by Longview Aviation Capital’s subsidiary, Longview Aviation Services.
The Republic of Indonesia’s purchase agreement is a firm commitment that is conditional only on Longview Aviation Capital’s Board of Directors approving the production launch program.
“We are thrilled to welcome the Republic of Indonesia as the first customer for this extraordinary aircraft,” said David Curtis, Chairman and Chief Executive Officer of Longview Aviation Capital. ”This contract is a major milestone in bringing the next generation CANADAIR to market. The confidence of a sovereign government in our program is matched by our own confidence in our ability to deliver this new aircraft platform to the world. We are very well advanced in all aspects of program planning, including our supply chain, and we are nearing a final decision on manufacturing and final assembly sites. We expect to complete the remaining program milestones in the near future, and deliver the first new CL-515 on schedule in 2024.”
Program Development Process
Since acquiring the type certificates for the CANADAIR amphibious aircraft program from Bombardier in 2016, Longview has had positive discussions with numerous potential customers from around the world, including both governments and private operators, who have enthusiastically encouraged a production restart.
On the basis of the global interest in the unique and unrivalled capabilities of the CL-515, Longview and Viking have invested in a rigorous process ahead of full production launch decision:
Consulted extensively with current global operators to understand their future aerial firefighting resource requirements
Conducted
extensive market research and feasibility studies and developed a new
all-season multi-mission platform, leveraging advanced technology not
previously included in the CL program
Consulted with key supplier partners
Undertaken
advanced supply chain and manufacturing planning, including options
associated with Longview’s current facilities and potential new
facilities in Western Canada
CL-515 Highlights
Up to 15% better aerial firefighting productivity, including increased tank capacity and ability to refill in 14 seconds
State-of-the-art Collins Pro Line Fusion® digital avionics suite for unrivaled situational awareness
Flexible architecture to support multi-mission capabilities including aerial firefighting, maritime patrol, surveillance, medevac, environmental monitoring, insect control, oil spill detection and dispersant
Reduced maintenance and operating costs through improved, scalable avionics and superior design
Unmatched mission efficiency and flexibility, requiring no runway or reloading capacity during waterbombing firefighting
“Indonesia is on the front lines of increasing challenges like forest fires, and as an island nation has extensive needs for a range of amphibious capabilities,” said Air Chief Marshal Yuyu Sutisna, chief of staff for Indonesia’s Air Force. “We have chosen to invest in this aircraft based on the CANADAIR’s solid track record demonstrated around the world over the last 50 years, and Viking’s established capabilities as an aircraft developer and producer. The next generation CL-515 will have unmatched operational performance, particularly as a firefighter. This aircraft has the best productivity of any aerial firefighting aircraft, capable of delivering the highest quantity of foam retardant per day, while at the same time providing the flexibility to save lives and protect our coastal areas through its multi-role SAR and Maritime Surveillance functionalities. We are proud to sign the first contract for this extraordinary aircraft that will enhance our mission capability at excellent value.”
Bombardier (TSX: BBD.B) confirmed today the closing of the previously announced sale of the Q Series aircraft program assets to De Havilland Aircraft of Canada Limited (formerly Longview Aircraft Company of Canada Limited), an affiliate of Longview Aviation Capital Corp., for gross proceeds of approximately $300 million. Net proceeds are expected to be approximately $250 million after the assumption of certain liabilities, fees, and closing adjustments.
Longview will carry on the production of Q400 aircraft at the Downsview Facility in Toronto, and will continue performing aftermarket services for Q Series aircraft. Bombardier will provide transitional services and will license certain intellectual property to Longview to facilitate a seamless transition of the Q Series aircraft program.
-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.
