News & Press: Press Release

Bombardier Reports Second Quarter 2020 Financial Results, Progress on Near-Term Priorities

August 7, 2020  
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Bombardier Reports Second Quarter 2020 Financial Results, Progress on Near-Term Priorities 

  • Pro-forma(1) liquidity(2)of approximately $3.5 billion, including approximately $1.7 billion of consolidated cash on hand, $738 million of available revolver capacity at Transportation as of June 30, 2020, and up to $1.0 billion of new liquidity from recently announced senior secured credit facility 
  • Free cash flow usage(3) and cash flow usage from operating activities better than expected at $1.0 billion, including an estimated $700-$900 million of Coronavirus impact 
  • Consolidated revenues were $2.7 billion, down 37% year-over-year due to pandemic related disruptions 
  • Consolidated adjusted EBIT(3)loss of $427 million reflecting charge at Transportation related to legacy projects and COVID-19 impact at both Aviation and Transportation; Reported EBIT of $26 million reflecting an accounting gain on the CRJ divestiture 
  • All 51 manufacturing sites and other operations successfully resumed, full-year production and delivery rates reset with current market conditions and customer requirements 
  • European Commission regulatory approval of Bombardier Transportation sale to Alstom obtained in July; Sale of aerostructures business to Spirit AeroSystems is expected to close this fall 

All amounts in this press release are in U.S. dollars unless otherwise indicated. Amounts in tables are in millions except per share amounts, unless otherwise indicated.

Montréal, August 6, 2020 – Bombardier (TSX: BBD.B) announced today its financial results for the second quarter of 2020 and provided an update on the actions the company is taking to manage the business through the COVID-19 pandemic. Bombardier also provided an update on the status of the previously announced divestitures undertaken to reshape the company’s capital structure. 

“Bombardier continues to take the right actions to manage the impact of the ongoing public health crisis while protecting the business for the long-term,” said Éric Martel, President and Chief Executive Officer, Bombardier Inc. “We begin the second half of the year with our global operations safely and successfully resumed and our production rates and workforce realigned to current market conditions and customer requirements. We’ve also improved our liquidity position with solid cash management, cost reduction actions and a new secured credit facility, providing additional flexibility as we work to address our balance sheet challenges and close the sale of Bombardier Transportation and our aerostructure business.” 

On July 31, 2020, the European Commission provided conditional approval of the sale of Bombardier Transportation to Alstom, a significant milestone in obtaining the necessary regulatory approvals to complete the transaction. Bombardier and Alstom continue to work together to obtain the remaining approvals and complete the Works Councils consultations required prior to executing the definitive sale and purchase agreement. Bombardier expects the sale of its aerostructure business to Spirit AeroSystems Holdings, Inc. to close this fall.(1) 

Bombardier began the third quarter with pro-forma liquidity(2) of approximately $3.5 billion. This includes approximately $1.7 billion of cash on hand, access to the undrawn amount of $738 million on Transportation’s revolving credit facility as of June 30, 2020, and the new $1.0 billion senior secured credit facility announced on July 22, 2020 and expected to close in the third quarter. (1) 

Revenues of $2.7 billion during the second quarter reflect a lower level of production activity and deliveries in the quarter as operations at key Aviation and Transportation sites across North America and Europe were temporarily suspended for several weeks due to the global COVID-19 pandemic. 

Adjusted EBITDA(3) loss and adjusted EBIT loss were $319 million and $427 million, respectively, for the quarter. These results reflect an additional charge of $435 million at Transportation, largely related to 

incremental engineering, certification and retrofit costs associated with a number of late-stage projects mainly in the U.K. and Germany. At Aviation, earnings were lower year-over-year primarily as a result of disruptions from the global COVID-19 pandemic. Reported EBIT was $26 million for the quarter and reflects the
$496 million accounting gain on the disposal of the CRJ program to Mitsubishi Heavy Industries, Ltd. closed on June 1, 2020. 

Free cash flow usage and cash usage from operating activities were $1.0 billion for the quarter. This was better than anticipated as the company resumed operations faster than expected and took additional actions to mitigate the full COVID-19 impact. These actions resulted in higher than expected customer deliveries both at Aviation and Transportation, lower inventory intake as production rates were realigned with market conditions and reduced discretionary spending across the business. The impact on free cash flows of the COVID-19 pandemic during the quarter is estimated at $700 to $900 million. 

While we are seeing some early encouraging trends in our end markets, including new interest in private air travel and the enhanced safety it provides, the continuing uncertainty surrounding the duration of the pandemic and the shape of the recovery continues to preclude us from providing financial guidance at this time.(4) However, based on our backlogs and the near-term production and delivery outlook, we currently expect business activity to gradually recover in the second half of the year with improving cash usage in the third quarter and with the seasonal release of working capital in the fourth quarter.(1) 

SEGMENTED RESULTS AND HIGHLIGHTS

Aviation

Results (PDF)