Bombardier 4Q24 Results Strong, but that Tariff threat |

Bombardier reported its 4th quarter and full 2024 results today, with strong financial performance. Revenues grew to $8.7 billion in 2024, including record service performance over $2.04 billion. The company delivered 146 aircraft in 2024, up from 138 in 2023. The company also reported continued strong demand, with a 1.0 book-to-bill ratio for the year. Adjusted net income for 2024 reached $547 million, with full-year adjusted EPS of $5.16, up 31% year-over-year from $3.94 in 2023. Adjusted EBITDA was $1.36 billion in 2024, up 11% year-over-year. The company also generated $232 million in free cash flow during the year while continuing to de-leverage by about $400 million in debt. Net debt to adjusted EBITDA fell from 3.3 times in 2023 to 2.9X in 2024. CEO Éric Martel stated, “Our team passionately and proudly executed our plan in 2024 at a very high level, growing revenue to meet guidance, growing deliveries, growing our backlog, meaningfully expanding our margins, and reaching a net leverage ratio of 2.9x. Four years ago, we outlined a bold vision for how we wanted to structure Bombardier for success. Our company has accomplished more than we set out to, including reaching our 2-billion-dollar service revenue ambition a full year ahead of schedule by rapidly elevating our customer experience and offerings. Whether in our operations, in the field or on our balance sheet, we have time and again demonstrated that we are strong and resilient.” REVENUES AND BACKLOG Fourth quarter total revenues grew to $3.11 billion, up year-over-year from $3.06 billion in 2023. This represented 36% of annual revenues, which aligns with the typically strong fourth quarters in the business jet market. New aircraft revenues were stable at $2.57 billion during the quarter, while service revenues increased from $482 million to $524 million year-over-year. The strategy to significantly grow services revenue appears to be working. Bombardier’s backlog grew year-over-year to $14.4 billion at year-end. The unit book-to-bill ratio 1.1 reflects continued demand for the Global and Challenger business jet product lines. The 4th quarter was particularly active, with 57 aircraft delivered, including 29 Globals and 28 Challengers, compared with 32 and 24, respectively, in 2023. While the mix tilted in favor of the lower-priced aircraft during the 4th quarter, both product lines are experiencing strong demand, with between 18 and 24 months of backlog, depending on the model. [caption id="attachment_89625" align="aligncenter" width="640"] image: Bombardier[/caption] PROFITABILITY Fourth-quarter profitability was strong. Gross profit increased to $621 million from $582 year over year. The company reported stronger margins, with adjusted EBITDA growing 11% to $1.36 billion for the full year. Free cash flow was positive at $232 million, and a debt reduction of $100 million was achieved despite the significant expense of the new Global assembly facility near Toronto. Net additions to property, plant, and equipment were $405 million. OUTLOOK The company has declined to guide 2025, given the uncertainty regarding potential tariffs from the United States on imports originating from Canada. A proposal for a 25% tariff has been deferred by 30 days, but the eventual outcome is uncertain. The company stated that it has elected to defer providing guidance and 2025 objectives until it can further assess the direct and indirect impacts to its business of such tariffs, retaliatory tariffs, or other trade protectionist measures that may or may not be implemented. Bombardier’s long-term priorities and strategies remain intact, including plans for continuing growth in defense and services businesses, as well as continued de-leveraging. You can see our FAA business jet data model here. THE BOTTOM LINE Bombardier had strong financial performance in 2024 and appears well positioned for 2025, as previously guided before the threat of tariffs. While the impact of potential tariffs remains unknown, the company is closely monitoring the situation and is hopeful that harmful tariffs can be avoided. Without tariffs, Bombardier should have another strong year in 2025. However, should tariffs be implemented, the impacts of a 25% tariff, raising the price of a $70 million aircraft to $87.5 million, would place the company in a difficult situation with the US market. Major US customers, including NetJets, FlexJet, and VistaJet, represent about 20% of the backlog, but each has international operations that could order and register aircraft outside the US without tariffs. Tariffs would negatively impact the company.

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