HALIFAX, March 1, 2019 /CNW/ – Chorus Aviation Inc. (‘Chorus’) (TSX: CHR) is proud to announce that its subsidiary, Jazz Aviation LP (‘Jazz’), was named one of Canada’s Best Diversity Employers for the eighth consecutive year by Mediacorp Canada Inc.
“We are proud to continue to be recognized as one of Canada’s Best Diversity Employers,” said Colin Copp, President, Jazz. “We aim to embed diversity and inclusion into everything we do. This achievement is a testament to the efforts of the Jazz employees dedicated to creating workspaces that empower champions of inclusion and allow each other to work as their authentic selves. We will continue to prioritize creating workspaces which are welcoming to all diverse top talent.”
Canada’s Best Diversity Employers is an annual competition that recognizes employers across Canada that have exceptional workplace diversity and inclusiveness programs. These include successful diversity initiatives in a variety of areas, including programs for employees from five groups: women; members of visible minorities; persons with disabilities; aboriginal peoples; and lesbian, gay, bisexual and transgendered/transsexual (LGBT) people.
26 February 2019 – Flight Global – By Ellis Taylor, Perth
Air Vanuatu has ordered two Airbus A220-100s and two A220-300s, making it the launch customer for the A220 in the South Pacific.
The order, announced at the start of the Avalon air show in Australia, is the first Airbus purchase by Air Vanuatu, and will form a major part of its future growth plans.
The first delivery from the order is due in June 2020.
Airbus
“We are proud to be the launch airline in the South Pacific of the best-in-class Airbus A220,” says chief executive Derek Nice.
“These aircraft will be deployed to operate on our current domestic and international routes, including our newly announced non-stop Melbourne-Vanuatu service, and will bolster plans to expand our network in the South Pacific.”
Pratt & Whitney PW1500G engines power all A220s, and at list prices the four aircraft are valued at $345 million.
Cirium’s Fleets Analyzer shows that the carrier operates one Boeing 737-800, an ATR 72, three Viking Air DHC-6-300 Twin Otters and two Britten-Norman Islanders.
26 February 2019 – Flight Global – by Ellis Taylor, Perth
Bombardier will quadruple the size of its Singapore Service Centre to handle growing aftermarket demand from business jet operators in Asia.
The expanded facility at Seletar Aerospace Park will open in 2020, and will be able to handle over 2,000 visits annually. It will also introduce new customer facilities, a 3,500m2 aircraft painting facility, expanded component repair and overhaul services, heavy structural and composite repair, and a 929m2 integrated parts depot.
“Customers will enjoy access to the complete range of OEM customer service and support right on their doorstep, 24/7, 365 days a year,” says Jean-Christophe Gallagher, Bombardier’s vice-president and general manager customer experience.
“This expansion is another key building block in our drive to enhance the accessibility of our OEM expertise for customers worldwide and to solidify our position as a leader in aftermarket services in the Asia-Pacific region, a pivotal growing part of our global network.”
Since it opened in 2014, the existing service centre has grown to employ over 150 staff and has a range of authorisations to service Bombardier’s Global, Challenger, and Learjet aircraft.
Net income of $2.0 million, or $0.01 per basic share, inclusive of an unrealized foreign exchange loss of $32.9 million.
Adjusted net income1 of $35.1 million, or $0.25 per basic share, in increase of $11.5 million.
Adjusted EBITDA1 of $92.6 million, an increase of $9.7 million or 11.7% primarily due to increased earnings from the regional aircraft leasing segment.
Signed agreements to place seven aircraft with three lessees.
Completed the eighth Extended Service Program (‘ESP’) on a Dash 8-300 aircraft.
Selected annual 2018 information:
Net income of $67.0 million, or $0.49 per basic share, inclusive of an unrealized foreign exchange loss of $49.5 million.
Adjusted net income1 of $121.8 million, or $0.89 per basic share, an increase of $6.4 million.
Adjusted EBITDA1 of $342.7 million, an increase of $55.8 million or 19.4% primarily due to increased earnings from the regional aircraft leasing segment.
Diversified and grew leased fleet to 40 regional aircraft valued at approximately $1.1 billion1, inclusive of nine transactions pending completion. All pending transactions are subject to customary conditions precedent to closing.
2019 Year-to-Date Accomplishments:
Amended and extended the capacity purchase agreement (‘CPA’) with Air Canada, securing Jazz’s position in Air Canada’s regional network for the next 17 years.
Completed a $97.26 million equity investment by Air Canada to fund new, larger gauge aircraft at Jazz and further growth in regional aircraft leasing.
Entered into a firm purchase agreement with Bombardier for nine CRJ900s as part of Jazz’s fleet modernization plan.
Achieved an unprecedented 17-year collective agreement with Jazz pilots and enhanced the pilot mobility program to access pilot careers at Air Canada.
Secured US $300 million credit facility to support growth of regional aircraft leasing business.
Reached an agreement to acquire a portfolio of six aircraft with leases attached: two ATR72-600s on lease to Azul of Brazil, and four Q400s on lease with two other existing customers.
Jazz named one of Canada’s Top Employers for Young People for the seventh year and one of Atlantic Canada’s Top Employers for the eighth consecutive year.
1 Includes aircraft for which an agreement to lease has been signed but the aircraft have yet to be delivered.
HALIFAX, Feb. 22, 2019 /CNW/ – Chorus Aviation Inc. (‘Chorus’) (TSX: CHR) today announced fourth quarter and year-end financial results for fiscal year ended December 31, 2018.
“I’m very pleased with our start to 2019 as we build upon the positive momentum of 2018. Our growth and diversification strategy took further hold in 2018 generating $342.7 million in adjusted EBITDA and adjusted net earnings per basic share of $0.25, increases over 2017 of 11.7%. and 19.4% respectively.
Our group of companies performed well and reached important milestones that strengthened our company. These successes helped advance our vision to transform into a worldwide provider of regional aviation services. To date, we’ve grown our fleet to 40 aircraft, inclusive of nine transactions pending completion, valued at approximately $1.1 billion. The pipeline of opportunities for additional transactions is strong. With the establishment of our new US $300 million credit facility and the capital we have on hand, we’re maturing and building scale as a worldwide lessor.
Our strategic partnership with Air Canada and the value we’ve created through the amended and extended CPA will benefit our shareholders, employees and other stakeholders for the long term. We are well positioned to take advantage of new opportunities for growth and to effectively compete in an ever-changing industry. I extend my sincere thanks and gratitude to the Chorus team for these significant accomplishments,” said Joe Randell, President and Chief Executive Officer, Chorus.
In the fourth quarter of 2018, Chorus reported adjusted EBITDA of $92.6 million versus $82.9 million in 2017, an increase of $9.7 million or 11.7% due primarily to:
a $10.4 million increase due to growth in the regional aircraft leasing segment; offset by:
a net decrease in the regional aviation services segment of $0.7 million resulting from declines in incentive and other revenue and an increase in certain operating costs; offset by increased aircraft leasing under the CPA of $2.4 million.
Adjusted net income was $35.1 million for the period, an increase from 2017 of $11.5 million, or 48.6% due to:
the $9.7 million increase in adjusted EBITDA previously described;
lower foreign exchange losses on working capital which amounted to $4.7 million; and
a decrease of $0.4 million in depreciation; offset by:
an increase in interest costs of $1.2 million related to additional aircraft debt; and
an increase in income tax expense of $2.1 million.
Net income was $2.0 million for the period, a decrease of $18.0 million or 89.9% from the same period of 2017. The decrease was primarily due to a quarter-over-quarter change in unrealized foreign exchange losses on long-term debt of $30.5 million; offset by the previously noted $11.5 million increase in the adjusted net income and decreased employee separation program costs of $1.0 million.
YEAR-END 2018 SUMMARY
Financial Performance – Year end 2018 compared to year end 2017
For the year ended December 31, 2018, Chorus reported adjusted EBITDA of $342.7 million versus $286.9 million in 2017, an increase of $55.8 million or 19.4% due to:
a $47.3 million increase in the regional aircraft leasing segment; and
increased earnings in the regional aviation services segment of $8.5 million due primarily to increased aircraft leasing income under the CPA.
Adjusted net income was $121.8 million for the year, an increase from 2017 of $6.4 million, or 5.5% due to:
the $55.8 million increase in adjusted EBITDA previously described;
lower foreign exchange losses on working capital which amounted to $1.6 million; offset by:
increased income taxes of $20.5 million. In 2017 adjusted net income was impacted by changes in tax rates which were recorded in the third quarter of 2017. This change had the impact of lowering income taxes, and therefore increased adjusted net income for the twelve months ended December 31, 2017;
an additional $17.4 million in depreciation primarily related to new aircraft;
an increase in interest costs of $12.8 million related to additional aircraft debt and convertible units; and
an increase in other expenses of $0.3 million.
Net income was $67.0 million for the year, a decrease of $100.3 million from the same period of 2017. The decrease was primarily due to a year-over-year change in unrealized foreign exchange losses on long-term debt of $110.4 million and foreign exchange gain on cash held for deposit of $1.6 million; offset by decreased employee separation program costs of $5.3 million and the previously noted $6.4 million increase in the adjusted net income.
2019 OUTLOOK
On February 4, 2019, the amendments to the CPA first announced on January 14, 2019 (the ‘2019 CPA Amendments’) became effective on a retroactive basis to January 1, 2019.
The 2019 CPA Amendments result in a near-term reduction in fixed fees starting in 2019, as Chorus accelerates its transition to market-based rates. The reduction was implemented by eliminating the Infrastructure Fee per Covered Aircraft and the Fixed Margin per Covered Aircraft (each as defined in the CPA) and replacing them with a single ‘Fixed Margin’. As a result, Fixed Fee revenue in each of 2019 and 2020 is anticipated to be $75.5 million per year as compared to $111.3 million in 2018. In addition, the maximum future available performance incentives reduce from $23.4 million in 2019 and 2020, to an annual average maximum available amount of $3.4 million for the full term of the CPA. The near-term reductions are more than offset over the term of the CPA by incremental contracted revenue secured with the extension of the agreement including fixed fees and aircraft leasing.
In 2017, Chorus launched Chorus Aviation Capital, with the support of a $200.0 million investment in the Corporation from Fairfax. In 2018, Chorus raised further gross proceeds of $112.0 million, primarily for investment in its leasing business, through a public offering of Shares*. On February 4, 2019, the Air Canada investment was completed, providing further gross proceeds of $97.26 million, approximately 40% of which is to be invested in the leasing business carried on by Chorus Aviation Capital.
Since the start of 2017 Chorus has raised net proceeds of CAD $401.0 million in capital from both the issuance of convertible debt units and share capital, which if levered at 3:1, provides approximately $1.6 billion of investment capital. As at February 21, 2019, approximately three quarters of this capital has been committed including deposits on future commitments. Chorus anticipates committing the remaining balance by early 2020 in new to mid-life aircraft with long-term leases to a diverse group of high-quality customers around the world.
Capital expenditures for 2019, excluding those for the acquisition of aircraft and the ESP, and including capitalized major maintenance overhauls, are expected to be between $36.0 million and $42.0 million. Aircraft related acquisitions and the extended service program capital expenditures in 2019 are expected to be between $299.0 million and $302.0 million.
‘Shares’ refers to Chorus’ Class A Variable Voting Shares and Class B Voting Shares
Investor Conference Call / Audio Webcast
Chorus will hold an analyst call at 09:30 a.m. ET on Friday, February 22, 2019 to discuss the fourth quarter and year-end financial results. The call may be accessed by dialing 1-888-231-8191. The call will be simultaneously audio webcast via: https://event.on24.com/wcc/r/1923003/1C1675BF55CDC811D8CD46BF1E407F1B
This is a listen-in only audio webcast. Media Player or Real Player is required to listen to the broadcast; please download well in advance of the call.
The conference call webcast will be archived on Chorus’ website at www.chorusaviation.ca under Reports > Executive Management Presentations. A playback of the call can also be accessed until midnight ET, February 28, 2019 by dialing toll-free 1-855-859-2056, and passcode 1093749#.
1NON-GAAP FINANCIAL MEASURES
This news release references several non-GAAP financial measures to supplement the analysis of Chorus’ results. These measures are provided to enhance the reader’s understanding of our current financial performance. They are included to provide investors and management with an alternative method for assessing our operating results in a manner that is focused on the performance of our ongoing operations and to provide a consistent basis for comparison between periods. These non-GAAP measures are not recognized measures under GAAP, and therefore they are unlikely to be comparable to similar measures presented by other companies. A reconciliation of these non-GAAP measures to their nearest GAAP measure is provided in the Management’s Discussion and Analysis (‘MD&A’) dated February 21, 2019.
Adjusted net income and Adjusted net income per Share are used by Chorus to assess performance without the effects of unrealized foreign exchange gains or losses on long-term debt and finance leases related to aircraft, foreign exchange gains or losses on cash held on deposit for investment in the regional aircraft leasing business, signing bonuses, employee separation program costs and strategic advisory fees. Chorus manages its exposure to currency risk on such long-term debt by billing the lease payments within the CPA in the underlying currency (US dollars) related to the aircraft debt. These items are excluded because they affect the comparability of our financial results, period-over-period, and could potentially distort the analysis of trends in business performance. Excluding these items does not imply they are non-recurring due to ongoing currency fluctuations between the Canadian and US dollar.
EBT is defined as earnings before income tax. Adjusted EBT (EBT before signing bonuses, employee separation program costs, strategic advisory fees and other items such as foreign exchange gains and losses) is non-GAAP financial measure used by Chorus as a supplemental financial measure of operational performance. Management believes Adjusted EBT assists investors in comparing Chorus’ performance by excluding items, which it does not believe will occur over the longer-term (such as signing bonuses, employee separation program costs and strategic advisory fees) as well, which items that are non-cash in nature such as foreign exchange gains and losses.
EBITDA is defined as earnings before net interest expense, income taxes, and depreciation and amortization and is a non-GAAP financial measure that is used frequently by companies in the aviation industry as a measure of performance. Adjusted EBITDA (EBITDA before signing bonuses, employee separation program costs, strategic advisory fees and other items such as foreign exchange gains or losses) is a non-GAAP financial measure used by Chorus as a supplemental financial measure of operational performance. Management believes Adjusted EBITDA assists investors in comparing Chorus’ performance by excluding items, which it does not believe will occur over the longer-term (such as signing bonuses, employee separation program costs and strategic advisory fees) as well, which items that are non-cash in nature such as foreign exchange gains and losses.
Adjusted EBITDA should not be used as an exclusive measure of cash flow because it does not account for the impact of working capital growth, capital expenditures, debt repayments and other sources and uses of cash, which are disclosed in the statements of cash flows, forming part of Chorus’ financial statements.
Consolidated Financial Analysis
Three months ended December 31,
Year ended December 31,
(In thousands of Canadian dollars)
2018
2017
Change
Change
2018
2017
Change
Change
$
$
$
%
$
$
$
%
Operating Revenue
358,663
356,033
2,630
0.7
1,451,194
1,352,200
98,994
7.3
Operating Expenses
297,402
305,872
(8,470)
(2.8)
1,234,553
1,179,154
55,399
4.7
Operating Income
61,261
50,161
11,100
22.1
216,641
173,046
43,595
25.2
Net interest expense
(14,447)
(13,341)
(1,106)
(8.3)
(56,285)
(43,511)
(12,774)
(29.4)
Other(1)
(33,784)
(7,899)
(25,885)
(327.7)
(56,194)
54,448
(110,642)
(203.2)
Earnings before Income tax
13,030
28,921
(15,891)
(54.9)
104,162
183,983
(79,821)
(43.4)
Income tax expense
(11,011)
(8,918)
(2,093)
(23.5)
(37,174)
(16,660)
(20,514)
(123.1)
Net Income
2,019
20,003
(17,984)
(89.9)
66,988
167,323
(100,335)
(60.0)
Adjusted EBITDA(2)
92,608
82,915
9,693
11.7
342,692
286,912
55,780
19.4
Adjusted EBT(2)
46,116
32,536
13,580
41.7
159,008
132,091
26,917
20.4
Adjusted Net Income(2)
35,105
23,618
11,487
48.6
121,834
115,431
6,403
5.5
(1) Other includes foreign exchange loss/gain and gain on disposal of property and equipment. (2) This is a non-GAAP financial measures – refer to Section 18 of the MD&A for disclosures on Non-GAAP financial measures.
HALIFAX, Feb. 21, 2019 /CNW/ – Chorus Aviation Inc. (‘Chorus’) (TSX: CHR) announced today an agreement by Chorus Aviation Capital to acquire a portfolio of six aircraft with leases attached. The portfolio consists of two ATR72-600s on lease to Azul of Brazil, and four Q400s on lease to two other existing customers of Chorus Aviation Capital. With these acquisitions, Chorus’ suite of leased regional aircraft (inclusive of nine transactions pending completion) has reached 40 aircraft, comprising 28 turboprops and 12 regional jets valued at approximately US $850 million.
“We are delighted to secure this portfolio acquisition, which will add six more attractive turboprop aircraft to our global fleet and further our relationships with our customers,” commented Steven Ridolfi, President, Chorus Aviation Capital. “With the establishment of our new US $300 million credit facility and the capital we have on hand, I’m confident the momentum achieved in our growth strategy will continue to build.”
The acquisitions of the aircraft on lease to Azul have been completed. The acquisitions of the aircraft on lease to the two other lessees remain to be completed subject to satisfaction of customary conditions precedent to closing.
February 19, 2019 Montréal Business Aircraft, Press Release
Dedicated Challenger 300 aircraft boosts mobile response capability in Europe and supplements shipping from Frankfurt parts distribution hub
Additional mobile response aircraft continues worldwide Customer Experience growth to further enhance product support and services
Challenger 300 mobile response aircraft will provide thorough coverage and skilled OEM support throughout Europe and the Middle East
Newly entered-into-service Global 7500 business jet operators to benefit from increased mobile response capability
Bombardier today announced the latest addition to its expanding service and support network – a dedicated Mobile Response Team (MRT) aircraft, based in Frankfurt, Germany. The Challenger 300 aircraft marked its entry-into-service by successfully completing its first mission, providing a European customer with efficient unscheduled maintenance support.
The strategically located Challenger 300 aircraft will deftly supplement the shipping of parts from Bombardier’s main European parts distribution hub at Frankfurt International Airport. Its 3,065-NM (5,646-km) range and impressive Mach 0.83 top speed capability will enhance the MRT’s reach and response times to a fleet size of more than 700 aircraft in Europe and the Middle East.
“With this investment, we are adding expertise and increasing accessibility to OEM support for our European operators and paving the way for the industry’s largest and longest-range business jet – our flagship Global 7500 aircraft – which is now in service,” said Jean-Christophe Gallagher, Vice-President and General Manager, Customer Experience, Bombardier Business Aircraft. “The addition of a dedicated Challenger 300 aircraft will augment the worldwide efforts of our MRT, already ranked as one of the most comprehensive onsite, mobile and aircraft-on-ground resolution services in the industry.”
Bombardier Customer Support in Europe: There are a total of seven Bombardier line maintenance stations in Europe located in Luton, UK, Linz, Austria, Paris, Nice and Cannes in France, and Milan and Olbia in Italy. They complement the tip-to-tail heavy maintenance services provided by Bombardier’s newest wholly-owned service centre at London Biggin Hill Airport in the UK and jointly owned Lufthansa Bombardier Aviation Services in Berlin. Bombardier operators also have access to 12 Authorized Service Facilities in the region.
Bombardier Worldwide Mobile Response Services: In recent months, Bombardier has expanded its customer response capability significantly. Five new Mobile Response Team trucks have been deployed, bringing the current worldwide total to 30. The Challenger 300 aircraft in Frankfurt joins a dedicated Learjet45 aircraft in Chicago, along with two maintenance control centres (MCCs) in Linz, Austria and Wichita, Kansas. The new MCCs work in conjunction with Bombardier’s Customer Response Centre, which operates 24/7 to streamline customer requests and optimize maintenance support.
airBaltic will end its Boeing 737 fleet operations in the autumn, one year ahead of plan.
The airline aims to minimise complexity and benefit from the additional efficiency of the Airbus A220-300 aircraft which will become the only jet type operated by the Latvian airline.
Martin Gauss, chief executive of airBaltic, said: “Airbus A220-300 is the aircraft of our future and, by phasing out the Boeing 737, we will have the youngest jet fleet in Europe.
“The introduction of Airbus A220-300 has been very successful and provided the additional efficiency any airline is seeking in the highly competitive aviation market.
“Thanks to the good overall performance we took a decision to introduce a single type fleet of up to 80 (50 firm order and 30 options) Airbus A220-300 aircraft by 2022.”
So far airBaltic has received 14 of its Airbus A220-300 orders and eight new aircraft will join this year.
In late 2018, airBaltic phased out three of its Boeing 737-500 aircraft.
Currently the airline still operates six Boeing 737-300 and two Boeing 737-500 jets.
airBaltic serves over 70 destinations from Riga, Tallinn and Vilnius, offering the largest variety of destinations and convenient connections via Riga to its network spanning Europe, Scandinavia, the CIS and the Middle East.
HALIFAX, Feb. 19, 2019 /CNW/ – Chorus Aviation Inc. (‘Chorus’) (TSX: CHR) today announced that it will seek shareholder approval at its 2019 annual and special meeting of shareholders to amend its articles of incorporation to increase the limits on foreign ownership and control of its voting shares to those permitted by amendments made to the Canada Transportation Act (the ‘CTA’) in 2018. The amendments to its articles, together with certain related amendments to its by-laws, will be undertaken by way of a court supervised and shareholder approved statutory plan of arrangement.
Prior to the CTA amendments, no more than 25% of the voting interests of a Canadian air carrier could be owned or controlled by non-Canadians. The Government of Canada’s stated purpose in implementing the CTA amendments is to attract more foreign investment and encourage growth in the aviation sector by increasing, from 25% to 49%, the permitted level of foreign ownership of Canadian air carriers. At the same time, the CTA amendments introduced two new limitations on voting ownership and control, by capping the voting rights of single non-Canadians and of the aggregate of non-Canadian air carriers at 25%.
Completion of the plan of arrangement is subject to shareholder approval and approval of the Ontario Superior Court of Justice (Commercial List). Full details regarding the plan of arrangement will be included in the management proxy circular, which will be made available to Chorus shareholders in connection with the shareholder meeting.
Capacity increasing for Vancouver Island, Northern BC, BC Interior, Saskatoon, Winnipeg
MONTREAL, Feb. 14, 2019 /CNW Telbec/ – Air Canada today announced it will boost capacity on regional routes across Western Canada this spring as it deploys more state-of-the-art Bombardier Q-400 Next Gen aircraft. The changes are part of an ongoing transformation of Air Canada Express that will result in enhanced services for customers.
“Air Canada is strategically enhancing the flying experience and increasing capacity this summer on key regional routes in Western Canada. The ultra-quiet, comfortable, fuel efficient and faster Q-400 aircraft will be well-received by our customers and is larger than the regional aircraft it is replacing. We are pleased to deploy it to more communities in Western Canada as we further strengthen our regional network to optimize all significant connections between our extensive regional and global markets,” said Mark Galardo, Vice President, Network Planning at Air Canada. “With our varied and flexible fleet, we are also adding frequencies to our Vancouver-Anchorage and adding capacity to our Calgary-Winnipeg route with larger Airbus aircraft in response to demand.”
Air Canada Express flights operated by Jazz Aviation LP are scheduled to provide convenient, point-to-point travel, as well as easy connections to Air Canada’s extensive domestic, US and international network at Vancouver and Calgary. Customers also collect and redeem Aeroplan Miles through Canada’s leading loyalty program when travelling with Air Canada, and eligible customers have access to priority check-in, Maple Leaf Lounges at main airports, priority boarding and other benefits.
Increased services this summer peak compared to last year include:
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 $1.0 billion
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
MONTRÉAL, Feb. 14, 2019 (GLOBE NEWSWIRE) — 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.
