Bombardier (($TSE:BBD.B)) has held its Q4 earnings call. Read on for the main highlights of the call.
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Bombardier’s recent earnings call painted a picture of both triumph and caution. The company showcased significant achievements in service revenue, financial metrics, and product performance, indicating a strong performance in 2024. However, looming uncertainties such as potential tariffs from the U.S. and ongoing supply chain issues pose notable challenges for the future.
Record Service Revenue Achievement
Bombardier achieved a remarkable milestone in 2024, reaching $2 billion in service revenue a full year ahead of schedule. This achievement marks a doubling of their high-margin service business in less than five years, highlighting Bombardier’s strategic growth and operational excellence.
Improved Financial Metrics
The company’s financial metrics showed robust improvement, with an adjusted EBITDA margin increasing to 15.7% in 2024. This marks an impressive 11% year-over-year increase in adjusted EBITDA and a 31% rise in adjusted net income, underscoring Bombardier’s strong financial health.
Leverage Ratio and Credit Rating Improvement
Bombardier successfully improved its net leverage to 2.9x, reaching its 2025 target a year early. This financial progress earned the company credit rating upgrades from both Moody’s and S&P Global Ratings, reflecting enhanced creditworthiness and financial stability.
Product Performance and Market Leadership
Bombardier’s product portfolio continued to demonstrate market leadership, with the Global 7500 setting multiple speed records and the Challenger 3500 becoming the fastest platform to reach 100 deliveries in its class. These accomplishments reinforce Bombardier’s position as an industry leader.
Robust Backlog and Order Activity
The company reported a robust backlog of $14.4 billion and a book-to-bill ratio of 1 in 2024, indicating strong demand for its products and services. This healthy order activity reflects Bombardier’s continued market appeal and future growth potential.
Tariff Uncertainty
The potential imposition of tariffs by the U.S. poses a significant risk to Bombardier, leading the company to withhold guidance for 2025. This uncertainty casts a shadow over the otherwise strong performance record of 2024.
Supply Chain Pressures
Bombardier faced ongoing supply chain challenges in 2024, which resulted in over 50 basis points of drag on EBITDA margins and missed deliveries. These pressures highlight the operational hurdles that the company must navigate in the current economic climate.
Forward-Looking Guidance
Despite the uncertainties, Bombardier remains optimistic about its future. The company refrained from providing 2025 guidance due to tariff concerns but highlighted its achievements in 2024. With a backlog increase and a focus on financial resilience, Bombardier is poised to manage potential disruptions with contingency plans, ensuring continued demand for its aircraft and favorable market conditions.
In conclusion, Bombardier’s earnings call revealed a company that is performing strongly yet remains cautious due to external uncertainties. With record service revenue, improved financial metrics, and product excellence, Bombardier is well-positioned for future success, provided it can adeptly navigate the challenges posed by potential tariffs and supply chain issues.
