Bombardier forecasts revenue growth and breakeven free cash flow for 2018
Bombardier released its 2018 financial guidance, targeting approximately $1 billion in revenue growth and aiming for breakeven free cash flow. The company also confirmed continued earnings improvement as part of its turnaround plan.
Bombardier Inc. has announced its financial guidance for 2018, projecting a revenue increase of approximately $1 billion over its 2017 forecast. The company expects consolidated revenues to reach between $17.0 billion and $17.5 billion. This anticipated growth is attributed to the ramp-up of key projects within Bombardier Transportation and an increase in C Series aircraft deliveries.
The manufacturer also anticipates its earnings before special items (EBIT) to grow to between $800 million and $900 million in 2018, representing an improvement over 2017. A significant financial target for 2018 is achieving breakeven free cash flow, with a tolerance of plus or minus $150 million. This goal represents an improvement of roughly $1.0 billion from the previous year and is expected to be driven by better working capital management and reduced development costs as the company concludes its heavy investment cycle.
President and CEO Alain Bellemare stated that Bombardier is on track with its five-year turnaround plan, which is now nearing its halfway point. He affirmed the company's commitment to achieving its 2017 guidance and its 2020 objectives. Over the next three years, Bombardier aims to increase revenues by $4.0 billion and more than double its EBITDA and EBIT before special items. The target for free cash flow by 2020 is set between $750 million and $1.0 billion.
Bombardier also noted that its 2020 objectives will reflect the deconsolidation of the C Series program, following its partnership agreement with Airbus. The 2018 guidance, however, includes the full-year consolidation of the C Series. The company's financial forecasts, both for 2018 and 2020, are based on the adoption of IFRS 15 accounting standards.