Bombardier releases 2017 guidance, confirms turnaround plan is on track

Bombardier released its 2017 guidance and confirmed that its turnaround plan is on track. The announcement came ahead of Bombardier’s Investor Day event, where the Company will provide an update on its business outlook, highlight its 2016 accomplishments and reaffirm both its 2018 free cash flow breakeven goal and its 2020 revenue target of US$25bn. Bombardier is targeting consolidated EBIT before special items in the range of US$530m – US$630m for 2017, which represents a year-over-year improvement of approximately 50% at the mid-point of the range. This targeted profit growth will primarily be driven by transformation initiatives already in place, including the previously announced restructuring actions. In 2017, the company expects to spend US$250m – US$300m on restructuring to further improve efficiency, reduce costs and optimize its operations. This charge will be categorized as a special item. Bombardier also anticipates a significant improvement in its free cash flow usage for 2017, which is targeted to be in the range of US$750m to US$1.0bn, representing a year-over-year improvement of more than US$400m at the mid-point of the range. Consolidated revenue is expected to grow by low single digits, driven by growth in the rail business and the ramp up of the C Series aircraft program.