Bombardier Sets Three and Five Year Revenue and Earnings
Targets
SEPTEMBER 30, 1999
MONTREAL, QUEBEC--In the context of a meeting today with analysts
and investors, Bombardier provided its three and five-year targets
for revenue and earnings growth as well as an update on each of
its main business segments. The Corporation also announced its
intention to study the market for the CRJ 900, a 90-seat stretched
version of its successful family of 50 - and 70-seat Canadair
Regional Jet*. Bombardier will also continue to assess the
opportunity of launching an all-new commercial aircraft in the
100-seat category.
President and Chief Executive Officer Robert E. Brown stated that
"as a result of a target annual revenue growth of an average of 20
% over the next three years, and earnings before tax margin of 10
% by fiscal 2001-2002, I am confident in setting a target of 30 to
35 % earnings growth for the current fiscal year and of 30 to 40 %
for each of the years ending January 31, 2001 and 2002."
"The last 12 months have been good to Bombardier, noted Mr. Brown.
We had a record year in fiscal 1998-99 in revenues, earnings and
backlog. For the first six months of fiscal 1999-2000, we are
doing even better with revenues up 25 % and earnings per share up
33 %. Backlog was up 40 % to $26 billion as compared to a backlog
of $18.6 billion at July 31, 1998."
Mr. Brown added that "based on our target of doubling our revenues
over the five-year period and achieving our new target of earnings
before tax margin of 11 % in fiscal 2003-2004, we are aiming for a
compounded annual EBT growth rate of 25 % for the period, assuming
that the present economic conditions continue to prevail."
In his comments, Executive Vice President Yvan Allaire underlined
Bombardier's cash generation potential and conservative balance
sheet which support its targeted earnings growth.
Group Presidents and Chief Operating Officers provided additional
details on Bombardier's main business segments.
In aerospace, Mike Graff outlined the basis for Bombardier's
approach to the 90 - plus seat commercial aircraft market with two
new product offerings. "First, a stretched version of the CRJ
aircraft, the CRJ 900 which would allow customers family
commonality across 50, 70, and 90-seat aircraft with superb
economics, and if we proceed, first deliveries could start in
2002. Second, an all-new commercial jet in the 100-seat category
could fill a niche which is not being optimally served by existingaircraft."
Commenting on the performance of his group for the year, Mr. Graff
stated that aircraft deliveries are forecasted to reach close to
300 units, up by more than 30 % from 227 units last year. With
the recently announced production rate increase of the CRJ 200
aircraft and deliveries of the new 70-seat Q400 Dash 8* and CRJ
700, increased deliveries of some 20 % is targeted for fiscal 2000-2001.
In recreational products, Pierre Beaudoin confirmed that the
successful implementation of the restructuring plan has allowed
for a return to modest profitability this year even with continued
investments in new products. The group launched new personal
watercraft models that reduce noise and emissions and improve
fuel-efficiency, and introduced a new line of Sea-Doo* sport boats
in alliance with Mercury Marine. The Traxter* ATV launched last
year and a second model launched this year have been very well
received in the marketplace.
Jean-Yves Leblanc noted that Bombardier Transportation has moved
this year to the number one position worldwide in passenger
railcars based on new order intake and reaffirmed his commitment
to continue to grow as a global leader in railcar manufacturing,
maintenance and turn-key mass transit systems. He provided
details on a plan to adjust Bombardier Transportation's German
operations and workforce to market demand. The plan now in
discussion with the Workers Councils calls for a reduction in
total employment of approximately 25 % throughout the production
network during year 2000. The one time costs of this adjustment
is estimated at between $30 million and $40 million. On its
ongoing operations, it is expected that the transportation segment
will continue to improve its EBT margin on revenues this year
compared to last year.
For Bombardier Capital, Pierre-Andre Roy set out targets of more
than doubling revenues over the next five years and reaching an
EBT margin of 15 % by fiscal 2001-2002.
Pierre Lortie noted the progress achieved by Bombardier
International in building relationships, securing low-cost
sourcing and supporting successful sales campaigns in China,
Japan, and other targeted markets.
Bombardier Inc. is a Canadian corporation active in the fields of
aerospace, rail transportation equipment, recreational products
and financial services. It operates plants in 12 countries in
North America, Europe and Asia, and more than 90% of its revenues
are generated outside Canada. Bombardier's revenues for its
fiscal year ended January 31, 1999 totalled $11.5 billion.
This press release includes "forward looking statements" that are
subject to risks and uncertainties. For information identifiying
economic, climatic, currency, technological, competitive and other
important factors that could cause actual results to differ
materially from those anticipated in the forward looking
statements, see Bombardier Annual Report under the heading Risks
and Uncertainties in the Management's Discussion and Analysis section. |
