Bombardier Sets New Revenue and Earnings Targets
MONTREAL, QUEBEC--OCTOBER 24, 2000 - 18:08 EDT
In the context of its annual meeting with
financial analysts and institutional investors which will be held
Wednesday, October 25, Bombardier today provided its three and
five-year targets for revenue and earnings growth as well as an
update on each of its main business segments.
President and Chief Executive Officer Robert E. Brown stated that
"we are maintaining the earnings growth target of 30 to 40% set at
this time last year for the current fiscal year ending January 31,
2001 and for fiscal 2002. For fiscal 2003, we are setting an
earnings growth target of 20 to 30%."
Mr. Brown added that "we are extending our target of doubling our
revenues over the next five years and we are also setting the
target of tripling our profits during that period. This should
translate into a compounded annual EPS growth rate of 25% for the
period, assuming that the present economic conditions continue to
prevail. These targets do not take into account the acquisition
of Adtranz which is still subject to approval by regulatory
authorities."
During the last fiscal year ended January 31, 2000, Bombardier
reached a 32% growth in earnings per share and also had a record
year in terms of revenues and backlog. Mr. Brown also stated that
"for fiscal 2001, we are on our way to achieving another record
breaking year in terms of revenues, earnings and backlog, and we
are comfortable with the First Call analysts' consensus estimate
of $0.69 per share for the current year. For the first six months
of fiscal 2001, revenues were up 11% and earnings per share up
32%. At July 31, 2000, backlog was up 19% to $30.9 billion as
compared to a backlog of $26 billion at July 31, 1999."
Bombardier also provided additional details on each of its main
business segments.
In aerospace, for the first six months of the fiscal year,
all-time record orders were set for regional aircraft with new
order intake increasing by 33% compared to the previous year.
Deliveries of regional aircraft, business aircraft and amphibious
aircraft combined increased by 18%. For the year, aircraft
deliveries are expected to reach around 350 units compared to 292
units last year. Overall increase in deliveries of some 20% is
targeted for fiscal 2002.
Due to the continued success of the CRJ100/200 program and a
strong backlog of 315 firm orders, earlier this year Bombardier
announced a production rate increase from 9.5 to 12.5 units per
month by fiscal year 2003, which should translate into deliveries
of 102 units this year, 135 units next year and 150 units
thereafter. The CRJ family was extended last July at the
Farnborough Air Show, with the launch of the CRJ900, which
complements the 50- and 70-seat models. Bombardier continues to
expect strong demand over the coming years for the CRJ series.
In recreational products, profitability has continued to improve
and inventories remained at acceptable levels. Since the launch
of the group's first ATV, the Bombardier Traxter, two years ago,
three new models have been introduced and the focus is on further
expansion of the product line to increase market share.
Production of ATVs has increased from 6,000 units last year to
18,000 this year and the target for next year is to increase the
level to over 30,000 units.
The group continues to focus on new product development and
innovation and in order to identify new product opportunities, a
Design and Innovation unit has been created. R&D expenditures are
mainly focused on further developing high performance 4-stroke
clean engine technologies for the group's product line.
A major achievement for the transportation segment was the
successful conclusion of a sale and purchase agreement for the
acquisition of DaimlerChrysler's subsidiary Adtranz.
If approved by regulatory authorities, the acquisition of Adtranz
would enhance Bombardier Transportation's ability to compete
vigorously in all markets by giving it access to state-of-the-art
technologies such as propulsion systems and other complementary
technologies. It would make Bombardier Transportation almost
equal to Bombardier Aerospace in terms of revenues, thus improving
the balance of the Corporation's activities.
During the year, Bombardier Transportation has made progress on
major contracts such as the New York subway and Virgin's
Cross-Country railcars. After some delay, the first Acela
trainset was delivered last week with entry into revenue service
announced by Amtrak for December 11, 2000. The group's results
for the second half of the year will be negatively impacted by
these additional delays as well as by slower new order intake than
expected in Germany. As a result, the EBT margin for this segment
should be at approximately 4% for the current year. However, this
result has already been factored in the Corporation's overall
performance targets.
Bombardier Capital is proceeding with the orderly liquidation of
discontinued operations and growing the business where it has
clear expertise and know-how. With its new focus, Bombardier
Capital continues to increase its profitability.
During the year, Bombardier International has made a significant
contribution to breakthroughs achieved by the operating groups in
non-traditional markets such as China.
Bombardier Inc., a diversified manufacturing and service company,
is a world leading manufacturer of business jets, regional
aircraft, rail transportation equipment and motorized recreational
products. It is also a provider of financial services and asset
management. The Corporation employs 56,000 people 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 Jan. 31, 2000 totaled $13.6 billion.
FORWARD LOOKING STATEMENTS
This press release includes "forward looking statements" that are
subject to risks and uncertainties. For information identifying
legislative or regulatory, 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's Annual Report
under the heading Risks and Uncertainties in the Management's
Discussion and Analysis section. |
