Bombardier expects revenue surge in next five years
March 22, 2013, Montreal - Bombardier says it is positioned to nearly double its annual revenues over the next five years and generate enough cash to boost its dividend and restore its investment grade credit rating, the
transportation giant told an investors conference in New York on Thursday.
March 22, 2013 By The Canadian Press
The Montreal-based maker of planes and trains said it expects to add US$10 billion to US$16 million in new revenue, with up to US$12 billion coming from a recovery in demand for its existing planes and the contribution from new designs such as the CSeries.
An increase in sales volumes, better pricing and lower costs should also help to improve its operating margins in both the aerospace and railway divisions, it told analysts.
Chief executive Pierre Beaudoin said this year will be a turning point for the company as new products begin to be delivered and it starts to reduce the massive investment it has devoted to product development.
Bombardier is expecting revenues will increase by 30 per cent in 2015 mainly through the improved sales of existing products.
It will be followed in subsequent years with the ramp up of sales from new business and commercial aircraft along with growth opportunities around the world for railway products and services.
Beaudoin said Bombardier's priorities are to use its increased cash flow to restore its investment grade credit rating and to increase its annual dividend beyond 10 cents per share to keep it in line with its peers.
Aerospace president Guy Hachey hinted that Bombardier will increase the production rate of its regional jets to meet increasing demand and said it is looking at offering a cheaper Q400 to better compete against rival ATR.
He said this year will be a turning point for the CSeries as the aircraft is expected to have its first test flight by the end of June.
Every time customers see the real plane and observes the progress changes their perception, Hachey said.
Bombardier still expects to have 300 orders by the time it enters into service in June 2014 and has just a few production slots available in 2016.
Earlier, Transportation president Andre Navarri said he expects Chinese orders will soon resume with the appointment of new leaders and still sees strong demand in Northern Europe despite financial challenges.