Q3 2020 Bombardier Inc Earnings Call
All participants please standby your conference is scheduled to begin.
Good morning, ladies and gentlemen, and welcome to <unk> third quarter.
2020 earnings Conference call. Please be advised that this call is being recorded at this time I'd like to turn the discussion over to Mr., but he goes vice president corporate strategy and Investor Relations.
Please go ahead Mr. goes.
Good morning, everyone and welcome to both parties earnings call for the third quarter ended September Thirtyth 2020.
I wish to remind you that during the course of this call we may make projections or other forward looking statements regarding future events or the financial performance of the Corporation.
There are risks that actual events or results may differ materially from these statements.
For additional information on forward looking statements and underlying assumptions.
He's referred to the MDT.
Making this cautionary statement on behalf of each speaker on this call.
With me today is our president and Chief Executive Officer.
And our Chief Financial Officer, John The Bird to review, our operations and financial results for the third quarter.
<unk>.
I'd now like to turn over the discussion there.
Thank you Patrick and good morning, everyone and thank you for joining US this morning as.
As you know.
The cold it's endemic countries that have a broad and deep impact on the global economy and in our industries. Despite these challenges I am encouraged by our progress and by the market stabilization, we've seen in the third quarter.
Well there is still a great deal of uncertainty.
To the pad and timing for a full recovery.
I am proud of our team's absorbed the initial impact of the pen damage and how we can quickly adapted to the new reality.
This includes taking all the actions necessary to protect the health and safety of our employees and communities.
And working together with our customer and suppliers do not only navigate through the crisis, but also to prepare for the recovery and to build momentum as we complete those strategic repositioning to a pure play business have you shouldn't company.
On that one that is capable of delivering solid financial performance in any market conditions.
Of course.
None of this would be possible without the hard work and dedication of our incredible people.
So this morning I want to thank our employees for their ongoing support.
And dedication to the company to each other and to our customer during this extremely challenging period.
Throughout the pandemic our people a reason to challenges.
And that continued in the third quarter as we made solid progress on each of our priorities.
This includes securing additional liquidity with the new billion dollars senior secured credit facility.
Keeping our strategic transaction moving forward and.
Taking the right actions to improve cash performance, which remains or I guess financial priory.
Notwithstanding the uncertainty created by the pandemic, we are continuing to target breakeven cash flow for the second half of the year as we achieved key milestones and the ramp up deliveries across the business.
How do you envision we delivered 24 aircraft in the third quarter, including a record eight global 7500.
Global 7500 deliveries are expected to further accelerate in the fourth quarter to approximately a dozen.
50% increase over the third quarter.
Instead of Reacceleration during the second half of 2020 demonstrate our continued progress ramping up the program the word of more stable delivery profile.
The high level of deliveries concentrated in the last six months of the year will outpace orders as we execute on our multi year backlog.
As we look at the market overall, we are confident that we took the right action earlier this year to realign our production rate to reflect the cool with him.
We expect the market to remain stable for at least the next year.
Long term.
The emerging trends are more encouraging.
Pre owned inventory level remains healthy.
And we're seeing signs of new interest in private air travel and DNS safety. It provides.
In the third quarter order activity improved significantly over Q2, especially for our challenger aircraft with their market, leading reliability and performance.
From an aftermarket perspective, what utilization rates no overarching 85% of free gold mid level, we're seeing some impact on our Smartboard program.
However, all service center or operating at near normal capacity and longer term we.
We still see aftermarket as a strong grow the Portuguese.
To position ourselves to capture that growth, we've recently taken a number of action.
These include reaching an agreement to acquire full ownership of our Berlin Service Center.
Partnering with Jetsteps to establish and then if you experience as part of our Singapore expansion.
Establishing a new service center in Australia, and appointing new leadership to oversee our multiple expansion project, including our big in the old facility in London.
I transport vision, our focus has been on improving project management and making the business more predictable.
With our new project management office firmly in place, we are making steady progress implementing the right tools and processes to better manage commercial and technical requirements. This.
This will provide greater visibility there resource planning and lead to a more predictable more to more predictable results.
While the impact of these effort is most visible on early stage projects. We're also seeing improvement on our legacy projects, including our large contract in the UK and Germany, where we expect delivery to accelerate in the fourth quarter.
We also expect to see an acceleration of new order as transit agencies begin to look beyond the immediate school good related operating issue and a word contract necessary to support the long term requirement.
With respect to our strategic divestitures, we remain very much on schedule.
The sale of our Aerostructure business closed last week.
And the definitive agreement, we signed with all of them in September and the approval of their shareholder last week.
So on a solid path to close the BT. So in Q1 2021.
This of course assumes that the few remaining regulatory approvals are received in time.
With the sale of bombard you transportation nearly completed we're looking forward to our future as a pure play business Jets company and I want to spend some time this morning talking about or strategy and not full creating stakeholder value.
Today, I'll give you a high level overview and early next year. After the BG transaction closes we'll host an analyst day, where we'll provide a detailed plan updated market outlook and give you. Unfortunately to meet hopefully in person with the leadership team.
Again, we are very excited about our future as a more focused company and about the are fortunate these to grow our aftermarket business and leverage our industry leading product portfolio.
At the same time we.
We are fully aware of the challenges we face this.
This includes significant and then he created Edwin.
Our company like most aerospace and transportation company took a big hit in 2020.
They shut the rewalk, while recovering at a much faster rate than commercial aircraft deliveries are still down by more than 30%.
And as I said earlier, we expect it will take a year to recover to prequaled mid level.
Looking at the number the financial impact of the pandemic is roughly two point 25 billion on liquidity.
This means we'll start operating as a pure play business Jets company with 4.5 billion of net debt versus the 2.5, we estimated when we announced the BT. So.
Addressing this challenge is going to require two things first.
First we'll need an effective debt management strategy, one that minimize interest costs.
While creating a runway to execute our strategy.
Second.
We're going to have to learn how to operate profitability.
In the current market condition in.
In other words, we need to have a cost structure and a backlog that allows us to make money out of current market condition, delivering 100 to 120 aircraft a year.
With these two action, we ensure a sustainable business in the near term and better position the company for profitable growth when the market turns.
After conducting extensive deep dives into B.A.S operation you are fortunate D and path forward is clear well.
While the company has undertaken a number of restructuring action over the past few years. The through is we still have an infrastructure design to support twice the capacity of the current market.
This needs to be addressed.
And we are already taking actions. This include establishing a new transformation office to bring a clean sheet mindset to address our cost structure. This.
This will be a comprehensive company wide initiative.
It is about the re envisioning Oh, we operate.
And showing that we have the right scalable infrastructure to support growth Adam.
At a much lower cost.
And finally.
It's about building a company that can deliver stable and predictable returns.
We look forward to talking and details about our plan for achieving this goal and our debt management strategy at the next year's Analyst day.
Okay, Let me stop here and turn it over to John to discuss detail up the third quarter result, and the fourth quarter.
Hi, Joe.
Thank you, Eric and good morning, everyone.
Weve made good progress in the last few months towards our goal to reshape our balance sheet star.
Starting with the implementation of the Hps loan to bridge short term liquidity needs, resulting from the pandemic.
The closing the Aerostructures and CRT transactions, thereby fully exiting commercial aviation and importantly, the signing of the S.P.A. with Austin not supported by their shareholder vote.
These achievements move us closer to becoming a more focused business aviation company and provide flexibility as we look to align our capital structure to our strategic and operating plans going forward.
While we are still assessing the optimal deployment strategy for proceeds of the sale of beating our goal is clear.
We seek to strike the right balance between maintaining financial flexibility to operate the business through a recovery and minimizing our debt service costs.
To achieve this goal in the current hosts pandemic post.
Post <unk> environment, we will need some time and therefore, one objective will be to create.
The appropriate debt maturity runway.
This this additional time will allow us to realign our cost structure with the current markets to generate cash even with low volumes.
To fully realize the earnings potential of the global 7500 by progressing on the learning curve.
And finally.
Leverage our best in class products and services to benefit from growth as market conditions recover.
We are confident that achieving these objectives in the next two to three years will provide the business with a stronger financial Foundation.
More on this as we will close the BG transaction.
Next year.
Turning now to Q3 results, which reflect colder related disruptions gradually subsiding and business returning to more normal operations.
Total revenues reached $3.5 billion split 2.1 billion a year and.
And 1.4 billion.
Okay.
Where division. These revenues include 24 business aircraft deliveries, a lower delivery count over the prior year given production production rate adjustments.
Highlighting this quarter's results in business aircraft.
As a 10 year year over year revenue is excuse me, a 10% year over year revenue growth.
This is driven by the significant dollar contribution of eight global 75 hundreds delivered.
Finally, offset by the lower services revenue due to reduced reduced flight activity impacted like over 19.
Against the second quarter. This growth represents a 23% revenue increase for business aircraft.
Finally, the wind down of commercial aviation activities. Following the completion of the sale of the synergy program in the second quarter also impacted comparability of results versus Q3 2019.
At Beachy revenues for the quarter, excluding currency translation were 5% lower year over year.
As BT operations gradually recover from disruptions due to the COVID-19 and them.
On earnings.
Total adjusted EBITDA for the quarter was 176 million and the adjusted EBIT was 51 million.
I'd be eight.
Quarterly adjusted EBITDA, and adjusted EBIT margins of 8.1, and 1.4% respectively reflect lower volumes lower service revenues.
Combined with lower contribution of early mobile 7500 units as we progress down production learning curve.
At Beachy.
Adjusted EBITDA and EBIT margins were 4.3, and 2.9%, reflecting an unfavorable rolling stock contract mix with approximately a third of revenues not contributing to earnings.
Well. This is a significant number of these major contracts are moving past, the engineering and Homologation phase and into fleet acceptance and regular delivery phase, which should reduce future viability of results.
Our consolidated free cash flow usage was $706 million for the quarter.
While BT free cash flow was nearly breakeven.
Patients working capital increased in preparation for a sequentially stronger aircraft deliveries anticipated in the fourth quarter.
The new $1 billion secured facility was set up to support the seasonal surgeon inventory, particularly as we accumulated excess inventories ahead of our production rate reductions due to coal.
Worth highlighting is the approximately $170 million of cash usage during the third quarter tied to RV jeeze and the wind down of the reverse factoring facility used over prior years to wrap up to 7500.
In some respect these outflows can be considered nonrecurring and the pay downs do reduce non trade liabilities.
Also included in our Q3 cash burn is approximately $170 million of cash interest costs and corporate expenses.
These cash costs would be expected to reduce materially once we deploy the proceeds from the sale of BT and downsizing our corporate overhead.
As we enter the final quarter of 2020 pro forma liquidity remains strong at approximately $3 billion when including the proceeds received last week from the sale of the Aerostructures business.
And we continue to manage our business towards free cash flow break even for the second half of the year the.
This implies approximately $700 million.
Cash generation in the fourth quarter.
This would further strengthen your year end liquidity, mainly driven by the release of working capital.
I'd be a this expected working capital release comes from peak season with deliveries, including accelerating global 75, hundreds which are offsetting lower aircraft volumes on remaining platforms.
Overall, however, the Q4 capsules are expected to be lower than last year, as we anticipate approximately $160 million free cash flow headwind coming from the wind down of the remaining reverse factoring facility balance.
At BT.
Well Q4 margins are expected to remain low free cash flow generation is expected to be in line with prior years as we catch up on key projects with accelerated deliveries.
Strong order intake should also be an important contributor to transportation fourth quarter cash flows.
With $672 million of cash on its balance sheet as of September thirtyth.
And with anticipated cash generation in Q4, BP should be in a position to fully repeats revolver by year end.
We have enough cash on its balance sheet to redeem a time, we closed the sale to Austin, a large share of the equity injections made earlier this year.
When factoring those redemptions, we expect to be within a couple of hundred million dollars of the yearend minimum cash condition in DSP with Alstom.
As such we continue to expect the net proceeds from the sale to be approximately $4 billion.
This said we are mindful of the continuous evolution of the pandemic and large scale lockdowns could negatively impact our expectations.
Before I conclude a few words on the significant changes to our financial statements. Following the signing of the SP with all of them for the sale of transportation.
Based on DSP and the positive shareholder vote in support of all sums acquisition of BG, We now report BT as discontinued operations.
Our balance sheet position and results are now segregated, giving investors a clearer view of initiation of Aviations balance sheet.
This increased visibility shows that other than retained RV Jeeze aviation carries limited trade liabilities.
I also want to take this opportunity to mention that the continued operations results reported today are not representative of future earnings.
They include the full corporate costs, including both <unk> and BT.
And the debt service costs of the current capital structure before any debt pay downs.
Obviously as we receive the capital structure and address our corporate cost structure. These charges are expected to reduce significantly improving future earnings.
To wrap up.
We are moving closer to becoming a pure play business Aviation company.
We haven't continued to surmount the challenges caused by the pandemic and have secured the liquidity to do so.
There are key actions and decisions to take in the coming months and as we converge on the right strategy. We will look to create a sustainable business that can create long term value.
With that operator, we're ready for our first question.
Thank you.
A question. Please press star one on your Touchtone telephone if you are using a speaker phone. Please lift your handset and then press star one.
Okay. So no question please press the pound.
Yeah.
Okay time for all participants please limit yourself to one question and one follow up.
Our next question from Myles Walton.
Yes. Please go ahead.
Thanks, Good morning.
I'm just wondering if you could maybe talk about the needs for investment.
BA after as a pure play Standalone and I can tell you mentioned the facilitation about twice the size you need for that 100 to 120 per year aircraft production, but but more on the investment side and the engineering and the R&D.
I guess I'm thinking that the business maybe need still.
You know $150 million to $200 million of Capex and R&D is that the right number or is it significantly higher or lower.
So maybe a second thing that's when John if you're okay. So so thanks my portfolio for your question.
You know our product portfolio right now as being a refresh of course and I think we feel very comfortable with where we are.
And this being said, we will definitely keep sort of certain investments like for the next few years.
We're thinking somewhere around a couple of hundred million dollar we will provide debt reduction to position you know for future you know investment of course.
This is going to be our priority.
But clearly we will continue to target investment equal to depreciation in the long run, but I would see that today.
I think we feel pretty good you know are you know complete global brand has been refreshed very recently with the introduction of course of the 70, 560, 550, 500, and and that that's going to be important. So yes, we're thinking of other products. Some some refresh on product but the.
No over the next few years I think we'll definitely be concentrating our efforts on the on debt reduction.
Okay, and just maybe a follow up on this 100 to 120 aircraft per year is that a is that a level that you're trying to be breakeven against on a free cash flow basis, and how quickly can you get there.
So Myles I guess, you know for US 101 in 2000.
Aircraft expectations.
Matches to where we see the environment today, and I think that.
The real focus there on cost reduction and so the goal for US is to is to target significant cost take out.
That trend in the queue for delivery acceleration that you're expecting.
So let me say it clearly you know we've seen some enthusiasm in the market recently.
Clearly there is a new customer coming and not really in the corporate world, yet, but mainly Ah so far I would see more you know I never.
Work individuals that are buying our airplane some people that we've never talked before but at the same time I think we've seen mainly also across the board all the fleet operator, you know seeing a lot of new people coming to them to buy a different program that they are offering.
So there is clearly mm.
No new customer coming to our business either directly or indirectly via the fleet. Operator. So this is encouraging and I think a lot of them are of course concerned about flying commercial so that's why probably we see a much faster pick up in our industry right now compared to commercial aircraft.
Okay. That's that's that's helpful. And then and then you you commented in or commented that the acceleration of deliveries in the second half of 2020.
Okay quarters in the near term and the M D N a but but from what you can tell right now do you see the first half of 2021 deliveries exceeding was gone in the first half of 2020.
I think right now what we what we were seeing as if we've adjusted the right. This year and as I said earlier, you know we are planning to keep those right.
You know going into 2021.
And you know, we'll see you know home all kinds the market recover you know it's important in this industry to have you know a <unk>.
Backlog.
In some program you know we want to refill the backlog and we're taking the unfortunate you have having to read down into market being you know you know good right now and picking up.
You know at at a good base to refilled backlog keep their rate lower and we need to figure out our in our company to be able as I said to make money be profitable with a 100 to 120 airplane and when the market picks up we need to have also build the agility to be able to.
To come back.
And increase the rate when the market will will allow us to do that so that's that's what we're we're we're heading for for next year.
Okay. Thanks, a lot that's it for me I'll I'll pass on.
Thank you.
Following question Summit set siphon J P. Morgan. Please go ahead.
Okay. Thanks, very much then good morning, everyone. I was wondering you know when when you talk about the the increased uhm demand from fleet operators you know.
Which segment you see that impacting the most in terms of the the size.
The japs.
I would see right now we've seen clearly activity in the in the in the medium segment.
But also in the large shankman, so I would see between these two right now we've been seeing activity.
Okay, and then just as a quick follow up John when when you know all all of a sudden done exiting uhm structures and N. B T. How should we think about the remaining pension obligation for the aviation business.
Yeah. Thanks. Good question. So you know we another tough year I mean, it seems that it's been perpetual enough for the better part of a decade is not more of that the rates have been a tough on pension plans.
We started the year I think it was somewhere in the neighborhood of probably one and a quarter billion. When we did the deal and today I would say that you know if you look through the the results to see about at 1.6 billion dollar a liability about 1 billion foreign and change I think is the deficit on the plan itself and then there's some postretirement other benefits.
Things that we have on the balance sheet for maybe a couple of hundred million. So all in at this point, we're kind of one six worse, we'll see where things take us as I guess, so the world's shakes out here over the next year.
But you know I think one I'd say, a very positive Ah north maybe is that when we completed the deal here with with our Belfast operations. There was a significant pension plan that was long dated there that that we've been able to to move with the assets and I feel very good about that because that was additional volatility.
On my on asset management, So think about one and a half billion more or less for aviation.
Okay. Thank you very much.
No problem.
Thank you.
Following question is from David Shout Somebody play. Please go ahead.
Thanks, Good morning, everyone. Good morning, good morning, Dave.
I I think I heard you said future business that will have sworn etheljean, an internet that I guess, John can you just walk us from where you sit today I guess around 8 billion and that that's that's four and a half billion dollar number I mean, obviously.
Some proceeds or you know big big benefit, but just walk us to that number thanks.
Yeah, So I'll I'll try to do it you know big picture here and then we can always talk after as well, but if you. If you just think today. We're about nine three I think it is or so of long or a high yield bond and then you've got the H B S facility that we've put in place is drawn about 750, so called at 10.
Just for math.
[noise] and our our expectations are that.
Said I guess from the beginning of about $4 billion worth of cash available for debt reduction from net proceeds of VT. So that get you down to call at six.
Expect to finish the the year all things considered between one and a half and 2 billion of cash something like that so that's what we'd probably hold it. So if you take the six minus that kind of wanted to have Ah plus you're looking at about four and a half so that makes sense yeah.
Yeah, Okay, just one of them just want to make sure.
In the Eric 100, 120 delivery level that you're talking about targeting going forward.
What would you envision.
<unk> G 7500 accounting for within that number.
You know this will be a a a significant part of of of our of our delivery.
And we're talking about 35 plus per year. So this would be definitely what we would be targeting next year. As you know we have a solid backlog on the on this platform.
Multi year and of course next year, you know targeting 35 to 40 is what we're targeting so that would be a big part of our of of the one eyed red to 120 that we've mentioned earlier.
Thanks very much.
Thank you.
Thank you.
Following question is some Robert Spingarn from could you. Please go ahead.
Hi, good morning.
I had a similar question of David's but of the hundred to 120, if 35 to 40 or 75, hundreds how did the rest shakeout between the segments. So the remaining 80 85 aircraft in terms of large medium and light and then.
Sort of longer term if services is running around a billion a year now aviation services.
How how do you think about that as a percentage of revenue longterm as you continue to expand the business.
Yeah.
The value.
Okay. Thank you both.
No problem and it may be on your second question that I did not answer on the after market clearly.
You know we are moving.
Moving extremely quickly on this one I've talked earlier about the growth path that we have.
No opening and growing our service center all around the world and clearly we want this to be a much bigger piece.
Within the next five years of our revenue.
We know that this is a very resilient business for us and we're going to be definitely putting a strong focus on growing that aftermarket business.
So if it's about 25% now it could be maybe half in the future.
Pop is a is a bit heavy to be honest, but.
We're we're past 1 billion I think are you know this here can be a bit off because of the fact that you have two months kind of just almost nothing happening with the the lockdown, but.
So I would say that get into getting to have a revenue is probably.
A big a big order.
Thinking big picture.
No maybe closer to a third would be kind of the the right spot for us depending on on the aircraft delivery recovery over a few years.
Okay.
Okay. Thank you.
Welcome.
Thank you.
Knowing question your stomach Cameron that's fine from National Bank Financial Please go ahead.
Thanks, Good morning, just Wanna come back to the I guess, the the free cash flow question, just looking at the year to date for aviation 2.2 billion in free cash flow usage, obviously, an unusual year. This year, but maybe you can sort of talk us through kind of puts and takes of the free cash flow as we look ahead to 2021 and not necessarily one.
To give you a number of different next year, but just what what impacted this year, specifically to aviation and you know is from working capital or Covid related things that we should not expect to see in 2021.
So the the the total impact we we estimate about two and a quarter billion for the business right and but.
It's a pretty big hit to us and there's really I'd say two components that are are fundamental when you look at it right the.
The orders.
You go through I mean business Jets. The business model is typically that you would work around the one to one book to Bill [noise].
So as you deliver aircraft Hume, bringing in supply chain and so on and so forth you bring in new orders and that's.
That's that's been a a big chunk of the 2 billion or so that were off this year and I'd say that that's probably split between BT NBA.
B a is the one that in a typical recession environment you'd feel it would kind of sale through.
Kind of non cyclical.
But this year, because just a distraction and.
It affected everything across the world. It also affected strangely enough also the and the more non cyclical btn environment. So think about that as being maybe a third of the the 2 billion.
And then for the other two thirds I mean, there's not a lot of rocket science here. It's.
It's the reason also we went out and created the facility, particularly on the aviation side, you have supply Chi coming in long lead time components and parts you've set the production right that the higher levels in the market is able to give you in this environment and so where would have been expecting it to be probably 150 aircraft I'm more aware.
Better from here on in the the aircraft should start to be a profitable as we get into 2021 and then certainly is every unit goes by starts to expand profitability and I think it's gonna be premium margin for us as we get past the 20th.
Okay. Thanks very much.
Well.
Thank you.
Question, if I'm no I'm <unk> I'm Goldman Sachs. Please go ahead.
Hi, good morning, everyone.
Hi, good morning.
Just looking at the aviation segment, the business, yet orders in the quarter and year to date.
I understand your comments that.
I guess, you're delivering on the 7500 and it and it already had a backlog so you're sort of working off the backlog there, but you know what I would've thought you know maybe you could have some water activity on that given that more.
More more tilted to the part of the market that seems a stronger right now and then even if I strip. The 7500 revenues out you know the book to Bill It's still it's still pretty light so.
Is there any any you know competitive concern there or anything to take from that or is it just.
You know too short period of time to read them too.
Like almost a year before.
And then we had that inventory that we needed to take care of so we've done the right thing we've reset the rate right away. So thats why I feel much more confident that going into 2021, you know we have the rate.
Or lower.
And we are being prudent here and if the market picks up as we think it's going to be then we're going to be in a position to refill backlog and on all platform. So and eventually the market comes back then we'll we'll.
Deploying the the proceeds affectively as I mentioned in my comments to balance runway with.
With interest cost reduction, they're going to be important to that kind of stand alone aviation business and then also.
Including in the cost adjustment is going to be the overall look at the size of the overhead on the corporate side and how that can improve.
Relative to a smaller more focus business, so not because I don't want to give you a more precise number but I think in fairness those pieces needs to be worked out and then we'll have a sense for 21, but also hopefully over the next couple of years, how the business then emerges cash generating and solid profit business.
But it's fair enough okay. Thank you.
Thank you thank.
Thank you I'm filing question that you cannot go down some scotiabank. Please go ahead.
Thanks, and good money everybody just.
I just wanted to coming from one I think you guys said you have a one and a half to 2 billion dollar cash at the end of this year just wanted to get through the math behind that I guess you have some beat the related cash settlements before the the deal goes into the dog to them.
So if he can help us through what are the nuances in queue for an catch a drain our cash payments that you expect that you know obviously someone had been a dollar cash generation minus what do you intend to pay for Rpgs and beating settlements.
Well, let me just give you a little bit of a simple breakdown I guess [noise]. We we're we mentioned in our comment that we expect to generate about 700 million a free cash flow that's kind of what we're targeting we burn 700 in Q3 in our our objective here is to try to break even on the second half of these.
A table at the business.
If you just kind of maybe just big picture think about B T.
The last couple of years about 600 million of cash generation in queue for I think we'll be in the same ballpark. This year as well I'd say that'd be a in the neighborhood of five to 600 million of cash generation, probably the right spot and that's a little bit lighter than the last couple of years on a comparative basis for to be.
A franchise, but.
We work through the the lower production and so on so thank you know you know a billion one is sure so of cash from the two operating units.
So that's kind of the breakdown of how are you.
We are where we are and where we're going in the next 90 days.
Okay that makes sense. Thanks for that so it seems like the any.
Any BT related cash outflows for for equity redemptions and other things will happen next year before before the deal closes.
It depends we are all I mean, I won't comment on that and only because we'll see how this whole thing plays itself out I mean, I would say that probably is largely right, but that doesn't it's not to the good news we have flexibility right. So these are provided that all parties are kind of a line that we can depending on the cash on hand at BT in a whole bunch of other things.
And even our depending on what we'd like to do it could either be before the end of the year or can be early next year or can be consistent with the transaction as well and to be honest I mean, I'm not overly stressed about that as long as the liquidity is available and were able to to a.
The total investment you know that are required to our platform in the next five years I would see will be very minimal because we've refreshed our product line pretty much across the board.
Are still leading in the in the in the medium market segment, the global as being refresh completely. So so you have to make the assumption here that this is going to be a low number.
In the next coming years.
At the same time to improve our cash flow I mentioned earlier I need with the team here to resize aggressively our business.
Reflect what the market conditions are so that this translate into EBITDA this translate into cash flow.
And we're going to be very aggressive the other I think.
You know for delivery 23, so that gives us plenty of time to sell these airplane that better pricing, but in the meantime, you know since the pandemic started we had like very few cancellation. The good news is the airplane is doing extremely well and when we had cancellation on this I mean 500, we have customer.
That are interested very quickly. So so our backlog remains very solid you know on that platform you know what.
The airplane is starting to deliver and we have 31 aircraft in service right now the airplane is showing up.
Of course, all focused on back on this as you see you know with the opening of multi service center around the world and at the same time you know we are going to be also pushing other businesses you know part of our product portfolio using.
Using our product portfolio that are much more also resilient thinking here of more Missionize aircraft as an example, being part of our portfolio and other a portion of the market.
Brings to US right now so we'll bring more clarity to that but clearly we have in mind.
You know a shift in our revenue over the next five year, which makes the new aircraft portion you do of course till the most significant but with other businesses that are generating.
Good cash flow and good margin.
All in.
Thank you.
Thank you we have.
No further questions registered at this time back to you Mr. mix so.
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Hi, just a modest a coffeehouse at Delta.
Seafood opinion nutcase that type of medical fan also tell me the seafood picked out cause she was feeling etsy.
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Five fifth fever. Please note that this conference call has ended cease disconnect. Your line at this time. Thank you.
[noise] opinion, nutcase that that person for telling me.
Cause she was Kenny.
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About 550 people.
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[noise] opinion up guess it depends on how many people pay her cause she got pending Murphy.
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Assist people.