Q2 2022 Bombardier Inc Earnings Press Conference
Some of them, yes, we lapped a silty duckenfield they'd be touched soup to nuts, who pay them to be on Hulu I don't want to get it because that's the renewable isn't there some of the best guilty.
[music].
This conference is being recorded.
Schools. They host it don't go as you see.
All participants please standby your meeting is ready to begin at 20 Bucks spun up cycle and also someone appointed deputy.
Ladies and gentlemen, and welcome to bombard music in quarter of 2022 Midyear Conference call. Please be advised that this call is being recorded.
Finally, I would like to turn the discussion I'll go to my stomach Muslim Sunny off director communication pop on Buffy welcoming them as an issue.
Let me just.
Spend under the bone biopsy, but again I think a sense of peloton could you see that's just that she would take home shield she'll Mr. Michel <unk>.
The company shall share ballpark T I, probably double Mr. Messina. Please go ahead and stomach.
Mixed Smokey bones rule.
Good morning, and welcome to this morning's call our team has long standing by after the call. If you require further clarification, so you're more than welcome to reach out to me or my colleague team Who's with US today don't Miss Yes, just don't come in place.
Yes.
She's spending schedule is that correct.
Yeah, I think what Don.
None of them are.
Mr <unk>.
I don't Boswell.
On the extra man who's the best fit that bill. So theoretically is excellent as we took a well enough to be used methane.
You might see them so.
So I'd like to welcome all of you. This morning to this call we are excited about.
Sharing our results today with you know.
The second quarter are resolved and the improved guidance on free cash flow.
So I think the first thing to say is you.
Q2 was solid we are extremely confident in our business, but also the resilience that we've been able to to to structure over the last couple of years I think one of the highlights for the quarter is clearly the Moody's created reading upgrade that demonstrate external recondition to what what we have.
Been able to achieve.
We've launched a global 8000, also which solidifies again, our position as a leader in the large market segment.
D. L. Just backlog that we've had for a long time at the $14 $7 billion.
This is.
Another positive free cash flow quarter for fifth time in a row and demonstrated our ability also to generate free cash flow or adjusted.
At EBITDA, which is a in our mind, our most important one of our most important indicator is up by 41% year over year.
And again, the free cash flow guidance.
Where we're telling the market that they improved from $50 million to greater than 550 million you know for this year. So were also well ahead and deliver aging.
We repaid this year $773 million, so three quarters of 1 billion roughly on.
On our debt, so are still making progress and and and deleveraging our balance sheet moving forward. So anyway those are in our in our minds.
Highlights for our fourth quarter and if okay, what everybody will go with questions.
Thank you.
Oh wait a little equal the Casey I don't know if we can now turn to the question period and I'll leave a she's all the floor to explain the instructions.
Is that are you still there on the line.
Oh, I'm, sorry, I was mute that I'm sorry, thank you.
Press Star one at this time, if you have a question on.
You sort of tell them myself proposing guests.
And the first question is from Sunbelt Theyre promoters. Please go ahead.
Thank you very much and Berkshire.
We know Joel good morning.
On the call you were talking about engine RASK being considered would in your delivery target of greater than 100, yet.
Are you referring to do that using delivery of engine for one of your programs could you specify.
Yeah, No I was not thinking specific here Oh as I said, it and it's it's a well known thing there is pressure in the supply chain right now it's pretty much across the board all engine.
You know manufacturer.
So we've been working as I said earlier also very diligently with everyone and I think one of the thing on the supply chain that Bombards you did well as we took action extremely early in the pandemic.
You know we are weir redeploy more people in the supply chain to make sure we're gonna money or you know that capability and making sure thats where were proactive.
And I think that there's a payback on this today.
So we brought back the equivalent of 500 people of work in our own factory. So we created within Bombardier 500, new jobs, bringing back works that was a supplier in our facility to.
Actually make sure that we were more solid.
On the engine front, yes, there is challenges we work with every OEM right now to bring everybody back on track are you know and at least you know where we're sharing with them our practices year to make sure that they do the same but you know we reiterated our guidance of greater than 120 and that guidance takes into it.
There's a couple of risk. So that's why we're seeing greater than 120, but are still very comfortable with the guidance. We we submitted earlier this year.
Thanks, and just as a follow up have.
Have you seen cases.
Chip shortages, what in your supply chain I guess more on the lines of the tier two tier three and how was that the impact from deliveries of products like crazy on it.
Yeah, Yeah. So we did a pretty much everybody else. So so.
There is some impact which is being either mitigated or we're monitoring this very closely it's been affected a little bit our service delivery of spare parts are but you know every one of our of our supplier partner working with us.
Have a good plan in place and we've been working diligently with every single one of them to make sure that we don't affect our delivery our supplier base, but so far that's why and we're confident to reiterate or a greater than 120 delivery and our revenue and and other metrics for the year.
Okay. Thank you.
Thank you Allison.
And I'd like to remind our colleagues on the line. It's a star one if you'd like to join the question queue. So operator, we'll take the next question.
Yes.
Joseph.
No question.
You know it was almost nothing missed it sounds like it's Weibo's Allstate fan Boy My thing.
Oh My bad.
Isn't it so yeah I mean is this stuff that's very effective for quite some time.
Right.
E I N T O 's article did he gets he also like factor.
Yes, yes, that's right.
Taiwan against my stomach, Okay told me that he come off yeah I see.
Well they practice that I've also got Publix Yonks I'm not asking you some style she handled what Taiwan.
Hey, good so that's an excellent guests don't see circa Donna townsell appraisal well. So we are constantly red man.
Lead times shows you pretty sick.
Salt buses.
Yeah, Alex So cocky its lead Mello Roos, mainly on adult solo a T. A consultant melas at all come shipped out to honor those who JV are the PDP left other than the fossil extra month pool at CMC scale up soon.
Ankle like Hell on the E. P. S. The fabric S O P S I, let Terry a dull.
Adult stepped in PSP business, that's something that is your own Oh Atlassian is always the issue.
He left.
Okay. So I'll get them trained up lobbies, yet not all jobs reshape all about Z.
Today take it home measure it is a little phone saw sweat so sweat Naga music game.
He will be allowed on the on the Mitsubishi. So just colo all his visa appetites are sometimes exposure one of it cause of these thresholds you pretty sick, although only coughed up a only a matter of fact fastest stopped any of us really deep.
If you have to see how the shows so all of that is going to hold US yeah. The blackouts cold lay up of Exxon sued.
What's young people, who have near there that I wanted to know is supposed to have no. One else did you see be a play play and multimodal, while we see alot cities will small people speak really make or break out those who have made the beaches real about chico's won't be volatility.
Okay.
I'll also say, it's a problem right.
Magazine gets younger than me.
Yeah, and then at least gives up what was it I guess you also had convincing these.
Now carefully as I can.
Joe.
Yep.
Sounds great principle right.
It's not a it's not like it's.
I mean I'm sorry.
Okay. Firstly on class I found that well developed nine new Volkswagen.
And he says that it's not they're not right.
Now clearly see stfan <unk> some other notes for debt.
Don't succeed no matter, where I got the governor kept style, calling all if he can speak on locomotive years. He has not all of it is as you know and all of that to me up here at the demo the Israel not that there's pascuzzi circa a Moody's AVO work on U L. P loves it.
Bill Yogi I'll tell them there is really no debt a swift squishy Zika and then it is what it is it's a good news I don't.
So these are the ones, who watched us a bunch of what I found that key area. They are on it sounds like.
You saw the Duke, but she filmed saw that Kelly full knee they.
Is that a bunch of stuff Apple plus as you know signed up with Genmab, a although they still buy it are those of Boston D. C. On the ER ostracon suddenly, we'll probably get them. They could see circle in on a total division I'm curious as you said so it's really just the math she taught us I'm not sure widespread sequel, I thought he was sika was because he did that while the bun.
Well, Sam Walker console, they said that I'll say plug I'm Super pool, what C. D. Due to more questions on this at all actually I, probably I don't have it because it's usually a product push them a decision at all or who subsidiary Shimon Buzzy Consalvo pilot has shown us how pleased I'm with <unk> guess I saw it was asleep. Although this capacity if not shy at all you Gotta make sure that they have.
Both down military or do you see I coughed M C. Silk ASEAN, obviously, Purdue melba coaching to read this we've anybody's shouldn't be the Smith doesn't Puzio, who school belmond Mount on the OLED capacity that flexibility does that.
Tony.
Yes, yes exactly.
Next question is from Nick.
Please go ahead.
Good morning.
Yeah, Good morning, Nick.
I wanted to ask first on supply chain issues.
You said you brought the equivalent of 500 people in house through work that you've taken.
Yeah.
How exactly did you do that well you continue to do that and what is the limit do you see for doing that I mean in terms of limit like how much more business could you how much more work could you bring in house.
We we still got a quite a quite a bit of capability.
You know available and I'm talking about here more machining our main building major structures. So as you know we have our plant here in Montreal and seller that we call internally plant one and they are this is where we had the majority of the increase two years ago. We had about 900 people in that facility. We're now.
14 under the people and the majority of the increase is due to parts we brought back in.
And and that secure our capability and we still have capability. You know, we don't actually operate that shop on three shifts in exit with a few exceptions.
And we still have weekend capability on equipment available. So we got quite a bit of capability available. If we have to do it. It's always a decision of protecting the supply chain and also being cost efficient ourself to to do that so and but we monitor everything going on Theres a few critical supplier that we already made.
Isn't to bring things back in like almost two years ago, we put that strategy forward.
But if you've taken the equivalent of 500 people in house to double back to triple that whats the thinking we could probably easily had another you know we used to have like you know in some of these facility up to a three to 4000 people. So so I guess, if we're at the 2000 at 1600 today.
For 1500, sorry.
We still have quite a bit of room to up to them to increase.
Okay I'll come back with another question later on at this time, Thank you Sir.
Thank you that question it does.
Oh, yes.
No problem.
But what's come from Mckinsey, where he also talked me if you think about my time.
Hum fairly cool Keystone to just finally, I mean, you don't.
Don't seek probably possible about yeah.
She said that ammonia it will stretch your legs demo <unk> zones.
And of course these are not so don't Louis Casita I've seen Amanda.
So now that you're on that we'll see.
The bolt ons.
Well well see.
The last trend that causes a nice kosygin kruszewski.
So it'd be quite useful.
Does that mean.
They could or the degree that we see on it takes somebody who don't associate their drilling costs. You don't have all the flotation Australia problems, you're not dose us really when they go public and I think the coops on compete differently at them a lot.
Our office other certain baas Iliad OLED capacity, it's funny about all the theoretical playoff Atlas supposed to fill up all the news are two separate E. Dr. Josh sector on the Napa side medallion when I take all of them they found us but.
Is there a real extreme.
Uh huh.
Ah I stepped in as older February Castillo I'd always bhaskar, new on the on the Piedmont. He is yes. So sounds like R&D is many of the more severe episodic tell me I'll do Ms V. On the pillar. This is you know they haven't needed volume unless we did say, though that the peso. So you've kept C V on the existing that's true.
So we have all of those we took on the we suffered some time down the road.
A fellow officer, he called him a carpet Cisco motivated that somebody like Epstein of log ins of some sorts with no further about that.
Miss you just described.
Sure.
That's all.
Now I'll turn them off.
I'll take that one.
Hum.
I don't.
Okay.
Our point of view.
How should a book to Bill as you can pass it onto the system.
Both sounds like to see a full pallet to altra.
Altra on points. Thank you Duke point call D. D D M U T mez, she should not Colombian doses, so to do that.
As you said that's going to work I mean, do you seem to touch them all down done at Mt.
Where does that show up on a scale of the wet speed is Cisco announced SIB guests have already near the naval prudent not myeloid told Oh.
Uh huh.
Make them Sallie Mae.
See I was I came on my you can't see the long term what the cabinets come on because as I've always those really start to work with Michael and everybody has got to do is ask what Filippo.
Chris maybe just that thing.
Oh it for at least a one way back look it all along I mean, that's what Nik Cohn Zidlicky solving more delicate answer class shined up obviously, unless we got about the street at all sarcoma, Neil of lawn and garden tobacco and food, but I'd see if what speaker or the.
One other point, we'd see Sydney Paul.
And it's not I don't want them still atmel or the rest of it was Tony although that is owned or a point or a Cisco total pet that Paul if sort of elaborated associated still maintained although I would point, Oh, sorry, zig or may it seem that backlog kit out less.
Hello physical illnesses.
Get those points at me because he talked about the future.
That's actually don't consciously just that sample bald mountain.
Yeah.
Personally I apology for these shifts.
He's done microphone. Nevertheless, it is a model that maybe somebody else the other flood the values I need to do so.
Maybe on the backlog the hustle Jesse I'll answer that possible I started I call them adult system shipped and then I'll dwell on it yes, we'll see.
This is jack on their backlog.
You get couple of points that's it okay.
Shifting the result volume E systems backlog is diverse E is a tag along Kinsey.
Okay.
Yes.
Okay.
Next question from Kevin.
Please go ahead.
Hello, and thank you for taking my call.
Good morning, Gary.
Good morning.
Switch gears, a little bit Matthew.
Calendar 3500.
I guess, you mentioned that you've got auto throttle certifications or keep what can you say, which certification they were and what remains before happy what you have ahead of you before you reach market and also.
Okay.
Uh huh.
To deliver this year or where they might go or just a little bit about what's your plan for the remainder of the year.
Yeah. Thanks for the question Kerry.
So yes, we do it we got the auto truckload certification. We've also got the seat certification. So so we pretty much have everything in our hands right now a certification of wise to be able to deliver all the airplanes on time. So we're gonna be starting as we said this quarter to deliver the airplanes. So we're in a pretty good place to do that so so we have there.
Under our control right now with certification already happened and available for us in.
In terms of number of airplane.
It's part of the greater than 120, we usually don't give specific we don't get specific in terms of which program for.
For competitive reason of course, but we are.
We're in a good place and of course part of the increase on the on the on the rates. We're talking about for next year, we mentioned, 15% to 20% I or there's a there's a you know some of that that comes from the 3500, which has been extremely successful in terms of sales since the beginning of that since the launch are almost.
A year ago now.
Thank you.
Thank you.
Thank you.
Once again, please press star one to ask questions.
Please go ahead.
Yeah.
Hello question Kessel.
Potential.
Cool.
We bought Shaw.
Hum.
Some of you.
Does this have all work on my mother.
Take care.
With robotic bumps recently found that there's long instrument.
No.
So it's been masked.
And then like as you all know the Latvia and made a pretty chunky coals, they probably jump that far.
Yes.
Alright, sorry, yes.
The amount of loss at select.
They loved it.
Okay.
No it goes towards true at Neal solar plugging and monetize it.
Three of our PD isn't I got it.
I'm.
I guess, if sue <unk> Museum.
<unk> on the players out there you know in fact that too in Quebec.
Andy Michel <unk>.
If you also look at an all time high because I know you remember the long exists on a fully synthetic yamana, Oh, Wow and in a clear manner. Please don't misread technologic aren't really computer huh.
So excuse me argue system is sustainable.
We see a leak out.
I mean, we see let me do yoga, so language that makes it kind of plays out but he also Youtube there so.
<unk> only got bad debt issue, she put them out in the heat shield.
So that when they're thinking about contributor it just showed up as I said, there's left posa dim weight the CCR they cloud Dunkelberg, Israel that concern myself, the Cambria EUR, we see Oh Italiana clean water is so they take another dose.
Tucson song C class at Etame.
No. Its objective come age he made mobile E. H M already dialed down sub because I don't know, Doug It's real easy museum come totally as age thriller phone he or she wants to lose at new a new subject. This all takes time out aggregates is a kind of come to Sergio.
Yeah.
Indeed, the founder.
There is one of the things shut down all the time just silly.
Okay.
So I can't I can't remember, what you booked have a good man.
C U E.
The last thing just popped out on long island.
<unk> see any popeye's somebody I presume.
On the park sets a cap you know because of that.
In dark blue.
You can have a different answer and then how does he work okay.
Okay.
Pocket because that's what you just gave me a hard job.
She baskets will boost <unk>.
Difficult to say.
Technology exists.
We had messaged kept bureau, so as not to leave EQ weaponry meat seafood guest so the discipline you pushed zama Dufka Selim S. C media come empty concept. The apparent there I think you said they've loved to come back and goes back to see that fabric as well.
<unk> dedicated E E.
The scope of Fine example, I met tons led to the Caribbean CMO.
Q I just can't give me pay either pity the cap you're a G E.
E. A kelly full NEPA skis, all that Disposability Evo met doesn't have you may see new demand.
Shelby.
We'll see.
E a D periods real easy Michelle when episodes Bookend Clayton.
So the processes Smith, our plastics or you'd have us that fast so I don't know yet.
It can be only like any formula E. CMO reality deposits first of all Paul if I don't know if we're lucky to have shined up obviously, unless somebody else, especially when you're talking about <unk> a.
That message to the Wassa has told people, Arizona, I mean, Japan is going to clear seasonal flu virus spud to TD.
The Biggie inflame Pooh Pooh Walsh Sistema.
Re leasing Michelle series of UNFI.
Yes.
Nancy.
And stuff.
If you would like to ask another question. Please press star one now.
I think you're on mute.
No further question with just a at this time.
Yes.
Max you just don't Ken's I don't mess.
So I think yourself will now close the call and leave the last minutes for Eric to for the final words.
I don't think I'll go and flush Bhaskar Chilean peso them a competitor <unk> Tms plus we are extra.
Extremely extremely happy with.
How things are shaping up in our industry, but also at Bombardier. So I'm just really solid we got good.
Visibility on the way forward.
We made commitments for 2025, and we are clearly.
On the on the right path.
To deliver on these on these commitments.
We're making progress also across the board on our ESG report our metrics are all heading in the right direction, but also on the financial standpoint, and again priority for us will be to continue to reimburse our depth, but clearly you know we've been doing everything possible here to get this done, but I think as <unk>.
EBITDA is progressing year over year with today are an improvement over a quarter about a year ago by 41%, which is significant and I want to reiterate that we are raising our guidance today on free cash flow.
Which makes our business even more solid moving forward. So I want to thank you for attending the call today and.
It's becoming a tradition that we do it every quarter and we enjoyed to have that conversation with you guys on a quarterly basis. Thank you so much.
Thank you I will now close the line.
Thank you.
The conference has now ended like open also.
Amit.
Please disconnect your lines at this time.
My question about funding. Thank you for your participation.
Thanks, Sean.