BOMBARDIER: 'Bombardier closed out the second full year of its five-year turnaround plan with very strong performance', said Bombardier Inc President & CEO Alain Bellemare on February 15, when presenting the group’s annual results for 2017.

‘Because of this solid performance, we begin 2018 with great momentum’, he said. ‘Our operational transformation is in full motion; our growth programmes are on track and we have a clear line of sight to our 2020 objectives.’ Revenue in 2017 was down 1% at US$16·2bn, EBIT before special items up 57% at US$672m.

The Transportation business ‘delivered superior financial performance’, Bombardier said, ‘while also positioning our segment for further growth in both revenues and profitability’. Transportation revenues grew 13% year-on-year to US$8·5bn, in-line with guidance. EBIT margin before special items grew 100 basis points to 8·4%, representing the fifth consecutive quarter with margins at or above 8%. Two-thirds of the division’s transformation initiatives had been completed by the year-end, and continued implementation of the plan was ‘expected to lead to further margin expansion’.

The Transportation order backlog was up 14% at US$34·4bn on December 31, supported by a 20% increase in order intake across all product segments primarily in Europe and Asia-Pacific. This order activity led to a book-to-bill ratio of 1·2, the fourth consecutive year with a ratio above 1·0.

These ‘strong results’ outpaced the performance targets underlying CDPQ’s investment in the Transportation division’s holding company BT Holdco. As a result, for the 12-months from February 12 2018, Bombardier’s percentage of ownership on conversion of CDPQ’s shares will increase from 70% to 72·5%, with any dividends paid by BT Holdco to its shareholders during this period distributed accordingly.

Looking to 2018, Bombardier Inc listed some factors which could affect its future performance including the risks associated with general and rail industry economic conditions, trade policy including the future of NAFTA, and Brexit.