Bombardier Inc.

Good morning, ladies and gentlemen, and welcome to the Bombardier fourth quarter and full year 2023 earnings conference call. Please be advised that this conference call is being recorded. At this time, I'd like to turn the discussion over to Mr. Francis Richer de la Fleche, Vice President, FP&A and Investor Relations for Bombardier. Please go ahead, Mr. Richer de la Fleche.

Good morning, everyone, and welcome to Bombardier's earning call for the fourth quarter and full year ended December 31st, 2023. 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, please refer to our MD&A in our 2023 Annual Report. I'm making this cautionary statement on behalf of each speaker on this call. With me today is our President and Chief Executive Officer, Eric Martel, and our Executive Vice President and Chief Financial Officer, Bart Domarski, to review our operations and financial results for the fourth quarter and full year 2023.

I would now like to turn over the discussion to Eric. Good morning, everyone, and thank you for joining us today. Before we get started, I would like to express my deepest gratitude to our team members listening around the world for a very successful year. 2023 was a significant turning point for Bombardier. We overperformed on many fronts and we delivered on the solid foundation we set for ourselves over the past few years. None of it would have been possible without the passion and dedication of our more than 18,000 people. Thank you. Our 2023 numbers show that the team executed the plan in a very methodical and consistent manner. We met or exceeded our guidance on all fronts for the third year in a row. Revenues were up by 16% year-over-year, reaching $8 billion, the highest since the company refocused its activities in 2021. Profitability also reached new heights. We executed on our strategy effectively and this allowed us to achieve a real step change. Our adjusted EBITDA rose by 32% year over year and reached 1.23 billion, beating our 2023 guidance by more than 100 million. Our adjusted EBIT stood strong at 799 million Finally, the most impressive growth metric is our net income. On an adjusted basis, it jumped to $3.94 per share, five times more year over year. Net reported earnings per share hit $4.70, representing not just a swing to the positive, but a big leap into the black. This great financial performance was driven in part by the 138 deliveries we put on the board. Considering the ongoing pressure on the supply chain and the struggles some have faced in our industry, reaching our delivery target is a major accomplishment. Bombardier products tapped into a consistent and stable demand environment in the medium and large categories. We achieved a book to bill of one on a higher number of deliveries year over year. Not only did we keep our momentum in key markets, but we eclipsed all competitors in our segment when it came to firm orders. With our strong and diversified backlog of $14.2 billion, we have a clear line of sight on our skyline for the upcoming years and can look with confidence at the future. While we are in a more normalized demand environment, we see sustained activity across customer types and have the right portfolio of aircraft to continue to lead the industry. Another key driver of our revenues was the aftermarket, which delivered record high revenues of $1.75 billion for the year. As you know, we have significantly expanded our network With each quarter passing, we are seeing a consistent and predictable growing contribution to our business. More importantly, our growth has a tremendous importance in supporting our customer through more touchpoint in their aircraft lifecycle. Before we set our sights on 2024, I would like to provide a little bit of color on the initiatives we launched in 2023. They are well aligned with our strategic priorities and will help fuel the RAISE 2024 guidance that Bart will explain shortly. First, we ensure that our product continues to meet the highest standard and keep elevating the travels of our clients around the world. On that front, it's abundantly clear that Bombardier leads the industry. Our newly introduced Challenger 3500 stole the show. It reigns as the top pick for fleet operators and is quickly making its way to 100 deliveries. This platform won significant deals with Airshare and EB Jets and recorded another large order in December. In the launch category, the Global 7500 airframe continues to simply woe its client around the world. It is the largest and fastest certified and in-service jet in the sky. In fact, we delivered the 150th Global 7500 last fall and announced that our fleet has well surpassed 100,000 flying hours. The Global 7500 is now a proven platform that clients choose for its outstanding range and unrivaled smooth ride. In parallel, our Global 8000 development program steadily progressed towards its entry into service in 2025, with all engineering work being on track. The global family of aircraft is also shining bright in the defense sector. with the Global 6500 winning the trust of governments and military entities all around the world. With its exceptional range and payload capability, the Global 6500 allows defense customers to fly faster, higher, and longer than legacy intelligence, surveillance, and reconnaissance platforms. This is exactly why the US Army announced in January the purchase of a Global 6500 with options for two more to serve as a prototype for this program. This marks the first time the Army will use a large business jet for intelligence, surveillance and reconnaissance missions and represents a tremendous show of trust for Bombardier Defence. Over the past year, Our team also delivered global aircraft to the US Air Force as part of the bacon program and to Saab as part of the globalized solution for the Swedish Air Force. It was a banner year for Bombardier Defense, and I look forward to what 2024 will bring for the team. As mentioned earlier, another key pilot of performance is our newly expanded service network. Over the past year, We focus on integrating our new and expanded facilities to the Bombardier family, and we continue to refine our offer in order to meet the needs of our clients at every point of their journey. We are already starting to see the return of those efforts as an increasing number of Bombardier clients choose to bring their jet homes. Over the last two years, our aftermarket revenue increased by more than 40%. We remain on track to reach or exceed our goal of $2 billion in revenue by 2025, and there is clear opportunity for growth beyond that point. Another highlight was the introduction of our certified pre-owned program, which has been met with great enthusiasm. This premium class of pre-owned Learjet Challenger and Global aircraft offers refurbished and upgraded jets that meets Bombardier's highest quality and safety standard. With this program, we created a new segment in the market and continue to add value throughout our clients' journey. And finally, let's discuss sustainability. We demonstrated Bombardier's deep commitment to a greener future as well as our company's undeniable leadership on that front. Our Ecojet research project reached significant milestones and is steadily progressing toward the goal of dramatically reducing aircraft emissions. This project doesn't only exist on paper. Our teams are currently ramping up our second phase of flight testing with an 18-foot wide blended wing-body prototype. We also revealed a first partner, the University of Victoria and its renowned center of aerospace research. Innovation is part of Bombardier's DNA and will continue to channel our company's unrivaled talent to build the aircraft of the future. Sustainability is also top of mind when it comes to our operations, and we are committed to continuously improve the energy efficiency of our sites around the world. Our newly built Pearson Airport manufacturing facility in Toronto is a perfect example. It will use 60% less energy than our previous site. Once the move is completed, more than 2,000 of our employees will work at this state-of-the-art facility. I had the pleasure of visiting the site at the end of January, and I want to commend the team for executing this historic move without impacting our operations. Speaking of operation, I want to acknowledge their remarkable performance in meeting their target despite the notable pressure coming from the supply chain. The actions we have put in place since the pandemic have allowed us to mitigate the impact and deliver strong results year after year. It is, however, important to acknowledge that we are still in turbulence and need to remain highly focused on monitoring and proactively supporting our supply chain. I also want to touch on some key levers that shape how we are navigating through 2024 and allow us to confidently maintain our 2025 objectives. First and foremost, we have delivered step changes in profitability, deleveraging, and aftermarket growth. We are well ahead of plan. When it comes to deliveries, our healthy backlog of 14.2 billions provide us with predictability and visibility in the short term and well into 2025. Just looking at 2024, we're increasing our delivery targets, aiming to put between 150 and 155 new aircraft in the sky this year. The one area of short-term focus that merits comments is supply chain. While we have everything in place to achieve our objective, I want to highlight that our delivery profile for the year is largely set by the pace at which we receive parts from our supplier. We are in an environment where we continue to play the cards we are dealt versus planning an ideal production schedule. This, of course, will mean we must build more inventories in the first half to then deliver higher volumes through the back of the year. All this being said, Our team has firm grasp on this and demand remains strong for our aircraft. We expect a steady influx of sales in 2024. We will continue to raise the bar by offering the best aircraft, build our aftermarket and defense business, invest in innovation, and fortify our position as an industry leader. Before turning to Bart to take a closer look at our financial performance, I want to highlight the incredible strength that lies in our team's collective effort. The pure talent of our employees is what drives us forward and what will allow us to reach new heights in 2024. Bart, over to you.