Bombardier Inc.

Good morning, ladies and gentlemen, and welcome to the Bombardier first quarter 2025 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. Francis Richer de la Fleche, Vice President, FP&A, and Investor Relations from Bombardier. Please go ahead, sir.

Good morning, everyone, and welcome to Bombardier's earnings call for the first quarter of 2025. 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 the MD&A. I am 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 Demoski, to review our operations and financial results for the first quarter ended March 31, 2025. I would now like to turn it over to Eric.

Thank you very much Francis. Hello and welcome everyone. Good morning everyone and thank you for joining us today. So last time we spoke here, we were celebrating our 2024 results and we also had to announce that we would not be providing guidance given the unstable geopolitical context. Today, I am pleased to start on a very positive note and to confirm a strong guidance for 2025. Our team has successfully navigated the first three months of the year. I am proud of their poise, their dedication, and their commitment to our customers. Since February, we have gained a lot more clarity on potential tariff mechanics. We also took the time to complete multiple deep dives throughout our business. It's important to note that despite being in a more volatile environment, we continue to see order activity and we have not seen any cancellations. With that said, we expect meaningful increases in revenues, profitability, and free cash flow versus 2024, all of which are in line with the journey we began in 2021. We stayed confident when faced with a lot of speculation. We kept our eyes closely on business aviation flight hours, which went up in Q1. We watched pre-owned inventory of Challenger and Global jets go down, remaining at very favorable levels. And finally, we kept a relatively stable backlog and a book to build close to one, achieving 0.9. We manage our supply chain proactively. While this may not make headlines during a global trade war, it does require continuous attention and is something we are proud of. The tariff landscape has clearly created new challenges for our suppliers, and we continue to work closely with them. I'll speak more to this later. For now, let's focus on the detailed results of Q1. They set the stage for the full year guidance number that Bart will cover with you in detail. As you've seen this morning in our release, double-digit gains are a major theme across Archimetrics. Looking at revenue, we have raised the bar. We have told this story before and are delighted to tell it again. Our operations team remained flexible and agile, delivering three more aircraft than in 2024. We also raised the bar in Q1 for services, boasting another year-over-year gain. The conclusion? 19% more revenue in what I am sure we will all agree was a turbulent quarter for many companies. Staying calm and confident help us maintain focus on what we control. This really comes true when you look at our adjusted EBITDA, which recorded an impressive 21% year-over-year jump to $248 million. It represents a margin of 16.3%. We were also much more efficient when it came to our seasonable use of cash. I call it seasonal because the first quarter is often a very intense time for inventory buildup. Adding to this, January and February are typically slower on the sales front. Overall, our free cash usage ticked in the right direction, noting a 21% improvement versus Q1 last year. I also want to take a moment to highlight key growth aspects in our business. At our investor day last year, we introduced the notion of high return on invested capital in our product, as well as continued diversification through services and defense. To start the year, we have seen strategic moves and milestones in all of those categories. Let's start with the Global 8000. It's a joy to watch the aircraft smoothly move down the final assembly line. It's en route to a non-time delivery entry into service this year. Excitement for this plane is really building. It is being healthy demand because of its unparalleled capabilities. I know people have been captivated by the fact that it will be the fastest civilian jet on the market. But the bottom line is that it does so much more. It combines the size, the range, the cabin comfort with speed in a way no other jet can. It's a total package. It also delivers unprecedented landing performance on shorter runways, unlocking thousands more destinations for our customers. With a plane that can virtually land anywhere, service is key. This is why we continue to look at strategic expansions in our network. These will happen on two fronts, capacity and new services. In terms of capacity, As far as Australia, more line stations are coming online. We also recently confirmed our commitment to the United Arab Emirates, where our next full-scale service centre will take shape in Abu Dhabi. In terms of new services, in the United Kingdom, we have begun construction of a paint facility. This will further drive diversification in how we generate revenues by offering customers more of what they need in the region. This worldwide focus on seizing opportunities also translates to Bombardier Defence. We continue to make strategic gains, much like the recent order for Challenger 650 aircraft in Australia. Our approach in Defence has been to remain flexible and collaborative with allied governments. In the defense sphere, this is as important as the fundamental quality of and performance of the planes themselves. The world has changed, and it continues to change at a pace that we'll see requirements quickly evolve. Our products, all the way up to our global jets, are set to take a more prominent position when it comes to defending vast expanses of land and oceans. Our team is working with partners to create customized solutions that can enter service fast and at advantageous costs. Bombardier continues to be well-placed to succeed. Managing through the short term will remain a priority as markets and our customers react to the international trade landscape. We are very happy with our results and our team's performance. I do want to add some color on order activity. It's important to note that we have a number of order discussion stalled around the March timeframe. We saw a similar trend during the 2023 banking crisis. Uncertainty caused a short speed bump as everyone involved in transaction slowed down a bit to reassess the situation. As things progress today, we are seeing much better traction and activity. I also want to highlight that there are new opportunities emerging as the geopolitical landscape shifts. Our existing relationship in all geographies will help us open doors as the year progresses. Governments upholding the USMC exemption has also contributed to stability. It has ultimately preserved aviation jobs in the U.S., Canada and Mexico on a broad scale. While we and our customers have not been subject to a tariff on a delivery, the whole process has been taxing, if you'll pardon the pun. We have an all-ends-on-deck approach on being responsive to customers, being in close touch with governments and working with our suppliers. This has represented a lot of effort and disrupted many days for our team's members specializing in international logistics, customs brokerage, taxation, and other such fields. Managing this very fluid situation is not magic, it's hard work. It's recognizing that your need to start working on scenarios, or needs of starting to work on scenarios early, and you need to go as far upstream as you can go to solve the problem. This is an approach that helps us succeed with supply chain. It's a reflex we have confidently deployed in our current situation with the threat of tariffs. The conclusion to our hard work is simple. Our aircraft are USMCA compliant, making them exempt of tariffs. Additionally, our guidance accounts for all known tariffs-related impacts. We have also factored an impact for aluminum, steel, and the reciprocal tariffs on non-USMC compliant materials. All this said, Bombardier and business aviation as a whole are resilient. There are dozens, if not hundreds, of major international trade deals to be done around the world in the immediate future. Business aviation is an accelerator thanks to the fundamental purpose of our plane. to connect leaders across ocean with speed and efficiency. It's important that we also carefully consider that in times of such intense and rapid change, there are always hidden opportunities. That will be an immediate focus for us. We have boots on the ground across so many countries, and we will be ready to capture opportunities in defense and also civil markets. With that, I will turn the floor to Bart to go through our results as well as our outlook for the remainder of the year. Bart, over to you.