Bombardier Aerospace...looking statements sections in Overview, Bombardier Aerospace and Bombardier...

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© Bombardier Inc. or its subsidiaries. All rights reserved. Bombardier Aerospace Market Forecast 2013-2032 14 June 2013

Transcript of Bombardier Aerospace...looking statements sections in Overview, Bombardier Aerospace and Bombardier...

Page 1: Bombardier Aerospace...looking statements sections in Overview, Bombardier Aerospace and Bombardier Transportation sections in the Management’s Discussion and Analysis (“MD&A”)

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Bombardier

Aerospace

Market Forecast

2013-2032

14 June 2013

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This presentation includes forward-looking statements, which may involve, but are not limited to: statements with respect to our

objectives, guidance, targets, goals, priorities, our market and strategies, financial position, beliefs, prospects, plans, expectations,

anticipations, estimates and intentions; general economic and business outlook, prospects and trends of an industry; expected

growth in demand for products and services; product development, including projected design, characteristics, capacity or

performance; expected or scheduled entry-into-service of products and services, orders, deliveries, testing, lead times, certifications

and project execution in general; our competitive position; and the expected impact of the legislative and regulatory environment and

legal proceedings on our business and operations. Forward-looking statements generally can be identified by the use of forward

looking terminology such as “may”, “will”, “expect”, “intend”, “anticipate”, “plan”, “foresee”, “believe”, “continue”, “maintain” or “align”,

the negative of these terms, variations of them or similar terminology. By their nature, forward-looking statements require us to make

assumptions and are subject to important known and unknown risks and uncertainties, which may cause our actual results in future

periods to differ materially from forecasted results. While we consider our assumptions to be reasonable and appropriate based on

information currently available, there is a risk that they may not be accurate. For additional information with respect to the

assumptions underlying the forward looking statements made in this presentation, refer to the respective Guidance and forward-

looking statements sections in Overview, Bombardier Aerospace and Bombardier Transportation sections in the Management’s

Discussion and Analysis (“MD&A”) of the Corporation’s annual report for the fiscal year ended December 31, 2012.

Certain factors that could cause actual results to differ materially from those anticipated in the forward looking statements include

risks associated with general economic conditions, risks associated with our business environment (such as risks associated with

the financial condition of the airline industry and major rail operators), operational risks (such as risks related to developing new

products and services; doing business with partners; product performance warranty and casualty claim losses; regulatory and legal

proceedings; to the environment; dependence on certain customers and suppliers; human resources; fixed-price commitments and

production and project execution), financing risks (such as risks related to liquidity and access to capital markets, exposure to credit

risk, certain restrictive debt covenants, financing support provided for the benefit of certain customers and reliance on government

support) and market risks (such as risks related to foreign currency fluctuations, changing interest rates, decreases in residual

values and increases in commodity prices). For more details, see the Risks and uncertainties section in Other in the MD&A of the

Corporation’s annual report for the fiscal year ended December 31, 2012. Readers are cautioned that the foregoing list of factors

that may affect future growth, results and performance is not exhaustive and undue reliance should not be placed on forward-looking

statements. The forward-looking statements set forth herein reflect our expectations as at the date of this presentation and are

subject to change after such date. Unless otherwise required by applicable securities laws, we expressly disclaim any intention, and

assume no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or

otherwise. The forward-looking statements contained in this presentation are expressly qualified by this cautionary statement.

1

Forward-looking statements

ALL AMOUNTS ARE EXPRESSED IN U.S. DOLLARS UNLESS OTHERWISE INDICATED.

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2

Leading the industry and our customers into the future

The Bombardier Business and

Commercial Aircraft Market Forecasts are

a key foundation of our strategic planning

process

The Forecasts are built on common

baseline assumptions

The Forecasts are primarily driven by

econometric modeling, adjusted for

certain qualitative factors

The output, a 20-year delivery forecast, is

used to frame our strategies and help us

better serve our customers

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Forecasted economic recovery has been delayed

two years in a row

Source: IHS Global Insight, 2011 to 2013

GDP growth is a major driver of new aircraft demand

3

World GDP 20-Year Forecast [%, 2008-2032]

-3%

-2%

-1%

0%

1%

2%

3%

4%

5%

2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032

Actuals 2011 Forecast 2012 Forecast 2013 Forecast

20-Year Average GDP

Growth

2011 Forecast 3.3%

2012 Forecast 3.2%

2013 Forecast 3.2%

Today

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$1.4 $5.3

$1.3 $3.6

$2.2

$1.3

$14.9

$8.5 $15.5

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%

4 Source: IHS Global Insight, February 2013

World Average: 3.2%

India China Africa Europe Asia

Pacific

North

America

Latin

America

CIS Middle

East

Mature economies will show slower growth rates, but on a larger base

India and China will be the fastest growing major

economies over the next 20 years

Bubble Size =

2012 GDP in Trillion

20-Year GDP Growth by Region

[%, Regions]

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Source: Energy Information Administration Annual Energy Outlook 2013

Sustained high oil prices are expected

5

Higher oil prices drive demand for more efficient commercial aircraft

$-

$20

$40

$60

$80

$100

$120

$140

$160

2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032

Forecast Actuals

20-Year Oil Price Forecast

[Brent 2011 $ per barrel, 2008-2032]

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Commercial aircraft market is building momentum

Improved stability in the US and most emerging economies, while inertia continues to

drag the European economies

Exploding middle-class population in growth markets will speed up the demand for

new aircraft

High oil prices continue to be the most critical factor influencing airline fleet decisions

Worldwide, traffic demand remains strong and yields are stabilizing

US scope clause relaxation in 2012 will open up new opportunities for more regional jets

in the near term

7

Bombardier is confident in the long-term prospect of the 60- to 149-seat market

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8

Our key market drivers suggest a bright future for the

commercial aircraft market

Long-Term Commercial Aircraft Market Drivers

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E.g.:

•LCC business model

•Air travel tax scheme

•Airport infrastructure

1

10

100

1,000

10,000

100 1,000 10,000 100,000

Se

ats

pe

r 1

millio

n p

op

, (l

og

sc

ale

)

GDP per capita ($, log scale)

NORTH AMERICA

LATIN AMERICA

ASIA

MIDDLE EAST

& AFRICA

EUROPE

Economic growth is driving commercial aircraft

penetration worldwide

9 Sources: Fleet iNet, IHS Global Insight and IMF, Bombardier analysis

1st driving

force: GDP

growth

2nd driving

force:

removal of

barriers

Typical

growth path

20- to 219-seat aircraft per capita vs. GDP per capita [Seats, $]

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3,500 2,600

4,800

250

5,650

6,900

2,700

1,300

3,000

1,050

6,950 8,700

World fleet forecasted to grow to 16,700 units in

the 20- to 149-seat market by 2032

10 Source: Bombardier Commercial Aircraft Market Forecast 2013-2032

Total Fleet 2012 Deliveries Retirements Fleet 2032

20- to 149-seat 10,900 12,800 7,000 16,700

20- to 59-seat 60- to 99-seat 100- to 149-seat

2012

Fleet

Fleet

2032

Deliveries Retirements

Demand will shift away from 20- to 59-seat category

20-Year Commercial Aircraft Fleet Forecast [Units, 2012-2032]

2012

Fleet

Fleet

2032

Deliveries Retirements 2012

Fleet

Fleet

2032

Deliveries Retirements

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Source: Bombardier Commercial Aircraft Market Forecast 2013-2032

Energy Information Administration - Brent

Higher fuel prices will influence mix between

turboprops and jets

11

20- to 99-Seat Fleet Mix [%, 2002, 2012, 2013-2032]

86%

55% 52%

14%

45% 48%

2002 Actual 2012 Actual 2013-2032 Forecast

Oil @ $108 / barrel Oil @ $31 / barrel Oil @ $112 / barrel

Turboprops

Regional Jets

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North America, Greater China and Europe to lead in terms

of aircraft deliveries

Source: Bombardier Commercial Aircraft Market Forecast 2013-2032

Total Deliveries: 12,800 Units

12

Total Deliveries: 12,800 Units

Regional 20-Year Delivery Outlook [Units]

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3 4 4 4

6 5 4

24

34

2012 2022 2032

100- to 149- seats

20- to 99- seats jets

20- to 99-seats turboprops

Annual industry revenues to grow to $43B in 2032

Sources: Bombardier Commercial Aircraft Market Forecast 2013-2032

$11B

$34B

$43B

13

$646 billion in revenues in the 20- to 149-seat market over the next 20 years

Annual Industry Revenues [$B, 2012, 2022, 2032]

20-Year Revenues

20- to 99-seat turboprops $81B

20- to 99-seat jets $105B

100- to 149-seat jets $460B

Total $646B

100- to 149-seat

20- to 99-seat jets

20- to 99-seats turboprops

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Business aircraft market continues to recover from the

recent industry downturn

Current market indicators remain mixed, but signs of forward momentum are beginning to

emerge

Industry net orders up in 2012

Pre-owned inventory levels continue to gradually improve

Deliveries and aircraft utilization remain stable

Orders and deliveries in 2013 are expected to remain comparable to those of 2012

The long-term outlook for business aircraft demand remains solid

15

Bombardier remains confident in the strong long-term potential for the

business aircraft market

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The strong potential for the business aircraft industry is

based on long-term business aircraft key market drivers

16

Long-Term Business Aircraft Market Drivers

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Wealth creation will continue to drive rate of business jet

adoption in each region

17 Sources: ASCEND, IHS Global Insight and IMF, Bombardier analysis

1

10

100

1000

10000

100 1,000 10,000 100,000

GDP per Capita (USD, Log Scale)

Fle

et

pe

r 1

00

Mill

ion

Po

pu

lati

on

(L

og

Sc

ale

)

2nd driving

force:

removal of

barriers

1st driving

force: GDP

growth

NORTH AMERICA

LATIN AMERICAEUROPE &

RUSSIA

ASIA

MIDDLE-EAST &

AFRICA

Average

growth path

NORTH AMERICA

LATIN AMERICA

MIDDLE-EAST

& AFRICA

ASIA

EUROPE & CIS

1st driving

force: GDP

growth

2nd driving

force:

removal of

barriers

Typical

growth path

Fleet per capita vs. GDP per capita [Units, $]

E.g.:

•Infrastructure

•Regulatory regime

•Airspace Access

GDP per capita ($, log scale)

Fle

et

pe

r 1

00

millio

n p

op

, (l

og

sc

ale

)

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World fleet forecasted to grow to 30,975 units by 2032

18 Source: Bombardier Business Aircraft Market Forecast 2013-2032

14,875

9,800

3,150

21,525

14,200

4,750

30,975

Fleet 2032 Retirements Deliveries Fleet 2022 Retirements Deliveries Fleet 2012

Retirements expected to accelerate over next 20 years as a result of emerging

environmental concerns, new regulations and airspace modernization

20-Year Business Aircraft Fleet Forecast [Units, 2012-2032]

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Our forecast calls for 24,000 business jet deliveries worth

$650 billion over next 20 years

19 Source: Bombardier Business Aircraft Market Forecast 2013-2032

$119B

(18%)

$238B

(37%)

$293B

(45%)

Large

Medium

Light

8,000

(33%)

10,500

(44%)

5,500

(23%)

Total

$650B

Total

24,000 units

Units Revenues

The Light category will account for the largest share of deliveries, while the Large

category will account for the largest share of revenues over the next 20 years

20-Year Forecast Deliveries and Revenues

[Units, $B]

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North America, Europe and Greater China will be the

largest markets for business jet deliveries

20 Source: Bombardier Business Aircraft Market Forecast 2013-2032

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Total Deliveries: 24,000 Units

Regional 10-Year and 20-Year Delivery Outlook [Units]

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Conclusion

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Bombardier is well-positioned to benefit from the next

business aircraft industry up-cycle

22

Market category: Light business jets

Models: Learjet 701, Learjet 751, Learjet 60XR and Learjet 851

Competitive advantages2: The Learjet heritage of high performance is upheld by each Learjet

product. The Learjet family of aircraft features exceptionally fast cruise speeds, high climb rates and

operating ceilings, along with competitive operating costs. The Learjet 85 will be the largest and most

comfortable Learjet ever built.

LEARJET family of aircraft

Market category: Medium business jets

Models: Challenger 300, Challenger 3501, Challenger 605 and Challenger 800 series

Competitive advantages2: The Challenger aircraft are productivity-enhancing business tools, with

the widest, most spacious cabins in their category. Each aircraft offers low operating costs, high

reliability, and can be customized with leading-edge cabin communication equipment.

CHALLENGER family of aircraft

Market category: Large business jets

Models: Global 5000, Global 6000, Global 70001 and Global 80001

Competitive advantages2: The Global family of aircraft offers an ideal balance of performance and

comfort for long-range missions. The Global 7000 and Global 8000 aircraft are being developed as

an extension to the Global family of aircraft and will give Bombardier the broadest market coverage in

the upper end of the business aircraft market.

GLOBAL family of aircraft

1.Currently under development.

2.Under certain operating conditions, when compared to aircraft currently in service.

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Our family of commercial aircraft is optimized to thrive in

the fast-growing 60- to 149-seat market

23

Market category: 60- to 90-seat turboprops

Models: Q400 NextGen

Competitive advantages1: For short-haul operations, the optimized Q400 NextGen airliner is a fast,

fuel-efficient and low-emission large turboprop. It is the only in-production turboprop that offers jet-like

speed and an extended range, along with competitive operating costs and product commonality across

the Q-Series family of turboprops.

Q-SERIES turboprop aircraft

Market category: 70- to 100-seat regional jets

Models: CRJ700 NextGen, CRJ900 NextGen and CRJ1000 NextGen

Competitive advantages1: Designed for hub expansion and point-to-point service, the CRJ family of

aircraft is optimized for medium to long distance routes. The family features best-in-class operating

costs, fuel burn and greenhouse gas emissions, as well as commonality across the family, including

the CRJ100 and CRJ200 aircraft.

CRJ regional jet family of aircraft

Market category: 100- to 149-seat commercial jets

Models: CS1001 and CS3002

Competitive advantages3: Designed for the growing 100- to 149-seat market, the 100% new CSeries

family of aircraft will offer 15% cash operating cost and 20% fuel burn advantage over in-production

aircraft in its class. The CSeries aircraft clean-sheet design ensures that the aircraft will achieve

greatly reduced noise and emissions, as well as superior operational flexibility, exceptional airfield

performance and a range of 2,950 NM (5,463 km).

CSERIES mainline single-aisle jet family of aircraft

1.Under certain operating conditions, when compared to aircraft currently in service for short-haul flights up to 500 NM.

2.Currently under development. 3.All data and specifications are estimates, subject to change in family strategy,

branding, capacity and performance during the design, manufacture and certification process (based on 500 NM trips).

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