BOMBARDIER - SEES 2019 BUSINESS AIRCRAFT DELIVERIES OF 150-155 UNITS - Revenue Up 10% - Profit Up 30%...
Bombardier provides 2019 Business Unit guidance highlighting strength across the portfolio, and reaffirms its 2020 financial objectives
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December 6, 2018 - Bombardier News
* SEES FY 2019 REVENUE UP ABOUT 10 PERCENT
* SEES FY 2019 REVENUE $18 BILLION
* BOMBARDIER - FREE CASH FLOW INCLUDING ONE-TIME ITEMS, ESTIMATED TO BE BREAKEVEN +/- $250M IN 2019
* BOMBARDIER - 2020 FINANCIAL OBJECTIVES REAFFIRMED
* BOMBARDIER - 2019 REVENUES ESTIMATED TO GROW BY ABOUT 10% OVER 2018 GUIDANCE TO $18 BILLION OR MORE
* BOMBARDIER - EBIT BEFORE SPECIAL ITEMS ESTIMATED TO GROW BY ABOUT 20% IN 2019 OVER 2018 GUIDANCE TO $1.15 BILLION-$1.25 BILLION
* BOMBARDIER - SUSTAINABLE CAPITAL EXPENDITURES ARE PROJECTED TO DECREASE TO APPROXIMATELY $800 MILLION OR LESS ON AN ANNUALIZED BASIS IN 2019
* BOMBARDIER - NORMALIZED 2019 FREE CASH FLOW (EXCLUDING ONE-TIME ITEMS) ESTIMATED TO BE IN RANGE OF $250 MILLION-$500 MILLION
* BOMBARDIER - AFTERMARKET REVENUES ARE ESTIMATED TO GROW FROM APPROXIMATELY $3.5 BILLION IN 2018 TO APPROXIMATELY $4.0 BILLION IN 2020
* BOMBARDIER - E BITDA BEFORE SPECIAL ITEMS ESTIMATED TO INCREASE BY ABOUT 30% IN 2019 OVER 2018 GUIDANCE TO $1.65 BILLION-$1.80 BILLION
* BOMBARDIER - ANTICIPATES ENDING 2020 WITH STRONG LIQUIDITY INCLUDING MORE THAN $3.5 BILLION OF CASH ON HAND A "SIGNIFICANTLY" IMPROVED LEVERAGE RATIO
* BOMBARDIER - SEES 2019 BUSINESS AIRCRAFT DELIVERIES OF 150-155 UNITS
* BOMBARDIER - SEES ABOUT 35 COMMERCIAL AIRCRAFT DELIVERIES IN 2019
* BOMBARDIER - ONE-TIME ITEMS EXPECTED TO IMPACT FREE CASH FLOW IN 2019 INCLUDE A $250-MILLION CHARGE FOR PREVIOUSLY ANNOUNCED RESTRUCTURING
* BOMBARDIER - ESTIMATES CASH ON HAND OF OVER $3.0 BILLION IN 2019 AND OVER $3.5 BILLION IN 2020
* BOMBARDIER - GROWTH IN 2019 REVENUE IS EXPECTED TO BE DRIVEN BY ENTRY-INTO-SERVICE OF GLOBAL 7500 AIRCRAFT, WHICH IS SOLD OUT THROUGH 2021
* BOMBARDIER - GROWTH IN 2019 REVENUE WILL BE DRIVEN BY EXECUTION ON $34-BILLION RAIL BACKLOG, COVERING OVER 80% OF TRANSPORTATION'S TARGETED 2019 & 2020 REVEN UES
* BOMBARDIER - GROWTH IN 2019 REVENUE WILL ALSO BE DRIVEN BY AN INCREASED FOCUS ON AFTERMARKET SERVICES ACROSS PORTFOLIO
* BOMBARDIER - ITEMS SEEN TO IMPACT FCF IN 2019 INCLUDE WORKING CAPITAL CONTINGENCY OF $250 MILLION LARGELY RELATED TO GLOBAL 7500 PROGRAM RAMP-UP
Bombardier provides 2019 Business Unit guidance highlighting strength across the portfolio, and reaffirms its 2020 financial objectives
- 2019 revenues estimated to grow by ~10% over 2018 guidance to $18B or more
- EBITDA before special items(1)(2) estimated to increase by ~30% in 2019 over 2018 guidance to $1.65B-$1.80B
- EBIT before special items(1) estimated to grow by ~20% in 2019 over 2018 guidance to $1.15B-$1.25B
- Free cash flow(1), including one-time items, estimated to be breakeven +/- $250M in 2019
- Normalized 2019 free cash flow (excluding one-time items) estimated to be in the range of $250M-$500M
- 2020 financial objectives reaffirmed: revenues over $20B; EBITDA before special items over $2.25B; EBIT before special items over $1.6B and $750M-$1.0B of free cash flow generation
All amounts in this press release are in U.S. dollars unless otherwise indicated.
Refer to the Caution Regarding Forward-Looking Statements, Caution Regarding Non-GAAP Measures and Assumptions sections at the end of this press release.
NEW YORK, Dec. 06, 2018 (GLOBE NEWSWIRE) -- Bombardier (TSX: BBD.B) today released its 2019 business unit guidance and confirmed that it remains on track to achieve its 2020 financial objectives. The 2019 guidance reflects the anticipated closing of the sale of both Business Aircraft's flight and technical training activities and the Q Series aircraft program as of September 30, 2019.
For 2019, Bombardier is targeting revenues of $18 billion or more, representing a year-over-year increase of approximately 10% over 2018 guidance. This growth is expected to be driven by: (i) the entry-into-service of the Global 7500 aircraft, which is sold out through 2021; (ii) execution on Bombardier's strong $34-billion rail backlog, which covers more than 80% of Transportation's targeted 2019 and 2020 revenues; and (iii) an increased focus on aftermarket services across the portfolio. Aftermarket revenues are estimated to grow from approximately $3.5 billion in 2018 to approximately $4.0 billion in 2020 as the Company continues to optimize its aftermarket and services operations, leveraging its large installed base which includes over 100,000 rail cars, more than 4,700 business jets and approximately 1,250 regional jets(3).
Profitability is anticipated to grow faster than the top line, and is expected to be driven by solid conversion on revenue growth and the strategic reshaping of Commercial Aircraft. EBITDA before special items is targeted to grow by approximately 30% over 2018 guidance to a range of $1.65 billion to $1.80 billion, while EBIT before special items is targeted to increase by approximately 20% over 2018 guidance to a range of $1.15 billion to $1.25 billion.
From a free cash flow perspective, 2019 is expected to mark the transition from a heavy investment cycle to a strong growth and cash generation cycle. Sustainable capital expenditures(4) are projected to decrease to approximately $800 million or less on an annualized basis, which represents a decrease of approximately 50% from the previous five-year average.
On a normalized basis, before one-time items, Bombardier estimates free cash flow in a range of $250 million to $500 million for 2019. One-time items that are expected to impact free cash flow in 2019 include; (i) a $250-million charge for the previously announced restructuring; and (ii) a working capital contingency of $250 million largely associated with the intense ramp-up of the Global 7500 program. Free cash flow including these one-time items is targeted to be breakeven plus or minus $250 million, resulting in an estimated cash on hand exceeding $3.0 billion by year end.
Along with announcing its 2019 business unit guidance, Bombardier reaffirmed its 2020 objectives of revenues in excess of $20 billion, EBITDA before special items over $2.25 billion, EBIT before special items over $1.6 billion and free cash flow between $750 million and $1 billion(5). In addition to generating strong cash flow from operations, Bombardier anticipates ending 2020 with strong liquidity(6), including more than $3.5 billion of cash on hand and a significantly improved leverage ratio.
"Three years into our turnaround plan and Bombardier is a much stronger company," said Alain Bellemare, President and Chief Executive Officer, Bombardier Inc. "We are confident in achieving our 2020 objectives and see tremendous opportunities beyond 2020. As we continue to execute our turnaround plan, we are building a company with great products, strong backlogs and an efficient cost structure, capable of delivering superior financial performance well into the future."
The Company will provide an update on its turnaround plan and discuss its 2019 guidance and 2020 objectives at its annual Investor Day later this afternoon. A live webcast of Bombardier's Investor Day, along with the corresponding presentation, will be available at www.ir.bombardier.com. The webcast will begin at 2:00 pm EST on Thursday, December 6, 2018 and will be available on the same website afterwards.
2019 Guidance and 2020 Objectives
| ||2019 Guidance||2020 Objectives|
|Consolidated||Revenues||≥$18.0 billion||>$20.0 billion|
before special items
|$1.65 billion - $1.80 billion(2)||>$2.25 billion|
before special items
|$1.15 billion - $1.25 billion(2)||>$1.6 billion|
|Free cash flow||Breakeven |
+/- $250 million
|$750 million -$1.0 billion|
at 1.15 USD/€
at constant exchange rates
|EBIT margin |
before special items(1)
|Business Aircraft||Revenues||~$6.25 billion||>$8.5 billion|
|EBIT margin |
before special items
|Deliveries||150-155 deliveries|| |
|Aerostructures and |
|Revenues||~$2.0 billion||>$2.25 billion|
|EBIT margin |
before special items
|Commercial Aircraft||Revenues||~$1.4 billion||Withdrawn(5)|
before special items
including the equity pick-up
for the CRJ Series program
|Deliveries||~35 deliveries|| |
Other estimates for 2019 and 2020
| ||2019 Estimates||2020 Estimates|
|Consolidated||Aftermarket revenues|| ||~$4.0 billion|
|Cash on hand||>$3.0 billion||>$3.5 billion|
|Liquidity||>$4.0 billion||>$4.5 billion|
|Capital expenditures||~$800 million|| |
With over 69,500 employees across four business segments, Bombardier is a global leader in the transportation industry, creating innovative and game-changing planes and trains. Our products and services provide world-class transportation experiences that set new standards in passenger comfort, energy efficiency, reliability and safety.
Headquartered in Montreal, Canada, Bombardier has production and engineering sites in 28 countries across the segments of Transportation, Business Aircraft, Commercial Aircraft and Aerostructures and Engineering Services. Bombardier shares are traded on the Toronto Stock Exchange (BBD). In the fiscal year ended December 31, 2017, Bombardier posted revenues of $16.2 billion US. News and information are available at bombardier.com or follow us on Twitter @Bombardier.
(1) Non-GAAP financial measures. See Caution regarding non-GAAP measures at the end of this press release.
(2) Special items are expected to include restructuring charges of $250 million in 2019, as per previously announced initiatives.
(3) Figures as at September 30, 2018.
(4) Capital expenditures include net additions to PP&E; and intangible assets.
(5) Due to the recent announcements related to the proposed sale of the Q Series aircraft program and the exploration of strategic options for the CRJ Series aircraft program, Commercial Aircraft's revenue objective for 2020 is withdrawn.
(6) Defined as cash and cash equivalent plus the current amount available under revolving credit facilities.
Bombardier, CRJ Series, Global, Global 7500 and Q Series are trademarks of Bombardier or its subsidiaries.
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CAUTION REGARDING FORWARD-LOOKING STATEMENTS
This press release includes forward-looking statements, which may involve, but are not limited to: statements with respect to our
objectives, guidance in respect of various financial metrics and sources of contribution thereto, targets, goals, priorities, market and strategies, financial position, market position, capabilities, competitive strengths, 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; competitive position; the expected impact of the legislative and regulatory environment and legal proceedings on our business and operations; strength of capital profile and balance sheet, creditworthiness, available liquidities and capital resources, expected financial requirements and ongoing review of strategic and financial alternatives; the introduction of productivity enhancements and restructuring initiatives and anticipated costs, intended benefits and timing thereof; the expected continued expansion of the business aircraft aftermarket; the objectives and financial targets underlying our transformation plan and the timing and progress in execution thereof, including the anticipated business transition to cash generation; expectations and timing regarding an opportunistic redemption of CDPQ's investment in BT Holdco; intentions regarding the CRJ program; the funding and liquidity of C Series Aircraft Limited Partnership (CSALP); the impact and expected benefits of the transaction with Airbus, on our operations, infrastructure, capabilities, development, growth and other opportunities and prospects, geographic reach, scale, assets and program value, footprint, financial condition, access to capital and overall strategy; and the impact of such transaction on our balance sheet and liquidity position. As it relates to the strategic actions and proposed sale of the Q Series aircraft program and Business Aircraft's flight and technical training activities discussed herein, this press release also contains forward-looking statements with respect to: the expected terms, conditions, and timing for completion thereof; the respective anticipated proceeds and use thereof, related costs and expenses, as well as the anticipated benefits of such actions and transactions; and the fact that closing of these transactions will be conditioned on certain events occurring, including the receipt of necessary regulatory approval. Forward-looking statements can generally be identified by the use of forward-looking terminology such as "may", "will", "shall", "can", "expect", "estimate", "intend", "anticipate", "plan", "foresee", "believe", "continue", "maintain" or "align", the negative of these terms, variations of them or similar terminology. Forward-looking statements are presented for the purpose of assisting investors and others in understanding certain key elements of our current objectives, strategic priorities, expectations and plans, and in obtaining a better understanding of our business and anticipated operating environment. Readers are cautioned that such information may not be appropriate for other purposes. By their nature, forward-looking statements require management 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 forecast results set forth in forward-looking statements. While management considers these assumptions to be reasonable and appropriate based on information currently available, there is risk that they may not be accurate. The assumptions underlying the forward-looking statements made in this press release in relation to the transaction with Airbus include the following material assumptions: the accuracy of our analyses and business case including estimated cash flows and revenues over the expected life of the program and thereafter; aircraft prices, unit costs and deliveries gradually improving during the acceleration phase; assumptions regarding the strength and quality of Airbus' scale, reach, sales, marketing and support networks, supply chain and operational expertise, and customer relationships; the fulfilment and performance by each party of its obligations pursuant to the transaction agreement and future commercial agreements and absence of significant inefficiencies or other issues in connection therewith; the realization of the anticipated benefits and synergies of the transaction in the timeframe anticipated; our ability to continue with our funding plan of CSALP and to fund, if required, any cash shortfalls; adequacy of cash planning and management and project funding; and the accuracy of our assessment of anticipated growth drivers and sector trends. The assumptions underlying the forward-looking statements made in this press release in relation to the strategic actions and proposed sale of the Q Series aircraft program and Business Aircraft's flight and technical training activities discussed herein include the following material assumptions: the satisfaction of all conditions of closing and the successful completion of such strategic actions and transactions within the anticipated timeframe, including receipt of regulatory approvals. For additional information with respect to the assumptions underlying the forward-looking statements made in this press release, including as relates to 2018 guidance, refer to the Strategic Priorities and Guidance and forward-looking statements sections in Overview and in each reportable segment of our financial report for the fiscal year ended December 31, 2017. For additional information with respect to the assumptions underlying the forward-looking statements relating to 2019 guidance and 2020 objectives made in this press release, refer to our disclosure regarding assumptions further in this press release. With respect to the transaction with Airbus specifically, certain factors that could cause actual results to differ materially from those anticipated in the forward-looking statements include, but are not limited to: reliance on our analyses and business case including estimated cash flows and revenues over the expected life of the program and thereafter; the occurrence of an event, change or other development having an adverse effect on Airbus' scale and reach, sales, marketing or support networks, supply chain, operations, or customer relationships; the failure by either party to satisfy and perform its obligations pursuant to the transaction agreement and future commercial agreements and/or significant inefficiencies or other issues arising in connection therewith; the failure to realize, in the timeframe anticipated or at all, the anticipated benefits and synergies of the transaction; risks associated with our ability to continue with our funding plan of CSALP and to fund, if required, the cash shortfalls; inadequacy of cash planning and management and project funding; and reliance on our assessment of anticipated growth drivers and sector trends. Certain other factors that could cause actual results to differ materially from those anticipated in the forward-looking statements include, but are not limited to, risks associated with general economic conditions, risks associated with our business environment (such as risks associated with "Brexit", the financial condition of the airline industry, business aircraft customers, and the rail industry; trade policy; increased competition; political instability and force majeure events or natural disasters), operational risks (such as risks related to developing new products and services; development of new business; the certification and homologation of products and services; fixed-price and fixed-term commitments and production and project execution; pressures on cash flows and capital expenditures based on project-cycle fluctuations and seasonality; our ability to successfully implement and execute our strategy, transformation plan, productivity enhancements and restructuring initiatives; doing business with partners; product performance warranty and casualty claim losses; regulatory and legal proceedings; environmental, health and safety risks; dependence on certain customers and suppliers; human resources; reliance on information systems; reliance on and protection of intellectual property rights; and adequacy of insurance coverage), financing risks (such as risks related to liquidity and access to capital markets; retirement benefit plan risk; exposure to credit risk; substantial existing debt and interest payment requirements; certain restrictive debt covenants and minimum cash levels; 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; increases in commodity prices; and inflation rate fluctuations). For more details, see the Risks and uncertainties section in Other in the Management's Discussion and Analysis (MD&A;) of our financial report for the fiscal year ended December 31, 2017. With respect to the strategic actions and proposed sale of the Q Series aircraft program and Business Aircraft's flight and technical training activities discussed herein specifically, certain factors that could cause actual results to differ materially from those anticipated in the forward-looking statements include, but are not limited to: the failure to receive or delay in receiving regulatory approvals, or otherwise satisfy the conditions to the completion of such strategic actions and transactions or delay in completing and uncertainty regarding the length of time required to complete such strategic actions and transactions, and the funds and benefits thereof not being available to Bombardier in the time frame anticipated or at all; alternate sources of funding that would be used to replace the anticipated proceeds and savings from such strategic actions and transactions, as the case may be, may not be available when needed, or on desirable terms. Accordingly, there can be no assurance that the proposed strategic actions and/or proposed sale of the Q Series aircraft program and Business Aircraft's flight and technical training activities will occur or that the anticipated benefits will be realized in their entirety, in part or at all. There can also be no assurance that the intended benefits from the productivity enhancements and restructuring initiatives discussed herein will be realized in their entirety, in part or at all, or on the completion, the form, or the timing of a BT Holdco buy-back. 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. Other risks and uncertainties not presently known to us or that we presently believe are not material could also cause actual results or events to differ materially from those expressed or implied in our forward-looking statements. In addition, there can be no assurance that the anticipated strategic benefits and operational, competitive and cost synergies of the transaction with Airbus will be realized in their entirety, in part or at all. The forward-looking statements set forth herein reflect management's expectations as at the date of this press release 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 press release are expressly qualified by this cautionary statement.
2020 financial objectives in this press release reflect the deconsolidation of the C Series program, the Q Series program and Business Aircraft's flight and technical training activities.
This press release contains both IFRS and non-GAAP measures. Non-GAAP measures are defined at the end of this press release and reconciled to the most comparable IFRS measures in our MD&A.; See Caution regarding non-GAAP measures further in this press release.
GLOBAL 5500, GLOBAL 6500, GLOBAL 7500 AND GLOBAL 8000 AIRCRAFT DISCLAIMER
The Global 5500, Global 6500, Global 7500 and Global 8000 aircraft are currently in development, and as such are subject to changes in family strategy, branding, capacity, performance, design and/or systems. All specifications and data are approximate, may change without notice and are subject to certain operating rules, assumptions and other conditions. This document does not constitute an offer, commitment, representation, guarantee or warranty of any kind.
CAUTION REGARDING NON-GAAP MEASURES
This press release is based on reported earnings in accordance with International Financial Reporting Standards (IFRS). Reference to generally accepted accounting principles (GAAP) means IFRS, unless indicated otherwise. This press release is also based on non-GAAP financial measures including EBITDA, EBIT before special items and EBITDA before special items and free cash flow.
Management believes that providing certain non-GAAP performance measures, in addition to IFRS measures, provides users of the Corporation's 2018 Third Quarterly Report with enhanced understanding of the Corporation's results and related trends and increases the transparency and clarity of the core results of the Corporation's business. Refer to the Non-GAAP financial measures and Liquidity and capital resources sections in Overview and each reporting segments' Analysis of results sections in the Corporation's 2018 Third Quarterly Report for definitions of these metrics and reconciliations to the most comparable IFRS measures.
Non-GAAP financial measures are mainly derived from the interim consolidated financial statements but do not have standardized meanings prescribed by IFRS. The exclusion of certain items from non-GAAP financial measures does not imply that these items are necessarily non-recurring. From time to time, the Corporation may exclude additional items if it believes doing so would result in a more transparent and comparable disclosure. Other entities in the Corporation's industry may define the above measures differently than the Corporation does. In those cases, it may be difficult to compare the performance of those entities to that of the Corporation based on these similarly-named non-GAAP measures.
The following are the material assumptions underlying the 2019 guidance and 2020 objectives included in this press release:
- normal execution and delivery of current firm orders and projects in the backlog;
- the ability to understand customer needs and portfolio of products and services to drive increasing market demand and secure key strategic orders;
- continued deployment and execution of leading initiatives according to plan to improve revenue conversion into higher earnings and free cash flows(1), through improved procurement cost, controlled spending and labor efficiency;
- delivering on the transformation plan targets, through restructurings and other initiatives addressing the direct and indirect cost structure, focusing on sustained cost reductions and operational improvements, while reducing working capital consumption;
- the ability to leverage the global manufacturing footprint and transfer best practices and technology across production sites, and by leveraging lower cost geographies and emerging economies;
- the ability of the supply base to support product development and planned production rates;
- the ability to identify and enter into further risk sharing partnerships and initiatives;
- the effectiveness of disciplined capital deployment measures in new programs and products to drive revenue growth;
- the ability to recruit and retain highly skilled resources to deploy the product development strategy;
- competitive global environment and global economic conditions to remain similar;
- the stability of foreign exchange rates at current levels;
- the ability to have sufficient liquidity to execute the strategic plan, to meet financial covenants and to pay down long term debt or refinance bank facilities and maturities starting in 2020.
- financials reflect IFRS 16 lease accounting starting January 1, 2019;
- closing of Q Series Aircraft program assets & Business Aircraft flight and training activities transactions by the second half of 2019;
- the alignment of production rates to market demand;
- the ability to ramp up production and deliveries of new programs, and meet scheduled entry-into-service date for the Global 7500 and Global 5500, Global 6500 and Global 8000 aircraft program;
- continued ability to capture and win campaigns and projects based on market forecasts(2), leading to estimated future order intake;
- continued deployment and execution of growth strategies, including the aftermarket business;
- the reduction of investments and development spend to normalized levels by 2019-2020;
- the realization of the anticipated benefits and synergies of the transaction with Airbus in the timeframe anticipated;
- our ability to continue with our current funding plan of CSALP and to fund, if required, any cash shortfalls and adequacy of cash planning and management and project funding.
- our ability to execute and deliver business model enhancement initiatives;
- revenue conversion and phase out of our legacy contracts;
- a sustained level of public sector spending;
- the realization of upcoming tenders and our ability to capture them based on market forecasts(3), leading to estimated future order intake;
- successful deployment and execution of growth strategies, including the value chain approach and the creation of ecosystems, site specialization and the creation of engineering centers of excellence, and the evolution of the revenue mix towards more signaling and systems and operations and maintenance contracts.
For a discussion of the material risk factors associated with the forward-looking information, refer to the Caution regarding forward-looking statements above in this press release and to the Risks and uncertainties section in Other in the MD&A; of our Financial Report for the fiscal year ended December 31, 2017.
(1) Non-GAAP measure. For further information on non-GAAP measures used in this press release refer to our disclosure regarding non-GAAP measures above in this press release.
(2) Demand forecast for aerospace segments is based on the analysis of main market indicators, including real GDP growth, industry confidence, wealth creation, corporate profitability within the aerospace customer base, aircraft utilization, pre-owned business jet inventory levels, aircraft shipments and billings, passenger traffic levels, fuel prices, airline profitability, pilot scope clauses, environmental regulations, globalization of trade, installed base and average age of the fleet, replacement demand, new aircraft programs and non-traditional markets and their accessibility. For more details, refer to the market indicators in the Industry and Economic Environment sections in the respective aerospace reportable segments in our 2017 Financial Report.
(3) Demand forecast in the Transportation segment is based on sustained level of public sector spending and the continuation of favourable megatrends, including urbanization and environmental awareness trends, the densification of cities and demand for mobility and digitalization solutions. For more details, refer to the market indicators in the Industry and Economic Environment section of the Transportation segment in our 2017 Financial Report.