No doubt that the arrival of Éric Martel at the head of Bombardier, on April 6, 2020, is one of the good “financial” moves of the Beaudoin-Bombardier, the controlling shareholders.
Bombardier is today unveiling its results for 2022, which point to a strong comeback for the Quebec multinational, which has become a world leader in the design and manufacture of business jets with its Challenger and Global ranges.
Since Bombardier sold its rail division of Bombardier Transportation and liquidated the costly C Series and several other assets, the company has been on a roll.
The share price explodes
And that caused the stock market to soar. Taking into account the recent reverse stock split (25 to 1), Bombardier’s share price rose from $10.13 (April 5, 2020) to $67 yesterday, up more than 560% in less than three years.
This stock market valuation allowed the shareholders of the company to enrich themselves on paper by some 5.4 billion dollars.
The Bombardiers (Janine, Claire, Huguette, JR André) and Laurent Beaudoin alone have seen their control block appreciate by some $640 million since the former CEO of Hydro-Québec, Éric Martel, replaced Alain Bellemare.
During his five-year reign, Bellemare was unable to turn the company around, so much so that it had to be dismantled to save the furniture.
The signal from the big bosses
In my May 25, 2022 column “Bombardier is flying pretty low, but no crash on the horizon”, I had tried to draw investors’ attention to the fact that Bombardier stock, at $28 each At the time, seemed to be on the low end as the company was on its way to returning to profitability with its specialty business jet maker, including the all-new Global 8000, the fastest business jet in the world.
Of the 17 stock analysts who followed the title of Bombardier at that time, 12 of them recommended its purchase.
They weren’t wrong, with the stock having more than doubled in the past nine months.
In addition, in this same column, I also took the opportunity to draw investors’ attention to the fact that in May 2022, the 11 senior executives of Bombardier had been granted blocks of options and warrants subscription at an exercise price of $29.75 (or $1.19 per share with the 25:1 consolidation).
Just with these blocks of options and warrants obtained just nine months ago, Bombardier’s senior executives have made $18.5 million in paper gains to date.
With such gains, Martel and its senior management team have an interest in seeing Bombardier continue to perform well in the lucrative business jet market.
Quebec benefits
Considering the niche market in which Bombardier operates today, many Quebecers are wondering if Quebec will emerge a winner from the restructuring of what remains of this Quebec flagship.
The answer is yes!
According to a report by PwC (PricewaterhouseCoopers), Bombardier generates significant economic benefits in Canada, particularly in Quebec. The data relates to the year 2021.
Bombardier’s contribution to Canadian GDP amounts to $5.7 billion, including $4 billion in Quebec. In terms of Quebec aircraft exports, Bombardier exported a total value of $5.1 billion in 2021.
Of the 33,275 direct and indirect jobs supported in Canada by Bombardier’s activities, 21,460 come from Quebec. This includes 7,063 direct Bombardier jobs in Quebec.
Bombardier’s payroll in Canada amounted to $2.7 billion in 2021, including $1.8 billion for employees in Quebec.
Of the $1.1 billion in tax revenue generated by Bombardier from its payroll and the taxes paid by the company, just over $700 million ended up in the coffers of the Quebec government.
The average salary at Bombardier is regarding 70% higher than the average salary in Quebec, nearly $90,000, compared to $52,920.