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Bombardier Releases 2019 Business Unit Guidance

Bombardier Releases 2019 Business Unit Guidance

Bombardier has 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 programme as of September 30, 2019.

For 2019, Bombardier is targeting revenues of USD 18 billion or more, representing a year-over-year increase of approximately 10 percent 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 USD 34-billion rail backlog, which covers more than 80 percent 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 USD 3.5 billion in 2018 to approximately USD 4.0 billion in 2020 as the company continues to optimise 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.

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 percent over 2018 guidance to a range of USD 1.65 billion to USD 1.80 billion, while EBIT before special items is targeted to increase by approximately 20 percent over 2018 guidance to a range of USD 1.15 billion to USD 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 are projected to decrease to approximately USD 800 million or less on an annualised basis, which represents a decrease of approximately 50 percent from the previous five-year average.

On a normalised basis, before one-time items, Bombardier estimates free cash flow in a range of USD 250 million to USD 500 million for 2019. One-time items that are expected to impact free cash flow in 2019 include; (i) a USD 250-million charge for the previously announced restructuring; and (ii) a working capital contingency of USD 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 USD 250 million, resulting in an estimated cash on hand exceeding USD 3.0 billion by year end.

Along with announcing its 2019 business unit guidance, Bombardier reaffirmed its 2020 objectives of revenues in excess of USD 20 billion, EBITDA before special items over USD 2.25 billion, EBIT before special items over USD 1.6 billion and free cash flow between USD 750 million and USD 1 billion. In addition to generating strong cash flow from operations, Bombardier anticipates ending 2020 with strong liquidity, including more than USD 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.”

2019 Guidance And 2020 Objectives (in USD)

Other Estimates For 2019 And 2020 (in USD)


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Interview With Cas Brentjens, Vice President Solution Consulting Asia Pacific & Japan At Infor

Interview With Cas Brentjens, Vice President Solution Consulting Asia Pacific & Japan at Infor

Asia Pacific Metalworking Equipment News is pleased to speak to Cas Brentjens,Vice President Solution Consulting Asia Pacific & Japan at Infor regarding his projections on the megatrends for 2019 and the disruptive technologies that have impacted the industry in 2018.

1. Can you sum up your company’s focus and achievements in 2018?

Users now want to have an intuitive, mobile-app style user experience. That’s the first aspect of our focus – Infor builds complete industry suites in the cloud and efficiently deploys technology that puts the user experience first, leverages data science, and integrates easily into existing systems.

The second focus is to offer end-to-end digital solutions to help companies and enterprises outpace the digital disruption and unlock their growth potential. Companies are now in a competitive environment where most industries are being disrupted by new players with unique business models. We want to help companies by providing a platform where they can outpace the competition and the disruption that is happening in the industry.

2. What are the projects that companies within the industry are currently focusing on?

There has been a focus on upstream supply chain processes and we have been working on projects to help optimise large data centers through our asset management solutions. For the automotive industry, we are also looking at how to position companies in their journey towards establishing electric vehicle plants and the manufacturing of components for the new electrical vehicle market.

Companies are also investing in the factory of the future, which are optimized factories with connected IoT devices that are collecting data and doing smart things with that data. This could help in maximizing output, optimizing maintenance schedules or the customizing of products for the individual customer.

There is also one megatrend whereby companies are customizing what the consumer wants and individual industry players are working towards that trend.

3. What are your projections for the APAC economy in 2019?

Digital disruption will still happen with new players entering with new revenue models and new product offerings. Companies in most industries will be moving from a product-only business model to offering both products and services. A shift of focus in the industry from mass products to hyper-personalization will continue to happen and companies will shift from a horizontal or vertical play towards a functional play. Industries are also moving from one aspect that they are really good at from a manufacturing or services perspective, to servicing the customer from a holistic view.

4. What business trends in Asia will capture your interest for growth next year?

What is happening with the “Made in China 2025” vision is changing the way supply chains across APAC are being organised. You can see a re-design of supply chains where factories are moved out of China to Vietnam or other emerging countries. The Belt and Road initiative has not only impacting the infrastructure in China, but it is also impacting the re-design of the supply chains in other regions. Therefore, large mega-trends like the Belt and Road initiative, Industry 4.0 and “Made in China 2025” vision are making a big impact in the industry, and we are looking very closely at those.

5. To sum up, what do you think is the key industry trend in 2019?

Dealing with hyper-personalization in the market where customers are now expecting more customized products and the industry must deal with how to meet that demand and bring it to market and with speed.


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Worldwide Spending On Robotics And Drones To Reach USD115.7 Billion In 2019

Worldwide Spending On Robotics And Drones To Reach USD115.7 Billion In 2019

A new update to the International Data Corporation (IDC) Worldwide Semiannual Robotics and Drones Spending Guide forecasts that worldwide spending on robotics systems and drones will total USD115.7 billion in 2019, an increase of 17.6 percent compared to 2018. By 2022, IDC expects this spending will reach USD 210.3 billion with a compound annual growth rate (CAGR) of 20.2 percent.

Robotics systems will be the larger of the two categories throughout the five-year forecast period with worldwide robotics spending forecast to be USD 103.4 billion in 2019. Investments in drones will total USD 12.3 billion in 2019 but are forecast to grow at a faster rate (30.6 percent CAGR) than robotics systems (18.9 percent CAGR).

Robotics spending in 2019 will be dominated by hardware purchases, with nearly two thirds of all spending going toward robotic systems, after-market robotics hardware, and system hardware. Purchases of industrial robots and service robots will deliver nearly 30 percent of the category total in 2019. Robotics-related software spending will largely go toward purchases of command and control applications and robotics-specific applications. Services spending will be spread across several segments, including systems integration, application management, and hardware deployment and support. Software spending is forecast to grow at a slightly faster rate (21.7 percent CAGR) than services or hardware spending (19.0 percent CAGR and 18.2 percent CAGR respectively).

Discrete manufacturing will be responsible for nearly half of all robotics systems spending worldwide in 2019, generating USD 50.2 billion in revenues. The next largest industries for robotics systems will be process manufacturing, resource industries, healthcare, and consumers. The industries that will see the fastest growth in robotics spending over the 2017-2022 forecast are wholesale (31.4 percent CAGR), retail (29.6 percent CAGR), and construction (28.1 percent CAGR). By 2022, IDC expects retail will overtake consumer spending on robotics systems.

“Industrial robotics continues to top the technology investment priorities of manufacturing organisations across all major markets surveyed by IDC in 2018,” said Dr. Jing Bing Zhang, Research Director, Worldwide Robotics. “While the looming trade war between the United States and China is likely to dampen the market growth slightly in the near term, we expect the growth trend to pick up from 2020 onward.”

“The worldwide market for commercial service robotics will continue to grow at a rate of 20% per year for the coming five years,” said John Santagate, Research Director for Commercial Service Robotics at IDC. “This growth is due to continued innovation in ease of use as well as the drive for flexible automation across industries. We expect to see growth driven by increased adoption of autonomous mobile robots and collaborative robots being deployed as a means to deliver improvements in capacity, productivity, and efficiency.”

Spending on drones will also be dominated by hardware purchases with roughly 90 percent of the category total going toward drones and after-market drone hardware. Consumer drones will account for roughly 40 percent of the category total in 2019 with service drones delivering another 18 percent. Similar to robotics systems, drone software spending will primarily go to command and control applications and drone-specific applications. Services spending will be led by education and training and will see the fastest growth (35.9 percent CAGR) over the five-year forecast, followed by software (33.9 percent CAGR) and hardware (301 percent CAGR).

Consumer spending on drones will total USD 5.1 billion in 2019, accounting for a little over 40 percent of the worldwide total. Industry spending on drones in 2019 will be led by utilities (USD 1.4 billion), construction (USD 1.05 billion) and discrete manufacturing (USD 913 million). The industries that will experience the fastest growth in drone spending over the five-year forecast period will be federal/central government (56.0 percent CAGR), education (51.0 percent CAGR), and retail (42.01 percent CAGR). By 2022, IDC expects the resource industry to move ahead of both construction and discrete manufacturing to become the second largest industry for drone spending.

“The market is working to simplify the use and integration of drones with efforts ranging from enabling new drone applications through improved technological capabilities to understanding the regulatory implications of drones and the viability of these applications. Drones are developing new skills, coupling 3D mapping and fully autonomous navigation capabilities with rapid improvements in battery performance and air-traffic management systems. Drone adopters continue to search for a safe, cost-efficient, and repeatable drone solution that can be easily implemented in a variety of situations and use cases,” said Stacey Soohoo, Research Manager, Customer Insights & Analysis at IDC.


Worldwide Spending On Robotics And Drones To Reach USD115.7 Billion In 2019

On a geographic basis, China will be the largest region for drones and robotics systems with overall spending of $38.5 billion in 2019. Asia/Pacific (excluding Japan and China) (APeJC) will be the second largest region with $23.3 billion in spending, followed by the United States ($17.2 billion) and Western Europe ($13.0 billion). China will also be the leading region for robotics systems with $36.1 billion in spending this year. The United States will be the largest region for drones in 2019 at $4.8 billion. China will deliver the fastest spending growth in both categories with a five-year CAGR of 24.6% for robotics systems and 63.5% for drones.

The Worldwide Semiannual Robotics and Drones Spending Guide quantifies the robotics and drone opportunities from a region, industry, use case, and technology perspective. Spending data is available for more than 60 use cases across 20 industries in nine regions. Data is also available for 18 robotics systems technologies and 16 drone systems technologies. Unlike any other research in the industry, the detailed segmentation and timely, global data is designed to help suppliers targeting the market to identify market opportunities and execute an effective strategy.



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Vietnam To Eliminate At Least 50 Percent Of Business Conditions By 2019

Vietnam To Eliminate At Least 50 Percent Of Business Conditions By 2019

VIETNAM: Vietnam’s Prime Minister, Nguyen Xuan Phuc, has requested for ministries and government agencies to remove and simplify at least 50 percent of business and investment conditions by 2019.

This follows the government’s resolution No. 19 which is aimed at improving Vietnam’s business environment and enhancing national competitiveness. To add to this, the Vietnamese government has also recently issued resolution No.139 which acts to approve the action plan on reducing financial expenses for enterprises, meaning that enterprises can now save up to a minimum of 10 percent of financial costs when investing in Vietnam.

According to the Minister Nguyen’s new directive, ministries and ministry-level agencies are required to report to the Prime Minister on a quarterly basis on the remaining number of business conditions and goods subject to specialised control. Clear justifications are also required in the event that there are changes to the number of  business conditions and goods required for specialised inspection. Additionally, proposals on removing business conditions must also be substantial in order to produce new conditions that would be viable for businesses.

Based on Minister Nguyen’s vision, the lessening of business conditions will function as a key for economic growth and efficiency and the successful execution of this vision mandates strong collaboration from government leaders and ministers.  Minister Nguyen has also strictly prohibited government agencies and ministries from establishing new business conditions or abusing specialised inspections.


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IDC Unveils Top 10 Asia Pacific Predictions For 2019

IDC Unveils Top 10 Asia Pacific Predictions For 2019

SINGAPORE: IDC has unveiled its top predictions for the Asia Pacific region, with the exception of Japan (APeJ), at the IDC Asia/Pacific Futurescapes 2019 held at the Singapore Marriott Tang’s Plaza Hotel. The event is one of ICT’s biggest thought leadership events every year where IDC unveils its top 10 predictions for ICT and industries for the next 36 months. This year, IDC shared that it predicts that at least 55 percent of organisations will be digitally determined by 2020, transforming markets and reimagining the future through new business models and digitally enabled products and services. Digitally determined organisations demonstrate the ability to vision, plan, and operationalise DX through ambition, grit, discipline, commitment and hard work. Ultimately, all digital determined organisations aspire to become Digital Native Enterprises (DNE) which are defined by IDC as an entity that can scale its business and innovate at a pace that is an order of magnitude greater than traditional businesses.

“To be one of the digitally determined, Asia/Pacific organisations requires more than tenacity; it requires a blueprint that consists of a single enterprise strategy, resoluteness to make required organisational and cultural changes, a long investment strategy based on the principle that digital is inherently valuable to the business; and should have a single digital platform to scale technology innovations,” said Sandra Ng, Group Vice President for ICT Practice at IDC Asia/Pacific.

According to Ng, the top predictions that will impact the ICT industry and both technology buyers and suppliers in Asia/Pacific in the next 36 months are:

#1: Digital determination: By 2020, at least 55 percent of organisations will be digitally determined, transforming markets and reimagining the future through new business models and digitally enabled products and services.

#2: Data monetization: By 2020, 60 percent of large enterprises will create data management or monetization capabilities, thus enhancing enterprise functions, strengthening competitiveness, and creating new sources of revenue.

#3: Digital KPIs: By 2023, 80 percent of entities will have incorporate new digital KPI sets – focusing on product/service innovation rates, data capitalisation, and employee experience – to navigate the digital economy.

#4: Digital twin: By 2020, 30 percent of A1000 companies will have implemented advanced digital twins of their operational processes which will enable flatter organisations and one third fewer knowledge workers.

#5: Agile connectivity: By 2021, driven by LoB needs, 60 percent of CIOs will deliver “agile connectivity” via APIs and architectures that interconnect digital solutions from cloud vendors, system developers, startups, and others.

#6: Blockchain-enabled DX platforms: By 2021, prominent in-industry value chains, enabled by blockchains, will have extended their digital platforms to their entire omni-experience ecosystems, thus reducing transaction costs by 35 percent.

#7 BizOps: By 2021, 45 percent of CIOs will expand agile/ DevOps practices into the wider business to achieve the velocity necessary for innovation, execution, and change.

#8 AI-driven edge: By 2022, over 30 percent of organisations’ cloud deployments will include edge computing, and 25 percent of endpoint devices and systems will execute AI algorithms.

#9 Digital trust: By 2020, 55 percent of CIOs will initiate a digital trust framework that goes beyond preventing cyberattacks and enables organisations to resiliently rebound from adverse situations, events, and effects.

#10 AI-based IT Operations: Compelled to curtail IT spending, improve enterprise IT agility, and accelerate innovation, 60 percent of CIOs will aggressively apply data and AI to IT operations, tools, and processed by 2021.

Ng concludes, “AI is creating a new paradigm for individuals, businesses, industries, economies and governments. It is shaping the future of intelligence in organisations and in workers. To this end, IDC predicts that by 2025, 60 percent of frontline connected devices will be voice-enabled, with a smart assistant, and able to control 80 percent of devices deployed in consumer and enterprise settings. Voice is increasingly influencing the way we work, live, learn and play. The race to the future enterprise has begun. No one and no entity will be spared of the need to at least reset or reboot, if not reinvent. Reinvention is the new black!”AI

These strategic predictions for the Asia/Pacific market are presented in full in the following reports: IDC FutureScape: Worldwide IT Industry 2019 Predictions – APeJ Implications; IDC FutureScape: Worldwide Digital Transformation (DX) 2019 Predictions – APeJ Implications; and IDC FutureScape: Worldwide CIO Agenda 2018 Predictions – APeJ Implications.

To learn more about other IDC FutureScape reports on the latest technology and industry predictions for WW and the Asia/Pacific region, please visit the FutureScapes Reports Library.

IDC has also prepared a FutureScape webinar series, which provides a crisp guidance to all executive parties on how to lead one’s Digital Transformation strategy on various technology and vertical topics. To register for these webinars, click here.


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