MONTREAL, March 23 (Reuters) – Business jet maker Bombardier Inc (BBDb.TO) on Thursday raised 2025 revenue and free cash flow targets at its investor day and said it would produce more corporate planes, sending shares up 7.5% in late morning trade.

Corporate jet makers have reported swelling order backlogs on persistent strong demand for private flying in the U.S. But flatter global traffic, supply chain snags and fears of a recession remain concerns.

Bombardier Chief Executive Eric Martel told investors that he expects tailwinds such as a growing backlog and few pre-owned planes available for sale to overcome headwinds like delays on parts.

Supply chain “is improving, but certain issues are persisting,” Martel said.

He said there was nothing “abnormal” when asked about order cancellations, but said the environment was not the same as a year ago.

Martel said Bombardier expects to produce about 150 business jets by 2025, and is targeting more than $9 billion in annual revenue for 2025, up from $6.9 billion in 2022.

The company has been paying down debt and is targeting stronger free cash flow generation of more than $900 million in 2025 after being hit by a cash crunch while bringing new planes to market a decade earlier.

Bombardier did not disclose a 2025 capital expenditures target, raising questions over the timing of company plans for a new, clean-sheet plane to market.

Martel said he does not see how the company could produce a new clean-sheet jet without spending billions of dollars.

Higher free cash flow in 2025 and an expected improvement in the company’s credit rating to near investment grade levels would give Bombardier options for allocating capital. That could include reinvestment in its existing product lines, M&A, or launching a new aircraft, the company said.

“We will only make investment decisions with the right balance sheet and not strain it by taking too much on at once,” Chief Financial Officer Bart Demosky said.

Desjardins analyst Benoit Poirier said Bombardier’s free cash, revenue and deliveries targets were stronger than expected and deemed the lack of a capital expenditures commitment less risky.

“A clean sheet design has received pushback from investors,” Poirier wrote.

Bombardier also said it anticipates tripling its revenues from defense sales and services to more than $1 billion in the second half of the decade.

The company expects an adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) margin of 18% in 2025, down from an earlier target of 20% on high inflation on materials, Demosky said.

Reporting By Allison Lampert in Montreal and Abhijith Ganapavaram in Bangalore. Additional reporting by Kannaki Deka in Bangalore; Editing by Jamie Freed, Will Dunham and Jonathan Oatis

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