Q4 FY2022
- Revenue of $955.0 million vs. $894.3 million in Q4 last year, up 7% year-over-year (up 25% ex. revenue from ventilators)
- Earnings per share (EPS) of $0.17 vs. $0.07 in Q4 last year
- Adjusted EPS(1) of $0.29 vs. $0.22 in Q4 last year ($0.12 ex. COVID-19 government support programs(2))
- Operating income(3) of $93.3 million vs. $47.6 million in Q4 last year
- Adjusted segment operating income(4) of $142.7 million vs. $106.2 million in Q4 last year ($69.0 million ex. COVID-19 government support programs(5))
- Free cash flow(6) of $187.6 million vs. $170.6 million in Q4 last year
- Orders of $1.3 billion for 1.38x book-to-sales
Annual FY2022
- Revenue of $3.4 billion vs. $3.0 billion last year, up 13% year-over-year (up 23% ex. revenue from ventilators)
- Diluted EPS of $0.45 vs. negative $0.17 last year
- Adjusted EPS of $0.84 ($0.80 ex. COVID-19 government support programs) vs. $0.47 last year ($0.12 ex. COVID-19 government support programs)
- Operating income of $284.2 million vs. $48.4 million last year
- Adjusted segment operating income of $444.5 million ($430.9 million ex. COVID-19 government support programs) vs. $280.6 million last year ($153.2 million ex. COVID-19 government support programs)
- Free cash flow of $341.5 million for 131% cash conversion(6)
- Record orders of $4.1 billion for record $9.6 billion backlog and 1.21x book-to-sales
Montreal, Canada, May 31, 2022 – (NYSE: CAE; TSX: CAE)
CAE today reported fourth quarter fiscal 2022 revenue of $955.0 million, compared with $894.3 million last year. Revenue was 25% higher this quarter, excluding $130.0 million of revenue in the fourth quarter last year from a contract to provide the Canadian government with ventilators as part of CAE’s COVID-19 humanitarian initiatives. Fourth quarter net income attributable to equity holders was $55.1 million ($0.17 per share) compared to $19.8 million ($0.07 per share) last year. Adjusted net income in the fourth quarter was $92.0 million ($0.29 per share), compared to $63.2 million ($0.22 per share) last year. Adjusted net income excluding COVID-19 government support programs, of which there was none this quarter, was also $92.0 million ($0.29 per share) this quarter compared to $35.9 million ($0.12 per share) last year.
Annual fiscal 2022 revenue was $3.4 billion, compared to $3.0 billion last year. Revenue was 23% higher this year, excluding $230.6 million of revenue last year from the ventilator contract. Annual operating income was $284.2 million and adjusted segment operating income was $444.5 million compared to $280.6 million last year. Adjusted segment operating income excluding COVID-19 government support programs was $430.9 million this year compared to $153.2 million last year. Annual net income attributable to equity holders was $141.7 million ($0.45 per share) compared to a net loss of $47.2 million (negative $0.17 per share) in fiscal 2021. Adjusted net income(7) was $261.5 million ($0.84 per share) this year, compared to $127.1 million ($0.47 per share) last year. Adjusted net income excluding COVID-19 government support programs(8) was $251.5 million ($0.80 per share) this year compared to $33.6 million ($0.12 per share) last year. All financial information is in Canadian dollars.
Summary of consolidated results
| (amounts in millions, except per share amounts) | FY2022 | FY2021 | Variance % | Q4-2022 | Q4-2021 | Variance % | |
| Revenue | $ | 3,371.3 | 2,981.9 | 13% | 955.0 | 894.3 | 7% |
| Operating income | $ | 284.2 | 48.4 | 487% | 93.3 | 47.6 | 96% |
| Adjusted segment operating income | $ | 444.5 | 280.6 | 58% | 142.7 | 106.2 | 34% |
| As a % of revenue | % | 13.2 | 9.4 | 14.9 | 11.9 | ||
| Adjusted SOI excluding COVID-19 government support programs | $ | 430.9 | 153.2 | 181% | 142.7 | 69.0 | 107% |
| As a % of revenue | % | 12.8 | 5.1 | 14.9 | 7.7 | ||
| Net income (loss) | $ | 150.0 | (47.5) | 416% | 57.1 | 18.8 | 204% |
| Net income (loss) attributable to equity holders of the Company | $ | 141.7 | (47.2) | 400% | 55.1 | 19.8 | 178% |
| Basic EPS | $ | 0.46 | (0.17) | 371% | 0.17 | 0.07 | 143% |
| Diluted EPS | $ | 0.45 | (0.17) | 365% | 0.17 | 0.07 | 143% |
| Adjusted net income | $ | 261.5 | 127.1 | 106% | 92.0 | 63.2 | 46% |
| Adjusted EPS | $ | 0.84 | 0.47 | 79% | 0.29 | 0.22 | 32% |
| Adjusted net income excluding COVID-19 government support programs | $ | 251.5 | 33.6 | 649% | 92.0 | 35.9 | 156% |
| Adjusted EPS excluding COVID-19 government support programs | $ | 0.80 | 0.12 | 567% | 0.29 | 0.12 | 142% |
| Order intake(9) | $ | 4,091.2 | 2,723.5 | 50% | 1,321.1 | 927.9 | 42% |
| Total backlog(9) | $ | 9,577.5 | 8,201.1 | 17% | 9,577.5 | 8,201.1 | 17% |
“I am very pleased with our strong performance in the fourth quarter and for the year, having delivered double-digit growth with higher margins, excellent free cash flow, and record order bookings,” said Marc Parent, CAE’s President and Chief Executive Officer. “We drove 23 percent annual revenue growth, before the contribution of our ventilator humanitarian initiative last year, 58 percent higher adjusted segment operating income and 79 percent higher earnings per share. Testament to the quality of these results, we generated $342 million of free cash flow for a 131 percent cash conversion. We also continued to secure the future with some $4.1 billion in orders for a book-to-sales ratio of 1.21 times and a record $9.6 billion backlog. These numbers are especially impressive considering that our industry is still in the early days of a cyclical recovery. In Civil, we booked $2.0 billion in orders for a 1.25 times book-to-sales ratio, including long-term training agreements with airlines and business aircraft operators, and 48 full-flight simulator sales, demonstrating the strength of demand for pilot training. In Defense, we had continued momentum with a record $1.9 billion of orders for training and mission support solutions, representing 1.20 times book-to-sales, and we also concluded the year with a record $8.6 billion of Defense bids and proposals outstanding. And in Healthcare, we delivered our fifth consecutive quarter of double-digit revenue growth and double-digit growth for the year with our reenergized organization and innovative solutions. Despite a still challenging environment, our strategy is bearing fruit.”
On CAE’s outlook, Parent added, “we are adeptly playing offence in a disrupted market, by seizing on highly strategic growth opportunities to expand our capabilities and reach. In parallel, we are significantly lowering our cost base and continuing to innovate ways to revolutionize our customers’ training and critical operations with digitally immersive solutions to elevate safety, efficiency, and readiness. Our recent results and the expanded set of opportunities before us, add to my conviction that we are on a clear path to a bigger, stronger, and more profitable CAE in the future.”
Civil Aviation (Civil)
Fourth quarter Civil revenue was $432.7 million, up 11% compared to the same quarter last year. Operating income was $58.1 million compared to $40.5 million in the fourth quarter last year. Fourth quarter Civil adjusted segment operating income was $96.3 million (22.3% of revenue), compared to $66.6 million (17.2% of revenue) in the fourth quarter last year. Adjusted segment operating income excluding COVID-19 government support programs, of which there was none this quarter, was also $96.3 million (22.3% of revenue) this quarter compared to $46.9 million (12.1% of revenue) in the fourth quarter last year. Fourth quarter Civil training centre utilization(10) was 69% and has been trending at a similar level since the end of the quarter.
Annual Civil revenue was $1,617.8 million, up 15% compared to last year. Annual operating income was $224.1 million compared to $6.5 million last year, and annual adjusted segment operating income was $314.7 million (19.5% of revenue) compared to $164.3 million (11.6% of revenue) last year. Adjusted segment operating income excluding COVID-19 government support programs was $309.5 million (19.1% of revenue) this year compared to $100.7 million (7.1% of revenue) last year. Annual Civil training centre utilization was 60%.
During the quarter, Civil signed training solutions contracts valued at $517.0 million, including long-term training services agreements and the sale of 15 full-flight simulators (FFSs)(11). For the year, Civil booked orders for $2.0 billion, demonstrating the value afforded to CAE as the partner of choice for airlines, business jet operators, aircraft OEMs and pilots worldwide. These included 48 FFS sales (vs. 11 in the prior fiscal year) and comprehensive, long-term training agreements with customers worldwide, including Endeavor Air, Avianca, Scandinavian Airlines, WestJet, Envoy Air, LOT Polish Airlines, and Sun Air Jets. Civil also partnered with four leading electric vertical takeoff and landing (eVTOL) developers to provide a range of solutions including simulators, pilot and maintenance training programs, and aircraft system integration engineering support.
The Civil book-to-sales(9) ratio was 1.19x for the quarter and 1.25x for the last 12 months. The Civil backlog at the end of the year was $4.9 billion, which is up 15% from the prior year period.
On February 28, 2022, Civil concluded its acquisition of Sabre’s AirCentre airline operations portfolio and is currently in the process of integration. It is an integral part of a strategy to establish CAE as a technology leader in the growing market for industry-leading, digitally-enabled flight and crew operations solutions.
Summary of Civil Aviation results
| (amounts in millions except SEU and FFSs) | FY2022 | FY2021 | Variance % | Q4-2022 | Q4-2021 | Variance % | |
| Revenue | $ | 1,617.8 | 1,412.9 | 15% | 432.7 | 388.2 | 11% |
| Operating income | $ | 224.1 | 6.5 | 3,348% | 58.1 | 40.5 | 43% |
| Adjusted segment operating income | $ | 314.7 | 164.3 | 92% | 96.3 | 66.6 | 45% |
| As a % of revenue | % | 19.5 | 11.6 | 22.3 | 17.2 | ||
| Adjusted SOI excluding COVID-19 government support programs | $ | 309.5 | 100.7 | 207% | 96.3 | 46.9 | 105% |
| As a % of revenue | % | 19.1 | 7.1 | 22.3 | 12.1 | ||
| Order intake | $ | 2,016.5 | 1,261.9 | 60% | 517.0 | 385.8 | 34% |
| Total backlog | $ | 4,919.2 | 4,293.1 | 15% | 4,919.2 | 4,293.1 | 15% |
| Simulator equivalent unit (SEU)(12) | 246 | 246 | —% | 246 | 240 | 3% | |
| FFSs in CAE’s network | 316 | 317 | —% | 316 | 317 | —% | |
| FFS deliveries | 30 | 36 | (17%) | 7 | 14 | (50%) | |
| Utilization rate | % | 60 | 47 | 69 | 55 |
Defense and Security (Defense)
Fourth quarter Defense revenue was $469.5 million, up 40% compared to the same quarter last year. Operating income was $25.8 million compared to an operating loss of $8.5 million in the fourth quarter last year. Fourth quarter Defense adjusted segment operating income was $36.8 million (7.8% of revenue), compared to $23.2 million (6.9% of revenue) in the fourth quarter last year. Adjusted segment operating income excluding COVID-19 government support programs, of which there was none this quarter, was also $36.8 million (7.8% of revenue) this quarter and $6.8 million (2.0% of revenue) in the fourth quarter last year.
Annual Defense revenue was $1,602.1 million, up 32% over last year. Annual operating income was $56.0 million compared to $15.5 last year, and annual adjusted segment operating income was $119.2 million (7.4% of revenue), compared to $87.0 million (7.1% of revenue) last year. Adjusted segment operating income excluding COVID-19 government support programs was $111.2 million (6.9% of revenue) this year compared to $26.7 million (2.2% of revenue) last year. Fourth quarter and annual fiscal year 2022 Defense results reflect the acquisition of the L3H MT.
During the quarter, Defense booked record orders for $751.3 million. Notable wins include a contract with the Government of Canada to extend and expand the NATO Flying Training in Canada program through 2027. Defense also broadened its customer access with a US$250 million ceiling U.S. Naval Air Systems Command (NAVAIR) Rapid Acquisition Prototyping, Integration and Development ID/IQ win on two pools: Command and Control (C2) and Aviation Systems Development and Operations.
For the year, Defense booked a record $1.9 billion in orders, including competitive prime awards across all five domains (Air, Land, Sea, Space and Cyber). Among the notable wins in the Air Domain, CAE unseated a 60+ year incumbent in Germany to provide Ab Initio flight training to the German Air Force. Land Domain wins include a contract with the U.S. Air Force to develop and deploy new build Joint Terminal Control Training Rehearsal System (JTC TRS) simulators, as well as upgrade existing systems to a common configuration across the U.S. Department of Defense enterprise. Within the Sea Domain, Defense won a contract to deliver a second NH90 Seal Lion Helicopter simulator to the German Navy and was competitively awarded, through a joint venture Xebec, the new and upgraded Maritime Integrated Training System (MITS) contract for the U.S. Army. Defense won its first Space Domain prime contract with decisive mission capabilities and reliable space services and received multiple task orders to expand its support for operations at the Army Space and Missile Defense Command. In Cyber, Defense won a contract to enhance cyber intrusion detection capabilities for Canada’s Department of National Defense through the Innovation for Defense Excellence and Security (IDEaS) program and expanded its Simulator Common Architecture Requirements and Standards (SCARS) contract, providing cyber-hardened, hybrid cloud-based network architecture integrating over 2400 Air Force simulators. Defense was also awarded its first U.S. Intelligence Community prime win, leading the Beyond 3D prototype development and integration efforts for the National Geospatial Intelligence Agency.
The Defense book-to-sales ratio was 1.60x for the quarter and 1.20x for the last 12 months, which marks the first time the annual Defense book-to-sales ratio has exceeded 1.0x in the last four fiscal years. The Defense backlog at the end of the year was $4.7 billion. The Defense pipeline has strengthened with some $8.6 billion of bids and proposals pending customer decisions.
Summary of Defense and Security results
| (amounts in millions) | FY2022 | FY2021 | Variance % | Q4-2022 | Q4-2021 | Variance % | |
| Revenue | $ | 1,602.1 | 1,217.1 | 32% | 469.5 | 334.4 | 40% |
| Operating income (loss) | $ | 56.0 | 15.5 | 261% | 25.8 | (8.5) | 404% |
| Adjusted segment operating income | $ | 119.2 | 87.0 | 37% | 36.8 | 23.2 | 59% |
| As a % of revenue | % | 7.4 | 7.1 | 7.8 | 6.9 | ||
| Adjusted SOI excluding COVID-19 government support programs | $ | 111.2 | 26.7 | 316% | 36.8 | 6.8 | 441% |
| As a % of revenue | % | 6.9 | 2.2 | 7.8 | 2.0 | ||
| Order intake | $ | 1,923.3 | 1,109.7 | 73% | 751.3 | 370.4 | 103% |
| Total backlog | $ | 4,658.3 | 3,908.0 | 19% | 4,658.3 | 3,908.0 | 19% |
Healthcare
Fourth quarter Healthcare revenue of $52.8 million was 69% lower than the fourth quarter last year. Revenue was 27% higher this quarter, excluding $130.0 million revenue from a contract to supply the Canadian government with ventilators. Operating income was $9.4 million compared to $15.6 million in the fourth quarter last year. Fourth quarter adjusted segment operating income was $9.6 million (18.2% of revenue) compared to $16.4 million (9.6% of revenue) in the fourth quarter last year. Adjusted segment operating income excluding COVID-19 government support programs, of which there was none this quarter, was also $9.6 million (18.2% of revenue) this quarter and $15.3 million (8.9% of revenue) in the fourth quarter last year. Healthcare continued to deliver year over year quarterly revenue growth (excluding ventilators), as it ramped up an expanded and reenergized organization with a clear focus on achieving greater scale.
Annual Healthcare revenue was $151.4 million, down 57% compared to last year. Revenue was 25% higher this year, excluding $230.6 million of revenue last year from the ventilator contract. Annual operating income was $4.1 million compared to $26.4 million last year, and annual adjusted segment operating income was $10.6 million (7.0% of revenue), compared to $29.3 million last year (8.3% of revenue). Adjusted segment operating income excluding COVID-19 government support programs was $10.2 million (6.7% of revenue) this year compared to $25.8 million (7.3% of revenue) last year.
During the year, CAE Healthcare and Defense collaboratively won a contract supporting the German Armed Forces by providing patient simulators, user training, and maintenance support across several sites. This collaboration is an example CAE’s cross-business synergies and is testament to its unique One CAE culture.
Healthcare also bolstered its position as the innovation leader in simulation-based healthcare education and training. Healthcare began worldwide deliveries of its newest pediatric patient simulator, CAE Aria, and launched several updates to its current offerings including the Vimedix 3.3 ultrasound simulator, CAE CathLabVR, the Inventory Manager for CAE LearningSpace Enterprise tool, and CAE Maestro.
Summary of Healthcare results
| (amounts in millions except segment operating margins) | FY2022 | FY2021 | Variance % | Q4-2022 | Q4-2021 | Variance % | |
| Revenue | $ | 151.4 | 351.9 | (57%) | 52.8 | 171.7 | (69%) |
| Operating income | $ | 4.1 | 26.4 | 9.4 | 15.6 | ||
| Adjusted SOI | $ | 10.6 | 29.3 | 9.6 | 16.4 | ||
| As a % of revenue | % | 7.0 | 8.3 | 18.2 | 9.6 | ||
| Adjusted SOI excluding COVID-19 government support programs | $ | 10.2 | 25.8 | 9.6 | 15.3 | ||
| As a % of revenue | % | 6.7 | 7.3 | 18.2 | 8.9 |
Additional financial highlights
CAE incurred restructuring, integration and acquisition costs of $36.0 million during the fourth quarter of fiscal 2022, including $22 million related to L3H MT and AirCentre acquisitions, and $12 million related to its cost savings restructuring program. This brings the total restructuring, integration and acquisition costs incurred since the start of the program in the second quarter of fiscal 2021 to $179 million.
Net cash provided by operating activities was $206.8 million for the quarter compared to $174.6 million in the fourth quarter last year. Free cash flow was $187.6 million for the quarter compared to $170.6 million in the fourth quarter last year. For the year, net cash provided by operating activities was $418.2 million compared to $366.6 million last year and free cash flow was $341.5 million, compared to $346.8 million in the same period last year. The cash conversion ratio for fiscal year 2022 was 131%.
Income tax expense this quarter was $3.7 million, representing an effective tax rate of 6%, compared to a negative effective tax rate of 21% in the fourth quarter last year. The tax rate was impacted by restructuring, integration and acquisition costs and a cloud computing transition adjustment this quarter, excluding which the income tax rate was 15%, and which is the rate used to determine adjusted net income of $92.0 million and adjusted EPS of $0.29 in Q4FY22. On the same basis, the rate would have been 16% in the fourth quarter last year.
Growth and maintenance capital expenditures(13) totaled $74.7 million this quarter and $272.2 million for the year, mainly in support of accretive growth opportunities to expand the Civil global aviation training network.
Net debt(14) at the end of the year was $2,700.1 million for a net debt-to-adjusted EBITDA(15) of 3.58 times. This compares to net debt of $2,310.5 million, for a net debt-to-adjusted EBITDA of 3.23 times at the end of the preceding quarter. During the last two fiscal years, CAE has made several growth investments to expand its capabilities and reach, including nine acquisitions for $2.1 billion and $379.8 million in capital expenditures.
Adjusted return on capital employed (ROCE)(16) was 6.2% this quarter compared to 6.1% last quarter and 5.0% in the fourth quarter last year. Adjusted ROCE excluding COVID-19 government support programs was 6.1% this quarter compared to 5.5% last quarter and 3.1% in the fourth quarter last year.
Management outlook for fiscal year 2023
Since 2020, CAE has been carrying out a growth strategy which it believes will enable it to emerge from the pandemic a bigger, stronger, and more profitable company than ever before. Specifically, as a waypoint along its journey to cyclical recovery and beyond, the Company is targeting a consolidated adjusted segment operating margin of approximately 17% by the time its markets are generally recovered, with steady room for further improvement thereafter. It expects to reach this level of profitability on a significantly larger base of business with a post-pandemic capital structure that will allow the Company to sustain ample flexibility to further invest in its future.
Current headwinds include the ongoing global pandemic, geopolitical tensions and the war in Ukraine, decades-high inflation, slower global economic growth, and acute supply chain and labor shortages – any of which may influence the exact timing and rate of market recovery. Notwithstanding the additional volatility induced by these factors, management maintains a highly positive view of its potential in market recovery and beyond. For the current fiscal year 2023, CAE expects to continue delivering strong growth and substantial order bookings.
Expected secular trends are highly favorable for all three of the Company’s core business segments. Greater desire by airlines to entrust CAE with their critical training and digital operational support and crew management needs, higher expected pilot demand and strong growth in business jet travel demand are enduring positives for the Civil business. Tailwinds that favour the Defense business include the shift in national defence priorities to an increased focus on near-peer threats and the recognition of the sharply increased need for digital immersion-based synthetic solutions. Healthcare is poised to leverage opportunities presented by an acute nursing shortage and rising demand for Public Safety and Security.
The Company believes there is considerable pent-up demand for air travel, and the rate of Civil’s recovery to pre-pandemic levels and beyond is expected to continue to be driven in large part by the easing of travel restrictions. Civil’s strong training performance in the Americas and sharply higher FFS order activity, provide a compelling blueprint for the potential of a broader global recovery. In fiscal year 2023, in addition to continuing to grow its share of the aviation training market and expanding its position in flight services, Civil expects to maintain its leading share of FFS sales and to deliver upwards of 40 FFSs to customers worldwide, with a higher proportion of units expected to be delivered in second half of the fiscal year.
CAE’s Defense segment is also on a multiyear path to becoming an even bigger and more profitable business. Defense is closely aligned with its customers’ utmost priorities focused on defending freedom in the face of near-peer threats. In the last two years, Defense has established itself as the world’s leading platform agnostic, global training and simulation pure play defence business. This is expected to bring increased potential to capture business around the world, accelerated by the acquisition of L3H MT and the expanded capability and customer set the combined entity possesses. Current geopolitical events have galvanized national defence priorities in the U.S. and across NATO, and management expects increased spending and specific prioritization on defence readiness to translate into additional opportunities for CAE in the years ahead. Defense is expected to continue making good progress with the integration of L3H MT acquisition in fiscal 2023 and to fully realize $35 to $45 million of cost synergies by fiscal year 2024. COVID-19 related headwinds are still a factor for the international defence business; however, management views them as temporary. In the near term, Defense is expected to continue working its way through the lagging effects of a historically lower than one-time book-to-sales ratio and expects growth over a multiyear period to be driven by the progressive realization of synergies related to the L3H MT integration and the translation of the recent record order intake and bid activity into revenue.
And in Healthcare, the long-term potential is for it to become a more material and profitable business within CAE as it gains share in the healthcare simulation and training market and continues to build on the momentum created over the last 18 months by a reenergized organization.
For fiscal year 2023, management expects CAE’s consolidated adjusted segment operating income growth to be in the mid 30-percent range, weighted more heavily to the second half of the year.
Total capital expenditures are expected to be approximately $250 million in fiscal year 2023, primarily in support of sustainable and accretive growth opportunities. The Company usually sees a higher investment in non-cash working capital accounts in the first half of the fiscal year, and as in previous years, management expects a portion of the non-cash working capital investment to reverse in the second half. The Company continues to target a 100% conversion of adjusted net income to free cash flow for the year. Concurrent with its continued pursuit of attractive growth opportunities, CAE expects net debt-to-adjusted EBITDA to decrease to a ratio of below three times (3x) within the next 18 months. CAE expects its effective income tax rate to increase to approximately 22% going forward, reflecting some of the recent changes to global tax regimes.
Management’s outlook for fiscal year 2023 and the above targets and expectations constitute forward-looking statements within the meaning of applicable securities laws, and are based on a number of assumptions, including in relation to prevailing market conditions, macroeconomic and geopolitical factors, supply chains and labor markets, and the timing and degree of easing of global COVID-19-related mobility restrictions. Air travel is a major driver for CAE’s business and management relies on analysis from the International Air Transport Association (IATA) to inform its assumptions about the rate and profile of recovery in its key civil aviation market. Additionally, as the basis of its fiscal year 2023 outlook, management assumes no further disruptions to the global economy, air traffic, CAE’s operations, and its ability to deliver products and services. Expectations are also subject to a number of risks and uncertainties and based on assumptions about customer receptivity to CAE’s training solutions and operational support solutions as well as material assumptions contained in this press release, quarterly MD&A and in CAE’s fiscal year 2022 MD&A. Please see the sections below entitled: “Caution concerning forward-looking statements”, “Material assumptions” and “Material risks”.
Environmental, Social, and Governance (ESG)
During the quarter, CAE issued a formal Code of conduct to its suppliers worldwide to reinforce ESG across its entire value chain. It also strengthened its internal focus on ESG by appointing a Chief Sustainability Officer, reporting to the CEO, as well as a Chief Diversity, Equity, and Inclusion Officer along with dedicated teams. CAE also completed an extensive ESG materiality exercise with various external and internal stakeholder groups that will inform its next multi-year ESG roadmap. A significant milestone was achieved on Climate Change this quarter: CAE’s Climate Change Committee completed the Climate Change risk assessment exercise involving several strategic sites that are representative of CAE’s range of activities and geographical footprint. The results will be reported under the recommendations of the Taskforce on Climate-related Financial Disclosures (TCFD) in CAE’s next CSR report. CAE also continued to be a longstanding contributor to the decarbonization of the aerospace industry: with the acquisition of Sabre’s AirCentre airline operations portfolio, CAE expanded flight management capabilities that enable airlines and business jet operators to reduce their carbon footprint through the optimization of flight plans and fuel consumption. In September 2020, CAE became the first carbon-neutral Canadian aerospace company.
To learn more about CAE’s corporate sustainability roadmap and achievements, the report can be downloaded at https://www.cae.com/social-responsibility/.