CAE releases its FY20 Annual Activity and Corporate Social Responsibility report

From CAE Inc

  • CAE designs and manufactures CAE Air1 ventilator as humanitarian response to COVID-19.
  • CAE confirms commitment to become carbon neutral by the end of Summer 2020.
  • CAE introduces a new section aligned to the Task Force on Climate-related Financial Disclosures (TCFD) to its reporting.

MONTREAL, June 29, 2020 /CNW Telbec/ – (NYSE: CAE) (TSX: CAE) – CAE announced today the publication of its FY20 Annual Activity and Corporate Social Responsibility (CSR) report. The report provides CAE’s environmental, social and governance (ESG) disclosure and for the first time includes a section aligned to the Task Force on Climate-related Financial Disclosures (TCFD). The report also includes information on the evolution of CAE’s sourcing practices to ensure responsible procurement by integrating labour, environment and anti-corruption considerations into its global strategic sourcing tools and processes. The report can be downloaded at www.cae.com/investors/financial-reports.

“Corporate Social Responsibility is embedded in our culture, and drives our decisions and actions, as evidenced by our commitment to becoming carbon neutral and by our response to the COVID-19 pandemic,” said Marc Parent, CAE’s President and Chief Executive Officer. “When the pandemic hit, our first priority was to ensure the safety of our employees and customers, while continuing to support them in maintaining their critical operations and this continues to be our top priority. We also felt it was our responsibility to expand the aperture of our thinking and find ways to apply CAE’s strengths of innovation in a meaningful way to help save the lives of COVID-19 patients. The CAE Air1 ventilator, designed and created by our employees and certified by Health Canada, is the prime example of this humanitarian effort.”

In addition to a full coverage of CAE’s societal impact as part of the COVID-19 pandemic, this year’s report has been enhanced to achieve further transparency in CAE’s disclosure:

  • The report includes a section aligned with the Task Force on Climate-related Financial Disclosures (TCFD) recommendations.
  • Five United Nations Sustainable Development Goals (SDGs) have been identified to focus CAE’s actions on areas where the company can have the most significant impacts, such as: SDG 3: Good health and well-being; SDG 4: Quality education; SDG 5: Gender equality; SDG 8: Decent work and economic growth; SDG 13: Climate action.
  • CAE has enhanced its sourcing practices and established a framework for responsible procurement. It has also revisited its materiality matrix following its commitment to become carbon neutral.

CAE is now included for the first time as part of the Jantzi Social Index (JSI) which consist of 50 Canadian companies that pass a set of broad-based ESG rating criteria. Launched in 2000, the JSI index is meant to be used by institutional investors to benchmark the performance of socially-screened portfolios and by financial institutions to develop investment products. 

CAE has also been recognized for the second consecutive year in the Bloomberg Gender-Equality Index (GEI) for its commitment to advancing women in the workplace.

CAE reports fourth quarter and full fiscal year 2020 results

From CAE Inc

  • Strong annual performance despite COVID-19 impact in Q4
  • Annual revenue up 10% to $3.6 billion
  • Annual segment operating income(1) of $537.1 million ($590.4 million before specific items(2)) up 12% vs. $480.6 million in prior year (up 21% vs. $487.4 million before specific items)
  • Annual EPS of $1.16 ($1.34 before specific items(3)) vs. $1.23 (up 7% vs. $1.25 before specific items) in prior year
  • Q4 revenue down 4% to $977.3 million
  • Q4 segment operating income of $146.5 million ($193.9 million before specific items) down 14% vs. $170.4 million in prior year (up 9% vs. $177.2 million before specific items)
  • Q4 EPS of $0.29 ($0.46 before specific items) vs. $0.46 ($0.48 before specific items) in prior year
  • $3.8 billion annual order intake(4), including 49 Civil FFSs, and $9.5 billion order backlog(4)
  • Annual free cash flow(5) of $351.2 million for 98% cash conversion(6)
  • CAE Air1 ventilator in final stages of certification by health authorities

MONTREAL, May 22, 2020 /CNW Telbec/ – (NYSE: CAE) (TSX: CAE) – CAE today reported strong annual performance despite the COVID-19 impact during its fourth quarter of fiscal year 2020. Annual revenue was $3.6 billion, up 10% over the prior year. Annual segment operating income was $537.1 million compared to $480.6 million in fiscal year 2019. Annual segment operating income before specific items was $590.4 million, up 21% compared to $487.4 million in the prior year. Annual net income attributable to equity holders was $311.4 million ($1.16 per share) compared to $330.0 million ($1.23 per share) in fiscal year 2019. Net income before specific items(7) was $359.7 million ($1.34 per share) this year, compared to $335.2 million ($1.25 per share) last year, which represents a 7% EPS increase over the same period last year.

Fourth quarter fiscal 2020 revenue was $977.3 million, down 4% from the fourth quarter last year. Fourth quarter net income attributable to equity holders was $78.4 million ($0.29 per share) compared to $122.3 million ($0.46 per share) last year. Net income before specific items in the fourth quarter was $122.3 million ($0.46 per share), compared to $127.5 million ($0.48 per share) last year. All financial information is in Canadian dollars.

Summary of consolidated results

(amounts in millions, except operating margins and per share amounts)FY2020FY2019Variance %Q4-2020Q4-2019Variance %
Revenue$3,623.23,304.110%977.31,022.0(4%)
Segment operating income (SOI)$537.1480.612%146.5170.4(14%)
Operating margins%14.814.515.016.7
SOI before specific items$590.4487.421%193.9177.29%
Operating margins%16.314.819.817.3
Net income$318.9340.1(6%)81.1125.4(35%)
Net income attributable to equity holders of the Company$311.4330.0(6%)78.4122.3(36%)
)Earnings per share (EPS)$1.161.23(6%)0.290.46(37%)
Net income before specific items$359.7335.27%122.3127.5(4%)
EPS before specific items$1.341.257%0.460.48(4%)
Order intake$3,821.63,971.4(4%)778.81,414.4(45%)
Total backlog$9,458.19,494.9—%9,458.19,494.9—%
Specific items include the impacts of the integration of Bombardier’s Business Aviation Training Business (BBAT) in fiscal 2019. In fiscal 2020, specific items also include the impacts of Defence and Security’s reorganizational costs and the impact of a $37.5 million goodwill impairment charge recognized in Healthcare.
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CAE recalls all temporarily laid-off employees in Canada and signs contract with the Government of Canada for life-saving ventilators

From CAE Inc

  • All 1,500 Canada-based CAE employees back on payroll this week
  • CAE ventilator design and testing being finalized following signature of a contract with the Government of Canada for 10,000 units which will help save lives of COVID-19 patients
  • 100,000 N95 masks to be delivered to the Government of Quebec to support frontline healthcare workers

MONTREAL, April 20, 2020 /CNW Telbec/ -(NYSE: CAE) (TSX: CAE) – CAE announced today that it has recalled all remaining temporarily laid-off employees in Canada. Between recalls of employees providing essential services and recalls through the Canada Emergency Wage Subsidy (CEWS) program, approximately 1,500 employees will be back on the payroll this week; the vast majority are based in Montreal and will work from home. The temporary layoffs were part of a series of measures CAE announced on April 6 in response to the COVID-19 pandemic.

Rendering of CAE Air1 ventilator (CNW Group/CAE INC.)
Rendering of CAE Air1 ventilator (CNW Group/CAE INC.)

CAE also announced that it has signed a contract with the Government of Canada on April 10 to manufacture and supply 10,000 ventilators which will be used to help save lives of COVID-19 patients. The company is finalizing the design and testing of its CAE Air1 ventilator and is preparing for production. The first unit is expected to be delivered in early May to health authorities for certification.

In addition, CAE announced that it is leveraging its global supply chain to source scarce N95 masks for humanitarian purposes in support of front-line health workers. To date, CAE has secured 100,000 N95 masks which will be delivered to the Quebec government.

“I applaud the Government of Canada for its immediate and decisive action to support Canadians by creating the emergency wage subsidy program. It also allows Canadian industry to put staff back on payroll and be better positioned to rebound when the current challenges have passed,” said Marc Parent, CAE’s President and CEO. “CAE employees are proud to play a role in saving lives by equipping the country with a made-in-Canada ventilator, and by using the CAE global supply chain to obtain a significant quantity of N95 masks to protect our guardian angels who are caring for COVID-19 patients.”

Flight-simulator company CAE pivots to ventilator production, plans 10,000 units within three months

News provided by The Globe and Mail – link to story and updates

GREG MCARTHUR, SECURITIES REGULATION REPORTER, APRIL 5, 2020

With the covid-19 crisis impacting everybodyÕs life, a CAE team in Montreal has sprung into action to create a ventilator in less than two weeks! This is a simple, resistant and easy to manufacture ventilator that could be used for patients with respiratory complications due to COVID-19. We have tested it on our healthcare simulation mannequin. We are ready to collaborate with other companies to secure the sourcing of components and manufacturing (10 000 ventilators in 3 months) of this ventilator as soon as it is approved by Health Canada.CAE

CAE Inc., a Montreal-based manufacturer that specializes in flight simulators, has created a ventilator prototype it hopes to mass produce, placing the company among a growing number of businesses that have responded to calls to industry to help contain the fallout from the novel coronavirus.

About two weeks ago, CAE assembled a team of a dozen specialists who worked tirelessly to come up with a design after facing calls from political leaders to help out in the crisis, chief technology officer Marc St-Hilaire said in an interview.

“Our CEO has given the mandate to us, ‘Go full blast,’ ” Mr. St-Hilaire said. “We’re taking this as an order to action. We’re mobilizing the army.”

Although CAE – which has a market value of about $4.2-billlion – is best known for its flight simulators, which are used to train pilots in both civil aviation and defence, it also produces surgical and medical simulators, which account for about 4 per cent of its annual revenue.

The company employs doctors, including a chief medical officer, who were included in the ventilator design team, Mr. St-Hilaire said. The result is a prototype that the company has tested on simulation mannequins – outfitted with iron lungs – which CAE says is effective.

Ventilators are used to keep patients’ lungs supplied with oxygen when they are unable to breathe on their own and are vital to keeping alive those with the most severe cases of COVID-19. It’s still not known whether Canada could experience a ventilator shortage, but the federal government, as well as its provincial counterparts, have called on manufacturers to fill a potential void for the devices, as well as medical masks and other personal protective equipment used by health care workers.

CAE hopes to mass produce ventilators if it can receive the necessary certifications from the federal government, Mr. St-Hilaire said. Last Thursday morning, following several reports in the Quebec media about CAE’s project, the company held a teleconference with 33 officials from the federal government about the prototype’s efficacy and CAE’s capacity for manufacturing ventilators at its main Montreal plant, he said.

Normally, such approvals for manufacturing a medical product take place over many months and years. “We are not in normal times. We are in a race, and so the government is taking extraordinary measures,” Mr. St-Hilaire said.

CAE declined to answer questions about how COVID-19 has affected the company’s sales, but social distancing policies have, in general, hit the aviation sector hard. The company has no specific orders in place for its proposed ventilators, but Mr. St-Hilaire said the company’s chief executive, Marc Parent, has had discussions with Canadian politicians – whom he declined to identify – but who he said have challenged CAE to fill the demand.

The company has set a production goal similar to the target set by Linamar Corp., an engine parts company based in Guelph, Ont., that has partnered with a small medical company, O-Two Medical Technologies Inc., to produce 10,000 ventilators. CAE intends on building 10,000 ventilators in three months, Mr. St-Hilaire said.

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The stock price of both Linamar and CAE has plummeted since North American governments began implementing public health policies designed to slow the spread of the virus, such as restricting travel and encouraging self isolation. In the past three months, Linimar’s share price has dropped from about $48 to $28.27 at Friday’s close. Over that same period, CAE’s share price has dropped from about $34.60 to $15.87.

He said that the motivation for CAE’s team, and the company’s suppliers, is the potential positive impact. The company was initially spurred by the Code Life Ventilator Challenge, which is sponsored by the Montreal General Hospital Foundation – a competition to come up with a low-cost, high-quality ventilator.

A panel of judges is scheduled to announce the three winning projects on April 15.

“Every company feels touched by this. They all want to save the life of their parents, their neighbours, their colleagues,” Mr. St-Hilaire said.

CAE announces opening of its 2020 CAE Women in Flight scholarship program

Provided by CAE Inc/CNW

  • Launching second edition with Southwest Airlines, interested aspiring female pilots can apply for this scholarship at www.cae.com/womeninflight
  • Learn more about the Southwest Airlines’ Destination 225° program here
  • Additional airline partners will be announced in the upcoming months

LAKE BUENA VISTA, FL, March 5, 2020 /CNW Telbec/ -(NYSE: CAE) (TSX: CAE) – CAE announced today at the International Women in Aviation conference the opening of its second edition of the CAE Women in Flight scholarship program, with its first airline partner in this edition: Southwest Airlines. The objective of this unique annual scholarship program is to inspire a new generation of professional pilots among women, as well as to encourage diversity in aviation. One outstanding candidate will be selected and awarded the scholarship to train with CAE. Other airline partners will be announced in the upcoming months.

In 2019, for the first edition of the program, CAE awarded five scholarships to cadets that started their journey to become pilots with one of our global airline partners: American Airlines, Aeroméxico, AirAsia, Cityjet and easyJet.

CAE is creating role models for the next generation of professional pilots by awarding scholarships every year to its ab-initio training programs across its global training network. Each scholarship covers the entire cost of the ab-initio program, including accommodation and travel, and will be awarded to outstanding female ambassadors who will become role models to inspire more women to join the pilot profession.

“Gender diversity continues to be a high-profile topic in aviation and today; the industry is leaving half of its available pilot talent pool on the bench. We are committed to ensuring that our industry will make a difference and continue to offer these annual scholarships,” said Nick Leontidis, CAE’s Group President, Civil Aviation Training Solutions. “There is an exciting future that awaits a new generation of female pilots, and we are proud to officially launch the second edition of the CAE Women in Flight scholarship program with Southwest Airlines’ Destination 225° program. The largest U.S. domestic carrier is looking for more than 700 new professional pilots over the next 10 years, and together we are tapping into a wider pool of talent and supporting gender diversity in the aviation industry.”

“One of the reasons Southwest Airlines introduced our Destination 225° pathways is that we recognize for many, the barriers to entering this career field can be prohibitive,” said Julie Weber, Vice President and Chief People Officer at Southwest Airlines. “It’s exciting to leverage our partnership with CAE to remove one of those barriers and make it possible for aspiring female aviators to pursue their dream of a career at Southwest Airlines.”

Upon successful completion of their ab-initio training program, the selected candidates will have the opportunity to begin building experience as flight instructors, with the intent to one day fly for Southwest Airlines, subject to certain conditions.

More details about the program are available at cae.com/womeninflight. Follow @CAEpilot on Instagram for the latest updates.

About CAE Women in Flight
CAE’s Women in Flight scholarship program is a competitive program for female ambassadors who demonstrate leadership skills, perseverance and who are passionate about aviation. The CAE Women in Flight scholarship recipients will receive a full tuition scholarship that will cover the entire cost of training at CAE, including accommodation and travel. Other airline partners for the second edition will be announced in the upcoming months. Eligible female candidates who meet the requirements of the Destination 225° program can submit their CAE Women in Flight scholarship application via CAE’s website at cae.com/womeninflight.

CAE reports third quarter fiscal 2020 results

CAE Inc Press Release

  • Revenue of $923.5 million up 13% vs. $816.3 million in prior year
  • Segment operating income(1) of $154.9 million ($155.3 million before specific items(2)) up 37% vs. $113.0 million in prior year
  • EPS of $0.37 vs. $0.29 in prior year
  • Free cash flow(3) of $275.3 million up from $155.1 million in prior year
  • Order intake(4) of $1,106.6 million for 1.20x book-to-sales(4) and $9.4 billion backlog(4)
  • Company pledged to become carbon neutral by summer 2020

Montreal, Canada, February 7, 2020

CAE today reported revenue of $923.5 million for the third quarter of fiscal 2020, compared with $816.3 million in the third quarter last year. Third quarter net income attributable to equity holders was $97.7 million ($0.37 per share) compared to $77.6 million ($0.29 per share) last year. Net income before specific items(5) in the third quarter of fiscal 2020 was $98.0 million ($0.37 per share before specific items(6)).

Third quarter segment operating income was $154.9 million (16.8% of revenue) compared with $113.0 million (13.8% of revenue) in the third quarter of last year. Segment operating income before specific items in the third quarter of fiscal 2020 was $155.3 million (16.8% of revenue). All financial information is in Canadian dollars unless otherwise indicated.

“CAE had strong growth in the third quarter, with 13 percent higher revenue and 37 percent higher operating income, and we generated over $275 million of free cash flow. Customers continued to put their trust in CAE as their training partner of choice, awarding us $1.1 billion of orders for a $9.4 billion backlog,” said Marc Parent, CAE’s President and Chief Executive Officer. “Our performance was led by Civil with 42 percent operating income growth and continued good momentum with our innovative and comprehensive training solutions. In Defence, we had 32 percent operating income growth and we secured orders in excess of revenue by 1.11 times. Todd Probert recently joined CAE as its new Group President, Defence & Security and I am very pleased to welcome a leader of his calibre to our executive team. In Healthcare, we had double-digit revenue growth and we continued to bring highly innovative solutions to market to help make healthcare safer. As we look to the remainder of the fiscal year, our positive annual growth outlook for the Company remains unchanged.”Summary of consolidated results

(amounts in millions, except operating margins and per share amounts) Q3-2020 Q3-2019Variance %
Revenue$923.5$816.313%
Segment operating income (SOI)$154.9$113.037%
Operating margins%16.8%13.8 
SOI before specific items$155.3$113.037%
Operating margins before specific items%16.8%13.8 
Net income$99.8$79.526%
Net income attributable to equity holders of the Company$97.7$77.626%
Earnings per share (EPS)$0.37$0.2928%
Net income before specific items$98.0$77.626%
EPS before specific items$0.37$0.2928%
Order intake$1,106.6$882.125%
Total backlog$9,434.3$8,964.65%

Civil Aviation Training Solutions (Civil)

Third quarter Civil revenue was $558.1 million, up 22% compared to the same quarter last year. Segment operating income was $123.0 million (22.0% of revenue) compared to $87.2 million (19.0% of revenue) in the third quarter last year. Third quarter segment operating income before specific items was $123.4 million (22.1% of revenue), up 42% compared to the third quarter last year. During the quarter, Civil delivered 12 full-flight simulators (FFSs)(7) to customers and third quarter Civil training centre utilization(8) was 70%.

During the quarter, Civil signed training solutions contracts valued at $706.2 million, including a long-term pilot training agreement with JetSmart Airlines, and 17 FFSs, for 37 sales in the first nine months of the year. Since the beginning of January, Civil received orders for seven FFSs, including six for the Boeing B737MAX aircraft, bringing total current year-to-date FFS sales to 44.

To address the growing global demand for new pilots, during the quarter, Civil launched new Multi-Crew Pilot License programs with easyJet and Volotea and a new cadet pilot training program with Jazz Aviation and Seneca School of Aviation called Jazz Approach. In business aviation, Civil signed several business aviation pilot training contracts with business jet operators including JetSuite, Solairus Aviation, and TAG Aviation Holdings.

The Civil book-to-sales ratio was 1.27x for the quarter and 1.44x for the last 12 months. The Civil backlog at the end of the quarter was a record $5.3 billion.Summary of Civil Aviation Training Solutions results

(amounts in millions, except operating margins, SEU, FFSs deployed and FFS deliveries) Q3-2020 Q3-2019Variance %
Revenue$558.1$458.422%
Segment operating income$123.0$87.241%
Operating margins%22.0%19.0 
SOI before specific items$123.4$87.242%
Operating margins before specific items%22.1%19.0 
Order intake$706.2$586.620%
Total backlog$5,263.0$4,566.115%
Simulator equivalent unit (SEU)(9) 252 21915%
FFSs deployed(7) 303 26614%
FFS deliveries 12 16(25%)

Defence and Security (Defence)

Third quarter Defence revenue was $332.4 million, up 1% compared to the same quarter last year and segment operating income was $31.3 million (9.4% of revenue). Before reorganizational costs incurred this quarter, Defence segment operating income for the quarter would have been $33.2 million (10.0% of revenue), up 32% compared to the third quarter last year.

During the quarter, Defence booked orders for $367.4 million, including contracts to provide the German Navy with a comprehensive training solution for the NH90 Sea Lion helicopter and to upgrade and modify the German Army’s NH90 full-mission simulators. Other notable contracts include the next increment of a multi-year contract with the U.S. Air Force to provide comprehensive C-130H aircrew training services. Defence also received orders to continue providing long-term maintenance and support services for Rotorsim, a joint venture between CAE and Leonardo, and a contract for Abrams M1A2 tank maintenance trainers for the U.S. Army.

The Defence book-to-sales ratio was 1.11x for the quarter and 0.88x for the last 12 months (excluding contract options). The Defence backlog, including options and CAE’s interest in joint ventures, at the end of the quarter was $4.2 billion. The Defence pipeline remains strong with approximately $3.8 billion of bids and proposals pending customer decisions.

On January 20, 2020, CAE announced the appointment of Todd Probert as Group President, Defence & Security, effective January 27, 2020. He is based in Washington, DC and succeeds Gene Colabatistto, who retired from CAE in December 2019.Summary of Defence and Security results

(amounts in millions, except operating margins) Q3-2020 Q3-2019Variance %
Revenue$332.4$330.21%
Segment operating income$31.3$25.224%
Operating margins%9.4%7.6 
Order intake$367.4$267.837%
Total backlog$4,171.3$4,398.5(5%)

Healthcare

Third quarter Healthcare revenue was $33.0 million, up 19% compared to $27.7 million in the same quarter last year, and third quarter segment operating income was $0.6 million, stable compared to $0.6 million in the third quarter last year.

Healthcare, together with the American Society of Anesthesiologists, launched a new Anesthesia SimSTAT module, the final module in a series of interactive screen-based modules approved for Maintenance of Certification in Anesthesiology credits. As well, during the quarter, Healthcare developed custom training solutions for Edwards Lifesciences to enhance physician training, and it delivered a custom cardiovascular simulation application to Cardinal Health (Cordis). Healthcare was also awarded an EMS World Innovation Award for CAE AresAR, the Microsoft HoloLens application for our emergency care manikin that includes six augmented reality scenarios.Summary of Healthcare results

(amounts in millions, except operating margins) Q3-2020 Q3-2019Variance %
Revenue$33.0$27.719%
Segment operating income$0.6$0.6—%
Operating margins%1.8%2.2 

Additional financial highlights

Free cash flow was $275.3 million for the quarter compared to $155.1 million in the third quarter last year. The increase in free cash flow results mainly from a lower investment in non-cash working capital and higher cash provided by operating activities. CAE usually sees a higher level of investment in non-cash working capital accounts during the first half of the fiscal year and it expects to see a significant portion of these investments reverse in the second half.

Income taxes this quarter were $18.4 million, representing an effective tax rate of 16%, compared to 15% for the third quarter last year. The tax rate was higher due to the impacts of tax audits in Canada last year, partially offset by a change in the mix of income from various jurisdictions.

Net finance expense this quarter was $36.7 million, $17.4 million higher than the third quarter of fiscal 2019, mainly from higher interest on long-term debt due to the issuance of unsecured senior notes since the fourth quarter of fiscal 2019 and higher interest on lease liabilities because of the adoption of IFRS 16.

Growth and maintenance capital expenditures(10) totaled $51.6 million this quarter.

Net debt(11) at the end of the quarter was $2,306.6 million for a net debt-to-capital ratio(12) of 48.5%. This compares to net debt of $2,442.8 million and a net debt-to-capital ratio of 51.0% at the end of the preceding quarter. Excluding the impacts of the adoption of IFRS 16, net debt would have been $2,021.2 million this quarter for a net debt-to-capital ratio of 44.9%.

Return on capital employed (ROCE)(13) was 11.4% this quarter compared to 11.7% in the third quarter last year, before specific items. Excluding the impacts of the adoption of IFRS 16, ROCE before specific items would have been 11.6% this quarter.

CAE will pay a dividend of 11 cents per share effective March 31, 2020 to shareholders of record at the close of business on March 13, 2020.

During the three months ended December 31, 2019, CAE repurchased and cancelled a total of 386,700 common shares under the Normal Course Issuer Bid (NCIB), at a weighted average price of $32.69 per common share, for a total consideration of $12.6 million. On February 7, 2020, CAE received approval from its Board of Directors for the renewal of its NCIB to purchase up to 5,321,474 of its issued and outstanding common shares (approximately 2% of its outstanding shares) during the period from February 25, 2020 to no later than February 24, 2021.Management outlook for fiscal year 2020

Management’s outlook for CAE in fiscal year 2020, as updated November 13, 2019, is unchanged. In Civil, the Company expects to continue building on its positive momentum in training, increasing market share and securing new customer partnerships with its innovative training solutions. Civil expects operating income growth closer to 30 percent based on year-to-date performance and a further increase in demand for its training solutions, including maintaining its leading share of FFS sales, and the successful integration of its recently acquired Bombardier BAT business, which is substantially complete. In Defence, the Company expects modest operating income growth for the year, reflecting the Defence group’s performance year-to-date, expected performance on programs in backlog, and the expected timing of new contract awards from a large pipeline. CAE continues to expect Healthcare to achieve double-digit growth for the year. Funding growth opportunities remains CAE’s top capital allocation priority and continues to be driven by and supportive of growing customer training outsourcings in its large core markets. The Company prioritizes market-led capital investments that offer sustainable and profitable growth and accretive returns and support its strategy to be the recognized worldwide training partner of choice. CAE continues to expect total annual capital expenditures to be approximately 10 to 15 percent higher, in fiscal 2020, primarily to keep pace with growing demand for training services from its existing customers and to secure new long-term customer contracts. Management’s expectations are based on the prevailing positive market conditions and customer receptivity to CAE’s training solutions as well as material assumptions contained in this press release, quarterly MD&A and in CAE’s fiscal year 2019 MD&A.Corporate Social Responsibility

CAE creates significant value for customers, shareholders, and its employees. CAE products and services contribute to improvements in aviation safety, ensure defence forces are mission-ready, and help make healthcare safer-a noble purpose that is a source of pride for CAE’s more than 10,000 employees worldwide. As the largest civil aviation training company in the world, and the only pure‑play aviation training company, it has an unwavering customer focus and commitment to innovation. Furthermore, CAE is committed to doing its share in the fight against climate change for the well-being of future generations. In November 2019, CAE announced its plan to become carbon neutral in summer 2020. This goal will be achieved by offsetting carbon emissions from the fuel used for all the live training flights of its academies, from energy consumption in its locations worldwide and from the business travel by air of all its employees. CAE will also work with the industry to progressively use electric aircraft for the live flight training in our academies. CAE will continue to invest to make its full-flight simulators more energy efficient, therefore allowing its customers worldwide to reduce their own footprint.

In support of CAE’s local community of Greater Montreal, the Company raised more than one million dollars in its 2019 CAE-Centraide (United Way) fundraising campaign. This record amount was collected through employee donations and a corporate donation. Since 2000, CAE and its employees have donated $12.6 million to Centraide of Greater Montreal. In addition to Centraide, CAE supports the communities in which it operates around the world through donations and sponsorships that mainly support causes in education, civil aviation, defence, security and healthcare.

To learn more about CAE’s corporate sustainability roadmap and achievements, refer to CAE’s FY19 Annual Activity and Corporate Social Responsibility Report.IFRS 16 – Leases

Effective April 1, 2019, CAE adopted IFRS 16 – Leases, which introduces a single lessee accounting model and eliminates the classification of leases as either operating or finance leases. The main impact of IFRS 16 to CAE is the recognition of a right-of-use asset and a lease liability for substantially all leases. This change results in a decrease of our operating lease expense and an increase of our finance and depreciation expenses. The financial results reported in the press release for the fiscal year ended March 31, 2019 do not reflect the accounting changes required by IFRS 16 as the Company adopted the standard using the modified retrospective application as of April 1, 2019. For more detailed information, including the expected impacts of the transition to IFRS 16, refer to Note 2 of the interim consolidated financial statements for the quarter ended December 31, 2019.Detailed information

Readers are strongly advised to view a more detailed discussion of our results by segment in the Management’s Discussion and Analysis (MD&A) and CAE’s consolidated financial statements which are posted on our website at www.cae.com/investors.

UPDATE 1-Commercial pilot training unit drives profit beat at Canada’s CAE

News provided by Reuters – link to full story

MONTREAL, Feb 7 (Reuters) – Canada’s CAE Inc, the world’s largest civil aviation training company, on Friday reported a better-than-expected profit, driven by strength in its commercial pilot training and simulators business.

CAE is inking deals to train pilots for airlines like easyjet Plc, as air traffic rises.

Both CAE and U.S.-based Textron Inc’s TRU training division are also seeing an increase in demand for flight simulators after Boeing earlier this year recommended that airline pilots retrain before flying the grounded 737 MAX plane, which is being fixed by the planemaker for a software problem.

Revenue in CAE’s civil aviation training business jumped about 22% to C$558.1 million in the third quarter ended Dec. 31.

CAE reaffirmed its full-year outlook for 30% growth in operating income in the civil aviation training business.

Montreal-based CAE said net income attributable to shareholders rose 26% to C$97.7 million ($73.4 million), or 37 Canadian cents per share, in the quarter.

CAE appoints Todd Probert as Group President, Defence & Security

Provided by CAE Inc/Globe Newswire

MONTREAL and WASHINGTON, Jan. 20, 2020 /CNW Telbec/ – (NYSE: CAE) (TSX: CAE) – CAE is pleased to announce the appointment of Todd Probert as Group President, Defence & Security, effective January 27, 2020. He will be based in Washington, DC and is succeeding Gene Colabatistto, who retired from CAE in December 2019.

Todd Probert appointed Group President, CAE Defence and Security (CNW Group/CAE INC.)
Todd Probert appointed Group President, CAE Defence and Security (CNW Group/CAE INC.)

“I am very pleased to welcome Todd Probert to CAE’s executive management team, as our new Group President, Defence & Security. He is a proven strategic business leader with the right balance of technical, business and international experience in defence and technology,” said Marc Parent, CAE’s President and Chief Executive Officer. “Todd’s competencies and background are very well aligned with CAE’s emphasis on digital innovation and our long-term vision to be the training partner of choice. His ability to drive business growth and create strategic partnerships will bring significant value to our company and our defence customers.”

Mr. Probert worked for Raytheon, the world’s fourth largest defence company, over the past 10 years. Most recently, he was leading the Command, Control, Space & Intelligence business unit as part of Raytheon’s Intelligence, Information and Services segment. In this role, he spearheaded Raytheon’s use of commercial software development practices and artificial intelligence for military and intelligence community customers in addition to establishing strategic relationships with Silicon Valley companies. He previously served as the Vice President of Raytheon’s Mission Support & Modernization product line where he steadily grew the business during his tenure. He has formed innovative partnerships with leading tech companies to transform the development timelines and delivery of capabilities to the U.S. Department of Defense in areas such as fully open architectures, artificial intelligence and cyber security. He also held the position of Vice President, Engineering and Technology, where he managed the engineering workforce for Raytheon’s Intelligence, Information and Services portfolio.

Before joining Raytheon, Mr. Probert worked for Honeywell Technology Solutions, Inc. (HTSI) in various functions such as strategy and business development, planning and operations, merger and acquisition activities, and he also served as HTSI’s Chief Technology Officer. Prior to that, he worked for ANSER, where he led the Space Technology division.

In 2019, Mr. Probert was named by WashingtonExec as one of the Top 10 Department of Defense (DOD) Executives to Watch based on business accomplishments, impact on the defence community and vision for the future. He also received the 2019 Aviation Week Program Excellence Award in the OEM Sustainment category. 

Mr. Probert holds a master’s degree in aeronautical and astronautical engineering from Purdue University, where he was named Outstanding Aerospace Engineer of the Year in 2017. He has a bachelor’s degree in aerospace engineering from the University of Michigan. 

CAE open to building 737 Max simulators faster to help airlines

News provided by the Montreal Gazette – link to full story

Montreal-based manufacturer says it’s ready to speed up output once the beleaguered jet is cleared to fly again.

Montreal’s CAE Inc. stands ready to speed up production of Boeing Co. 737 Max flight simulators once the beleaguered jet is cleared to fly again — whenever that happens.

Boeing on Tuesday recommended airline pilots go through simulator training before they resume operating the 737 Max — a departure from its long-held position that pilots would only require computer-based training. The U.S. planemaker has spent the past few months preparing software fixes to secure regulatory approval for the jets to fly commercially again.

The 737 Max has been grounded since March following two fatal crashes in Indonesia and Ethiopia. Air Canada and WestJet Airlines, the two biggest Canadian carriers, both flew the plane until the grounding.

Long a manufacturer of full-flight simulators, CAE also runs the world’s largest training network for civil aviation pilots, with about 300 devices deployed at company-run facilities in cities such as Abu Dhabi, Kuala Lumpur and London. CAE says its 2,000 instructors train more than 135,000 pilots every year.

“We think we have a role to play to help solve the situation,” Hélène Gagnon, a CAE spokeswoman, told the Montreal Gazette in a telephone interview. “We can increase our production capacity. We can go faster. We have the people and we have the space. It’s easier for us to boost output than it would be for a smaller player.”

While welcoming Boeing’s revised stance, which will present CAE with a “clear market opportunity,” Gagnon noted it will be up to regulatory authorities such as Transport Canada and the Federal Aviation Administration of the U.S. to outline training rules for 737 Max pilots. No such decision has yet been taken.

Only 34 certified Max flight simulators currently exist globally, the New York Times and the Seattle Times reported Tuesday.

CAE currently needs about a year to build a 737 Max simulator, Gagnon said. She couldn’t immediately say how much time could be saved by speeding up output, or how many workers CAE would need to hire.

All of CAE’s simulator manufacturing takes place in Montreal. The company says it controls about 80 per cent of the global market for the devices.

CAE is currently building 25 of its 737 Max simulators for various airlines, having already delivered 23 units as of last month. It also has two 737 Max devices installed at company training centres in Toronto and Dallas. Carriers that have bought CAE simulators for the 737 Max include Air Canada and Southwest Airlines of the U.S.

Gagnon declined to say how much time CAE will need to build the remaining 737 Max simulators it has on order.

CAE said in November it had started making extra 737 Max simulators in anticipation of future demand. It wouldn’t say how many of those so-called “white tail” devices — which aren’t attributed to any airline customer — are being built.

Once Boeing’s software fixes have been approved, all 737 Max simulators — including CAE’s — will still need to be re-certified by Transport Canada and other civil aviation authorities.

Reuters contributed to this report.

CAE wins contract to provide German Navy with comprehensive NH90 Sea Lion training solution

CAE Inc Press Release

Stolberg, Germany, December 19, 2019

Peter Dohmen (left), General Manager of the NATO Support and Procurement Agency, and Niels Kröning (right), General Manager, CAE Elektronik GmbH, celebrate the signing of the German Navy NH90 Sea Lion training contract awarded to CAE.

CAE today announced that CAE Elektronik GmbH has signed a contract with the NATO Support and Procurement Agency (NSPA) to provide the German Navy with a comprehensive training solution for the NH90 Sea Lion helicopter.

The German Navy is procuring a fleet of 18 NH90 Sea Lion helicopters to support search and rescue (SAR) operations and replace the venerable Sea King MK41 helicopter, which has been in operation for over 40 years for the German Navy.  The German Navy NH90 Sea Lion training solution will be based near German Naval Airbase Nordholz, which is the home of the German Naval Air Command.

“CAE has a long history supporting German naval aviation training at Nordholz on platforms such as the Sea King and Lynx helicopters as well as P-3C Orion maritime patrol aircraft,” said Niels Kröning, General Manager, CAE Elektronik GmbH. “We are honoured to be selected to continue this longstanding cooperation with the development of a world-class training solution for the NH90 Sea Lion helicopter.”

Under terms of the contract, CAE will design and manufacture a suite of NH90 Sea Lion training devices for the German Navy, including:

  • NH90 full-mission simulator capable of compliance to the European Aviation Safety Agency (EASA) Level D qualification, the highest for flight simulators;
  • NH90 cockpit procedures trainer;
  • NH90 operational tactics trainer for training rear-crew tactical coordinators (TACCO) and sensor operators, and capable of networking with the full-mission simulator to provide full-crew mission training;
  • NH90 winch and hoist operator trainer, which will also be capable of networking to other NH90 training devices for full-crew training.

In addition, CAE will construct an interim training facility just outside the main entrance to German Naval Airbase Nordholz and will provide on-site training support and maintenance services upon delivery.  The new NH90 Sea Lion training system is expected to be operational by the second half of 2022.

“This contract award for the German Navy NH90 Sea Lion further extends CAE’s industry-leading position providing comprehensive training solutions for the enduring NH90 helicopter platform,” said Marc-Olivier Sabourin, Vice President and General Manager, Defence & Security International, CAE.  “The German Navy will now join the German Army and other countries including Australia, the Netherlands, Qatar, New Zealand and others in partnering with CAE to provide the training systems and support required to prepare their NH90 aircrews.”

The NH90 full-mission simulator for the German Navy will feature a range of CAE’s core simulation technologies. These technologies include: six degree-of-freedom (DOF) electric motion system; high-performance vibration platform to replicate vibration cues critical to helicopter pilots; and a high-fidelity CAE Medallion-6000 image generator. The NH90 training devices will also feature the Open Geospatial Consortium Common Database (OGC CDB) architecture, an international standard for the creation of synthetic environment databases that has been adopted on a range of German Armed Forces training systems.