CAE reports fourth quarter and full fiscal year 2024 results
Press Release
May 27, 2024
CAE Inc. (CAE or the Company) today reported its financial report for the fiscal year ended March 31, 2024. Financial results are unchanged from preliminary data that CAE disclosed on May 21, 2024, including the re-baselining of the Defense & Security business along with Defense & Security impairments and unfavourable contract adjustments related to eight previously identified fixed-price legacy contracts (the Legacy Contracts). All financial information is in Canadian dollars.
“Last week we acted decisively and took the necessary steps to provide a clear path to margin improvement in our Defense business, supported by compelling long-term secular trends for this segment,” said Marc Parent, CAE’s President and Chief Executive Officer. “As a result of the changes we have made, we have a more balanced risk profile going forward, and with Nick Leontidis as our new Chief Operating Officer (COO), we are well-positioned to further strengthen our execution capabilities and drive additional synergies between our Civil and Defense segments.”
As previously disclosed, in Civil, the larger of CAE’s two businesses, record margins and orders position the Company well in the fiscal year ahead with expected low double-digit percentage Civil annual adjusted segment operating income growth and continued margin strengthening, with an annual adjusted segment operating income margin of approximately 23%. For Defense, CAE continues to expect fiscal 2025 revenue growth in the low- to mid-single-digit percentage range and annual Defense adjusted segment operating income margin in the 6- to 7-percent range.
As announced separately today, the TSX has approved the re-establishment of CAE’s normal course issuer bid (NCIB). The NCIB will commence on May 30, 2024 and end on May 29, 2025. The decision of the Board of Directors to re-establish the NCIB reflects CAE’s current outlook and the cash generative nature of its highly recurring revenue business. CAE’s Board of Directors will also continue to evaluate the possibility of reintroducing a shareholder dividend.
Fourth quarter fiscal 2024 revenue was $1,126.3 million, compared with $1,197.4 million last year. Fourth quarter EPS from continuing operations was negative $1.58 compared to $0.29 last year. Adjusted EPS(1) was $0.12 ($0.37 excluding Legacy Contracts(1)) compared to $0.33 last year.
Operating loss this quarter was $533.0 million, compared to an operating income of $178.3 million (14.9% of revenue(1)) last year. Fourth quarter adjusted segment operating income(1) was $125.7 million (11.2% of revenue(1)) ($216.0 million excluding Legacy Contracts(1), 19.2% of revenue(1)) compared to $193.4 million (16.2% of revenue) last year.
Annual fiscal 2024 revenue was $4.3 billion, compared to $4.0 billion last year. Annual EPS from continuing operations was negative $1.02 compared to $0.69 in fiscal 2023. Annual adjusted EPS was $0.87 this year ($1.12 excluding Legacy Contracts) compared to $0.87 last year.
Annual operating loss was $185.4 million, compared to an operating income of $466.0 million (11.6% of revenue) last year. Adjusted segment operating income was $549.7 million (12.8% of revenue) ($640.0 million excluding Legacy Contracts, 14.9% of revenue) compared to $538.4 million (13.4% of revenue) last year.
| (amounts in millions, except per share amounts and net debt-to-EBITDA ratios) | FY2024 | FY2023 | Variance % | Q4-2024 | Q4-2023 | Variance % | |
| Revenue | $ | 4,282.8 | 4,010.6 | 7% | 1,126.3 | 1,197.4 | (6%) |
| Operating (loss) income | $ | (185.4) | 466.0 | (140%) | (533.0) | 178.3 | (399%) |
| Adjusted segment operating income(1) | $ | 549.7 | 538.4 | 2% | 125.7 | 193.4 | (35%) |
| As a % of revenue(1) | % | 12.8 | 13.4 | 11.2 | 16.2 | ||
| Adjusted segment operating income | |||||||
| excluding Legacy Contracts(1) | $ | 640.0 | 538.4 | 19% | 216.0 | 193.4 | 12% |
| As a % of revenue(1) | % | 14.9 | 13.4 | 19.2 | 16.2 | ||
| Net (loss) income attributable to equity | |||||||
| holders of the Company | $ | (325.3) | 220.6 | (247%) | (504.7) | 93.6 | (639%) |
| (Loss) earnings per share (EPS) | $ | (1.02) | 0.69 | (248%) | (1.58) | 0.29 | (645%) |
| Adjusted EPS(1) | $ | 0.87 | 0.87 | —% | 0.12 | 0.33 | (64%) |
| Adjusted EPS excluding Legacy Contracts(1) | $ | 1.12 | 0.87 | 29% | 0.37 | 0.33 | 12% |
| Free cash flow(1) | $ | 418.2 | 333.1 | 26% | 191.1 | 147.6 | 29% |
| Cash conversion rate(1) | % | 151 | 121 | ||||
| Adjusted order intake(1) | $ | 4,937.4 | 4,856.4 | 2% | 1,550.5 | 1,406.2 | 10% |
| Adjusted backlog(1) | $ | 12,183.9 | 10,796.4 | 13% | |||
| Net debt-to-adjusted EBITDA(1) | 3.17 | 3.49 | |||||
| Net debt-to-adjusted EBITDA excluding | |||||||
| Legacy Contracts(1) | 2.89 | 3.49 |
(1) This press release includes non-IFRS financial measures, non-IFRS ratios, capital management measures and supplementary financial measures. These measures are not standardized financial measures prescribed under IFRS and therefore should not be confused with, or used as an alternative for, performance measures calculated according to IFRS. Furthermore, these measures should not be compared with similarly titled measures provided or used by other issuers. Refer to the Non-IFRS and other financial measures section of this press release for the definitions and a reconciliation of these measures to the most directly comparable measure under IFRS.
Comparative figures have been reclassified to reflect discontinued operations.
During the quarter, Civil signed training and operational support solutions contracts valued at $832.1 million. These included the sale of 7 full-flight simulators (FFSs) and long-term training and digital flight services contracts. For the year, Civil booked orders for a record $3.0 billion, including 64 FFS sales (vs. 62 in the prior fiscal year) and comprehensive, long-term training agreements with customers worldwide.
The Civil book-to-sales ratio was 1.19x for the quarter and 1.24x for the last 12 months. The Civil adjusted backlog at the end of the year was a record $6.4 billion, which is up 12% from the prior year period.
| (amounts in millions) | FY2024 | FY2023 | Variance % | Q4-2024 | Q4-2023 | Variance % | |
| Revenue | $ | 2,435.8 | 2,166.4 | 12% | 700.8 | 661.4 | 6% |
| Operating income | $ | 442.0 | 430.3 | 3% | 147.0 | 149.3 | (2%) |
| Adjusted segment operating income | $ | 548.9 | 485.3 | 13% | 191.4 | 162.9 | 17% |
| As a % of revenue | % | 22.5 | 22.4 | 27.3 | 24.6 | ||
| Adjusted order intake | $ | 3,025.5 | 2,827.1 | 7% | 832.1 | 841.5 | (1%) |
| Adjusted backlog | $ | 6,440.4 | 5,730.8 | 12% | 6,440.4 | 5,730.8 | 12% |
| Supplementary non-financial information | |||||||
| Simulator equivalent unit | 272 | 257 | 6% | 279 | 265 | 5% | |
| FFSs in CAE’s network | 343 | 324 | 6% | 343 | 324 | 6% | |
| FFS deliveries | 47 | 46 | 2% | 17 | 17 | —% | |
| Utilization rate | % | 76 | 72 | 78 | 78 | ||
During the quarter, Defense booked orders for $718.4 million, bringing the full-year total to $1.9 billion. The Defense book-to-sales ratio was 1.69x for the quarter and 1.04x for the last 12 months. The Defense adjusted backlog at the end of the year was $5.7 billion. In addition, the Defense pipeline strengthened with some $9.6 billion of bids and proposals pending customer decisions.
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