The following is a summary of the CAE Inc. (CAE) Q4 2024 Earnings Call Transcript:

Financial Performance:

• CAE's Q4 revenue dropped by 6% MoM reaching $1.1 billion.

• The net finance expense for the quarter stands at $52.4 million with adjusted segment operating income of $125.7 million excluding the impact of legacy contracts.

• The annual consolidated revenue showed an uptick of 7%, amounting to $4.3 billion, and annual net adjusted income reaching $276.8 million.

• The company managed to generate $566.9 million from its operating activities during the financial year.

• Overall, CAE's financial stability improved with a net debt of $2.9 billion by quarter-end.

Business Progress:

• The company set a clear margin improvement path in their defence business and appointed Nick Leontidis as the COO.

• The adjusted backlog saw a 13% YoY growth, valued at $1.6 billion for Q4 and crossing $4.9 billion for the year.

• CAE reduced its leverage below three times net debt to adjusted EBITDA (excluding legacy contracts), generating $418 million of free cash flow.

• The Civil division achieved record high $3 billion orders, including 64 full-flight simulator sales.

• New contracts for the quarter include a multi-year commercial aviation training agreement with ITA Airways and a new initial training partnership in Canada for NAV CANADA specialists.

• CAE expects a steady rise in revenue growth, better margins, and stable cash flows from its Defense business.

• The company has aimed for growth by scaling its transformative programs and is also planning for restructuring to eliminate duplication for successful operations.

• A future expansion in their SaaS offering in the Civil business division is anticipated, and the company plans to de-leverage aiming for a lower leverage inline with their investment grade.

More details: CAE Inc IR

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