CAE Inc. (NYSE:CAE) Q2 2023 Earnings Conference Call November 10, 2022 2:00 PM ET

Company Participants

Andrew Arnovitz - Senior Vice President & Investor Relations

Marc Parent - President & Chief Executive Officer

Sonya Branco - Chief Financial Officer

Conference Call Participants

Kevin Chiang - CIBC

Fadi Chamoun - BMO

James McGarragle - RBC

Konark Gupta - Scotiabank

Kristine Liwag - Morgan Stanley

Anthony Valentini - Goldman Sachs

Operator

Good day, ladies and gentlemen. Welcome to the CAE Second Quarter Conference Call. Please be advised that this call is being recorded.

I would now like to turn the meeting over to Andrew Arnovitz. Please go ahead.

Andrew Arnovitz

Good afternoon everyone, and thanks for joining us today. Before we begin, I’d like to remind you that today’s remarks, including management’s outlook and answers to questions contain forward-looking statements. These forward-looking statements represent our expectations as of today, November 10, 2022, and accordingly, are subject to change. Such statements are based on assumptions that may not materialize and are subject to risks and uncertainties.

Actual results may differ materially, and listeners are cautioned not to place undue reliance on these forward-looking statements. A description of the risks, factors and assumptions that may affect future results is contained in CAE’s annual MD&A, available on our corporate website, and in our filings with the Canadian Securities Administrators on SEDAR and the US Securities and Exchange Commission on EDGAR.

On the call with me this afternoon, are Marc Parent, CAE’s President and Chief Executive Officer; and Sonya Branco, our Chief Financial Officer. After the remarks from Marc and Sonya, we’ll open the call for questions from financial analysts. At the conclusion of that segment period, we’ll open the lines to members of the media.

Let me now turn the call over to Marc.

Marc Parent

Thank you, Andrew, and good afternoon to everyone joining us on the call. We had strong performance in the second quarter, led by double-digit growth in Civil and sequentially better results in Defense. We also delivered another quarter of double-digit revenue growth in Healthcare with higher profitability. We continued to secure CAE’s future with nearly $1.3 billion in total orders for a record $10.6 billion adjusted backlog and 1.30 times book-to-sales ratio.

In Civil, we made excellent progress, converting our large opportunities pipeline into $751 million of orders, resulting in a 1.48 times book-to-sales ratio. This is especially impressive considering that revenue is 40% higher than last year. Orders include long-term training agreements with airlines and business aircraft operators, including a new 15-year pilot training and operations agreement with Qantas, one of the world’s most renowned airlines, and like CAE, a name synonymous with safety.