Good morning, folks. Could just ask everybody to find their seats, please. Wow, the room became so quiet all at once. Well, good morning, and I'm Andrew Arnovitz, for those of you that I've not met before. I'm Senior Vice President, Investor Relations and Enterprise Risk Management at CAE. I can't tell you how great it is, almost surreal to be in front of a room full of people again. I wanna welcome you to CAE's Investor Day 2022, which was really supposed to be CAE's Investor Day 2020, but as we were in 2020, our only alternative was to do this virtually. Taking a cue from Tom Cruise in Top Gun, we decided that the little screen really wouldn't do justice to what we have here, so we decided to delay. Here we are. You know, we'll of course draw your attention to our disclaimer about forward-looking statements. The speakers today will provide some forward-looking information that you shouldn't place undue reliance on without reading these disclaimers, as well as some targets. Draw your attention to that for those who are joining us on the live cast and here in person. For the agenda this morning, we'll hear from Marc Parent, Sonya Branco, the group presidents. Each one of them will provide a bit of a perspective on CAE's journey over the past several years, but really focus in on all the things that we've done as a company over the last two years, specifically to ensure that CAE emerges from the pandemic a bigger, stronger, and more profitable company than it's ever been before. I'd really encourage you to listen to the presenters today and think about CAE through that lens as you're contemplating how the company will perform through the remainder of a cyclical recovery and the secular growth that we expect to enjoy beyond. At the end of the session, after the formal presentations, the full team will come up here to take your questions. We'll do a Q&A session together. We look forward to having good interaction with folks in the room, as well as taking questions from people who are watching the live cast. Before I call Marc Parent up to the podium to kick things off, we'd like to show you a quick corporate video really to set the tone. Thank you. I'm sure you saw that tagline, "Moments that matter." That's what we do at CAE. We prepare you for the moments that matter. Whether you're a pilot flying an airplane and losing your engine at critical speed on takeoff, whether you're a soldier performing a critical mission, whether you're a surgeon doing a life-saving procedure for the first time, we prepare you for those moments that matter. That's what we do at CAE. Thanks for being here this morning. Really love the fact that so many of you have taken time out of your busy schedule to hear our story, and I can tell you. I can tell you very frankly that I've been CEO for this company for the last 13 years, and I have never been more excited about the future of this company and the opportunity to lead it. I hope that as you hear the stories today and after a lot of comments I heard from you this morning, last night, if you come away as half as excited as I am, I think we'll be doing pretty good. Let's go right into it. What do we do at CAE? Well, here's how we go to market. Go around the quadrant. In civil aviation, what do we do? Well, we're the largest provider of civil aviation training in the world, the largest network in the world. Commercial aircraft, business aircraft, helicopter training. Unmatched scale across the globe. We're literally customers everywhere. We're the leading provider of simulation equipment in the world. We do crew and maintenance training. The whole gamut from cadets to captains. What you'll hear us talk about today is how really uniquely positioned that we are for both secular and cyclical growth as the market recovers. In defense and security, the L3Harris deal. That we did last year was truly transformational. Positioning us as the number two training and simulation provider in the world. Perhaps even more importantly is that we are the only global pure play platform-agnostic training and simulation company in the world with capabilities in all five battle space domains. You'll hear from Dan Gelston how critical that is and how aligned that puts us to the mission of the U.S. government and their allies in defense. That positions us for strong above-market growth in years to come. In healthcare, we're very well-positioned. We're number two in a very attractive market. Number two in the supply of medical simulation equipment for training that involves patient simulators, some of them that you see outside. If you haven't seen them, really, you know, invite you to go see 'em at the break 'cause they're nothing short of fantastic. There's nothing like seeing to really get a you know how fantastic those tools are and how great they can be as training tools. E-learning solutions. Across the organization, we're increasingly providing digital and software tools to do things like efficient flight planning through optimized crew routings, digitizing air crews' schedules, optimizing airline operations, airport operations. What you're seeing us do, and the best example of that is Sabre, the recent acquisition that we've done, is we are leveraging our huge global scale and our very deep customer relationships in a way that's dramatically increasing our total available market. That's. We're really positive about that, obviously. Let's just go down memory lane just a little bit. CAE has had an amazing evolution over the last 20 years. If you were to look at us 20 years ago, what you would've seen us as is a company doing less than CAD 1 billion, essentially a simulation provider to the world's airlines. With that, fairly concentrated in North America and in Europe. What you would've seen on the defense side is us providing simulation products to the world's militaries outside of the United States where we weren't present. You fast-forward to today, the transformation's been amazing. We've invested both organically and inorganically to grow our training network across the world, leveraging the position that we have today as the largest civil aviation training company in the world. We have locations and customers literally everywhere, giving us really unmatched scale. In defense, a couple of smart and large acquisitions as well as organic growth throughout the years has yielded really the powerhouse franchise that we have today. Very well-positioned, I said, and aligned to the priorities, as I said, of United States government and its allies across the world as they prepare for their mission, which Dan Gelston will take you through in some detail today. Over time, we expanded to healthcare. We expanded into broader solutions in civil aviation by providing cadets, largest provider of cadets in the world. Great timing at a time that pilots are in great demand. Right to supplying, actually trained captains to world airlines and everything in between. That's what we do. We provide expanding to maintenance training. There's a global shortage of maintenance technicians as well. No surprise there. Finally, you've seen us recently in expanded flight services into digitally provided tools for the world's airlines. When you look at what this means for us now is we've gone from what we were, a product-centric, somewhat regionally concentrated, very cyclical company to, with 90% of our revenue at that time coming from products, to a company now with much, much more revenue, obviously, much more diversified, and with much less variability in our revenues, because now 60% our revenue comes from services. Services, ergo, training-related services. With some of the highest EBITDA margins in the whole industry. As well, just repeating myself slightly, with huge amounts of customer and geographical diversification and of course, much, much more scale. Completely transformed company and very attractive profile in today's market. Now, if I was to talk from a customer standpoint of what that evolution is marked by, I'd point. It's the story of really two mega trend lines that you'll see across our whole business and presentations today. You know, how we interact with customers kind of looks like what I'm showing on this slide. If you go on the left, showing civil aviation, and I'm giving you a case study here of three airlines. Nick will show you more later. The story here, I picked three airlines, the numbers are real, just took the individual names out. But if you would take those three airlines, you could have any one of our customers, and the stories would look very similar. What you've seen us do over the last 10 years is expand our revenue dramatically and diversify. Diversify from product-centric to services, training, and related, products and services. That's what you see that we've done. Dramatically increases in diversification, diversifying our source of revenue. In defense, we've done exactly the same thing, which diversifying across the gamut in terms of the products and service that we offer to our strategic government customers and OEMs. I would tell you that those two. Actually, I did. With the second mega-trend, which goes with this, is leveraging technology over the broad global scale that we have. I would tell you that the single most important reason that we're able to do this, ergo be so sticky with our customers, is that we keep the customer's mission at the center of everything that we do at CAE. That's who we are as a company. That's what our people do day in and day out. Let me talk technology, 'cause you can't talk CAE without talking technology. It's in our DNA. That's who we are. We've always been at the forefront of the technology curve, leveraging to lead our markets and expand, you know, business with our customers. Always ahead of that. Whether it be, you know, evolution of visual systems over the year, the adoption of commercial off-the-shelf technology, which certainly I lived at the beginning of my tenure, to cloud adoption, to AR, VR. We've always been at the leading edge, and we're continuing today, and I'll give you some of the examples. You know, see, just going into it, what are some of the technologies today that we're investing in to be sure that we have the best pilots, the best soldiers, the best healthcare practitioners that the world has ever seen? Just some of the examples. The adoption of AI, data analytics. What we're doing here, and we've been aggressively doing this and still doing it now, is transform all of our simulators around the world into IoT devices, sending us back data real-time to the cloud, leveraging AI, leveraging machine learning for data analytics, providing. With that, we're able to provide unique data-driven insights to our customers, which of course are very valuable. Now we're layering on biometrics, investing biometrics that we're leveraging from our investments in technology on the military side, giving us really unique insights into the whole human experience as regards to training. You can well imagine what you can unlock in terms of understanding, you know, what pilots or other practitioners are doing if you're monitoring their biometrics, their heart rate, where their eyes are looking. That's very, very important. The technology to do that is breakthrough and giving us, you know, fantastic insights. Again, very valuable to our customers, both on the civil and the defense side. Maybe I take just a sidebar on this one. A lot of you know I'm a pilot, which is great because makes me the ultimate undercover boss. I'm actually Nick Leontidis, when he comes up to me, I'm his worst nightmare because I go into our training centers in Dallas every six months. If you've been there, as those of you who saw the training center yesterday here, it has 15 simulators in it. It's pretty big, right? Well, that. The one in Dallas has got 40 simulators in the same building. I go in on the weekend with jeans and a T-shirt with customer badge. Nobody is any the wiser who I am. I get to experience our product firsthand, what simulators are used for, those moments that matter. You know, it's a really good, you know, continuous improvement measure, I can tell you that, with the feedback I give. The reason I tell you that is because I've been a pilot since I was 17. That's a few years ago. Still today, how we measure pilots, how we measure, you know, the experience of pilots is through flight hours. How many hours you got? You got 200 hours, you got 500 hours, you got 10,000 hours. I think, you know, it doesn't take too much of a stroke of imagination to figure out that's a pretty darn flawed metric. Because I can tell you, take a U.S. Navy pilot, he's landing at 200 hours on an aircraft carrier. That's probably the most difficult flying that exists in the world is doing that 200 hours. Somebody would say, "Ah, 200 hours," you know, it doesn't win anything. Why is that important? Why is that important? It's because I had a conversation a few years ago with an airline CEO friend of mine, very, very senior CEO in the industry. There had been an accident, and we were talking about it, and he said, "Marc, how could this happen? We had very, very senior pilots with tens of thousands of hours, and yet they did this. How could it be possible?" He says, "Couldn't you, with all the training that you do, couldn't you give us a better way to assess the skills and the proficiency of our pilots other than flight hours?" I said, "Yeah. Yeah, we can do that." That was the genesis for what you'll hear Nick talk about today and Dan talk about called CAE Rise. Remember that acronym, because to me, we're on the cusp of a revolution in this regard into data-driven objective assessments of aircrew. That becomes particularly important as, you know, transportation, airline transportation continues to expand. Pilots are getting scarcer, pilots are getting younger, pilots are getting less experienced, and they come from places in the world that have not grown with the same experience, the flight schools in every corner that we have. Data-driven insights are critical and are being adopted, led by CAE. Of course, there's a whole host of technologies I could talk about that are really exciting that we're adopting. Just talk about AR, VR. AR, VR, everybody's talking about AR, VR. I invite you to see, if you haven't seen what we do with AR, VR. We're really creating breakthrough products and services using AR, VR, and augmented reality, where basically we're using it not only for being able to dramatically save costs in terms of training, but also increase the efficacy of training. That, by the way, doesn't just apply to pilots. It can apply to maintenance technicians. As I said, there's a shortage there as well. It can apply to nurses and other healthcare practitioners. You'll hear Heidi say there's a shortage there as well. We need to reduce the time it takes to train nurses as just one example. Those tools that we're developing, we can leverage them simultaneously across all of our businesses. Why not other areas of focus, other markets in years to come? That's a potential. We're focused now, but potential is there. To me, the bottom line with this is there's no, as I said, there's no shortage of amazing technology that we can invest in at CAE. Now, it's not to say the last two years haven't had their load of challenges. You know, like all of our peers, COVID presented, you know, huge headwinds to our business. You know, once we picked ourselves all off the floor back in March 2020, we decided to play offense. You know, personally, I always say, "If you want to look for opportunity, look for the train wreck." We could all agree that this was one heck of a train wreck. What do we do? Just a few of the highlights. We did nine accretive M&A deals during the pandemic. We stripped CAD 70 million of costs out of our cost structure. We invested nearly CAD 500 million of growth CapEx, all at the same time as protecting and serving our communities, developing and deploying 10,000 life-saving ventilators, where we never developed ventilators in our life. Like tools like that, we did it for humanitarian reasons. We got it certified in Canada, in the United States, demonstrating the expertise of CAE, our deep knowledge of the markets that we're in, specifically healthcare in that regard. We led the way, initiated the vaccination effort in the province of Quebec. We, through our efforts, 10% of the population of Quebec was vaccinated with the initiative that we started, where businesses got involved free of charge, contributing to personnel, contributing their facilities, again, to help in the vaccination effort with the result that we have. Obviously, doing wonders for our brand and the engagement of our employees, which by the way, through all of this, you know, at the most, the deepest, you know, time in this whole episode back in, you know, March 2020, when again, 90% of the world's airliners were grounded every night, overnight, we were nearly breakeven in that quarter, and we've been cash flow positive every single quarter after that. I think we're a pretty good port in the storm as well. Through all of this today, after everything, we're not out of it totally. Employee engagement, this company has never been higher. 13,000 people. That takes something. I mean, this what we've done the past couple of years has been nothing to me short of amazing. I can tell you, I will be forever indebted and thankful for what our employees have done during this time. As you can imagine, like all of us, was very difficult from personal and a business standpoint for everyone. Now, looking forward. When you look at our markets, there's every reason for us to have, you know, a strong optimism about growth. I mean, let's just talk about civil aviation. IATA is predicting that this year, air traffic levels, passenger transportation will be still a third down from 2019 levels. Now, there's a lot of talk about and opinions about, you know, the shape of that recovery, the pace of that recovery. I think we can all agree that people are getting back on planes. Anybody who's flown here, which a lot of you have flown here, know that. We're back to extremely high levels in the United States. Europe is catching up in a very big way. You know, Asia Pacific is coming. Places like Singapore are open up now, as our guests from Singapore can attest. That's happening. Now, I think we all agree that there's not only a lot of growth coming back, cyclical growth coming back here, but think about the fact that I don't think that 2019, as we're using as a reference prior to the pandemic, that should not be our goal. Because last I heard, the GDP has grown during the intervening years during the pandemic. There's gonna be compounded growth to be had here just to catch back up. You know, two things need to happen. Two things are required to make those passenger flights happen. Fuel and trained pilots. Consider the fact that at CAE, we train more of the latter than anyone else in the world. Our own forecast shows that a long-term forecast we had actually prior to COVID shows that 4% of new pilots are required per year, CAGR of 4% every single year. Well, actually, 4% every single year are required, you know, to be brought into the business just to cater for retirements. But that's in a steady state. That's a normal situation. I think we, again, I think everybody's seen that the two years in, during the pandemic has not been normal in any way, shape, or form, with accelerated retirements across the whole industry compounding the factor, the effect of yielding what we see today of shortage of pilots and demand for pilots that will last for years to come to be able to cater and meet that demand. If you go to defense and security, you know, you pick your number. This is before Ukraine. You know, defense budgets were forecast to go at 3%-4%. I don't know about you, but I saw Japan go up to 7.8% yet, yesterday. It's variable around the world. There's no doubt defense budgets are going up. Now, in the areas, more importantly for us, in the areas of focus that we have, and you'll hear Dan Gelston talk a lot about that this morning, the budgets are going up much more dramatically. You'll hear an acronym that Dan will talk about in the bottom area, JADC2. JADC2, we're very exposed to that. That's going up by 30% in line with the priorities of the U.S. government. We'll go through some example, but bottom line, we're seeing the signs that for us to be able, in defense, to grow at above market rate. Finally, in healthcare, you know, we see, you know, 12% CAGR just over the next 5 years in the market that we serve, which is the basic simulation market. You'll hear Heidi talk about that there's other factors that might yield even better prospects than that. Bottom line is that our markets are showing us plenty of avenues for strong growth in years ahead. You know, part of the reason that, obviously, we get confidence in our growth is the investments that we've made over the last couple of years. We haven't been standing still, as I mentioned, in terms of growth path CapEx that we're delivering. Just in business aviation alone, in a market that is structurally stronger than it was before, I predict that will continue. It's had a strong V-shaped recovery. Business aviation is 25% up as we speak right now year-over-year in the FAA world. It's up in Europe as well. We are deploying three new business aviation training centers like the one you saw yesterday in Las Vegas and Singapore and Savannah after opening up another one or actually breaking ground on one last November with our joint venture partner, Directional Aviation Capital, in Orlando. We're making those investments. In our core civil aviation commercial market, you hear Nick talk about we deployed over 20, actually number's 21, new full flight simulators deployed with both existing customers on the airline side and new airlines just to cater for the global demand in pilots. As well, we're continuing. I mentioned technology investment. Technology investments we're focusing on is developing synthetic environments. Dan is going to talk a lot about that today, and we're demonstrating those synthetic environments, those digital twins of the world, these artificial worlds where people can practice, exercise, and conduct real missions. We're demonstrating that at exhibition trade shows around the world. Finally, you'll hear Nick talk about the fact that we are becoming the partner of choice for the leading OEMs in the exciting EVTOL market or urban air mobility market. A very exciting market which basically is having a big meeting in Bentonville right as we speak, where we have personnel there. Of course, the growth has not only been inorganic. As I said, we've invested with nine accretive M&A deals during the pandemic. Of course, some of them you've heard about, like L3Harris, like the recent Sabre acquisition that we've done that I invite you to have a look at the demos out in the hall again. I think they're, you know, you'll get a very good idea of what we're doing there as you look at those demos. There's a lot more. Think about the acquisition we did, TRU, for example, in the booth. That's a competitor on the products market, located literally three doors down from us in Montreal, you know, making the consolidation effort pretty straightforward and integration not too difficult. Same applies to FSC. FSC is, you know, great, you know, company. Was a competitor of ours in Amsterdam. Again, fits in perfectly, providing us new customers as well and fitting in perfectly into our network optimization efforts, which yielded some of the massive savings that we have out of our cost structure. We've made technology investments like Merlot and RB Group, investment in digital that were really our early forays into world of flight services, culminating in the acquisition of Sabre just recently. We invest as well into maintenance training with Global Jet Services here in New York. We invested in Medicor on the medical side. Finally, Sky Warrior for ab initio military pilot training with the United States. I couldn't get off the stage without, you know, talking about, you know, our track record on ESG. I am, you know, super excited and proud of the fantastic role that we have played in leading the way in aerospace defense on the, on ESG. I mean, let's just talk about that we fulfilled the promise that we had made, I had made, to become the, we fulfilled it during the pandemic to become the first Canadian aerospace company to become carbon neutral, and we have been ever since, making investments required to do that. Hugely proud of the progress that we've made on diversity and equity and inclusion. The probably one of the initiatives I talk about I'm most proud of is the CAE Women in Flight program, where we underwrite the whole cost of the training, which is quite significant, as you might imagine, to take deserving young women from no experience to airline type rating, and then with our partner airlines, giving them job as airline. You know, doing our part to fill the inequity that still exists today, that only 5% of the world's airline pilots are women. If you want to look for pilots, well, there's an avenue right there. On inner city kids as well, that kind of initiatives. Finally, we're incredibly proud of the role that we play in helping our military customers defend freedom. Extremely proud of that. If I wrap it all up, before I turn it over to Nick and the group presidents, let me just go through some of the takeaways I think that you will get yourselves, I believe, as you listen through the whole presentation today. In civil aviation, no exaggeration that we're extremely well-positioned for strong cyclical and secular growth as the market recovers. Think about the fact that we're entering that upcycle at near record margins with plenty of room to grow beyond that. In Defense & Security, the L3Harris deal was truly transformational, aligning us as a pure play directly in line with the priorities of the U.S. government and its allies. Positioning us again for above-market growth and associated margin expansion. In healthcare, very well situated in attractive growth market, totally aligned with CAE's core values, our missions, our technology. Across the business, you're gonna see our continued push into technology dramatically changing our business and our opportunity sets. You know, there's really no shortage of places to invest or places to grow. We're supremely excited about the growth prospects of the business, and I'm hoping that today that you'll share that enthusiasm. Thank you. Marc, thank you very much for that great overview. Now we'll call Nick Leontidis, Group President of Civil Aviation, to come and share with us his views on what the future looks like. Thank you, Nick. Thank you. Is it working? Can you hear me? No. Okay. Good morning, everybody. My name is Nick Leontidis. I've been with CAE 34 years, when the last nine in the position that I'm in right now leading the civil team. Just a quick comment. You know, I feel very privileged to be part of this company for 30 years and really be a part of the transformation that CAE's been on for all these years. Just to give you how profound that transformation has been, when I joined the company, we had 600 employees in simulation. You know, roll the clock forward 30 years, there's 13,000. It's been an amazing journey, and I've been you know, blessed really to be part of that transformation. Now looking at civil and just really following up what you've seen from Marc in terms of our capabilities, the value proposition for civil is four things. We are the market leader in training equipment. It's the business that we've been in the longest, and we are the standard in the industry. You know, if I look at customers, I mean, every customer would rather have a CAE simulator if they can. We have the largest aviation training business in the world. And I'll show you later, we have training centers all over the world to cater to airlines and business aircraft operators. We provide aviation operation services, which is things like crew resourcing. We lease pilots to airlines. We provide technical services to airlines and to leasing companies. Finally, we provide technology services, and the main core of that business is our newest business is the operations support. They have operations technologies that airlines use to be able to run their business efficiently and to run their business effectively. We serve all the markets, commercial, business, helicopter, and I'll speak a little bit at the end about the advanced air mobility market. Now, digging in a little deeper in equipment. The equipment is a business where very similar to other industries, we provide the aviation equipment itself. We provide all kinds of aftermarket services, updates, upgrades, spares, anything to do with maintaining these simulators are 25-year-long life devices, and customers need a lot of support to be able to keep them. Finally, we provide technology, and I'll get into that a little bit on the next slide. Now, how does this equipment all fit together? Why do people buy simulators? Why do they buy FTD? Really there's a regulated training footprint that is effectively actioned by most of the airlines of the world, most corporate operators. You learn in the classroom, and we provide all the technology for you to learn. You practice in a fixed training device, and we provide technologies to allow pilots to be able to practice how the aircraft works. Finally, we provide full flight simulator where they learn how to fly. Every one of these tech devices, we are a market leader. We provide on every aircraft type, every model of training device, and we allow the customers and the pilots to advance their skills to become more proficient and to become safer pilots ultimately, for and do their job. Now, we've coined the term cadet to captain. You know, CAE goes beyond just pilot, airline pilot training or corporate training. We can take people off the street and assess them, and assess their competencies for ultimately becoming a pilot. We can select them and license them in multiple jurisdictions. As you can imagine, licensing in Europe is different to licensing in North America, is different to licensing in other parts of the world. We can do all the flight training. We have flying operations in the U.S. and in Australia where people can actually do all of their flying. Finally we can do experience building. As you know, in some jurisdictions like the United States, there's a 1,500-hour rule. You do not get a license until you've accumulated 1,500 hours. We have programs where graduates of our flight schools can become instructors. They can accumulate their hours and then ultimately go to the airline when they have completed that, the hour building. We can train you, we can type rate you on an aircraft, and then we can give you to the airline for service. Effectively, you know, we have many, and I'll get into a couple of these case studies. We have many customers where we take them all the way through the value chain and up until that student becomes a first officer on an A320 or 737, he's our responsibility, and then he's handed over to the airline. Now, another I think pretty interesting statistic here is, you know, the global footprint was a journey that we started many years ago. Why did we need a global footprint? You know, the cost of training is really twofold. It is the actual costs of coming to the training center and all of the inefficiencies of travel and expense and for airlines. One of the value drivers for CAE is to place training centers at customer locations that allows airlines to be as efficient as they can be on some of those costs. Over the years, we capture customers, we've grown the business. You know, when you look back 20, 10 years, you know, we've over doubled the number of simulators. Today, we operate over 300 simulators in the network, and we have 70 training locations. We've pretty much now covered most of the world, and really are looking at, you know, expansion only in areas where we are today. We train about 1 million hours. This is a number that we're back to now, that we were at in 2020, and that equates to about 135,000 pilots. When you look at a chart I'm gonna show you in a couple of charts from now, the world has about 350,000 pilots. CAE has a significant amount of touch points with pilots by training about 135,000 a year. One of the avenues that we've been able to grow the business and be the partner that airlines want us to be is by deepening and being more flexible on the partnerships. We have customers who have joint ventures. We have customers who have completely outsourced. We have customers who want us to run their back office and their technical services. We have customers who want basically a seamless cadet-to-captain solution. All of these customers have different stories. The beauty of the offering that CAE has is we can offer it, you know, in pieces, we can offer it all together, and we can really tailor the solution to what the customer needs and the operational requirements that they have. We thought it would be a good idea to show you a couple of case studies just to refer back to what Marc showed in terms of how we've grown these relationships over time. AirAsia, many of you know, Malaysia-based carrier, had started in about 2000 and 2001. They operated 5 737 classics but had an order for about 300 Airbuses. We went to them. They initially chose to buy their own equipment to set up their own training center. We rolled the clock forward a few years. We formed a joint venture with that same training center really to address the growth needs that they had and also to address some of the broader market opportunities that existed. Finally in 2017, having experienced with us for almost 16 or 17 years, they decided basically to sell off their portion of the training center, sign a very long-term agreement with us, and effectively train, in this case, pilot, cabin crew, maintenance technicians, the gamut. Basically everybody that AirAsia employs in pilot and cabin crew in all of their subsidiaries comes to Malaysia and gets trained there by CAE. Avianca, we skipped a step. They were a proud customer for many years, and then basically in 2018, listened to a proposal where we would outsource their training and buy out their capacity, their training center in Bogotá and signed a multi-year agreement with us. Effectively now they will train with us for the next, you know, 15 years. Then finally, you know, Singapore Airlines, very similar to where we are with AirAsia in the middle. So today in Singapore, we have a joint venture that supports the airline's training and supports the broader market that's available to us, and that has also parlayed into Sabre. Singapore Airlines is one of our biggest customers in our flight operations solutions. Finally, easyJet, completely different story. easyJet has a philosophy of variable cost. We used to train them in the training operations over time. In 2018, we signed an agreement where we built, if you go to Gatwick today, one portion of the Gatwick Training Center is an easyJet campus. We occupy 10 simulators for this customer. It's a massive airline. In 2019, we signed an additional agreement to supply pilots over the next five years. It's 1,000 pilots that they'll get from us in the next five years. Really a great anchor customer in London and a great anchor customer in Milan as well. Now, switching gears a little bit into the market, you know, you saw Marc spoke about the market and where we're going. There's no question the market has rebounded. In business aircraft, we're way above where we were in 2019. Number of flight hour records are being broken right now by these business aircraft operators. You can't buy an airplane. You can't do anything if you just decide to start now. We've seen 50% more flights in one year, three times the orders, and definitely we see a strong growth CAGR over the next three years. Now we're not talking about 10 years or 15 years, over the next three years that we're in. Commercial, again, very similar. There's no question the rebound is here. The U.S. is on fire. The airlines has a lot of publicity around that. They're hiring, they're growing their capacity, they're relying on us, so we're certainly in the thick of it. Europe is starting to look good. I just mentioned easyJet as one example of a bellwether of an airline that if they're occupying that type of capacity, means that they have some optimism in the future. Finally, Asia, over the last three or four weeks, we've seen a number of restrictions being lifted. We've seen a number of airlines start to build capacity. I think we see good CAGR on the commercial side, we see very good CAGR on the business side. We have a lot of evidence that things are rebounding back. Now one of the secular dynamics that is specific to us is pilots. In 2019, we put out an outlook report that said that we were gonna need 264,000 pilots over the next 10 years. Why do we need that many pilots? Well, a lot of retirement. Pilots in the airline world have to retire, have a mandatory retirement age. Pilots in the corporate aviation world just retire at some point because they wanna retire. 264,000 pilots means there's a lot of demand, there will be a lot of demand for capacity that we can provide to train people, new pilots. Also, when people retire in a system where there's structure around what happens when that senior pilot retires, the airlines call it bumping. We will see a lot of churn in the system where a senior pilot is retired and a junior pilot enters the system, and everybody moves up the channel. Every single one of those moves is a training event for CAE. Part of what you hear and read about training bubbles and training is because a lot of airlines have a structure around who goes where after somebody retires. For us, all of this is very good. COVID has kind of exacerbated that a little bit because some people have left the system early and are not planning to come back. That again has been. It will be a positive outcome for us because the demand for pilots will just get stronger. Now, as Marc showed in one of his charts, you know, we haven't been sitting still in terms of activities over the last two years. You know, six of the M&A deals that we've shown so far have come from civil. One was. Excuse me, two were consolidation, one was capability, one was expansion of market. We announced three training centers. We consolidated nine others. We took out a significant amount of cost out of the business on a permanent basis, and I'll talk about a little bit about that later. We've deployed 21 new simulators. Our order intake last year was CAD 2 billion, and we sold 48 simulators. From our perspective, when you look at most of this, what you see is pretty much I would say a normal year, or at least a year which is getting very close to normal. We're also investing in technology. You know, part of the strategy of acquiring Sabre and some of the other acquisitions and the investments we're making in Rise is to build a digital ecosystem that we can provide to our airline customers and our partners to make them more efficient, to make them more effective, and obviously to make us more important to them in their day of operation. I have just one slide on Rise, and I know many of you in speaking to Terry. I understand there's been a lot of good questions about what this is and how the market's reacted and how the customers. Rise is a data-driven next generation platform that gives real-time analytics for performance. It measures pilots' performance and compares it to what the optimal should be. It provides information to all the constituents. E-grading is the instructor. The instructor has better tools to be able to instruct. Metrics-based insights is for the pilot. The pilot can see how he's doing when he compares himself to what he should do. Analytics is for management. They wanna know how the pilots are doing and if there are any areas of risk that they need to adapt training programs. Everybody gets something in this system, and it allows the ability to be able to react and act more proactively to make changes to the training programs. Then you know, leveraging our acquisition. You know, Sabre provides us another step up in terms of our ability to provide operational support solutions to our customers. I won't go into each one, but just to give you one example of what the value proposition of these technologies is. Flight management, you know, the value proposition is fuel savings. When a customer acquires our technology, what they're buying really is a more efficient way to plan their flights. You see the three-quarters of a% of fuel savings. Three-quarters a% doesn't sound a lot, but if you consider the amount of fuel and the cost of fuel that we start to hear these days, the amount of dollars that this saves them is significant. Oh, by the way, you know, one of the other aspects of this is, you know, fuel savings means less carbon emissions. It's a great benefit to the airline to acquire these technologies and then to have us acquire improvements as we continue to evolve the capabilities in these systems. Then finally, you know, we are participating, as Marc mentioned earlier, in the eVTOL market. There's a number of OEMs out there that we're building relationships with. I thought I'd just give you, without getting into a lot of the detail, what are we doing. Right now, these aircraft are mainly in certification. We're able to provide pre-certification capabilities. This is technologies that allow them to be able to more effectively certify these aircraft. This is capabilities that we brought from our experiences with some of our other OEM clients. We bring operational readiness solutions, so courseware, curriculum, workforce training, everything to do with how they're gonna stand up a training program. You need a training program in order to certify the aircraft. Then finally, we have some. I thought it was interesting. We have a good collaboration with our defense colleagues, technologies and defense around remotely piloted. There are a couple of these vehicles that are planned to be remotely piloted, and we're gaining traction there as well because these OEMs are also in advanced stages of development. It's a growth opportunity for us. It's something that we're going to you know, cultivate relationships. I've shown you some of the technology and some of the training devices. There are some new training devices that we're designing to cater to this market, to be able to do this effectively and economically. You know, we'll see how this goes. Really in summary, there's no question our industry is rebounding. Business aircraft, you know, much more aggressively. Commercial aircraft, definitely, you know, many parts of the world have rebounded. We have great growth drivers. We spoke about pilots. We spoke about, you know, opening border restrictions. Double-digit growth in passenger traffic is gonna be with us for the next three years, and the world's gonna need a lot of pilots. We're positioned as a market leader. We are the market leader in this market, so we think we're poised to be able to capture the you know, our fair share and more of that market. We've optimized the network. We have increased our addressable market through the acquisition of Sabre. And we're gonna leverage these technology differentiators that I've spoken about to better position us as the preferred choice for our customers. We've taken out the cost. We see the revenue and the utilization stronger, and therefore, we're optimistic that, you know, the margins that we're gonna look at going forward are gonna be even stronger than what they were pre-pandemic. Thank you. Thank you, Nick, for providing us with those exciting perspectives on civil. I'd now ask, Dan Gelston, who's our Group President, Defense and Security, to share with us some thoughts about the business. Thank you, Andrew. The nature of defense, and therefore defense training, has changed. In the wake of 9/11, there was a paradigm shift for the United States and its allies from preparing for a post-Cold War conflict to actually fighting an asymmetric war. I know this very well as I experienced it firsthand. At the time of 9/11, I was actually commanding a tank training unit in Fort Knox, Kentucky, and then through that transitionary training, applied all those lessons learned to make it through the next near half-decade of participating in that asymmetric war. Now, nearly 20 years later, the pendulum is swinging back. That paradigm shift is going from a counterterrorism-focused asymmetric war, primarily on the ground, back to preparing for something referred to as the near- peer fight. Think China or Russia. That drives five clear requirements for our defense customers, both in the United States and internationally. First, exactly what I said, we're pivoting from fighting a war to training for a potential conflict. Next, we're expanding from primarily focusing on the ground tier to focusing on all five battlespace domains that Marc touched on. Why? You train how you may have to fight, and certainly a much more sophisticated potential adversary like China is not just gonna fight on the ground, it's gonna be an air, sea, space, cyber. Next, to prepare for that potential conflict, a lot of new and different equipment platforms are gonna be needed, particularly ones that have range and stealth capability, much more advanced than what we needed to use, particularly in the air and space, against a much less sophisticated asymmetric threat. Those more sophisticated future platforms are gonna bring with it much higher classification levels to work with, simulate, and train on. When you take those four aspects together, it drives you towards a much greater need for our customers to have synthetic environments. Because training across all five domains, the cost, the complexity, the fact that some platforms are not quite available yet, and the classification makes it nearly impossible to do this with the regularity of real assets that you need to be properly trained. You have to do it in synthetic environments. I joined CAE D&S in the heart of the pandemic almost two years ago, and I saw an incredible opportunity to shape a pure play business that could address all five of these immediate customer requirements. If you read, you know, Jim Collins' Good to Great, that hedgehog concept continued through my mind. I realized in order to accomplish this, some inorganic help was needed, particularly for the classifications and the domain spread. That inorganic acquisition has happened, and the integration is in full swing. Actually, Marc had been looking at L3Harris Military Training for upwards of a decade. Having come from a different part of L3Harris, I was quite familiar with the potential of this business and the synergies it could provide CAE D&S. I'm proud to say that through this integration, we are realizing the vision I had in coming to the company, and that is the world's leading platform-agnostic training and simulation pure play, ensuring mission readiness by integrating solutions across all five domains. Those words were purposely selected, and I hope over the next 18 or so minutes to illustrate why each one of those words is so meaningful. We're gonna take this vision statement to aggressively pursue two markets. You see them, training and simulation, our traditional core market, as well as an adjacent space of mission operations. Our discriminator besides that vision statement in addressing this market is really our technology. Marc touched on a little bit of it, integrating secure architectures and adaptive learning. Now, this is a defense brief, so my apologies, but we're gonna have some acronyms. I'll try to limit it and not quiz you at the end of my 20 minutes. But if I can ask you to focus on maybe three that'll come back up in the presentation. If you can remember VISTA, a C4ISR product coming from L3Harris Military Training legacy, SCARS, a major prime contract of ours, and then ALE, Adaptive Learning Environment, be rather key in the next few slides. We've achieved the vision statement. Now positioning, how do we capitalize on these higher growth markets, and what are they? Marc had mentioned generally accepted CAGR of about 4% in U.S. and allied defense markets. February 24th invasion of Ukraine is certainly going to move those in an upwards direction. We're already seeing it in places like Japan and Germany and the United States. That's not really what is exciting here, is the portions of those budgets underneath that we are focused on that have much greater growth potential. Training in synthetic environments, mid- to high-single digits%, integrated, secure, common architecture, and as Marc mentioned, JADC2, quite a mouthful, Joint All-Domain Command and Control, the ability to work across all domains in a coordinated, contiguous effort. You break that down into our addressable markets. In the core, CAD 14 billion of addressable market, that training and simulation that really lends itself to the air domain. 75%, not surprisingly, aligns very well with the legacy capability of CAE D&S, predominantly in the air domain. Note, space and cyber, the two newest domains, are rapidly accelerating. We're sitting at about 11% now, and I don't doubt that that will double in the near future. Hence, our focus on expanding across those domains to include space and cyber. In the adjacent market, now addressable with the integration of L3Harris Military Training, products like VISTA that I mentioned, the C4ISR product, we now have access to a much larger $24 billion market. With particularly exciting work at places like the research labs and DARPA, you may be familiar, designing the highly classified future of training and simulation, and with products like VISTA and work like the common operating picture we do for SOCOM, getting inside the decision cycle of defense forces, moving beyond training into that preparation and execution of command and control of our forces. I don't think any quote sums it up better than JROC, which is the organization that defines the priorities for the U.S. Defense Budget when they say, "Integrated modeling and simulation solutions across all domains is exactly what the DoD needs." I will humbly submit that no company can better provide the products and services those customers need than CAE. We have competition. Let's look a little deeper into it. You can see number two position by revenue is CAE. We're surrounded by OEMs. The largest is a company familiar to you, has a lot to do with the F-35, and that's why their position is there. That said, those OEMs are really refocusing their energies, their IRAD. They're getting back to their core markets, doing what they do best, building the best platforms in the world and keeping them flying or sailing or what. They're moving away from the vertical integration of the last decade and starting to partner more and more on training and simulation and other non-core activities. This is where the platform-agnostic position comes in because I can partner with all of those OEMs because I will never be competing with them on building a F-35 or a submarine or a tank. They're very limited in the partnership they're gonna do with the other OEMs because obviously they are partners. As we go forward, the advanced development, particularly of these classified platforms, requires simulation to be done simultaneously with those designs. You can imagine pretty challenging to open those kimonos with competitors. You do have other large and midsize as well in the market space, but they have challenges when it comes to integrating solutions across all five domains, and they don't have the worldwide reach. Lastly, you do have a small business, no question. There's always small business set-asides in advanced markets. As training moves from pure services, in many regards, to a bundled services plus technology solution that increases the effectiveness and the efficiency, small business is gonna struggle there. They obviously don't have the IRAD and the engineering horsepower to insert high-level technology. As you'll see, our now 5,700 employees, most importantly of which 4,100 cleared and over 1,700 engineers, I think perfectly positions D&S to capture exciting top-line growth in this market. That top-line growth will always depend on staying at the cutting edge of mission readiness technology, and that's what these 1,700+ engineers will do, as well as leveraging the technologies out of Montreal and civil and healthcare. We're really focusing on three technology areas as our key discriminators. First, bringing together ALE, Adaptive Learning Environment, from legacy L3Harris Military Training, combined with RISE, and this technology, you're gonna get to experience here in the demos. That is solving pilot shortage issues, speeding proficiency of training through that adaptive nature, and overall revolutionizing a digital training solution. It's also being integrated between the United States and our international activities. We're taking technologies done for places like SOCOM and the Common Operating Picture in the United States and melding that with our international work started a few years ago in Montreal and now really advancing in NATO, in the UK and Europe on single synthetic environments. Bringing those together gets us inside that decision-making cycle, solving speed to decision in multi-domain environments for next-generation situational awareness. But these two technologies couldn't advance at the rate and capacity our customers need without a foundation, without underlying technology. That comes from the, hopefully one of the last acronyms, the SCARS contract. It's a near $1 billion prime contract that provides the hybrid cloud-based, cyber-secured network architecture for the United States Air Force, connecting all 2,400+ of their simulators so the Air Force can train across all synthetic domains around the world, no matter where they are, and the enemy is none the wiser. Not only are we doing this for the Air Force, but we look to expand this to space, to the sea domain and others, as well as use it internally to advance our own capabilities and cross-work, particularly in engineering spaces. That ability is going to facilitate the key technologies across the bottom of this slide, there's about a half a dozen of them, that our customers require, which really continues the story of the larger, more capable enterprise that D&S is now. In fact, this is already yielding results. In FY 2022, obviously ending at the end of March, DNS won prime competitive contracts across all five domains. I would love to foot stomp that. I'm very proud of that fact. In fact, now DNS trains every single U.S. DoD pilot, Air Force, Army, Navy, Marines, even the Coast Guard. This progress isn't in just the United States, it's also international. A couple of months ago, we won against the 60-year German incumbent, the ab initio training in a true One CAE effort with help from civil, help from L3Harris Military Training in Germany for the Luftwaffe. In fact, inside of 3 months, that contract is already up and training pilots, and just in time. We won major awards in land and sea. Yes, you read that right. As much as it pains me as a land army guy, the big win in land was for the Air Force, and the win in sea was actually for the army. That speaks to the multi-domain environment our defense forces are now training in. Speaking of sea, excuse me, we are now rounding out our capabilities and active contracts across all three legs of the nuclear triad. This is especially important as we move towards this near-peer threat challenge because the recap budget in the United States for the nuclear triad is a third of a trillion dollars, yes, that's trillion with a T, over the next couple of decades. We are the key modeling, simulation, and training partner for that triad. I'd be remiss if I didn't mention we also won our first competitive prime contracts in space and cyber and kind of put on top of it the intelligence community. It's not a domain, but that's particularly exciting because we now lead modeling and simulation for the National Geospatial-Intelligence Agency, the intel community, my old world, from uniform. That encompasses capability, research and development, and move forward technology across all five domains in one contract. Larger and more capable is also accelerating our future. This top-line growth is very exciting. Over the next couple of slides, I'm gonna dive into a bit more of these specific areas that portend well to growth. The key, certainly a larger, more diverse talent base, access strategic markets through increased cleared employees with the acquisition. It's the integration here that is really the magic, that classic acquisition hope of one plus one equaling three. As I'm constantly reminded by Marc, he looks at it and says, "Daniel, you know, one and one looks more like eleven to me." It's good to have a boss that constantly drives you to greater heights. We're doing this through increasing our addressable market. I'll touch on prime positions on things called IDIQ vehicles, moving up the value chain, some real exciting progress when it comes to how we partner with our OEMs, and the scale to pursue bigger opportunities, both in size and in quantity. I'll finish up and really starting to look at the progress in our financials that this is flowing through to. In fact, FY 2022 was the first year since FY 2018 that DNS was above 1 book-to-bill. We achieved 1.2 with fantastic quarter-over-quarter progress. First, let's look at these IDIQs. I understand this is acronym salad. Don't have to worry specifically about the details. Maybe look them up later. The concept is really what is important here. Think of these IDIQs as hunting licenses, and you want as many hunting licenses and as big as possible to ensure you go after the most big game in your growth goals. We are doing that. In fact, post-acquisition, I now have six times the size, if you will, of hunting license ceiling that I had prior to the acquisition. This is key because it gives us direct access to the customer and helps drive our future. It also is very critical in times of quick turn need of our customers, like February twenty-fourth, the invasion of Ukraine, or end of year sweep funds. You'll hear a lot about that come September-ish, August, September, the end of particularly the U.S. budget cycle. That helps drive our future. Speaking of driving our destiny, moving up the value chain, again, is extremely important in this top-line growth story and process. Pre-acquisition, DNS was a niche subcontractor. We did about $150 million a year in revenue as a subcontractor to our OEM partners. We have now flipped that relationship on its head. Industry is recognizing our move to being a prime integrator, and you see it in these numbers. Our pipeline, our potential with OEMs going forward is now at $800 million versus $150 million. More exciting, if you break down that $800 million, is that $500 million of the $800 million, DNS is prime, and the OEM, the platform provider, is a subcontractor, in fact, many times on that OEM's very own platform. This is a true shift in the nature of our valued partnerships with these OEMs, especially as we drive forward with all these new platforms that will secure decades and decades of more work. Again, it helps drive our destiny, direct access to the customer, contract control, being in charge of our future versus a flow-down subcontract. This hunting license, I wanna go after bigger game and more of it, and that's these IDIQs and individual larger contracts. We're already seeing that in our pipeline. Prior to the acquisition, our average prime bid was $20 million. That number is now 5x. Our average prime bid is $100 million, significantly larger in size. Add to that story, there's now significantly more of those opportunities. Prior to the acquisition, DNS averaged approximately 1 large bid a year, $100+ million lifecycle value. In our pipeline, we now have 13 a year. You know, it's pretty hard to grow the top line significantly of a business already knocking on the door of $2 million, taking $20 million bites. Taking a dozen plus, you know, $100 up to a $1 billion+ bites and winning your fair share of them or more really moves the needle. It's going after that trophy game, and this is a key. Lastly, it's not just in the air tier, these opportunities are across all five domains, again, solidifying us as that platform-agnostic, pure play in training and simulation that can integrate solutions, whether you're looking at space, ground, cyber, sea, you name it. I'm gonna spend some time on this slide 'cause this is really where the rubber meets the road. The top-line growth is key to our multiyear recovery in this business, this progress. To have a multiplicative effect, I need to grow the top line and the bottom line, ensure that every extra dollar of order has more pennies of profit associated with it. In order to do this, the integration is key. When I think of integration of acquired businesses, I have five priorities. Quickly, strategy, structure, process, people, and incentives. I'll break it down. An appropriate strategy for the growth of the business and increasing margins, we've got it. You then have to create a structure that supports that strategy. A structure without the right processes and tools isn't gonna be as efficient and effective as it should be. Of course, no structure, no matter how good the tools are, works without great people and a great culture. Lastly, you need incentives to drive the right behaviors within that business by those people. We're accomplishing this. We're starting from the top down, and I'll touch on the leadership team. Leadership sets the tone, sets the culture, and I think we have a very appropriately diverse leadership team post the acquisition. In fact, it's quite balanced. One-third legacy CAE, one-third legacy L3Harris Military Training, and one-third new blood, fresh eyes. They're driving a culture with me. Now, culture is a softer metric. It's a little harder to put a number on outside of a feeling, particularly to outsiders. I always look for a metric, a KPI. The one that I believe is the most accurate is retention of senior leaders within the acquired business. When I say senior leaders, I'm thinking kinda director level and above. They're where the rubber meets the road, where the strategy meets execution. How many of those, one year into this acquisition, are still with DNS? 97%. 67 out of 69. It's the best number I've ever had, very proud of it, in the multiple integrations I've done over my career. Not surprisingly, great strategy, great structure, working on the process and tools, driving a good culture. We're seeing the impact to the business starting to flow through our financials. Our synergies are on track. We had announced run rate of CAD 35-45 million a year, not just on the cost side, but also on the revenue side. We've identified over $2 billion worth of new opportunity, particularly prime integration opportunity, that we can now chase because of our bigger size, scale, capability, clearances, all that goodness we have from the integration. That's flowing through to the orders. I showed the 1.2, but that's on a much bigger base. You have to think about it. One point two is equaling $1.9 billion in actual orders in FY 2022, an all-time record. That all-time record is also in backlog and in proposals pending award with our customers. Probably best to show this progression quarter-over-quarter as you dive into FY 2022. You can see we started at 0.5 book-to-bill and made it to 1.6. Revenue, a little less than CAD 300 million to nearly CAD 500 million. That's exactly the progression we need for this multi-year effort. Let's face it, you're not gonna overcome COVID in 3 years of less than book-to-bill of 1 overnight. This takes time to profitably refill that backlog. We're doing that, but it is a progression. At the same time, over the next year, I've got some very key integration milestones to complete, absolutely essential for the long-term health, profitability, and growth of this business, but they're gonna take time and attention. The ones that come off the top of my head would be ERP integration. We're taking 5 enterprise resource planning tools into one. We're completing the transition service agreement with the former parent, L3Harris. We're streamlining our myriad of IT, particularly with the classified and our, special security agreement regulations we have to follow, systems into one. In doing that, along with this orders momentum, is the key to this multi-year progression of the business. I'm particularly excited about it. In summary, I truly believe DNS is a transformed business and is in a position to outpace our peers in the market and significantly improve margins. We've got the right growth drivers. We've got the right positioning. Looking ahead, those orders, which I am very excited and confident in, hopefully that came through, are the leading indicator. In fact, I think this leads to a future worthy of standing on the shoulders of giants. You may not know, but post-acquisition, now all three founding fathers of training and simulation, the Mount Rushmore of our business, if you will, reside under one roof. Ken Patrick of CAE, Luther Simjian of Reflectone, our legacy Tampa-based CAE defense business, and now Ed Link of Link, L3Harris' military training business stretching back all the way to the 1920s. Together, those three legacy businesses encompass nearly a quarter millennia of training and simulation experience, one that I am confident will lead us to a fantastic 75 more years plus in DNS. Thank you. Dan, thanks so much for giving us such great clarity of your vision for D&S and for your military precision. You had until 10 A.M. You're spot on. I'd now like to call Heidi Wood up, our Group President of Healthcare, and to get a sense of, well, how we're making a difference in terms of preparing people for the moments that matter in healthcare. Heidi, over to you. Great. Thank you very much. Dan and Nick have been talking to us about how we are a world leader in training professionals, and we are leaders in these capabilities. We are leaders in creating synthetic environments where professionals can train, and we have that capability likewise in the healthcare arena. Sorry about that. We have great leadership in the healthcare arena that we'd like to be able to show you and wanna share a little bit about what we do. Sorry, a little bit nervous here. We have the capabilities with our healthcare arena to train our. I'm sorry about this. Let me go back to my notes. Thank you. A little bit of a rocky start, everybody. We're the world leader in training professionals where safety is paramount, and we create synthetic environments using technology that enable extremely high-fidelity training to produce superior outcomes. Now, we know that we want to be able to have that capability in the civil aviation world, and we also wanna be able to do that in defense. But there's a third sector where we want the best trained professionals to make us all safer, and that's in the healthcare arena. Not all of us are gonna get a chance to fly in an F-35, and not all of us get a chance to interact with commercial pilots, where we, many of us travel, but we don't intersect with the pilots. It's safe to say that every one of us in this room, that when we are in a situation where we are in danger and we have a dire medical need, we're gonna want the best-trained professionals to be helping us out. It's safe to say that we are capable in the healthcare arena and that we are gonna be growing in a way that's very exciting. We're the world leader in healthcare training. When Marc talked about the moments that mattered, that we are the leader in the medical health moments that matter. Let me explain a little bit about why we're well-positioned in a high growth market. When you look at our end user markets, 94% of our sales are to nurses, doctors, and emergency medical technicians. If you break out our capabilities into four major sectors, there's patient simulators, where we do high fidelity simulators, medium and low fidelity simulators. We're also a leader in childbirth and neonatal care training, and we're a leader as well in anesthesia. In software and digital solutions, we have ultrasound capabilities, cardiac and e-learning. We're the largest player in the market in simulation center and operations management. Then we also have a number of other capabilities in simulation equipment as well as CPR certification. I wanna give you a feel about some of our capabilities in that range in the pediatric simulation world and in our digital as well as our other capabilities. We have the broadest suite of capabilities of pediatric patient simulation in the world. When you look at, we have adult simulators, we have pediatric capabilities, we have trauma care, we have skills trainers so that nurses can practice drawing blood so that they can develop those skills and competencies. We're particularly strong in nursing areas, both in the nursing simulators with Juno, as well as in childbirth practice, where not only can nurses practice the regular childbirth methodology, but also for those one in a million instances where they need to be practiced. In anesthesiology, we have the world's leading HPS simulator that takes in oxygen and expels CO2, that you can administer drugs and medication to it, and it has a physiology that responds just like human beings that enable anesthesiologists to practice. If you were to imagine yourself in a situation where you needed to go under general anesthetic, you would want those anesthesiologists to have a chance to practice several times over before they were to turn to you. In digital, we're a leader in ultrasound with our popular Vimedix product. If you were to look outside, you know, we'd encourage you to take a look and play with those capabilities there. We are a leader in ultrasound training, and that's gonna be a fast-growing market in the next coming years. We're a number one player in simulation lab management. In cardiac training, we have exciting capabilities with our CathLabVR. I just wanna give you an illustration of what we're able to do with our CathLabVR, for example. Imagine if an infant were born with a severe cardiac problem and desperately in need of surgery. We can make a digital twin of that infant's heart so that the cardiac surgeons and the nurses can practice as a team together and practice over and over until they're ready to go into the operating room and practice on that and engage in surgery with that infant where you may only get one time to get it right. In e-learning, we do hundreds of thousands of modules that enable the students to learn in a way that's adaptive to the ways that they particularly learn. In other areas where we are strong, we have CPR certifications. We make simulated equipment for hospitals as well, for hospital simulated equipment as well as operating room equipment, and we make custom courses for people as well. I wanna talk a little bit about where healthcare sits because we stand within a mosaic of some very powerful fundamental trends that are gonna intensify over the coming years. First, starting with medical error. We have 250,000 people die every year in the United States through medical error. According to CDC, that's 3%. According to CDC, that's the third leading cause of death in the United States. That would tell us that we need to have more well-trained healthcare professionals, and yet what I'm out to show you is that situation is actually getting worse and not better. In fact, worldwide, we have a shortage of nurses. There's 6 million shortage of nurses worldwide, and that shortage is going to get worse because since COVID, we've had a departure of 17 million healthcare professionals, and that workforce attrition is gonna intensify the need that we have for superior training in healthcare. Yet we're not seeing any efficiency in the ways that healthcare professionals are trained. In fact, in the last 100 years, there's been no improvement in the time required to become a registered nurse. That situation is resulting in a loss of ICU beds, of 6 ICU beds a day. Again, as we stare into the future and think about how the world is gonna change, with the aging of Americans, with given the baby boomers, we see that the population of those over 65 is gonna grow from 16% now today to over 22% by the end of this decade. All of that means that we're gonna start to have increasing demand in our core market of simulation and training. We have an attractive market today of about $1.7 billion, and we think that grows at about a 12% per year growth rate to being about $3 billion by the middle of this decade. That's not all of the picture. What's even more exciting perhaps is what we see in the adjacent market right next to our core market. We've... The medical education market is a very attractive $45 billion market, and we see the lines blurring between medical education, medical simulation, and the medical education market. The reason why is that simulation and training is becoming more and more accepted in the medical education field, and we see ourselves penetrating that in an aggressive way through a combination of our technology as well as through our partnerships. Let me just give you a stat that explains why that is so compelling. We believe that we can take 5 or 6 hours of classic training and condense that into 1 hour with 65% greater retention. With those kinds of compelling stats, we believe that the medical education market is gonna be increasingly more receptive to what can be done in the training and simulation world. I want to peel back. We just talked about this nursing shortage, which is distressing in and of itself. Yet I want to talk a little bit about what, some other elements that is making this even further intensified. Why are we talking about nurses? Because they are 37% of all the healthcare professional field. They are the heart and soul of what make healthcare work. Yet what's happening within the nursing community is quite worrisome. The turnover rate in 2019 was 16%, and today it's 27% and rising. We're seeing a significant disruption in the nursing market, and that's getting even worse because we're seeing a growing aging of the nurses out there in today with over 53% of nurses above 50 years old. In terms of nurses that are over 65, about 24% of nurses are going to be over 65 by the end of next year. Think about that. That's one out of every four nurses. These trends up against this rising need for healthcare, both with the aging of the population as well as these elective procedures that we've seen postponed in the last coming years, we think that that demand is going to get even higher. Yet when a recent survey taken of nurses, greater than 20% of the current workforce plans to retire by 2025. I want to talk about another phenomenon that's happening that again augurs for greater growth in this market. Pre-COVID, only 17 states accepted simulation as part of the clinical education hours. There was a certain amount of headwind that our industry was facing in terms of resistance to accepting training and simulation. Yet, what we're seeing now post-COVID is that every state has introduced or passed legislation permitting simulation training as part of clinical hours. That augurs for a significant uptick in demand. We're not seeing it yet, but we do expect that that's going to be possible. Let us talk a little bit about what we've been doing operationally to get ourselves on solid footing so that we can take advantage of the strong strategy for growth that we see going forward. We've had excellent progress recently, where our fiscal year sales in FY 2022 are up 25%. Our order book is up CAD 55 million, which is the greatest order book we've ever seen. We shipped 1,250 patient simulators, a 22% increase from FY 2020. Likewise, our number of product ships is up 31% compared to where we were in pre-pandemic levels. What the team and I are most proud of is that our quality improvement is up 48% versus where we were eight months ago. Quality is a cornerstone of what we're able to do with our customers to engender customer loyalty and delight them. This focus, we think, again, augurs well for us going forward. We're on a multiyear journey to accelerate growth and profitability, and what we've been doing recently has really put us on a solid springboard to be able to take advantage of the exciting strategy that we have ahead. We're embarking on it in sort of a two-part way in terms of growing in the next few years to grow our revenue and profitability, and then also in parallel, growing on our strategy to be able to take advantage of the medical education market. If we focus on where we are today, most of our sales are in the hardware arena, with less than 10% of our sales coming from digital. We are embarking in a two-part phase to grow that. One is we have a growing mix of high-margin digital sales. Secondly, we're adding new levers for profitable growth. We are scaling our operations. We have made investments to optimize operations, supply chain. We're improving on our design for manufacturability to increase our efficiencies and lowering our costs on our products, as well as embarking on improved customer service. We're focusing our sales force on flagship product sales, which is high margin, high revenue products. Their sales quotas are not just flat quotas, but we also look for them to be focusing on those flagship products. We're embarking nowadays on growing our software as a service and our e-commerce capabilities. In addition, we're growing our task trainers, which are high-margin businesses. We are also focusing the engineering team on recurring revenue streams so that as we design, we design with the recurring revenue capabilities in mind so that we can continue to grow from a landslide chart on our revenues. That should lead in the next coming years to us being increasingly digital in our sales, which should again raise our margins. In the meantime, again, the longer-term strategy is that we're executing on our tech roadmap to build partnerships so that we can access this exciting $45 billion medical education market. Let's talk a little bit about what we're doing with digital, because again, we think the potential going forward is really quite exciting. I just want to give you a couple of stats to help you see what we've been able to do. We have 2 million in data points captured in the virtual operating rooms. We have 600,000 simulation procedure video recordings. We have 650 simulation management systems installations. All of that in data is enabling us to enrich our technology and our offerings to our customers, which we think is going to accelerate going forward. We are able to make advancements in artificial intelligence and machine learning to enable adaptive learning. We're making great progress in hybrid cloud solutions, where we combine in-person and remote training for our simulation centers. Also, if you own the data analytics, that's the gold. We intend to goldmine these capabilities by with increased use of these data analytics to enhance our student performance and elevate our education standards. In summary, we think this healthcare is a great business. We are the second-largest player in a fast-growing market bolstered by long-lived tailwinds. We hope you've seen that we're increasing statewide acceptance of simulation training. We think that could accelerate demand. We see an intensifying nursing shortage which could further accelerate demand going forward beyond the 12% that we're estimating the market could grow in. In terms of CAE positioning, we've been accelerating our growth in digital. We see that as favorable to CAE Healthcare. None of our competitors have a technology parent the way that we have with CAE, and that enables us to have strong competitive differentiators that we intend to extend in the years ahead. We're gonna be investing to grow ourselves in the medical education market. Looking ahead, we expect to grow healthcare faster than the underlying market. We see benefits of volume, scale, and efficiencies taking hold, and we're leveraging the digital to drive margin expansion. To conclude, as we think about growing our healthcare business and imagine our revenues growing 2x, 5x, maybe even 10x in size, the thing to ask yourself is, how many more lives will be saved? Thanks very much. Thank you very much, Heidi. Before we hear from Sonya Branco to tell us about how we think about capital and to show some of our performance in terms of organic and inorganic capital deployment, we're gonna take a break now until ten to the hour. It'll be an opportunity for you to get out into the hallways and try some of the great demos that you've heard the team talking about. We'll see you back here at ten to. Thank you. You should've been sleeping in my bed. Now, baby, you're messing with my head. I told you before, don't break my heart. I said let's lay here in the dark. You should've been sleeping in my bed. Now, baby, you're messing with my head. I told you before, don't break my heart. I said let's lay here in the dark. You should've been sleeping in my bed. Now, baby, you're messing with my head. I told you before, don't break my heart. I said let's lay here in the dark. You should've been sleeping in my bed. Now, baby, you're messing with my head. I told you before, don't break my heart. I said let's lay here in the dark. Okay, folks. I'd ask you to please come and find your seats so we can maintain this military precision we have. Thanks very much to everyone for finding their seats. I didn't want this to go on too much longer because Dan Gelston was getting a big ego with the swarm around him. Certainly a lot of interest in the many areas of the business. Maybe if I could ask the CEO to find his seat. Marc. All right. Well, fantastic. I now wanna welcome Sonya Branco, our CFO, to the podium again to tell us about how we've been deploying capital, how we think about capital deployment, and also to reflect on, you know, some of the outlook and maybe longer range targets that we have in view. Sonya, up to you. Thanks, Andrew, and good morning, everyone. As we heard from Marc and the group presidents, CAE is in a unique set of opportunities of significant growth opportunities ahead of us. An exciting place to be, and what I'd like to walk you through is really how do we look at these from a capital allocation perspective, our track record, and how does it inform the view of the future for us. CAE was already a growth company pre-pandemic. We were outpacing our market. What this market disruption did, obviously a significant headwind, but it allowed us to go into the offense. With the moves that we made externally, both on extending and expanding our positioning in the market and internally creating greater resiliency and efficiency, it provides even more opportunities, secular opportunities, whether they're on the organic, M&A, or on innovation front. With that pipeline that we see and our track record, this is why within capital allocations, growth opportunities and investing in these growth opportunities remain our number one capital allocation priority. If I look at it from a high level, effective capital deployment has been an important part of our history, our success, and very much an important part of our future. From a capital allocation perspective, our approach is a balanced one. However, we have a priority towards growth. With the market opportunities and the pipeline that we see, we have the opportunity to really lean in and continue to identify, invest in these growth opportunities with the right financial profiles and also the alignment with our strategic operations and our strategic priorities. What this delivers, as it has in the past, is outpacing market growth and accretive returns. Now, we wanna invest in growth, but we also wanna maintain a sound balance sheet. One, to protect against any unforeseen shocks or downturns, but also to provide the financial flexibility to be able to act with agility and proactively when the right opportunities present themselves. If I had to describe CAE and our stance, I would say that we're patient, value-driven investors. Now, that might be a little counterintuitive given the level of activity that we've done with nine acquisitions in the last 18 months. If you look today a layer deeper, most of the acquisitions that we closed out were properties that we had been tracking and monitoring for some time, years. Really kinda looking for that right value range and the right conditions. The pandemic had a lot of effects, but really one of the unique elements was to open up a unique window where it aligned sale conditions, value parameters for us to be able to act proactively, decisively, deliberately to capture these great assets and close on these transactions, some of them transformational. While we balance investing in accretive growth, a strong balance sheet, we also balance that with shareholder returns. Our view is that dividends are avenues for the excess free cash flows once in a steady state environment. If we go a layer deeper, what are the criteria that we look at that we use when making capital deployment decisions? On the strategic element, Marc and the group presidents spoke about our strategic priorities. Of course, when we're looking at investments, we're looking to strengthen our competitive position, expand our TAM, but also expand our reach with customers and our capabilities. You know, as we saw on Marc's slides, on Nick's slides, ultimately expanding the reach with our customers and even leveraging those capabilities across our customer base is a model that we've been very successful at. From a financial perspective, accretive growth to earnings and returns, and we favor recurring revenues with a high cash generative profile. We saw 60% of our services, of our revenue with services. When we look at investments, we are looking to be additive and to drive higher services, which means higher recurring and usually very good cash flows along with it. If you look at our history and looking back, you know, we've been able to really fulfill those strategic priorities, but also deliver on the financial ones. I'll walk through a few examples over the next few slides. First off, organic investments. Now, this is concentrated mainly on simulator deployments within our civil network to deliver on long-term training contracts. Now, this is the best example of growth compounding that CAE demonstrates. What this chart, lots of numbers on it, but what this chart illustrates is really the incremental return of the deployments, the simulator deployments that we've made over the last 5 years. What it demonstrates is 3 things. One, these simulator deployments consistently deliver 20%-30% accretive returns within 2-3 years. Highly accretive in a short period of time. This is even more compelling when you think about the fact that these are long-term assets operating seven days a week, day in, day out for at least 25 years, right? Highly accretive long-term assets. Lastly, what I'd add is that these returns are really a good proxy for cash generation as well. Strong recurring free cash flow generation that adds to the free cash flow of the corporation, new cash flow to fuel new investments of assets like these. Why? What's the reason for this? The reason that we can deliver this type of accretive investments within that short period of time is because these investments are customer-led. Every simulator deployment has an anchor customer and a contract to go along with it. Really ultimately, what it is an illustration of CAE capturing the market share and extending the reach with that customer and that customer's journey, like Nick and Marc spoke about. Ultimately, you know, looking forward with the market just really at the starting stages of its recovery and the opportunities that we see ahead, you know, there's a lot of active pipeline and opportunities to continue to deploy this. Frankly, at 20%-30% returns within a couple of years, this is one of the most compelling areas for CAE to continue to invest in. If we look at the inorganic and the M&A side of things, we'll walk through a few case studies. Now, I spoke about our value-driven discipline. One element that I wanted to also illustrate, and that's a little bit different, is that more often than not, a lot of our acquisitions are carve-outs of businesses that operate within larger operations and businesses. Properties that are not necessarily core to the sellers, but that are core to CAE. What does that mean is that not only does that make us the natural buyer, but also it allows us to have a greater impact on value generation. These are the types of properties that we look for and that we really like. I'll walk through a couple of case studies, starting on the civil side. First, the Bombardier Business Aircraft Training acquisition. A great acquisition for our business jet operations. Not only expanding our portfolio addressable market, it hits all of the strategic criteria. We also knew those operations quite well because we were co-located in the same premises. And in fact, even sharing some cross-functional operations support. If I look at it from an integration perspective and a risk level, it wasn't that risky a proposition, 'cause ultimately, integration was basically changing the locks and maybe removing a couple of doors. From a financial perspective, strong recurring cash generation. And frankly, you know, in line with the profiles of the organic deployments that I just showed you on the last slide. From a margin expansion perspective, it accretive by 200 basis points to the civil margins. Now, when we announced the acquisition, we had estimated publicly that it'd be accretive by 100 to 150 basis points. Well, we beat that. Sabre AirCentre, more recent acquisition, once again, opens up greater access to $2 billion of incremental market to the civil aviation market. From a financial perspective, software-based business. The attributes that we like are long-duration contracts, high contract renewal rates, also recurring revenue, and highly cash generative and accretive margins. These are all the financial dynamics that we look to reinforce. Now, still relatively early in the integration, but going well, great customer reception, and we've had one month of reports of results in our FY 2022 results, and off to a good and accretive start. On the defense side, a couple examples, of course, L3Harris Military Training, the largest acquisition that we've done in our history, and another great example of a property that we looked at for many, many years, and looking for the right value and conditions to act. When the opportunity presented itself, we acted with agility and speed to be able to seize that opportunity. It's been transformational for defense. Dan spoke to it. He spoke about the strategic and the operating benefits. Probably add just a few financial elements. Immediately accretive and really good cash flow generation. For the first nine months since its acquisition, it's been accretive for 150 basis points to the defense margins. Now, the other one I wanted to highlight is the Seamath acquisition in 2015. Now, I realize, you know, the others are in the billions and hundreds of millions. This is really, you know, only a smaller deal at barely $20 million, but it's had a disproportionate impact and really a great example of how we can use inorganic to launch and accelerate a whole new business stream within our segments. Ultimately, here, on its own, it stands as a great performance acquisition. In itself, this acquisition has driven $700 million of backlog since acquisition. That's for $20 million. And it's been accretive to the defense margins. Great stats just on its own. We don't stop there because really this provided a launching pad, the experience and the capabilities for us to expand across our global customer network. With this program and the experience that came along with it and the capabilities, we were able to bid and win the U.S. Army fixed-wing contract. That was then our first foray into live training in the USA. Since then, we've leveraged all of this to become best-in-class provider for not only the U.S. Army, the Air Force, the U.S. Navy, the Marines, and just recently, the German Air Force with that win against the 60-year incumbent that Dan mentioned. Really, this is a great example of how we can leverage capabilities and scale and expand that across our customer base. This is not just a civil dynamic, but really one that we do across all our businesses, and that's core to CAE. From a cash generation perspective, our business model is highly cash generative, and we look for investments with the same profile. We target 100% conversion of net income to free cash flow. As you can see, we've consistently delivered on those targets. We can also see on the chart is a track record and history of investing, successfully integrating the M&A and the acquisitions that we've done, and then generating that profit and cash flow to be able to fuel the new investments. What we see also is really that helps us on the leverage ratios, keeping it within a relatively tight range and in periods after periods of larger investments and acquisitions, the ability and the history of quickly delevering while continuing to invest This is something we expect to continue going forward. Now, moving on beyond the capital allocation and everything that we've done externally, focused a lot on the internal as well. The pandemic was an opportunity to really be laser-focused on costs, on processes, and optimizing operations. Now, before the pandemic, we were growing high utilization rates. The opportunity was not necessarily there to drive these kinds of efficiencies because it would have disrupted customers and disrupted revenues, which obviously would be a significant cost. When COVID hit and volume went down, this was the opportunity to go on the offense and drive a high level of efficiencies. What did we do? We consolidated nine training centers across the world. Not only driving network optimization, footprint reduction, but not exiting any markets or impacting customers. For example, we used to have four training centers in the UK, been consolidated into two, centers of excellence for CAT and for BAT. In Amsterdam, we had three. We acquired FSC. That added another four locations in the city of Amsterdam, then optimized to one training center. Ultimately, this at the same time as relocating 50 simulators across the world, and that without skipping a beat, without impacting customers, and without disrupting revenues. What does that translate to? It translates into reduction of hard costs, leases, all of footprint-related, real estate-related ancillary costs. But it also drives added staffing efficiencies in the training centers and also provided a moment to design and deliver a better customer experience for our customers. Now, CAE, as COVID has changed the way we work, so hybrid is now a reality. We continue with that focus on footprint optimization. To date, we've consolidated or reduced 20% of our office leases, footprint, 10% on warehousing space. This is all, you know, high-level examples of cost reductions that really resulted in CAD 70 million of permanent cost reductions. This, on the higher end of the range than what we had shared with you guys, a payback period of two and a half years, and in fact, this doesn't even include the benefits of the capital efficiency that came out of the relocations. Where we took simulators out of Europe and Asia and transferred and relocated them to the U.S. to capture that new demand from the faster recovery that we saw in the U.S. Not only did we cut CAD 70 million of costs, drive better capital efficiency, but drove new revenues out of existing capital. A lot of great focus on internally making us stronger and contributing to margin expansion. In summary, a few takeaways that I'd like to leave with you guys. A proven track record of deploying effective, efficient capital, not only organically, but successful integration of acquisitions. Achieving above market revenue growth and high cash generation profile, and all through that, while focusing and driving growth investment, we did that by maintaining a sound financial position, and we expect to continue to do so. Looking ahead, we see a unique set of growth opportunities, and these secular growth opportunities, along with the cyclical opportunities that we see ahead, will contribute to above-market revenue growth and margin expansions to higher than past peaks. What does this translate in terms of hard numbers? Well, I'll speak to one year ahead some of the highlights of the outlook that we just shared last week. Mid-30% consolidated adjusted segment operating income growth and in line with our cash generative profile, we expect to continue to deliver free cash flow conversion of about 100%. Now, looking further out, we target mid-20% EPS growth over the next three years. Now, underlying these targets are three things. On the civil side, double-digit revenue growth and new peak margins. Now, historically, the peak margins for Nick and his team have been 22%, and we expect to exceed that. On the defense side, Marc said it, Dan said it, the indicator, the market indicator to monitor is order intake. As we continue the transformation of the defense business, and as those orders and bids translate into revenues and growth over the periods ahead, this will deliver and target above-industry growth and low double-digit margins. In healthcare, backed by our current track record, we target double-digit growth and expanding margins as we bring this business to scale. Great, strong growth potential. I share Marc's optimism too across the three businesses to be able to deliver, and then culminating in a superior EPS growth of mid-20% over the next three years for a bigger, stronger, and more profitable CAE. Thank you. Thanks very much. Thanks very much, Sonya, and certainly, I think you've demonstrated where the rubber hits the road in terms of bringing the whole story together. I now wanna ask the executive team to join Marc and me up here in front, and we'll open up to a Q&A session. We'll take questions from the room, as well as questions from people joining the live webcast. You can use that platform to register questions or the Socio app itself. We're ready to take first question from the floor. Sure. We have mics. We have microphones? Yeah. Claudia, thank you. Thanks. It's Matt Lee from Canaccord Genuity. I just wanted to ask about the margin profile of the larger contracts that you're trying to take on the bids in the defense business. Is that generally a better margin kind of contract than what you currently have, or is it, you know, maybe a little bit more competitive? I turn it over to Dan. Dan, wanna take that one? Maybe get up if you wanna. Sure. Happy to. The key to these larger contracts is that position as a prime integrator. They are more complex, they are more classified, and those discriminators and barriers to entry typically create a situation that you have higher return on sales, than you would for a subcontractor role for something that's maybe a bit more service-oriented, than something that has product and services with those barriers to entry. I'd say the general trend, and certainly the focus we're working on, is higher return. I also mentioned incentives. We're driving incentives that modify behavior and ensuring that incentives for our capture personnel as well as our execution, our P&L personnel, are both tied to performing on that contract at bid-approved profitability versus what can happen. Let's face it's pretty easy to sell a dollar for ninety cents, just chasing the order and not caring if you're a business developer, how that will actually be executed profitably. Tying them together with coinciding incentives is the key to that. Dan, if I'll just add. I think I'm mic'd. You know, you can jump in, but scale, size, volume, a greater product exposure, the leveraging of these contracts on an international stage as we saw in some of these examples, and international generally has a higher return on sales. These elements will all contribute to that pathway to the low double-digit margins that we spoke about. Fadi. Yes. Thank you. So I have just a couple of questions, maybe first on the aviation side. If I go back to pre-pandemic, typically, you were able to deliver like 13% SOI relative to sales. Currently, as of the end of last year, you had CAD 4.2 billion of capital employed. You had CAD 314 million of SOI. That's about 7.5% of return to sales. Do you envision yourself getting back to that 13%, and over what timeframe potentially you can get back to that kind of SOI? My number two question is maybe on the military side. Dan presented kind of the strategy and the L3Harris, how it basically fit with the other Are you looking at other M&A or technology or any additions, tuck-in or otherwise, in the military side still to complete that, or are you happy with the framework you have right now to go to market with? Sonya, you wanna take the first one? I'll take the first one. Yep. Fadi, you said return on sales, but I assume it's return on capital employed that you're speaking to, right? First, I think a couple of dynamics. We're, you know, great results, Q4 for the year, but I think we're still very far off from a steady state, from disruptive environments. Right now we're seeing a few things. Mm-hmm. On the return on capital, it's one fact that we're not necessarily at a steady state, and so there's a certain level of capital intensity on the civil side. But on the converse, it's got a high level of operating leverage, which we've now enhanced with a lot of this cost restructuring. As the recovery and the elements of growth come in, you'll see there's disproportionate addition to the return on capital employed. Second, you know, a bit of a headwind is all of this activity that we've done. Great because we've captured long-term value, you know, at good valuations that drive, you know, basically capitalize on this disruption to create long-term value. There's, you know, probably close to CAD 2 billion worth of capital employed, and that'll take a bit of time to ramp up as we kinda drive the synergies and the benefits of that acquisition. Those are kind of the, okay, elements that you're working through. Ultimately, yes, all of this deployment of capital and so on and capturing of growth opportunities, not only to drive growth, but to drive accretive growth and growing the return on capital, you know, basically back to the double digits realm as we continue to invest. As you know, if we were to stop all capital deployment right now, that return on capital would go through the roof, but we would leave so much opportunity on the table, and I don't think that's the right balance. The balance is to continue to invest in the right things with the right accretive financial returns, but also and seeing that progression on the return on capital. Dan, you wanna take the next one? Certainly. Obviously, it's somewhat limited how much I can speak on M&A strategy, but I'll put it this way. All five domains was an emphasis today. When you look at the L3Harris acquisition, they augmented us in the traditional domains of land, air, and sea, and they really gave us entree into space and cyber, the two newer domains. When I look at growth in space and cyber, we pointed out 11% and growing. I see space as new enough and close enough to our traditional air there, Space Command being born out of the Air Force, that we should be able to grow that organically, and I see that progress, particularly with our first competitive win and some other pursuits that we've engaged in. Cyber is nearly about 15 years old as a battlespace domain. It is more established. It's had its bumps and starts. I would say when I look at cyber to be a major player, kind of the Jack Welch, you wanna be sort of one or two in each space and that's the end state, that would be more challenging because it's more established without inorganic support. That would be an area we'd look at. I think the business has proved with L3Harris. I mentioned that, you know, Marc had been looking at it for a decade. Patient, strategic buyer when the time is right, I would advocate that that would be the area when the time is right, potentially to augment the portfolio. The only thing I might add, Fadi, as sure as you can well surmise, is that we don't need to do anything to accomplish, you know, the forecast we've put in front of you today. It's not a question of lacking capabilities. It's in augmenting to go to the even next level. That applies to the business as a whole. Yes, sir. Konark Gupta from Scotiabank. Thanks for all the presentations. I really have two questions here. Maybe the first one, for Dan and Marc, if you wanna take it. Like it's pretty counterintuitive, to imagine services being lower margin in any business, right? Defense tends to be that. A, why is that? Why services are lower margin than products in defense? And then- Can you do something structurally in the defense business to narrow the gap or divergence between services and products margins such that, you know, like, you cannot control the mix obviously over time, right, from period to period. Can you sustainably have double-digit margin regardless of the mix between services and products? That's my number one. For Sonya, you talked about the three-year outlook, and that's great to see that, thanks. You didn't talk about a lot on leverage ratio and maybe the dividend aspirations in that three-year timeframe. Any thoughts there? Thank you. Dan? Yeah. Traditionally, particularly in the U.S., services are lower margin, particularly when you think services as pure providing of people, typically on a military base. Mid- to high single digits% is what is allowed, sometimes required by these different government contracts in the United States. Fundamentally, it's much lower risk. There's not IRAD, there's not that complexity. You have the ability now that it's an established market to come in and many times just provide back similar staffing that was there. Sometimes if it's pure services, it becomes a wrap rate game and who can drive to the bottom. Not of interest to me. We obviously wanna move up in the return on sales. How do you change that dynamic? International always has higher return. There's more complexity there 'cause many times you have to use indigenous forces or employment or a transfer of technology in the process. As Sonya pointed out, moving more of the portfolio to international back to a balance of about 50/50 is a key. The product versus service portfolio mix has two aspects to it. When DNS was much smaller, but in double digits, it was about 60% product, 40% service. Not surprisingly, heavy product bias, product mid-teens, high teens at times. Not surprisingly, they were in the low double digits. Through COVID, three years of less than one book-to-bill, that bias flipped to 60% services, 40% product, part of the degradation story of those margins down to, you know, 7-8%. I can tell you last year, if you look at our order book, it was still 60% services, 40% product. As we look at our pipeline going forward, that has flipped. Again, pipeline, but that has flipped to 60% product, 40% service, exactly the direction we wanna go and much more international. The last key, besides just pure product mix, is this concept of bundling. The governments, particularly United States, are moving away from just pure services. I just want instructors to realize, hey, it's 2022. These instructors can be a lot more effective if they have, let's say, biometric-enabled advanced digital training solutions, like some of the stuff you're seeing out there, to be much more efficient, much more adaptive in their training. It's bundling those services contracts to make them more complex and technology-heavy. They may still technically fall in the services bucket, but that gives the complexity and the barriers to entry that it's not a race to the bottom anymore. You have true discriminators that not many other companies can compete with us on and therefore drive your margins up. Great. Thanks, Konark. On the first question for debt, I mean, what we've guided to and kinda historically live within is a certain range on net debt to capital, around 35%-45%. You know, whether we've been on a higher end or lower end of that's generally the range that we live in. I wouldn't see a big change in that, and that equates to kind of maintaining an investment grade profile. That's what I would expect going forward. No major changes on that front. On the dividends, as I mentioned in the presentation, you know, still very much a part of our capital allocation priorities, but it's still a very uncertain world out there. In fact, quite a few variables still out there. We're really ultimately, you know, looking for a more steady state environment in order to kind of assess the level of free cash flow, excess free cash flow, and then the introduction of dividends back into the capital allocation mix. Okay. Benoit Poirier from Desjardins. Thank you very much for hosting this great event. Just to come back on the first question about the return on capital employed, you laid out a great color about the three-year financial target with 17% margin. Would the 17% would allow you to get back to a return on capital employed of around 13%, down the road in about three years? Sonya? What we spoke about on the 17% was really kind of what we saw as a point in time when we see kind of more of a recovery, right? That's not necessarily equating to that three-year guidance, so could be higher and so on. Ultimately, you know, with the guidance that we've given on the consolidated target, it does show a good progression on the return on capital as we see the operating leverage from the recovery and from the growth investments that we've made, and also all the synergies and the ramp-up of the acquisitions as well. Okay. I have a second question about the crew management business. Obviously, you were able to strengthen your capabilities throughout the pandemic with a great acquisition. You've been talking about a TAM of CAD 2.4 billion, and obviously market share for CAE is still relatively small in that big market. Could you talk about where you see the your market share evolving with now all the capabilities that you have in this great market? I'll kick it off, Benoit, and maybe I'll ask Pascal, who's in charge of that business, and Nick to give additional color. Look, as we said, we're very excited about the business. Extremely complementary. When you think about- Where we are in the business overall in civil aviation. I mean, we already cover every solution from cadet to captain, maintenance technician, the whole crew. Nick talked about so many examples like we do with just pick one airline area, but there's lots of airlines like that. Now what you see us moving, you know, further, you know, vertically integrated into the broader crew ecosystem. That's what we're doing here. There's tons of opportunity in that. The largest one, of course, increases our total addressable market. In a market where the customers themselves, like I tell the CEOs of the airlines, are extremely receptive of CAE going into that market because it's essential to their day-to-day operations. You know, before we talk about organic growth, we got to do what we have to do here, right and forward. You know, this is a carve-out, but we do well at carve-outs. You know, that's one of the reasons that we can buy it at the value we did. We're putting a lot of capital in it to make sure that we do what we always do, apply technology to differentiate. That's the goal. You heard Nick talk about it's an efficiency play. Just give it 0.1% of the time. That's just going to be key to organic growth. That's going to be the key. Inorganically, we'll see. I mean, we're not focused on that now. It's a market that's about, you know, about four players. Let's see. This business is kind of just, use an analogy, it's kind of like your ERPs that we have in a lot of our companies, right? I mean, changing ERPs is like corporate root canal. You know, we don't really want to do it unless we really have to, unless we get a compelling reason to do it. Neither do we want to wind up with an orphan system that nobody's investing in. That's where we come in. That's the play, okay? Apply, integrate the business, which Pascal is doing, make sure we apply our technology to it, increase the efficiency of that system, provide the customer delight that CAE is associated with it and the people that we have, and I think great things happen from there. Maybe that's my color. Pascal, would you like to add a little bit more in terms of? Yeah. Well, like you said, Marc, there's four main players, but it's highly segmented. You know, when you span across crew management, flight management, movement, which is the op center, there's a lot of providers that are touching this. Very few have a platform as we do. Okay? Very few of them are fully providing an integrated platform and call it a data lake, where you can leverage insight. How do you compare your operation to the other airlines and so on, and really you know, get more profit out of it? This is important. The market share is about 25%, so there's room to grow at this level in all aspect of those solutions. When you look at what Marc has said is you know, meeting customer, the reception is actually amazing. Why? Because when we say we're coming with a crew management system, we know about crew management, and it's also about crew engagement, which is key. We all talked about, you know, pilot demand and so on. It's how do you make sure that the airlines is managing their crew, the collective agreement properly, and providing tools to the pilots to obviously, you know, manage their life during the course of their career, which is extremely important. Thank you very much. Just last point I'll say is that I should have said it when I was talking, what is really exciting, particularly exciting. I talked about the evolution of our company over, you know, over the last 20 years. What you're seeing us do now, you've seen us move from being a products-heavy, you know, partner to the world airline, to a training partner, expanding to all aspects. What you're seeing us be now is a technology partner to the airline, complementing what we do as an essential provider to them that is critical on their day-of operations, just like training is. Next question. Yes, sir. Question. Mike, over here. Maybe it's me as I get the mic to that gentleman. Oh, I'm sorry. Kevin from CIBC. Just right down the middle here. Maybe just looking at your three-year forecast, does this just assume kind of a broader macro recovery, or are you assuming any additional, like, revenue synergies from cross-selling, which seem to be an opportunity with some of the acquisitions you've made, or is that upside to some of these targets you have here on a three-year target? I'll just say it's baked into all of what you saw today. Everything you saw today is baked in. It assumes in terms of the recovery of the market is based on the civil side, is based essentially on the IATA forecast. That's what we model on. Okay. Defense, you heard what Dan said with regards to budget. Those are macro assumptions, but you want to add anything? Yeah, no, absolutely. That's really one of the largest underpinnings is the IATA recovery curve. That's really an underpinning, an important underpinning. You know, relatively stable macroeconomic conditions, no major shocks and so on. Those are, you know, integral to the assumptions that we're making. I guess I'd be interested to know how much, like these ESG metrics you've talked about in this presentation and some of the things outside play a role in your bidding. Like the fuel consumption savings on the commercial side, I think, Dan, you talked about simulation helping reduce fuel consumption as you move from a simulated training environment to a live training environment. Are these variables that are key to the decision-making when they decide to go with you or another product, or are they kind of nice to haves at this moment in time when you're bidding on these contracts? I'll open it up. To me, ESG is a critical factor to anybody going forward to our company. I think there are increasingly parameters across the business where, you know, customers are requiring commitments with regards to ESG on all aspects of it, you know, diversity being one. We see that. We impose that on our own suppliers as an example. Maybe Hélène, as the Chief Sustainability Officer, maybe you expand on the subject. Yes, of course, we are the Scope 3 of our customers, right? We are part of the value chain, and therefore, we're part of the solution. When we speak to our customers, whether the airlines or even the defense forces, increasingly they are interested in seeing how we can help them, so that fuel efficiency that we can bring definitely will make a difference because all the airlines have huge Scope 1 with their fuel, and therefore, they're looking at tangible ways to actually reduce their emissions. For your question, we're seeing more and more in bids, whether it's from airlines or even defense forces and environment and climate change action portion of it. Yes, customers are paying attention. We're part of the solution. Of course, with simulation-based training, we avoid carbon, so in civil aviation it's quite clear, 5 million tons of carbon that we avoid every year. Defense forces are starting to pay attention and think about it. When we can convince an allied force to actually train on simulation-based training, it's more efficient. Of course, it can reduce their carbon significantly. In some bids, we're seeing some question related to environment and carbon in defense bids as well. We think we're uniquely positioned to make huge difference on ESG. Increasingly, these metrics and the actions that we're taking matter, and they matter for our customer, they matter for us, they matter for the planet, of course, and we're very proud to be carbon neutral. Right now, carbon neutral means that we're compensating our scope one and scope two emissions. All of our sites, and you know that we are present all over the world, we have almost 200 sites. All of our sites either use renewable energy or are covered by non-renewable energy certificates. We've built in that incentive because we are compensating our residual carbon. We built in an incentive to reduce carbon at the source. That's why we're gonna have some electric aircraft in our fleet as well to reduce our scope one emissions. We think we're a leader. We wanna do even more, and we're part of the solution for our customers. Just to add on that, though, a little known fact is that in civil aviation, all of a pilot's training and recurrent training is done in the simulator. The first time you go in a real aircraft is with passengers in the back. Now, one of the two is not his first time, but nevertheless, so all of it's there. So you could say like, you know, when you compare that with defense, that is not the case, nor should it ever be the case. But there's still a lot of room as you expand the fidelity, some of the things that you see out in the hall and the realism on real-world missions, there's still plenty of room to expand the use of simulation for defense forces around the world. Greenhouse gas reduction is a driver of that. Yes, sir. Sorry, it's Byron Callan, Capital Alpha Partners. Two more questions for Dan. Hate to keep you in the hot seat, but this is probably more an attitudinal question, but you see with Ukraine this transfer of Western military equipment, a need to really rapidly train Ukrainian forces. I just wonder, A, is that a business opportunity longer term? 'Cause this is probably not gonna be a problem that goes away anytime soon. Then can you articulate a little bit more about what you're looking at in JADC2? What is the opportunity there for CAE? Certainly. Thank you for the question. When you think of defense capability, the word capability is very specific. We've got a former TRADOC commander on our parent board, the Inc. board, General David Perkins, and he illustrates this very well. It's equipment plus trained personnel to utilize that equipment that equals true capability. I think the Ukraine invasion is a perfect example of only having one piece of that equation, the equipment, but the training, particularly on the Russian side, has lacked and have had surprising amount of difficulty as a result. I think that is fair to say. Training is a big portion of it. That said, the outcropping of the invasion, the immediate requirement was, as it always is, beans and bullets. It's the missiles, it's the. That had to get over there. Orders were flowing February 25, the day after the invasion. The training is a bit lagging. I'm tracking three distinct opportunities flowing right out of Ukraine. At this point in time, I can talk about one of them, and that's Germany just announcing with their $100 billion infusion and commitment to get to 2% of their GDP for NATO on defense spending, announced the CH-47, 66 planes, multi-generational platform. In that announcement, we were announced as their training and simulation provider. It's gonna take a little time. It's a foreign military sale. It's got to get to Boeing and then get to us. That is a win directly out of Ukraine. We are seeing that flow, not that you wanna take advantage of a crisis, but the reality is we do training and full preparation to make sure this stuff will not happen, or those already engaged have a much better chance of coming home. That is absolutely key. The second question. JADC2. JADC2. It is an overarching commitment, particularly driven out of the army. I had mentioned the MCS/COP, that is the Mission Command System/Common Operating Picture contract we won. That is right in the heart of JADC2. There was over 100 competitors to start, down select to 30, down select to 10, finally winning. CAE was the winner. The incumbent that we beat, as well as every other known name in that process, was one that you'll readily recognize. I think it's fair to say it was a bit of surprise that CAE won this. What does that do? It's a single pane of glass, think of yourself as a special operations commander, that infuses either synthetic or real-time feeds from all five domains to help that commander make the timely decisions. To be more effective in the mission and get more of the good guys home at the end. That $140 million+ contract is, in the second phase, gonna infuse artificial intelligence to help that decision-making process. Again, moving out of pure training into the decision-making mission operation support that AI will analyze courses of action. If you go this way, casualty rate of X, if you go this way, casualty rate of Y, most dangerous course of action, most probable course of enemy action, all that analysis. The growth there is that SOCOM is always a lead buyer. They're seen as the first, the most willing to take whatever technology is available now and put it on the battlefield, kind of like a scrum mentality in the IT world, if you will. Try it, see if it works. If it doesn't, you scrap it quickly. If it does, they will proliferate it, and then all the other services will follow SOCOM. We've got big aspirations with SOCOM to take this product and others related to the intelligence community, to the Navy, to the Army, even international partners like the UK. Example of that would be the intelligence win Beyond 3D at NGA. That was tied because NGA, National Geospatial-Intelligence Agency, is feeding a lot of this information into the SOCOM solution. Obviously, overhead imagery is the primary, and that coordination helped lead us to the win. We're already seeing that expansion. I think I'm just gonna jump in here with a question from the platform. The question is, you know, to what extent is the global pilot shortage possibly a headwind for growth in your business? How are you addressing that, and is it having any impact on your ability to attract and retain instructors? You wanna go ahead and take it, Nick? Sure. You can hear me? Yeah. I don't think the pilot shortage, it's a headwind. I think it's a tailwind, 'cause obviously, you know, our business is to train pilots, and therefore, to the extent that there is a lag in terms of building people up to the point where they can start working for an airline, then I think, you know, we think it's a tailwind. On instructors, Nick. Well, instructors, if you look at our demographics of instructors, we kind of dip into a slightly different pool. For those of you who came to New Jersey last couple days, our instructor pool are either people that have retired from flying and have decided that they'd like a second career as an instructor or younger people who have a different lifestyle, made a lifestyle decision and are more interested in instructing and sometimes, you know, go back to flying for a few years and come back. For us, it's an issue always because our instructors are also attractive to other airlines or to our competitor on the corporate aviation side. I would say by and large, we keep the pipeline going and we can find a lot of suitable candidates to do the job. It's something that is just part of our existence at the moment. Maybe the only thing I would add is that, you know, as part of our evolution, you know, again, always go back to that. It's you know it's when you start focusing. The last time we did Investor Day was in 2016. The reason we did it, because there's something new to say. Like, at that time, it was announcing the training strategy. Today, the reason we're gathering is because, like, we did nine acquisitions, and we did a lot of things during COVID, so it was time to speak to you as a group rather than just on an analyst call. Going back to when we, in 2015, or 2016, we announced our training strategy, how we were basically gonna expand our training strategy. Our vision was all about that, and I think we did a pretty good job of doing it as the results show. The reason I'm highlighting it is not to—when you set out a vision out there, say, "We're gonna do that," then you have to start thinking, "Okay, what does that future look like?" Okay, well, much bigger training, and we did that. Then you gotta start thinking, "What are the artifacts that what would we look like if we were there?" You start breaking down what's critical to making that happen. Right off the bat, it doesn't take, you know, a genius. Certainly me as a pilot, no one could answer the question. Well, if you wanna be the best training company in the world, you better have the best instructors in the world because pilots like myself, they basically determine your training by instructors. Think about it. In your own life, you probably had a favorite teacher or something. When you're a pilot and you go through your license, every six months, your license is on the line. That's the practice. You wanna have the world's best instructor. We have had a tremendous era of focus on making sure that we attract, retain, and develop the world's best instructors. That's critical to us 'cause it's a great question. Right now, yeah, as Nick said, there's flying jobs everywhere. If we're to look at, you know, our instructor turnover, it's higher than it was. You would expect that. We're quite confident that we can continue to, again, retain the amount of instructors and attract more. Because as Nick said, there's a lot of retirements that have happened. Well, that's good because it stimulates the amount of pilots required in a short amount of time. That's good for us. That's the tailwind. Another tailwind, to take it the other way, is that these pilots that have retired, a lot of them want to, you know, apply as instructors. We have a pool out there to go after. I mean, long story short, but it's something we really focus on as a company, both on the civil and on the military side. Thank you. It's Tim James here with TD Securities. I have two questions for Dan. The first question is, you look at your capabilities now across the five domains. As you think about the pipeline that you have in front of you today and the future pipeline. Will there be the need or the opportunity for some more strategic opportunities? And what I'm wondering is, do you get more aggressive in winning certain opportunities that may be in your pipeline because you think they're important to sort of further build up your position in those domains? We have something called our bowling chart. Something obviously I can't share publicly, but takes us out to FY 2027 with discrete qualified opportunities, predominantly prime opportunities that are those needle movers I talked about. They're across all five domains. They are more complex, they're bigger. They're those that big game, that trophy hunting we're looking after. I've got to balance those pursuits with the fact that we also need to grow the bottom line as well as pursue top line. I think we've really got a nice focus on the fact that we're going after more discriminated work, therefore higher margins because of higher barriers to entry, whether it's classification or technology, whatever that is, versus just saying, "I need the biggest jobs possible, and I'm gonna throw something at the wall and hope it sticks." Typically, that would be a more services oriented, and it's a race to the bottom. That's not something we're interested in. That said, are there key stepping stone contracts, particularly in the space and cyber domains, that would be a leapfrog for us if we were to win, particularly in those newer entries that CAE's name has just really exploded onto the scene? Yes. Are they gonna be decremental to our ROS, our current ROS? Absolutely not. Everything has to build, be a building block. There's a few that strategically, yes, certainly we're saying, "Hey, we really want this because it's a space or a cyber." The big one coming after it gives us that past performance, that connection to the customer, whatever that is, strategically, to continue to move the needle forward. Okay. Thank you. My second question is somewhat related. Dan, I'm wondering if you can talk through, in your view, what are the keys to a successful bid process. I'm sort of thinking about success in terms of ensuring that when CAE delivers on a contract, that the costs come in line with what you anticipated during the bid process. What are really the key factors in making sure that you meet your anticipated costs? Maybe if you can talk about differences in risk in product contracts versus services contracts. Thank you. Yes. I am struggling to identify. Tim. Thank you so much. You're right behind his head. Like this ethereal voice coming at me. Where is this? Now I can be polite and actually address you, eye to eye. Lifecycle management is the key here. In fact, I've established a program management professional portion of the business under Paul Curtis, a direct report of mine. He runs all operations and program management. What that does, if you're familiar with something called gate reviews or phase reviews, it starts from identifying the opportunity, business development, qualifying and starting the strategy, business capture, moving into something called phase three, which are bid proposals and approvals, particularly looking at risk and profitability. That gets into your business proposals, your B&P team, and then it starts moving into the execution post-win, lessons learned, and then execution all through a gate seven, which is close out. That rigor established best practices across the business is really helping us 'cause traditionally, particularly in international, you had much smaller pockets, you know, 100 people in Australia, 100 people in Germany, 50 in the Middle East. Because it wasn't at the level of tapping into the synergies and the best practices of the whole organization, it was a small team sometimes kinda going it on its own. You know, Australia, it's halfway around the world. It's just, it's sort of challenging. Todd Breyer, my head of business development and capture, is specifically ensuring he is tied to Paul Curtis and following the standard set of best practices through that whole process to ensure it is a winnable but achievable profit level at the bid, and then tying that on the execution side to make sure the program managers who are also signing off say, "Yes, we can execute at this number." I've shared with a few of you know, pretty easy to sell a dollar at 90 cents. That's gonna be the knee-jerk for a capture person who's only looking at the orders numbers. You gotta look at the whole orders through cash process and make sure we're successful through the entire process. The second part of your question? Sorry, I was so busy- That was it, I think. That was it. Yeah, just maybe just taking that a step further. Any significant differences between products versus services? Yeah. Traditionally, it's the risk profile. I mean, products, it's heavy IRAD, lot of engineering work, higher rates. You build it, and they may or may not come. Not surprisingly, on the civil side, that's a lot of that model, and it's key also to their services. I probably should qualify that services in defense are a bit different from how you would think of services on Nick's side, 'cause Nick's is all incorporated, the technology plus the instructors and the building and all of that. Services many times traditionally on the defense side is really just the body. I don't wanna belittle it's important work, it's good work, keeps you close to the customer. It's easily forecastable, but the reality is, it's much lower risk, and there's not a heavy IRAD. There's not a heavy amount of overhead and discriminators involved with that until you really start blending the two, and honestly, looking maybe a bit more like the civil business, where it's not just the talent that you're providing, but it's also the discriminated technology. That's a key part of sort of fusing services and product in the services play to move up the discriminator level, the classification level, get more barriers to entry, get more profit, and then obviously kind of balance again the mix of product and services and those, as Sonia pointed out, the mix of U.S. versus international. All those keys along with focused on cost and synergies are gonna get us to those double digits. Hi. Hi, Elizabeth Grenfell from BofA. I had a couple questions. The first one is, within the M&A strategy, where do you see the biggest opportunities for investment? On the defense side, again, what kind of headwinds are you potentially seeing as a Canadian company selling into the U.S. defense market, and what are you doing to offset those headwinds? I'll take the first part, and I'll turn it over to Dan. In the U.S., we're a U.S. company. If you look at the kind of contracts we have, think about what Dan shared, the type of program, the secrecy, the inherent secrecy of those programs. There's absolutely no issue of where we're headquartered. Maybe just add to it, Dan. Yeah, there's not to get too geeky on you on U.S. security, but there's something called FOCI mitigation, foreign ownership control or influence. Essentially, think of like BAE Systems. We are the same. When you have a non-U.S. parent that does classified work in the United States in the military arena, you have to have something called a firewall. Ours is a special security agreement, SSA. I happen to have spent most of my time, most of my career at BAE Systems, seven years, in these SSA FOCI mitigated companies. The downfall, the risk, if you will, is any firewall, if it's a wall and not a fence, can be a barrier, particularly to trust and gaining synergies between the parents and the U.S. business. I think that's absolutely key to ensure we get the goodness, those economies of scale, tap into the engineering talent, the supply chain synergies, all of that. You gotta make sure it's a fence, follow all the rules, but really a trust across the executive management team is the first step. I think looking at the acquisition of a highly classified business, the largest one in the history of CAE, speaks to that level of trust that the subordinate U.S. SSA business has with its parent. Then as far as selling as a Canadian business, either into the United States or internationally, to be honest, I see it as an advantage. By law, we are recognized with FOCI mitigation because we are an independent U.S. business as a U.S. business. Buy America, all that stuff, there's no difference between CAE and Lockheed Martin or Raytheon, whatever. Internationally, I see it actually as a real advantage, 'cause let's face it, a lot of international partners want that Western defense tech, but sometimes they chafe a bit at having to buy it from big brother United States. We tend to be brash and poke people in the eye and all that good stuff. Canadians, and I can now really say this firsthand, are just better people. I mean, they're just much nicer. I'll be honest. I mean, and I've got a guy named Marc-Olivier, speaks four languages fluently. I mean, a just European to the T, based in Montreal, tremendous asset for me that runs all my international. It's easier many times for them to buy from the friendly cousin Canada, you know, still North America, than sometimes having to get it from the United States. We can almost play both sides of the fence on that, and I think it's a real advantage. Maybe I know there's an M&A question, but I think you look at some of the expertise we have as a result of that. I mean, we have, you know, for FOCI mitigation, we have a dedicated U.S. board, and it's under the Special Security Agreement. That board is, you know, we have a huge honor as being chaired by a chairman, Mac Thornberry. If anybody doesn't know who Mac Thornberry is, I invite you to look him up, but was, like, you know, over nearly three decades in the U.S. Congress, and was the head of the House Armed Services Committee for, like, seven years, in that ballpark, head of a security company. Pretty good, you know, person, somebody who was cleared on absolute everything as leading our SSA board. On our parent board, Dan talked about General Perkins, who was U.S. Army four-star head of TRADOC, which is all to do with training, establishing training doctrine for the United States Army. Most recently, you might have seen us joining CAE on CAE's fiduciary board as well, Pat Shanahan, who was, you know, U.S. Secretary of Defense. I think, you know, we're well-rounded with the expertise to understand the markets we're in, you know, as a Canadian headquartered company. With regards to M&A, just get into it. Look, we always have a pipeline, and you saw, you know, what Sonia was saying, we're very strict about any M&A has to meet our criteria. I think we demonstrated that. You know, the value that we bring in total, all the deals we did, the 9, they bring much more than monetary advantages. You know, there's all kinds of others. You know, we talked about, you know, how we took the $20 million acquisition from Bombardier's military business over the past few years to a business worth, you know, hundreds of billions in terms of backlog and where it got us with the U.S. Department of Defense. We're always looking, but I think we gave you a forecast today in terms of, you know, what our priorities are, at least, you know, in the near term, in terms of de-leveraging. That's what we're focused on. But we take a lot of big bites here. We have a lot of work to do. It's not to say we're not looking, but in the end, you know, if we do deals, and it might be, if the criteria comes in, and it's like a lot of them we see during COVID, if there's a generational opportunity or something is very accretive, and we can do it, you know, we'll take a look at it. The thing I could tell you is we will remain very, very strict with regard, it has to meet our M&A criteria. Noah. Okay. Yeah. Noah. Hi. Yeah, Noah Poponak from Goldman Sachs. Thank you. I had a few questions. First, in civil, Nick, in your pilot demand slide that you have here, you have significantly less growth shown here on the business jet side compared to the airline pilot side. It's actually, you know, relatively almost flat over a decade. And you've declared here that you see, you know, a structural uplift in that market, and it's obviously very strong right now. If you could speak to why you've laid that view out, and then there's also a much larger chunk of replacement on the business jet side. I'm curious what's behind that. Maybe I'll start with the second half. The replacement on the business jet side is very high because the age demographic is much higher. So the anticipation is that you'll see a lot more people leaving the system just because of age. In terms of the growth, you're right. The forecast was built about a year ago, so this is a 2019 to 2029. So it probably is a little bit lower than what potentially we would look at today just in terms of growth of flight hours and growth in the fleet in terms of new deliveries. So it's something that we, you know, we currently update, so we're probably a little understated there. Nevertheless, it's only gonna get better than what you see there. Okay. Dan, I had a question in your business. Recognizing you've laid out a lot of ways that the profitability can improve going forward, I'm a little surprised the margins have not already been much better, just from the immediate scale and synergy opportunity you have. I think in the disclosure from the last quarter, the legacy L-3 margin actually went down considerably sequentially. I know it's one quarter, but it kind of stood out. What am I missing there? I mean, is there a lot of investment up front in addition to the synergy? Or why haven't we seen more margin trajectory already? Yeah. Happy to take the question. On the legacy CAE, you obviously have the COVID as well as three years of less than one book-to-bill impact. We've talked about, you know, the flip of product to services being primarily, services. Really, when you're attempting to grow a business and you have less than one book-to-bill for three years, you're eating up particularly the profitable work in that backlog. I kind of describe it as a lump in a snake, and that's just gotta get through the snake as you rapidly look to bring in more orders than you have revenue, not only to grow, but particularly to have that profitable work. It's a process that you will continually wean, but you pull a little bit on that profit early, like you put stuff on order if it's a product base, maybe you do advanced work ahead of time, so as soon as the order comes in, you can bill things to that effect to start improving that profit line and then basically get the boat up on the plane. Been very pleased. If you look in most ways, L3Harris in FY 2022 military training, we're about a third in everything you look at, to include profitability. You have to consider we only had them for 3 quarters of the year, so they were outweighed. They particularly had challenges with their highly profitable foreign military sales on things like F-16 and F-18 because of COVID. The challenge is they haven't lost anything, but there's significant delays in multiple countries where they've been announced as the winner, they know it's coming, and I honestly was expecting it to be filling in their backlog, 6, 9 months ago, and we're still waiting on some of these to come through. It's just a bit more of a lag on their side, due to COVID. Okay. If I could just round out the segments with a question on healthcare. Heidi, you know, you've been in the seat, I think, entirely during COVID. You know, changing a sales effort is hard to do in a pandemic. You know, you're able to lay out a very convincing case for why the technology and the service offering here could really help in that market. Obviously, it's been, you know, CAD 100 million and change for CAE for a long time, excluding the ventilators. I guess, just bigger picture, how much can you change in the customer convincing sales process or what is the hurdle to get the customer to see, you know, the case you're laying out here for how much value you can add? Thanks a lot, Noah, for the question. Actually, it's pretty exciting to answer it too, because the fact that we were able to grow 25% year-over-year despite COVID, you know, that was a significant headwind for us. Many of the universities were closed to us. The hospitals, we didn't have access to. The sales force just, I would say, brute force effort, just continued to push hard. Now we go from a headwind to a tailwind. We've re-energized our head of sales, so now we have new head of sales structure. We've expanded our divisions from 22 sales territories to 27, and we added a new head of marketing, and we're energizing the marketing department. With the results that you've seen has just been us limping along, I would say, with a tail. With a headwind and our sales force ramping up. As we head into FY 2023 and beyond, you're gonna see the one-two punch of what our sales force is able to do now that we're being driven more effectively and more directed deterministically, and our marketing efforts start to pick up. That's why we're so bullish that we're gonna be able to grow at least as fast as what the underlying industry is doing. That is attractive just at 12% with all the other without the legislation elements starting to kick in, without the nursing shortage effect really starting to become manifest. That's again, Noah, thanks for the question, why we believe very well in what we're gonna be able to do on the top line. Thank you. Thank you. It's Mike Ciarmoli at Truist Securities. Fabulous presentation both yesterday and today, by the way. Excellent. Question is about the future of new aircraft. Boeing, I think lunch has been eaten by Airbus' A321neo, and on the narrow body side has really taken over the lead. Boeing has not made any moves yet to develop a new narrow body single aisle aircraft. I'm wondering what your thoughts are on the future of Boeing's new aircraft. Is there perhaps a 797 out there on the horizon in the near future? Well, I think you're honestly gonna have to ask them that question. I'm quite confident that, you know, we're gonna see aircraft manufacturers such as Boeing continue to invest in their product line. That's what they do, right? On the defense side, you know, they're, you know, Boeing's characterized as a national treasure. They're required to be around, so I'm quite confident that they'll do what they have to do to grow, ensure the success of their business, just like we're gonna do. We'll play our game and be a partner to them. Okay. Thanks for your praise. Yeah, thanks very much everyone for the questions. If you have any other thoughts or questions, of course, please do reach out to me and the team. Be very happy to get back to you on those. Marc, any closing thoughts that you wanna leave us with before we convene this session? Well, only again, repeating, you know, how pleased we are that you made the time to come here. We are absolutely delighted. I'm sure you saw the telling our story. You know what I always said, and hopefully you've got the sense of the excitement that we have for the growth of the business. The thing I would leave you with is what I always leave with my team is, to me, the best is in front of us. Thank you very much for coming, and have a great day. Thank you.