Tear Sheet: CAE Inc.

This report does not constitute a rating action. CAE generated S&P adjusted EBITDA of about C$1.1 billion in fiscal 2025 (fiscal year ended March 31, 2025), reflecting an EBITDA margin increase to 23% stemming primarily from a recovery in its defense segment as previously impaired fixed-price contracts gradually roll off. The improving margin resulted in modestly lower leverage of about 3.4x in fiscal 2025 compared with the 3.7x we had expected. We assume the company will continue focusing on deleveraging, and now forecast S&P Global Ratings-adjusted debt to EBITDA will decline to the low-3x area by the end of fiscal 2026, which roughly corresponds to management?s target leverage of 2.5x (per our estimate of the company?s leverage calculation). In our

...(Editor's Note: S&P Global Ratings believes there is a high degree of unpredictability around policy implementation by the U.S. administration and responses--specifically with regard to tariffs--and the potential effect on economies, supply chains, and credit conditions around the world. As a result, our baseline forecasts carry a significant amount of uncertainty. As situations evolve, we will gauge the macro and credit materiality of potential shifts and reassess our guidance accordingly [see our research here: spglobal.com/ratings].)...

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