Okay. Good afternoon, everyone, and welcome to CAE's 2026 Annual Meeting of Shareholders. [Non-English content ] I'm accompanied today by Matthew Bromberg, President and Chief Executive Officer, Mark Hounsell, Chief Legal Officer, who will act as secretary of the meeting, Ryan McLeod, Chief Financial Officer, and Samantha Golinski, Senior Vice President Communications. Today's meeting will be conducted in both French and English. Shareholders participating online may listen to the webcast and view the presentation slides in either language. To change languages, please select the language icon shown on the top right of your screen. As was the case last year, the meeting is being held in a hybrid format. Shareholders and duly appointed proxy holders, regardless of their geographic location, may attend and participate in real time and cast their vote. [Non-English content]
I'd like to now ask Mr. Mark Hounsell, our corporate secretary, to present the forward-looking statement.
Thanks, Mr. Chair. Before we begin, I'd like to remind you that today's remarks, including answers to questions, contain forward-looking statements. These forward-looking statements represent our expectations as of today, August 12th, 2026, and accordingly are subject to change. Such statements are based on assumptions that may not materialize and are subject to risks and uncertainties. Actual results may differ materially, and listeners are cautioned not to place undue reliance on these forward-looking statements. A description of the risk factors and assumptions that may affect future results is contained in CAE's annual MD&A, available on our corporate website and in our regulatory filings with the Canadian Securities Administrators on SEDAR+ at sedarplus.ca and with the U.S. Securities and Exchange Commission on EDGAR at sec.gov. Let's now proceed with the formal portion of today's meeting. Mr. Chair, over to you.
Thank you, Mark. I now call to order the annual meeting of the corporation's shareholders. Mr. Mark Hounsell will act as secretary of the meeting. Our secretary has received the certificate of our transfer agent, Computershare Trust Company of Canada, indicating that proper notice of meeting has been given in accordance with the Canada Business Corporations Act and the bylaws of the corporation. I direct that a copy of the notice with proof of service be kept by the secretary with the records of this meeting. With the consent of the meeting, I appoint Martine Gauthier, representative of Computershare, as scrutineer of the meeting. Where are you, Madame Gauthier? Bonjour. Let us now turn to the meeting procedures.
CAE's bylaws provide that a quorum of shareholders is present at a meeting of shareholders if two or more persons holding not less than 25% of the shares entitled to vote at the meeting are present or represented by proxy. The scrutineer has advised that we have the necessary quorum present here today. I therefore now declare this meeting is regularly called and properly constituted for the transaction of business. I'd now like to ask the secretary of the meeting to explain the basic features of our meeting platform and how you can vote.
Thank you, Mr. Chairman. [Non-English content ] Voting on three resolutions will be conducted both online and in person. Only registered shareholders or validly appointed proxy holders may vote. If you are attending the meeting in person and have not already voted by proxy, you have received today a tablet allowing you to cast your votes with the same ease as shareholders attending online. At the appropriate time, I will ask you to record your votes or Mr. Chair will ask you to record your votes using your tablet. Following consideration of the last item of business, the scrutineers will tabulate the results of the votes. If you are attending the meeting online or using a tablet in person, you will see a voting icon on your screen and the resolution wording will be displayed. To vote, select one of the voting options.
Your response will be highlighted. A confirmation message will appear to show that your vote has been received. To change your vote, simply select the other option. If you do not select either for, withhold, or against as applicable when voting is open, your vote will not be recorded, and you will be regarded as having abstained from voting. In order for your vote to be properly recorded, it is important that you remain connected to the internet at all times. If you are not connected, your vote will not be recorded. The online polls are now open on all items of business. This will give you ample time to vote while we introduce each resolution. The chair will remind you of your choices for each item.
After the last item of business, the chair will provide a reminder to input your vote before the polls are closed if you have not already done so. You should know that while each of the votes cast today in person and online will be accounted for in the final results, proxies lodged with our registrar and transfer agent before this meeting allow the chair as proxy holder to determine the outcome of each of the motions that will go to a vote today. When each item of business is completed as a result of the proxies received in advance of the meeting, the chair intends to declare the motion carried or defeated even though all the votes may not have been counted or a final report may not yet be available.
In order to facilitate the flow of the meeting, the chair has asked me as a registered shareholder to move all motions. The chair will call on me at the appropriate time. Mr. Chair.
[Non-English content] We will now turn to the first item of business for which shareholders are asked to vote, the election of directors. The management proxy circular contains a list and biographical profile of the 13 nominees recommended for election as directors. Each nominee was elected at our 2025 annual shareholders meeting, except for Mr. Bruce Ross, who is a first-time nominee. In addition to Matthew Bromberg and myself, the other director nominees are the following, Sophie Brochu, Patrick Decostre, Elise Eberwein, Ian L. Edwards, Marianne Harrison, Peter Lee, Katherine Lehman , Mary Lou Maher, Bruce Ross, The Honorable Patrick M. Shanahan, and finally, Louis Têtu. Many of our board members are still here today with us.
Pursuant to a resolution adopted by the board of directors, the number of directors has been set at 13, and 13 eligible candidates have been nominated. Mark, may I ask you to move to elect each of the 13 nominees as directors?
I so move.
For the election of directors, you will see the names of the 13 nominees. Please scroll down to make sure you voted on all 13 nominees if you have not already done so. To cast your vote for a nominee, please select for or against. The next item on the agenda is the appointment of the auditor. Again, I will ask Mark Hounsell to introduce a motion to appoint PricewaterhouseCoopers as the auditor of the corporation to hold office until the close of the next annual meeting of shareholders and for authorization for the directors to fix the auditor's remuneration.
I so move.
For the appointment of the auditor, to cast your vote in favor, please select for, and to withhold your vote, please select withhold. The next motion is to approve on an advisory basis our approach to executive compensation. CAE's executive compensation is fully disclosed in the proxy circular made available to all shareholders in advance of this meeting. The board believes that the corporation's approach to executive compensation remains appropriate and aligned with the interests of our shareholders. We value your direct feedback on our executive compensation approach, and the board will consider the results of this vote when evalua ting future compensation decisions. We will now vote on the following resolution. Resolved that the shareholders accept the approach to executive compensation disclosed in the management proxy circular. Again, Mark, may I ask you to please move this resolution?
I so move.
To cast your vote in favor of this resolution, please select for, and to vote against this resolution, please select against. [Non-English content] I declare the polls now closed in all items of business.
Thank you, Mr. Chair. The scrutineer's preliminary report indicates that 80.11% of the eligible shares have been voted at this meeting. The results with respect to the election of directors are as follow. A substantial majority of the votes cast at the meeting were voted in favor of all 13 nominees named in the management proxy circular. The result with respect to the appointment of the auditor is 92.74% voted in favor of PricewaterhouseCoopers. The result with respect to the advisory vote on the approach to executive compensation is 94.35% in favor of the resolution. Final detailed results will be publicly available on sedarplus.ca in the coming days. I will now turn the meeting back over to our chairman for his remarks to shareholders.
Thank you very much, Mark. Now that the formal business of the meeting has been completed, I'd like to offer a few remarks on behalf of CAE's board of directors before inviting Matthew Bromberg to address shareholders. Let me begin with the board's perspective on fiscal 2026 and the opportunities we see for CAE as we look ahead. Fiscal 2026 demanded discipline, clarity of purpose, and steady governance. CAE operated through evolving markets, geopolitical pressures, and rapid technological change. Perfor mance was solid despite softer conditions in civil aviation, while defense and security delivered improved performance, which further underscored its strategic importance at a time of sustained defense investment across key geographies. This reinforced the value of CAE's balanced portfolio and the advantages of operating in markets with compelling long-term fundamentals.
Against this backdrop, the board remained focused on its responsibility to oversee CAE with rigor, sound judgment, and a clear view to long-term value creation. We also continue to engage with shareholders whose perspectives help inform the board's oversight and priorities. [Non-English content]
Defense and security remains a critical pillar of CAE and represents a meaningful long-term opportunity for growth. CAE is positioned to play an important role alongside its partners in supporting defense investment, accelerating innovation, and strengthening capabilities for Canada and its allies.
At the same time, civil aviation remains a core strength for CAE, with durable long-term demand supported by its strong market position, deep customer relationships, and enduring role in aviation safety and training. In fiscal 2027, the board is fully aligned with management on accelerating execution with a continued focus on efficiency, discipline, and returns. As CAE enters this next phase, board renewal and governance effectiveness remains central to our oversight. The board continues to take a thoughtful and orderly approach to renewal, balancing continuity with the addition of skills and perspectives that will support CAE's future. In that spirit, I'd like to recognize Ayman Antoun as he concludes his service on the board, and thank him for his contributions, including his leadership as chair of our recently constituted technology committee.
Ayman brought thoughtful judgment, relevant experience, and a strong commitment to CAE, and we're grateful for his contribution. As part of that same renewal process, I'm pleased to welcome Mr. Bruce Ross, Group Head AI at RBC, to the board. Bruce brings deep expertise in technology, cybersecurity, strategic leadership, and risk management, all of which are highly relevant to CAE's future and will further strengthen the board's oversight as the company continues to evolve. Following the CEO selection process last year and board renewal, I assumed the expanded role of executive chairman to supp ort the transition, engage with shareholders, government, and other stakeholders, and help evolve CAE's transformation plan and long-term strategy.
With that work now well advanced and with our board's full confidence in Matt, the leadership team, and CAE's direction, I will revert to the role of non-executive chairman of the board effective January 1, 2027. [Non-English content] Matt, the floor is all yours.
[Non-English content] Calin. Good afternoon, and thank you for joining us. Today marks nearly one year since I stepped into the role of CAE's President and Chief Executive Officer. I took on this responsibility knowing the company had an exceptional foundation. And after a year, traveling, listening to our people, meeting our customers, and visiting our operations around the world, this conviction has only been reinforced. CAE has two fantastic franchises, an iconic civil aviation business, and a defense and security business that the world needs now. Underpinning all that is an exceptional team that continues to deliver through a period of significant change. [Non-English content]
Over the past year, we have laid the groundwork for CAE's future with the objective of making the company more focused, more disciplined, and better positioned to grow. This future stems from three transformation priorities. First, our portfolio. We will invest where CAE is best positioned to differentiate, compete, and win. To that end, we are simplifying the parts of our portfolio that no longer fit in our future. That involves reviewing three businesses, including Flightscape. The result will be a cleaner, sharper CAE with our capital invested around businesses where we can lead. Second, our capital discipline. We are raising the bar on how we allocate capital across the company.
This means being more rigorous about where we invest, about how we evaluate returns, about how we use our assets. In civil aviation, for example, we are optimizing our training footprint by rationalizing capacity, improving utilization, and concentrating activity where customer demand is the strongest. Third, performance. We are tightening execution across the business. We are building better systems. We are driving clear accountability, and we are implementing robust operational processes. We are investing in ourselves in areas like our factory of the future and in our ERP simplification project. Our vision is to make the most modern training devices in the most modern factory, leveraging the most modern tools, and the most modern processes. We are doing this because of the opportunity ahead.
The transformation is expected to generate CAD 125 million -CAD 150 million in annual run rate savings by fiscal 2030. This will support our ambition to reach CAD 950 million -CAD 1 billion in adjusted segment operating income. Performing at this level will give us the financial freedom to further invest in our people, our technology, and in our customers. This work is already well underway. Our teams are mobilized and engaged, and I am confident that we are moving in the right direction. This confidence starts with our businesses. Our civil aviation business is the world-leading training organization, and we are making it stronger. The long-term fundamentals are compelling. 80% of the world's population has never flown in an aircraft. Airbus and Boeing are expected to deliver 40,000 new and replacement aircraft over the next decade.
The world needs more safe, qualified aviation professionals, and that is where CAE comes in. We have the global network, the customer trust, and the technical depth to serve this demand. Over the past 60 days, I have spoken with roughly 50 airline leaders through industry events. The message was consistent. They say, they see, excuse me, the same future we do, and they are not changing course. Aviation is inherently resilient. The industry is strong, and this matters. It means we need to execute with discipline, stay close to our customers, and keep building for the long term. CAE works in almost every country with almost every airline in the world. We understand their operations. We solve their problems. That trust is hard to replicate. It is unique, and we are not standing still.
We continue to invest in the products and capabilities that will keep CAE ahead and position it for the future. Over the course of this year, we qualified the world's first Boeing 777-9 full flight simulator and delivered simulators for Joby and Eve's advanced air mobility platform. In addition, we opened a pilot training center in Mumbai and secured a new teaming agreement. Sorry, a new agreement with Turkish Airlines. We announced here in Canada, the Alberta Training Centre of Excellence in Calgary with WestJet as our partner. It is a cutting-edge aviation training facility. So you can see we continue to invest, and this is why CAE leads. We are on today's fleets and on tomorrow's aircraft, and we are everywhere where the future of aviation is being built. In defense and security, our role is readiness.
A platform only matters if people can operate it, maintain it, and use it under pressure. CAE connects advanced systems with the people who must perform when the stakes are highest. The upside in defense is significant. Canada and allied NATO countries are entering a new cycle of defense investment. That investment will require people to be ready. Over the next decade, NATO forces are expected to grow from roughly 6 million to almost 7.5 million men and women in uniform. When you factor in attrition, roughly 3 million people will need to be recruited, equipped, and trained, and CAE is that training company. The defense market is moving at a scale we have not seen in decades. Canada has committed approximately CAD 80 billion over five years to defense modernization.
NATO allies are also moving towards a much higher level of investment. CAE enters this cycle with a substantial defense order book and a growing pipeline of opportunities across Canada, NATO, and allied markets. The potential is clear. Capturing this growth requires technology, scale, and reach. CAE has all three. As a training system integrator, we take complex platforms and help people learn how to use them safely and effectively. As defense platforms become more advanced and harder to operate, that role becomes more important. For example, a modern fighter aircraft can be 100x more complex than its commercial equivalent. Preparing a fighter pilot can cost as much as CAD 25 million. Buying the platform is only the beginning. People and systems must be able to train, rehearse, and operate together, and that is what CAE enables.
Across defense and security, our strategy is to partner early on new programs. It allows us to shape the training architecture and build relationships that can last for decades. That is why our partnerships with leading global defense OEMs matter. They give CAE the framework to connect devices, systems, software, courseware, synthetic environments, and mission rehearsal into an integrated training solution that helps our forces prepare for increasingly complex missions. This is already taking place across air and maritime domains. In advanced pilot training, airborne surveillance, fighter platforms, and naval programs, CAE is positioning itself where allied forces will need deeper, more integrated readiness capability. Our goal is not only to provide the devices. I t is to help the customers build the training ecosystems that supports operational readiness over the full life cycle.
We see this in our expanding relationships with partners such as Saab, Leonardo, TKMS, and Shield AI. These partnerships create franchise opportunities to build a defense pipeline that will drive long-term growth for decades to come. Stepping back, our two businesses reinforce each other. That is the real advantage. Across civil aviation and defense and security, we bring together commercial scale, recurring training expertise, advanced technologies, mission readiness capability, and deep customer relationships. These strengths help us innovate faster, improve efficiency, and compete more effectively across the markets we serve. Looking forward, fiscal 2027 year is a year of execution and transformation. We know what we need to do. We need to strengthen the core, we need to be ready for opportunities ahead, and we need to bring more discipline, more speed, and measurable progress across CAE.
We will draw on what makes CAE exceptional, our customer trust, our technical depth, our entrepreneurial drive, and our team's shared commitment. Delivering starts with people. To our employees, thank you. You are carrying this transformation forward while delivering for your customers every day. That takes focus, resilience, and commitment, and I do not take that for granted. To our customers and partners, thank you for your confidence. Your trust matters, and we will keep earning it every day through performance, reliability, and delivery. To our shareholders, thank you for your continued support as we build a stronger, higher-performing CAE. CAE prepares people to perform when it matters most. We help the world move safely. We prepare the men and women in uniform to protect it. That mission has never been more relevant.
The future is bright. We have the world's leading civil aviation business, and it will continue to grow. In defense, our business is becoming more relevant every day. In both, we have what the world needs. Our time is now. [Non-English content] Thank you. Calin, back to you.
Great. Thank you very much, Matt, for that address. It's an exciting time indeed. We will now open the floor to questions from shareholders of record and proxy holders. For those attending in person, before asking your question, please proceed to a microphone, identify yourself as a shareholder or proxy holder, and state your name for the record. In the interest of time, and to allow as many shareholders as possible to participate, we respectfully ask that all questions be kept brief. For those attending the meeting online, please submit your questions online, if not already done so. As noted earlier, you can select the messaging icon on the bottom of your screen and type your question or comment in English or in French in the chat box at the bottom left of your screen.
I think we will start with a question in the room. I see there is one already online as well, so please go ahead.
Good afternoon. My name is Anna Cristofaro, and I am a shareholder. As the transformation progresses, how are employees responding to the changes? Secondly, what steps is management taking to maintain employee engagement and morale?
Excellent question. Thank you very much for that question. Matt?
Yeah, thank you for the question. As you said, transformation is change, and change is hard. We have almost 12,000 employees and 250 sites in 40 countries around the world, and every one of them matters. We are working around the clock to over-communicate, to be transparent and collaborative about where the projects are, what our timelines are, what the expected results are, and what the challenges are. And working through those one by one. And every time an employee has a question or issue or a concern, we are going to take it very seriously. Every employee is involved in this transformation, and it is about making the company stronger for the future. We are already seeing, to the second part of your question, the fruits of our labor.
Our factory is starting to modernize, our tools are being improved, and that is improving the day-to-day life of our employees. We are also starting to invest in our programs and products of the future, and that is going to set CAE up for decades to come. So the transformation is hard, the employees are engaged, and they see a bright future in front of us. Thank you.
Thank you for your time.
Thank you. Samantha, are there any questions online?
Yes, I do see, Mr. Chairman, that we have a question online from shareholder James William Evans, and the question reads as follows, Could you provide a few words of optimism for shareholders who have been waiting six years for the reinstatement of the dividend policy and dividend reinvestment plan?
That's a great question, and I appreciate it because it's an extremely important area that the board, as newly constituted, is focusing on. Capital allocation is critical right now, and that's one of the reasons we've made as many changes as we have, both at the board level, at the executive level, and why we've put in place this transformation plan. Right now, we're in the environment where we control what we can control, and we've built this transformation plan with a view to improving share price performance. But when it comes to returning cash to shareholders between the share buybacks, which of course we continue to do, and we'll continue to assess the appropriate time to consider reinstating a dividend. Of course, share buybacks are another form of returning capital to investors.
I appreciate the question, and I hope you will read our communications in terms of the share buybacks that we are undertaking. We're very mindful of both the need, the desire, and how healthy it is for companies to return cash to their shareholders on a regular basis.
Thank you, Mr. Chairman. I do not see any other questions in the platform, and I am looking around the room to see if there is another question for today.
Come on, guys. Must have some more questions.
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Let's give it another moment or two to see if there are any others online and anyone else in the room. If not, there will be an opportunity to speak with Matt and the members of the leadership team in a more informal basis in the time that follows this meeting.
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[Non-English content] I would then declare that the question period is ended, and this officially will therefore conclude the meeting. On behalf of CAE, thank you to everyone who participated, both online and in person. Until next year, we wish you, your families, and your communities good health. The meeting is now terminated. Thank you.