Hello, and welcome to the annual meeting of stockholders of Magellan Aerospace. Please note that today's meeting is being recorded. During the meeting, we will have a question and answer session. You can submit a written question at any time by clicking on the message icon at the top of your screen. Please note that your registered name will be announced along with your question during the Q&A session, following the formal portion of the meeting, and guests will not be able to submit questions. Please also note that all participants are in a listen-only mode. If you experience technical difficulties during the meeting, please click on the support link on the broadcast screen. It is now my pleasure to turn today's meeting over to Mr. Murray Edwards. The floor is yours.
Thank you, Lydia. Good afternoon, ladies and gentlemen. Myself as Murray Edwards, as Chairman of Magellan Aerospace Corporation, would like to welcome you to our 2021 annual meeting. Due to continued public health impacts of COVID-19 and to mitigate risk to the health and safety of our community, shareholders, employees, and other stakeholders, we will hold this year's 2021 annual meeting once again in virtual audio-only format. The health and well-being of our employees, our shareholders, and partners are of the utmost importance to us. This is not representative of a change to our shareholder engagement philosophy, and we remain committed to return to an in-person meeting next year. I would first like to take this opportunity to welcome our management, employees, and directors who have joined this meeting from around the globe and acknowledge the following directors who are participating in this meeting.
Larry Moeller, Steve Somerville, Beth Budd Bandler, Bruce Gowan, and Phil Underwood. In addition, I would just like to take a brief moment to acknowledge the retirement of Mr. William G. Davis, who has been on the board of Magellan before the time that Mr. Moeller and myself became investors, and he was on the board since 1989. Mr. Davis, as former Premier of Ontario, was a man who had much experience in public service, and on the board, his advice, his commitment, and his energy was truly appreciated. He will be missed, but Bill decided this year on his own volition that it would be best to step back from active board role. So thank you, Mr. Davis. I would also like to take this opportunity to welcome and acknowledge Magellan's new director nominee, James Veitch.
Mr. Veitch is formerly a member in the investment community and has broad experience in capital markets, financial markets, and government relations. Mr. Veitch will be a welcome addition to our board, assuming his election today. Thank you for joining the board. The meeting will now come to order. We'll first ask Craig Vaughan, Corporate Secretary of Magellan Aerospace, to act as secretary of the meeting, and Josette Kottyberg, a representative of Computershare Investor Services, to act as scrutineers. In order to ensure that the formal business proceeds efficiently, we have asked certain employee shareholders to make and second motion. This is designated to facilitate the progress of the meeting and is not to intend to discourage comments. Now on the slide, on the web, if you're looking at it, you have a slide presentation, and you have to move through that on your own initiative.
The first slide obviously just highlights the Annual General Meeting. The second slide deals with forward-looking statements, which it does provide cautionary and comments about not relying on any forward-looking statements made by Magellan and should be read in normal and prudent course. As for the formal business meeting, which is the next slide three, the first thing we're going to do is receive the financial statement for 2020. We're going to proceed to election of directors. We're going to have an appointment of auditors and finally, any other business before the meeting. After that, Phil Underwood, President and CEO of Magellan, will make an updated presentation on the current business environment for Magellan. In view of the meeting being connected in virtual-only mode, before we start the formal part of the meeting, I have a couple of quick housekeeping matters.
As I mentioned, the business matters of the connected meeting are to be items set forth in the notice of meeting and the management proxy circular, each dated March 19th, 2021, which was mailed, emailed or otherwise made available to shareholders. Only shareholders of record at the close of business on March 19th, 2021 or their duly appointed proxy holders are entitled to submit questions and vote at the formal part of the meeting. Those persons that wish to ask a question may do so by clicking the questions icon on their computer, tablet or smartphone, composing their questions and then submitting them. Please indicate your name and whether you're a shareholder or proxy holder. All questions submitted relating to an item of business to be voted on in the meeting will be accepted by the secretary and then brought forward, and then he will bring forward them to me.
Any such questions will be answered at the time the item is presented for discussion. First thing is the notice of meeting. I have received an affidavit from Computershare Investor Services as to mailing of the notice of annual meeting, management information circular, and instrument proxy to shareholders. I direct this affidavit, together with copies of the documents mailed to shareholders, be kept by the Secretary of the company with the minutes of this meeting. As for quorum, pursuant to the bylaws of the corporation, business may be transacted at this meeting if two persons are present in the meeting and they hold or represent by proxy not less than 10% of the total number of issued shares of the corporation entitled to vote at the meeting. The scrutineer's report has confirmed that quorum is present.
The scrutineer's report shows there are 58 proxies cast for shareholders holding or represented by proxy, 48,964,026 shares, or 84.82% of the shares, which are entitled to be voted present at the meeting. The scrutineer report will be kept with the records of this meeting. Accordingly, there is quorum of shareholders present. I now declare the meeting is regularly called and properly constituted for the transaction of business. As for voting, all voting done today will be conducted by way of a poll over the internet. I hereby declare polling open, and it will remain open until the last item of business of the meeting has been completed. You may vote by clicking the voting icon on your device. If you have any difficulties, please refer to the instructions found in the virtual AGM user guide sent to you with the annual meeting materials.
The user guide is also available on the corporation's website. You do not need to vote at the meeting if you've already voted by telephone, internet, or mail on the proxy provided you. If you wish to change your vote or you've not done previously voted, you may vote online during the meeting while the polls are open. Thank you to those who have already voted prior to the meeting. Those votes will be tabulated along with today's vote, and the scrutineer report with a detailed breakdown of the voting after polling is closed. We will post the results on our website and at www.sedar.com. The next item of business is the receipt of the 2020 consolidated financial statements, as concluded in the 2020 annual report of the corporation to its shareholders for the fiscal year ended December 31st, 2020, and the auditor's report thereon.
A copy of the Corporation's annual report has been made available to each registered shareholder in either hard copy or electronically. The financial statements of the Corporation for the fiscal year ended December 31st, 2020, can also be found on the Corporation's website or at the SEDAR website. I now place before the meeting the consolidated financial statements and the auditor's report thereon for the year ended December 31st, 2020. The next item of formal business is the election of directors. The board has fixed the number of directors for this meeting at seven. We would like to welcome our new nominee director, Mr. James Veitch, to the board. As I've talked to you before, he has over 25 years of financial industry experience as institutional equity sales. I will now entertain nominations for directors of the Corporation. Do I have a motion in that regard?
Mr. Chairman, I do. My name is Joanne Ball. I am a shareholder. I nominate N. Murray Edwards, Philip C. Underwood, Beth M. Budd Bandler, Bruce W. Gowan, Larry G. Moeller, Stephen Somerville, and James P. Veitch as directors of the corporation to hold office until the next annual election of directors or until their successors are elected or appointed, subject to the provisions of the Business Corporations Act, Ontario, and by the bylaws of the corporation.
Thank you, Joanne.
Mr. Chairman.
Do we have a seconder?
Mr. Chairman, my name is Karen Yoshiki-Gravelsins, and I am a shareholder. I second the nomination.
Thank you, Karen. Are there any further nominations for directors? Also, could the corporate secretary advise me, have there been any questions asked in respect to the nomination of the directors? Have there been any questions, Craig?
Mr. Chairman, there have been no further questions in respect to the nomination of the directors.
As there are no further nominations, I now declare nominations closed. The next item of business is the appointment of auditors. Do we have a motion in that regard?
I move that the firm of Ernst & Young LLP, Chartered Professional Accountants, be appointed auditors of the corporation until the next annual meeting or until their successors are appointed, and that their remuneration as such be fixed by the board of directors.
Thank you, Karen. A seconder?
I second the motion.
Thank you, Joanne. Could the Corporate Secretary advise me if there have been any questions asked in respect of the appointment of auditors?
Mr. Chairman, there have been no further questions in respect of the appointment of the auditors.
Thank you, Craig. Seeing there are no questions, we will proceed with a vote. We now have the vote on the appointment of the auditors. I remind you again that voting is only available to registered shareholders and duly appointed proxy holders using their control numbers or user numbers as the case may be. If you are eligible to vote, please do, as I declare voting will be closed on all items of business in one minute. We're having the votes on the director nominees and the votes in respect the appointment of auditors. We will just pause for a minute and allow eight people to vote. Thank you. That now brings us to the end of voting on items at the meeting.
As for the results of the vote, I've been advised by the scrutineer, Computershare Investor Services, that the ballots and proxies deposited at the meeting are in favor of each of the resolutions provided. Each of the nominees as directors of the corporation and nominated above have been duly elected as directors of the corporation, and Ernst & Young LLP have been appointed, and the Board of Directors have been authorized to fix their remuneration as the auditors of the corporation. The directors and auditors of the corporation, in their roles, will hold their position until the next annual election of the corporation, or until their successors are elected or appointed, subject to provisions of the Business Corporations Act of Ontario and the bylaws of the corporation. I direct the Corporate Secretary and the scrutineer's report in respect of the voting be kept with the minutes of this meeting.
We'll now proceed.
Mr. Chairman?
With other formal business of the meeting. Yes, Craig. Craig, go ahead.
Mr. Chairman, there would be no further questions in respect to the business of the meeting.
There's been no other questions. As such, as there are no further questions, I now declare that the formal part of the meeting be terminated. With that, I will now turn the meeting over to Mr. Phil Underwood, who will go through a business update of the corporation on the slides before you, and you can work through the slides with Mr. Underwood as he gives his presentation. Over to you, Phil. Thank you very much.
Okay. Thank you, Murray. Good afternoon, everyone. Before I begin my presentation, I would also like to take the opportunity to thank the Honorable William Davis for all his years of service to the board and for all his helpful insights and support. I would also like to welcome Mr. Veitch to the board. I will now present a brief overview of the highlights for 2020. I'll start with a financial summary, then a business overview, followed by a strategic update. We nip onto slide five. It's impossible to talk about 2020 without noting the impact of COVID-19 on the aerospace industry. The pandemic has had a massive impact on our business across the globe, and I've been impressed and humbled by the dedication and resilience of everyone across the business in tackling the problems generated by the pandemic.
Our first priority was, and continues to be, the safety of our colleagues. To manage the additional safety risks presented by COVID-19, Magellan implemented standard tools and methods to keep its employees safe and well-informed. We're all proud of our colleagues and the efforts made to support the communities in which they operate during this period. As the impact of the pandemic started to emerge, we acted quickly to protect the business by mitigating costs and adapting our operations to lower levels of activity. The corporation also accelerated previously planned strategies to consolidate facilities and transfer work to its Indian and Polish businesses. Given the unprecedented and uncertain outlook, we reduced our capital expenditure and worked hard to maintain a balance sheet strong enough to weather the crisis.
We have shown resilience and adaptability through these extremely difficult circumstances and continue to take the necessary actions to manage the business through the recovery phase. Whilst the business has been impacted by the crisis in the short term and near term, Magellan's business model remains strong. I will now move on to the financial summary that's on slide seven. In 2020, the COVID-19 pandemic significantly impacted our air travel and the commercial aerospace industry. As a result, there was a decrease in the demand for the Corporation's commercial aerospace products and services that led to lower revenues. 2020 revenues decreased over the previous year by approximately 27%. Geographically, revenues in Canada were not impacted significantly as other regions due to the higher defense versus commercial mix. Revenues in the U.S. and Europe were impacted by reductions in the commercial, single aisle, and wide-body build rates.
Slide eight. Annual gross profit experienced in 2020 was impacted by the sharp decline in sales as a % of revenues. Gross profits decreased by 2.4%, CAD 0.13. The margins in 2020 were primarily driven by lower production volumes and higher manufacturing costs, which were offset in part by workforce reductions, product mix, and recognition of a CAD 18.7 million gain in subsidies from the CEWS program. Slide nine. Magellan reported adjusted EBITDA of CAD 100.4 million in 2020, impacted by the reduction in profits. EBITDA was adjusted for restructuring costs and goodwill impairment. It should be noted that 2017 included the sale of a facility and 2018 included the non-recurring gains related to a prior acquisition. If these items were excluded from the EBITDA, the adjusted EBITDA was CAD 155.8 million in 2017 and then CAD 152.4 million in 2018. Slide 10.
Magellan has reduced its total debt year-over-year for the last five years. Throughout these five years, Magellan has been able to maintain a debt-to-EBITDA ratio of under 0.8 times. In 2020, Magellan generated CAD 106 million of cash from operations, utilized CAD 25.8 million for investing activities, CAD 11.3 million for debt repayment, and issued dividends in the amount of CAD 24.4 million. Slide 11. Magellan reacted quickly to preserve cash in 2020 and reduced capital investment to CAD 24.5 million, which was approximately 3% of revenue. Slide 12. An improved balance sheet year-over-year has allowed Magellan to issue dividends to the current level of CAD 0.105 per share per quarter. Magellan stock price in 2020 was impacted by the overall movement in the market as a result of COVID-19. I'll now move on to the business overview section on slide 14.
Magellan is a global business with over 3,400 employees worldwide. Unfortunately, during 2020, as a result of the direct impact of COVID-19 to the aerospace industry and the corporation, Magellan's headcount was reduced from 4,200 at the end of 2019 to the current level of 3,400. I'll now provide a brief commercial and defense industry update on slide 16. 2020 was a challenging year for the commercial aerospace industry. The number of global daily flights dropped to a low of 20% of 2019 levels in April 2020 due to the pandemic. By June 2020, air travel began to increase but stalled again in Q3 due to the rise in COVID-19 cases. The impact of the pandemic totaled $118 billion in losses for airlines worldwide last year. With the dramatic drop in air travel, manufacturers reduced their aircraft and engine build rates by approximately 35% on average.
Whilst there are still differing views as to when the market will recover to the pre-pandemic levels, positive signs are appearing. Globally, daily flights returned to 63.5% of 2019 levels in Q1 2020. Single aisle production rates are increasing and new aircraft orders activity is improving. Magellan continues to take a conservative approach towards market recovery, but remains ready to respond as programs ramp back up again. Slide 17. Defense markets remained strong throughout 2020 despite a contraction in the world economy due to the pandemic. U.S. defense contractors advanced certain program purchases to help mitigate the impact of significantly decreased commercial programs on the supply chain. Global defense expenditures are expected to grow by an average of 2.4% annually through to 2025. Experts anticipate that 2022 and 2023 will be slower as countries deal with the financial impact of the pandemic.
Lockheed Martin delivered 120 of its F-35 aircraft in 2020, which was lower than planned due to the pandemic-related supply chain issues. It plans to deliver 140+ aircraft in 2021. I would now like to touch on the key announcements that we made during 2020, and these are on slide 19. On January the 13th, 2020, Magellan announced an agreement with Collins Aerospace for the supply of nose landing gear assemblies for the 737 aircraft to be delivered through to 2024. On April the 16th, 2020, the corporation announced that it would provide Black Brant sounding rocket motors to the German Aerospace Center, which is estimated to generate revenue of up to CAD 9.4 million over the term of the agreement.
On May the 7th, 2020, Magellan announced an agreement with an undisclosed customer for the supply of complex machine rotating engine components for military aircraft platforms. The five-year contract is valued at approximately CAD 46.4 million. Early in 2021, we announced the following new business and contract extensions. On January the 14th, 2021, we announced that Raytheon Missiles & Defense awarded the corporation a contract for the supply of complex missile fin components, with delivery starting in 2021 and continuing through to 2024. The value of this agreement is approximately CAD 61.4 million. On February the 8th, 2021, Magellan announced the signing of an MoU with GE for the purpose of exploring an agreement whereby GE Canada would support Magellan in establishing and delivering a Canadian-based sustainment solution for the GE F414 engine, which powers the Boeing F/A-18 Super Hornet fighter jet.
On the 16th of March 2021, Magellan announced the signing of a five-year renewal agreement with Avio Aero, the GE Aviation company, for the supply of magnesium and aluminum castings. On March the 31st, 2021, we announced an agreement with Boeing Commercial Airplanes, a contract extension for the supply of landing gear kits and other complex structural components for the 737, 767 and 777 airplanes. Moving on to slide 20. These charts show the revenue by customer and market segments in 2020. On the left, the pie chart on the left, you can see that 28% of our revenue is directly with Airbus and Boeing, which is down from 2019 levels of 40% due to the impact of the grounding of the 737 MAX, reducing revenues to Boeing.
On the top right of the chart, 52% of our business is in aerostructures, 28% aero engines, including repair and overhaul, 13% castings, and 7% is specialty products. Finally, the bottom right pie chart, you can see 54% of our revenue is derived from commercial business and our defense business of 46% has increased from 31% in 2019 due to the decreases in the commercial build rates. In this next section, I would like to provide a brief strategy update on slide 22. When we look at Magellan and its business and strategy, we clearly see it in three stages. In the first stage last year, we took immediate actions to protect our business from the impacts of COVID-19. We put in place strict workplace measures to ensure the safety of our employees and to manage the workplace presence for the continuity of our business.
We also had to monitor and adapt to the constantly changing customer demands and manage supplies to protect our liquidity and preserve working capital. We then moved into the restructuring phase to reduce operational costs. This involved the reduction of roles across the corporation and a consolidation of our facilities, specifically in our European operations. We also accelerated our cost reduction activities across the business, including work movement to our lower cost facilities. The third stage, on the right of the chart, is where we are moving into now. This is to ensure that our strategic plans achieve our business goals, and this includes meeting our long-term customer demand and return to previous levels of profitability. Moving on to slide 23. Magellan will continue to position itself as a global and key supplier for all our customers.
In order to achieve this, the corporation will continue to develop its people and technical expertise and to add value to our products to enable us to grow our market share. We will leverage our technology and engineering capabilities and continue to assess our facilities and products to further exploit our low-cost footprint, thereby improving our financial performance and competitiveness. We'll maintain a solid balance sheet through working capital management to support our business goals and continuously improve quality through our zero defects program, deliver 100% on time utilizing our MOS programs. We want to inspire, develop, and invest in our people to drive success. Moving on to slide 24. In summary, we've established health and safety protocols for keeping our employees safe and continue to prioritize this as we manage our way through this pandemic.
Our strong balance sheet has allowed us to weather the COVID-19 crisis, and we've made progress on zero defects programs and on-time delivery to our customer. We've also secured significant contract renewals with our major customers, and we will accelerate and implement further restructuring plans. As the aviation industry recovers, the key priority is to return the business to previous levels of revenue and profitability. Moving on to the last slide, 25. This concludes the presentation. I'd just like to check to see if we have any questions.
There's no questions, Phil.
Okay. Thank you, Elena. I'd like to take this opportunity to thank all our stakeholders, our customers, and our employees for the continued support and commitment to Magellan. I would say stay safe and have a good afternoon, and that concludes the presentation. Thank you.
This concludes the meeting. You may now disconnect.