CAE (TSX: CAE)(NYSE:CAE) appears to have identified ways to emerge stronger and position the company even more solidly for higher growth and profitability. In a market that levelled the same or similar challenges to CAE’s competitors, CAE appears to have responded differently. Recently, CAE raised equity for the first time in nearly 20 years, using the proceeds to heighten CAE’s positioning in the company’s civil and defence key markets.
Launching new products and expanding into new growth adjacencies
In fiscal 2020, CAE acquired four companies in core and related markets in the civil industry and became a defence training systems integrator with a pending acquisition in the company’s defence division. CAE also launched new products and expanded into new growth adjacencies while embarking on numerous initiatives to lower the company’s cost structure.
Leveraging highly connected, digitally enabled software solutions
Further, CAE leveraged highly connected, digitally enabled software solutions to address the company’s customers’ urgent needs and advance competitive advantages amid the morass of global health, social, and financial turbulence. All the while, CAE appears to have stayed connected with the company’s teams working dispersed and in far-flung regions.
Fundamentally shifting CAE’s strategy towards high technology
In addition, CAE took extraordinary actions through the year, not only to navigate the organization safely and securely through the COVID-19 pandemic, but to fundamentally shift CAE’s strategy towards high technology, as reflected in the company’s new mission and vision. CAE’s noble endeavour to make the world a safer place took on added depth and meaning through the overall social impact the company had this year.
Sound decisions to secure CAE’s financial health
This included producing the life-saving CAE Air1 ventilator in record time, developing an innovative app for vaccine administration, spearheading a coalition to accelerate vaccination in Quebec and Canada, and opening a vaccination centre in Montreal to serve employees, and the community. During what were challenging times for businesses worldwide, CAE’s leadership made sound decisions to secure the financial health of the company over the pandemic and beyond.
Providing an end-to-end offering of crew performance software
Also, CAE’s civil acquisitions provided the building blocks necessary to jumpstart the company’s vision of providing an end-to-end offering of crew performance software that extends from training through optimized crew operations. These connected capabilities should soon become unrivalled in the industry.
Securing acquisitions at uniquely attractive value and optimal use of capital
CAE seems to recognize this market as a potential secular driver for a new kind of pilot training, with CAE’s expertise in modeling and simulation playing a pivotal role in the acceptance and success of the training. To execute CAE’s adjacent market strategy, the company succeeded in securing acquisitions at uniquely attractive value and optimal use of capital.
Defence growth strategy aligned with national defence priorities
Additionally, CAE announced a definitive agreement to acquire a military training business, a significant complementary fit with the company’s core military training business. This accelerates CAE’s defence growth strategy and brings it into close alignment with United States national defence priorities. This initiative serves long-term shareholders well.
