Full-year FY2026 revenue of $4.9 billion, diluted EPS of $0.97 and adjusted EPS of $1.20
Transformation plan targeting $125 million to $150 million annual transformation run-rate savings(1) by fiscal 2030 (fiscal year ended March 31, 2030)
Targeting $950 million to $1 billion of adjusted segment operating income (under our updated definition)(1) in fiscal 2030 with a strong cash conversion rate(1)
MONTREAL, May 21, 2026 /CNW/ - (NYSE:CAE) (TSX:CAE) - CAE Inc. (CAE or the Company) today reported its financial results for the fourth quarter ended March 31, 2026. For more information, please refer to the Annex for Fourth Quarter and Fiscal Year 2026 available at cae.com/investors.
"We delivered solid performance overall in fiscal 2026, notwithstanding a softer civil training market and volatility in the Middle East", said Matthew Bromberg, CAE's President and CEO. "We made important strategic progress positioning CAE to capture generational growth opportunities in the defence market by forging new partnerships with major OEMs and advancing integrated training and mission rehearsal opportunities for customers seeking sovereign capabilities. We also executed a successful leadership transition, strengthening and aligning our executive team to drive greater integration and synergies across the organization, and put in place the transformation plan we are now executing.
There is significant work ahead to unlock the full value creation potential of CAE, and fiscal 2027 will be a year of disciplined execution as we strengthen the business and position it for long-term performance. We have a comprehensive transformation plan, supported by clear processes, aligned incentives, and a high-performing team. Our transformation plan is focused on three priorities: sharpening our portfolio, strengthening capital discipline, and elevating operational performance. Underlying all three priorities is an equally important objective: reinforcing a culture of accountability, performance and execution across the organization. We believe this cultural evolution is foundational to sustaining long-term performance improvement. We are updating key operating metrics, including how we define adjusted segment operating income, adjusted net income, adjusted EPS, free cash flow and how we measure asset utilization. These changes aim to reinforce disciplined decision‑making, while aligning incentives more closely with shareholder value creation through a greater focus on adjusted segment operating income margins, adjusted return on invested capital (ROIC), and cash conversion rate. Together, these initiatives reflect a better balance of growth with efficiency and returns.
This is a multi-year plan, with multiple initiatives already underway, and we have established the operational and financial visibility required to define long-term targets. Our transformation plan is composed of eight key workstreams and includes removing 10% of our commercial full-flight simulator fleet and relocating and optimizing more than a dozen additional full-flight simulators, which will meaningfully reduce square footage and sites.
As we execute, we are targeting $125 million to $150 million of transformation run-rate savings from these initiatives and others by fiscal 2030, while targeting fiscal 2030 adjusted segment operating income (updated definition) of $950 million to $1 billion and approximately 100% cash conversion (updated definition) over the four-year period, reflecting improved profitability and disciplined capital management. Importantly, we expect more than half of the performance improvement over this period to come from internally driven initiatives within our control, including transformation actions already underway across the business.
We are confident in our ability to deliver materially stronger performance and sustained value creation over time, positioning CAE as a growth company with stronger free cash flow, higher returns on invested capital, expanding margins, and a flexible, resilient capital structure."
(1) This press release includes historical and forward-looking non-IFRS financial measures, non-IFRS ratios, capital management measures, and supplementary financial measures. These measures are not standardized financial measures prescribed under IFRS and therefore should not be confused with, or used as an alternative for, performance measures calculated according to IFRS. Furthermore, these measures should not be compared with similarly titled measures provided or used by other issuers. For historical measures, refer to the Non-IFRS and other financial measures section of this press release for the definitions and reconciliation of these measures to the most directly comparable measure under IFRS. For forward-looking measures, refer to Forward-looking financial measures section of this press release for the definitions and reconciliation of these measures to their historical equivalents.
Management outlook and long-term targets, updated financial measures and transformation plan updateCAE's transformation plan, announced in November 2025, reflects management's view that evolving market conditions and long-term growth opportunities require a more focused portfolio, a streamlined operating footprint and a more accountable, performance-driven culture, with a deliberate shift towards balancing growth with greater efficiency and returns from our asset base and leading market positions.
The transformation is centered on three core principles: (i) aligning the portfolio to CAE's long-term strategy and areas of competitive advantage, (ii) strengthening capital discipline by prioritizing higher-return investments and optimizing the commercial training network, and (iii) improving operational performance through better integration of people, processes, and technology. Together, these actions are intended to position CAE to deliver sustainable long-term shareholder value.
In fiscal 2027, and in conjunction with our transformation plan, we have also decided to update the composition of certain non-IFRS measures to better align our external reporting with how management measures performance internally, to provide more accurate visibility to investors and to reinforce our cash centric focus on performance. Specifically, adjusted segment operating income, adjusted net income and adjusted EPS will be updated to exclude the impact of amortization of acquired intangible assets, removing a non-cash expense that we do not consider in evaluating the return on invested capital generated through our investing activities (in fiscal 2026, this expense was $86 million), and free cash flow has been revised as of the Q4 results to include all capital expenditures and all capitalized development costs.
For more information, please refer to the Annex for Fourth Quarter and Fiscal Year 2026 available at cae.com/investors.
As part of this transformation plan, CAE is establishing long-term financial targets to be achieved by fiscal 2030:
Fiscal 2030 consolidated financial targets
Annual organic revenue growth
Mid single-digit %
Adjusted segment operating income (updated definition)(1)
$950 million to $1 billion
Cash conversion rate (updated definition)(1)
Cumulative 100% over the 4-year period
Transformation run-rate savings(1)
$125 million to $150 million
Net debt to adjusted EBITDA(1)
Approximately 2.5x
CAE's transformation plan is expected to progress through a defined path, with fiscal 2027 focused on transformation and repositioning, fiscal 2028 marking a positive inflection as the benefits of these actions begin to be realized, and fiscal 2029 and beyond delivering accelerating performance and compounding value creation. Importantly, more than half of the anticipated performance improvement by fiscal 2030 is expected to be driven by transformation benefits, with the balance supported by volume growth and operating leverage.
Consistent with this trajectory, CAE targets strong cash generation reflecting improved profitability and disciplined capital management. The Company intends to maintain an investment grade credit profile, targeting net debt‑to‑adjusted EBITDA of approximately 2.5x, with flexibility to operate outside this range opportunistically, supported by strong cash generation and disciplined capital allocation. In addition, CAE will evaluate a range of value‑creation opportunities using a return on invested capital framework, prioritizing investments that deliver the highest risk-adjusted returns. These could include internal investments to drive incremental organic growth beyond the transformation plan, potential acquisitions in its core markets and, absent such opportunities, the return of excess cash flow to shareholders.
The fiscal 2030 targets provided in this press release do not constitute guidance or outlook but rather represent management's current view of the Company's long-term trajectory and are meant to assist analysts, investors and shareholders in forming their respective views on the Company's strategy and in measuring progress toward its transformation objectives. The degree of uncertainty inherent in these long-term targets is considerably higher than that associated with CAE's fiscal 2027 outlook due to the longer time horizon and the greater number of variables that could affect outcomes. As such, the reader is cautioned that using this information for other purposes may be inappropriate and these measures are subject to change as conditions evolve and actual results may differ, and such differences may be material.
The fiscal 2030 targets constitute forward-looking statements and were prepared based on the same methodology and assumptions described in CAE's MD&A for the fiscal year ended March 31, 2026 and the "Forward-Looking Statements" section below and are subject to the risks and uncertainties summarized therein. The Company cautions that the assumptions used to prepare the targets, while thoughtfully considered and currently reasonable in the circumstances could prove to be incorrect or inaccurate.
Fiscal 2027 outlookFiscal 2027 will be an execution year, defined by actions underway to reshape the business.
These include:
the rationalization and optimization of the commercial training network;
the consolidation and optimization of CAE's global real estate footprint; and
the evaluation of strategic alternatives for certain non-core businesses.
The total cost of the transformation plan is anticipated to be approximately $200 million to $250 million, with approximately $100 million arising from non-cash charges. Of the total cost, $84 million was incurred in fiscal 2026, with the majority of the balance to be incurred in fiscal 2027.
Additionally, we will incur several transformation-related costs in fiscal 2027 which we will not add-back to reported earnings and free cash flow, which have the effect of reducing the reported results from what they otherwise would have been. These costs include (i) cost inefficiencies associated with network rationalization, footprint optimization and portfolio changes, and (ii) specific investments to modernize the operating platform, including systems and processes. These actions are intended to strengthen the Company's operating foundation and enable the full realization of operational synergies over time.
The Company's fiscal 2027 outlook excludes potential divestitures, acquisitions, or new joint ventures.
Fiscal 2027 consolidated financial outlook
Revenue
Low-single digit percentage growth
Adjusted segment operating income margin (updated definition)(1)
14.6% to 15.1%
Adjusted EPS (updated definition)(1)
$1.21 to $1.28
Cash conversion rate (updated definition)(1)
85% to 95%
In fiscal 2027, management expects consolidated revenue to increase by a low-single digit percentage, with Civil revenue expected to be flat to slightly down and Defense expected to grow at a mid-single digit rate.
On a consolidated basis, management expects fiscal 2027 adjusted segment operating income margin (updated definition)(1) to be 14.6% to 15.1%. This outlook reflects the combined effect of continued margin expansion in Defense, temporarily lower profitability in Civil, transformation-related actions, temporary cost inefficiencies associated with network rationalization and relocations, and elevated investment levels intended to support stronger long-term performance, with benefits expected to build progressively over time.
In Defense, CAE expects continued growth and increased profitability, supported by strong demand and adjusted backlog conversion. In Civil, performance is expected to remain below prior levels, reflecting ongoing softness in the civil aviation training market, softer demand for products, and the impact of optimization actions currently underway.
Ongoing geopolitical uncertainty in the Middle East is affecting CAE's operations and customers in the region. Currently, the Company is experiencing month-by-month operational and financial impacts associated with the conflict and undertaking mitigation actions, including the redeployment of certain training activities within its global network. Our outlook assumes that the Middle East conflict winds down in the first half of our fiscal year. Further deterioration in regional conditions, including sustained increases in fuel prices, broader effects on airline activity, customer operations, or supply chains, could result in additional pressure on performance.
This outlook is provided as at May 21, 2026, to assist analysts, investors and shareholders in forming their respective views on CAE's expected performance for the fiscal year ending March 31, 2027. This outlook constitutes forward‑looking information and is based on multiple estimates and assumptions, including those set out in the "Forward-Looking Statements" section below, and are subject to the risks and uncertainties summarized therein. As such, the reader is cautioned that using this information for other purposes may be inappropriate and these measures are subject to change as conditions evolve and actual results may differ, and such differences may be material. The Company cautions that the assumptions used to prepare the outlook could prove to be incorrect or inaccurate.
Consolidated results for fiscal 2026(1)Fourth quarter fiscal 2026 revenue was $1,326.7 million, an increase compared to $1,275.4 million last year. Fourth quarter diluted EPS was $0.23 compared to $0.42 last year. Adjusted EPS was $0.42 compared to $0.47 last year. Operating income this quarter was $127.4 million (9.6% of revenue(1)), compared to $239.9 million (18.8% of revenue) last year. This period's operating income included restructuring costs of $84.4 million. Last year's operating income included costs related to shareholder matters of $10.6 million and executive management transition costs of $8.3 million. Fourth quarter adjusted segment operating income was $211.8 million (16.0% of revenue(1)) compared to $258.8 million (20.3% of revenue) last year.
Annual fiscal 2026 revenue was $4.9 billion, an increase compared to $4.7 billion last year. Annual diluted EPS was $0.97 compared to $1.27 in fiscal 2025. Annual adjusted EPS was $1.20 this year compared to $1.21 last year. Annual operating income was $612.3 million (12.5% of revenue), compared to $729.2 million (15.5% of revenue) last year. This period's operating income included executive management transition costs of $14.0 million and restructuring, integration and acquisition costs of $84.4 million. Last year's operating income included the gain on fair value remeasurement of SIMCOM of $72.6 million, costs related to shareholder matters of $10.6 million, executive management transition costs of $8.3 million and restructuring, integration and acquisition costs of $56.5 million. Adjusted segment operating income was $710.7 million (14.5% of revenue) compared to $732.0 million (15.5% of revenue) last year. All financial information is in Canadian dollars unless otherwise indicated.
Summary of consolidated results
(amounts in millions, except per share amounts)
FY2026
FY2025
Variance %
Q4-2026
Q4-2025
Variance %
Revenue
$
4,914.0
4,707.9
4 %
1,326.7
1,275.4
4 %
Operating income
$
612.3
729.2
(16 %)
127.4
239.9
(47 %)
Adjusted segment operating income(1)
$
710.7
732.0
(3 %)
211.8
258.8
(18 %)
As a % of revenue(1)
%
14.5
15.5
16.0
20.3
Net income attributable to equity
holders of the Company
$
313.1
405.3
(23 %)
73.1
135.9
(46 %)
Basic earnings per share (EPS)
$
0.98
1.27
(23 %)
0.23
0.42
(45 %)
Diluted EPS
$
0.97
1.27
(24 %)
0.23
0.42
(45 %)
Adjusted EPS(1)
$
1.20
1.21
(1 %)
0.42
0.47
(11 %)
Adjusted order intake(1)
$
5,026.2
7,703.5
(35 %)
1,611.3
1,337.5
20 %
Adjusted backlog(1)
$
19,258.6
20,142.2
(4 %)
19,258.6
20,142.2
(4 %)
(1) This section of this press release includes historical non-IFRS financial measures, non-IFRS ratios, capital management measures, and supplementary financial measures. These measures are not standardized financial measures prescribed under IFRS and therefore should not be confused with, or used as an alternative for, performance measures calculated according to IFRS. Furthermore, these measures should not be compared with similarly titled measures provided or used by other issuers. Refer to the Non-IFRS and other financial measures section of this press release for the definitions and reconciliation of these measures to the most directly comparable measure under IFRS.
Civil Aviation (Civil)Fourth quarter Civil revenue was $746.7 million, an increase of 3% compared to the same quarter last year. Operating income was $88.0 million (11.8% of revenue) compared to $197.4 million (27.1% of revenue) in the fourth quarter last year. Fourth quarter Civil adjusted segment operating income was $152.4 million (20.4% of revenue), compared to $208.4 million (28.6% of revenue) in the fourth quarter last year. In the fourth quarter, Civil training centre utilization was 73% and 17 full-flight simulators (FFSs) were delivered to customers.
Annual Civil revenue was $2,741.6 million, up 1% compared to last year. Annual operating income was $437.9 million (16.0% of revenue) compared to $605.3 million (22.3% of revenue) last year, and annual adjusted segment operating income was $510.5 million (18.6% of revenue) compared to $581.5 million (21.5% of revenue) last year. For the year, Civil training centre utilization was 70% and 52 FFSs were delivered to customers.
During the quarter, Civil signed training and operational support solutions contracts valued at $965.2 million. These included the sale of 20 FFSs and long-term training and digital flight services contracts.
For the year, Civil booked orders for $2.6 billion, including 42 FFS sales (vs. 56 in the prior fiscal year) and comprehensive, long-term training agreements with customers worldwide.
The Civil book-to-sales ratio was 1.29x for the quarter and 0.96x for the last 12 months. The Civil adjusted backlog at the end of the year was $8.4 billion, which is 5% lower from the prior year period.
Summary of Civil Aviation results
(amounts in millions)
FY2026
FY2025
Variance %
Q4-2026
Q4-2025
Variance %
Revenue
$
2,741.6
2,709.3
1 %
746.7
728.4
3 %
Operating income
$
437.9
605.3
(28 %)
88.0
197.4
(55 %)
Adjusted segment operating income
$
510.5
581.5
(12 %)
152.4
208.4
(27 %)
As a % of revenue
%
18.6
21.5
20.4
28.6
Adjusted order intake
$
2,641.8
3,717.4
(29 %)
965.2
741.8
30 %
Adjusted backlog
$
8,437.2
8,846.6
(5 %)
8,437.2
8,846.6
(5 %)
Supplementary non-financial information
Simulator equivalent unit
301
286
5 %
305
298
2 %
FFSs in CAE's network
371
363
2 %
371
363
2 %
FFS deliveries
52
61
(15 %)
17
15
13 %
Utilization rate
%
70
74
73
75
Defense and Security (Defense)Fourth quarter Defense revenue was $580.0 million, an increase of 6% compared to the same quarter last year. Operating income was $39.4 million (6.8% of revenue), compared to an operating income of $42.5 million (7.8% of revenue) in the fourth quarter last year. Fourth quarter Defense adjusted segment operating income was $59.4 million (10.2% of revenue), compared to $50.4 million in the fourth quarter last year.
Annual Defense revenue was $2,172.4 million, 9% higher compared to last year. Annual operating income was $174.4 million (8.0% of revenue) compared to $123.9 million (6.2% of revenue) last year, and annual adjusted segment operating income was $200.2 million (9.2% of revenue), compared to $150.5 million (7.5% of revenue) last year.
During the quarter, Defense booked orders for $646.1 million, bringing the full-year total to $2.4 billion.
The Defense book-to-sales ratio was 1.11x for the quarter and 1.10x for the last 12 months. The Defense adjusted backlog at the end of the year was $10.8 billion.
Summary of Defense and Security results
(amounts in millions)
FY2026
FY2025
Variance %
Q4-2026
Q4-2025
Variance %
Revenue
$
2,172.4
1,998.6
9 %
580.0
547.0
6 %
Operating income
$
174.4
123.9
41 %
39.4
42.5
(7 %)
Adjusted segment operating income
$
200.2
150.5
33 %
59.4
50.4
18 %
As a % of revenue
%
9.2
7.5
10.2
9.2
Adjusted order intake
$
2,384.4
3,986.1
(40 %)
646.1
595.7
8 %
Adjusted backlog
$
10,821.4
11,295.6
(4 %)
10,821.4
11,295.6
(4 %)
Additional financial highlightsNet finance expense this quarter amounted to $46.5 million, compared to $54.1 million in the preceding quarter and $56.5 million in the fourth quarter last year. The decrease was mainly due to lower finance expense on long‑term debt due to a decreased level of borrowings during the period.
Income tax expense this quarter was $6.6 million, representing an effective tax rate of 8%, compared to an effective tax rate of 25% in the fourth quarter last year. The adjusted effective tax rate(1), which is the income tax rate used to determine adjusted net income and adjusted EPS, was 17% this quarter compared to 25% in the fourth quarter of last year. The decrease in the adjusted effective tax rate was mainly attributable to the mix of income from various jurisdictions.
Net cash provided by operating activities was $185.6 million for the quarter compared to $322.7 million in the fourth quarter last year. Free cash flow was $135.0 million for the quarter compared to $194.2 million in the fourth quarter last year. For the year, net cash provided by operating activities was $791.9 million compared to $896.5 million last year and free cash flow was $473.8 million, compared to $474.9 million in the same period last year. The cash conversion rate(1) for fiscal year 2026 was 123%, using CAE's updated definition of free cash flow which includes total capital expenditures.
Growth and maintenance capital expenditures(1) totalled $42.7 million this quarter and $287.8 million for the year, representing a 19% decrease compared to fiscal 2025, primarily reflecting a 29% reduction in Civil capital investment.
Net debt(1) at the end of the year was $2,681.8 million for a net debt-to-adjusted EBITDA(1) of 2.29 times. This compares to net debt of $2,782.3 million, for a net debt-to-adjusted EBITDA of 2.30 times at the end of the preceding quarter.
Adjusted ROIC(1) was 7.6% this quarter compared to 7.8% last quarter and 8.0% in the fourth quarter last year.
During the quarter, CAE repurchased and cancelled a total of 85,100 common shares under the NCIB, at a weighted average price of $36.35 per common share, for a total consideration of $3.1 million.
(1) This section of this press release includes historical non-IFRS financial measures, non-IFRS ratios, capital management measures, and supplementary financial measures. These measures are not standardized financial measures prescribed under IFRS and therefore should not be confused with, or used as an alternative for, performance measures calculated according to IFRS. Furthermore, these measures should not be compared with similarly titled measures provided or used by other issuers. Refer to the Non-IFRS and other financial measures section of this press release for the definitions and reconciliation of these measures to the most directly comparable measure under IFRS.
Detailed informationReaders are strongly advised to view a more detailed discussion of our results by segment in the MD&A and CAE's consolidated financial statements for the year ended March 31, 2026, which are available on our website (www.cae.com), SEDAR+ (www.SEDARplus.ca) and EDGAR (www.sec.gov). Holders of CAE's securities may also request a printed copy of the Company's consolidated financial statements and MD&A free of charge by contacting Investor Relations ([email protected]).
Conference call Q4 and full FY2026 Calin Rovinescu, Executive Chairman of the Board; Matthew Bromberg, CAE President and CEO; Ryan McLeod, Chief Financial Officer; and Andrew Arnovitz, Chief Strategy Officer will conduct an earnings conference call tomorrow at 8:00 a.m. ET. The call is intended for analysts and institutional investors. Participants can listen to the conference by dialing + 1-800-990-2777 (Conference ID: 60970). The conference call will also be audio webcast live at www.cae.com.
Caution concerning limitations of summary earnings press releaseThis summary earnings press release contains limited information meant to assist the reader in assessing CAE's performance, but it is not a suitable source of information for readers who are unfamiliar with CAE and is not in any way a substitute for the Company's financial statements, notes to the financial statements, and MD&A reports.
Caution concerning forward-looking statementsThis press release includes forward-looking statements about our activities, events and developments that we expect or anticipate may occur in the future including, for example, statements about our fiscal 2027 consolidated financial outlook (under "Fiscal 2027 outlook"), long-term transformation plan targets to fiscal 2030 (under "Management outlook and transformation plan update"), transformation costs and savings, vision, strategies, market trends and outlook, future revenues, earnings, cash flow growth, profit trends, capital spending, expansions and new initiatives, including initiatives that pertain to sustainability matters, financial obligations, available liquidities, expected sales, general economic and political outlook, inflation trends, prospects and trends of the industry, expected annual recurring cost savings from operational excellence programs, management of the supply chain, estimated addressable markets, demand for CAE's products and services, access to capital resources, our financial position, expected accretion in various financial metrics, expected capital returns to shareholders, business outlook and opportunities, objectives, development, plans, growth strategies and other strategic priorities, our competitive and leadership position in our markets, expansion of our market shares, CAE's ability and preparedness to respond to demand for new technologies, the sustainability of our operations, and other statements that are not historical facts.
Since forward-looking statements and information relate to future events or future performance and reflect current expectations or beliefs regarding future events, they are typically identified by words such as "anticipate", "believe", "could", "estimate", "expect", "intend", "likely", "may", "plan", "seek", "should", "will", "strategy", "future" or the negative thereof or other variations thereon suggesting future outcomes or statements regarding an outlook. All such statements constitute "forward-looking statements" within the meaning of applicable Canadian securities legislation and "forward-looking statements" within the meaning of the "safe harbor" provisions of the United States Private Securities Litigation Reform Act of 1995.
By their nature, forward-looking statements require us to make assumptions and are subject to inherent risks and uncertainties associated with our business which may cause actual results in future periods to differ materially from results indicated in forward-looking statements. While these statements are based on management's expectations and assumptions regarding historical trends, current conditions and expected future developments, as well as other factors that we believe are reasonable and appropriate in the circumstances, readers are cautioned not to place undue reliance on these forward-looking statements as there is a risk that they may not be accurate. The forward-looking statements contained in this press release describe our expectations as of May 21, 2026 and, accordingly, are subject to change after such date. Except as required by law, we disclaim any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise. CAE expects to report on its progress toward the fiscal 2030 transformation plan targets as required by law. The forward-looking information and statements contained in this press release are expressly qualified by this cautionary statement. In addition, statements that "we believe" and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based on information available to us as of the date of this press release. While we believe that information provides a reasonable basis for these statements, that information may be limited or incomplete. Our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all relevant information. These statements are inherently uncertain, and investors are cautioned not to unduly rely on these statements. Except as otherwise indicated by CAE, forward-looking statements do not reflect the potential impact of any special items or of any dispositions, monetizations, mergers, acquisitions, other business combinations or other transactions that may occur after May 21, 2026. However, the long-term transformation plan targets reflect the assumed pursuit of strategic alternatives for certain non-core businesses identified as part of the transformation plan. The financial impact of these transactions and special items can be complex and depends on the facts particular to each of them. We therefore cannot describe the expected impact in a meaningful way or in the same way we present known risks affecting our business. Forward-looking statements are presented in this press release for the purpose of assisting investors and others in understanding certain key elements of our expected fiscal 2027 financial results and our long-term transformation plan targets, and in obtaining a better understanding of our anticipated operating environment. Readers are cautioned that such information may not be appropriate for other purposes. In particular, the fiscal 2030 targets reflect management's current view of the Company's long-term trajectory and are provided for the purpose of assisting investors and others in measuring progress toward its transformation objectives. Given the longer time horizon, these ambitions are subject to a greater degree of uncertainty and a wider range of variables that could affect outcomes relative to the fiscal 2027 outlook.
Material assumptionsThe forward-looking statements set out in this press release are based on certain assumptions including, without limitation, prevailing market conditions, customer receptivity to our training and operational support solutions, moderate GDP growth and inflation broadly consistent with consensus economic forecasts, stability in global interest rates and foreign exchange rate markets in which the Company operates, no material deterioration in the global geopolitical, trade and tariff environment beyond currently prevailing conditions, no material impact from the ongoing United States-Mexico-Canada Agreement renewal process, an adjusted effective income tax rate broadly consistent with the Company's current jurisdictional mix of earnings, with statutory tax rates remaining broadly stable, no material financial, operational or competitive consequences from changes in regulations affecting our business, continued secular growth in global air travel demand broadly in line with historical trends relative to GDP growth, sustained increase in defence spending by NATO and allied nations, Canadian federal government commitment to increased defence spending, successful ramp-up of recently awarded contracts and adjusted backlog conversion over the plan period, our ability to effectively execute and retire the remaining legacy contracts while managing the risks associated therewith, continued strong performance from existing joint venture partnerships, successful execution of the multi-year transformation plan, including identified transformation initiatives embedded in the baseline, progressing to full transformation run-rate savings of $125 million to $150 million by fiscal 2030, planned headcount reductions and facility consolidations proceeding within targeted timeframes and in compliance with local law and employee consultation requirements, total transformation costs of approximately $200 million to $250 million, with the majority of the remaining balance to be incurred in fiscal 2027, the evaluation of strategic alternatives for certain non-core businesses, including the outcome of the strategic review of the Flightscape business, proceeding within anticipated timeframes, continued access to capital markets at investment-grade terms, our available liquidity and cash flows from operations and continued access to debt funding being sufficient to meet financial requirements in the foreseeable future, and the ability to retain and attract key talent to execute the transformation plan and sustain long-term performance improvement. Air travel is a major driver for CAE's business and management relies on analysis from the International Air Transport Association (IATA) to inform its assumptions about the rate and profile of growth in its key civil aviation market. Accordingly, the assumptions outlined in this press release and, consequently, the forward‑looking statements based on such assumptions, may turn out to be inaccurate. For additional information, including with respect to other assumptions underlying the forward-looking statements made in this press release, refer to the applicable reportable segment in CAE's MD&A for the year ended March 31, 2026 available on our website (www.cae.com), SEDAR+ (www.SEDARplus.ca) and EDGAR (www.sec.gov).
With respect to the fiscal 2030 targets specifically, these are based on assumptions that extend over a significantly longer time horizon than the fiscal 2027 outlook and, accordingly, are subject to greater uncertainty. The assumptions underlying the fiscal 2030 targets, while reasonable in the circumstances and carefully considered, are particularly sensitive to the successful execution and timing of transformation initiatives, changes in competitive dynamics, macroeconomic conditions, foreign exchange rate movements and the broader geopolitical environment over the intervening period. Small changes in any of these assumptions could result in materially different outcomes over the longer time horizon.
Material risksImportant risks that could cause actual results or events to differ materially from those expressed in or implied by our forward-looking statements are set out in CAE's MD&A for the fiscal year ended March 31, 2026, available on our website (www.cae.com), SEDAR+ (www.SEDARplus.ca) and EDGAR (www.sec.gov). Readers are cautioned that any of the disclosed risks could have a material adverse effect on our forward-looking statements. Key risks that are particularly relevant to the forward-looking information contained in this press release include, but are not limited to the ability to successfully execute the transformation plan, including achieving cost savings and operational efficiencies, within the anticipated timeframe and at expected cost levels, softness or further deterioration in the civil aviation training market, including reduced demand for full-flight simulators and training services, lower-than-anticipated training centre utilization, OEM production delays and supply chain constraints that could further limit aircraft deliveries, and continued overcapacity from growth investments that outpaced actual demand, geopolitical instability, including the ongoing military conflicts in the Middle East, ...
