Tim James: Just have one question here. And I’m just wondering if you could give us an update on the progress with AirCentre, how it’s performing versus expectations? And sort of year-over-year comparisons? I know there was some integration costs in the quarter. Maybe just some details on what those costs were around and what that provides for the business going forward?
Marc Parent: Well, look, yes, I think the first — thanks for the question, Tim. What I would tell you, I’m very happy with the business, the progress that we’re making. We are — especially when I think about the success we’re having in the market. You look at — I mean you’ve seen that going back to Paris Air Show. So, the strong — very strong orders that came out, for example, of airlines in India that specifically saw Air India, while we just signed a major contract with Air India with our AirCentre suite of products. And considering that Air India is bringing together a number of airlines together as part of Air India group, that is very, very promising in terms of the business. As well, I was just recently in Budapest, and the CEO and his team at Wizz Air.
And they selected us for our AirCentre suite. So — and that’s just a couple. So, we make business front-end standpoint, I’m quite happy with the business. And I should say that’s the only thing I’m satisfied with. I’m very, very happy with the impact that we’re making with our customers with regards to how they see CAE, which is something you see as a natural owner of this business. Look, it’s taking — it will take time to recognize revenue because this is Software as a Service. Well, remember that we bought AirCentre at 7 times EBITDA. So, when I think about that and the money we’re spending, we are making the investments that we wanted to make at the rate we want to make to develop that business. And look, we’re on track where we want it to be, and it’s contributing positively to this quarter.
Tim James: Okay. That’s really helpful. I want to just actually ask one more question, if I could. The working capital in the quarter was great, really impressive. Just wondering maybe if you can talk a little bit about were there surprises in there? What drove that? Is that kind of more indicative of what second quarters might look like going forward? Just any details on that strong performance.
Sonya Branco : Thanks for the question. Yes. No, like I said in the remarks, very pleased to see strong reversal in working capital in the quarter. And really, this is not a surprise. This is really the outcome of continued focus on optimizing capital and our metrics. So, we saw good improvements all across the board, whether it’s on our day sales outstanding, contract assets, and deposits on contracts. And so, these all contributed to the positive reversal of working capital. We expect that to continue that momentum to continue in the second half we should that.
Operator: Our next question comes from Cameron Doerksen with National Bank Financial. Please proceed.
Cameron Doerksen : Just a couple of questions on the restructuring activity. We see that ongoing in Q2. Can you just maybe update us on where we are in that restructuring program? And how much of that at this point is reflected in your cost base?
Sonya Branco : So, I wouldn’t think that — Cameron, I wouldn’t necessarily call it a restructuring program anymore. The restructuring program, we closed out last year. This is really continued integration of the two acquisitions. So, the flight services one, Marc just spoke of it, we bought that at 7 times EBITDA, knowing that there would be investments to harmonizing and modernizing the structure. And what we’re seeing is investments in our more modernized IT infrastructure and migration of customers, which we expect to complete by mid next year. On the L3H MT, this is really a second phase of our integration, which was — which we had catalyst was a major ERP implementation to harmonize all of those businesses, the legacy, and the new businesses together. So, this triggered a second phase of further planned integration and synergies on that side. And that’s relatively towards this end.
Cameron Doerksen : Okay. So, we should expect, I guess, the outcome of these sort of integration activity to have maybe a more meaningful impact on — on margins as we look ahead to 2025, is that fair?
Sonya Branco : Sure. Yes.
Cameron Doerksen : Okay. And maybe just secondly, just wondering if you could maybe talk about, I guess, what you’re seeing as far as opportunities to deploy additional capital into the training network? What are you seeing on outsourcing opportunities, JV opportunities?
Marc Parent: Lots of opportunities out there, Cameron. You’ve seen what we’re doing. I think we’ve — from the outset, we came into this with a lot of dry powder. I mean, when we think about what we did, going back a little bit through COVID, we didn’t reduce the asset size. We put it at the right place. And in doing so, we took a lot of structural cost back in the neighborhood of $70 million, structural hard cost out of business. And we’re seeing a lot of that come to fore today. Since then, we’ve been seeing — we’ve been seizing the opportunities that the market gives us. And you’ve seen that in the business aviation training centers that we’ve deployed. We had Singapore, we’re opening up at Savannah very soon. We opened up Las Vegas, which has been very successful thus far.
We have Orlando, together with SIMCom opening up, and we’ve announced it in Vienna next year. Outsourcing, look, I can tell you the progress is pretty much as I indicated in the past, I’m very happy with what we’ve seen. We talked about Qantas before, was that — I was just — in the last month, I was in Athens with the CEO and his team at Aegean, and they’re the largest carrier in Greece, and we’ve done a deal with them. There’s other deals that I can’t really talk about right now, but I can — suffice to say that we’re traveling a lot, we’re meeting a lot of customers, and we see opportunities to continue to grow and efficiently deploy capital, particularly in the civil network, which as you know, is very accretive to margins.
