CGY: Defence momentum continues to accelerate

Research evidence excerpt

CGY: Defence momentum continues to accelerate

m increased deliveries. In particular, EV/ EBITDA, Adj 7.3x 13.3x 11.2x 9.5x

procurement at the Canadian federal government appears to have Prev. 11.0x 9.4x 7.9x

normalized following numerous delays over the past year. As a result, EPS, Adj Diluted 4.23 3.30 4.07 4.94

Prev. 3.28 4.04 5.03 Defence & Space accelerated to 14% organic growth, up from 9% last P/AEPS 16.1x 20.6x 16.7x 13.8x

quarter, above our estimate for 9%. Q2 bookings were strong ($321MM

vs. RBC at $228MM), driven by >$200MM in defence signings. Revenue Q1 Q2 Q3 Q4

• Essential Industries stabilizes. The rebound at Essential Industries 20252026 185.0A208.0A 193.7A228.7A 192.2A216.6E 203.2A221.8E

($72MM revenue vs. RBC at $69MM) reflects, in part, improved demand Prev. 217.4E 210.2E 217.4E

at Calian's U.S. commercial operations (i.e., previous ITCS segment). 2027 224.0E 246.5E 233.0E 238.8E

Calian is still in the process of evaluating potential divestitures of non- Prev. 221.9E 232.1E 224.0E 231.9E

EBITDA, Adj core segments within Essential Industries. With improved fundamentals, 2025 17.8A 17.4A 19.0A 24.3A

the segment may be easier for Calian to divest; a potential sale would lift 2026 22.8A 27.9A 20.0E 22.4E

Calian's organic growth and increase the proportion of revenue directly Prev. 22.5E 21.1E 25.3E

tied to defence, both of which in our view warrant a higher valuation 2027 24.2E 32.7E 24.9E 27.5E

Prev. 26.8E 27.4E 25.4E 29.6E multiple.

Priced as of 11:23am on May 14, 2026 • M&A is a pending catalyst. Calian reiterated its long-term outlook for

10-15% annual revenue growth, reflecting both organic growth and AllPricedvaluesas ofin priorCAD unlesstradingotherwiseday's marketnoted.close, EST (unless otherwise noted).

acquisitions.