Slide 1: Investor Presentation First Quarter Fiscal Year 2024
Investor Presentation First Quarter Fiscal Year 2024 Data as of August 9, 2023
Slide 2: Disclaimer
Disclaimer CAUTION REGARDING FORWARD-LOOK ING STATEMENTS This Presentation includes forward-looking statements about our activities, events and developments that we expect to or anticipate may occur in the future including, for example, statements about our vision, strategies, market trends and outl
Slide 3: Disclaimer
Disclaimer Readers are cautioned that any of the disclosed risks could have a material adverse effect on CAE’s forward-looking statements. Readers are also cautioned that the risks described above and elsewhere in this Presentation are not necessarily the only ones we face; additional risks and unce
Slide 4: Non-IFRS and Other Financial Measures
NON-IFRS AND OTHER FINANCIAL MEASURES This Presentation includes 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
Slide 5: CAE is a technology company with a mission and vision focused on safety, efficiency and readiness
OVERVIEW CAE is a technology company high technology with awith company mission and and vision a mission vision focusedfocused on safety, on safety, efficiency efficiency and readiness and readiness Our mission To lead at the frontier of digital immersion with high-tech training and operational supp
Slide 6: We are an essential partner in moving our world forward safely through training and technology
OVERVIEW We are an essential partner in moving our world forward safely through training and technology Civil Aviation Defense & Security Largest global civilian training network Leading defence training and simulation (+1 M hrs/year*) provider Leading provider of simulation equipment Only g
Slide 7: CAE is a global leader in training and operations support
OVERVIEW CAE is a global leader in training and operations support For the year ended, March 31, 2023 Total Revenue: $4.2B Civil Aviation Healthcare We play a key role in making air travel 5 safer, delivering over 1 million hours of training annually** Defense and 44 % 51 Civil Aviation Security Def
Slide 8: Key CAE technologies to define and elevate future standards of training and critical operations
OVERVIEW Key CAE technologies to define and elevate future standards of training and critical operations Virtual accessibility through Biometrics through ALE Real-time insights with CAE Rise TM LearningSpace Enhanced visualization across multiple Augmented, mixed, Advanced data analy tics and simula
Slide 9: Secular tailwinds across all markets
OVERVIEW Secular tailwinds across all markets Civil Aviation Defense & Security Healthcare Secular grow th and technology drivers ~31% 400K + 5% 10% 15+% 6M+ of 2023 pilots and growing training growth in training in growth in integrated growth in population Registered Nurses retiring by 2032 insight
Slide 10: Substantial headroom in high growth markets
OVERVIEW Substantial headroom in high growth markets Civil: potential to increase share in a large Defense & Security * positioned for larger bids Healthcare* sim mark et growing rapidly , with and growing mark et across all five domains large opportunities in adjacencies Civil Total Addressable Glo
Slide 11: Increasing adjusted backlog underpins growth for a bigger, stronger, more profitable CAE
OVERVIEW Increasing adjusted backlog* underpins growth for a bigger, stronger, more profitable CAE 12,000 CAE adjusted backlog up 27%** 11,000 10,000 9,000 8,000 7,000 6,000 Q2 FY22 Q3 FY22 Q4 FY22 Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 Q1 FY24 Adjusted Backlog* ($M) *Non-IFRS and other financial measures
Slide 12: Balanced approach to capital allocation
CAPITAL ALLOCATION PRIORITIES Balanced approach to capital allocation Priorities Revenue, earnings, and Focus on organic investments for sustainable and accretive cash flow grow th growth 1 Strong financial position Maintain a strong balance sheet for resiliency and financial flexibility Capital ret
Slide 13: Strategic investments in sustainable and accretive growth
CAPITAL ALLOCATION PRIORITIES Strategic investments in sustainable and accretive growth Expected leverage of below 3.0x Net Debt/ 4.0x Adjusted EBITDA300% by mid FY 24** 3.5x 250% 3.0x 2.5x 200% 2.0x 150% 1.5x Continue to 1.0x target 100% FCF conversion** 100% 0.5x 0.0x 50% FY17 FY18 FY19 FY20 FY21
Slide 14: Organic capital driving recurring revenues and accretive compounding growth
CAPITAL ALLOCATION PRIORITIES Organic capital driving recurring revenues and accretive compounding growth 50% Pre-tax Returns on Organic Capital* Deployed 48% Year of FFS in Civil Training (FY17-FY23) $966M+ 45% deployment 40% FY17 organic capital* 35% FY18 35% 33% 31% invested in FY17-FY23 30% FY19
Slide 15: Positive ESG impact is core to CAE's mission
ESG Positive ESG impact is core to CAE’s mission Committed to reduction of GHG emissions Advancing green aviation with the Climate development of an electric conversion k it for All CAE sites are 100% Piper Aircraft and enabling the all-electric action First Canadian aerospace sourced w ith Advanced
Slide 16: Civil Aviation
Civil Aviation Elevating and advancing human performance
Slide 17: Market leader with strong cyclical and secular growth dynamics
CIVIL AVIATION Market leader with strong cyclical and secular growth dynamics Aviation Aviation Simulation Training Simfinity XR Series Pilot Training Flight Training Devices Cadet Academies Leading provider Full Flight Simulators CAE Instructor-Led Training poised to benefit Equipment
Slide 18: Strong demand for new civil aviation professionals
CIVIL AVIATION Strong demand for new civil aviation professionals 1.3 million 284K new pilots 402K new aircraft maintenance technicians 599K new cabin crew Large demand for new personnel due to industry grow th and impending retirements Source: CAE 2023 Aviation Talent Forecast 18 Information confid
Slide 19: With the largest aviation footprint, we are always close to our customers
CIVIL AVIATION With the largest aviation footprint, we are always close to our customers #1 in Civil Aviation Training 1,300 + Full Flight Simulators Manufactured 320 + Full Flight Simulators in our Training Network 170 + Aircraft 70+ Locations +1 M hours Simulator Training Delivered Annually* 135,0
Slide 20: Launched new training centres, deployed additional FFS, sold 62 FFS and delivered 46 in FY23
CIVIL AVIATION Launched new training centres, deployed additional FFS to our network, sold 62 FFS, and delivered 46 FFS in FY23 CAE Vienna NEW CAE Las Vegas NEW CAE Minneapolis NEW Expansion CAE Singapore NEW SIMCOM Lake Nona NEW CAE Sydney NEW CAE Savannah NEW CAE Greece NEW 20 FFS: Full Flight Sim
Slide 21: Margin and adjusted backlog have eclipsed prior peak levels
CIVIL AVIATION Margin and adjusted backlog* have eclipsed prior peak levels, with renewed tailwinds for expansion and growth 7,000 25.0% 6,000 20.0% 5,000 15.0% 4,000 3,000 10.0% 2,000 5.0% 1,000 0 0.0% FY20 FY21 FY22 FY23 Q1 FY24 Adjusted Backlog ($M)* Adjusted SOI Margin* (%) (RHS) Opportunity for
Slide 22: Defense & Security
Defense & Security Making the world a safer place through enhanced mission readiness
Slide 23: Transformed with L3Harris Military Training
DEFENSE & SECURITY Transformed with L3Harris Military Training Training & Simulation Mission Operations Simulation Products Prime contractor for digital ecosystems Broad Range of Training Services Real-time modeling and simulation Training Centers Virtual Command, Control, World’s Ab I
Slide 24: Well positioned to address new realities in the defence environment
DEFENSE & SECURITY Well positioned to address new realities in the defence environment The global threat environment and budget priorities are accelerating demand for digital immersion solutions Focus has shifted from asymmetric to near-peer threats Budget priorities driving shift from live trai
Slide 25: Our broad global defence market presence
DEFENSE & SECURITY Our broad global defence market presence D&S is headquartered 40+ in Washington, DC and has locations in k ey Countries growth mark ets Washington, DC (HQ) 70+ Tampa, FL Arlington, TX Montreal, QC Platforms Ottawa, ON Burgess Hill, UK Stolberg, Germany 145+ Abu Dhabi, UAE Sydney,
Slide 26: Prime pursuits: increasing in size and quantity across all domains
DEFENSE & SECURITY Prime pursuits: increasing in size and quantity across all domains Average bid size ($M) Quantity of competitive prime pursuits > $100M $120 $100 FY23- FY25* $80 $60 FY20- $40 FY22 $20 - 10 20 30 40 50 $- FY20-FY22 FY23-FY25* Air Land Sea Space Cyber Joint/Other Average bid size f
Slide 27: Transforming and accelerating Defense for profitable growth
DEFENSE & SECURITY Transforming and accelerating Defense for profitable growth through adjusted backlog* renewal and execution 6,000 6x increase in Increase in prime position on large IDIQ addressable vehicles with total ceiling of $224B 5,000 market 4,000 Building order >$2.0B in orders FY23 moment
Slide 28: Transformational wins paving the way forward for Defense
DEFENSE & SECURITY Transformational wins paving the way forward for Defense Future Aircrew Training Program (FAcT) JV with SkyAlyne Generational training opportunity covering all aspects of the required training and in-service support to train Canadian military pilots, Air Combat Systems Officer
Slide 29: Healthcare
Healthcare Preparing you for the moments that matter
Slide 30: Healthcare combines physical and digital offerings for clinical education solutions
HEALTHCARE Healthcare combines its physical and digital offerings to provide best-in-class clinical education solutions EMT Patient Simulation Softw are/Digital Low, Mid, High-Fidelity Solutions Accelerating Nursing & Prehospital Center / Learning Management digital, cloud- Skills Trainers b
Slide 31: Our solutions help address considerable healthcare challenges
HEALTHCARE Our solutions help address considerable healthcare challenges 250K 26% Hospital deaths attributed to Aging Reduction in error rates Nursing medical error—the fourth leading Populations when using simulation Shortages cause of death in U.S. in the U.S. 6M+ Work force >50% Reduction in time
Slide 32: Building momentum in the healthcare simulation and training market
HEALTHCARE Building momentum in the healthcare simulation and training market 200 49.7% TTM revenue growth* 150 100 50 * Q1 FY22 Q1 FY23 Q1 FY24 TTM Revenue ($M) Strong Y/Y revenue grow th and increasing profitability *TTM from Q1 FY22 to Q1 FY24. Revenue is net of ventilator sales. 32 Information c
Slide 33: Financials
Financials
Slide 34: Q1 FY24 financial highlights
FINANCIALS Q41FY24 financial highlights Performance (amounts in millions, except per share amounts, ROCE and book-to-sales ratio) Q1 FY24 Q1 FY23 Variance % Revenue 1,054.4 933.3 13% Operating income 130.1 39.4 230% Adjusted segment operating income (SOI)* 145.1 60.9 138% Net income attributable to
Slide 35: Reconciliation of Non-IFRS Measures
FINANCIALS RECONCILIATION OF NON-IFRS MEASURES Reconciliation EBITDA, Adjusted EBITDA, net debt-to-EBITDA and net debt-to- adjusted EBITDA (last 12 months ended June 30) 2023 2022 (Amounts in millions, except net debt-to-EBITDA ratios) Operating income $564.7 $237.4 Depreciation and amortization 351
Slide 36: Reconciliation of Non-IFRS Measures
FINANCIALS RECONCILIATION OF NON-IFRS MEASURES Reconciliation of adjusted net income and adjusted earnings per share (EPS) (Three months ended June 30) 2023 2022 (Amounts in millions, except per share amounts) Net income attributable to equity holders of the Company 65.3 1.7 Restructuring, integrati
Slide 37: Reconciliation of Non-IFRS Measures
FINANCIALS RECONCILIATION OF NON-IFRS MEASURES Reconciliation of adjusted segment operating income Civil Aviation Defense & Security Healthcare Total Three months ended June 30 2023 2022 2023 2022 2023 2022 2023 2022 Amounts in millions Operating Income $105.6 $75.4 $22.7 ($30.3) $1.8 ($5.7) $130.1
Slide 38: Definitions of Non-IFRS and Other Financial Measures
DEFINITIONS OF NON-IFRS AND OTHER FINANCIAL MEASURES Non-IFRS and other financial measure definitions This Presentation includes non-IFRS financial measures, non-IFRS ratios, capital management measures and supplementary financial measures. These measures are not standardized financial measures pres
Slide 39: Definitions of Non-IFRS and Other Financial Measures
DEFINITIONS OF NON-IFRS AND OTHER FINANCIAL MEASURES Adjusted segment operating income margin (or adjusted segment operating income as a % of revenue) Adjusted segment operating income margin is a non-IFRS ratio calculated by dividing our adjusted segment operating income by revenue for a given peri
Slide 40: Definitions of Non-IFRS and Other Financial Measures
DEFINITIONS OF NON-IFRS AND OTHER FINANCIAL MEASURES LIQUIDITY AND CAPITAL STRUCTURE MEASURES Non-cash w ork ing capital Non-cash working capital is a non-IFRS financial measure we use to monitor how much money we have committed in the day-to-day operation of our business. We calculate it by taking
Slide 41: Definitions of Non-IFRS and Other Financial Measures
DEFINITIONS OF NON-IFRS AND OTHER FINANCIAL MEASURES Net debt-to-EBITDA and net debt-to-adjusted EBITDA Net debt-to-EBITDA and net debt-to-adjusted EBITDA are non-IFRS ratios calculated as net debt divided by the last twelve months EBITDA (or adjusted EBITDA). We use net debt-to-EBITDA and net debt-
Slide 42: Supplementary Non-Financial Information Definitions
SUPPLEMENTARY NON-FINANCIAL INFORMATION DEFINITIONS Full Flight Simulators (FFS) in CAE's netw ork A FFS is a full-size replica of a specific make, model and series of an aircraft cockpit, including a motion system. In our count of FFSs in the network, we generally only include FFSs that are of the