Slide 1: CAE to Accelerate Defence Strategy via Proposed Acquisition of L3Harris Military Training Business
CAE to Accelerate Defence Strategy via Proposed Acquisition of L3Harris Technologies’ Military Training Business Investor Presentation March 1, 2021
Slide 2: Disclaimer
DISCLAIMER This presentation has been prepared by CAE Inc. (“CAE” or the “Company”) solely for information purposes. No investment advice This presentation is not, and is not intended to be, an advertisement, public offering, prospectus or offering memorandum in the United States, Canada, or any oth
Slide 3: Disclaimer
DISCLAIMER Currency All amounts in this presentation are expressed in Canadian dollars unless otherwise indicated. Important notice The distribution of this presentation and the offering, purchase or sale of securities issued by the Company in certain jurisdictions is restricted by law. Persons into
Slide 4: Disclaimer
DISCLAIMER These statements are not guarantees of future performance or events, and we caution you against relying on any of these forward-looking statements. While management considers these assumptions to be reasonable and appropriate based on information currently available, there is risk that th
Slide 5: Highly Strategic Acquisition with Significant Financial Benefits
HIGHLY STRATEGIC ACQUISITION WITH SIGNIFICANT FINANCIAL BENEFITS 1 Accelerates CAE’s Defence & Security growth strategy 2 Enhances alignment with key US National Defense Strategy priorities and next gen platforms 3 Creates end-to-end suite of capabilities in military air training & simulation 4 Broa
Slide 6: L3Harris Technologies' Military Training: A Leading, Full-Service Training Provider
L3 HARRIS TECHNOLOGIES’ MILITARY TRAINING: A LEADING, FULL-SERVICE TRAINING PROVIDER WITH COMPREHENSIVE SOLUTIONS ACROSS MULTIPLE DOMAINS Core Business Areas... HEADQUARTERS Arlington, TX 9 COUNTRIES 23 LOCATIONS Fast Jet Bombers Rotary Ground Submarines EMPLOYEES 1,600+ 80% secret / high clearance
Slide 7: Addressing New Realities in the Defence Environment
ADDRESSING NEW REALITIES IN THE DEFENCE ENVIRONMENT The global threat environment and budget priorities are Commercial flights and accelerating demand for digital immersion solutions training utilization half their usual levels ▪ Focus has shifted from asymmetric to near-peer threats ▪ Budget priori
Slide 8: Strong Alignment with D&S Strategic Imperatives
STRONG ALIGNMENT WITH D&S STRATEGIC IMPERATIVES CAE DEFENSE & SECURITY STRATEGIC IMPERATIVES Align to US National Develop Strategic Leverage High PWIN Expand & Extend Target Larger Defense Strategy Partnerships on to Increase Teaming Addressable Market Opportunities (NDS) Next-Gen Platforms Expansio
Slide 9: Adds Balance to CAE, with Complementary Offering in D&S
ADDS BALANCE TO CAE, WITH COMPLEMENTARY OFFERING IN D&S L3Harris Military Training provides greater balance to CAE overall, and is highly-complementary to CAE D&S Pro Forma Mix (FY20) Complementary Exposure in Critical Domains Standalone CAE Pro Forma1 Domains Military Training AIR Non- Defense Reve
Slide 10: Transaction Summary
TRANSACTION SUMMARY ▪ All-cash purchase price of US$1.05 billion (C$1.35B) Transaction Consideration ▪ ~13.5x 2020E adjusted EBITDA of L3Harris Military Training 1, or ~10.0x including expected run-rate cost synergies (C$35-$45M or approximately US$28-$35M) ▪ L3Harris Military Training estimated rev
Slide 11: Clearly Identified and Reasonably Achievable Synergies
CLEARLY IDENTIFIED AND REASONABLY ACHIEVABLE SYNERGIES Proven M&A team with track record of success – focused on executing detailed integration roadmap SG&A ✓ Cost reductions from optimizing footprint ~C$35M – C$45M Cost Synergies (approximately US$28-$35M) Run-Rate Cost Synergies Expected to COGS ✓
Slide 12: Transaction Consistent with CAE's Three Interrelated Capital Allocation Priorities
TRANSACTION CONSISTENT WITH CAE’S THREE INTERRELATED CAPITAL ALLOCATION PRIORITIES TO DRIVE SUPERIOR AND SUSTAINABLE GROWTH Acquisitions involving existing capacity holders and capability holders to enhance CAE’s global offering and increase market addressability Invest in superior & sustainable Org
Slide 13: We Have Been Opportunistic in M&A
WE HAVE BEEN OPPORTUNISTIC IN M&A Canada Amsterdam-based provider of total civil A leading manufacturer of flight simulators A leading civil aviation crew management training solutions as well as instructor and training devices for civil markets and optimization software company provisioning Highlig
Slide 14: Concluding Thoughts
CONCLUDING THOUGHTS Logical step in CAE’s progression of growth investments ✓ Military Training Highly complementary and strategic acquisition ✓ Significant Expected to accelerate D&S growth strategy ✓ Opportunity to Create Value for Both Complementary capabilities and technology solutions ✓ Our Cus
Slide 15: Appendix
Appendix
Slide 16: Non-GAAP Measure Definitions
NON-GAAP MEASURE DEFINITIONS Backlog Total backlog is a non-GAAP measure that represents expected future revenues and includes obligated backlog, joint venture backlog and unfunded backlog and options: ▪ Obligated backlog represents the value of our order intake not yet executed and is calculated by
Slide 17: Thank you!
Thank you!