Slide 1: Investor Presentation
Investor Presentation March 2022
Slide 2: Disclaimer
Disclaimer This presentation has been prepared by CAE Inc. (“CAE” or the “Company”) solely for information purposes. External Sources and Data (including Financial) Where this presentation quotes any information or statistics from any external source, it should not be interpreted that the Company ha
Slide 3: Disclaimer
Disclaimer Caution Regarding Forward-Looking 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 outlo
Slide 4: Disclaimer
Disclaimer Material assumptions The forward-looking statements set out in this presentation are based on certain assumptions including, without limitation: the anticipated negative impacts of the COVID-19 pandemic on our businesses, operating results, cash flows and/or financial condition, including
Slide 5: CAE is a high technology company, at the leading edge of digital immersion
OVERVIEW CAE is a high technology company, at the leading edge of digital immersion, providing solutions to make the world a safer place Our mission To lead at the frontier of digital immersion with high-tech training and operational support solutions to make the world a safer place. Our vision To b
Slide 6: CAE is a world leader in training and operational support solutions with three core business units
OVERVIEW CAE is a world leader in training and operational support solutions with three core business units Civil Aviation Training Defence and Healthcare Solutions Security We play a key role in We are a world leading We help make healthcare making air travel safer as platform agnostic, training sa
Slide 7: Diversified global business
OVERVIEW Total Revenue Diversified global business Healthcare For the year ended March 31, 2021 Defence and 12 Security 41 % 47 Civil Aviation Training Solutions Products/Service Mix* Products 40 % 60 Services Geographic Mix 44 U.S.A. Corporate head office Civil Aviation Training Solutions % 33 $3.0
Slide 8: We are a global leader in immersive training environments
OVERVIEW We are a global leader in immersive training environments Knowledge Leadership Industrial Champion Advanced Technologies ▪ 2,500+ engineers ▪ Best-in-class global supply ▪ Deep technology expertise ▪ Electronics chain ▪ Virtual and Augmented Reality ▪ Systems ▪ Broad global footprint ▪ Remo
Slide 9: CAE's pillars of strength
OVERVIEW CAE’s 8 pillars of strength Industry leader with a Potential for strong competitive compounding growth moat and superior returns over the long term ‘8 Pillars of Strength’ underlie CAE’s High degree of recurring Solid financial position and compelling investment business highly cash generat
Slide 10: Social impact is at the heart of the Company
Social impact is at the heart of the Company Carbo-neutral for Scope 1 Reduction of GHG Impact on the industry and Scope 2 emissions emissions decarbonization and on employee business travel (Partial Quebec electricity: 99.64% For FY21, 5M+ tonnes CO2e Scope 3) from renewable sources emissions avoid
Slide 11: Extensive ESG disclosure
ESG Extensive ESG disclosure Signatory of the United Nations Global Compact Extensive reporting on recognized ESG frameworks CAE Inc. Proprietary Information and/or Confidential
Slide 12: Civil Aviation Training Solutions
Civil Aviation Training Solutions
Slide 13: The world's largest civil aviation training network
CIVIL AVIATION TRAINING SOLUTIONS The world’s largest civil aviation training network Stockholm Oslo • 170+ • Iceland London Burgess Hill • Copenhagen Rev: 364.5M Aircraft Dublin • Amsterdam Shannon Oxford • Antwerp Brussels • Prague London Gatwick 300+* Frankfurt • Milan Full Flight Simulators (FFS
Slide 14: Market drivers
CIVIL AVIATION TRAINING SOLUTIONS Market drivers Demand Drivers Profitability Drivers • Pilot and maintenance • Favourable business mix training and industry drivers, including large CAE’s Civil regulations; market headroom in training services Aviation Training • Safety and efficiency Solutions seg
Slide 15: Headroom in a large market
CIVIL AVIATION TRAINING SOLUTIONS Headroom in a large market Civil Addressable Market ~$6.2B* ~30%* CAE CAE has potential to increase share in a large and growing market Source: CAE internal analysis * Market share metrics based on FY20 (pre Covid-19 revenue) 15 CAE Inc. Proprietary Information and/
Slide 16: We have been opportunistic with M&A
CIVIL AVIATION TRAINING SOLUTIONS We have been opportunistic with M&A FY21 Acquisitions FY22 Acquisitions A leading on-location training provider of Amsterdam-based provider A leading civil aviation crew maintenance, avionics, of total civil training management and professional development, solution
Slide 17: Civil Flight Services – Sabre acquisitions overview
CIVIL AVIATION TRAINING SOLUTIONS Civil Flight Services – Sabre acquisitions overview MOVEMENT CREW FLIGHT AIRPORT IN-FLIGHT ▪ Acquisition closed in March 2022 ▪ Detailed discussions on-going regarding technology and product leadership ▪ Will invest in the technology to drive customer satisfaction a
Slide 18: Defence & Security
Defence & Security
Slide 19: The legacy of the three founding fathers now all under one roof
DEFENCE & SECURITY The legacy of the three founding fathers now all under one roof 1929 Edwin Link founds "The Luftwaffe met its Waterloo on all the training fields of the free world where there was a battery of Link Link Aviation Trainers“ - Air Marshall Robert Leckie, Wartime RAF Chief of Staff, W
Slide 20: Defence & Security Overview
DEFENCE & SECURITY Defence & Security Overview 50+ Countries 120+ Sites 75+ Platforms D&S regional offices in key markets 5,500+ ▪ Washington, DC (HQ) ▪ Montreal, QC ▪ Stolberg, Germany Employees ▪ Tampa, FL ▪ Ottawa, ON ▪ Abu Dhabi, UAE ▪ Arlington, TX ▪ Burgess Hill, UK ▪ Homebush, Australia CAE D
Slide 21: Addressing new realities in the Defence environment
DEFENCE & SECURITY Addressing new realities in the Defence environment Primary defence documents point to common needs: ▪ Training in synthetic environments to reduce costs and support complex, multi-domain exercises ▪ Using Artificial Intelligence / Machine Learning to process multi-layered / dispa
Slide 22: Defence addressable market
DEFENCE & SECURITY Defence addressable market Training Systems Integration (TSI) ~$14B* Military Training & Simulation Market Live Training Virtual Training Land 7% Naval Constructive Training Air 7% 75% 11% Space & Cyber CAE is a world leading Training Systems Integrator with significant headroom i
Slide 23: Market drivers
DEFENCE & SECURITY Market drivers Demand Drivers Profitability Drivers • Defence budgets; • Leading platform-agnostic • Installed base of enduring training and simulation CAE’s Defence and defence platforms and new integrator leveraging solutions customers; across a global footprint; Security segmen
Slide 24: Healthcare
Healthcare
Slide 25: CAE Operations are Strategically Located in Key Growth Markets
HEALTHCARE CAE Operations are Strategically Located in Key Growth Markets and Well-Positioned to Capitalize on Post COVID-19 Industry Trends Key Services & Products offered 3500+ 40+ ▪ Reimagining the art and science of simulation Simulated clinical experience courseware Countries packages ▪ Enhance
Slide 26: Market drivers
HEALTHCARE Market drivers Demand Drivers • Limited access to live patients during training; CAE’s healthcare • Medical and mixed reality technology revolution; segment is positioned as a leader in developing • Rising use of simulation, with a demand for innovative and healthcare professionals custom
Slide 27: Capital Allocation Strategy
Capital Allocation Strategy
Slide 28: Attractive compound growth
CAPITAL ALLOCATION PRIORITIES Attractive compound growth Incremental Pre-tax Return % on Organic Capital Deployed in Civil Training** (FY17-FY21) $578M+ organic capital investment from FY17-FY21 to deploy 67+ FFSs* within CAE’s Civil commercial and business aviation training network Organic growth c
Slide 29: Strong free cash flow generation
CAPITAL ALLOCATION STRATEGY Strong free cash flow generation $600 300% $500 250% $400 200% $300 150% $200 100% $100 50% $0 0% FY18 FY19 FY20 FY21 Free Cash Flow* Net cash provided by operating activities FCF Conversion Rate* The aim is to target average 100% conversion of net income to free cash flo
Slide 30: Maintain solid balance sheet while investing in accretive growth
CAPITAL ALLOCATION STRATEGY Maintain solid balance sheet while investing in accretive growth $2.0B growth capital deployed, including L3HMT acquisition acquisition of Bombardier BAT closure in July 2021 Net Debt to Millions Capital % $3,500 60.0% $3,000 50.0% $2,500 40.0% $2,000 30.0% $1,500 20.0% $
Slide 31: Summary
OVERVIEW Summary ✓ Compelling secular growth story with exposure to the anticipated Aero recovery Comprehensive solutions provider to partners in critical industries ✓ Poised to capitalize on significant benefits from recent M&A ✓ Proven track record of balanced, opportunistic capital deployment ✓ D
Slide 32: Appendix
Appendix
Slide 33: FY22 select financial highlights
SELECT FINANCIAL HIGHLIGHTS FY22 select financial highlights Summary of Financial Highlights Q1 FY22 Q2 FY22 Q3 FY22 FY22 YTD (amounts in millions, except per share amounts, ROCE and book-to-sales) Revenue $752.7 $814.9 $848.7 $2,416.3 Operating income 86.2 39.2 65.5 190.9 Adjusted segment operating
Slide 34: Reconciliation of non-GAAP measures
SELECT FINANCIAL HIGHLIGHTS Reconciliation of non-GAAP measures Reconciliation of adjusted segment operating income Q1 FY22 Q2 FY22 Q3 FY22 FY22 YTD (amounts in millions) Operating income $86.2 $39.2 $65.5 $190.9 Restructuring, integration and acquisition costs 12.2 51.5 47.2 110.9 Adjusted SOI $98.
Slide 35: Non-GAAP measure definitions
Non-GAAP measure definitions Adjusted earnings or loss per share (EPS) Adjusted earnings or loss per share is a non-GAAP measure calculated by excluding restructuring, integration and acquisition costs, and impairments and other gains and losses arising from significant strategic transactions or mat
Slide 36: Non-GAAP measure definitions
Non-GAAP measure definitions Free cash flow Free cash flow is a non-GAAP measure that shows us how much cash we have available to invest in growth opportunities, repay debt and meet ongoing financial obligations. We use it as an indicator of our financial strength and liquidity. We calculate it by t
Slide 37: Thank you!
Thank you!