Cae Inc. · TSX:CAE
Cae — Q1 FY2014 Earnings Presentation
36 slides from Cae's earnings presentation, Aug 8, 2013
Slide 1: Investor Presentation Q1 FY2014
Investor Presentation Q1 FY2014
Slide 2: Forward Looking Statements
Forward Looking Statements Certain statements made in this presentation, including, but not limited to, statements that are not historical facts, are forward-looking and are subject to important risks, uncertainties and assumptions. The results or events predicted in these forward-looking statements
Slide 3: Our Vision
Our Vision To be the partner of choice for customers operating in complex, mission-critical environments by providing the most innovative modeling and simulation-based solutions to enhance safety, improve efficiency and help solve challenging problems. CAE Inc. Confidential and/or Proprietary Inform
Slide 4: About CAE
About CAE Approximately 8,000 employees with ½ international – Emerging markets leader Critical mass in aviation training – 100,000+ crewmembers trained by CAE annually – End-to-end solutions provider – Largest installed base of civil and military aviation simulators supplied to industry Expan
Slide 5: Strong Position Across Segments
Strong Position Across Segments CAE Inc. Confidential and/or Proprietary Information 5
Slide 6: Integrated Go-to-Market Approach
Integrated Go-to-Market Approach CAE offers a broad portfolio of integrated products and services to customers across segments CAE Inc. Confidential and/or Proprietary Information 6
Slide 7: Diversified and Balanced
Diversified and Balanced CAE is well balanced between geographic markets and business segments CAE Inc. Confidential and/or Proprietary Information 7
Slide 8: Q1 FY2014 Segmented Financial Results
Q1 FY2014 Segmented Financial Results Simulation Products Training & Services TOTAL (amounts in millions) Actual Prior year Actual Prior year Actual Prior year Revenue 123.5 90.5 178.3 147.9 301.8 238.4 CIVIL SOI 20.1 17.4 17.5 29.5 37.6 46.9 % 16.3% 19.2% 9.8% 19.9% 12.5% 19.7% MILITARY Revenue 137
Slide 9: Civil
Civil 9
Slide 10: Civil Strategic Focus
Civil Strategic Focus Maintaining Core Leadership Expanding Core Commercial and Business Ab-Initio Pilot Training: Aviation Training CAE Oxford Aviation Academy Simulation Products: Pilot and Maintenance crew Full-Flight Simulators, Training sourcing: CAE Parc Aviation Devices, Updates Hel
Slide 11: Civil Market Drivers
Civil Market Drivers Active Fleet Load Factors Pilot Movement CAE’s strategy is to increase Emerging dependence on Markets the global active aircraft fleet to New Pilot bolster recurring Demand revenue while maintaining leadership with Pilot complete end-to- Certification end solutions Regulations N
Slide 12: Civil Complete End-to-End Training Solutions
Civil Complete End-to-End Training Solutions Most comprehensive portfolio of products and services and Type Training unique end-to-end training solutions Cabin Crew & Differentiated Maintenance Training Ab Initio technologies Simulation Span three aviation markets: Products – Commercial – Busi
Slide 13: Civil Broadest Reach in Global Training
Civil Broadest Reach in Global Training Oslo Stockholm Stavanger Aberdeen Manchester Copenhagen Vancouver Montreal Oxford Amsterdam Gatwick Brussels Toronto Burgess Hill San Francisco Prague Morristown Paris Beijing Phoenix Charlotte Sesto Calende Seoul Dallas Barcelona Rome Shanghai Miami Madrid Pa
Slide 14: Defence
CAE Defence 14
Slide 15: Defence Strategic Focus
Defence Strategic Focus Maintaining Core Leadership Expanding Core Virtual Air Simulation Products Land Simulation Products & Services Technology Leadership Naval Simulation Products & Services Technology Upgrades and Updates Critical Infrastructure Support Maintenance and Support Services Int
Slide 16: Defence Market Drivers
Defence Market Drivers Installed Based Platform Deliveries, Upgrades, Life Extensions Our strategy involves positioning on enduring platforms and in key Emphasis on Maintaining Readiness regions to grow our revenue from simulation products and long-term recurring services programs Cost Savings CAE I
Slide 17: Defence Positioned on Enduring Aircraft Platforms
Defence Positioned on Enduring Aircraft Platforms United States MH-60 OFT P-8A OFT C-130J FMS C-5 WST KC-135 AST United Kingdom AW-101 OFT C-130J DMS CH-47 DMS Hawk 128 FMS SA 330 DMS Germany EC-135 FFS Tornado FMS CH-53 FMS NH-90 FMS UH-1D FFS Canada C-130J FMS CH-47 WST CP-140 OMS CH-146 FMS Italy
Slide 18: Defence Growth in RPA Training & Simulation
Defence Growth in RPA Training & Simulation Remotely piloted aircraft (RPA) flight training and simulation is an approximate $475M market annually and growing at 4%+* *Source: VisionGain 2012 CAE is well positioned: 5-year contract with U.S. Air Force to train all its pilot and sensor operator
Slide 19: Defence Positioned Globally
Defence Positioned Globally Malaysia Algeria South Korea Taiwan Turkey Poland Saudi Arabia Belgium Brazil Japan Spain Denmark Egypt Indonesia Nigeria France Morocco Norway Israel Oman Sweden Thailand Netherlands UAE Austria South Africa Greece Peru Finland New Zealand Argentina Bolivia Chile Kuwait
Slide 20: Defence Global Operations
Defence Global Operations Benson Burgess Hill Stolberg Halifax Ottawa Sesto Calende Montréal Orlando Dubai Tampa Bangalore Singapore Sydney Largest Canadian defence company Operations strategically located in 8 geographic markets Supporting customer operations at over 80 sites CAE Inc. Confidential
Slide 21: Increasing use of simulation-based training
Defence Increasing use of simulation-based training Driven by economics “An hour of flight time in the KC-135 is roughly $6,500 whereas operating the Boom Operator Weapons System Trainer cost less than $300 per hour.” - U.S. Air Force Col. Brian Smith, 6th Operations Group Commander Driven by th
Slide 22: New Core Markets
CAE New Core Markets
Slide 23: New Core Markets
New Core Markets Leveraging our core capabilities to solve common challenges in all our markets Skilled Labour Common Challenges Shortage Need to Demand and Drivers Across Rehearse from Critical Emerging CAE’s Markets Missions Markets Civil Aviation Modeling Simulation Customer Training Defence De
Slide 24: CAE Healthcare Solutions Offering
CAE Healthcare Solutions Offering CAE Inc. Confidential and/or Proprietary Information 24
Slide 25: CAE Mining Solutions Offering
CAE Mining Solutions Offering Integrated Training Simulation Software Consulting Operation Centre Training delivery Integrate CAE Mine planning and Improve business Leverage centralized across a number of simulation and operations outcomes command and control disciplines training expertise in optimi
Slide 26: CAE Investment Thesis: Upside Potential
CAE Investment Thesis Upside Potential Leveraged to civil aviation installed base and expansion Strong long term industry dynamics and trends – Global pilot shortage – Training outsourcing – Record aircraft backlog with high delivery rates to airlines – Increasing demand for business jets intern
Slide 27: CAE Investment Thesis: Downside Protection
CAE Investment Thesis Downside Protection Well diversified revenue mix Good platform exposure and country diversity in Defence Solid financial position Healthy backlog with long term contracts Market leadership supported by strong relationships with key OEMs and airlines Strong and exper
Slide 28: Capital Allocation Priorities
Capital Allocation Priorities Capital Allocation Priorities 1. Invest in growth – Where demand has been secured and we have a clear view to target returns 2. Balance current and long term shareholder returns – Increased quarterly dividend twice in 2 years 3. De-leverage balance sheet – Optimize capi
Slide 29: Appendix
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Slide 30: Main Competitors
Main Competitors CIVIL MILITARY SIMULATION PRODUCTS TRAINING & SERVICES CAE Inc. Confidential and/or Proprietary Information 30
Slide 31: First Mover in Emerging Markets
First Mover in Emerging Markets India Middle East Latin America Southeast Asia China Annual growth in passenger air 8.4% 6.4% 6.6% 6.5% 7.0% travel¹ FFS installed base #1 #1 #1 #1 #1 market position Share of FFS 70% 62% 47% 50% 67% installed base2 Sales of defense simulators 11 21 2 25 - First sale
Slide 32: Q1 FY2014 Consolidated Financial Results
Q1 FY2014 Consolidated Financial Results Three months ended Summary of Consolidated Results June 30 (amounts in millions) 2013 2012 Revenue $530.4 $462.2 Total segment operating income 62.8 75.3 Operating profit 62.8 43.3 As % of revenue 11.8% 9.4% Net income 45.4 21.9 Net income attributable to equ
Slide 33: Q1 FY2014 Segmented Financial Results
Q1 FY2014 Segmented Financial Results Simulation Products Training & Services TOTAL (amounts in millions) Actual Prior year Actual Prior year Actual Prior year Revenue 123.5 90.5 178.3 147.9 301.8 238.4 CIVIL SOI 20.1 17.4 17.5 29.5 37.6 46.9 % 16.3% 19.2% 9.8% 19.9% 12.5% 19.7% MILITARY Revenue 137
Slide 34: Cash Movements
Cash Movements Three months ended Consolidated Cash Movements June 30 (amounts in millions) 2013 2012 Cash provided by operating activities $ 85.6 $ 37.8 (before changes in non-cash W/C) Changes in non-cash working capital (69.0) (120.1) Maintenance capex and others assets (20.1) (15.1) Proceeds fro
Slide 35: Foreign Exchange Sensitivity
Foreign Exchange Sensitivity The approximate annual impact of a one cent change in the Canadian dollar against each of our other three main operating currencies Exposure Net Revenue Op. Income Hedging (amounts in millions) Exposure U.S. dollar (US$ or USD) 10.4 2.8 (2.2) 0.6 Euro € 3.9 0.2 (0.1) 0.2
Slide 36: CAE
CAE