Cae Inc. · TSX:CAE
Cae — Shareholder Meeting (2015)
70 slides from Cae's shareholder meeting presentation, 2015
Slide 1: Annual and Special Meeting of Shareholders 2015
2015 ANNUAL AND SPECIAL MEETING OF SHAREHOLDERS 1
Slide 2: Mr. Marc Parent, President and Chief Executive Officer
MR. MARC PARENT President and Chief Executive Officer 15
Slide 3: FY2015 Achieved Strategic and Financial Objectives
FY2015 ACHIEVED STRATEGIC AND FINANCIAL OBJECTIVES RECORD RECORD REVENUES BACKLOG OF AND HIGHER OPERATING MARGINS $5.4B ENHANCED 3 41 CORPORATE CIVIL SOCIAL NEW JOINT SIMULATORS RESPONSIBILITY VENTURES SOLD FOCUS 16
Slide 4: CAE Matters
MATTERS —4 CAE
Slide 5: CAE Setting the Standard
CAE fey «SETTING THE P/ STANDARD Chey
Slide 6: Civil Aviation: Leader in Training
THE DEFINITION OF TRAINING CIVIL AVIATION: LEADER IN TRAINING 19
Slide 7: Defence: Leading Global Training Systems Integrator
THE DEFINITION OF TRAINING DEFENCE: LEADING GLOBAL TRAINING SYSTEMS INTEGRATOR LAND >30 SEA nations AIR 20
Slide 8: Passionate People and Quality Solutions
THE DEFINITION OF TRAINING PASSIONATE PEOPLE AND QUALITY SOLUTIONS 21
Slide 9: CAE Innovation Leader
CAE INNOVATION LEADER
Slide 10: US Air Force Reserve Command
INNOVATION LEADER US AIR FORCE RESERVE COMMAND Integrated aeromedical evacuation system : Air mobility simulation and training combined with patient simulators 23
Slide 11: Commercial Aviation: Joint Ventures
INNOVATION LEADER COMMERCIAL AVIATION: 3 JOINT VENTURES 24
Slide 12: Multi-Crew Pilot Licence (MPL) Certification
INNOVATION LEADER MULTI-CREW PILOT LICENCE (MPL) CERTIFICATION 25
Slide 13: Thought Leadership
INNOVATION LEADER THOUGHT LEADERSHIP First to adopt and implement industry standards to prevent Loss of Control in-Flight 26
Slide 14: Training >120,000 civil and military crewmembers annually
Training >120,000 civil and military crewmembers annually 27
Slide 15: Air Mobility Training Centre in Trenton
WORLD-CLASS EXPERTISE AIR MOBILITY TRAINING CENTRE IN TRENTON ► Most advanced training systems integration ► Showcases the full breadth of our capabilities ► Setting the standard for defence forces 28
Slide 16: US Predator and Reaper Training
WORLD-CLASS EXPERTISE US PREDATOR AND REAPER TRAINING Classroom, simulator and live flying instruction to all U.S. pilots and sensor operators 29
Slide 17: NATO Flying Training in Canada
WORLD-CLASS EXPERTISE NATO FLYING TRAINING IN CANADA Live flying training for fighter pilots 30
Slide 18: Disaster Relief in Nepal
WORLD-CLASS EXPERTISE DISASTER RELIEF IN NEPAL Quickly developed virtual databases of airfields to help rehearse pre-deployment missions 31
Slide 19: >$1.2 billion in research and development
>$1.2 billion in research and development over past 10 years 32
Slide 20: Innovation Challenges
WORLD-LEADING TECHNOLOGY INNOVATION CHALLENGES ► Hundreds of ideas from employees every year ► Winning ideas are incorporated into solutions 33
Slide 21: CAE 7000XR Series
WORLD-LEADING TECHNOLOGY CAE 7000XR SERIES First 7000XR 34
Slide 22: Airbus A350 XWB Simulator
WORLD-LEADING TECHNOLOGY AIRBUS A350 XWB st 1 SIMULATOR 35
Slide 23: CAE Medallion-6000 Image Generator
WORLD-LEADING TECHNOLOGY CAE MEDALLION-6000 IMAGE GENERATOR 36
Slide 24: Healthcare
WORLD-LEADING TECHNOLOGY HEALTHCARE ► Transform training of medical practitioners ► Simulator to practice placement of Impella heart pump 37
Slide 25: Launch of CAE Vïvo
WORLD-LEADING TECHNOLOGY LAUNCH OF CAE VÏVO Gives users full control over patient simulator METIman 38
Slide 26: CAE Training Partner of Choice
CAE TRAINING PARTNER OF CHOICE a >
Slide 27: Global Customer Base
TRAINING PARTNER OF CHOICE GLOBAL CUSTOMER BASE 40
Slide 28: Training Systems Integrator
TRAINING PARTNER OF CHOICE TRAINING SYSTEMS INTEGRATOR Provide comprehensive training for all U.S. Army fixed-wing aviators annually 41
Slide 29: Extended Long-Term Agreements
TRAINING PARTNER OF CHOICE EXTENDED LONG-TERM AGREEMENTS 42
Slide 30: Customers
TRAINING PARTNER OF CHOICE CUSTOMERS 43
Slide 31: Solutions to Customers Worldwide
TRAINING PARTNER OF CHOICE SOLUTIONS TO CUSTOMERS WORLDWIDE Turnkey training centre to Turkmenistan 44
Slide 32: Shaping a More Sustainable Future
TRAINING PARTNER OF CHOICE SHAPING A MORE SUSTAINABLE FUTURE 160 sites in 35 countries Serving customers in 190 countries 45
Slide 33: CAE Corporate Social Responsibility Matters
CAE ENBRIDGE ; tt CORPORATE SOCIAL RESPONSIBILITY MATTERS
Slide 34: CSR Integral Part of Our Business Strategy
CSR MATTERS CSR INTEGRAL PART OF OUR BUSINESS STRATEGY 47
Slide 35: Conclusion
CONCLUSION OUR VISION IS TO BE THE RECOGNIZED GLOBAL TRAINING PARTNER OF CHOICE —@ TO ENHANCE SAFETY, : EFFICIENCY AND READINESS. CAE
Slide 36: Mr. Stéphane Lefebvre, Vice President, Finance, and CFO
MR. STÉPHANE LEFEBVRE Vice President, Finance, and Chief Financial Officer 49
Slide 37: FY15 Highlights
CAE FY15 HIGHLIGHTS
Slide 38: FY15: CAE
FY15 HIGHLIGHTS FY15: CAE ► Consolidated revenue of $2.2B +8% from FY14 ► Net income attributable to equity holders of the Company from continuing operations of $201M $0.76 per share ► Record total backlog of $5.4B 51
Slide 39: FY15: Civil
FY15 HIGHLIGHTS FY15: CIVIL ► Revenue of $1.3B +10% from FY14 ► Operating income of $210M +17% from FY14 ► Operating margin of 16.3% 15.3% in FY14 ► Orders valued at $1.5B 52
Slide 40: FY15: Defence
FY15 HIGHLIGHTS FY15: DEFENCE ► Revenue of $857M +4% from FY14 ► Operating income of $115M +7% from FY14 ► Operating margin of 13.5% 13.1% in FY14 ► Orders valued at $755M 53
Slide 41: FY15: Healthcare
FY15 HIGHLIGHTS FY15: HEALTHCARE ► Revenue of $94.3M +19% from FY14 ► Operating income of $6.7M 4x FY14 54
Slide 42: FY15 Cash Flow and Capital Expenditures
FY15 HIGHLIGHTS FY15 ► Capital expenditures of $144M two-thirds for growth ► Free cash flow of $174M ► Net cash provided by continuing operating activities and investing activities of $90M +9% from FY14 55
Slide 43: FY15 Overall
FY15 HIGHLIGHTS FY15 OVERALL ► Strengthened balance sheet ► Net debt to total capital ratio at 36.3% ► Achieved operational and strategic milestones ► Well positioned for the year ahead and the long-term 56
Slide 44: Q1FY16 Highlights
_wg CAE Q1FY16 HIGHLIGHTS
Slide 45: Q1FY16 Highlights
Q1FY16 HIGHLIGHTS Q1FY16 HIGHLIGHTS ► Civil ► Higher margin on higher utilization of training network over Q1FY15 ► Double-digit increase in operating income over Q1FY15 Defence ► Higher operating income ► Robust order activity 58
Slide 46: Q1FY16: CAE
Q1FY16 HIGHLIGHTS Q1FY16: CAE ► Revenue of $557M +6% from Q1FY15 ► Net income attributable to equity holders of the Company from continuing operations of $44.9M $0.17 per share ► Net income before restructuring costs of $50.6M $0.19 per share +16% from Q1FY15 59
Slide 47: Q1FY16: Civil
Q1FY16 HIGHLIGHTS Q1FY16: CIVIL ► Revenue of $336.2M +9% from Q1FY15 ► Operating margin of $57M (17% ) +15% from Q1FY15 ► Orders of $288.3M ► Book-to-sales 0.86x Trailing twelve months at 1.09x 60
Slide 48: Q1FY16: Defence
Q1FY16 HIGHLIGHTS Q1FY16: DEFENCE ► Revenue of $196.9M Stable from Q1FY15 ► Operating margin of $23.6M (12% ) +8% from Q1FY15 ► Orders of $207M ► Book-to-sales 1.05x Trailing twelve months at 0.95x ► $211M in unfunded orders 61
Slide 49: Q1FY16: Healthcare
Q1FY16 HIGHLIGHTS Q1FY16: HEALTHCARE ► Revenue of $23.9M ► Operating margin of $0.6M Double-digit increase over Q1FY15 62
Slide 50: Q1FY16: Mining
Q1FY16 HIGHLIGHTS Q1FY16: MINING Q2FY16: sale of CAE’s mining business to Constellation Software ► For $32 million ► With potential $10 million earn out 63
Slide 51: Financial Highlights
Q1FY16 HIGHLIGHTS FINANCIAL HIGHLIGHTS Q1FY16 Q1FY15 Income taxes $9.8M $11.6M Effective tax rate 18% 21% Free cash flow ($61.2M) ($20.9M) Net cash used in continuing ($67.4M) ($51.7M) operating and investing activities Net debt $1,006.8M $901.6M Net debt to total capital ratio 36.6% 37.9% Capital e
Slide 52: Strengthen CAE's Competitive Position
Q1FY16 HIGHLIGHTS STRENGTHEN CAE’S COMPETITIVE POSITION ► Implement process improvement plan to transform Production processes Product offering ► Anticipate $19 million after-tax expenditure ► Transformation substantially completed by first half FY17 ► Expected annualized cost savings of $15 to
Slide 53: Summary
Q1FY16 HIGHLIGHTS SUMMARY ► Strong balance sheet ► Healthy position ► Solid backlog valued at $5.4B ► Well positioned to continue to deliver growth 66
Slide 54: Looking Forward
CAE LOOKING FORWARD
Slide 55: TREMNGRAMA
TREMNGRAMA
Slide 56: Global Passenger Traffic Increase
LOOKING FORWARD GLOBAL PASSENGER TRAFFIC INCREASE Global Increase + 6% Asia +9% Middle East +11% 69
Slide 57: Commercial Aircraft Record Deliveries
LOOKING FORWARD COMMERCIAL AIRCRAFT RECORD DELIVERIES 70
Slide 58: Civil Market Outlook
LOOKING FORWARD CIVIL MARKET OUTLOOK 27,000 pilots a year for 20 years 71
Slide 59: Civil Market Outlook
LOOKING FORWARD CIVIL MARKET OUTLOOK 27,000 pilots a year for 20 years 72
Slide 60: History of Innovation
LOOKING FORWARD HISTORY OF INNOVATION 73
Slide 61: World Leader in Market
LOOKING FORWARD WORLD LEADER IN MARKET Improvement plan to become more efficient in engineering, manufacturing and delivering simulators 74
Slide 62: 75
75
Slide 63: Leader in All Markets
LOOKING FORWARD LEADER IN ALL MARKETS 76
Slide 64: Civil Market Share
LOOKING FORWARD CIVIL MARKET SHARE CAE market share $3B+ Market space market Considerable ~6x Larger headroom ~25% FY15 ~70% FY15 Simulation Products Market Total Training Market 77
Slide 65: Defence
LOOKING FORWARD DEFENCE ► More nations turning to simulation 50% Bigger ► >$2.5 billion proposals market ► Focus on training and training systems integration Training Systems Simulation Products and Integration Services Air Training Market Market 78
Slide 66: Healthcare Long-Term Vision
LOOKING FORWARD HEALTHCARE LONG-TERM VISION 79
Slide 67: Conclusion
LOOKING FORWARD CONCLUSION ► Proud of the impact of our solutions on society ► Well positioned for higher investment returns ► Leading position in growth markets ► Strength of dedicated and experienced professionals 80
Slide 68: The Confidence in CAE
LOOKING FORWARD THE CONFIDENCE IN CAE CAE Quarterly dividend $0.075 Fifth year in a row of increased $0.04 dividend 2011 2015 81
Slide 69: Thanks
THANKS ► CUSTOMERS ► EMPLOYEES ► BOARD MEMBERS ► SHAREHOLDERS 82
Slide 70: Annual and Special Meeting of Shareholders 2015
2015 ANNUAL AND SPECIAL MEETING OF SHAREHOLDERS 1