Slide 1: Investor Presentation Fourth Quarter Fiscal Year 2024
Investor Presentation Fourth Quarter Fiscal Year 2024 Data as of May 28, 2024
Slide 2: 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 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 with a mission and vision focused on safety, efficiency and readiness To be the worldwide partner of choice in civil aviation and defence & security by revolutionizing our customers’ training and critical operations with digitally immersive solutions to elevate s
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 provider (+1 M hrs/year*) ▪ Only global pure-play, platform-independent ▪ Lea
Slide 7: A world leader in training, mission, and operational support
Total Revenue A world leader in Defense and Security 43 % Civil training, mission, and 57 Aviation operational support Products/Services Mix* solutions Services Products 68 32 % $4.3B $918.4M 40+ 240+ 13,000 FY24 Revenue FY24 Adj EBITDA# countries locations employees Geographic Breakdown Canada/ 52
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 Enhanced visualization Advanced data analytics Biometrics through Real-time insights with Augmented, mixed, across multiple and optimization with ALETM* CAE RiseTM* and virtual reality simulation
Slide 9: Secular growth and technology drivers
OVERVIEW Secular tailwinds across all markets Secular growth and technology drivers 1.3 million ~31% New civil aviation personnel needed over Civil Aviation 1.1 million the next decade of 2023 pilots total for 2022-23 and growing High demand for new personnel due to retiring by 2032 training insight
Slide 10: Substantial headroom in high growth markets
OVERVIEW Substantial headroom in high growth markets Civil: potential to increase share in a large and Defense & Security:* positioned for larger bids growing market Civil Total Addressable Market Defense Training & Education ~$6.5B Total Addressable Market ~$22.7B 5% 5% Canada IPAC 17% ~40% EMEA 73
Slide 11: Increasing adjusted backlog underpins growth for a bigger, stronger, more profitable CAE
OVERVIEW Increasing adjusted backlog* underpins growth for a bigger, stronger, more profitable CAE 12,000 10,000 CAE adjusted backlog up 8,000 ~38%** 6,000 Q2 FY22 FY22 FY23 FY24 Adjusted Backlog* ($M) *Non-IFRS and other financial measures (See slides 38-43). **Reflects percentage change in adjuste
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 growth growth Strong financial 1 Maintain a strong balance sheet for resiliency and financial position flexibility Capital retu
Slide 13: Strategic investments in sustainable and accretive growth
CAPITAL ALLOCATION PRIORITIES Strategic investments in sustainable and accretive growth 4.0x ~2.9x Net Debt/ 300% Adjusted EBITDA in FY24** 3.5x 250% 3.0x 200% 2.5x 2.0x 150% 1.5x ~150% FCF 100% 1.0x conversion** 50% 0.5x 0.0x 0% FY17 FY18 FY19 FY20 FY21 FY22 FY 23 FY24 * Net Debt / Adjusted EBITDA#
Slide 14: Organic capital driving recurring revenues and accretive compounding growth
CAPITAL ALLOCATION PRIORITIES Organic capital driving recurring revenues and accretive compounding growth Year of FFS Pre-tax Return (%) on Organic Capital* Deployed $1,077M+ deployment in Civil Training (FY17-FY24) 65% FY17 61% 60% FY18 organic capital* 55% FY19 invested in FY17-FY24 50% FY20 48% 4
Slide 15: Positive sustainability impact is built-in CAE's business strategy
Sustainability Positive sustainability impact is built-in CAE’s business strategy Strong sustainability Civil Aviation Defense & Security impact across businesses Moving aviation safety, diversity and industry Noble mission to support preparedness; fostering sovereignty, decarbonization forward stab
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 growth and impending retirements Source: CAE 2023 Aviation Talent Forecast 18 Information confide
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 343 Full Flight Simulators in our Training Network 130+ Aircraft 70 Locations +1 M hours Simulator Training Delivered Annually* 135,000+
Slide 20: Launched new training centres, deployed additional FFS to our network
CIVIL AVIATION Launched new training centres, deployed additional FFS to our network CAE Vienna NEW CAE Las Vegas NEW CAE Minneapolis Expansion CAE Singapore NEW SIMCOM Lake Nona NEW CAE Sydney NEW CAE Savannah NEW CAE Greece NEW 20 Information confidentielle et/ou propriété de CAE inc.
Slide 21: Margin and adjusted backlog continue to strengthen
CIVIL AVIATION Margin and adjusted backlog* continue to strengthen, with renewed tailwinds for expansion and growth 6,500 25% Civil backlog 50% higher vs. FY21 6,000 22.5% 5,500 20% 5,000 4,500 15% 4,000 3,500 3,000 10% FY20 FY21 FY22 FY23 FY24 Adjusted Backlog ($M) (LHS) Adjusted SOI Margin* (%) (R
Slide 22: Defense & Security
Defense & Security Making the world a safer place through enhanced mission readiness
Slide 23: Training, Simulation and Operations Support leader
DEFENSE & SECURITY Training, Simulation and Operations Support leader 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
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 40+ Countries D&S has locations in key growth markets 85+ Washington, DC Tampa, FL Platforms Arlington, TX Montreal, QC Ottawa, ON 145+ Burgess Hill, UK Stolberg, Germany Sites Abu Dhabi, UAE Sydney, Australia 6,000 Employees Enhancing trai
Slide 26: Prime pursuits: increasing in size and quantity across key battlespace domains
DEFENSE & SECURITY Prime pursuits: increasing in size and quantity across key battlespace 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 Averag
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 market 5,000 4,000 Building order >$1.9B in orders momentum fo
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: Re-baselining Defense and forging a clearer path toward margin improvement
DEFENSE & SECURITY Re-baselining Defense and forging a clearer path toward margin improvement ➢ New leadership: further targeting operational changes at the segment and corporate executive management levels, strengthening our focus and execution capabilities and driving additional synergies between
Slide 30: Financials
Financials* *Comparative figures have been reclassified to reflect results on a continuing basis as a result of the Healthcare segment being presented as discontinued operations
Slide 31: Q4 FY24 financial highlights
FINANCIALS Q4 FY24 financial highlights Performance (amounts in millions, except per share amounts) Q4 FY24 Q4 FY23 Variance % FY2024 FY2023 Variance % Revenue $1,236.3 $1,197.4 (6%) $4,282.8 $4,010.6 7% Operating (loss) income ($533.0) $178.3 (399%) ($185.4) $466.0 (140%) Adjusted segment operating
Slide 32: Q4 FY24 financial highlights
FINANCIALS Q4 FY24 financial highlights Performance (amounts in millions, adjusted ROCE and book-to-sales ratio) Q4 FY24 Q4 FY23 Variance % Liquidity and capital structure Capital employed* $7,216.8 $7,621.4 (5%) Adjusted return on capital employed (ROCE)* 5.9% 5.6% Total debt $3,074.3 $3,250.1 (5%)
Slide 33: Reconciliation of Non-IFRS Measures
RECONCILIATION OF NON-IFRS MEASURES Reconciliation of EBITDA, Adjusted EBITDA, net debt-to-EBITDA and net debt-to-adjusted EBITDA (last 12 months ended March 31) 2024 2023 (Amounts in millions, except net debt-to-EBITDA ratios) Operating (loss) income ($185.4) $466.0 Depreciation and amortization $3
Slide 34: Reconciliation of Non-IFRS Measures
FINANCIALS RECONCILIATION OF NON-IFRS MEASURES Three months ended Years ended Reconciliation of adjusted net income and adjusted earnings per share (EPS) March 31 March 31 2024 2023 2024 2023 (Amounts in millions, except per share amounts) Net (loss) income attributable to equity holders of the Comp
Slide 35: Reconciliation of Non-IFRS Measures
FINANCIALS RECONCILIATION OF NON-IFRS MEASURES Calculation of adjusted effective tax rate Three months ended Years ended March 31 March 31 2024 2023 2024 2023 (Amounts in millions, except effective tax rates) (Loss) earnings before income tax ($585.4) $127.9 ($390.4) $292.4 Restructuring, integratio
Slide 36: Reconciliation of Non-IFRS Measures
FINANCIALS RECONCILIATION OF NON-IFRS MEASURES Reconciliation of adjusted segment operating income Civil Aviation Defense & Security Total Three months ended March 31 2024 2023 2024 2023 2024 2023 Amounts in millions Operating income (loss) $147.0 $149.3 ($680.0) $29.0 ($533.0) $178.3 Restructuring,
Slide 37: Reconciliation of Non-IFRS Measures
FINANCIALS RECONCILIATION OF NON-IFRS MEASURES Reconciliation of adjusted segment operating income Civil Aviation Defense & Security Total Year ended March 31 2024 2023 2024 2023 2024 2023 Amounts in millions Operating income (loss) $442.0 $430.3 ($627.4) $35.7 ($185.4) $466.0 Restructuring, integra
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 or loss Adjusted segment operating income or loss is a non-IFRS financial measure that gives us an indication of the profitability of each segment because it does not include the impact of any items not specifical
Slide 40: Definitions of Non-IFRS and Other Financial Measures
DEFINITIONS OF NON-IFRS AND OTHER FINANCIAL MEASURES Adjusted earnings or loss per share (EPS) Adjusted earnings or loss per share is a non-IFRS ratio calculated by dividing adjusted net income or loss by the weighted average number of diluted shares. We track it because we believe it provides an en
Slide 41: Definitions of Non-IFRS and Other Financial Measures
DEFINITIONS OF NON-IFRS AND OTHER FINANCIAL MEASURES Capital employed Capital employed is a non-IFRS financial measure we use to evaluate and monitor how much we are investing in our business. We measure it from two perspectives: Use of capital: – For the Company as a whole, we take total assets (no
Slide 42: Definitions of Non-IFRS and Other Financial Measures
DEFINITIONS OF NON-IFRS AND OTHER FINANCIAL MEASURES Maintenance and growth capital expenditures Maintenance capital expenditure is a supplementary financial measure we use to calculate the investment needed to sustain the current level of economic activity. Growth capital expenditure is a supplemen
Slide 43: Supplementary Non-Financial Information Definitions
SUPPLEMENTARY NON-FINANCIAL INFORMATION DEFINITIONS Full flight simulators (FFSs) in CAE's network 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