Investor Presentation Q4 FY2013. CAE Inc. Confidential and/or Proprietary Information Forward...

Investor PresentationQ4 FY2013

CAE Inc. Confidential and/or Proprietary Information

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 may differ materially from actual results or events. These statements do not reflect the potential impact of any non-recurring or other special items or events that are announced or completed after the date of this presentation, including mergers, acquisitions, or other business combinations and divestitures.

More information about the risks and uncertainties associated with our business can be located in the MD&A section of our annual report and our fourth quarter fiscal 2013 report, and as well in our annual information form for the year ended March 31, 2012. These documents have been filed with the Canadian securities commissions and are available on our website (www.cae.com) and on SEDAR (www.sedar.com). They have also been filed with the US Securities and Exchange Commission under Form 40-F and are available on EDGAR (www.sec.gov). Forward-looking statements in this presentation represent our expectations as of May 16, 2013 and, accordingly, are subject to change after this date.

We do not update or revise forward-looking information even if new information becomes available, unless required by law, regulation or statutory authority. You should not place undue reliance on forward-looking statements.

2


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 problems3


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

Expanding core into new markets

4

Exciting company with strong growth potentialExciting company with strong growth potential


Strong Position Across Segments

5


Integrated Go-to-Market Approach

6

CAE offers a broad portfolio of integrated products and services to customers across segments

CAE offers a broad portfolio of integrated products and services to customers across segments


Diversified and Balanced

7

A growing proportion of CAE’s revenue comes from customers in high growth emerging markets

A growing proportion of CAE’s revenue comes from customers in high growth emerging markets


Actual Prior year

Revenue

SOI

%

Revenue

SOI

%

Revenue

SOI

%

Consolidated operating profit

8

1,158.0 840.9755.6 498.4402.4 342.5

195.1 173.8121.5 122.273.6 51.6

16.8% 20.7%16.1% 24.5%18.3% 15.1%

834.4 897.3272.8 278.1561.6 619.2

113.1 142.135.2 40.977.9 101.2

13.6% 15.8%12.9% 14.7%13.9% 16.3%

1,992.4 1,738.21,028.4 776.5964.0 961.7

308.2 315.9156.7 163.1151.5 152.8

15.5% 18.2%15.2% 21.0%15.7% 15.9%

245.7 302.1

New Core Market Revenue 1.0 (34.1)

Actual Prior year

Actual Prior year

CIV

ILM

ILIT

AR

YTO

TAL

Simulation Products Training & Services TOTAL(amounts in

millions)

112.1 83.0

New Core Market SOI 6.4 (13.8)

Other –(68.9)

YTD Q4 FY2013Segmented Financial Results

Civil

9


CivilStrategic Focus

Maintaining Core Leadership Commercial and Business

Aviation Training

Simulation Products: Full-Flight Simulators, Training Devices, Updates

Expanding Core Ab-Initio Pilot Training:

CAE Oxford Aviation Academy

Pilot and Maintenance crew sourcing: CAE Parc Aviation

Helicopter Training: Offshore operators

Aviation Services: Training Centre Operations, Maintenance Services, Flight Data Analysis

10


Demand for Aviation Training & Services

(TS/C segment)

Demand for Aviation Simulation Products

(SP/C segment)

CivilMarket Drivers

11

CAE’s strategy is to increase dependence on the global active aircraft fleet to bolster recurring revenue while maintaining leadership with complete end-to-end solutions


CivilComprehensive Portfolio of Training Services

12

CAE offers the most comprehensive portfolio of services to recruit, train and place aviation professionals with

end-to-end solutions

CAE offers the most comprehensive portfolio of services to recruit, train and place aviation professionals with

end-to-end solutions

Recruit Ab-Initio Type rating Placement


CAE training location


Upcoming

CAE training location


Upcoming

São Paulo

Montreal

Toronto

Charlotte

Miami

Santiago

Vancouver

Phoenix

Brussels

RomeMadrid

Zhuhai

Bengaluru

SingaporeKuala Lumpur

San Francisco PragueParis

Seoul

Palma de Mallorca

Sydney

Beijing

Amsterdam

Lima

New Delhi

Clark (Manila)

Tokyo

Burgess Hill

Manchester

Gatwick

StockholmOslo

Copenhagen

Hong Kong

Barcelona Dallas

Toluca

Morristown

Sesto Calende

Melbourne

Aberdeen

Stavanger

Oxford

Douala

Gondia Rae Bareli

Perth

Shanghai

Johannesburg

Dubai

Civil Broadest Reach in Global Training

13

>45 locations with >215 full-flight simulatorsserving >3,500 customers

>45 locations with >215 full-flight simulatorsserving >3,500 customers

Defence

14


DefenceStrategic Focus

Virtual Air Simulation Products

Technology Leadership

Technology Upgrades and Updates

In-Service Support

Aviation Training Services

Aviation Training Centers

Land Simulation Products & Services

Naval Simulation Products & Services

Critical Infrastructure Support

Integrated Enterprise Solutions

Professional Services

Constructive Simulation

Mission Systems

15

Maintaining Core Leadership Expanding Core


DefenceMarket Drivers

Training and maintenance services sourcing from industry

Mission rehearsal

Lower cost

Modeling and Simulation use across defense lifecycle

16

Our strategy involves positioning on enduring platforms and in key regions to grow our revenue from simulation products and long-term recurring services programs

Our strategy involves positioning on enduring platforms and in key regions to grow our revenue from simulation products and long-term recurring services programs


DefenceWell Positioned on Enduring Aircraft Platforms

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United States

United Kingdom

Germany

Canada

Italy

India

MH-60 OFT P-8A OFT C-130J FMS

C-5 WST KC-135 AST

AW-101 OFT C-130J DMS

CH-47 DMS Hawk 128 FMS

SA 330 DMS

EC-135 FFS

Tornado FMS

CH-53 FMS NH-90 FMS UH-1D FFS

C-130J FMS CH-47 WST CP-140 OMS

CH-146 FMS

Typhoon FMS

AW 139 FMS

M-346 FMS A-109 FMS

DHRUV FMS C-130J FMS Bell 412 FMS SA 365 FMS

Australia C-130J FFS

P-3C OMS MRTT FMS S-70 FMFS

Singapore CH-47 FMS

S-70 FMS AS 332 CDS


Malaysia

Algeria South Korea

Taiwan Turkey

Saudi Arabia

Belgium Brazil Japan Spain

Egypt Indonesia Nigeria France Morocco

Israel Oman Sweden Thailand Netherlands

Poland

Denmark

Norway

UAE

Austria South Africa Greece Peru Finland New Zealand

Argentina Bolivia Chile Kuwait Botswana Uruguay

DefenceGlobal Customer Base

18

CAE serves the defence forces of more than 50 countriesCAE serves the defence forces of more than 50 countries

CAE Inc. Confidential and/or Proprietary Information 19

Largest Canadian defence companyOperations strategically located in 8 geographic markets

Supporting customer operations at over 70 sites

Sydney

Singapore

Bangalore

Sesto Calende

Stolberg

Benson

Burgess Hill

Montréal

Tampa

DefenceGlobal Operations

Ottawa Halifax

Orlando

New Core Markets

20


New Core Markets

Common Challenges and Drivers Across CAE’s Markets

Civil Aviation

Defence

Healthcare

Mining

21

Leveraging our core capabilities to solve common challenges in all our markets


CAE HealthcareSolutions Offering

22


CAE MiningSolutions Offering

23

Leverage centralized command and control technologies for efficient decision making and operations

Personnel collaboration for greater efficiency

Reduces risk and redundancies

Integrated Operation Centre

Integrate CAE simulation and training expertise in mining

Increase safety and productivity

Reduce maintenance

CAE Terra simulator

Shovel

Haul-truck

SimulationTraining delivery across a number of disciplines

Induction, safety and general training

Software

Professional Services

Simulation

Training Software

Mine planning and operations optimization

Resources modeling

Reserve evaluation

Open pit and underground mine design

Long and short term operation scheduler

Improve business outcomes

Resources operational improvement

Mining studies

Research and development

Process reviews and audits

Consulting


CAE Investment ThesisUpside 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 internationally

– Solutions for defence to maintain readiness at a lower cost

Global reach with leading presence in emerging markets

Healthcare and Mining

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CAE Investment ThesisDownside Protection

Well diversified revenue mix

Good platform exposure and country diversity in Defence

Solid financial position

Healthy backlog with long contracts and recurring revenue

Market leadership supported by strong relationships with key OEMs and airlines

Strong and experienced management team

Good market differentiation

– Content/technology leadership

– Customer intimacy

– Global infrastructure

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Capital Allocation PrioritiesCapital 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 two years

3.De-leverage balance sheet

– Optimize capital structure vis-à-vis low cost of debt and higher recurring cash flows

– Maintain investment grade profile

– Remain fiscally prudent

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CAE Inc. and/or Proprietary Information Confidential

Appendix

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Main Competitors

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SIMULATION PRODUCTS

TRAINING& SERVICES

MILITARYCIVIL


First Mover in Emerging Markets

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LEGEND: FFS – full-flight simulator; JV – joint venture1 – Expected annual growth in passenger air travel 2012-2031 (Source: Boeing Forecast 2012-2031). 2 – Includes CAE-built FFSs sold to third parties as well as those located in CAE training centres.


YTD Q4 FY2013 Consolidated Financial Results

30


Q4 FY2013Consolidated Financial Results

31


Actual Prior year

Revenue

SOI

%

Revenue

SOI

%

Revenue

SOI

%

Consolidated operating profit

32

331.6 215.4201.8 132.3129.8 83.1

54.1 44.331.8 30.322.3 14.0

16.3% 20.6%15.8% 22.9%17.2% 16.8%

227.3 267.172.4 71.5154.9 195.6

29.4 45.610.2 11.019.2 34.6

12.9% 17.1%14.1% 15.4%12.4% 17.7%

558.9 482.5274.2 203.8284.7 278.7

83.5 89.942.0 41.341.5 48.6

14.9% 18.6%15.3% 20.3%14.6% 17.4%

71.6 88.7

New Core Market Revenue 1.0 (34.1)

Actual Prior year

Actual Prior year

CIV

ILM

ILIT

AR

YTO

TAL

Simulation Products Training & Services TOTAL(amounts in

millions)

29.0 24.2

New Core Market SOI 1.8 (1.2)

Other

Q4 FY2013Segmented Financial Results

(13.7)


Cash Movements

33


Cash Movements

34


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

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