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Investor Presentation

Investor Presentation. Q4 FY2013. Forward Looking Statements.

anneliese-panagos
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Investor Presentation

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  1. Investor Presentation Q4 FY2013

  2. 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.

  3. 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 efficiencyand help solve challenging problems

  4. About CAE Exciting company with strong growth potential • 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

  5. Strong Position Across Segments

  6. Integrated Go-to-Market Approach CAE offers a broad portfolio of integrated products and services to customers across segments

  7. Diversified and Balanced A growing proportion of CAE’s revenue comes from customers in high growth emerging markets

  8. YTD Q4 FY2013Segmented Financial Results Simulation Products Training & Services TOTAL Actual Prior year Actual Prior year Actual Prior year (amounts in millions) Revenue 402.4 342.5 755.6 498.4 1,158.0 840.9 CIVIL SOI 73.6 51.6 121.5 122.2 195.1 173.8 % 18.3% 15.1% 16.1% 24.5% 16.8% 20.7% 561.6 619.2 272.8 278.1 834.4 897.3 Revenue MILITARY 77.9 101.2 35.2 40.9 113.1 142.1 SOI 13.9% 16.3% 12.9% 14.7% 13.6% 15.8% % 964.0 961.7 1,028.4 776.5 1,992.4 1,738.2 Revenue TOTAL 151.5 152.8 156.7 163.1 308.2 315.9 SOI 15.7% 15.9% 15.2% 21.0% 15.5% 18.2% % New Core Market Revenue 1.0 (34.1) 112.1 83.0 6.4 (13.8) New Core Market SOI (68.9) Other – Consolidated operating profit 245.7 302.1

  9. Civil

  10. CivilStrategic Focus Maintaining Core Leadership 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 • Commercial and Business Aviation Training • Simulation Products: Full-Flight Simulators, Training Devices, Updates

  11. CivilMarket Drivers Active Fleet Load Factors Pilot Movement 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 Emerging Markets New Pilot Demand Pilot Certification Regulations New Aircraft Deliveries Demand for Aviation Simulation Products (SP/C segment) Demand for Aviation Training & Services (TS/C segment)

  12. CivilComprehensive Portfolio of Training Services Recruit Ab-Initio Type rating Placement CAE offers the most comprehensive portfolio of services to recruit, train and place aviation professionals with end-to-end solutions

  13. Civil Broadest Reach in Global Training Stockholm Stavanger Oslo Aberdeen Copenhagen Manchester Oxford Vancouver Montreal Amsterdam Gatwick Brussels Toronto Burgess Hill San Francisco Prague Morristown Paris Beijing Phoenix Charlotte Seoul Tokyo Sesto Calende Dallas Barcelona Shanghai Rome Miami Madrid New Delhi Dubai Palma de Mallorca Hong Kong Toluca Zhuhai Clark (Manila) Rae Bareli Gondia Bengaluru Kuala Lumpur Singapore Douala Lima CAE training location CAE Oxford Aviation Academy Upcoming São Paulo Santiago Johannesburg Sydney >45 locations with >215 full-flight simulatorsserving >3,500 customers Perth Melbourne

  14. Defence

  15. DefenceStrategic Focus Maintaining Core Leadership Land Simulation Products & Services Naval Simulation Products & Services Critical Infrastructure Support Integrated Enterprise Solutions Professional Services Constructive Simulation Mission Systems Expanding Core Virtual Air Simulation Products • Technology Leadership • Technology Upgrades and Updates • In-Service Support Aviation Training Services Aviation Training Centers

  16. DefenceMarket Drivers InstalledBased Platform Deliveries, Upgrades, Life Extensions Emphasis on Maintaining Readiness CostSavings Our strategy involves positioning on enduring platforms and in key regions to grow our revenue from simulation products and long-term recurring services programs Training and maintenance services sourcing from industry Mission rehearsal Lower cost Modeling and Simulation use across defense lifecycle

  17. DefenceWell Positioned on Enduring Aircraft Platforms MH-60 OFT C-130J FMS P-8A OFT United States C-5 WST KC-135 AST AW-101 OFT C-130J DMS Hawk 128 FMS CH-47 DMS SA 330 DMS United Kingdom Tornado FMS EC-135 FFS Germany NH-90 FMS UH-1D FFS CH-53 FMS C-130J FMS CH-47 WST CP-140 OMS CH-146 FMS Canada Typhoon FMS AW 139 FMS Italy A-109 FMS M-346 FMS India DHRUV FMS C-130J FMS Bell 412 FMS SA 365 FMS Australia MRTT FMS S-70 FMFS C-130J FFS P-3C OMS Singapore AS 332 CDS CH-47 FMS S-70 FMS 17

  18. DefenceGlobal Customer Base Malaysia Algeria Taiwan Turkey South Korea Poland Brazil Japan Belgium Spain Denmark Saudi Arabia Nigeria France Morocco Norway Indonesia Egypt Oman Sweden Thailand Netherlands UAE Israel Austria South Africa Greece Peru Finland New Zealand Chile Argentina Bolivia Kuwait Botswana Uruguay CAE serves the defence forces of more than 50 countries 18

  19. DefenceGlobal Operations Benson Stolberg Burgess Hill Halifax Ottawa Sesto Calende Montréal Orlando Tampa Bangalore Singapore Sydney Largest Canadian defence company Operations strategically located in 8 geographic markets Supporting customer operations at over 70 sites

  20. New Core Markets

  21. New Core Markets Leveraging our core capabilities to solve common challenges in all our markets Common Challenges and Drivers Across CAE’s Markets Civil Aviation Defence Healthcare Mining

  22. CAE HealthcareSolutions Offering

  23. CAE MiningSolutions Offering Simulation • Integrate CAE simulation and training expertise in mining • Increase safety and productivity • Reduce maintenance • CAE Terra simulator • Shovel • Haul-truck Integrated Operation Centre Software Training Consulting • Leverage centralized command and control technologies for efficient decision making and operations • Personnel collaboration for greater efficiency • Reduces risk and redundancies • Training delivery across a number of disciplines • Induction, safety and general training • Software • Professional Services • Simulation • Improve business outcomes • Resources operational improvement • Mining studies • Research and development • Process reviews and audits • Mine planning and operations optimization • Resources modeling • Reserve evaluation • Open pit and underground mine design • Long and short term operation scheduler

  24. 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

  25. 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

  26. Capital Allocation PrioritiesCapital Allocation Priorities • Invest in growth • Where demand has been secured and we have a clear view to target returns • Balance current and long term shareholder returns • Increased quarterly dividend twice in two years • 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

  27. Appendix • CAE Inc. and/or Proprietary Information Confidential

  28. Main Competitors CIVIL MILITARY SIMULATION PRODUCTS TRAINING & SERVICES

  29. First Mover in Emerging Markets LEGEND: FFS – full-flight simulator; JV – joint venture 1 – 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.

  30. YTD Q4 FY2013 Consolidated Financial Results

  31. Q4 FY2013Consolidated Financial Results

  32. Q4 FY2013Segmented Financial Results Simulation Products Training & Services TOTAL Actual Prior year Actual Prior year Actual Prior year (amounts in millions) Revenue 129.8 83.1 201.8 132.3 331.6 215.4 CIVIL SOI 22.3 14.0 31.8 30.3 54.1 44.3 % 17.2% 16.8% 15.8% 22.9% 16.3% 20.6% 154.9 195.6 72.4 71.5 227.3 267.1 Revenue MILITARY 19.2 34.6 10.2 11.0 29.4 45.6 SOI 12.4% 17.7% 14.1% 15.4% 12.9% 17.1% % 284.7 278.7 203.8 558.9 482.5 Revenue 274.2 TOTAL 41.5 48.6 42.0 41.3 83.5 89.9 SOI 14.6% 17.4% 15.3% 20.3% 14.9% 18.6% % New Core Market Revenue 1.0 (34.1) 29.0 24.2 1.8 (1.2) New Core Market SOI Other (13.7) Consolidated operating profit 71.6 88.7

  33. Cash Movements

  34. Cash Movements

  35. 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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