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Investor Presentation. Q4 FY2013. Forward Looking Statements. - PowerPoint PPT PresentationTRANSCRIPT
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Investor PresentationQ4 FY2013
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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.
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CAE Inc. Confidential and/or Proprietary Information
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
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CAE Inc. Confidential and/or Proprietary Information
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
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Exciting company with strong growth potentialExciting company with strong growth potential
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CAE Inc. Confidential and/or Proprietary Information
Strong Position Across Segments
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CAE Inc. Confidential and/or Proprietary Information
Integrated Go-to-Market Approach
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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
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CAE Inc. Confidential and/or Proprietary Information
Diversified and Balanced
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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
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CAE Inc. Confidential and/or Proprietary Information
Actual Prior year
Revenue
SOI
%
Revenue
SOI
%
Revenue
SOI
%
Consolidated operating profit
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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
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Civil
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CAE Inc. Confidential and/or Proprietary Information
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
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CAE Inc. Confidential and/or Proprietary Information
Demand for Aviation Training & Services
(TS/C segment)
Demand for Aviation Simulation Products
(SP/C segment)
CivilMarket Drivers
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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
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CAE Inc. Confidential and/or Proprietary Information
CivilComprehensive Portfolio of Training Services
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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
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CAE Inc. Confidential and/or Proprietary Information
CAE training location
CAE Oxford Aviation Academy
Upcoming
CAE training location
CAE Oxford Aviation Academy
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
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>45 locations with >215 full-flight simulatorsserving >3,500 customers
>45 locations with >215 full-flight simulatorsserving >3,500 customers
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Defence
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CAE Inc. Confidential and/or Proprietary Information
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
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Maintaining Core Leadership Expanding Core
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CAE Inc. Confidential and/or Proprietary Information
DefenceMarket Drivers
Training and maintenance services sourcing from industry
Mission rehearsal
Lower cost
Modeling and Simulation use across defense lifecycle
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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
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CAE Inc. Confidential and/or Proprietary Information
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
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CAE Inc. Confidential and/or Proprietary Information
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
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CAE serves the defence forces of more than 50 countriesCAE serves the defence forces of more than 50 countries
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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
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New Core Markets
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CAE Inc. Confidential and/or Proprietary Information
New Core Markets
Common Challenges and Drivers Across CAE’s Markets
Civil Aviation
Defence
Healthcare
Mining
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Leveraging our core capabilities to solve common challenges in all our markets
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CAE Inc. Confidential and/or Proprietary Information
CAE HealthcareSolutions Offering
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CAE Inc. Confidential and/or Proprietary Information
CAE MiningSolutions Offering
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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
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CAE Inc. Confidential and/or Proprietary Information
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 Inc. Confidential and/or Proprietary Information
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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CAE Inc. Confidential and/or Proprietary Information
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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CAE Inc. Confidential and/or Proprietary Information
Main Competitors
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SIMULATION PRODUCTS
TRAINING& SERVICES
MILITARYCIVIL
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CAE Inc. Confidential and/or Proprietary Information
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.
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CAE Inc. Confidential and/or Proprietary Information
YTD Q4 FY2013 Consolidated Financial Results
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CAE Inc. Confidential and/or Proprietary Information
Q4 FY2013Consolidated Financial Results
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CAE Inc. Confidential and/or Proprietary Information
Actual Prior year
Revenue
SOI
%
Revenue
SOI
%
Revenue
SOI
%
Consolidated operating profit
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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)
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CAE Inc. Confidential and/or Proprietary Information
Cash Movements
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CAE Inc. Confidential and/or Proprietary Information
Cash Movements
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CAE Inc. Confidential and/or Proprietary Information
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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