Slides
Page 1
I nvestor Presentation Third Quarter Fiscal Year 2026 Data as of 12 February 2026 1
Page 2
CAE Inc. Proprietary Information and/or Confidential 2 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 outlook, future revenues, earnings, cash flow growth, profit trends, growth capital spending, expansions and new initiatives, including initiatives that pertain to sustainability matters, financial obligations, available liquidities, expected sales, general economic and political outlook, inflation trends, prospects and trends of an industry, expected annual recurring cost savings from operational excellence programs, our management of the supply chain, estimated addressable markets, demands for CAE’s products and services, our access to capital resources, our financial position, the expected accretion in various financial metrics, the expected capital returns to shareholders, our business outlook, business opportunities, objectives , development, plans, growth strategies and other strategic priorities, our competitive and leadership position in our markets, the expansion of our market shares, CAE's ability and preparedness to respond to demand for new technologies, the sustainability of our operations, our ability to retire the Legacy Contracts (as defined in Section 6 . 2 “ Defense and Security ” of our MD&A for the third quarter ended December 31 , 2025 ) as expected and to manage and mitigate the risks associated therewith, the impact of the retirement of the Legacy Contracts and other statements that are not historical facts . Since forward - looking statements and information relate to future events or future performance and reflect current expectations or beliefs regarding future events, they are typically identified by words such as “anticipate”, “believe”, “could”, “estimate”, “expect”, “intend”, “likely”, “may”, “plan”, “seek”, “should”, “will”, “ strategy ”, “ future ” or the negative thereof or other variations thereon suggesting future outcomes or statements regarding an outlook . All such statements constitute "forward - looking statements" within the meaning of applicable Canadian securities legislation and “forward - looking statements” within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995 . By their nature, forward - looking statements require us to make assumptions and are subject to inherent risks and uncertainties associated with our business which may cause actual results in future periods to differ materially from results indicated in forward - looking statements . While these statements are based on management’s expectations and assumptions regarding historical trends, current conditions and expected future developments, as well as other factors that we believe are reasonable and appropriate in the circumstances, readers are cautioned not to place undue reliance on these forward - looking statements as there is a risk that they may not be accurate . The forward - looking statements contained in this Presentation describe our expectations as of February 12 , 202 6 , and, accordingly, are subject to change after such date . Important risks that could cause such differences include, but are not limited to, strategic risks, such as geopolitical uncertainty, global economic conditions, competitive business environment, original equipment manufacturer (OEM) encroachment, inflation, international scope of our business, changes in U . S . trade policies or regulations, level and timing of defence spending, constraints within the civil aviation industry, our ability to penetrate new markets, research and development (R&D) activities, evolving standards and technology innovation and disruption, length of sales cycle, business development and awarding of new contracts, strategic partnerships and long - term contracts, our ability to effectively manage our growth, estimates of market opportunity and competing priorities ; operational risks, such as supply chain disruptions, program management and execution, mergers and acquisitions, business continuity, subcontractors, fixed price and long - term supply contracts, our continued reliance on certain parties and information, and health and safety ; cybersecurity risks ; talent risks, such as recruitment, development and retention, ability to attract, recruit and retain key personnel and management, corporate culture and labour relations ; financial risks, such as shareholder activism availability of capital, customer credit risk, foreign exchange, effectiveness of internal controls over financial reporting, liquidity risk, interest rate volatility, returns to shareholders, estimates used in accounting, impairment risk, pension plan funding, indebtedness, acquisition and integration costs, sales of additional common shares, market price and volatility of our common shares, seasonality, taxation matters and adjusted backlog ; legal and regulatory risks, such as data rights and governance, U . S . foreign ownership, control or influence mitigation measures, compliance with laws and regulations, insurance coverage potential gaps, product - related liabilities, environmental laws and regulations, government audits and investigations, protection of our intellectual property and brand, third - party intellectual property, foreign private issuer status, and enforceability of civil liabilities against our directors and officers ; sustainability risks, such as extreme climate events and the impact of natural or other disasters (including effects of climate change) and sustainability commitments and expectations ; reputational risks ; and technological risks, such as information technology (IT) and reliance on third - party providers for information technology systems and infrastructure management . The foregoing list is not exhaustive and other unknown or unpredictable factors could also have a material adverse effect on the performance or results of CAE . Additionally, differences could arise because of events announced or completed after the date of this Presentation . You will find more information about the risks and uncertainties affecting our business in Section 11 “Business risk and uncertainty” of our MD&A for the year ended March 31 , 2025 , which is available on our website (www . cae . com), SEDAR + (www . sedarplus . ca) and EDGAR (www . sec . gov) .
Page 3
CAE Inc. Proprietary Information and/or Confidential 3 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 uncertainties that are presently unknown to us or that we may currently deem immaterial may adversely affect our business . Except as required by law, we disclaim any intention or obligation to update or revise any forward - looking statements whether as a result of new information, future events or otherwise . The forward - looking information and statements contained in this Presentation are expressly qualified by this cautionary statement . In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject . These statements are based on information available to us as of the date of this Presentation . While we believe that information provides a reasonable basis for these statements, that information may be limited or incomplete . Our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all relevant information . These statements are inherently uncertain, and investors are cautioned not to unduly rely on these statements . Except as otherwise indicated by CAE, forward - looking statements do not reflect the potential impact of any special items or of any dispositions, monetizations , mergers, acquisitions, other business combinations or other transactions that may occur after February 12 , 2026 . The financial impact of these transactions and special items can be complex and depends on the facts particular to each of them . We therefore cannot describe the expected impact in a meaningful way or in the same way we present known risks affecting our business . Forward - looking statements are presented in this Presentation for the purpose of assisting investors and others in understanding certain key elements of our expected FY 2026 financial results and in obtaining a better understanding of our anticipated operating environment . Readers are cautioned that such information may not be appropriate for other purposes . MATERIAL ASSUMPTIONS The forward - looking statements set out in this Presentation are based on certain assumptions including, without limitation : the prevailing market conditions, geopolitical instability including the rapidly evolving trade and tariff environment, the customer receptivity to our training and operational support solutions, the accuracy of our estimates of addressable markets and market opportunity, the realization of anticipated annual recurring cost savings and other intended benefits from restructuring initiatives and operational excellence programs, the ability to respond to anticipated inflationary pressures and our ability to pass along rising costs through increased prices, the actual impact to supply, production levels, and costs from global supply chain logistics challenges, the stability of foreign exchange rates, the ability to hedge exposures to fluctuations in interest rates and foreign exchange rates, the availability of borrowings to be drawn down under, and the utilization, of one or more of our senior credit agreements, our available liquidity from cash and cash equivalents, undrawn amounts on our revolving credit facility, the balance available under our receivable purchase facility, the assumption that our cash flows from operations and continued access to debt funding will be sufficient to meet financial requirements in the foreseeable future, access to expected capital resources within anticipated timeframes, no material financial, operational or competitive consequences from changes in regulations affecting our business, our ability to retain and attract new business, our ability to effectively execute and retire the remaining Legacy Contracts while managing the risks associated therewith, our ability to defend our position in the dispute with the buyer of the CAE Healthcare business, the realization of the expected strategic, financial and other benefits of the increase of our ownership stake in SIMCOM Aviation Training in the timeframe anticipated , and our ability to effectively execute on the opportunities identified as part of our transformation plan to simplify our structure, sharpen our focus and strengthen execution . Air travel is a major driver for CAE's business and management relies on analysis from the International Air Transport Association (IATA) to inform its assumptions about the rate and profile of growth in its key civil aviation market . Accordingly, the assumptions outlined in this Presentation and, consequently, the forward - looking statements based on such assumptions, may turn out to be inaccurate . For additional information, including with respect to other assumptions underlying the forward - looking statements made in this Presentation, refer to the "Business risk and uncertainty" section of our MD&A for the year ended March 31 , 2025 , which is available on our website (www . cae . com), SEDAR+ (www . sedarplus . ca) and EDGAR (www . sec . gov) . CURRENCY All amounts in this presentation are expressed in Canadian dollars unless otherwise indicated.
Page 4
CAE Inc. Proprietary Information and/or Confidential 4 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 used as an alternative for, performance measures calculated according to IFRS . Furthermore, these measures should not be compared with similarly titled measures provided or used by other issuers . Management believes that these measures provide additional insight into our operating performance and trends and facilitate comparisons across reporting periods . Performance Measures – Gross profit margin (or gross profit as a % of revenue) ; – Operating income margin (or operating income as a % of revenue) ; – Adjusted segment operating income or loss ; – Adjusted segment operating income margin (or adjusted segment operating income as a % of revenue) ; - Adjusted effective tax rate ; – Adjusted net income or loss ; – Adjusted earnings or loss per share (EPS) ; – EBITDA and Adjusted EBITDA ; – Free cash flow ; - Cash conversion rate . Liquidity and Capital Structure Measures – Non - cash working capital ; – Capital employed ; – Adjusted return on capital employed (ROCE) ; – Net debt ; – Net debt - to - capital ; – Net debt - to - EBITDA and net debt - to - adjusted EBITDA ; – Maintenance and growth capital expenditures . Growth Measures – Adjusted order intake ; – Adjusted backlog ; – Book - to - sales ratio . To give the reader a better understanding of the indicators used by management, definitions of all non - IFRS and other financial measures, other than cash conversion rate, are provided in Section 9 . 1 “ Non - IFRS and other financial measure definitions " of our MD&A for the quarter ended December 31 , 2025 , which section is incorporated by reference herein . Cash conversion rate is a non - IFRS ratio calculated by dividing free cash flow by adjusted net income . We use it to assess our performance in cash flow generation and as a basis for evaluating our capitalization structure . In addition, when applicable, we provide a quantitative reconciliation of the non - IFRS and other financial measures to the most directly comparable measure under IFRS, which reconciliations are incorporated by reference herein . Refer to Section 9 . 1 “ Non - IFRS and other financial measure definitions " of our MD&A for the quarter ended December 31 , 2025 , for references to where these reconciliations are provided . Our MD&A for the quarter ended December 31 , 2025 , is available on our website ( www . cae . com ), SEDAR+ ( www . sedarplus . ca ) and EDGAR ( www . sec . gov ) . ABOUT MATERIAL INFORMATION This Presentation includes the information we believe is material to investors after considering all circumstances, including potential market sensitivity . We consider something to be material if : – It results in, or would reasonably be expected to result in, a significant change in the market price or value of our shares ; or – It is likely that a reasonable investor would consider the information to be important in making an investment decision .
Page 5
To be the trusted partner in advancing safety and mission readiness, defining the standard of excellence in training and critical operations by harnessing technology and enhancing human performance . Our vision CAE Inc. Proprietary Information and/or Confidential
Page 6
Total Revenue 42 5 8 % 60 40 Products/Services Mix* % Geographic Mix % 48 2 0 32 A global leader in training, mission, and operational support solutions For the year ended, March 31, 2025. * Approximate value including JV sales FY25 revenue $4.7B sites ~240 employees ~13,000 Defense and Security Civil Aviation U.S.A. Europe & UK Canada/ Rest of World Products Services countries 40+ CAE Inc. Proprietary Information and/or Confidential CAE Inc. Proprietary Information and/or Confidential 6 FY25 adjusted backlog $20.1B
Page 7
CAE Inc. Proprietary Information and/or Confidential Current and next - generation p roducts enabling our training ecosystem 7
Page 8
Civil Aviation Elevating and advancing human performance
Page 9
CAE Inc. Proprietary Information and/or Confidential 1.5 million new personnel required by 2034 to support commercial and business aviation growth Sources : CAE Aviation Talent Forecast 2025, Aviation Week, Cirium , IATA; *Fleet forecast period from 2025 - 2034. Passenger Traffic forecast period from 2026 - 2030. Fleet Growth New business aviation personnel needed: 102K New pilots needed 33K New maintenance technicians needed 69K New commercial aviation personnel needed: 1,292K New pilots needed 267K New maintenance technicians needed 347K New cabin crew needed 678K 35% Commercial aviation fleet growth* 19% Business aviation fleet growth* New air traffic controllers needed: 71K 3.25% 9 - year CAGR* 1.80% 9 - year CAGR* 9 Passenger Traffic 4.8% 4 - year CAGR*
Page 10
CAE Inc. Proprietary Information and/or Confidential We are the world’s largest provider of civil aviation training services with the unique capability and global scale to address the total lifecycle needs of the professional pilot, from cadet to captain 1.3M hours Simulator Training Delivered Annually 155,000+ pilots Trained Annually #1 Civil Aviation Training 360+ Full Flight Simulators in our training network 1,350+ Full Flight Simulators manufactured 85+ sites * All figures for the year ended March 31, 2025. 120+ aircraft in training network Every 5 seconds a flight takes off using Flightscape , powered by CAE 10
Page 11
Defense & Security Making the world a safer place through enhanced mission readiness
Page 12
CAE Inc. Proprietary Information and/or Confidential Defence markets growing across regions and platforms: Need to meet critical training needs in complex environments Sources: US DoD, NATO, Janes, BGOV, CAE in ternal analysis based on allied nations budgeting data . *Key allied nations: US, Canada, Germany, Australia. Four - year CAGR: 2026 - 2030. Average personnel shortfalls across key allied nations 12 Canada and NATO commit to target of 5% of GDP in annual defence spending by 2035. U.S. Department of Defense budget increases 13% in fiscal 2026 Of allied d efence operations & maintenance budgets allocated to training and simulation ~ 10% ~11% 6% 4 - year CAGR Projected growth rate for multinational, cross - domain training across key allied nations* Multigenerational increases in defence spending driving further upside for training and simulation
Page 13
CAE Inc. Proprietary Information and/or Confidential CAE a critical enabler in delivering integrated training architectures for allied nations 13 Cooperation agreement positioning CAE as preferred supplier for select training and simulation requirements on early warning and control aircraft. CAE is one of Canada’s l eading publicly traded defence contractor s and trusted partner of integrated simulation , training, and mission - rehearsal solutions *Future Fighter Lead - in Training; Future Aircrew Training, Future Air Mission Training System, Flight School Training Support Se rvices SkyAlyne joint venture to deliver innovative training and support solutions to the Royal Canadian Air Force Strategic partner with the Government of Canada to deliver next generation fighter lead - in training Advancing next - generation air mission training capabilities for the Australian Defence Force Delivery of integrated rotary wing training solutions for US Army Highly complex, integrated flight training programs a key differentiator FFLiT FSTSS Saab/ Global Eye AEW&C F - AMTS FAcT
Page 14
Located in key growth markets with local community and industry connection 85+ platforms 140+ sites 40+ countries 6,000+ employees 2,000+ engineers CAE Inc. Proprietary Information and/or Confidential ▪ Tampa, FL (US HQ) ▪ Arlington, TX ▪ Halifax, NS ▪ Montreal, QC ▪ Ottawa, ON ▪ Burgess Hill, UK ▪ Stolberg, DE ▪ Sydney, AU Regional offices with manufacturing and integration capabilities 14 * All figures for the year ended March 31, 2025.
Page 15
CAE Inc. Proprietary Information and/or Confidential Solid financial foundation underpins performance in Q3 * Data as of Q3 FY26. Non - IFRS and other financial measures (See slides 4, 2 0 - 22 ) 2.30x Net Debt/Adjusted EBITDA* $411.3M Free Cash Flow * 15 $19.2B Adjusted Backlog * Exceeding FY26 leverage target ~2.5x Higher y/y free cash flow generation Strong pipeline of opportunities across Civil and Defense
Page 16
CAE Inc. Proprietary Information and/or Confidential Portfolio CAE’s Transformation Plan focused on three priorities • Bottom - up review of all businesses, investments, and partnerships • Concentrating capital and management attention where CAE has greatest advantage • Identified several non - core assets for divestiture ~ 8 % of revenue Capital Discipline Performance • Tightened capital approval and operating policies • Sharper filters for returns, strategic fit, and execution certainty • Rationalization of approximately 10% of deployed commercial simulators • CEO review of all major projects and proposals • Data - driven R&D prioritization; moderation of spend later in the fiscal year • Simplifying organization structure and consolidating • End - to - end accountability across operations and products • Factory modernization roadmap • Real estate, asset utilization, cost transformation, and go - to - market under review • Strengthening governance and post - investment performance tracking 16
Page 17
CAE Inc. Proprietary Information and/or Confidential Outlook for FY26 ^2.30x net debt - to - adjusted EBITDA* as of end Q3 FY26. * Non - IFRS and other financial measures (See slides 4, 2 0 - 22 ) Civil Defense & Security Consolidated • T otal CAPEX for fiscal 2026 more than 10% lower than fiscal 2025, which totaled $356.2 million. D riven primarily by an approximate 30% reduction in Civil capital expenditure • Target net debt - to - adjusted EBITDA * of ~2.5x by the end of fiscal 2026 ^ • Cash conversion rate* ~150% of adjusted net income* • Quarterly run - rate finance expense of approximately $55 million • Annual effective income tax rate ~25% • Annual Civil adjusted segment operating income* mid - single digit percentage lower vs. FY25. • Annual adjusted segment operating income margin* in the 20% range • Greater than 20% growth in annual adjusted segment operating income* • Annual Defense adjusted segment operating income margin* of ~8.5% 17
Page 18
CAE Inc. Proprietary Information and/or Confidential Climate Sustainability By FY33, CAE commits to : Committed to 100% sourcing with renewable electricity by 2050 1. Base year for scope 1 and 2 targets: FY19; base year for scope 3 target: FY22. Scope 3 target is applicable to only the fo llo wing categories: purchased goods and services, capital goods and fuel and energy related activities Approved by SBTi 1 Human Sustainability top 15% of our industry Mobilizing our partners for greater impact 15 CAE Women in Flight Ambassadors receiving full scholarship for their pilot training B in FY26 Civil Aviation Moving aviation safety, inclusion, and industry decarbonization forward Defense & Security Noble mission to support preparedness; fostering sovereignty, stability and safety through deterrence 18
Page 19
CAE Inc. Proprietary Information and/or Confidential Financial Highlights (amounts in millions, except per share amounts, adjusted ROCE, net debt-to-adjusted EBITDA and book-to-sales ratio) Q3FY26 Q3FY25 Variance % Performance Revenue $ 1,252.1 $ 1,223.4 2% Operating income $ 195.8 $ 262.6 (25%) Adjusted segment operating income* $ 195.8 $ 190.0 3% Net income attributable to equity holders of the Company $ 108.9 $ 168.6 (35%) Basic and diluted earnings per share (EPS) $ 0.34 $ 0.53 (36%) Adjusted EPS* $ 0.34 $ 0.29 17% Net cash provided by operating activities $ 407.6 $ 424.6 (4%) Free cash flow* $ 411.3 $ 409.8 —% Liquidity and Capital Structure Capital employed* $ 8,032.3 $ 8,111.8 (1%) Adjusted return on capital employed (ROCE)* 7.0% 5.7% Net debt-to adjusted EBITDA* 2.30 3.36 Growth Adjusted order intake* $ 1,143.5 $ 2,218.7 (48%) Adjusted backlog* $ 19,193.9 $ 20,279.7 (5%) Book-to-sales ratio* 0.91 1.81 Book-to-sales ratio* for the last 12 months 0.98 1.74 *Non-IFRS and other financial measures. See slides 4 and 21-23. 19 20-22
Page 20
Reconciliation of non-IFRS measures Last twelve months ended December 31 Reconciliation of EBITDA, adjusted EBITDA, net debt-to-EBITDA and net debt-to-adjusted EBITDA 2025 2024 (amounts in millions, except net debt-to-EBITDA ratios) Operating income (loss) $ 724.8 $ (43.7) Depreciation and amortization 453.7 400.4 EBITDA $ 1,178.5 $ 356.7 Restructuring, integration and acquisition costs — 111.5 Impairments and other gains and losses arising from significant strategic transactions or specific events: Executive management transition costs 22.3 — Shareholder matters 10.6 — Gain on fair value remeasurement of SIMCOM — (72.6) Impairment of goodwill — 568.0 Impairment of technology and other non-financial assets — 35.7 Adjusted EBITDA $ 1,211.4 $ 999.3 Net debt $ 2,782.3 $ 3,352.9 Net debt-to-EBITDA 2.36 9.40 Net debt-to-adjusted EBITDA 2.30 3.36 20
Page 21
Reconciliation of non-IFRS measures Three months ended December 31 Reconciliation of adjusted net income and adjusted EPS 2025 2024 (amounts in millions, except per share amounts) Net income attributable to equity holders of the Company $ 108.9 $ 168.6 Impairments and other gains and losses arising from significant strategic transactions or specific events: Gain on fair value remeasurement of SIMCOM, after tax — (76.7) Adjusted net income $ 108.9 $ 91.9 Average number of shares outstanding (diluted) 322.7 319.8 Adjusted EPS $ 0.34 $ 0.29 21
Page 22
Reconciliation of non-IFRS measures Reconciliation of adjusted segment operating income Civil Aviation Defense & Security Total Three months ended December 31 2025 2024 2025 2024 2025 2024 (amounts in millions) Operating income $ 141.8 $ 223.4 $ 54.0 $ 39.2 $ 195.8 $ 262.6 Impairments and other gains and losses arising from significant strategic transactions or specific events: Gain on fair value remeasurement of SIMCOM — (72.6) — — — (72.6) Adjusted segment operating income $ 141.8 $ 150.8 $ 54.0 $ 39.2 $ 195.8 $ 190.0 22