#1Investor Presentation June 2021 CAE CAE 3#2Disclaimer This presentation has been prepared by CAE Inc. ("CAE" or the "Company") solely for information purposes. External Sources and Data (including Financial) Where this presentation quotes any information or statistics from any external source, it should not be interpreted that the Company has adopted or endorsed such information or statistics as being accurate. We advise you that some of the information presented herein is based on or derived from statements by third parties, has not been independently verified by or on behalf of the Company, and that no representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of this information or any other information or opinions contained herein, for any purpose whatsoever. Pending the Acquisition closing, L3Harris Military Training is a fully integrated business unit of L3Harris, and separate financial statements historically have not been prepared for the L3Harris Military Training business. Consequently, the financial information of the L3Harris Military Training business included in this document has been derived from the consolidated financial statements and historical accounting records of L3Harris and reflects certain significant assumptions, judgments and allocations made by L3Harris. The financial position, net income and cash flows of the L3Harris Military Training business may not be representative of the financial performance if the L3Harris Military Training business had been a stand-alone entity or operated independently of L3Harris. As a result, the historical financial information of the L3Harris Military Training business may not be a reliable indicator of future results. Market Data This presentation may contain or reference certain market, industry and peer group data which is based upon information from independent industry publications, market research, analyst reports and surveys and other publicly available sources. Although the Company believes these sources to be generally reliable, such information is subject to interpretation and cannot be verified with complete certainty due to limits on the availability and reliability of raw data, the voluntary nature of the data gathering process and other inherent limitations and uncertainties. The Company has not independently verified any of the data from third party sources referred to in this presentation and accordingly, the accuracy and completeness of such data is not guaranteed. In addition, certain of the data contained in this presentation come from the Company's own internal research and estimates based on the knowledge and experience of the Company's management in the market in which the Company operates. While the Company believes that such research and estimates are reasonable and reliable, they, and their underlying methodology and assumptions, have not been verified by any independent source for accuracy or completeness and are subject to change without notice. Accordingly, undue reliance should not be placed on any of the contained estimates or research in this presentation. Currency All amounts in this presentation are expressed in Canadian dollars unless otherwise indicated. CAE 2 CAE Inc. Proprietary Information and/or Confidential#3Disclaimer 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 relating to 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, capital spending, expansions and new initiatives, financial obligations, available liquidities, expected sales, general economic outlook, prospects and trends of an industry, expected annual recurring cost savings from operational excellence programs, estimated addressable markets, statements relating to our proposed acquisition of the L3Harris Military Training business (L3H MT), the attractiveness of the L3H MT acquisition from a financial perspective and expected accretion in various financial metrics, expectations regarding anticipated cost savings and synergies, the strength, complementarity and compatibility of the L3H MT acquisition with our existing business and teams, other anticipated benefits of the L3H MT acquisition and their impact on our future growth, results of operations, performance, business, prospects and opportunities, our business outlook, objectives, development, plans, growth strategies and other strategic priorities, and our leadership position in our markets and other statements that are not historical facts. Forward-looking statements normally contain words like believe, expect, anticipate, plan, intend, continue, estimate, may, will, should, strategy, future and similar expressions. All such forward-looking statements are made pursuant to the 'safe harbour' provisions of applicable Canadian securities laws and 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. You will find more information about risk factors in CAE's MD&A for the year ended March 31, 2021 and in our filings with the Canadian securities regulatory authorities and the U.S. Securities and Exchange Commission, all of which are available under our profile on SEDAR at www.sedar.com and on EDGAR at www.sec.gov. Any one or more of the factors described above and elsewhere in this presentation may be exacerbated by the continuing COVID-19 pandemic and may have a heightened negative impact on CAE's business, results of operations and financial condition. Accordingly, 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 in the MD&A 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. The forward-looking statements contained in this presentation describe our expectations as of March 31, 2021 and, accordingly, are subject to change after such date. 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. Forward-looking statements are presented in this presentation for the purpose of assisting readers in understanding certain key elements of the Acquisition and the related private placements. Readers are cautioned that such information may not be appropriate for other purposes. 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. 3 CAE Inc. Proprietary Information and/or Confidential CAE#4Disclaimer Material assumptions The forward-looking statements set out in this presentation are based on certain assumptions including, without limitation: the anticipated negative impacts of the COVID-19 pandemic on our businesses, operating results, cash flows and/or financial condition, including the intended effect of mitigation measures implemented as a result of the COVID-19 pandemic and the timing and degree of easing of global COVID-19-related mobility restrictions, the prevailing market conditions, customer receptivity to CAE's 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 recent restructuring initiatives and operational excellence programs, 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 facilities, the balance available under our receivable purchase program, our cash flows from operations and continued access to debt funding will be sufficient to meet financial requirements in the foreseeable future, no material financial, operational or competitive consequences from changes in regulations affecting our business, the satisfaction of all closing conditions of the L3H MT acquisition, including receipt of all regulatory approvals in a timely manner and on terms acceptable to CAE, our ability to retain and attract new business, achieve synergies and maintain market position arising from successful integration plans relating to the L3H MT acquisition, our ability to otherwise complete the integration of the L3H MT business acquired within anticipated time periods and at expected cost levels, our ability to attract and retain key employees in connection with the L3H MT acquisition, management's estimates and expectations in relation to future economic and business conditions and other factors in relation to the L3H MT acquisition and resulting impact on growth and accretion in various financial metrics, the realization of the expected strategic, financial and other benefits of the L3H MT acquisition in the timeframe anticipated, economic and political environments and industry conditions, the accuracy and completeness of public and other disclosure, including financial disclosure, by L3Harris Technologies, absence of significant undisclosed costs or liabilities associated with the L3H MT acquisition, the ability of CAE to opportunistically access the capital markets before or after the L3H MT acquisition closing and absence of material change in market conditions. For additional information, including with respect to other assumptions underlying the forward-looking statements made in this presentation, refer CAE's MD&A for the year ended March 31, 2021 and in our filings with the Canadian securities regulatory authorities and the U.S. Securities and Exchange Commission, all of which are available under our profile on SEDAR at www.sedar.com and on EDGAR at www.sec.gov. Given the impact of the changing circumstances surrounding the COVID-19 pandemic and the related response from CAE, governments, regulatory authorities, businesses and customers, there is inherently more uncertainty associated with CAE's assumptions. Accordingly, the assumptions outlined in this presentation and, consequently, the forward-looking statements based on such assumptions, may turn out to be inaccurate. Non-GAAP Measures Except as otherwise indicated, all financial information has been reported in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB). This presentation includes non-GAAP and other financial measures. Non-GAAP measures are useful supplemental information but do not have a standardized meaning according to GAAP. These measures should not be confused with, or used as an alternative for, performance measures calculated according to GAAP. Furthermore, these non-GAAP measures should not be compared with similarly titled measures provided or used by other companies. Management believes that providing certain non-GAAP measures provides users with a better understanding of our results and trends and provides additional information on our financial and operating performance. For non-GAAP and other financial measures monitored by CAE, and a reconciliation of such measures to the most directly comparable measure under GAAP, please refer to Section 3.7 and 3.8 of CAE's MD&A for the year ended March 31, 2021 filed with the Canadian Securities Administrators available on our website (www.cae.com) and on SEDAR (www.sedar.com). Non-GAAP and other financial measure definitions and reconciliations to the most directly comparable measures under GAAP can also be found in the Appendix of this presentation. 4 CAE Inc. Proprietary Information and/or Confidential CAE#5OVERVIEW We are a high-tech company with a noble purpose focused on safety 5 Our mission To lead at the frontier of digital immersion with high-tech training and operational support solutions to make the world a safer place. Our vision To be the worldwide partner of choice in civil aviation, defence and security, and healthcare by revolutionizing our customers' training and critical operations with digitally immersive solutions to elevate safety, efficiency and readiness. CAE Inc. Proprietary Information and/or Confidential CAE#6OVERVIEW CAE is a world leader in training and operational support solutions with three core business units Civil Aviation Training Defence and Security Healthcare We play a key role in making air travel safer We deliver over 1 million hours of training annually* We train and support allied forces around the world for critical missions We help to ensure their readiness We help make healthcare safer and improve patient outcomes *FY2019 and FY2020 6 CAE Inc. Proprietary Information and/or Confidential CAE#7OVERVIEW Diversified global business For the year ended, March 31, 2021. Metrics not reflective of recently announced Military Training and Simulation acquisition. ° Hawallan a Islands ARCTIC OCEAN U.S. BEAUFORT SEA CANADA NORTH PACIFIC OCEAN UNITEDOSTAT MEXICO GULF OF MEXICO THE BAHAMAS GREENLAND Greenland (DENMARK) SEA BAFFIN BAY BELARE CARIBBEAN SEA VENEZUELA COLOMBIA NORTH ATLANTIC OCEAN NORWEGIAN SEA ICELAND SWEDEN FINLAND PORTUGAL BARENTS SEA BELARUS POLAND UKRAINE FRANCE MOROCCO ALGERIA KARA SEA RUSSIA KAZAKHSTAN MONGOLIA TURKEY VECSTA TURISTAN MALTA TUNISIA CYPRUS YARAQ IRAN AFGHANISTAN NEPAL PAOSTAN LIBYA EGYPT SAUDI ARABIA INDIA MAURITANIA MALI NIGER SUDAN ERITREA CHAD ARABIAN SEA BENN NIGERIA COME 1000 BERRA LEONE SOUTH ETHIOPIA AFRICAN REPUBLIC SUDAN French Guiana EQUATORIAL GUINEA SOMALIA KENYA BRAZIL SOUTH PACIFIC BOLIVIA OCEAN PARAGUAY ARGENTINA CHILE GABON CON DEM, REP OF THE CONGO ANGOLA ZAMBLA TANZANIA 50 LANKA MOZAMBIQUE ZIMBABWE SOUTH ATLANTIC OCEAN BOTERALA MADAGASKAR NAMIBIA INDIAN OCEAN SAZILAND SOUTH SOUTH sono AFRICA BAY OF BENGAL, CHINA * 7 Corporate head office Civil Aviation Training Solutions Defence & Security Healthcare Approximate value including JV sales تورج $3.0B FY21 Revenue 160+ locations CAE Inc. Proprietary Information and/or Confidential ARCTIC OCEAN PHILIPPINE SEA WETNAM PHILIPPINES LAYSLA INDONE- EAST SIBERIAN SEA BERING SEA SEA OF OKHOTSK FEDERATED STATES OF MICRONESIA PALAU CORAL SEA Total Revenue Defence and Security Healthcare 41 12 % 47 Civil Aviation Training Solutions Products/Service Mix* NORTH PACIFIC OCEAN Products 40 % 60 MARSHALL ISLANDS ORAT NAURU SOLOMON SLANDS TUVALU SAMOA Services AUSTRALIA Tasmania NEW TASMAN ZEALAND SEA 10,000+ employees Geographic Mix 44 Europe & UK 23 U.S.A. % 33 Rest of the World CAE#8OVERVIEW We are a global leader in immersive synthetic training environments Knowledge Leadership 2,000+ engineers ■ Electronics ■ Systems ■ Mechanical & electrical ■ Software ■ Talented manufacturing workforce Industrial Champion ■ Best-in-class global supply chain Broad global Footprint ■ World-class operational and functional processes ■ Short prototype-to-production cycle time ■ Highly agile organization ☐ Advanced Technologies Deep technology expertise ■ Virtual and Augmented Reality ■ Remote (real-time) networking ☐ ☐ Synthetic Environment ■ Cloud- and Al-based solutions Complex man-to-machine interface 8 CAE Inc. Proprietary Information and/or Confidential CAE#99 OVERVIEW CAE's 8 pillars of strength '8 Pillars of Strength' underlie CAE's compelling investment thesis, culminating in a technology-focused, secular growth company with market- leading positions and a high degree of recurring business C Industry leader with a strong competitive moat High degree of recurring business Headroom in large markets + + Potential for compound growth and superior returns over the long term Solid financial position and highly cash generative business model Excellent and diverse team with a unique social impact on safety Culture of innovation, empowerment, excellence and integrity Technology and industry thought leader CAE Inc. Proprietary Information and/or Confidential CAE#10OVERVIEW Recently announced highly strategic acquisition with significant financial benefits 1 Accelerates CAE's Defence & Security growth strategy 2 Enhances alignment with key US National Defence Strategy priorities and next gen platforms CAE 3 Creates end-to-end suite of capabilities in military air training and simulation L3HARRIS™ 4 Broadens position in other large and growing military training and simulation domains Military Training 5 Common culture focused on innovation, at the frontier of digital immersion 10 6 Low-teens % EPS accretion expected in first full year post-close, including cost synergies CAE Inc. Proprietary Information and/or Confidential CAE#11Civil Aviation Training Solutions CAE CAE#12CIVIL AVIATION TRAINING SOLUTIONS The world's largest civil aviation training network + 170+ Aircraft 300+* Full Flight Simulators (FFS) 60+ Training Locations Stockholm Oslo. London Burgess Hill Copenhagen Dublin. Shannon Oxford • ⚫Amsterdam Antwerp Brussels • Prague London Gatwick Frankfurt Milan ⚫ Barcelona ⚫ Rome Vancouver. Madrid. Istanbul Minneapolis • Toronto .Montréal New Jersey Morristown • St John's ⚫ Palma de Mallorca San Francisco ⚫ Phoenix. Scottsdale ⚫ Dallas Orlando Dubai Dammam⚫ Abu Dhabi Mexico City / Toluca ⚫ 1M+ hours Annual Training Delivery (FY19, FY20) 135,000+ pilots Trained Every Year (FY19, FY20) Locations Cadet training Commercial aviation training Business aviation training Helicopter aviation training Aviation recruitment * Non-GAAP and other financial measures (see Appendix) 12 Lima⚫ ⚫ Bogotá Santiago. Addis Ababa. New Delhi. Gondia⚫ Beijing. ⚫ Seoul Tokyo Shanghai⚫ Guangzhou. Hong Kong ⚫ Clark Bengaluru⚫ Ho Chi Minh Kuala Lumpur • Singapore • Jakarta • São Paulo Johannesburg O Perth. Melbourne. CAE Inc. Proprietary Information and/or Confidential CAE#13CIVIL AVIATION TRAINING SOLUTIONS Market drivers 13 Demand Drivers Rigorous industry regulations and secular growth in air travel • Safety and efficiency · • imperatives, including maintenance of time-bound flight crew, new training requirements and enhanced safety management systems Pilot churn and new pilot demand Expected LT growth from new aircraft deliveries and renewal of fleet Need for innovative solutions to drive greater operational efficiency Enhanced safety management systems for aircraft operators + . • Profitability Drivers Favourable business mix drivers, including large market headroom in training services Potential to increase ratio of wet vs dry training in commercial training Expansion of operational support offering by leveraging advanced analytics, software solutions and other digital technologies Operational excellence programs expected to realize significant annual recurring cost savings across whole organization, commencing in fiscal year 2022 and ramping up to a run rate of ~$65 to $70M company-wide Training outsourcing and partnerships CAE's Civil Aviation Training Solutions segment is positioned as a gateway in a highly regulated, secular growth market, and it has significant headroom for growth CAE Inc. Proprietary Information and/or Confidential CAE#14CIVIL AVIATION TRAINING SOLUTIONS Headroom in a large market Civil Addressable Market ~$6.2B* -30%* CAE CAE has potential to increase share in a large and growing market Source: CAE internal analysis * Market share metrics based on FY20 (pre Covid-19 revenue 14 CAE Inc. Proprietary Information and/or Confidential CAE#15CIVIL AVIATION TRAINING SOLUTIONS We have been opportunistic with M&A + TRU SIMULATION + TRAINING Canada + + merlot.aero RB group.aero Amsterdam-based provider of total civil training solutions as well as instructor provisioning Highlights Expands CAE's addressable market of customers including commercial cargo operators ✓ Low integration complexity within CAE's existing European footprint A leading manufacturer of flight simulators and training devices for civil markets Highlights Acquisition strengthens CAE's global civil training capabilities Expands addressable market for simulator lifecycle support ✓ Adds order backlog* and access to new customers A leading civil aviation crew management and optimization software company Highlights Accelerates expansion into software-enabled civil aviation services ✓ Strengthens CAE's digital flight operations portfolio ✓ Expands addressable market in airline crew operations and optimization software A leading provider of fully integrated solutions that modernize the way airlines interact with their crew. Highlights Continued expansion of CAE's reach beyond pilot training and into the rapidly growing market for digitally enabled crew optimization services. ✓ Expands CAE's technology capabilities to offer our airlines and business aviation's enhanced modern mobile technology to connect with their crew. CAE is capitalizing on market disruption by successfully executing acquisitions that align with its strategic priorities * Non-GAAP and other financial measures (see Appendix) 15 CAE Inc. Proprietary Information and/or Confidential CAE#16Defence & Security CAE CAE#17DEFENCE & SECURITY The global defence business 17 50+ Countries 750+ Defence forces 70+ Platforms 120+ Sites Hewan ARCTIC OCEAN U.S. BEAUFORT SEA CANADA Greenland (DENMARK) BAFFIN BAY NORTH PACIFIC OCEAN UNITED STATES NORTH ATLANTIC OCEAN MEXICO GULF OF MEXICO CARIBBEAN BEAT COLOMBIA PERU SOUTH PACIFIC OCEAN VENEZUELA BOLIVIA ARGENTINA CHILE BRAZIL TEGANGA GREENLAND SEA NORWEGIAN SEA NORWAY SWEDEN FINLAND BARENTS SEA UKRAINE FRANCE ONA TURKEY пакилистой KARA SEA RUSSIA KAZAKHSTAN MONGOLIA NOROCCO IRAN AFHANAN ARDA ALGERIA PASTAM LIBYA EGYPT Safar SAUDI ARABIA MAURITANIA MAU NIGER SUDAN CHAD SOUTH ATLANTIC OCEAN MOERA BOATRALNEA 300TH ETHIOPIA SUTAN SOMALIA KENYA CABO DEN REP OF THE CONGO ТАЛДАНА INDIA ARABIAN SEA - LANGA BAY OF BENGAL CHINA MALAYSIA ARCTIC OCEAN PHILIPPINE SEA PHILIPPINES EAST SIBERIAN SEA BERING SEA SEA OF OKHOTSK NORTH PACIFIC OCEAN D&S regional offices in key markets Washington, DC (HQ) Tampa, FL Montreal, QC Ottawa, ON Burgess Hill, UK Stolberg, Germany Abu Dhabi, UAE Sydney, Australia FEDERATED STATES OF TALAU E-S PAPIA NEW GUINEA ZAMBIA MOZAMBIQUE RADAGASKAR INDIAN OCEAN LAND AFRICA AUSTRALIA Canada 847 employees Europe 656 employees APAC USA 1,815 employees Middle East 37 employees CORAL SEA SLALES URGAT NAUMU TUVAL Таримл NEW TASMAN ZEALAND 159 employees SAMA Operations strategically located in key growth markets with training support services at 120+ sites CAE Inc. Proprietary Information and/or Confidential CAE#18DEFENCE & SECURITY Market drivers 18 Demand Drivers Profitability Drivers • • • Premium on mission readiness driven by global geopolitical tension and instability Higher mix of simulated vs live training due to budget priorities Complex, multi-domain, joint and coalition forces exercises require training in synthetic environments Need for analytics and Al to process large data sets and complex threats Increasing adoption of new and innovative mediums of training + Increasing mix of international, including foreign military sales (FMS) Operational focus on improving contracting, sub-contracting and quality Expansion of mission support offering by using advanced analytics and software solutions Operational excellence programs expected to realize significant annual recurring cost savings across whole organization, commencing in fiscal year 2022 and ramping up to a run rate of ~$65 to $70 million company-wide CAE's Defence & Security segment is positioned as the partner of choice in live, virtual and constructive training, and is focused on being the global leader in digital immersion CAE Inc. Proprietary Information and/or Confidential CAE#19DEFENCE & SECURITY Defence addressable market Training Systems Integration (TSI) Live Training N195TP G120TP Virtual Training Constructive Training Learn Practice Perform ~$14B* Military Training & Simulation Market Land 7% Naval 7% Air 75% 11% Space & Cyber CAE is a world leading Training Systems Integrator with significant headroom in its addressable markets Source: CAE internal analysis * Metrics in CAD. Market size represents FY20 19 CAE Inc. Proprietary Information and/or Confidential CAE#20DEFENCE & SECURITY L3Harris technologies' military training: a leading, full-service training provider with comprehensive solutions across multiple domains 20 20 HEADQUARTERS Arlington, TX 9 COUNTRIES 23 LOCATIONS T EMPLOYEES 1,600+ 80% secret / high clearance 150+ Programs Vertically integrated total training solutions provider 15 Year F-16 Training Provider Legacy of electronic warfare systems on F-16s Core Business Areas Fast Jet Bombers Rotary Ground Submarines DEPARTME UNITED SOF THE ARM 1775 STATES OF AMER DEPART ARTMENT ...Provide Complete Solutions for Critical US Defense Priorities US Army (W US Navy of US Dept. of Defense WAITED MARINE US Marine Corps CAE Inc. Proprietary Information and/or Confidential DE AIR NATI THE GUARD US Air Force US Air National Guard CAE#21DEFENCE & SECURITY Acquisition strongly aligned with D&S strategic imperatives ++ CAE DEFENCE & SECURITY STRATEGIC IMPERATIVES ΚΑ Ky Alignment to US National Defense Strategy (NDS) Develop Strategic Partnerships on Next-Gen Platforms Leveraging High PWIN to Increase Teaming Expansion Expand & Extend Addressable Market Target Larger Opportunities 21 21 Solidifies position in Air Augments Land/Sea Enhances solutions for multi-domain ops Potential tie into NGAD and B-21 Cleared workforce (80%) key enabler for next-gen platforms Incumbency in high profile Flight Training Ops (FTO) and FSXXI (Rotary) Access to DoD Labs/ DARPA GBSD / SCARS entrée to Space / Cyber WHAT L3HARRIS MILITARY TRAINING OFFERS CAE Inc. Proprietary Information and/or Confidential Augment our offering for major programs CAE#22DEFENCE & SECURITY Adds balance to CAE, with complementary offerings in D&S L3Harris Military Training provides greater balance to CAE overall, and is complementary to CAE D&S Pro Forma Mix (FY20) Standalone CAE Pro Forma* Complementary Exposure in Critical Domains CAE L3HARRIS™ Military Training Domains AIR Defence Revenue Non- Defence Defence ■ Fast Jets Non-Defence Transport / Tanker ◉ Rotary ✓ ✓ ■ Bombers ✓ ✓ US Non-US Revenue by Geography US Non-US GROUND SEA ✓ ✓ SPACE & CYBER * Non-GAAP and other financial measures (see Appendix) 22 CAE Inc. Proprietary Information and/or Confidential CAE#23DEFENCE & SECURITY Addressing 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 training into cost- effective, virtual trainers ■ Defence forces need to train in multi-domain operations using immersive synthetic environments CHESprint Source: CAE internal analysis 23 23 Risk Estimate Distance The US National Defense Strategy (NDS) lays out priorities that address the capabilities necessary to operate in this changing, multi-domain environment These priorities are shared by our customers around the world The acquisition enhances our ability to address these evolving needs CAE Inc. Proprietary Information and/or Confidential CAE#24Healthcare CAE CAE#25HEALTHCARE The global healthcare business 3500+ Simulated clinical experience courseware packages1 Canada 50+ Adjunct faculties, incl. nurses, physicians, paramedics and sonographers² United States Mexico 80+ Countries with CAE- provided training solutions² ~US$1.7B CAE Est. Total Healthcare Simulation Market¹ Venezuela Colombia Peru Bolivia Chile Brazil Argentina Toeland United Kingdom Sweden Norway Finland Russia Poland Germany Ukraine Kazakhstan Mongolia France Italy Spain Turkey Iraq Iran Afghanistan Pakistan Algeria Libya Egypt • Saudi Arabia India Thailand Mali Niger Sudan Chad Nigeria Ethiopia DRC Kenya --- Tanzania Angola Namibia Madagascar Botswana South Africa Operations strategically located in key growth markets 1 Source: CAE FY20 annual report. 2 Source: CAE Q3 FY21 quarterly report. 25 CAE Inc. Proprietary Information and/or Confidential Japan China South Korea Indonesia Papua New Guines Australia New Zealand CAE#26HEALTHCARE Market drivers Demand Drivers Increasing investments in training to prevent medical errors • Refocus on disaster preparedness • Chronic shortage of medical professionals / rising . • enrollments in medical and nursing schools Rising use of simulation in clinical training Greater acceptance of remote and virtual training delivery methods New training models and solutions to drive value-based care CAE's Healthcare segment is positioned as a leader in developing healthcare professionals through technology, educational content and training 26 26 CAE Inc. Proprietary Information and/or Confidential CAE#27HEALTHCARE Broad portfolio of high-tech training solutions Imaging Simulation Interventional Simulation Vimedix Ultrasound Augmented Reality Blue Phantom Ultrasound Models NeuroVR | EndoVR | Cath LabVR LapVR | Surgical Cut Suits Center Management Learning Space Experience / Essentials / Enterprise Curriculum ESPIR TORY Patient Simulation Standard and custom Learning Modules Apollo | Athena | Lucina | Caesar HPS PediaSIM BabySIM Juno | Ares CAE Inc. Proprietary Information and/or Confidential CAE#28Capital Allocation Strategy CAE CAE 3#29CAPITAL ALLOCATION STRATEGY CAE's three capital allocation priorities 29 Invest in superior & sustainable growth Maintain a strong financial position Provide current shareholder returns CAE Inc. Proprietary Information and/or Confidential Acquisitions involving existing capacity holders and capability holders to enhance CAE's global offering and increase market addressability Organic capital investment in capacity and to develop innovative capabilities to strengthen competitive moat and expand aperture to pursue greater addressable market Customer outsourcings mainly training for airlines seeking to improve efficiency and enhance their safety management programs CAE#30CAPITAL ALLOCATION PRIORITIES Attractive compound growth Incremental Pre-tax Return % on Organic Capital Deployed in Civil Training** 30% 20% 10% 0% 15% 8% (FY17-FY21) 35% 31% 29% 29% 27% 14% 10% 3% 5% 4% 2% 1% 0% FY17 FY18 FY19 FY20 FY21 ■FY17 Deployments Total FY18 Deployments Total FY19 Deployments Total FY20 Deployments Total FY21 Deployments Total $578M+ organic capital investment from FY17-FY21 to deploy 67+ FFSS* within CAE's Civil commercial and business aviation training network Organic growth capital deployed in Civil over the last five years has increased the base of recurring revenues and has been highly accretive *Non-GAAP and other financial measures **Defined as the operating profit of the FFSs divided by the investment in FFSS* by year of deployment 30 CAE Inc. Proprietary Information and/or Confidential CAE#31CAPITAL ALLOCATION STRATEGY Strong free cash flow generation $600 $500 $400 $300 $200 $100 $0 FY18 FY19 FY20 Free Cash Flow* Net cash provided by operating activities * Non-GAAP and other financial measures (see Appendix) 31 CAE Inc. Proprietary Information and/or Confidential 120% 115% 110% 105% 100% 95% 90% 85% 80% FY21 FCF Conversion Rate* CAE#32CAPITAL ALLOCATION STRATEGY Maintain solid balance sheet while investing in accretive growth Millions $3 500 $3.000 $2500 $2000 $1500 $1.000 $500 $0 FY18** FY19** Net Debt* Debt $2.0B growth capital deployed, including acquisition of Bombardier BAT Net Debt to Capital % FY20 60,0% 50,0% 40,0% 30,0% 20,0% 10,0% 0,0% FY21 Net Debt-to-Capital* Track record of maintaining a solid financial position while deploying accretive growth capital * Non-GAAP and other financial measures (see Appendix) ** 32 Figures have not been restated to reflect the adoption of IFRS 16. CAE Inc. Proprietary Information and/or Confidential CAE#3333 33 Summary Compelling secular growth story with exposure to the anticipated Aero recovery Comprehensive solutions provider to industry-critical partners Accelerated Defence strategy growth CAE Poised to capitalize on significant benefits from recent M&A Proven track record of balanced, opportunistic capital deployment Deep industry expertise and commitment to innovation CAE Inc. Proprietary Information and/or Confidential CAE#34Appendix CAE CAE 3#35SELECT FINANCIAL HIGHLIGHTS FY21 YTD select financial highlights Summary of Financial Highlights (amounts in millions, except per share amounts, ROCE and book-to-sales) Revenue Operating (loss) income Adjusted segment operating (loss) income* Adjusted SOI excluding COVID-19 government support programs* Q1 FY21 Q2 FY21 Q3 FY21 Q4 FY21 YTD FY21 $550.5 $704.7 $832.4 894.3 $2,981.9 (110.3) 28.2 82.9 47.6 48.4 (2.1) 79.3 97.2 106.2 280.6 (46.5) 44.1 86.6 69.0 153.2 Net (loss) income attributable to equity holders (110.6) (5.2) 48.8 19.8 (47.2) Basic and diluted (loss) earnings per share (EPS) (0.42) (0.02) 0.18 0.07 (0.17) Adjusted net income (loss)* (30.3) 34.2 60.0 63.2 127.1 Adjusted EPS * (0.11) 0.13 0.22 0.22 0.47 Adjusted net income (loss) excluding COVID-19 government support programs* Adjusted EPS excluding COVID-19 government support programs* (62.9) 8.4 52.2 35.9 33.6 (0.24) 0.03 0.19 0.12 0.12 Free cash flow* Net cash (used in) provided by operating activities Capital employed* Non-cash working capital* Net debt* Total debt Return on capital employed (ROCE)* Adjusted ROCE* Total backlog* $(92.7) $44.9 $224.0 $170.6 $346.8 (88.4) 45.6 234.8 174.6 366.6 $4,746.8 $4,707.8 $4,680.8 $4,638.2 169.6 193.2 129.9 35.5 2,407.5 2,358.9 1,819.9 1,425.4 2,770.8 2,616.9 2,439.8 2,351.5 5.3% 3.7% 2.7% 1.7% 8.0% 7.2% 6.4% 5.0% $8,550.9 $8,296.2 $7,820.1 $8,201.1 Order intake* 417.1 667.8 710.7 927.9 Book-to-sales ratio* Book-to-sales ratio* for the last 12 months * Non-GAAP and other financial measures (see Appendix) 35 0.76x 0.95x 0.85x 1.04x 0.99x 0.94x 0.84x 0.91x CAE Inc. Proprietary Information and/or Confidential CAE#36Reconciliation of non-GAAP measures 36 Reconciliation of adjusted segment operating income Q1 FY21 Q2 FY21 Q3 FY21 Q4 FY21 YTD FY21 (amounts in millions) Operating (loss) income $(110.3) $28.2 $82.9 $47.6 $48.4 Restructuring, integration and acquisition costs 51.1 14.3 58.6 124.0 Impairments and other gains and losses incurred in relation to the COVID-19 pandemic (1) Adjusted SOI 108.2 - - 108.2 $(2.1) $79.3 $97.2 COVID-19 government support programs 44.4 35.2 Adjusted SOI excluding COVID-19 government support programs $(46.5) $44.1 10.6 $86.6 $106.2 37.2 $280.6 127.4 $69.0 $153.2 Reconciliation of adjusted net income and adjusted earnings per share (amounts in millions, except per share amounts) Q1 FY21 Q2 FY21 Q3 FY21 Q4 FY21 YTD FY21 Net (loss) income attributable to equity holders of the Company $(110.6) $(5.2) $48.8 $19.8 $(47.2) Restructuring, integration and acquisition costs, after tax 39.4 11.2 43.4 94.0 Impairments and other gains and losses incurred in relation to the COVID-19 pandemic (1), after tax Adjusted net (loss) income COVID-19 government support programs 80.3 80.3 $(30.3) $34.2 $60.0 $63.2 $127.1 32.6 25.8 7.8 27.3 93.5 Adjusted net (loss) income SOI excluding COVID-19 government support programs $(62.9) $8.4 $52.2 $35.9 $33.6 Average number of shares outstanding (diluted) Adjusted EPS Adjusted EPS excluding COVID-19 government support programs 265.7 265.8 273.0 287.3 272.0 $(0.11) $(0.24) $0.13 $0.22 $0.22 $0.47 $0.03 $0.19 $0.12 $0.12 (1) Mainly from impairment charges on non-financial assets and amounts owed from customers. This reconciling item does not adjust for any operational elements, including COVID-19 heightened employee costs. During the period, we carried higher employee costs than we would have otherwise been carrying as amounts received under COVID-19 government support programs either flowed through directly to employees according to the objective of the subsidy programs and the way they were designed in certain countries, or the amounts were offset by the increased costs we incurred in revoking some of our initial cost saving measures including eliminating salary reductions and bringing back employees who were previously placed on furlough or reduced work weeks. We also incurred additional operating costs including the purchase of personal protective equipment, increased sanitary measures to protect the health and safety of our employees and costs of safety protocols implemented. These higher costs have been included in our results. While these additional costs are in certain cases estimated, they almost entirely neutralize the positive impacts of the COVID-19 government support programs. CAE Inc. Proprietary Information and/or Confidential CAE#37Non-GAAP measure definitions Adjusted earnings or loss per share (EPS) Adjusted earnings or loss per share is a non-GAAP measure calculated by excluding restructuring, integration and acquisition costs, and impairments and other gains and losses arising from significant strategic transactions or material events, after tax, as well as significant one-time tax items from the diluted earnings per share from continuing operations attributable to equity holders of the Company. The effect per share is obtained by dividing these restructuring, integration and acquisition costs and other gains and losses, after tax, as well as one-time tax items by the average number of diluted shares. We track it because we believe it provides a better indication of our operating performance on a per share basis and facilitates the comparison across reporting periods. Adjusted earnings or loss per share excluding COVID-19 government support programs further excludes the impacts of government contributions related to COVID-19 support programs that were credited to income, after tax, but does not adjust for COVID-19 heightened operating costs that we have been carrying and that have been included in our results. Adjusted net income or loss Adjusted net income or loss is a non-GAAP measure we use as an alternate view of our operating results. We calculate it by taking our net income attributable to equity holders of the Company from continuing operations and excluding restructuring, integration and acquisition costs, and impairments and other gains and losses arising from significant strategic transactions or material events, after tax, as well as significant one-time tax items. We track it because we believe it provides a better indication of our operating performance and facilitates the comparison across reporting periods. Adjusted net income or loss excluding COVID-19 government support programs further excludes the impacts of government contributions related to COVID-19 support programs that were credited to income, after tax, but does not adjust for COVID-19 heightened operating costs that we have been carrying and that have been included in our results. Adjusted segment operating income or loss (SOI) Adjusted segment operating income or loss is a non-GAAP measure and is the sum of our key indicators of each segment's financial performance. Adjusted segment operating income or loss gives us an indication of the profitability of each segment because it does not include the impact of any items not specifically related to the segment's performance. We calculate adjusted segment operating income by taking operating income and excluding restructuring, integration and acquisition costs, and impairments and other gains and losses arising from significant strategic transactions or material events. We track it because we believe it provides a better indication of our operating performance and facilitates the comparison across reporting periods. Additionally, adjusted segment operating income or loss is the profitability measure employed by management for making decisions about allocating resources to segments and assessing segment performance. Adjusted segment operating income or loss excluding COVID-19 government support programs further excludes the impacts of government contributions related to COVID-19 support programs that were credited to income but does not adjust for COVID-19 heightened operating costs that we have been carrying and that have been included in our results. While management is aware of such further adjusted measure, it is not specifically employed by management as a profitability measure for making decisions about allocating resources to segments and assessing segment performance. Capital employed Capital employed Capital employed is a non-GAAP measure we use to evaluate and monitor how much we are investing in our business. We measure it from two perspectives: Capital used: For the Company as a whole, we take total assets (not including cash and cash equivalents), and subtract total liabilities (not including long-term debt and the current portion of long-term debt); For each segment, we take the total assets (not including cash and cash equivalents, tax accounts and other non-operating assets), and subtract total liabilities (not including tax accounts, long-term debt and the current portion of long-term debt, royalty obligations, employee benefit obligations and other non-operating liabilities). Source of capital: In order to understand our source of capital, we add net debt to total equity. For a reconciliation of this non-GAAP measure to the most directly comparable measure under GAAP, refer to section 9.1 "Consolidated capital employed" of the interim MD&A for the periods ending June 30, 2020, September 30, 2020 and December 31, 2020 (as filed on SEDAR (www.sedar.com) on August 12, 2020, November 10, 2020 and February 12, 2021, respectively), as well as section 7.1 "Consolidated capital employed" of the financial report for the years ended March 31, 2018, March 31, 2019, March 31, 2020 and March 31, 2021 (as filed on SEDAR (www.sedar.com) on May 25, 2018, May 17, 2019, May 22, 2020, and May 19, 2021 respectively), which sections are specifically incorporated by reference into this presentation. Return on capital employed (ROCE) ROCE is used to evaluate the profitability of our invested capital. We calculate this ratio over a rolling four-quarter period by taking net income attributable to equity holders of the Company excluding net finance expense, after tax, divided by the average capital employed. 52 37 CAE Inc. Proprietary Information and/or Confidential CAE#38Non-GAAP measure definitions EBITDA EBITDA comprises earnings before income taxes, finance expense - net, depreciation and amortization. EBITDA margin in D&S is defined as the EBITDA of the Defense and Security segment expressed as a percentage of the Defense and Security revenues. EBITDA of L3Harris Military Training business comprises earnings before income taxes, finance expense – net, depreciation and amortization. Adjusted EBITDA of L3Harris Military Training business is calculated as EBITDA from L3Harris Military Training, after giving effect to the Acquisition and Acquisition related adjustments from sales type leases accounted for under US GAAP and estimated standalone costs. Free cash flow Free cash flow is a non-GAAP measure that shows us how much cash we have available to invest in growth opportunities, repay debt and meet ongoing financial obligations. We use it as an indicator of our financial strength and liquidity. We calculate it by taking the net cash generated by our continuing operating activities, subtracting maintenance capital expenditures, investment in other assets not related to growth and dividends paid and adding proceeds from the disposal of property, plant and equipment, dividends received from equity accounted investees and proceeds, net of payments, from equity accounted investees. For a reconciliation of this non-GAAP measure to the most directly comparable measure under GAAP, refer to section 8.1 "Consolidated cash movements" of the interim MD&A for the periods ending June 30, 2020, September 30, 2020 and December 31, 2020 (as filed on SEDAR (www.sedar.com) on August 12, 2020, November 10, 2020 and February 12, 2021, respectively), as well as section 6.1 "Consolidated cash movements" of the financial report for the years ended March 31, 2018, March 31, 2019, March 31, 2020 and March 31, 2021 (as filed on SEDAR (www.sedar.com) on May 25, 2018, May 17, 2019, May 22, 2020, and May 19, 2021 respectively), which sections are specifically incorporated by reference into this presentation. Cash conversion rate Cash conversion rate is a non-GAAP measure we use to assess our performance in cash flow generation and as a basis for evaluating our capitalization structure. We calculate it by dividing free cash flow by adjusted net income or loss 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 highest fidelity and do not include any fixed based training devices, or other lower-level devices, as these are typically used in addition to FFSs in the same approved training programs. Net debt Net debt is a non-GAAP measure we use to monitor how much debt we have after taking into account cash and cash equivalents. We use it as an indicator of our overall financial position, and calculate it by taking our total long-term debt, including the current portion of long- term debt, and subtracting cash and cash equivalents. Net debt-to-capital is calculated as net debt divided by the sum of total equity plus net debt. For a reconciliation of this non-GAAP measure to the most directly comparable measure under GAAP, refer to section 9.1 "Consolidated capital employed" of the interim MD&A for the periods ending June 30, 2020, September 30, 2020 and December 31, 2020 (as filed on SEDAR (www.sedar.com) on August 12, 2020, November 10, 2020 and February 12, 2021, respectively), as well as section 7.1 "Consolidated capital employed" of the financial report for the years ended March 31, 2018, March 31, 2019, March 31, 2020 and March 31, 2021 (as filed on SEDAR (www.sedar.com) on May 25, 2018, May 17, 2019, May 22, 2020, and May 19, 2021 respectively), which sections are specifically incorporated by reference into this presentation. Non-cash working capital Non-cash working capital is a non-GAAP measure we use to monitor how much money we have committed in the day-to-day operation of our business. We calculate it by taking current assets (not including cash and cash equivalents and assets held for sale) and subtracting current liabilities (not including the current portion of long-term debt and liabilities held for sale). For a reconciliation of this non-GAAP measure to the most directly comparable measure under GAAP, refer to section 9.1 "Consolidated capital employed" of the interim MD&A for the periods ending June 30, 2020, September 30, 2020 and December 31, 2020 (as filed on SEDAR (www.sedar.com) on August 12, 2020, November 10, 2020 and February 12, 2021, respectively), as well as section 7.1 "Consolidated capital employed" of the financial report for the year ended March 31, 2021 (as filed on SEDAR (www.sedar.com) on May 19, 2021), which sections are specifically incorporated by reference into this presentation. Operating income or loss Operating income or loss is an additional GAAP measure that shows us how we have performed before the effects of certain financing decisions, tax structures and discontinued operations. We track it because we believe it facilitates the comparison across reporting periods, and with companies and industries that do not have the same capital structure or tax laws. 38 CAE Inc. Proprietary Information and/or Confidential CAE#39Non-GAAP measure definitions Order intake and Backlog Order intake Order intake is a non-GAAP measure that represents the expected value of orders we have received: For the Civil Aviation Training Solutions segment, we consider an item part of our order intake when we have a legally binding commercial agreement with a client that includes enough detail about each party's obligations to form the basis for a contract. Additionally, expected future revenues from customers under short-term and long-term training contracts are included when these customers commit to pay us training fees, or when we reasonably expect the revenue to be generated; For the Defence and Security segment, we consider an item part of our order intake when we have a legally binding commercial agreement with a client that includes enough detail about each party's obligations to form the basis for a contract. Defence and Security contracts are usually executed over a long-term period but some of them must be renewed each year. For this segment, we only include a contract item in order intake when the customer has authorized the contract item and has received funding for it; For the Healthcare segment, order intake is typically converted into revenue within one year, therefore we assume that order intake is equal to revenue. The book-to-sales ratio is the total orders divided by total revenue in a given period. Backlog Total backlog is a non-GAAP measure that represents expected future revenues and includes obligated backlog, joint venture backlog and unfunded backlog and options: Obligated backlog represents the value of our order intake not yet executed and is calculated by adding the order intake of the current period to the balance of the obligated backlog at the end of the previous fiscal year, subtracting the revenue recognized in the current period and adding or subtracting backlog adjustments. If the amount of an order already recognized in a previous fiscal year is modified, the backlog is revised through adjustments; Joint venture backlog is obligated backlog that represents the expected value of our share of orders that our joint ventures have received but have not yet executed. Joint venture backlog is determined on the same basis as obligated backlog described above; Unfunded backlog represents firm Defence and Security orders we have received but have not yet executed and for which funding authorization has not yet been obtained. Options are included in backlog when there is a high probability of being exercised, but indefinite-delivery/indefinite-quantity (ID/IQ) contracts are excluded. When an option is exercised, it is considered order intake in that period and it is removed from unfunded backlog and options. For a reconciliation of this non-GAAP measure to the most directly comparable measure under GAAP, refer to Section 4.3 "Consolidated orders and total backlog" of the financial report for the years ended March 31, 2019, March 31, 2020 and March 31, 2021 (as filed on SEDAR (www.sedar.com) on May 17, 2019, May 22, 2020, and May 19, 2021, respectively), which sections are specifically incorporated by reference into this presentation. Other The following non-IFRS measures are also used by the Company in this presentation and defined as follows: Accretion is defined as the expected change in CAE's EPS after giving effect to the Acquisition. Pro forma revenue is defined as revenue as if the revenues of L3Harris Military Training were included for the entire period. Pro forma revenue does not have a standardized meaning under IFRS; accordingly, it may not be comparable to similarly named measures used by other companies. Investors should not view pro forma revenue as an alternative measure to, for example, revenue, which is an IFRS measure. 39 CAE Inc. Proprietary Information and/or Confidential CAE#40Thank you! CAE CAE 3