#1Investor Presentation November 2018 Your worldwide training partner of choice CAE#2Caution regarding forward looking statements This presentation contains forward-looking statements about our activities, events and developments that we expect to or anticipate may occur in the future. These forward-looking statements include, without limitation, statements about our vision, strategies, plans, market trends and outlook, future revenues, capital spending, expansions and new initiatives, financial obligations, and expected sales. Forward-looking statements normally contain words like believe, expect, plan, intend, continue, estimate, may, will, should, strategy, future and other similar expressions or future or conditional verbs such as aim, anticipate, believe, could, expect, intend, may, plan, seek, should, strive and will. A statement is forward-looking when it uses what we know and expect today to make a statement about the future. 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. 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. You will find more information in Section 9-Business risk and uncertainty of our fourth quarter and fiscal year ended March 31, 2018 MD&A. This document has been filed with the Canadian securities commissions and is available on our website (www.cae.com) and on SEDAR (www.sedar.com). It has also been filed with the U.S. Securities and Exchange Commission under Form 6-K and is available on EDGAR (www.sec.gov). Forward-looking statements in this document represent our expectations as of November 13, 2018, and, accordingly, are subject to change after this date. We caution readers that the risks described 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. Additionally, differences could arise because of events that are announced or completed after the date of this document, including mergers, acquisitions, other business combinations and divestitures. 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 report are expressly qualified by this cautionary statement. The terms "segment operating income (SOI)", "backlog", "book-to-sales", "free cash flow", "return on capital employed", "net debt", "net-debt-to-capital ratio", "earnings per share (EPS) before specific items", "capital expenditures (capex)”, “operating profit", "gross profit", and "non-cash working capital" are non-GAAP financial measures and do not have any standardized meaning under IFRS. Therefore, they are unlikely to be comparable to similar measures presented by other issuers. Refer to the definitions in this presentation and to Section 5- Non-GAAP and other financial measures in our second quarter ended September 30, 2018 MD&A for more details. 2 CAE Inc. Proprietary Information and/or Confidential CAE#33 Our vision is to be the recognized global training partner of choice to enhance safety, efficiency and readiness.#4CAE at a glance Leader in three business segments 4 Civil Aviation Training Solutions ■ Commercial Aviation Business Aviation Training equipment ■ Ab Initio Training ■ Crew sourcing Defence and Security ◉ Training Systems Integrator Virtual and live training ■ Training equipment Healthcare ■ Patient simulation Imaging/Interventional simulation ■ Courseware & Audiovisual solutions ■ Turnkey training solutions CAE Inc. Proprietary Information and/or Confidential CAE#5CAE at a glance Diversified base of business with a high degree of recurring revenue LO 5 4 % 56 40 Civil Aviation Training Solutions Defence and Security Healthcare 36 28 % U.S.A. 36 Europe Asia Australia 40 Canada % Central and 60 South America Middle East Total FY18 revenue(1); $2,823.5M (1) Restated as a result of the adoption of IFRS 15 CAE Inc. Proprietary Information and/or Confidential Services Products Approximate value including JV sales CAE#66 pillars of strength underlie CAE's strategy and investment thesis 6 Strong competitive moat 0 Headroom in large markets High degree of recurring business حالك + Underlying secular tailwinds Potential for superior returns CAE Inc. Proprietary Information and/or Confidential Culture of innovation CAE#7Unmatched global reach 7 Hawaiian Islands ARCTIC OCEAN U.S. BEAUFORT SEA NORTH PACIFIC OCEAN CANADA UNITEDOSTATES TATES SOUTH PACIFIC OCEAN MEXICO Corporate head office Civil Aviation Training Solutions Defence & Security Healthcare O Greenland (DENMARK) BAFFIN BAY GULF OF MEXICO THE BAHAMAS GUATEMELA BELIZE HONDURAS NICARAGUA PANANGA COSTA RICA JAMAICA ECUADOR DOMINIC REPUBLIC CARIBBEAN SEA NORTH ATLANTIC OCEAN THINDAD AND TOBAGO VENEZUELA GUYANA French Guiana COLOMBIA RU BOLIVIA BRAZIL PARAGUAY ARGENTINA CHILE URUGUAY GREENLAND SEA NORWEGIAN SEA ICELAND NORW SWEDEN FINLAND EST ED North Sea LITH RU IRELAND BELARUS PORTUGAL SPAIN Western Sahara AUS FRANCE SUB MOROCCO ALGERIA POLAND BARENTS SEA UKRAINE MOLDOVA KARA SEA RUSSIA KAZAKHSTAN ROMANIA SER LY KON BAGANA MONT ALB GEORGIA ARMENIA AZERBALIAN URVEKISTAN KYROWZSTAN GREECE TURKEY TURK STAN TALNOSTAN "MAILTA CYPRUS SYRIA IRAQ TUNISIA MEDITERRANEAN SEA LEB IRAN AFGHANISTAN ISRAEL JORDAN LIBYA EGYPT BAR UNITSBARAL SAUDI ARABIA OMAN MAURITANIA MALI NIGER SUDAN ERITREA CHAD YEMEN SENICAL THE GAMBIA BURKINA FASO GUINEA-BISSAU GUINEA BENIN NIGERIA SIERRALEONE COTE DIVORE TOOD GHANA LIBERA SOUTH ATLANTIC OCEAN 160+ locations CENTRAL AFRICAN REPUBLIC SOUTH SUDAN ETHIOPIA CAMEROON EQUATORIAL GUINEA SOMALIA REP. OF THE UGANDH KENYA GABON CONGO DEM. REP. DA OF THE CONGO ANGOLA ZAMBIA BOTSWANA NAMIBIA BURLINOI TANZANIA MOZAMBIQUE ZIMBABWE SWAZILAND SOUTH AFRICA LESOTHO NEPAL BHUTAN PAKISTAN ARABIAN SEA MONGOLIA ARCTIC OCEAN EAST SIBERIAN SEA SEA OF OKHOTSK CHINA SOUTH KOREA NORTH PACIFIC OCEAN BANGLADESH BURMA INDIA LAOS BAY OF BENGAL THAILAND LANKA MADAGASKAR INDIAN OCEAN 35+ countries CAE Inc. Proprietary Information and/or Confidential VIETNAM CAM SOUTH CHINA SEA PHILIPPINES LAYSIA SINGAPORE NDON E-S 9,000+ employees PHILIPPINE SEA FEDERATED STATES OF MICRONESIA PALAU BERING SEA MARSHALL ISLANDS NAURU KIRIBATI PAPUA NEW GUINEA SOLOMON ISLANDS TIMOR LESTE TUVALU SAMOA AUSTRALIA CREAT AUSTRALIAN BIGHT CORAL SEA FUL TONGA TASMAN SEA NEW ZEALAND Tasmania CAE#88 FY2018 SELECT PERFORMANCE HIGHLIGHTS $2.8B $2.8B +8% +4% $7.85B $2.7B $1.11 $7.53B $1.03 Record Revenue FY2017 FY2018 12.3% Record Earnings Per Share from continuing operations 1,2 Record Backlog FY2017 FY2018 FY2017 FY2018 12.3% 21.5% 11.2% 26.5% 21.5% +10% $126.3M $138.7M Higher Return on Capital Employed² Strong Financial Position - Net Debt-to-Total Capital Ratio Higher Return to Shareholders³ FY2017 FY2018 FY2017 FY2018 FY2017 FY2018 1. Before specific items in FY2017 2. Before impact of U.S. tax reform and net gains on strategic transactions related to Asian joint ventures in FY2018 3. Combining dividends and share buy-back Note: EPS from continuing operations before specific items, backlog, return of Capital employed, and debt-to-capital ratio are all non-GAAP financial measures and are defined in CAE's FY2018 Management discussion and analysis CAE Inc. Proprietary Information and/or Confidential CAE#9Civil Aviation Training Solutions Your worldwide training partner of choice Pi CAE#1010 CIVIL AVIATION TRAINING SOLUTIONS Market drivers COMMERCIAL AVIATION BUSINESS AVIATION Market expansion: Over the next 10 years, IATA forecasts passenger trips to grow by 3.5% annually Fleet renewal and expansion Commercial aircraft deliveries at historical levels and driven by OEM backlogs Activity of the installed base Training regulations Market expansion: New aircraft deliveries and sales of pre-owned aircraft generate increased training. demand Activity of existing active fleet Training regulations 5.2B 39K 27K 3.7B Passengers trips* Active commercial aircraft 2018 2028 2018 2028 4.5M 4.2M 27K 22K Business aviation training is predominantly outsourced Business Jet flights* Active business jets 2014 2017 2018 2028 CAE Civil business is supported by strong pilot demand and the recurring (and regulated) nature of training *Passenger trips: IATA Passenger forecasts, October 2017 Business Jet flights: millions takeoffs and landings, FAA data CAE Inc. Proprietary Information and/or Confidential CAE#11CIVIL AVIATION TRAINING SOLUTIONS Headroom in a large market MEAFT SWITCH FT SHO SEAT PAN FILT MUST BE ROTATED FULLY PWD EXCEPT DURING CRUISE 11 143139 130 2200 Civil Training Market $4.2B 35% CAE CAE has potential to increase share in a large market CAE Inc. Proprietary Information and/or Confidential CAE#12CIVIL AVIATION TRAINING SOLUTIONS 10-YEAR AIRLINE AND BUSINESS JET PILOT DEMAND OUTLOOK Pilot Population to Exceed 1/2 Million New Civil Pilots Needed Captain Upgrades Needed 12 Business Commercial Additional Pilots for Growth 10K 530K 65K Active Pilots in 2028 160K* Active Pilots Pilot Replacements 55K 40K* 305K 2018 110K 465K *Including a net 20K business jet pilots movement to airlines Sources: Based on CAE analysis 300K New Business Jet and Airline Pilots EUROPE, MIDDLE EAST & AFRICA +90K New pilots 2028 Commercial Business CAE Inc. Proprietary Information and/or Confidential Active Captains New Captains 215K AMERICAS +110K 2018 2028 New pilots Business Jet Pilots Needed +50K New 55K 65K Active Pilots Pilots ASIA-PACIFIC Active Needed +100K Pilots New pilots 2018 2028 CAE#13CIVIL AVIATION TRAINING SOLUTIONS World's largest civil aviation training network 50+ Training Locations 250+ Full Flight Simulators + IVANCOUVER⭑ MINNEAPOLIS TORONTO + • MONTREAL STOCKHOLM • OSLO MANCHESTER DUBLIN. SHANNON OXFORD • LONDON BURGESS HILL AMSTERDAM BRUSSELS I COPENHAGEN I I LONDON GATWICK • PARIS I • PRAGUE FRANKFURT SESTO CALENDE + • ROME • BARCELONA MADRID + ST-JOHN'S PALMA DE MALLORCA I NEW JERSEY/MORRISTOWN • CHARLOTTE I PHOENIX* DALLAS • ORLANDO MIAMI HAWAII. MEXICO CITY/TOLUCA ⚫ 10 160+ Academies Aircraft CAE trains 180,000 crew members every year LOCATIONS CADET TRAINING ■LIMA. * BOGOTÁ I COMMERCIAL AVIATION TRAINING BUSINESS AVIATION TRAINING HELICOPTER AVIATION TRAINING AVIATION RECRUITMENT SANTIAGO. Network as o ctober 2018 * SÃO PAULO CAE Inc. Proprietary Information and/or Confidential DUBAI DAMMAM + ABIT ABU DHABI I NEW DELHI⚫ ■GONDIA ⚫ • OMANI BENGALURU⚫ ADDIS ABABA+ BEIJING + • SEOUL * TOKYO SHANGHAI + ■ GUANGZHOU IZHUHAI⚫HONG KONG THO CHI MINH KUALA LUMPUR. • CLARKI BRUNEI • SINGAPORE • JAKARTA JOHANNESBURG II PERTH+ TAMWORTH ⚫ MELBOURNE⚫ CAE#14CIVIL AVIATION TRAINING SOLUTIONS Trusted partner of regulatory organizations and industry associations Thought leadership and innovation ICAO 0 OAC/. • ИКАО FEDERAL AVIATION ADMINI RATION EASA European Aviation Safety Agency IATA Suite 14 国际民航组织 ايكا ROYAL AERONAUTICAL SOCIETY Constantly developing training solutions for partners Development of the Next Generation Training System Supported by innovative data collection and analysis techniques, we aim to improve training quality and efficiency through the integration of untapped data-driven insights into training (e.g. CAERise™) TM CAERise TRAINING SYSTEM Electronic Training SOP Management Tool Objective Assessment Data Analytics Thought leadership and innovation are at the heart of our success CAE Inc. Proprietary Information and/or Confidential CAE#1515 CIVIL AVIATION TRAINING SOLUTIONS Business Aviation Training expansion CAE WORLDWIDE TRAINING PARTNER OF CHOICE GLOBAL 7500 CHOARDER BOMBARDIER CAE to acquire Bombardier's Business Aircraft Training business for enterprise value of US$645 million to expand its position in the business aviation training market CAE Inc. Proprietary Information and/or Confidential CAE#1616 CIVIL AVIATION TRAINING SOLUTIONS Acquisition highlights ✓ Expands CAE's addressable market in Business Aviation Training Acquires an established and growing business for the provision of flight and maintenance training services for operators of one of the world's largest and most valuable in-service business jet fleets Extends OEM Authorized Training Provider (ATP) agreement to 2038 ✓ Enhances CAE's position in largest and fastest growing segment of Business Aviation Training Increases training portfolio focus on medium- and large-cabin business jet market High quality training platforms based on in-production aircraft with superior growth profiles Modern fleet of state-of-the-art full-flight simulators with limited ongoing maintenance investment required ✓ ✓ . Strong strategic and operational fit • Expands CAE's addressable market for business jet instructor-led (wet) training Provides greater leverage across CAE's BAT network Low-risk, plug-&-play integration with operations already co-located within CAE's training premises Financially attractive Accretive to earnings and free cash flow in the first full year of ownership Attractive growth and margin profile Provides additional value from ATP extension and monetization of existing royalty obligations at a discount • Fits capital allocation strategy for a balance of growth and cash returns to shareholders • High cash flow generating business provides flexibility to deleverage balance sheet; continue supporting future growth opportunities; and generate current returns to shareholders Maintains CAE's investment grade profile with proforma leverage ratio remaining within target leverage range CAE Inc. Proprietary Information and/or Confidential LASSROOMS 5-27 CAE + BOMBARDIER CAE#17CIVIL AVIATION TRAINING SOLUTIONS Transaction summary Transaction Overview ■ Two main transaction elements ("Transaction"): ☐ 1. Acquisition of Bombardier Business Aircraft Training ("BAT") business for enterprise value of US$645 million • EV / one-year Forward EBITDA (1) (2) multiple of approximately 9x EV/LTM (Jun-18) Bombardier BAT Adjusted EBITDA (1) (3) of approximately 10x 2. Monetization of existing future royalties at a discount for US$155 million ("Monetization") Bombardier BAT business EBITDA (1) growing at a double-digit pace High single-digit-percentage earnings accretion for CAE in first full year of ownership Free cash flow accretive in first full year of ownership Expected Financial Impact ☐ Accretive to Civil segment operating margin by 100-150bps Expected cost synergies of US$6.0 million by the end of the first fiscal year post closing CAE's outlook for 13% ROCE (4) by FY2022 maintained Acquisition financed through a combination of: . New committed term loans of up to US$400M 17 Fully Committed Financing Other Terms ☐ Balance from cash on hand and drawing on existing credit facility Net-debt-to-capital (4) ratio of 42% pro-forma at closing is within CAE's target leverage range of 35-45% Plan to return to lower end of target leverage range within 24-36 months post completion of the Transaction Investment grade financial profile maintains financial flexibility and access to debt markets at attractive terms ■ Transaction subject to customary regulatory approvals. ☐ Closing of the Monetization transaction expected by end of FY19 and the Bombardier BAT acquisition by H2 CY2019 (1) EBITDA: earnings before net finance expense, income tax expense, amortization and depreciation (2) Forecasted EBITDA reflecting the ramp up of newly deployed simulators and expected cost synergies (3) Adjusted for lease costs and one-time / non-recurring items (4) Refer to Section 5- Non-GAAP and other financial measures in our first quarter ended June 30, 2018 MD&A for definition and more details. CAE Inc. Proprietary Information and/or Confidential CAE#18CIVIL AVIATION TRAINING SOLUTIONS Industry-leading Business Aviation Training platforms Bombardier's BAT Business by Aircraft Platform Aircraft Platform Entry Into Service Cabin Size In Production # of Simulators 1 9500 Global 7500 2018 Large 2018 1 (Q3 FY19) 6500 2019 Global 5500/6500 Large (Expected) 2019 (Expected) 1 (FY2021) ■ Growth expected from strong demand by customers operating a large in-service fleet (4,800 business aircraft), additional business jet deliveries, and the ramp-up of new full-flight simulator (FFS) deployments already included with the acquisition Acquiring a network with 12 modern FFSs, three of which have recently (or will soon be) deployed Global 5000/6000 (Vision) . 6000 2012 Large 2 1 Global 7500 FFS recently deployed 2012 Global Express XRS 2005 Large 1 • (last year of production) 650 Challenger 650 2015 Large 2 1 Global 7500 FFS to be deployed Q3FY19 1 Global 6500 FFS scheduled for FY2021 Approximately 90% of training platforms are for aircrafts that are currently (or soon-to-be) in production Challenger 350 350 2014 Medium Learjet 70/75 2013 Small 3 1 Expands CAE's position on training platforms for high-growth and high-value, medium- and large- cabin aircraft 18 Bombardier BAT business provides CAE with increased exposure to new generation medium- and large-cabin aircraft platforms CAE Inc. Proprietary Information and/or Confidential CAE#19Defence & Security Your worldwide training partner of choice CAE#20DEFENCE & SECURITY Global Presence Ottawa Montreal Washington Orlando Tampa London Stolberg 3650+ EMPLOYEES 30 COUNTRIES Rome 50+ DEFENCE AGENCIES Abu Dhabi Bangalore 80+ SITES Singapore 70+ MILITARY AIRCRAFT TYPES Sydney $1B+ Business strategically located in key growth markets CAE Inc. Proprietary Information and/or Confidential CAE#21DEFENCE & SECURITY Defence Growth Cycle 20% Canada 43% United States OCAE Revenue Distribution 26% Europe 11% 70% spending increase over 10 years Acquisition of Major Capital Assets Significant unmet needs Reliant on US defense technology ■ Persistent Defence budget increases Aerospace & Defence firms are ◉ Shaping portfolio to focus on core Vertically integrating Consolidating ■ Trend towards increased outsourcing ■ Focused on Foreign Military Sales Middle East Asia-Pacific Plans to recapitalize/modernize aircraft Near-term shortfalls delaying programs Increased bi-lateral cooperation ■ Reliant on US technology Instability in ME, IN/PAK, CH, NK Adoption of US technology Focus on Air/Naval Systems Historic increases in US Defence budgets are being met with similar increases in the EU, NATO, GCC and APAC CAE Inc. Proprietary Information and/or Confidential CAE#22DEFENCE & SECURITY Defence Training Market Drivers Increased Defence spending in all major markets Requirement to maintain mission readiness Increased use of Live-Virtual-Constructive solutions for Integrated Mission Training K Propensity to increase outsourcing of training solutions Increasing budgets, operational emphasis, adoption of advanced technology and increased reliance on contracted personnel are all persistent trends CAE Inc. Proprietary Information and/or Confidential CAE#23DEFENCE & SECURITY Training Systems Integration (TSI) Strategy TSI programs are driven by increased outsourcing in the Live Flight Training portion of the program Live Flight Training Devices users are focused on increasing the fidelity of the virtual environment and on-board systems Virtual TSI Interoperability and secure. connectivity allow for increased collective, joint and coalition training Constructive Integrated training solutions all have Live, Virtual and Constructive components The TSI approach defines and implements an optimal, integrated mix CAE Inc. Proprietary Information and/or Confidential CAE#24DEFENCE & SECURITY Strategic Successes 24 24 • DEPARTMENT OF THE ARA UNITED 1775 STATES 0% AMER U.S. Army Fixed-Wing Flight Training Program Lakota Training System Abrams Maintenance Training System • DEPARTMENT O T OF AMERICA U.S. Navy DEPARTMENT OF UNITED STA HE AIR MCMXLVII STATES AMERICA FORCE U.S. Air Force CNATRA Contract Instruction Services for T-45 and T-6 Aircrew Training • MQ-1/MQ-9 Aircrew Training • KC-135 Aircrew Training T-44C Aircrew Training MH-60R Tech Refresh C-130J Training Systems O U.K. Royal Air Force Medium Support Helicopter Aircrew Training Facility Military Flying Training System Merlin Life Sustainment Program • Royal Australian Air Force Management and Support of ADF Aerospace Simulators (MSAAS) • MRH90 Training System • P-8 Training System • Royal Canadian Air Force NATO Flying Training in Canada (NFTC) C-295 Fixed Wing SAR Aircrew Training CC-130J and CH-147F Operational Training Systems Provider UAE Defence Forces • Naval Training Centre (NTC) Joint Aviation Command AH407 / . UH60 Training System MQ-1 (Protector) Training Program Innovative and comprehensive training solutions on leading platforms for Defence organizations worldwide CAE Inc. Proprietary Information and/or Confidential CAE#25DEFENCE & SECURITY Headroom in a Large Market Live TASK FORCE LOOD DARK MIG 29 TASK FORCE LUND PHRS UnPTEY Virtual Constructive TORIDOS TORNADOS TEAM CHE CHEROO Training Systems Integration Market $17B+ $1.09B CAE D&S Traditional Flight Simulation Market Well positioned to increase share in a $17B+ market CAE Inc. Proprietary Information and/or Confidential CAE#26Healthcare Your worldwide training partner of choice CAE पंप#27CAE HEALTHCARE The case for CAE healthcare Digital transformation enables data-driven care and training Synergies with CAE's next generation training solutions 27 27 ㅆ Explicit desire to adopt aviation best practices $ Shift to value-based care aligns prices with patient outcomes Opportunity to lead in a potentially much larger market as quality of care gets incentivized and regulations take hold CAE Inc. Proprietary Information and/or Confidential CAE#28CAE HEALTHCARE Market drivers Increasing use of simulation in healthcare Digital transformation of healthcare training 28 Limited access to live patients during training Students paired with experienced staff Limited access to high-risk procedures and rare conditions CAE Inc. Proprietary Information and/or Confidential 100 Growing emphasis on quality of care and patient safety Reducing medical errors* and improving patient outcomes Medical technology revolution Advancements in medical technology are driving the use of simulation by OEMs, pharma and clinicians * 3rd leading cause of death in USA CAE#29Regulatory shift toward Value-based Care US Centers for Medicare and Medicaid Services' Hospital Acquired Conditions (HAC) Uses quality of care as a performance metric 6 Quality Measures 1. Patient Safety Indicators 90 Composite 2. Central line bloodstream infections 3. Catheter-associated urinary infections. 4. Surgical site infections 5. Multi-resistant infections 6. Clostridium difficile infections 25% lowest performing US hospitals face penalties = FY17 1% payment cut FY18 4% payment cut = FY19 6% payment cut In FY17, lowest performing hospitals lost $430M USD in government reimbursements In FY19, lowest performing hospitals will lose ~$3B USD in government reimbursements Value-based Care is driving a greater adoption by US hospitals of simulation-based training to improve the quality of care CAE Inc. Proprietary Information and/or Confidential CAE#30CAE HEALTHCARE Broadest portfolio of training solutions Patient simulators 30 30 PNCI METI Learning PNCI ECS ECS Leerwe Version METI Courseware Simulation centre management solutions CAE Inc. Proprietary Information and/or Confidential CAE Ultrasound simulators Surgical simulators#31CAE HEALTHCARE Culture of innovation 31 CAE Healthcare became the first company to bring a commercial Microsoft HoloLens mixed- reality application to the medical simulation market... ...by using the Microsoft HoloLens, the CAE VimedixAR ultrasound simulator integrates real-time interactive holograms of the human anatomy CAE Inc. Proprietary Information and/or Confidential CAE#32CAE HEALTHCARE Thought leadership and Innovation American Society of Anesthesiologists Trusted partner of scientific societies CHEST™ American Heart Association® AMERICAN COLLEGE of CHEST PHYSICIANS European Society of Anaesthesiology ESA ESICM EUROPEAN SOCIETY OF INTENSIVE CARE MEDICINE ASE American Society of Echocardiography Screen-based simulation for Maintenance of Certification in Anesthesiology (MOCA) The Next Generation Training and Certification Created in collaboration with American Society of Anesthesiologists (ASA) and approved by American Board of Anesthesiology (ABA) Powered by CAE MÜSE physiology and deployed via ASA Education Center Fluid Warmer 32 32 CAE CAE Inc. Proprietary Information and/or Confidential#33Financial highlights and capital priorities Your worldwide training partner of choice CAE#34CAPITAL ALLOCATION PRIORITIES Priorities 34 1 2 Invest in superior and sustainable growth Market/customer-led investments in core and close adjacencies with a clear path to market share gains and attractive returns Provide current shareholder returns while generating long term growth Current shareholder returns commensurate with earnings and cash performance 3 Maintain a strong balance sheet Target leverage ratio of Net Debt-to-Capital of 35-45% to maintain flexibility for growth investment opportunities CAE Inc. Proprietary Information and/or Confidential CAE#3535 55 CAPITAL ALLOCATION PRIORITIES Investment in accretive growth remains a priority given attractive return potential 40% Incremental Pre-tax DOI Return % on Capital Deployed in Civil Training (FY14-FY18) 30% 20% 10% 0% 2% 14% 7% 25% 24% 3% FY14 FY15 FY16 FY14 Deployments ■FY15 Deployments ■FY16 Deployments 31% 30% 28% 27% 11% 3% 15% FY17 FY18 ■FY17 Deployments ■FY18 Deployments 19% 5% ~$316M capital investment from FY14-FY18 to deploy 47 FFSs within CAE's Civil commercial and business aviation training network Growth capital deployed in Civil in the last five years has grown recurring revenue and has been highly accretive CAE Inc. Proprietary Information and/or Confidential 1 CAE#36CAPITAL ALLOCATION PRIORITIES Current shareholder returns 36 2 Profits returned to shareholders Millions $160 $140 $120 $100 $80 $60 $40 $20 $0 FY11 FY12 FY13 Dividends FY14 FY15 FY16 FY17 FY18 ■ Share repurchases CAE prioritizes a balance between long-term capital appreciation and cash returns to shareholders CAE Inc. Proprietary Information and/or Confidential CAE#37CAPITAL ALLOCATION PRIORITIES Strong balance sheet 37 Millions $2,000 $1,800 $1,600 50% Optimal Net Debt-to-Capital (35-45%) 40% $1,400 $1,200 $1,000 30% $800 $600 20% $400 $200 $0 10% * * * FY11* FY12* FY13* FY14 FY15 FY16 FY17 FY18 *Not adjusted for IFRS11 impact Net Debt Net Debt-to-Capital CAE's strong financial position provides stability and flexibility to pursue accretive growth investments in our core CAE Inc. Proprietary Information and/or Confidential 3 CAE#38Increased proportion of recurring revenue (services) FY2001 FY2008 FY2018 15% 43% 60% Products Services 38 CAE Inc. Proprietary Information and/or Confidential CAE#39A resilient business model 39 CAE Consolidated Segment Operating Income (SOI) SOI down 14% post 'Financial Crisis' Millions $500 $450 $400 SOI down 60% $350 post '2001 Crisis' $300 $250 $200 $150 $100 $50 $0 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY01-FY10 Canadian GAAP; FY11-FY17 IFRS CAE Inc. Proprietary Information and/or Confidential CAE#40Strong backlog for enhanced visibility Total Backlog Billion $9.0 16% CAGR $8.0 $7.0 $6.0 9% CAGR $5.0 $4.0 $3.0 $2.0 $1.0 $0.0 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 Civil ■ Defence 40 40 CAE Inc. Proprietary Information and/or Confidential CAE#41Compelling long term investment thesis C High Degree of Recurring Business · • • Services revenue approx. 60% of mix and expected to continue increasing relative to products Long-term contracts in regulated markets Large order backlog Strong Competitive Moat • • Market leader Unique comprehensive Solutions Unmatched global reach Deep customer intimacy and scale * ८ Underlying Secular Tailwinds Long-term passenger traffic growth in Civil aviation • Increased defence spending and rise in simulation-based training . Rising adoption of simulation in Healthcare and potential for regulation + Potential for Superior Returns 41 41 • Rising proportion of recurring services which portends lower volatility الله Headroom in Large Large addressable markets in Civil Aviation and Defence • Innovation leader in developing Healthcare simulation market Markets Innovation leader in simulation products and training solutions Potential to grow faster than underlying markets. by increasing share in large markets Proven outsourcing Culture of Innovation models CAE's position for sustainable growth inside of large end markets makes it highly attractive from a risk/return standpoint CAE Inc. Proprietary Information and/or Confidential CAE#42Outlook summary for FY2019 CIVIL Continued low double-digit percentage operating income growth DEFENCE AND SECURITY HEALTHCARE Continued mid to high single-digit percentage operating income growth Resumption of double-digit growth Continued measured and profitable growth investment mainly in support of and driven by customer training outsourcing opportunities Total capital expenditures of approximately $250M commensurate with larger scale of CAE and high level of opportunity for market-led investments offering accretive returns and free cash flows 42 42 Expect to exceed underlying growth of CAE's core markets CAE Inc. Proprietary Information and/or Confidential CAE#43Appendix Your worldwide training partner of choice CAE#44CAE'S PERFORMANCE Q2 FY19 business highlights 44 EPS Revenue Operating profit Free cash flow Book-to-sales Total backlog FY19 Q2 $0.23 vs. $0.20 in prior year* $743.8M (+20% YoY) $98.7M (+12% YoY*) $137.7M compared to $63.5M to last year 1.33x $8.67B *Q2 FY18 results exclude the impact of the net gain on a strategic transaction related to our Asian joint venture. CAE Inc. Proprietary Information and/or Confidential CAE#45FY19 Q2 Consolidated financial results Summary of Consolidated Results (amounts in millions, except per share amounts) Revenue Gross profit Operating profit As % of revenue Net income Net income attributable to equity holders of the Company Basic and Diluted EPS attributable to equity holders of the Company Three months ended September 30 2018 2017 Restated* $ 743.8 $ 618.2 201.5 181.5 98.7 88.5 13.3% 14.3% 63.6 55.1 60.7 53.3 0.23 0.20 45 45 *FY18 results restated as a result of the adoption of IFRS 15. Q2 FY18 results exclude the impact of the net gain on a strategic transaction related to our Asian joint venture. CAE Inc. Proprietary Information and/or Confidential CAE#46FY19 Q2 Cash movements Consolidated Cash Movements (amounts in millions) Three months ended September 30 2018 2017 Restated* Cash provided by operating activities $123.0 $ 102.4 (before changes in non-cash W/C) Changes in non-cash working capital 54.1 (5.3) Maintenance capex and other assets (17.2) (17.2) Proceeds from the disposal of property, plant and equipment 10.8 Net payments to equity accounted investees (3.6) (4.0) Dividends received from equity accounted investees 7.1 Dividends paid Free cash flow *FY18 results restated as a result of the adoption of IFRS 15. (25.7) (23.2) 137.7 63.5 46 46 CAE Inc. Proprietary Information and/or Confidential CAE#47Our vision is to be the recognized global training partner of choice to enhance safety, efficiency and readiness. 47 17