investor presentation - héroux-devtek

INVESTOR PRESENTATION

HÉROUX DEVTEK │INVESTOR PRESENTATION

FORWARD-LOOKING STATEMENTS

This presentation contains forward-looking statements which are mainly about, but may not be limited to, Héroux-Devtek’s future financial performance, expectations,objectives or possible events. The predictive nature of such statements makes them subject to risks, uncertainties and other important factors that could cause the actualperformance or events to differ materially from those expressed in or implied by such statements.

Such factors include, but are not limited to: the impact of worldwide general economic conditions; industry conditions including changes in laws and regulations;increased competition; the lack of availability of qualified personnel or management; availability of commodities and fluctuations in commodity prices; financial andoperational performance of suppliers and customers; foreign exchange or interest rate fluctuations; and the impact of accounting policies issued by international standardsetters. For further details, please see the Risk Management section of the Corporation’s MD&A. Readers are cautioned that the foregoing list of factors that may affectfuture growth, results and performance is not exhaustive, and undue reliance should not be placed on forward-looking statements.

Héroux-Devtek provides such forward-looking statements for the purpose of assisting the reader in understanding the Corporation’s financial performance and prospectsand to present management’s assessment of future plans and operations. The reader is cautioned that such statements may not be appropriate for other purposes.

Although management believes in the expectations conveyed by the forward-looking statements and although they are based on information available to it on the datesuch statements were made, there can be no assurance that such expectations will prove to be correct. All subsequent forward-looking statements, whether written ororally attributable to the Corporation or persons acting on its behalf, are expressly qualified in their entirety by these cautionary statements. Unless otherwise required byapplicable securities laws, the Corporation expressly disclaims any intention, and assumes no obligation to update or revise any forward-looking statements whether as aresult of new information, future events or otherwise.


ABOUT HÉROUX-DEVTEK

8 FACILITIESCANADA5

FACILITIESU.S.A.

3 FACILITIES UK

2 FACILITIES IN SPAIN

≈2,000

AEROSPACE COMPANYWORLD’S 3RD LARGEST LANDING GEAR MANUFACTURER

$ 272

$ 365 $ 407 $ 407 $ 387

$ 484

$ 613

FY14 FY15 FY16 FY17 FY18 FY19 FY20


FISCAL 2020 RESULTS

(1) Non-IFRS financial measure. Please refer to the “Non-IFRS financial measures” section at the end of this document for further details

($M except per share data)

Fiscal years ended March 31 Variance

2020 2019 %

Sales 613.0 483.9 26.7

Gross profit % 16.8% 17.2% (40 bps)

Operating income (30.1) 37.2 (180.7)

Operating income (%) (4.9%) 7.7% (1260 bps)

Adjusted EBITDA(1) 96.2 74.2 29.6

Adjusted EBITDA(1) % 15.7% 15.3% 40 bps

Net income (50.7) 26.2 (293.4)

Adjusted net income(1) 35.7 30.4 17.5

EPS (1.38) 0.73 (289.0)

Adjusted EPS(1) 1.00 0.84 19.0

Sales growth of 26.7%• Organic growth of 6.1%• Acquisitions contributed 20.6%

Operating income down from 7.7% to (4.9%) of sales

• $85.8M of impairment charges (non-cash)• ADJ operating income(1) at $52.5M up from $41.6M,

stable at 8.6% of sales

Adjusted EBITDA(1) grew from 15.3% to 15.7% of sales


DIVERSIFIED AND BALANCED FISCAL 2020 REVENUE MIX

5

Transport

53.7% DEFENCE

DEFENCE / CIVIL

46.3% CIVIL

Large Jets

27.4%

5.1%

5.3%

2.85.7%

5.7%

10.0%

14.1%

23.9%

Business Jets

Regional Jets

Helicopters

Other

Helicopters

Other

Fighters

Canada

FY20 sales mix by end customer location

9.4%

United States

UnitedKingdom

Spain

Rest of Europe

Othercountries

10.2%53.4%

7.8%

11.0%

8.2%

PROPRIETARY / BUILD-TO-PRINTLONG TERM AGREEMENT

31.3%

53.4%

9.4%8.2%

11.0%

7.8%

10.2%

BY END CUSTOMER LOCATION

Build-to-printOther

15.7%

10.8%

42.2%

Proprietary and Life of ProgramContracts

Build-to-printTier 1

Build-to-printOEM

27.4%


RESILIENCE

6

The measures we tookat the beginning of the pandemic allowed usto control fixed and variable costs and generate cash flow.


Q1 FY21 RESULTS

(1) Non-IFRS financial measure. Please refer to the “Non-IFRS financial measures” section at the end of this document for further details

($M except per share data)

Three months ended June 30, Variance

2021 2020 %

Sales 128.3 143.4 (10.5)

Gross profit % 16.0% 16.9% (90 bps)

Operating income 1.4 10.4 (86.5)

Operating income (%) 1.1% 7.2% (610 bps)

Adjusted EBITDA(1) 18.4 21.5 (14.6)

Adjusted EBITDA(1) % 14.3% 15.0% (70 bps)

Net income (1.3) 6.4 (120.2)

Adjusted net income(1) 3.4 7.0 (51.3)

EPS (0.04) 0.18 (122.2)

Adjusted EPS(1) 0.09 0.19 (52.6)

Sales decrease of 10.5%• Civil sales were down 25.9%, with a 44% decrease in

twin-aisle deliveries• Defence sales were up 3.2%

Operating income down from 7.2% to 1.1% of sales

• $6.0M of restructuring in Q1 FY21• ADJ operating income(1) at $7.4M or 5.8% of sales

down from $11.0M or 7.7% of sales

Adjusted EBITDA(1) down from 15.0% to 14.3% of sales


HEALTHY ORDER BOOK

2/3 of order book comes from the defence market

Defence market relatively unaffected by COVID-19

Order book diversified by sector, geography and customer

$ 405

$ 466

$ 624

$ 810 $ 772

2017 2018 2019 2020 2021 Q1

FIRM ORDER BOOK NEW HEIGHT


$232.2M

FREE CASH FLOWS AND LIQUIDITY POSITION

9

$15.5 M

Q1-FY21

$3.7 M

Q1-FY20

Cash flows related to operating activities

Net debt to EBITDA of 2.5x at June 30, 2020 (vs 2.6x at March 31, 2020)

As of June 30, we had$205 M in available liquidity

June 30, 2019 Sept 30, 2019 Dec 31, 2019 Mar 31, 2020 June 30, 2020

Net Debt over the last 4 quarters

$269.6M $256.8M$264.7M $246.9M

$200M

$233.2M


RAMP-UP PHASE OF NEW PLATFORMS

BOEING F/A-18 E/F SUPER HORNET AND EA-18G GROWLER1st delivery Q2-FY21

BOEING MQ-25UNMANNED AERIAL REFUELING PROGRAMNew PlatformDevelopment phase

SIKORSKY CH-53K*New PlatformEntering LRIP phase

SAAB GRIPEN E*New PlatformEntering LRIP phase

* Proprietary programs


OUR FUTURE

11

Solid financial position1

Diversified profile 2

Strong backlog in the defence sector3

Experienced management team and talented employees5

Ready to be opportunistic4


NON-IFRS FINANCIAL MEASURES

The information included in this presentation contains certain financial measures that are notprescribed by International Financial Reporting Standards (“IFRS”) and are not likely to becomparable to similar measures presented by other issuers.• EBITDA - Earnings before financial expenses, income tax expense and amortization

expense.• Adjusted EBITDA - EBITDA as defined above excluding non-recurring items.• Adjusted Operating income – Operating income excluding non-recurring items.• Adjusted net income - Net income excluding non-recurring items net of taxes.• Adjusted earnings per share - Diluted earnings per share calculated on the basis of

adjusted net income.• Free cash flow - Cash flows related to operating activities, less additions to property, plant

and equipment and net increase in finite-life intangible assets.

Refer to the Corporation’s MD&A for further details

HÉROUX DEVTEK │ INVESTOR PRESENTATION 13

HÉROUXDEVTEK.COM

investor presentation - héroux-devtek

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