Factsheet 2016

Safran financial profile
Key figures*
2011
2012
2013
2014
2015
Adjusted revenue (€M)
11,736
13,560
14,363
15,355
17,414
Adjusted EBIT (€M)
1,189
1,444
1,780
2,089
2,432
EBIT margin
Group profile
Employing 70,087 people worldwide, Safran is an
international high-technology group and Tier-1
supplier of systems and equipment in its core markets
of Aerospace, Defence and Security.
It is a leading global player on markets in which the
technological and financial barriers to entry are high,
with substantial and profitable service activities and
long-lasting partnerships and customer relations
based on trust.
July 29, 2016
10.1%
10.6%
12.4%
13.6%
14.0%
Adjusted net income (€M)
644
979
1 193
1,248
1,482
Self-funded R&D
808
1,103
1,289
1,464
1,356
CAPEX
352
419
492
674
758
Free cash flow (€M)
532
564
699
740
974
Free cash flow / EBIT
45%
39%
39%
35%
40%
Net Debt (€M)
(997)
(932)
(1,220)
(1,503)
(748)
Gearing
19.5%
15.5%
17.9%
23.2%
12.7%
Dividend per share (€)
0.62
0.96
1.12
1.20
1.38
Pay out
40%
40%
40%
40%
40%
59,805
62,558
66,289
68,845
70,087
Headcount
Revenue breakdown by business (2015)
Aerospace Propulsion
11%
7%
Aircraft equipment
54%
28%
Defence
Security
EBIT breakdown by business (2015)
6%
3%
19%
Aerospace Propulsion
Aircraft equipment
Defence
73%
Security
Shareholding structure (July 29, 2016)
0,1%
13,7%
Public
French State
15,4%
Employees
70,8%
Treasury shares
*For 2011, data as published under prevailing accounting standards; 2012 restated for IAS 19 amended; 2013 restated for the application of IFRS11
More than 80% of revenue exposed to Aerospace; c.80% of revenue exposed to non military activities
Aircraft equipment
Aerospace propulsion
Key figures
2015
8%
Revenue
Rec. EBIT
EBIT Margin
9,319
1,833
19.7%
2015
% of business line revenue
Military aviation
70%
Helicopter turbines
Ballistics and space
Civil Aviation:
 Narrowbody : prime contractor for the CFM56 engine
powering the A320 (dual source) and the 737 (single source)
through CFM International (50-50 JV with GE). Also
developing the LEAP to power the A320neo (dual source), the
737MAX (single source) and the C919 (sole western source)
 Widebody : partner to GE on CF6, GE90, GenX, GE9X.
Partner to Engine Alliance on GP7200
 Regional jets : prime contractor for the Sam146 (powering
the Sukhoi Superjet 100) in partnership with NPO Saturn.
 Business jet : development of the Silvercrest for the Dassault
Falcon 5X
Military aviation
 Main products include the M53-P2 for the Mirage 2000, the
M88-2 for the Rafale, and a stake in the TP400 for the Airbus
A400M.
Helicopter turbines
 #1 worldwide with a 26% marketshare over 2011-2015
 Supplier to Airbus Helicopters, Bell, HaL, Avic, Kamov
Ballistics and Space
 Leading expertise in cryogenic and solid rocket propulsion
 Safran & Airbus are regrouping their strategic and civil space
launcher activities into Airbus Safran Launchers
 CFM56
CFM56 engine
engine =>
=> c.80%
c.80% market
market share
share on
on NB
NB aircraft
aircraft


 CFM56
CFM56 programme
programme =>
=> c.50%
c.50% of
of Propulsion
Propulsion revenue
revenue

Services
=>
50%
of
Propulsion
revenue
 Services => 54% of Propulsion revenue
 Preparing
Preparing the
the transition
transition to
to the
the LEAP
LEAP engine
engine

Defence
Revenue
Rec. EBIT
EBIT Margin
4,943
466
9.4%
Key figures
2015
% of business line revenue
Civil aviation
13%
9%
Key figures
Landing & aircraft syst
29% 48%
23%
Rec. EBIT
EBIT Margin
1,266
64
5.1%
Rec. EBIT
EBIT Margin
1,878
151
8.0%
% of business line revenue
Optronics
41%
Identity&Security
Avionics
85%
Electronics&critical software
Landing gear & braking systems
 #1 worldwide in landing gear: 24,000+ aircraft equipped
 #1 worldwide in carbon brakes (aircraft>100pax): 50%+ market share
in large jets, 7,500 a/c equipped, to reach 10,000+ by 2020
 Systems integration capabilities including landing systems,
steering, braking and monitoring systems, and Electric Green
Taxiing System (EGTS).
 Major player in MRO.
Optronics
 #1 in Europe with a large family of optronics equipment for
surveillance, tracking, warning and fire control.
 Main products: gyrostabilized observation pods (for
airplanes, helicopters, submarines…), long range infrared
binoculars, modernization systems for infantry soldiers and
combat vehicles
Engine systems & Equipment
 A world leader in nacelle integration with a 20% marketshare
 Main programmes: A380, A340, A330, A320, Embraer 135/145
and 170, Gulfstream V, Bombardier Global Express, Challenger
300, Sukhoi Superjet 100
 Main programmes under development: A320neo, A330neo,
C919, Falcon 5X
 #1 worldwide on power transmission market (accessory
gearboxes for civil aircraft >100pax). Presence on CFM56,
LEAP, Trent XWB, Trent 700, Trent 7000
Avionics
 #1 in Europe with a complete expertise in all inertial
navigation technologies for air, land and naval applications
 Main products: Sigma laser gyro navigation units (for
Rafale, EC725 and NH90 helicopters, FREMM
multimission frigates…), infrared seekers (MICA, Mistral
and MMP missiles), AASM (modular air-to-ground weapon)
 Production
build-up and
maturingimprovements
installed base and

Production build-up,
productivity
driving
positive
growth
(OE andoutlook
services)
maturing
installed
base outlook
driving growth

Leading
innovation:
Electric
Green
System,
 Leading innovation: “More electricalTaxiing
aircraft”,
cutting
« More
electrical
aircraft »
edge
carbon
technology…
2015
Revenue
15%
10%
49%
Electrical systems & engineering
 A world leader in electrical wiring interconnection systems
(EWIS) and power systems for civil and military aircraft.
 Complete offering in onboard electrical power systems to
capture trend toward “the more electrical aircraft”
Key figures
% of business line revenue
Engine systems & equipt
Electrical syst & engineering
Security
Revenue
Electronics and critical software
 Consolidates Safran’s expertise in onboard electronics and
critical software
 Includes electronic control of aircraft engines (FADEC),
landing/braking control systems and monitoring systems
 #1 worldwide in engine control systems for civil aircraft
(>100pax) in partnership with BAE Sytems.
 Balanced portfolio with a broad range of products
 Sales: close to 50% exported
 Sustaining R&D effort to maintain competitive edge
Detection
Identification&Security:
 #1 worldwide for biometric ID solutions and automated
multi-biometric ID systems.
 End-to-end solutions for identity management, criminal
justice, border control, transport, secure biometric access
 Strong presence in the US market including driver license
issuance (issuance of 80% of US driver licenses), prime
contractor for the Universal Enrolment Service (UES) of
TSA, supplier of biometrics technology to the FBI
 Other major programs for governments: Chile (biometric
ID cards & e-passports), Albania (electronic identity
documents), Egypt (ID project), Holland (passports and
ID), India (Aadhaar project)…
 Commercial identity solutions cover transaction and digital
identity security, in areas such as telecom applications,
bank applications, transportation and access to enterprise
networks and the internet.
Detection
 Detection systems for dangerous or illicit substances for
airport security, border control and access control systems
 #1 worldwide in computed-tomography (CT) explosive
detection systems for checked luggage
 Unique ability to deliver large-scale operations
services
 Technological leadership notably in biometrics
 Expansion in non governmental security markets
Safran roadmap
Investing in our future
July 29, 2016
Reaping the benefits of CFM56 investment
Transitioning to LEAP
 Preparing for production
readiness: world class
supply chain, 85% of parts
are
double
sourced,
redundancy and/or buffer
stock for 100% of parts,
investments in new and
enhanced manufacturing
facilities and technology,
 Outstanding commercial
success for LEAP: 70%+
market share for future
narrowbodies
 R&D investment key to maintain technological differentiation
 Investing in successful programs : LEAP, A350, Helicopter next gen
turbines, GE9X, A330neo
 Sustained R&T for the long term: advanced materials, additive
manufacturing, more electrical aircraft, advanced propulsion systems…
 Decrease of self funded development spending as programs enter into
service; self funded R&D trending towards €1bn by end of decade
 Gradual reduction
CFM56 contribution
of
 Transitory
LEAP OE
on
losses
 CFM56 spare parts revenue to increase consistently
 Break-even on LEAP
OE by end of decade
 Expensed R&D peaking in 2017
 Recent CFM56 engines (2nd generation) to drive higher aftermarket needs.
1st generation CFM56 spare parts potential to fade out within next few years
 High confidence in aftermarket potential: 60% of CFM56 gen2 have not had
their first shop visit, CFM56 gen 2 shop visit activity will grow by more than 50%
over the next 10 years
Pursuing our development strategy
2016 outlook
Safran expectation for growth on an organic basis is
reaffirmed. With reference to the Group structure at end2015, Safran expects for 2016 on a full-year basis:

Adjusted revenue to increase by a percentage rate in the
low single digits compared to 2015 (at an estimated
average rate of USD 1.11 to the Euro).

Adjusted recurring operating income likely to increase by
around 5% with a further increase in margin rate
compared to 2015 (at a hedged rate of USD 1.24 to the
Euro). The hedging policy largely isolates adjusted
recurring operating income from current EUR/USD
variations except for the part generated in USD by
activities located in the US, subject to the translation
effect when converted into Euro.

Free cash flow representing more than 40% of adjusted
recurring operating income, an element of uncertainty
being the rhythm of payments by state-clients.
Starting on July 1, 2016, Safran will account for its share in ASL using
the equity method and thus no longer record revenue from space
activities. In 2016, the change is expected to reduce revenue by
approximately Euro 400 million and to have a slightly positive impact
on adjusted recurring operating income.
2016-2020 ambition
The period 2016-2020 will see several trends, as follows:
 Renewal of the Group’s flagship product with the transition
from CFM56 to LEAP, the effect of which on OE margins will
be visible from 2016 to 2020, while maintaining an overall
margin for this segment in the mid to high teens, in particular
thanks to the momentum of the civil aftermarket activity.
 Improvement of about one point per year in the operational
performance of the Aircraft Equipment, Defense and Security
activities.
 During the transition period, the Group margin should remain
consistent with the record set in 2015.
 Average free cash flow for the period at 50% of adjusted
recurring operating income.
Safran has three objectives for 2020, exiting this transition:
 Adjusted consolidated sales in excess of 21 billion euros
(assuming average spot rate of €/$1.11 in 2016 and 1.12 over 2017-2020);
 Adjusted recurring operating margin trending above 15%
(including benefits of medium-term FX strategy);
 A very strong increase in free cash flow compared with 2015
(subject to the usual uncertainties regarding the rhythm of payments by stateclients; future opportunities will be evaluated on their merits and investments
decided as appropriate).

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