Full-year 2015 Earnings - Safran · date. 540 hours logged in 220 flights since May 19, 2015. Zero...

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0 / FY 2015 EARNINGS / FEBRUARY 25, 2016 /

/ February 25, 2016 /

Full-year 2015 Earnings



/ 01/

Philippe Petitcolin - CEO

FY 2015 Highlights



FY 2015 financial highlights

Growing adjusted revenue, including positive $ impact, mainly driven by Aerospace services and Security

FY 14 FY 15

15,355 17,414 +13.4%

Adjusted recurring operating income at 14.0% of revenue

FY 15

2,089

2,432

+16.4%

Adjusted net profit (group share) at €3.55 per share

FY 14 FY 15

1,248

1,482 +18.8%

(€M) (€M)

(€M)

FY 14

Proposed 2015 dividend up 15.0%

FY 14 FY 15

1.20 1.38

(€)

+15.0%

Low net debt level (12.7% gearing)

Dec. 31, 2014 Dec. 31, 2015

(1,503)

(748)

(€M)

FCF representing 40% of adjusted recurring operating income

FY 14 FY 15

740

974 +31.6%

(€M)

3 /


FY 2015 EARNINGS / FEBRUARY 25, 2016 /

Excellent progress of LEAP

LEAP development proceeding according to plan

LEAP-1A: Engine certified on November 20, 2015 by both the FAA

and EASA. Flawless flight test program on A320neo and A321neo to

date. 540 hours logged in 220 flights since May 19, 2015. Zero engine

issues - all operating conditions. Engine is on specifications. EIS mid-

year.

LEAP-1B: Engine certification on track. Flawless first flight on 737

MAX on January 29, 2016. Start of one-year flight test certification

program. 18 flights within 3 weeks. Engine is on specifications. EIS in

2017.

LEAP-1C: Engine certification on track. C919 roll out on November 2,

2015. First flight planned for 2016.

Preparing for EIS and production ramp-up

First commercial deliveries of LEAP in 2016

LEAP supply chain mostly based on CFM56 supply chain

Building new and enhanced facilities, including:

2 new assembly lines dedicated to LEAP in Villaroche, France

A 3rd production plant of 3D woven carbon fan blades in Querétaro, Mexico,

to meet rising production rates and to enhance LEAP supply chain

First flight of the Boeing 737MAX

powered by LEAP-1B

Comac C919 roll-out

powered by LEAP-1C

First flight of A321neo

Powered by LEAP-1A

4 /



Capturing growth in Propulsion

Commercial leadership of CFM engines confirmed

13,252 engines (firm orders and commitments) at year-end

1,399 orders and commitments for LEAP and 736 orders for CFM56 in 2015

Excellent performance of CFM56

Record production rate: 1,612 deliveries in 2015

Increasing market share on A320ceo

Continuing momentum for LEAP

LEAP total firm orders and commitments surpassed 10,000 engines in February

after a good start to 2016

70%+ market share for future narrow-bodies, including 53% on A320neo

Orders from Egypt and Qatar for Rafale fighters powered by Safran’s

M88 engines

Helicopter turbines development proceeding to plan

Certification by EASA of the Arrius 2R powering the Bell Jet Ranger 505 X;

commercial deliveries starting in 2016

First flight of Arrano 1A engines on Airbus Helicopters H160 (sole source)

Rafale

Arrano 1A

5 /



Continuing momentum in civil aftermarket

Civil aftermarket up 18.9%* in 2015, in line with

guidance

More, higher value shop visits on recent CFM56

Positive trend in GE90 aftermarket

Positive global outlook for the airline industry in 2016

Passenger demand expected to be up 6.9% according to

IATA

Airlines profitability benefitting from lower oil price

Civil aftermarket to grow by a percentage in

the high single digits* in 2016

Growth driven by recent CFM56

High comparison base

*In USD

Maintenance,

Saint-Quentin-en-Yvelines, France

Maintenance,

Casablanca, Morocco

6 /



Strong execution in Aircraft Equipment

Successful ramp up of deliveries of accessory drive trains, landing

and wiring systems for A350

Growing shipments of wiring and landing gear systems for 787

Record production rates of thrust reversers, accessory drive

trains, wiring and landing systems for A320

Maintaining leadership in carbon brakes

Multiple contracts for carbon brakes: 737MAX, A320neo, 787, A350...

Increasing capacity to meet growing demand including the successful start

up of production in the new plant in Malaysia inaugurated beginning 2015

Bolstering partnership with Rolls-Royce in accessory gearboxes

Creation of Aero Gearbox International, a company jointly-owned by Safran

and Rolls Royce, that will supply accessory drive trains for all of Rolls

Royce’s future civil aircraft engines, starting with the Trent 7000 for the

A330neo

Landing gear of A350

Wiring for 787

Braking system for A320

7 /



Scoring commercial successes in Defence

Key systems and equipment on Rafale fighters

Supplying FADEC, inertial navigation systems and gyros for the fly-by-wire

flight control systems for the Egyptian and Qatari orders of Rafale

Supplying AASM Hammer missiles as part of the Rafale’s weapons suite

for Egypt and Qatar

Excellent performance of PASEO, a new generation of combat vehicle

sights

2 major contracts signed to supply PASEO to more than 2,000 systems for

the French army (Scorpion program) and international markets

Also selected by the French Army (Scorpion program) to provide optronics

equipment for remotely controlled turrets

Selection of the Patroller system, Safran’s long endurance tactical drone,

by the French defence procurement agency (DGA) in 2016

Safran will supply 14 Patroller systems with deliveries starting in 2018, as

well as the related support activities

Electronics: FADEC International* selected for the control system of the

GE9X powering the 777X, in partnership with GE Aviation**

Good order intake (France and exports)

Maintaining technological differentiation through R&D investment

Paseo sight

Patroller

*JV between

Safran and Bae

**Under the

FADEC Alliance

JV

8 /



Market leadership in Civil ID Unique ability to deliver large-scale turnkey solutions and operation services

Strong momentum in Public Private Partnerships (Chile, Albania, Netherlands)

Deployment of Civil ID solutions to secure and ease electoral campaigns in

Africa (Ivory Coast, Chad, Egypt)

Driver license issuance solutions to 85% of U.S. citizens (70M+ IDs issued per

year)

Pursuing development in digital ID programs for governments (launch of the

SecureIdentity platform in the UK for citizens to access government online services)

Expansion in Commercial ID Strategic partnerships (US, Brazil, etc.) to capture EMV migration of payment cards

Entering the mobile payment activity with acquisition of specialist Airtag

Strengthening in digital ID services (contract with Airtel in India for enrolment and

access to online services, based on Aadhaar national biometric identification

system)

Growth leverage in Public Security Leadership in enrolment services in the U.S., where MorphoTrust enrolled 2M+

travellers in the TSA pre-Check program

Large contracts in border control (e-Border contract in UAE with deployment of a

multi-biometric system in 5 airports)

Civil ID

Commercial ID

Public Security

Good performance in Security

9 /



Investing in our future

2015 total R&D effort of €2.1bn

2015 self-financed R&D decreased by

€108M to €1.36bn (7.8% of sales) in 2015 Lower spending on LEAP, A350

2015 split of spending in line with

business roadmap: c.50%: LEAP (3 applications), Silvercrest,

A350, helicopter next gen turbines, GE9X,

A330neo

c.30%: R&T in preparation of the future

(mostly next gen engines and electrical

technologies)

c.20%: Defence, Security, others…

2016 self-funded R&D to drop by €100-

€150M driven by a decline in capitalized

R&D Lower level of capitalized R&D as LEAP will

enter into service

Increase in expensed R&D by around €100M

After peaking in 2014, continuing decline in R&D

In €M

Total self-funded R&D

Capitalized R&D

€495M

Total R&D effort €1,356M

€2,057M

€1,464M

€644M

€1,990M

10 /



Silvercrest update

Major tests successfully performed: icing, bird ingestion…

More than 4,000 hours of accumulated testing (500 hours on FTB)

Complementary developments to achieve the targeted specifications and a

revised schedule have been agreed with Dassault Aviation

The current schedule provides for engine certification early in 2018, 18 months later than

the previous schedule and in line with the indication given in October 2015

Very confident that the technical solutions to obtaining the desired specifications have

been identified

Once implemented, they ensure that we offer customers an engine which meets their

requirements and remains the most competitive of its kind with respect to the market it

addresses

Citation Longitude redefinition

In November 2015, Cessna announced changes to its range of business jets, including a

redefinition of the Longitude and a different choice of engine appropriate for the smaller

design

Safran confirms that the effect of the developments on the group’s financial

performance is expected to be limited and spread over several years

Flight test of Silvercrest on FTB

Ground test of Silvercrest



/ 02/

Bernard Delpit – Group CFO

FY 2015 Results

12 /



Foreword

All figures in this presentation represent adjusted data

Safran’s consolidated income statement has been adjusted for the impact of:

purchase price allocations with respect to business combinations. Since 2005, this restatement concerns the amortization charged against

intangible assets relating to aircraft programmes revalued at the time of the Sagem-Snecma merger. With effect from the first-half 2010 interim

financial statements, the Group has decided to restate the impact of purchase price allocations for business combinations. In particular, this

concerns the amortization of intangible assets recognized at the time of the acquisition, and amortized over extended periods, due to the length

of the Group's business cycles, along gains or losses remeasuring the Group’s previously held interests in an entity acquired in a step

acquisition or assets contributed to a JV.

the mark-to-market of foreign currency derivatives, in order to better reflect the economic substance of the Group's overall foreign currency risk

hedging strategy:

revenue net of purchases denominated in foreign currencies is measured using the effective hedged rate, i.e., including the costs of the

hedging strategy,

all mark-to-market changes on foreign currency derivatives hedging future cash flows is neutralized.

The resulting changes in deferred tax have also been adjusted

Recurring operating income

It excludes income and expenses which are largely unpredictable because of their unusual, infrequent and/or material nature such as

impairment losses/reversals, capital gains/losses on disposals of operations and other unusual and/or material non operational items.

13 /



Fx volatility

Continued Fx volatility during FY 2015

Translation effect: foreign currencies translated into € Positive impact from $

Impact on Revenue and Return on Sales

Transaction effect: mismatch between $ sales and € costs

is hedged Positive impact from $

Impact on Profits

Mark-to-market effect €(2,485)M on fair value of financial instruments

Impact on consolidated “statutory” income statement

Hedge rate

FY 2014 FY 2015

$1.26 $1.25

Average spot rate

FY 2014 FY 2015

$1.33 $1.11

Spot rate

Dec. 31,

2014

June 30,

2015

Dec. 31,

2015

$1.21 $1.12 $1.09

14 /



Consolidated and adjusted income statements

FY 2015 reconciliation

(In €M)

Consolidated

data

Currency hedging Business combinations

Adjusted

data Re-

measurement

of revenue

Deferred

hedging

loss / gain

Amortization

of intangible

assets -

Sagem/Snecma

merger

PPA impacts -

other business

combinations

Revenue 18,100 (686) - - - 17,414

Other operating income and expenses (15,272) 8 (5) 89 152 (15,028)

Share in profit from joint ventures 45 - - - 1 46

Recurring operating income 2,873 (678) (5) 89 153 2,432

Other non-recurring operating income and

expenses (796) - - 133 (35) (698)

Profit (loss) from operations 2,077 (678) (5) 222 118 1,734

Cost of debt (28) - - - - (28)

Foreign exchange gains (losses) (3,248) 678 2,485 - - (85)

Other financial income and expense (111) - - - - (111)

Financial income (loss) (3,387) 678 2,485 - - (224)

Income tax expense 508 - (806) (75) (30) (403)

Share in profit from associates 4 - - - - 4

Gain on disposal of Ingenico shares 421 - - - - 421

Profit (loss) from continuing operations (377) - 1,674 147 88 1,532

Attributable to non-controlling interests (47) - - (3) - (50)

Attributable to owners of the parent (424) - 1,674 144 88 1,482

15 /



FY 2015 profit from operations

14.0% recurring operating income margin, up 0.4pt

(In €M) FY 2014 FY 2015

Revenue 15,355 17,414


% of revenue

2,089

13.6%

2,432

14.0%

Total one-off items (107) (698)

Capital gain (loss) on disposals - -

Impairment reversal (charge) (45) (641)

Other infrequent & material non operational items (62) (57)

Profit from operations

% of revenue

1,982

12.9%

1,734

10.0%

Including

€(654)M Silvercrest

€(16)M helicopter

programme

€(28)M restructuring and

others

16 /



FY 2015 income statement

* Based on 416,413,368 shares

** Based on 417,569,031 shares

FY 2015 net profit up 18.8%

(In €M) FY 2014 FY 2015

Revenue 15,355 17,414

Other recurring operating income and expenses (13,311) (15,028)

Share in profit from joint ventures 45 46


% of revenue

2,089

13.6%

2,432

14.0%

Total one-off items (107) (698)

Profit from operations

% of revenue

1,982

12.9%

1,734

10.0%

Net financial income (expense) (165) (224)

Income tax expense (522) (403)

Share in profit from associates 18 4

Gain on disposal of Ingenico shares - 421

Profit for the period attributable to non-controlling interests (65) (50)

Profit attributable to owners of the parent

EPS (in €)

1,248

3.00*

1,482

3.55**

Of which cost of debt of

€(28)M

Apparent tax rate of

26.7%

Post-tax capital gain from

placements of Ingenico

Group shares

17 /



Impairment of assets related to the Silvercrest program

Complementary developments to achieve the targeted specifications and a revised

schedule have been agreed with Dassault Aviation. The current schedule provides for

engine certification in the spring of 2018, 18 months later than the previous schedule

and in line with the indication given in October 2015

In November 2015, Cessna announced changes to its range of business jets, including

a redefinition of the Longitude and a different choice of engine appropriate for the

smaller design

On the basis of revised programme assumptions, notably higher development

expenses, lower volumes and a later entry into service, Safran has decided to

depreciate all programme-related intangible assets and other programme-specific

assets resulting in a one-off, non-cash charge of Euro (654) million

Post-tax capital gain on the sale of Ingenico shares

Sale of Safran’s entire remaining stake in Ingenico Group: 5.5 million shares

representing about 9.1% of Ingenico Group’s capital

Safran received total proceeds of Euro 606 million and recorded a post-tax capital gain

of Euro 421 million

One-off items

18 /



FY 2015 revenue

Currency

impact FY 2015

at constant

FY 2014

structure

Acquisitions &

activities

newly

consolidated,

disposals

Organic

variation FY 2015

at constant

FY 2014

structure and

exchange rates

FY 2015 FY 2014

+3.9%

organic

15,355

+13.4%

(in €M)

15,953

62 17,352

598

1,399 17,414

Organic growth: +3.9%

Driven by momentum in Aerospace services (notably civil aftermarket up 18.9% in $) and in Security (+11%)

Currency impact: +9.1%

Significant positive translation effect of USD. Positive translation impact from GBP

Positive effect of improved $ hedged rate

External growth: +0.4%

Eaton, Dictao…

19 /



FY 2015 recurring operating income

FY 2015

Currency

impact

FY 2015

at constant

FY 2014

scope

Changes in

scope

FY 2014

(In €M)

2,372 2,436

+13.5%

organic

Variation

excluding

currency

impact and

changes in

scope

FY 2015

at constant

FY 2014 scope

and exchange

rates

2,432 283 64 (4)

13.6%

RoS

14.0%

RoS

+16.4%

2,089

Main profitability drivers

Strong growth of Aerospace services, notably civil aftermarket

Contribution of CFM56 OE

Organic growth in Identification and business solutions activities in Security

Increased performance of corporate holding

Positive currency effect, notably from USD

20 /



Research & Development

Decrease of self-funded cash

R&D effort as planned, at 7.8% of

sales

Self-funded R&D declined notably

for LEAP and A350

Falling capitalised costs, as

expected, driven by lower LEAP

and A350 spending; Silvercrest

fully expensed since April 1, 2014

(In €M) FY 2014 FY 2015 Variation

Total R&D (1,990) (2,057) (67)

External funding 526 701 175

Total self-funded cash R&D (1,464) (1,356) 108

as a % of revenue 9.5% 7.8% (1.7)pt

Tax credit 151 165 14

Total self-funded cash R&D after tax credit (1,313) (1,191) 122

Gross capitalized R&D 644 495 (149)

Amortised R&D (78) (95) (17)

P&L R&D in recurring EBIT (747) (791) (44)

as a % of revenue 4.9% 4.5% (0.4)pt

21 /



FY 2015 results by activity

(In €M) FY 2015 Propulsion Equipment Defence Security Holding

& others

Revenue 17,414 9,319 4,943 1,266 1,878 8

Year-over-year growth in % 13.4% 14.3% 11.2% 3.7% 22.7% na

Recurring operating income 2,432 1,833 466 64 151 (82)

as a % of revenue 14.0% 19.7% 9.4% 5.1% 8.0% na

Record level of recurring operating income driven by Aerospace, Security

Strong improvement in performance of Holding by €93M

Cost reduction

Higher level of shared services provided on behalf of, and invoiced to, subsidiaries explaining their profit evolution

22 /



Aerospace Propulsion

Revenue

Strong growth in civil aftermarket

Good contribution from helicopter turbines and military engine support activities

Increase in civil aircraft engines sales


Excellent contribution of civil aftermarket

Good performance of helicopter turbine support contracts

Positive impact of CFM56 OE

Increase in R&D charges

(In €M) FY 2014 FY 2015 Change Organic

Change

Revenue 8,153 9,319 +14.3% +6.0%

Recurring operating income 1,633 1,833 +12.2%

% of revenue 20.0% 19.7% (0.3) pts

One-off items (9) (619)

Profit (loss) from operations 1,624 1,214

% of revenue 19.9% 13.0%

23 /



Aircraft Equipment

Revenue

Higher deliveries for A350 (landing gear, wiring) and A320 (thrust reversers, landing gear, wiring) and

modest increase in shipments for 787 (landing gear, wiring)

Lower volumes on A380 (nacelles) and A330 (thrust reversers, landing systems)

Growing contribution of services thanks to carbon brakes and landing gear activities


Temporary OE headwinds: lower OE deliveries for A380 and A330, higher OE deliveries for less mature

programs (notably A350), temporary pricing pressures as strong cost reduction and productivity actions

have been put in place to mitigate the impacts and drive margin improvements

Favourable impact from services, notably supported by high returns in carbon brakes and good

contribution of landing gear


Change

Revenue 4,446 4,943 +11.2% (0.9)%

Recurring operating income 426 466 +9.4%

% of revenue 9.6% 9.4% (0.2)pt


Profit (loss) from operations 368 423

% of revenue 8.3% 8.6%

24 /



Defence

Revenue

Optronics: higher contribution from sights for combat vehicles and submarines offset the expected negative impact of the end of FELIN infantry combat system deliveries to the French army

Avionics: lower volumes of inertial navigation and flight control systems, partially compensated by the growing contribution of support activities and aircraft information systems revenue


End of FELIN deliveries partially compensated by new contracts

Unfavourable products mix (mostly infrared goggles)

Sustained R&D charges to maintain technological leadership

Investments to improve industrial performance weighed temporarily on profitability


Change

Revenue 1,221 1,266 +3.7% (1.6)%

Recurring operating income 71 64 (9.9)%

% of revenue 5.8% 5.1% (0.7)pt

One-off items 3 (10)



25 /



Security


Change

Revenue 1,530 1,878 +22.7% +11.0%

Recurring operating income 134 151 +12.7%

% of revenue 8.8% 8.0% (0.8) pt




Identification & Security

Broad-based growth from public sector customers in Europe (France, Holland, Albania), the Americas (US

Federal contracts, Chile) and in the Middle East Africa region

Improving trend in smartcards for telco (product mix) and banking customers (volumes)

Detection

Revenue up thanks to the strong increase in CTX tomographic equipment shipments and to the success of

Itemiser 4DX (new trace detection system)

Positive currency effect, notably from the $

Investments in new commercial offers to address new markets, notably in digital identity, weighed

temporarily on margin.

Continued cost reduction actions to drive profitability improvements

26 /



Target 1.25 1.24 1.22 1.17-1.20 1.15-1.20

Fx hedging: $20.6bn Hedge portfolio* (Jan 28, 2016)

($bn)

€/$ hedge rate

*Approx. 45% of Safran US$ revenue are naturally hedged by US$ procurement

2016 & 2017 fully hedged

Yearly exposure: $7.4bn to $8.0bn

Increasing level of net USD exposure for 2016-19 in line

with the growth of businesses with exposed USD revenue

7.4 7.5 7.7

4.3

2.3

3.7

5.7

2015 2016 2017 2018 2019

2018

$4.3bn achieved through forward sales

and short dated knock out option

strategies to rise to a maximum of $8.0bn

at a target rate between $1.17 and $1.20 as

long as €/$<1.25 up to end 2016

Knock out options barriers set at various

levels between $1.20 and $1.45 with

maturities up to 2 years

2019

$2.3bn achieved through forward sales

and short dated knock out option

strategies to rise to a maximum of $8.0bn

at a target rate between $1.15 and $1.20 as

long as €/$<1.25 up to end 2017

Knock out options barriers set at various

levels between $1.19 and $1.45 with

maturities up to 1 years

27 /



Estimated impact on recurring operating income

of targeted €/$ hedge rates

EBIT impact

vs previous

year (in €M)

€/$

hedge

rate

€250M to €500M of tailwind over 2016-2019e

Fx hedging: benefiting margins over 2016-2019e

Up to 100M

Up to 250M

28 /



Free Cash Flow

(in €M) FY 2014 FY 2015

Adjusted net profit 1,248 1,482

Depreciation, amortization and provisions 906 1,688

Others 314 (357)

Cash from operating activities before

change in WC 2,468 2,813

Change in WC (111) (60)

Capex (tangible assets) (674) (758)

Capex (intangible assets)* (943) (1,021)

Free cash flow 740 974

Slight increase in WC to

cope with rising assembly

rates in aerospace partly

offset by advance payments,

as planned

* Of which €495M capitalised R&D in 2015 vs €644M capitalised in 2014

Of which amortization of

tangibles and intangibles for

€681M, provisions (net) for

€133M and depreciation for

€874M

+14%

Healthy increase in cash

from operations despite

higher expensed R&D

• Lower capitalized R&D

• Higher tangible and

intangible (ex-R&D)

investments due to the

transition to new engine

programs

+32%

29 /



Net debt position

Cash flow from operations

equals 1.17x recurring EBIT

2014 final dividend (€0.64/share)

and 2015 interim dividend

(€0.60/share)

“Acquisitions/Divestments &

Others” includes:

€606M of proceeds from the sale

of Ingenico Group shares

€(117)M of foreign exchange

differences on USPP

* Includes €(23)M of dividends to minority interests

(in €M)

(1,503)

Dividends*

Net debt at Dec 31, 2014

Cash flow from ops

Acquisitions /Divestments

& others

Net debt at Dec 31, 2015

Change in WC R&D

and Capex

€974M Free Cash Flow

2,813

(60)

(1,779)

(540)

193

(1,499)

321

(748)

30 /



Gross debt and liquidity

Gross debt repayment schedule (Dec. 31, 2015)

Gross

debt

€2,628M

Cash & equiv.

€1,845M

+

Debt hedging

instruments €35M

Net debt €748M

April 2014 private placement - €200M, maturity 2024, no covenant

USPP - $1.2bn, maturities 2019, 2022 & 2024; subject to 1 covenant (net debt/EBITDA <2.5)

OCEANE (issued on January 8, 2016) - €650M, maturity 2020, zero coupon

Committed & undrawn financing resources:

Credit line - €2.52B, maturity Dec. 2020 – no

covenant

31 /



Balance sheet highlights

OWC almost stable

at €1,042M (6.0% of

revenue)

Slight increase in provisions

mostly linked to service

contracts

(In €M) Dec 31,

2014

Dec 31,

2015

Goodwill

Tangible & Intangible assets

Investments in joint ventures and associates

Other non current assets

Operating Working Capital

Net cash (debt)

3,420

8,464

771

674

1,025

(1,503)

3,590

8,593

765

1,403

1,042

(748)

Shareholders’ equity - Group share

Minority interests

Non current liabilities (excl. net cash (debt))

Provisions

Other current liabilities / (assets) net

6,266

225

1,549

3,329

1,482

5,627

266

1,411

3,456

3,885

32 /



Customer financial guarantees

(In $M) Dec. 31,

2014

Dec. 31,

2015

Total guarantees 52 50

Estimated value of pledges 20 19

Net exposure on these guarantees 35 32

Provisions 29 23

Decrease of the level of total guarantees

Outstanding risk of the portfolio (net exposure) well covered by the provisions booked in Safran’s

accounts



/ 03/

Outlook

34 /



Equity shareholding

Free float continued to increase

As of Dec. 31, 2014

French State

22.0% Public

63.5%

Employees

14.4%

Treasury shares

0.1%

As of Dec. 31, 2015

French State

15.4% Public

70.9%

Employees

13.6%

Treasury shares

0.1%

35 /



2015 dividend

A proposal for a dividend payment

to parent holders of €1.38 at next

AGM on May 19, 2016

€0.60 interim dividend already

paid in 2015 (€250M)

€0.78 to be paid in 2016

(€326M)

Ex-dividend date: May 23, 2016

Payment date: May 25, 2016

€1.38/share dividend payment subject to shareholders’ approval, up 15%

152 202 256 400 467 500 576

Total

dividend

distribution

(€M)

152

154

202

0.50 0.38

0.62

102

Final

Dividend

distribution

(€M)

Dividend

per share

(€)

Interim

dividend

distribution

(€M)

0.96

129

271

200

267

1.12 1.20

267

233

1.38

326

250

36 /



2016 key assumptions

Healthy increase in aerospace OE deliveries

Civil aftermarket growth by a percentage in the high single digits

Start-up costs of series Leap production

Reduction of self-funded R&D of the order of €100M - €150M with a greater drop in

capitalised amounts

Less spending on LEAP, A350, helicopters, as they come closer to

certification and entry into service

Expensed R&D to rise by around €100M

Sustained level of tangible capex, including expansions, new production capacity

and tooling, around Euro 850 million, as requested by production transitioning and

ramp-up

Profitable growth for the security business

Continued benefits from productivity improvement

37 /



FY 2016 outlook

Adjusted revenue expected to increase by a percentage in low single

digits at an estimated average rate of USD 1.11 to the Euro

Adjusted recurring operating income likely to increase by around 5% and

a further increase in margin rate at a hedge 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 expected to represent more than 40% of the adjusted

recurring operating income, an element of uncertainty being the rhythm of

payments by state-clients

Safran’s 2016 outlook is applicable to the Group’s structure as of December 31, 2015 and does not take into account the

impact in 2016 of the finalisation of the regrouping of its space launcher activities with those of Airbus Group in their joint

venture, Airbus Safran Launchers (ASL). Guidance will be revised as necessary upon finalisation of Phase 2 of the operation.

Safran expects the contribution of its space launchers activities to ASL to be accretive to adjusted recurring operating margin.



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Questions & Answers



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Additional information



FY 2014: R&D by activity

(In €M) FY 2014 Propulsion Equipment Defence Security

Total self-funded cash R&D (1,464) (894) (308) (133) (129)

as a % of revenue 9.5% 11.0% 6.9% 10.9% 8.4%

Tax credit 151 58 46 35 12

Total self-funded cash R&D after tax credit (1,313) (836) (262) (98) (117)

Gross capitalized R&D 644 475 122 26 21

Amortised R&D (78) (25) (37) (11) (5)

P&L R&D in recurring EBIT (747) (386) (177) (83) (101)

as a % of revenue 4.9% 4.7% 4.0% 6.8% 6.6%



FY 2015: R&D by activity

(In €M) FY 2015 Propulsion Equipment Defence Security

Total self-funded cash R&D (1,356) (875) (229) (119) (133)

as a % of revenue 7.8% 9.4% 4.6% 9.4% 7.1%

Tax credit 165 66 46 37 16

Total self-funded cash R&D after tax credit (1,191) (809) (183) (82) (117)

Gross capitalized R&D 495 357 98 24 16

Amortised R&D (95) (27) (40) (21) (7)

P&L R&D in recurring EBIT (791) (479) (125) (79) (108)

as a % of revenue 4.5% 5.1% 2.5% 6.2% 5.8%

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Aerospace OE* / Services revenue split

Revenue

Adjusted data (in Euro million)

FY 2014 FY 2015 % change

OE Services OE Services OE Services

Propulsion

% of revenue

4,073

50.0%

4,080

50.0%

4,334

46.5%

4,985

53.5%

6.4%

22.2%

Equipment

% of revenue

3,166

71.2%

1,280

28.8%

3,463

70.1%

1,480

29.9%

9.4%

15.6%

* All revenue except services

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Quantities of major aerospace programmes

Number of units delivered

2014 2015 % change

CFM56 engines 1,560 1,612 3%

High thrust engines 690 695 1%

Helicopter engines 832 625 (25)%

M88 engines 26 12 (54)%

787 landing gear sets 118 127 8%

A350 landing gear sets 16 32 x2

A380 nacelles 112 104 (7)%

A330 thrust reversers 162 130 (20)%

A320 thrust reversers 506 564 11%

Small nacelles (biz & regional jets) 688 711 3%

44 /



Definition

Civil aftermarket (expressed in USD)

This non-accounting indicator (non audited) comprises spares and MRO

(Maintenance, Repair & Overhaul) revenue for all civil aircraft engines for

Snecma and its subsidiaries and reflects the Group’s performance in civil

aircraft engines aftermarket compared to the market.

45 /



Disclaimer

The forecasts and forward-looking statements described in this document are

based on the data, assumptions and estimates considered as reasonable by the

Group as at the date of this document. These data, assumptions and estimates

may evolve or change as a result of uncertainties related in particular to the

economic, financial, competitive, tax or regulatory environment. The occurrence

of one or more of the risks described in the registration document (document de

référence) may also have an impact on the business, financial position, results

and prospects of the Group and thus affect its ability to achieve such forecasts

and forward-looking statements. The Group therefore neither makes any

commitment, nor provides any assurance as to the achievement of the forecasts

and forward-looking statements described in this document

Full-year 2015 Earnings - Safran · date. 540 hours logged in 220 flights since May 19, 2015. Zero...

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