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Ce document et les informations qu’il contient sont la propriété de Safran. Ils ne doivent pas être copiés ni communiqués à un tiers sans l’autorisation préalable et écrite de Safran.
0 / INVESTOR MEETINGS / SEPTEMBER 2013 / Q3 REVENUE 2011 / OCTOBER 21, 2011 /
/ October 2013 /
Tier 1 supplier in
Aerospace, Defence & Security
Investor roadshows & conference
1 /
Ce document et les informations qu’il contient sont la propriété de Safran. Ils ne doivent pas être copiés ni communiqués à un tiers sans l’autorisation préalable et écrite de Safran.
INVESTOR MEETINGS / SEPTEMBER 2013 /
2012 revenue by activities
Revenue €13,560M
Recurring op. income €1,471M (10.8% of revenue)
Net income - Group share €999M (€2.41/share)
Free Cash Flow €564M
Net debt position (Dec. 31) €932M (15% gearing)
27%
10%
52%
11%
Aircraft Equipment
Defence Aerospace Propulsion
Security
Tier 1 supplier in Aerospace - Defence - Security
FY 2012
€13.6Bn
2 /
Ce document et les informations qu’il contient sont la propriété de Safran. Ils ne doivent pas être copiés ni communiqués à un tiers sans l’autorisation préalable et écrite de Safran.
INVESTOR MEETINGS / SEPTEMBER 2013 /
Leading market positions
#1 ww Single aisle engines
Helicopter turbines
Landing gear
Wiring
Power transmission
#2 ww Space Propulsion
Engine nacelles
Wheels & brakes
#4 ww
Military engines
Aerospace Security Defence
#1 Europe Optronics
#3 ww Inertial navigation systems
#1 ww Biometric and ID solutions
A leader in aviation markets Detection
Ce document et les informations qu’il contient sont la propriété de Safran. Ils ne doivent pas être copiés ni communiqués à un tiers sans l’autorisation préalable et écrite de Safran.
3 / INVESTOR MEETINGS / SEPTEMBER 2013 /
/ 5 key themes / Summary of Q3 2013 revenue announcement
Positive trends in civil aftermarket
Electrical Green Taxiing System
Cash allocation in line with Group strategy
Outlook: 2013 guidance and 2015 view
Ce document et les informations qu’il contient sont la propriété de Safran. Ils ne doivent pas être copiés ni communiqués à un tiers sans l’autorisation préalable et écrite de Safran.
4 / INVESTOR MEETINGS / SEPTEMBER 2013 /
LEAP program status
Commencement of ground testing : a critical
milestone achieved
Launch of a 3-year certification programme
3 applications
60 test engines
Simulation of 15 years of operation
40,000 cycles
Certification of LEAP-1A in 2015, EIS 2016
Preparing for production readiness
CFM has a world-class supply chain
LEAP ramp-up supported by CFM56 success
Investments in new and enhanced manufacturing facilities
and technology
1,131 firm orders and commitments received so far in 2013
Bringing total backlog to 5,483 engines
LEAP-1A engine commenced ground
testing on September 4, 2013
Ce document et les informations qu’il contient sont la propriété de Safran. Ils ne doivent pas être copiés ni communiqués à un tiers sans l’autorisation préalable et écrite de Safran.
5 / INVESTOR MEETINGS / SEPTEMBER 2013 /
Silvercrest program status
Today’s most advanced business jet engine now
powering the Falcon 5X
Safran will provide a complete propulsion system for the
Dassault Falcon 5X
Previously signed but unnamed customer
Testing commenced in 2012
Ground tests
Dedicated flying test bed
Certification of Silvercrest in 2015, EIS of Falcon 5X in 2017
Silvercrest has also been chosen by Cessna
Selected to equip its Citation Longitude business jet
Silvercrest: an integrated propulsion
system for the Falcon 5X
Ce document et les informations qu’il contient sont la propriété de Safran. Ils ne doivent pas être copiés ni communiqués à un tiers sans l’autorisation préalable et écrite de Safran.
6 / INVESTOR MEETINGS / SEPTEMBER 2013 /
Q3 2013 business highlights
Helicopter turbines: service contract
Defence: laser gyro inertial navigation Morpho: biometry
Agreement with INTERPOL to provide automated biometric
identification systems, security solutions and to collaborate
on the subject of border security.
Turbomeca will support the fleet of RTM 322 engines powering
the UK MoD Merlin and Apache helicopters under a 6-year,
£367 million contract.
Modernization of the navigation and alignment system
on Charles-de-Gaulle aircraft carrier.
Security: detection
Nice Côte d’Azur International Airport in Nice, France
purchased four high-speed CTX 9800 DSi™ explosives
detection systems
7 /
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INVESTOR MEETINGS / SEPTEMBER 2013 /
Q3 2013 and 9m 2013 financial highlights
Q3 2012 Q3 2013
3,134 3,437
(€M)
+9.7%
Q3 organic growth was 10.9%: contribution of acquisitions (principally GEPS) offset by translation
impact of weaker forex, notably USD, GBP, CAD, BRL and INR
Aerospace (Propulsion and Equipment) activities continue to benefit from civil aftermarket growth
and original equipment momentum
Civil aftermarket was up 45.2% in Q3 in USD terms, comparing the robust level of revenue in Q3
2013 to the dip in activity in Q3 2012. Maintenance of recent CFM56 and GE90 engines drove
revenue growth. Year-to-date growth was 25.5%: favourable positioning to achieve low-teens annual
guidance despite a tough comparison base in Q4
Defence revenues were slightly up in Q3; Security declined due to adverse currency variations
9m 2012 9m 2013
9,547 10,503
(€M)
+10.0%
8 /
Ce document et les informations qu’il contient sont la propriété de Safran. Ils ne doivent pas être copiés ni communiqués à un tiers sans l’autorisation préalable et écrite de Safran.
INVESTOR MEETINGS / SEPTEMBER 2013 /
Q3 2013 revenue by activity
Main growth drivers
Positive OE volumes:
Propulsion: increasing rates of assembly of narrowbody aircraft (CFM56) and favourable volume and mix in high thrust engine modules (GE90)
Equipment: increased deliveries of landing and wiring systems (787, A320, A330), of thrust reversers (A320, A330) and of nacelles ( A380, regional and business jets)
Continued momentum in civil aftermarket, thanks to the contribution of recent CFM56 and GE90 engines
Growth in Avionics, primarily due to the strength in the inertial navigation activity
Offsetting impacts
Currency variations, affecting Security activities (translation effect)
Adjusted data (in Euro million)
Q3 2012 Q3 2013 Change
reported
Change
organic
Aerospace propulsion 1,635 1,815 11.0% 12.9%
Aircraft equipment 850 990 16.5% 14.9%
Defence 276 278 0.7% 2.2%
Security 371 354 (4.6)% 0.3%
Others 2 0 na na
Total revenue 3,134 3,437 9.7% 10.9%
9 /
Ce document et les informations qu’il contient sont la propriété de Safran. Ils ne doivent pas être copiés ni communiqués à un tiers sans l’autorisation préalable et écrite de Safran.
INVESTOR MEETINGS / SEPTEMBER 2013 /
9M 2013 revenue by activity
Adjusted data (in Euro million)
9m 2012 9m 2013 Change
reported
Change
organic
Aerospace propulsion 4,901 5,588 14.0% 14.7%
Aircraft equipment 2,637 2,951 11.9% 9.9%
Defence 916 876 (4.4)% (3.7)%
Security 1,090 1,087 (0.3)% 1.7%
Others 3 1 na na
Total revenue 9,547 10,503 10.0% 10.1%
10 /
Ce document et les informations qu’il contient sont la propriété de Safran. Ils ne doivent pas être copiés ni communiqués à un tiers sans l’autorisation préalable et écrite de Safran.
INVESTOR MEETINGS / SEPTEMBER 2013 /
Aerospace OE / Services revenue split
Revenue
Adjusted data (in Euro million)
9m 2012 9m 2013 % change
OE Services OE Services OE Services
Propulsion
% of revenue
2,625
53.6%
2,276
46.4%
2,899
51.9%
2,689
48.1% 10.4% 18.1%
Equipment
% of revenue
1,878
71.2%
759
28.8%
2,094
71.0%
857
29.0% 11.5% 12.9%
Ce document et les informations qu’il contient sont la propriété de Safran. Ils ne doivent pas être copiés ni communiqués à un tiers sans l’autorisation préalable et écrite de Safran.
11 / INVESTOR MEETINGS / SEPTEMBER 2013 /
/ 5 key themes / Summary of Q3 2013 revenue announcement
Positive trends in civil aftermarket
Electrical Green Taxiing System
Cash allocation in line with Group strategy
Outlook: 2013 guidance and 2015 view
12 /
Ce document et les informations qu’il contient sont la propriété de Safran. Ils ne doivent pas être copiés ni communiqués à un tiers sans l’autorisation préalable et écrite de Safran.
INVESTOR MEETINGS / SEPTEMBER 2013 /
9M 2013: positive trends in civil aftermarket
Civil aftermarket up 25.5% (in USD) YoY: Q1 +10.0%, Q2 +24.4%, Q3 +45.2%
Reported growth benefited from an increasingly favourable comparison
base (Q3 2012 was a low point)
Recent CFM56 and GE90 engines both contributed strongly
Usage of Used Serviceable Materials remains under control
Aftermarket recoupling to airline activity Confirms CFM long-term spares growth outlook
IATA upgraded its global outlook for the airline industry in 2014
Confirmation of the FY 2013 guidance Robustly growing business in 9M 2013
But Q4 2013 will face a tough comparison base (Q4 2012 was strong)
Civil aftermarket to grow by a percentage
in the low-teens in 2013
13 /
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INVESTOR MEETINGS / SEPTEMBER 2013 /
High confidence in the aftermarket potential
The behaviour model
Understands volatility and better forecasts short term
Allows sales team to adjust offerings to airlines
Optimises CFMM strategy to protect the spare part market
Confirms aftermarket trends at 2025 horizon
Increasing long term maintenance contracts
Gradual shift in business model
Civil aftermarket is the right indicator going forward
14 /
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INVESTOR MEETINGS / SEPTEMBER 2013 /
Dedicated project decided
in 2011
Analysis concluded that
maintenance behaviour could differ
from one airline to another,
impacting new spare parts sales
Segment behaviour also varies
according to economic context and
air traffic
New model based on airlines
segmentation
Differentiate segments according to
maintenance behaviour
Simulate airlines’ reaction to
changing macro-economic
environment
Forecasting spare parts business opportunity:
the new “behaviour” model
Customer
Economics
Engine constraints
Air traffic forecast
Airlines maintenance behaviour
Maintenance contracts
Theoretical aging
15 /
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INVESTOR MEETINGS / SEPTEMBER 2013 /
Forecasting spare parts
Airlines maintenance behaviour segmentation
Allocate the customer base to segments with distinct maintenance behaviour
Long/short term financial horizon
Propensity to purchase OEM parts
Reaction to economic context
More than 30 parameters statistically analysed
Customer base segmented into 10 categories
16 /
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INVESTOR MEETINGS / SEPTEMBER 2013 /
Forecasting spare parts
Outcome of the new model (CFM56 spare parts forecast)
Expected CFM56 spare parts
revenue profile
CFM56 spare parts revenue to increase
consistently and to peak by around 2025E
Revenue should double from 2010 dip before
2020E
1st generation CFM56 spare parts potential to fade
out within 5 years from now
The new model confirms 2025 horizon
“Behaviour” model adds increased visibility on the short term
2007 2010 2013 2016 2019 2022 2025 2028
2x 3x
2010 dip
x
17 /
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INVESTOR MEETINGS / SEPTEMBER 2013 /
T&M: Time & Material
CFM is paid at the time of the actual shop visit on the basis
of an agreed-upon scope of material and labour
income, expenses and cash impact coincide
MSA: Material Service Agreement
CFM guarantees commercial conditions of parts supply
to airline/MRO providers
RPFH: Rate Per Flight Hour
CFM receives a fixed sum per flight hour based on estimated cost to
perform engine maintenance to meet performance and availability
guarantees
decoupling of revenue & cash-in with costs & cash-out
ESPO (Engine Service Per Overhaul): fraction of revenue booked
progressively and remainder booked at the time of SV
ESPH (Engine Service Per Hour): revenue booked progressively
Service agreements
A variety of aftermarket options tailored to needs
Service programmes aiming to
support airlines on a predictable
cost per engine flight hour
basis, to enable accurate
forecasting of operating costs,
reduced cost of ownership, and
improved asset utilisation
18 /
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INVESTOR MEETINGS / SEPTEMBER 2013 /
Long Term Service Agreements: LEAP status (June 2013)
Engines sold to airlines
99% LEAP-1A A320neo covered* by RPFH contracts
66% LEAP-1B 737 MAX covered* by RPFH contracts
hence average 76%
~2,000 LEAP aircraft sold (A320neo & 737 MAX)
423 to lessors (22%) Services agreements to be
decided later with end users (airlines)
1,540 to airlines: almost all of them ask for specific
terms and conditions on services during sales campaign
Almost 100% of LEAP orders to be covered by CFM
long term service contracts (excl. lessors)
= Visibility & spare parts market protected
*Signed or under discussion
76% 24%
RPFH* MSA*
78%
22%
Airlines Lessors
Ce document et les informations qu’il contient sont la propriété de Safran. Ils ne doivent pas être copiés ni communiqués à un tiers sans l’autorisation préalable et écrite de Safran.
19 / INVESTOR MEETINGS / SEPTEMBER 2013 /
/ 5 key themes / Summary of Q3 2013 revenue announcement
Positive trends in civil aftermarket
Electrical Green Taxiing System
Cash allocation in line with Group strategy
Outlook: 2013 guidance and 2015 view
20 /
Ce document et les informations qu’il contient sont la propriété de Safran. Ils ne doivent pas être copiés ni communiqués à un tiers sans l’autorisation préalable et écrite de Safran.
INVESTOR MEETINGS / SEPTEMBER 2013 /
Basic concept of the EGTS
EGTS uses electrical power to enable the aircraft to push-back and taxi without the main engines running
Electric motors integrated into main landing gear for maximized
performance, traction and agility
EGTS provides significant savings and “green” benefits, reducing:
Fuel use
Emissions
Noise
Need for ground tug
Other Direct Operation Costs
Target savings: ~4% block fuel reduction depending on mission
21 /
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INVESTOR MEETINGS / SEPTEMBER 2013 /
EGTS: innovation bringing substantial benefits
fuel use
emissions and noise
operational efficiency
other Direct Operating Costs
• Net ~3% block fuel savings per average flight cycle (750NM) when using EGTS
Increasing aircraft efficiency with a reduced environmental impact
EGTS can deliver
Up to 4% savings
total block fuel
consumption
Foreign Object Damage
22 /
Ce document et les informations qu’il contient sont la propriété de Safran. Ils ne doivent pas être copiés ni communiqués à un tiers sans l’autorisation préalable et écrite de Safran.
INVESTOR MEETINGS / SEPTEMBER 2013 /
Potential market for single aisle and large regional aircraft (2016-31E)
Forward fit: ~12,000 aircraft
80% are eligible (potential savings at least $ 150 k annually)
Shipset value determined from projected savings on a case-by-case basis
Most revenue is OE supply for upfront payment; initially small service
& aftermarket opportunity
Airlines expect a payback from operational savings in 3-5 years
Programme R&D included in our 2015 view
IRR in line with global Group targets
Plus Retrofit on current fleet
EGTS outline business model
23 /
Ce document et les informations qu’il contient sont la propriété de Safran. Ils ne doivent pas être copiés ni communiqués à un tiers sans l’autorisation préalable et écrite de Safran.
INVESTOR MEETINGS / SEPTEMBER 2013 /
On-aircraft testing: on time and above expectations
Experience it every day at 2013 Paris Air Show!
From lab tests to live demo at 2013 Paris Air Show
Extensive aircraft
and lab testing
Fully integrated system demo
Full system successfully tested since Dec. 2012 in bench test
On-aircraft testing began end of March 2013
More than 160km accomplished to date
Ce document et les informations qu’il contient sont la propriété de Safran. Ils ne doivent pas être copiés ni communiqués à un tiers sans l’autorisation préalable et écrite de Safran.
24 / INVESTOR MEETINGS / SEPTEMBER 2013 /
/ 5 key themes / Summary of Q3 2013 revenue announcement
Positive trends in civil aftermarket
Electrical Green Taxiing System
Cash allocation in line with Group strategy
Outlook: 2013 guidance and 2015 view
25 /
Ce document et les informations qu’il contient sont la propriété de Safran. Ils ne doivent pas être copiés ni communiqués à un tiers sans l’autorisation préalable et écrite de Safran.
INVESTOR MEETINGS / SEPTEMBER 2013 /
Cash allocation in line with Group strategy
Research & Development Create a distinctive difference through technological innovation (long term)
Spending reflects winning some attractive new business (medium term)
Capital expenditure Modernize existing sites and strengthen the international scope
Acquisitions Accelerate or establish positions in critical areas at justified price
Dividend payments Grow cash returns to shareholders
40% payout of adjusted net income since 2007
Bu
sin
ess
Sh
are
ho
lders
Ce document et les informations qu’il contient sont la propriété de Safran. Ils ne doivent pas être copiés ni communiqués à un tiers sans l’autorisation préalable et écrite de Safran.
26 / INVESTOR MEETINGS / SEPTEMBER 2013 /
Investing for the next 30 years
0
250
500
750
1000
1250
1500
1750
2000
2007 2008 2009 2010 2011 2012 2013E
In €M
Total self-funded cash R&D
Gross capitalized R&D
Self-funded cash R&D to peak in 2013-2014 (9% of revenue)
R&D level progressively to return to a normative
6-7% of sales at the end of the decade
Long term amortization of capitalized R&D remains
sustainable at less than 1% of sales
€1,103M
€504M
Total R&D effort
Current R&D spending reflects recent wins
in long term attractive businesses
€1,594M
27 /
Ce document et les informations qu’il contient sont la propriété de Safran. Ils ne doivent pas être copiés ni communiqués à un tiers sans l’autorisation préalable et écrite de Safran.
INVESTOR MEETINGS / SEPTEMBER 2013 /
Industrial investments: raising capacity & efficiency
Towards the right balance by 2015E 60% BUY / 40% MAKE
MAKE & BUY: >35% in $ and low cost countries
4 main industrial platforms Europe, Americas, South-East Asia, North Africa
Implementing industrial policy Europe: new technologies, modernised plants, higher
efficiency
Rest of the World: capacity growth, proximity with our
customers
Commercy, France
Capex to increase moderately in 2013 - Should remain
between 3-4% of sales range in the coming years
28 /
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INVESTOR MEETINGS / SEPTEMBER 2013 /
Acquisitions: objectives & criteria
HLP Electrical Power Systems
RTM322 programme
Buy “installed base”
& “customer access” Buy “technology assets”
M&A financial criteria
Cover cost of capital within 3 years (RoCE)
A deal should be EPS accretive in year 1 ideally. If not, in year 2
ROI in the range of 10 to 12% Pe
rfo
rman
ce
B
ala
nce
sh
ee
t Net debt/EBITDA around 2.0x. 2.5x max at peak for a limited period of time
Interest cover ratio at 6x (= EBIT / Interest expense)
Colombia/Peru
Post-tax cost of capital of 8%
(aerospace & defence)
and 9.5% (security)
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29 / INVESTOR MEETINGS / SEPTEMBER 2013 /
/ 5 key themes / Summary of Q3 2013 revenue announcement
Positive trends in civil aftermarket
Electrical Green Taxiing System
Cash allocation in line with Group strategy
Outlook: 2013 guidance and 2015 view
30 /
Ce document et les informations qu’il contient sont la propriété de Safran. Ils ne doivent pas être copiés ni communiqués à un tiers sans l’autorisation préalable et écrite de Safran.
INVESTOR MEETINGS / SEPTEMBER 2013 /
2013 outlook and 2015 view
Organic adjusted revenue above €15bn
Adjusted recurring operating margin heading to the mid-teens
Free cash flow generation trending to 50% of adjusted recurring operating
income
Cash: dividend distribution to shareholders
Adjusted revenue expected to increase by a percentage in the mid
to high single digits
Adjusted recurring operating income expected to increase
by around 20%
Regarding free cash flow, cash flow linked to business performance is likely
to be consistent with objectives, while uncertainty remains concerning the
rhythm of payments (including advance payments) by State-customers in the
fourth quarter
2013 outlook
2015 view
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31 / INVESTOR MEETINGS / SEPTEMBER 2013 /
/ Annexe /
Additional information
32 /
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INVESTOR MEETINGS / SEPTEMBER 2013 /
H1 2013: Quantities of major aerospace programs
Number of units delivered
9m 2012 9m 2013 % change
CFM56 engines 1,056 1,145 8%
High thrust engines 385 450 17%
Helicopter engines 671 713 6%
M88 engines 16 16 =
A380 nacelles 72 72 =
A330 thrust reversers 105 124 18%
A320 thrust reversers 342 399 17%
Small nacelles (biz & regional jets) 370 400 8%
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33 / INVESTOR MEETINGS / SEPTEMBER 2013 /
H1 2013 financial highlights
Growing adjusted revenue with strong performance in Aerospace
H1 12
restated*
H1 13
6,413
7,066 +10.2%
Adjusted recurring operating income at 12.0% of revenue
H1 13
687
847 +23%
Higher adjusted net profit (group share) at €1.58 per share, including €0.31 from the
sale of 12.57% of Ingenico share capital
H1 12
restated*
H1 13
414 658 +59%
(€M) (€M)
(€M)
H1 12
restated*
Limited net debt (19% gearing)
Dec. 31,
2012
June 30,
2013
(932)
(1,202)
(€M)
June 30,
2012
(1,129)
Improving Free Cash Flow conversion rate
H1 12 H1 13
104 157 +51%
(€M)
(*) 2012 has been restated to reflect the changes induced by IAS19 Revised
34 /
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INVESTOR MEETINGS / SEPTEMBER 2013 /
H1 2013: income statement
Of which cost of debt
of €(15)M
(In €M) H1 2012
restated H1 2013
Revenue 6,413 7,066
Recurring operating income
% of revenue
687
10.7%
847
12.0%
Profit from operations
% of revenue
668
10.4%
824
11.7%
Net finance (cost) income
Income tax expense
Share in profit from associates
Gain on disposal of Ingenico shares
Profit (loss) from discontinued op.
Minority interests
(80)
(172)
11
-
-
(13)
(67)
(231)
10
131
-
(9)
Profit - group share
Basic EPS (in €)
414
1.00*
658
1.58**
* Based on 414,658,530 shares
** Based on 416,151,726 shares
Effective tax rate
of 31%
Net profit growth of 59%
Post-tax capital gain
from placement of 12.57%
of Ingenico share capital
35 /
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INVESTOR MEETINGS / SEPTEMBER 2013 /
H1 2013: Aerospace Propulsion
Growing revenue
Strong rise in civil OEM deliveries (CFM56, high-thrust and military engines, helicopter turbines)
Favourable trends in civil aftermarket and solid military aftermarket
Excellent profitability mainly driven by civil aftermarket
Aftermarket (recent CFM56 and GE90 engines, helicopter turbine support contracts, M88 maintenance)
Impact of better OE volume and unit revenue for civil engines
Productivity improvements
Positive currency effect
(In €M) H1 2012
restated H1 2013 Change
Organic
Change
Revenue 3,266 3,773 +15.5% +15.6%
Recurring operating income 515 634 +23%
% of revenue 15.8% 16.8%
One-off items - (15)
Profit (loss) from op. 515 619
% of revenue 15.8% 16.4%
36 /
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INVESTOR MEETINGS / SEPTEMBER 2013 /
H1 2013: Aircraft Equipment
OE driven revenue growth Increases in OEM production rates (notably Boeing 787) coupled with production start-up of A400M programme,
as well as regional jets market segment
Market share wins in carbon brakes
Significant improvement in profitability Favourable mix/volume impact on harnesses and landing systems (Boeing 787, A330, A320)
Carbon brakes: high returns as a result of a larger installed base and continued air traffic growth
Positive currency effect
3 months contribution of GEPS: €47M in revenue and €3M in profits (6.4% of revenue)
(In €M) H1 2012
restated H1 2013 Change
Organic
Change
Revenue 1,787 1,961 +9.7% 7.6%
Recurring operating income 136 175 +29%
% of revenue 7.6% 8.9%
One-off items (7) (3)
Profit (loss) from op. 129 172
% of revenue 7.2% 8.8%
37 /
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INVESTOR MEETINGS / SEPTEMBER 2013 /
H1 2013: Defence
High-single digit growth in Avionics with a satisfactory profitability level
Higher deliveries of guidance kit modules and solid Flight Control Systems activity
Combination of favourable mix/volume effect with lower manufacturing costs
Mild decrease in Optronics slightly impacting profits
Delivery of the Felin infantry combat system to two regiments of the French Army
Long-range infrared goggles down compared to a very strong first-half 2012
(In €M) H1 2012
restated H1 2013 Change
Organic
Change
Revenue 640 598 (6.6)% (6.3)%
Recurring operating income 45 45 -
% of revenue 7.0% 7.5%
One-off items - 2
Profit (loss) from op. 45 47
% of revenue 7.0% 7.9%
38 /
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INVESTOR MEETINGS / SEPTEMBER 2013 /
H1 2013: Security
(In €M) H1 2012
restated H1 2013 Change
Organic
Change
Revenue 719 733 +1.9% +2.4%
Recurring operating income 66 66 -
% of revenue 9.2% 9.0%
One-off items (10) -
Profit (loss) from op. 56 66
% of revenue 7.8% 9.0%
Solid trends in Identification
MorphoTrust delivered performance as per initial expectations at time of acquisition, driven by increased
volumes in driving licences and passports, as well as the on-going nationwide implementation of the
federal Unified Enrolment System (UES), while achieving full cost synergies
Renewed momentum in biometric identity solutions in emerging countries: Kenya, Egypt, Mali, India…
e-Documents: mixed performance in smart cards for both telecom and banking markets
Detection: temporarily low Trace volumes and unfavourable mix on Explosive Detection Systems impacting
margins
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39 / INVESTOR MEETINGS / SEPTEMBER 2013 /
H1 2013: R&D by activity
(In €M) H1 2013 Propulsion Equipment Defence Security
Total self-funded cash R&D (590) (354) (117) (57) (62)
as a % of revenue 8.3% 9.4% 6.0% 9.5% 8.5%
Tax credit 65 22 19 18 6
Total self-funded cash R&D after tax credit (525) (332) (98) (39) (56)
Gross capitalized R&D 290 214 60 11 5
Amortised R&D (37) (14) (16) (5) (2)
P&L R&D in recurring EBIT (272) (132) (54) (33) (53)
as a % of revenue 3.8 % 3.5% 2.8% 5.5% 7.2%
40 /
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INVESTOR MEETINGS / SEPTEMBER 2013 /
Fx hedging: improving rate in 2014
Hedge portfolio, October 15, 2013
Achieved
Target
1.37
1.32
1.28
1.27
1.27
1.25
1.26
1.25
1.25
Estimated exposure needs
In US$ bn
€/$ hedge rate
Approx. 50% of Safran US$ revenue naturally hedged by US$ procurement
Total: $14.7bn 2013 and 2014 are fully
hedged
2015 hedging almost
finalized
$5.1bn achieved at $1.25
to rise to $5.4bn at $1.26
as long as €/$<1.42 in
2013 and 2014
Further increase in 2016
hedging
$3.4bn achieved at $1.25
to rise to $4.9bn at $1.25
as long as €/$<1.42 up to
end of 2014
~5.4 ~5.4
41 /
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INVESTOR MEETINGS / SEPTEMBER 2013 /
Fx hedging: benefiting margins over 2013-2016
Estimated impact on recurring operating income
of targeted €/$ hedge rates
c.120 135
155
1.37
1.32
1.26
2012 2013E
1.28
2014E 2015E
c.30
200
100
0
-100
EBIT impact
vs. previous
year (in €M)
1.2
1.3
1.4
1.1
1.35
1.25
1.15
1.05
1.0
€/$
hedge
rate
300
2011
c.30
2016E
1.27 1.25
c.30
Cumulative €210M tailwind in profits over 2013-2016E
42 /
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INVESTOR MEETINGS / SEPTEMBER 2013 /
Equity shareholding
As of July 31, 2013
French State
27.1% Public
57.9%
Treasury shares
0.1%
Employees
14.9%
Free float continued to increase
As of Dec. 31, 2012
French State
30.2% Public
54.1%
Treasury shares
0.3%
Employees
15.4%
43 /
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INVESTOR MEETINGS / SEPTEMBER 2013 /
0
100
200
300
400
500
600
700
800
0
5 000
10 000
15 000
20 000
25 000
30 000
82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14E 16E 18E 20E 22E 24E
CFM Gen 1 CFM Gen 2 Global spare parts revenue (in $ - 100 base in 2000)
CFM56: strong prospects until 2025 and beyond
CFM56 active installed fleet to peak by 2017E
at ~26,400 engines (~31,000 deliveries)
CFM56 spare parts revenue to peak by around 2025E
44 /
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INVESTOR MEETINGS / SEPTEMBER 2013 /
LEAP: a gradual build up starting in 2016
0
2 000
4 000
6 000
8 000
10 000
12 000
14 000
~3,000 LEAP engines by 2020E
~10,000 LEAP engines by 2025E
LEAP services revenue should reflect
Rate Per Flight Hour contracts
with smoother progressive revenue flows,
depending on contract terms
Global services revenue
LEAP engines
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45 / INVESTOR MEETINGS / SEPTEMBER 2013 /
2008 – 2012: operating cash flows fund growth
(932)
Divestments
298
(in €M)
(169)
552
Dividends
5,963
(682)
Net debt at Dec 31, 2007
Cash flow from ops
Acquisitions
Net debt at Dec 31, 2012
Change in WC
Tangible capex & R&D
€2,966M Free cash flow
(1,053)
(2,292)
(3,549)
Others
Operating cash flows paid R&D, capex, dividends
and acquisitions
46 /
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INVESTOR MEETINGS / SEPTEMBER 2013 /
Dividend payments rose with strong operating cash flow generation
40% payout on adjusted net income since 2007
2007 2008 2009 2010 2011 2012
104 152
256 202
0.50
0.25 0.38
0.62
Dividend
distribution
(€M)
Dividend
per share
(€)
0.96
400
0.40
167
Consistent dividend practice
€1.3bn distributed to shareholders since 2007
47 /
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INVESTOR MEETINGS / SEPTEMBER 2013 /
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.
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48 / INVESTOR MEETINGS / SEPTEMBER 2013 /