full-year 2013 earnings · up 16.7% vs. 2012 fy 12 fy 13 0.96 ... regrouping of electrical power...

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0 / FY 2013 EARNINGS / FEBRUARY 20, 2014 /

/ February 20, 2014 /

Full-year 2013 Earnings



/ 01/

Jean-Paul HERTEMAN - Chairman & CEO

FY 2013 Highlights



FY 2013 financial highlights

Growing adjusted revenue with strong performance in Aerospace

FY 12 FY 13

13,560 14,695 +8.4%

Adjusted recurring operating income at 12.2% of revenue

FY 13

1,444

1,788 +23.8%

Higher adjusted net profit (group share) at €2.87 per share

FY 12* FY 13

979 1,193 +21.9%

(€M) (€M)

(€M)

FY 12*

Proposed 2013 dividend up 16.7% vs. 2012

FY 12 FY 13

0.96

1.12

(€)

+16.7%

Low net debt level (16% gearing)

Dec. 31, 2012 Dec. 31, 2013

(932) (1,089)

(€M)

€(157)M

FCF was 40% of adjusted recurring operating income

FY 12 FY 13

564 712

+26.2%

(€M)

* Restated IAS19R

3 /


FY 2013 EARNINGS / FEBRUARY 20, 2014 /

Resolutely pursuing our development strategy

Executing on key engine development programmes: LEAP,

Silvercrest

Major programmes on track, on time and on budget

Turbomeca : a dynamic product portfolio

Arrius 2R, Arrano, Ardiden 3C/3G

Extension to 100% of Turbomeca’s ownership RTM322 programme

Regrouping of electrical power technologies into Labinal Power

Systems (LPS)

a world leader in on-board electrical power systems

reinforcement of LPS with the acquisition of complementary distribution

assets from Eaton

Self-funded R&D of € 1,299 M, in line with guidance

Increase in Propulsion as planned due to ramp-up in LEAP development

and 2nd Silvercrest application

Increasing industrial capacity and bringing new technologies into

production

Industrial capex : € 492 million in 2013

8,400 hires, 3,600 net job creations in 2013

4 /



Executing on key engine development programmes

LEAP has 70% market share for future medium-range

commercial airliners More than 5,700 orders at end 2013, nearly 6,000 to date

LEAP 1A: testing on track September – November 2013: FETT test cycle

300 hours, >400 cycles

LEAP 1B: preparation for FETT Ground testing to start June 2014

LEAP programme on track commercially, on time and on

budget. So far, zero technical surprises

Silvercrest Complete propulsion system for Dassault 5X

Equips Cessna Citation Longitude

Ground testing and preparing for in-flight testing

on dedicated flying test bed

Target 25-30% market share 2,000+ aircraft (4,000+ Silvercrest engines

The most advanced business jet engine for the highest

potential market segment, already on 2 platforms

5 /



Turbomeca : a dynamic product roadmap

Arrius 2R

Bell Helicopter and Turbomeca team up on new Small Light Short

helicopter

First ever collaboration between Turbomeca and Bell

Arrano launched at Heli-Expo 2013

For 4-6 ton helicopters

Ardiden 3G and Ardiden 3C

International collaborations with Kamov, AVIC Engines

RTM322 : extension to 100% of Turbomeca’s ownership

Heavy helicopters are a high-value, growing market segment

driven by developing countries (oil & gas, mining) and military

Target growth for military applications and accelerated time to

market for heavy commercial engines)

Annual demand up to 2,500 helicopters (2012-31)

6 /



The More Electric Aircraft – an irreversible trend

A key strategic long term market

Wing anti-icing

Engine start and

controls

Brakes

Thrust reverser

Flight controls

Boeing 737

1967

Airbus A380

2007

Boeing 787

2009

Next gen

aircraft

2025

Pneumatic

Hydraulic

Mechanical

Electric

Electrical equipment

Cabin equipment

Lighting

IFE

Avionics

Wing anti-icing

Engine start and

controls

Brakes

Thrust reverser

Flight controls

Fuel pump

Landing gear

Nacelle

Cabin equipment

Lighting

IFE

Avionics

E-Flight controls

E-Landing gear

E-Nacelle

EGTS

Wing anti-icing

Engine start and

controls

Brakes

Thrust reverser

Cabin equipment

Lighting

IFE

Avionics

Fuel pump

Landing gear

Nacelle

Fuel pump

EGTS*

* The Electric Green Taxiing System allows aircraft to taxi autonomously without use of the main engines

2016-17

7 /



Investing in our future

2013 total R&D effort of €1.8bn

Self-financed R&D increased as planned to €1.3bn

(8.8% of sales) Ramp up of LEAP development and testing in line with

the business plan

Development for 2nd Silvercrest application

Split of programs reflects upcoming opportunities c.40%: LEAP (3 applications) and Silvercrest

(2 applications)

c.30%: A350, helicopter next gen turbines, flight control,

infrared matrix, biometric ID engines…

c.30%: R&T in preparation of the future (mostly next gen

engines and electrical technologies)

Self-financed R&D to stabilise in 2014 with a lower

level of capitalisation Increases in R&T, LEAP (2 engines in test &

certification)

Decrease in Silvercrest

Long term amortization of capitalized R&D remains

sustainable at less than 1% of sales

0

200

400

600

800

1000

1200

1400

1600

1800

2000

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

In €M

Total self-funded R&D

Capitalized R&D

€1,103M

€694M

Total R&D effort

€1,299M

€504M

€1,800M

1 500

2 000

1 000

0

500

8 /



Positive trends in Civil aftermarket

Civil aftermarket up 19.2%* - above expectations Recent CFM56 and GE90 engines both contributed strongly

Civil aftermarket momentum to continue in 2014

Growth drivers More, higher value shop visits on recent CFM56

Strong increase in GE90 aftermarket after no growth in 2012

Catch-up of deferred maintenance as airlines’ financial health improves

Aftermarket recoupling to airline activity Confirms CFM56 fleet potential for spares revenue to double over 2010-20

Positive global outlook for the airline industry in 2014 according to IATA

Civil aftermarket growth in the low to mid-teens

expected in 2014 *In USD

9 /



Defence

Optrolead*: signing of an upstream study program (PEA) for the development of a 4th generation of airborne electro-optical gyrostabilized systems

*Equally-owned joint venture between Sagem and Thales

MBDA: selection for the development and production of the firing post and infrared seeker on the Medium-Range Missile (MMP)

Replacement of France’s Milan antitank missiles

BELL Helicopter: Sagem’s actuators chosen for the future B525

DCNS: 5 submarines have been equipped with 10 optronic masts and

periscopes for the Brazilian, Indian and French navies

Acquisition of the Swiss company Colibrys SA and of the Integrated Cockpit Solutions activities of Eaton

10 /



Scoring commercial successes in Security

MorphoDetection: Medium-range explosives detection

system

New 5-year IDIQ contract for CTX 5800™ EDS from the TSA (US)

for up to $130M

5-year exclusive contract with CATSA (Canada) for up to $100M

Nice Côte d’Azur International Airport in Nice, France purchased four

high-speed CTX 9800 DSi™ explosives detection systems

MorphoTrust: maintained market leadership in the U.S.

Driver license issuance solutions to 42 of 50 states (80% of U.S.

driver licences, 60M IDs issued per year); maintained leadership

since 2011 Safran acquisition

Prime contractor of Universal Enrolment Service (UES)

Morpho: maintained leadership in ID

Chile program start with first million ID documents issued (10 years

contract for provision of passports and ID cards)

Renewal of Albania concession for 10 years with extension to

e-services



/ 02/

Ross McINNES - Deputy CEO, CFO

FY 2013 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 aeronautical programs that were 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,

justified by the length of the Group's business cycles, and also the gain resulting from the remeasurement of the previously held interest in a

business combination achieved in stages;

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,

the recognition of all mark-to-market changes on foreign currency derivatives relating to future flows is neutralized.

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 2013

Translation effect: foreign currencies translated into € Negative impact from $, GBP, BRL and CAD

Impact on Revenue and Return on Sales

Transaction effect: mismatch between $ sales and € costs

is hedged Positive impact from $

Positive impact from other currencies

Impact on Profits

Mark-to-market effect €374M on fair value of financial instruments

Impact on consolidated “statutory” income statement

Hedge rate

FY 2012 FY 2013

$1.32 $1.28

Average spot rate

FY 2012 FY 2013

$1.29 $1.33

Spot rate

Diverse impacts on P&L

Dec. 31,

2012

June 30,

2013

Dec. 31,

2013

$1.32 $1.31 $1.38

14 /



Consolidated and adjusted income statements

FY 2013 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 14,490 205 - - - 14,695

Other operating income / expense (13,195) (2) 13 150 127 (12,907)

Recurring operating income 1,295 203 13 150 127 1,788

Other non current operating income /

expense 185 - - - (216) (31)

Profit (loss) from operations 1,480 203 13 150 (89) 1,757

Cost of net debt (42) - - - - (42)

Foreign exchange financial income (loss) 551 (203) (374) - - (26)

Other finance costs / income (70) - - - - (70)

Net finance costs / income 439 (203) (374) - - (138)

Income tax expense (650) - 110 (52) 52 (540)

Income from associates 15 - - - - 15

Gain on disposal of Ingenico shares 131 - - - - 131

Profit (loss) from continuing operations 1,415 - (251) 98 (37) 1,225

Profit (loss) from discontinuing operations - - - - - -

Minority interests (29) - (1) (2) - (32)

Parent 1,386 - (252) 96 (37) 1,193

15 /



FY 2013 profit from operations

12.2% recurring operating income

(In €M) FY 2012

(restated) FY 2013

Revenue 13,560 14,695


% of revenue

1,444

10.6%

1,788

12.2%

Total one-off items (50) (31)

Capital gain (loss) on disposals 1 39

Impairment reversal (charge) (1) (17)

Other infrequent & material & non operational

items (50) (53)

Profit from operations

% of revenue

1,394

10.3%

1,757

12.0%

Includes:

• Capital gains on sale of

Paris office building

€16M, Globe Motors

€23M;

• Impairment on a legacy

engine programme

€(15)M;

• Charge related to past

service costs on a new

DBP plan €(40)M,

acquisition &

integration charges

€(10)M

16 /



FY 2013 income statement

Of which cost of debt of €(42)M

* Based on 415,280,826 shares

** Based on 416,292,736 shares

Effective tax rate of 33.4%

Corporate tax surcharge in

France: tax rate of 38%

2012 tax expense included

the favourable impact of the

absorption by Safran of

subsidiaries which had been

involved in loss making

activities divested several

years ago.

Net profit growth of 21.9%

(In M€) FY 2012

restated FY 2013

Revenue 13,560 14,695


% of revenue

1,444

10.6%

1,788

12.2%


% of revenue

1,394

10.3%

1,757

12.0%

Net finance (cost) income (154) (138)

Income tax expense (254) (540)

Income from associates 19 15

Gain on disposal of Ingenico shares - 131

Minority interests (26) (32)

Profit – group share

Basic EPS (in €)

979

2.36*

1,193

2.87**

17 /



FY 2013 revenue

Record OEM production rates in aerospace coupled with continued positive trends in civil aerospace aftermarket

Strength in avionics and double-digit growth at MorphoTrust

Unfavourable currency impact

Negative translation effect (incl. $, GBP, BRL, CAD), particularly affecting Security activities

Changes in the scope of consolidation include:

Acquisitions: GEPS, RTM322 programme, AB notes, Cassis

Divestment: Globe Motors Inc

FY 2013 Currency

impact FY 2013

at constant

FY 2012

structure

Acquisitions &

activities

newly

consolidated,

disposals

FY 2012

(In €M)

14,678 14,512

+8.2%

organic

Organic

variation FY 2013

at constant

FY 2012

structure and

exchange rates

1,118 166 183

+8.4%

14,695

13,560

18 /



FY 2013 recurring operating income

Main organic profitability

drivers

Propulsion: increased OE volumes and favourable pricing in civil engines, strongly positive trend in civil aftermarket

Positive impact of higher OE production rates on nacelles, thrust reversers, wiring, landing and braking systems

Avionics

Currency hedging

Production and overhead costs savings (notably in Equipment and Defence)

Changes in the scope of consolidation include:

Acquisitions: GEPS, RTM322 programme, AB notes, Cassis

Divestment: Globe Motors Inc

FY 2013

Currency

impact

FY 2013

at constant

FY 2012

structure

Acquisitions &

activities

newly

consolidated,

disposals

FY 2012

restated

(IAS 19A)

(In €M)

1,444

1,678 1,781

+16.2%

organic

Organic

variation FY 2013

at constant

FY 2012

structure and

exchange rates

1,788

234 103 7

10.6%

RoS

12.2%

RoS

+23.8%

19 /



Research & Development

Self-funded cash R&D effort at

peak level of 8.8% of sales

Ramp up of LEAP development

and testing in line with the

business plan,

2nd Silvercrest application

Increase of capitalized costs:

€190M

(In €M) FY 2012 FY 2013 Variation

Total R&D (1,594) (1,821) (227)

External funding 491 522 31

Total self-funded cash R&D (1,103) (1,299) (196)

as a % of revenue 8.1% 8.8% 0.7 pt

Tax credit 124 140 16

Total self-funded cash R&D after tax credit (979) (1,159) (180)

Gross capitalized R&D 504 694 190

Amortised R&D (68) (76) (8)

P&L R&D in recurring EBIT (543) (541) 2

as a % of revenue 4.0% 3.7% (0.3) pt

20 /



FY 2013 results by activity

(In €M) FY 2013 Propulsion Equipment Defence Security Holding

& others

Revenue 14,695 7,791 4,121 1,278 1,502 3

Year-over-year growth in % 8.4% 11.2% 11.6% (2.8)% (2.8)% na

Recurring operating income 1,788 1,359 380 87 120 (158)

as a % of revenue 12.2% 17.4% 9.2% 6.8% 8.0% na

21 /



Aerospace Propulsion

Growing revenue

Robust rise in civil OEM deliveries (CFM, high thrust engines)

Strong growth in civil aftermarket

EBIT: Excellent profitability

Positive impact of better OE volume and unit revenue for civil engines

Favourable trend in civil aftermarket (recent CFM56 and GE90)

Increased contribution of helicopter turbine support contracts

Productivity improvements

Positive currency effects

(In €M) FY 2012

(restated) FY 2013 Change

Organic

Change

Revenue 7,005 7,791 +11.2% +11.3%

Recurring operating income 1,076 1,359 +26.3%

% of revenue 15.4% 17.4% +2.0 pts

One-off items 1 (14)

Profit (loss) from operations 1,077 1,345

% of revenue 15.4% 17.3%

22 /



Aircraft Equipment

OE driven revenue growth

Increases in OEM production rates (B787, B737; A400M, A330 and A320 programmes; regional jets) favourably impact landing gears, harnessing, nacelle and thrust reversers activities

Increasing activity related to the A350 programme

Continued momentum for the carbon brakes activity

Significant improvement in profitability

Favourable volume impact and productivity gains

Supportive mix/volume effect of services on auxiliary power gearboxes, nacelles and wheels and brakes. High returns of carbon brakes as a result of a larger installed base and continued air traffic growth

Positive currency effect

(In €M) FY 2012


Organic

Change

Revenue 3,691 4,121 +11.6% +9.8%

Recurring operating income 286 380 +32.9%

% of revenue 7.7% 9.2% +1.5 pt

One-off items (16) (2)

Profit (loss) from operations 270 378

% of revenue 7.3% 9.2%

23 /



Defence

Growth in Avionics with improved level of profitability

Higher deliveries of seeker kit modules. Solid activity in flight control systems

Favourable mix/volume effect on profitability

Softer revenue in Optronics, slightly impacting profits

Delivery of the Felin infantry combat system to 4 regiments of the French Army (same as in 2012)

First maintenance and upgrade activity on Felin equipment

Long-range infrared goggles down compared to 2012

Cost-savings measures mitigated margin pressure

(In €M) FY 2012


Organic

Change

Revenue 1,315 1,278 (2.8)% (2.2)%

Recurring operating income 79 87 +10.1%

% of revenue 6.0% 6.8% +0.8 pt

One-off items - 7



24 /



Security

(In €M) FY 2012


Organic

Change

Revenue 1,546 1,502 (2.8)% (0.5)%

Recurring operating income 145 120 (17.2)%

% of revenue 9.4% 8.0% (1.4) pt

One-off items (25) (3)



MorphoTrust continues robust growth driven by US Federal activities (Universal Enrollment, FBI,

weapons permits); margins under pressure from budgetary restrictions

Persistent softness in Morpho’s traditional biometric activities due to run-off of export contracts;

competitive pressure impacts profitability of new contracts

e-Documents: regaining traction in Q4 as NFC and LTE technology deliveries commenced; volume

declines impacted margins, exacerbated by R&D effort, somewhat compensated by cost reductions

Slow growth in detection: strong momentum at year-end with US, Canada and other export deliveries of

CTX systems; higher volumes and better mix boosting profits

New management taking measures to take full advantage of the outstanding potential

25 /



Fx hedging: improved rate for 2014

Hedge portfolio, Feb. 4, 2014

Achieved

Target

1.37

1.32

1.28

1.27

1.26

1.26

1.26

1.25

1.25

1.25

1.25

Estimated exposure needs

In US$ bn

€/$ hedge rate

4.04.3

5.8 6.0

4.9

5.6

5.04.3

0

1

2

3

4

5

6

2011 2012 2013 2014 2015 2016 2017

~6.0

Approx. 50% of Safran US$ revenue naturally hedged by US$ procurement

Total: $19bn Higher expected level of net USD

exposure for 2014-17 due to

strong growth of businesses with

exposed USD revenue

2014 and 2015 are fully hedged

Further increase in 2016 hedging

$4.3bn achieved at $1.25 to

rise to $4.9bn at $1.25 as

long as €/$<1.42 up to end of

2014

2017 hedging initiated

$4.0bn achieved at $1.25 as

long as €/$<1.42 up to end of

2014 for half and €/$<1.40

for the other half

~6.0

26 /



155

135 130

70

38

1.37

1.32

1.281.26 1.26 1.25 1.25

0

20

40

60

80

100

120

140

160

180

200

1

1,05

1,1

1,15

1,2

1,25

1,3

1,35

1,4

2011 2012 2013 2014E 2015E 2016E 2017E

Fx hedging: benefiting margins over 2014-17

Estimated impact on recurring operating income

of targeted €/$ hedge rates

EBIT impact

vs. previous

year (in €M)

€/$

hedge

rate

27 /



Free Cash Flow

(in €M) FY 2012*

Restated FY 2013

Adjusted net profit 979 1,193

Depreciation, amortization and provisions 700 678

Others 23 113

Cash from operating activities before change in

WC 1,702 1,984

Change in WC (85) 155

Capex (tangible assets) (419) (492)

Capex (intangible assets)** (634) (935)

Free cash flow 564 712

Increased R&D spending

and Capex investments;

includes €42M proceeds

from sale of an office

building in Paris

Good control over WC

requirements in a context

of strong increases in

production in aerospace

markets

* 2012 is presented in a comparable format to 2013

** Of which €694M capitalised R&D in 2013 vs €504M capitalised in 2012

Of which amortization of

tangibles and intangibles

for €512M and provisions

(net) for €67M

28 /



Net debt position

Cash flow from operations

equals 1.11x recurring EBIT

Decreased WC requirements

2012 final dividend

(€0.65/share) and

2013 interim dividend

(€0.48/share)

“Disposals” include

12.57% of Ingenico: €287M

Globe Motors: €68M

“Acquisitions & Others” include:

GEPS: €(301)M

Extension to full ownership in the

RTM322 programme: €(293)M

Safran-Albany JV for LEAP

composites €(33)M

(in M€)

(932) 353

Dividends*

Disposals

155

1,984

(1,427)

Net debt at Dec 31, 2012

Cash flow from ops

Acquisitions & others

Net debt at Dec. 31, 2013

Change in WC

R&D and

Capex

€712M Free Cash Flow

(481) (1,089) (741)

* Includes €(10)M of dividends to minority interests

29 /



Gross debt and liquidity

Gross debt repayment schedule (Dec. 31, 2013)

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

Gross

debt

€2,730M

Cash & equiv.

€1,672M

+

Debt hedging

instruments

€(31)M

Net debt €1,089M

Committed & undrawn financing resources: €2.55bn; subject to 1 covenant (net debt/EBITDA <2.5)

Credit line - €950M, maturity Oct. 2016

Credit line - €1,600M, maturity Dec. 2015

30 /



Balance sheet highlights

Shareholders’ equity up

by €0.8bn

OWC decreased by €127M

at €763M (5.2% of revenue)

Provisions grew slightly

(In M€) Dec 31, 2012

(restated) Dec 31, 2013

Goodwill 3,078 3,495

Tangible & Intangible assets 6,476 7,381

Other non current assets 818 734

Operating Working Capital 890 763

Net (debt) cash (932) (1,089)

Shareholders’ equity - Group share 5,834 6,636

Minority interests 163 178

Non current liabilities (excl. net (debt) cash) 1,732 2,082

Provisions 2,887 2,975

Other current liabilities / (assets) net (286) (587)

31 /



Customer financial guarantees

(In $M) Dec. 31,

2012

Dec. 31,

2013

Total guarantees 72 72

Estimated value of pledges 20 11

Net exposure on these guarantees 37 47

Provisions 37 36

Stabilization of the total guarantees at the

lowest level in the past 25 years



/ 03/

Outlook

33 /



Equity shareholding

Free float continued to increase

As of Dec. 31, 2012

French State

30.2% Public

54.1%

Treasury shares

0.3%

Employees

15.4%

As of Dec. 31, 2013

French State

22.4% Public

62.8%

Employees

14.7%

Treasury shares

0.1%

34 /



2013 dividend

A proposal for a dividend payment

to parent holders of €1.12 at next

AGM on May 27, 2014

€0.48 interim dividend already

paid in 2013 (€200M)

€0.64 to be paid in 2014

(€267M)

Ex-dividend date: May 29, 2014

Payment date: June 3, 2014

€1.12/share dividend payment subject to shareholders’ approval

2008 2009 2010 2011 2012

72 152

154

202

0.50

0.25

0.38

0.62

102

Final

Dividend

distribution

(€M)

Dividend

per share

(€)

Interim

dividend

distribution

(€M)

0.96

129

271

32

200

267

1.12

2013

104 152 202 256 400 467 Total

dividend

distribution

(€M)

35 /



Estimated impacts of IFRS11 on 2013 accounts

IFRS 11 Joint Arrangements is applied starting January 1, 2014

• 2014 performance will be measured against restated figures for 2013

• Reclassification of some jointly held activities previously proportionally

integrated, henceforth equity associates

Estimated impacts are the following:

Summary estimated impacts 2013 restatements

Orders

Order book Approx (800) M€

Income statement

Revenue Slightly more than (300) M€

Adjusted recurring operating

income

Slightly less than (10) M€

Net income No impact

Balance sheet

Net debt Approx 130 M€ higher

Working capital Approx 20 M€ lower

36 /



2014 key assumptions

Estimated IFRS 11 impacts of around €(300)M to 2013 revenue and less than

€(10)M to 2013 adjusted recurring operating income

Healthy increase in aerospace OE deliveries

Boeing 737, A330, regional jets...

Civil aftermarket growth in the low to mid-teens percentage

Mainly driven by recent CFM56 engines

Stable self-funded R&D level with less capitalisation

R&T; helicopter turbines higher; LEAP peaking; Silvercrest lower as peak is

passed

Stable tangible capex

Profitable growth for the security business

On-going Safran+ plan to enhance the cost structure and reduce overhead

Increased focus on Competitiveness, Expertise and Innovation

37 /



FY 2014 outlook

Adjusted revenue expected to increase by a percentage in mid single

digits* at an estimated average rate of USD 1.30 to the Euro

Adjusted recurring operating income expected to increase by a

percentage in low double digits* at a hedge rate of USD 1.26 to the

Euro

Free cash flow expected to represent close to 40% of the adjusted

recurring operating income subject to usual uncertainties on the

timing of advance payments

Strong confidence for the long term CFM franchise is assured for the next decades (aftermarket revenue

and successful LEAP transition)

Acquisitions reinforce Safran for the long term in helicopters and MEA

€/$ hedged book provides positive impact on profits

*2014 performance will be measured relative to the 2013 accounts restated for the effects of IFRS 11



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Questions & Answers



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Additional information

40 /



Amended IAS19 FY 2012 income statement

(In €M) FY 2012

published

Impact of

amended

IAS19

FY 2012

restated

Revenue 13,560 - 13,560


% of revenue

1,471

10.8%

(27)

1,444

10.6%


% of revenue

1,421

10.5%

(27)

1,394

10.3%

Net finance (cost) income

Income tax expense

Profit (loss) from discontinued op.

Minority interests

Share in profit from associates

(152)

(263)

-

(26)

19

(2)

9

-

-

-

(154)

(254)

-

(26)

19

Profit - group share

Basic EPS (in €)

999

2.41

(20)

(0.05)

979

2.36

The €(27)M decrease in recurring

operating income results from

the discontinuation of the

amortisation of actuarial gains

and losses and past service

costs previously not recognised

(Euro 10 million impact) and the

direct recognition in 2012 of past

service costs relating to

agreements entered into in the

second half of 2012 (Euro (36)

million impact)



FY 2012: R&D by activity

(In €M) FY 2012 Propulsion Equipment Defence Security

Total self-funded cash R&D (1,103) (649) (213) (117) (124)

as a % of revenue 8.1% 9.3% 5.8% 8.9% 8.0%

Tax credit 124 47 29 36 12

Total self-funded cash R&D after tax credit (979) (602) (184) (81) (112)

Gross capitalized R&D 504 342 126 22 14

Amortised R&D (68) (25) (32) (8) (3)

P&L R&D in recurring EBIT (543) (285) (90) (67) (101)

as a % of revenue 4.0% 4.1% 2.4% 5.1% 6.5%



FY 2013: R&D by activity

(In €M) FY 2013 Propulsion Equipment Defence Security

Total self-funded cash R&D (1,299) (790) (254) (126) (129)

as a % of revenue 8.8% 10.1% 6.2% 9.9% 8.6%

Tax credit 140 51 38 39 12

Total self-funded cash R&D after tax credit (1,159) (739) (216) (87) (117)

Gross capitalized R&D 694 517 129 31 17

Amortised R&D (76) (24) (36) (10) (6)

P&L R&D in recurring EBIT (541) (246) (123) (66) (106)

as a % of revenue 3.7% 3.2% 3.0% 5.2% 7.1%

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Aerospace OE* / Services revenue split

Revenue

Adjusted data (in Euro million)

FY 2012 FY 2013 % change

OE Services OE Services OE Services

Propulsion

% of revenue

3,718

53.1%

3,287

46.9%

4,045

51.9%

3,746

48.1%

8.8%

14.0%

Equipment

% of revenue

2,637

71.4%

1,054

28.6%

2,907

70.5%

1,214

29.5%

10.2%

15.2%

* All revenue except services

44 /



Quantities of major aerospace programmes

Number of units delivered

FY 2012 FY 2013 %

CFM56 engines 1,406 1,502 7%

High thrust engines 567 619 9%

Helicopter engines 924 934 1%

M88 engines 26 20 (23)%

TP400 - 36 na

A380 nacelles 108 108 -

A330 thrust reversers 146 166 14%

A320 thrust reversers 489 513 5%

Small nacelles (biz & regional jets) 534 605 13%

45 /



Affirming our strategy over the electrical energy chain

Competitive

positioning in

aerospace electrical

systems

Capture benefits of

closer integration of

electrical systems

and wiring, with

aircraft engines and

gearboxes

Lead innovation in

the electrification of

aircraft equipment

Broader offering:

higher shipset value

Long-term outlook

A world leader in electrical

power systems with combined

revenues c. € 1.4 billion in

2014

12,000 people in 12 countries

Strong installed base &

recurring aftermarket

revenues

Complete offering in power

systems

Consolidation of all electrical power activities within Labinal Power Systems

Acquisition

closed in

March 2013

Acquisition

expected to

close in H1

2014

+

+

+

Electrical Power systems

+

+

+

Power generation

Electrical equipment

Primary & secondary distribution

Systems integration

Support & Services

Wiring

PDMS

46 /



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.