1. intro cmd11 · obligation or undertaking to release any update or revisions to any...

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 / CMD’11 / DECEMBER 13, 2011 /Q3 REVENUE 2011 / OCTOBER 21, 2011 /

CMD’11/ Tuesday 13 December 2011 /


1 / CMD’11 / DECEMBER 13, 2011 /Q3 REVENUE 2011 / OCTOBER 21, 2011 /

Welcome

/ December 13, 2011 /


2 / CMD’11 / DECEMBER 13, 2011 /

Agenda

èWelcome

è CEO perspective

è CFM

è Break

è Innovation & continuous improvement

è Lunch with Safran executives

è Security

è Financial review

è Conclusion

8:35

8:45 - 9:15

9:15 - 11:05

11:05 - 11:25

11:25 - 1:00

1:00 - 2:30

2:30 - 4:10

4:10 - 5:00

5:00


3 / CMD’11 / DECEMBER 13, 2011 /

Speakers

JP.Herteman Chairman & CEO

R.McInnes Deputy CEO, CFO

M.Ventre Deputy CEO, Operations

P.Fabre Chairman & CEO Snecma

C.Goubet EVP CFM

M.BrioudeVP MRO Operations Snecma

G.Meheust EVP Sales & Marketing Snecma

E.BacheletCorporate

Senior VP R&T

Ph. PetitcolinPresident Defence Security

D.GodartVP Safran Innovation

O.SavinEVP Green Taxiing System JV

D.VercherinSenior VP for Industry

Y.LeclèreEVP, Chief

Transformation Officer

J.Westerouen Van MeeterenManaging Director Morpho BV

S.ShriyaManaging Director Smart chips Ltd.

R.EckelCEO MorphoTrust USA Inc.

CFM

Security

Innovation & continuous improvement


4 / CMD’11 / DECEMBER 13, 2011 /

Safe Harbor Statement

è These documents contain forward-looking statements. All statements other than statements of historical fact in this presentation, including, without limitation, those regarding our financial position, business strategy, management plans and objectives for future operations, are forward-looking statements. These forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause our actual results, performance or achievements, or industry results, to be materially different from those expressed or implied by these forward-looking statements. These forward-looking statements are based on numerous assumptions regarding our present and future business strategies and the environment in which we expect to operate in the future. Important factors that could cause our actual results, performance or achievements to differ materially from those in the forward-looking statements include, among other factors:§ the cyclical nature of the aviation market;§ the effects of exceptional and unpredictable events;§ the impact of changes in competition;§ fluctuations in exchange rates;§ our ability to maintain high levels of technology.

è Forward-looking statements speak only as of the date of this presentation and we expressly disclaim any obligation or undertaking to release any update or revisions to any forward-looking statements in this presentation as a result of any change in our expectations or any change in events, conditions or circumstances on which these forward-looking statements are based.


5 / CMD’11 / DECEMBER 13, 2011 /

Definitions

All figures in this presentation represent Adjusted data

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

è purchase price allocations with respect to material 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 all material business combinations (and not only those relating to the Sagem-Snecma merger). 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;

è 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 hedging rate, i.e., including the

costs of the hedging strategy,§ the recognition of all mark-to-market changes on non-settled hedging instruments at the closing date is neutralized, including the

“ineffective” portion, given that the Group's hedging strategy includes optional hedging instruments and optimization measures combined with highly volatile market inputs used to mark to market.

Recurring operating income

è 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).

6 /


7 /


Video clipSafran highlights

8 /


Q3 REVENUE 2011 / OCTOBER 21, 2011 /

Safran: growing and fast moving Jean-Paul Herteman - Chairman & CEO

/ December 13, 2011 /

9 /


Strategic continuity

è Reposition the Group

èManage crisis

è Prepare CFM56 replacement

è Invest in Security

è Boost innovation

è Deliver LEAP

è Complete integrations

è Leverage & grow services

2007 2011 2015

Accelerate growth and deliver

10 /


Countries with more than 1,000 employees

Globalising operational capability

2003 2010

Going global

6 9

FranceU.S.U.K.

MexicoBelgiumCanada

FranceU.S.

MexicoU.K.India

BelgiumMoroccoCanada

Germany

201311

FranceU.S.

MexicoU.K.India

BelgiumMoroccoCanada

GermanyChinaBrazil

11 /


Selective M&A aiming at profitable growthè

Acq

uisi

tions

HLP

Invest for the future through specific strategic fits

èD

ives

tmen

ts

2007 2008 2009 2010 2011

12 /


è Revenue

Strategy delivering results

è Recurring EBIT

2007

Organic variation

Acquisitions

Divestmen

ts

Currency im

pact

2011 guidance2007

Organic

varia

tion

Acquisitions

Divestmen

ts

Currency im

pact

2011

guidance

$1.37($ hedge)

$1.20

€10.8Bn

~ €1,350M

~ €(475)M

~ €800M> €11.4Bn

€663M

~ €250M

~ €(430)M

~ €540M ≥ €1.1Bn

~ €(750)M ~ €100M

M&A

M&A

13 /


Continuous improvement in each segment

Recurring operating margin by activity (in %)

(*) Excludes A400M loss at completion (**) Includes PPA amortization

Backlog (in €bn)

Cash from op. activities (in €M)

Propulsion Equipment

10.1% 11.1% 11.8%

0%2%4%6%8%

10%12%14%16%18%20%

2008 2009 2010 … 2015E

2.1% 2.6%4.5%

0%2%4%6%8%

10%12%14%16%18%20%

2008 2009 2010 … 2015E

Defence Security

4.0% 4.1% 4.4%

0%2%4%6%8%

10%12%14%16%18%20%

2008 2009* 2010 … 2015E

4.9%

9.5%12.3%

0%2%4%6%8%

10%12%14%16%18%20%

2008** 2009 2010 … 2015E

21.9

27.930.4

15

20

25

30

35

2008 2009 2010

936 1,042 1,142

0500

10001500200025003000

2008 2009 2010 … 2015E

14 /


From CFM56 to LEAP

Renewing a unique leadership for 30 years

è Up to 2,000 C919 (single western source)

è 4,000+ A320neo (dual source)

è 4,000+ B737MAX (single source)

1973: Gerhard Neumann/GE & René Ravaud/Snecma

2008: Marc Ventre/Safran & David Joyce/GE

è 1,000 DC-8, KC-135, A340

è 3,000+ A320 (dual source)

è 6,000+ B737 (single source)

CFM56 (# aircraft) LEAP potential market (# aircraft)

15 /


Short term volatility, short/medium term inevitable catch-up

Global spare parts revenue (in $ - 100 base in 2000)CFM engines

0

5 0 0 0

10 0 0 0

15 0 0 0

2 0 0 0 0

2 5 0 0 0

3 0 0 0 0

3 5 0 0 0

82 84 86 88 90 92 94 96 98 00 02 04 06 08 1012 E

14 E

16 E18 E

20 E

0

10 0

2 0 0

3 0 0

4 0 0

5 0 0

6 0 0

2010 : 20,000 engines / 500 million flight hours

2020 : 30,000 engines / 1,000 million flight hours

CFM56 spare parts revenue potentially to double by 2020

16 /


Short term volatility, short/medium term inevitable catch-up

CFM56: 2009-10 crisis deeper than 9/11

Global CFM56 spare parts revenueBasis 100 - 9/11/2001Basis 100 - Sept. 2008

2009 2010 2011

60

7080

90

100110

120

130140

2002 2003 2004

After Lehman

After 9/11

Retired CFM56 powered-aircraft (cumulated)

Inevitable catch-up in short/medium term

0

200

400

600

800

2009 2010 20112002 2003 2004

17 /


Leverage & grow services

Aerospace Propulsion Aircraft Equipment Defence

50%31%

Service revenues = services, upgrades, maintenance, consumables (FY 2010 adjusted figures, w/o L-1 ID & SME)

Potential: 60% Potential: 45% Potential: 25% Potential: 40%

25%

Security

16%

è €4.2bn service revenue in FY2011§ 39% of total revenue§ Up 4.7% vs. FY 2009§ High service content in all businesses

2012-2015 should see significant OE growth Resulting from growing installed base in ID

and detection

18 /


More diversified and international equity shareholding

As of Dec. 31, 2007

French State30.4%

Areva7.4%

Public*40.5%

Treasuryshares1.4% Employees

20.3%

As of Nov. 30, 2011

French State30.2%

1.3%

Public**50.6%

Treasury shares

1.8%Employees

16.1%

Increasing & globalising free float

* Public: 2/3rd France, 1/3rd International ** Public: 1/3rd US, 1/3rd UK, 1/3rd France

Areva

19 /


-70%

-60%

-50%

-40%

-30%

-20%

-10%

0%

10%

20%

30%

40%

50%

60%

70%

80%

2008

3 Sept.2007

Déc.2007

Déc.2008

Déc.2009

Déc.2010

9 Dec.2011

Creating value: share price evolution since Sept. 2007

Safran +31.9%(€22.83)

CAC -43.9%(3,172.35 pts)

Min €6.70

Max €30.03

(As of December 9, 2011)

20 /


A long term consistent strategy

è Aerospace§ Growing faster than GDP provided carbon neutral by 2025+§ Winners will be technology innovators

ú A320neo/B737MAX: -35% fuel burn vs. B757/MD-80ú Green taxiing system: 134 tons fuel savings/yr on narrowbody

è Defence§ Find appropriate ways to position our teams on top of world

league

è Security§ Grow double digit through technology

ú Smart gateways for efficient high throughput airport check-pointú Services: follow installed base in ID and detection

21 /


Growth strategic criteria

Key drivers§ Synergies and complementarities§ Globalisation§ Increased savings by leveraging scale§ Leveraging technology§ Skill and expertise

Targeted acquisitions, financial discipline

Key triggers§ In line with strategy§ Trust environment§ Friendly approach§ Share culture§ Ability to integrate§ Measurable success

Financial criteria§ ROI in the range of 10 to 12% § EPS accretion in year 1 ideally, if not in year 2§ Net debt/EBITDA around 2.0x (2.5x max)§ Interest cover ratio at 6x

è Among the top 5 Aerospace Defence Security Tier 1 world players

22 /


Expanding the reach

è Among the top 5 Aerospace Defence Security Tier 1 world players

§ Long term annual revenue growth rate in the high single digits

§ IRR towards 10-12%

§ Globalisation/emerging markets: a real opportunity

§ Fully capable of differentiation through innovation

§ Business model genetics drive operating cash flows to substantiate profitable growth

23 /


Outlook

è Three key aggregates should see healthy improvements comparableto 2011

è Revenue to increase in the mid to high single digits

è Recurring operating income progression to be comfortably in the upper twenties

è Free cash flow to represent about a third of the recurring operating income

2011

2012

24 /


There’s more to come!

è Despite uncertainties of current macro economic environment, Safranhas great prospects building on solid achievements and keeps singularly high level of visibility on its short and long term perspectives

è Demand for air transport will continue to grow ahead of GDP

è Reaping the benefits of 30 years of investment (CFM)

è Investing for the next 30 years, locked into successful programs

è Security: satisfying growing demand through technology compatible with lean government

25 /


Summary

è Investing for the future - talents, technologies

è Transforming capability and capacity

è Strong balance sheet: flexibility and options§ Well settled financial discipline

è Well-positioned for significant and sustained growth§ Relative resilience to European context§ Driven by innovation and emerging markets

è Continuing to improve financial performance

26 /


27 /


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