Safran : 2020 Kepler Cheuvreux Virtual Autumn Conference

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SAFRAN

SEPTEMBER 2020

KEPLER CHEUVREUX

VIRTUAL AUTUMN CONFERENCE

Bernard DELPIT - Group CFO

• Virtual Kepler Cheuvreux Autumn Conference / September 9, 2020

This document and the information therein are the property of Safran. They must not be copied or communicated to a third party without the prior written authorization of Safran

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Disclaimer

• FORWARD-LOOKINGSTATEMENTS
  This document contains forward-looking statements relating to Safran, which do not refer to historical facts but refer to expectations based on management's current views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance, or events to differ materially from those included in such statements. These statements or disclosures may discuss goals, intentions and expectations as to future trends, synergies, value accretions, plans, events, results of operations or financial condition, or state other information relating to Safran, based on current beliefs of management as well as assumptions made by, and information currently available to, management. Forward-looking statements generally will be accompanied by words such as "anticipate," "believe," "plan," "could," "would," "estimate," "expect," "forecast," "guidance," "intend," "may," "possible," "potential," "predict," "project" or other similar words, phrases or expressions. Many of these risks and uncertainties relate to factors that are beyond Safran's control. Therefore, investors and shareholders should not place undue reliance on such statements. Factors that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to: uncertainties related in particular to the economic, financial, competitive, tax or regulatory environment; the risks that the new businesses will not be integrated successfully or that the combined company will not realize estimated cost savings and synergies; Safran's ability to successfully implement and complete its plans and strategies and to meet its targets; the benefits from Safran's plans and strategies being less than anticipated; the risks described in the Universal Registration Document (URD); the full impact of the outbreak of the COVID-19 disease.
  The foregoing list of factors is not exhaustive. Forward-looking statements speak only as of the date they are made. Safran does not assume any obligation to update any public information or forward-looking statement in this document to reflect events or circumstances after the date of this document, except as may be required by applicable laws.
• USE OF NON-GAAP FINANCIAL INFORMATION
  This document contains supplemental non-GAAP financial information. Readers are cautioned that these measures are unaudited and not directly reflected in the Group's financial statements as prepared under International Financial Reporting Standards and should not be considered as a substitute for GAAP financial measures. In addition, such non-GAAP financial measures may not be comparable to similarly titled information from other companies.
• 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 Safran Aircraft Engines and its subsidiaries and reflects the Group's performance in civil aircraft engines aftermarket compared to the market.

• Virtual Kepler Cheuvreux Autumn Conference / September 9, 2020

This document and the information therein are the property of Safran. They must not be copied or communicated to a third party without the prior written authorization of Safran

SUMMARY

1. SAFRAN RESPONSES TO THE CRISIS

2. ADAPTATION PLAN OBJECTIVES AND H1 2020 ACHIEVEMENTS

3. 2020 OUTLOOK

4. KEY TAKEAWAYS

• Virtual Kepler Cheuvreux Autumn Conference / September 9, 2020

This document and the information therein are the property of Safran. They must not be copied or communicated to a third party without the prior written authorization of Safran

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1. Context : an unprecedented crisis in an already challenging environment

Background:

• Since 2015, operating margin of the legacy Equipment division improved by at least 100bps per year
• Since end of 2018, integration of former Zodiac activities in Safran Group
• Continuous grounding of the 737 MAX from March 2019
• Structural over capacity of the wideboby market

New IATA estimates (as of September 1, 2020):

• July air traffic improving slowly
• • RPK down by (79,8)% in July against (86,6)% in June
  • ASK down by (70.1)% in July against (80.1)% in June
• RPK for FY2020 downgraded late July to (63)% compared to 2019 (versus (54.7)% forecasted at the beginning of June)
• The recovery in short haul travel is still expected to happen faster than for long haul travel

CFM56 and LEAP flight cycles are improving, driven by China, North America and Europe. As of August 23, 2020 :

• Weekly CFM56 fleet cycles are down (46)% yoy (vs down (83)% at trough in April)
• Weekly LEAP fleet cycles are down (17)% yoy (vs down (76)% at trough in April)

• Virtual Kepler Cheuvreux Autumn Conference / September 9, 2020

This document and the information therein are the property of Safran. They must not be copied or communicated to a third party without the prior written authorization of Safran