INTEGRATED REPORT 2020 - Safran Group
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2020 INTEGRATED REPORT
CONTENTS SAFRAN AT A GLANCE
2020 KEY FIGURES
SAFRAN
AT A GLANCE
€1,073 million
3
rd FREE CASH FLOW
P. 01 Global aerospace
group, excluding
EDITORIAL
RISK
MANAGEMENT
airframers* €2,792 million
NET DEBT
P. 02 P. 40
GROUP CORPORATE €16,498 million
REVENUE(1)
down 33.0% (down 32.5%
€449 million
GOVERNANCE on organic basis) on 2019 CAPEX
PROFILE
P. 04 P. 42
€1,686 million
RECURRING OPERATING
INCOME(1) €1,213 million
PERFORMANCE down 55.9% (down 58.6% TOTAL R&D
ECOSYSTEM on organic basis) on 2019
AND VALUE (including customer-funded R&D)
P. 10 CREATION
78,892
PROFIT(1)
€844 million
P. 50
(Group share)
STRATEGY down 68.3% on 2019
EMPLOYEES
AND BUSINESS (at December 31, 2020)
MODEL
P. 18
Long-term credit rating: BBB+ (with stable outlook)
Our activities
AEROSPACE AIRCRAFT AIRCRAFT
PROPULSION EQUIPMENT/ INTERIORS
DEFENSE/
AEROSYSTEMS
BREAKDOWN OF
REVENUE(1) BY SEGMENT €7,633 million €6,893 million €1,922 million
BREAKDOWN OF
RECURRING OPERATING
INCOME(1) BY SEGMENT
€1,192 million €687 million €(174) million
BREAKDOWN OF
RECURRING OPERATING
MARGIN(1) BY SEGMENT
15.6% 10.0% (9.1)%
* Classification criteria: revenue - Source: Safran.
(1) Adjusted data. See section 2.1.1 of the 2020 Universal Registration Document for a reconciliation of the consolidated income statement with the adjusted
income statement and a breakdown of the adjustment.
1 I S A F R A N 2 0 2 0 I N T E G R AT E D R E P O R T
EDITORIAL EDITORIAL
IN 2021, SAFRAN WILL
Message from the Chairman
of the Board of Directors
ROSS McINNES
CONTINUE TO DRAW
and the Chief Executive Officer
OLIVIER ANDRIÈS
STRENGTH FROM ITS The total mobilization of all teams enabled Safran to tackle
ADAPTABILITY
the crisis in 2020. Although uncertainties remain, notably for the first
half of 2021, I am determined to push ahead with the ongoing efforts,
and I am optimistic for the future of the Group, which will harness
full strength from its assets once the recovery is underway.
Leadership in low-carbon aviation is a priority, and Safran,
Safran has robust fundamentals, and the Board of Directors stands firm in its support as a leading aircraft engine and equipment manufacturer,
of the new Chief Executive Officer on Group-wide efforts to emerge from the crisis in stronger shape has a central role to play in achieving the aerospace industry’s
and face the future with confidence. The Board of Directors is fully aware of the strategic importance carbon neutrality objectives by 2050.
of the climate challenge, and will be working with the Director responsible for monitoring climate OLIVIER ANDRIÈS
issues to ensure the Group achieves its climate roadmap.
ROSS McINNES
I
n 2020, Safran published results The total workforce fell by Our priorities are to contribute In connecting people and countries,
that were as good as could be more than 16,500 people (over to the development of a new aviation is an accelerator of human
expected given the severe crisis 21,000 including temporary staff), generation of ultra-efficient short- and trading links.
affecting the aerospace industry, from around 95,400 employees and medium-haul aircraft for 2030- Safran will leverage the quality
confirming the strength of its at the end of 2019 to around 2035, powered by an ultra-efficient of its many assets, which will
business model and the impact 78,900 at the end of 2020. engine consuming 20% less fuel than together help to drive the recovery:
of the cost reduction measures In France, the Group Activity the present-day LEAP® and running • LEAP, the engine of choice of
taken during the year. Transformation Agreement signed on up to 100% sustainable fuels. airlines for fleet renewal and new
While implementing the necessary in July brought in measures including Another development area that will investments;
health measures to enable a safe long-term short-time working prove essential in meeting carbon • a young in-service fleet of
return to work for its employees, (covering up to 40% of working time), neutrality objectives is that of electric second-generation CFM56® engines,
Safran reacted rapidly by accelerating in order to preserve skills in and hybrid propulsion systems for widely used by airlines even in
the streamlining of its sites and production as well as research short-distance flights. times of crisis, and the first to
demonstrating organizational and technology. Safran also benefit from the coming recovery;
flexibility. streamlined its industrial footprint, In late February, Safran released • leading global positions in the
with a number of site closures its financial targets for 2021, a year systems that will equip aircraft in
Our business was heavily impacted and production transfers in several of gradual recovery with back-end the recovery phase, as customers'
by the crisis, with 2020 revenue down regions of the world. loaded in terms of business and aircraft return to the air;
by 33.0% on 2019, at €16.5 billion. profitability. • technical and industrial credibility in
Despite the decline, Safran posted Safran is committed to offering an Air traffic at the start of the year Aircraft Interiors, which has restored
recurring operating income(1) of effective response to the major confirms the need for caution customers’ trust in the business
€1.7 billion (for a recurring operating challenge of climate change, which in the first half of 2021, especially despite being hard hit by the crisis;
margin(1) of 10.2%) and free cash flow will prove an essential factor in the in service and spare parts activities, • proven organizational agility
of €1,073 million. Our financial targets ongoing acceptability of air transport. where a gradual pick-up is expected (as with the introduction of
for 2020, as reviewed in July 2020, Its strategy seeks to reduce from the third quarter. In view of long-term short-time working
were all reached. greenhouse gas emissions from airframers’ new production rates, and teleworking).
its operations and its products. especially on long-haul programs,
Thanks to the commitment of its Safran foresees a slight organic dip
We would like to thank you
employees across the world, Safran Innovation is a central feature in original equipment sales for 2021.
for your trust and hope you enjoy
swiftly implemented the adaptation of the major shift under way.
reading this report.
plan drawn up in March, showing With its broad coverage of aircraft The long-term outlook for Safran
determination in the face of the crisis systems, and propulsion systems in remains bright, because we are
Regards,
and adjusting its capacities to its particular, Safran is capable of convinced that people will continue
customers’ needs. offering technological solutions. to need and want to travel. Ross McInnes and Olivier Andriès
(1) Adjusted data.
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GROUP PROFILE GROUP PROFILE
SAFRAN’S RESPONSE TO
THE COVID-19 CRISIS 3
The magnitude and duration of the unprecedented Covid-19 crisis will have Rapid, proactive implementation of adaptation plan,
a lasting impact on the aerospace industry. The central scenario points to a very lowering Safran’s breakeven point
gradual recovery, driven by the short- and medium-haul segment,
with air traffic expected to be back to 2019 levels by 2025.
Action Achievements (in 2020)
Workforce resized Global workforce reduction of more than 16,500 people, over 21,000 including temporary staff,
in line with Company at end-2020.
2 needs In France, signature of the Activity Transformation Agreement in July 2020 with all trade unions
at Group level, running to the end of 2021 and renewable:
Increased liquidity and sound - Rollout of long-term short-time working, with potential worktime reductions of up
to 40-50% in France, granting more flexibility
balance sheet to navigate the crisis - Wage restraint
and finance ongoing business - Promotion of mobility
- Cap of profit-sharing and savings schemes
On average from April to December 2020, short-time working concerned 21% of employees
worldwide and 23% in France (excluding public holidays and days off)
SECURING LONG-TERM FINANCING
At end-2020, the bridge facility set up at the start of the crisis Industrial footprint Closure of sites in Seats (Camberley in the United Kingdom, Santa Maria in the United States),
(April 22, 2020) for a maximum maturity of two years remained streamlined Cabin (Sterling in the United States) and Electrical & Power (Eatontown in the United States)
undrawn, and the initial amount of €3.0 billion was reduced
Purchasing programs
-43%
purchases of raw materials and supplies subcontracting
to €1.4 billion*, with Safran refinancing more than 50% of the
undrawn short-term facility with long-term debt (at 7-12 year
scaled back (excluding impact of change in inventories) -48% expenses
terms):
Operating expenses
May 15, 2020: issue of €800 million of convertible bonds reduced(1) -25%
due May 15, 2027.
June 29, 2020: issue of senior unsecured notes in euros
and US dollars on the US private placement market (USPP),
R&D expenses reduced -35%
for the equivalent of €564 million (€282 million at 10 years
Capex commitments
and €282 million at 12 years).
October 12, 2020: tap issue of €200 million in convertible
reduced -67% and a €246m reduction in cash outflow from 2019 to 2020
1
bonds due May 15, 2027.
Safran also has a €2.52 billion undrawn credit facility available
Employee until December 2022.
protection against Covid-19
and business continuity ▲
4
In 2020, Safran withstood
The Group crisis management unit formed in January 2020 Support for the supply chain the crisis thanks to its rapid
set two initial priorities: provide optimally safe working response capability and resilient
conditions for Safran employees, and ensure the continuity business model, drawing on
of essential businesses. its long-standing presence
ATTENTIVE MONITORING INDUSTRY-SPECIFIC RELIEF FUND in the civil engine aftermarket
Safran adapted its work organization in rigorous compliance OF SAFRAN SUPPLIERS In 2020, Safran invested €58 million in and the short- and medium-haul
with the requirements set by governments in its host countries,
To weather the crisis, Safran set up a the Ace Aéro Partenaires fund set up aircraft segment.
applying strict health standards and social distancing measures,
watch tower for monitoring and under the French aerospace industry In the longer term, the growth
and even temporarily shutting down some sites for varying
supporting its strategic suppliers, with support plan. With contributions from fundamentals behind Safran’s
durations.
the following aims: the French State, major industrial business remain unchanged.
Safran managed to continue serving its customers, while
identify the suppliers most at risk, with contractors and asset management firm Safran’s technological roadmap
ensuring the protection of its employees. Temporarily closed
MAIN FINANCIAL a potential impact on Safran businesses; Tikehau Capital, initial funds of remains appropriate thanks to
sites were reopened swiftly, with four sites remaining closed
RATIOS (2 ) determine the impact of the crisis on €630 million were raised in July 2020 the French government’s
on October 16, 2020 (down from 14 on July 17 and 30 on large-scale support plans
these suppliers and their capacity to (subsequently increased to €730 million),
May 18)(1). Net debt/EBITDA(3) (current roadmap pushed back
sustain business; the aim being a total of €1 billion. In
1.13
just less than a year behind the
examine possible measures (payment contributing to the financing of
pre-Covid-19 roadmap). Climate
term adjustments, advance orders, businesses hit by the crisis, Safran is change will be a central
etc.), and the impact of government actively participating in the restructuring challenge in the recovery
Net debt/total equity
support, and, where applicable, guide and consolidation of the industrial fabric process: Safran is committed to
(1) Including sites closed because of a decline in business.
(2) Calculated on the basis of aggregates published in Safran financial communications.
(3) EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) is the sum of recurring operating
income plus net recurring and non-recurring amortization, provisions and depreciation.
21.9% suppliers towards more structural
solutions (backing from other industrial
companies, investment funds, etc.).
of the French aerospace sector. green aviation, which will emerge
as a major post-crisis trend.
* The bridge facility was fully canceled on March 16, 2021 following the March 4, 2021 signature of a long-term
€500 million loan with the European Investment Bank, and the March 16, 2021 issue of €700 million in
five-year bonds and €700 million in ten-year bonds. (1) Excluding purchases, including R&D expenditure and government aids on short-time working measures.
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GROUP PROFILE GROUP PROFILE
SAFRAN: A balanced portfolio across
the aerospace and defense sector
A COMPREHENSIVE OFFERING
Present in all aircraft components, BREAKDOWN OF 2020 REVENUE
BY SEGMENT (ADJUSTED)
Safran strives to build the future of the global aerospace sector
(in %)
and be the preferred partner of airframers and airlines. AIR
42%
CR
AF
T
EQ
Avionics Cabin interiors Power & data wiring €6,893 MILLION
U
Inertial navigation systems Seats
IP
Flight data acquisition unit IFEC - In-flight
N
38,471
ME
SIO
entertainment & connectivity
SI
Electrical flight EMPLOYEES
NT
Cabin lighting
CE P R OP U L
UL
actuators Air management Original
, DE
systems Services equipment
ACE PROP
Cockpit 61% 69%
FENSE AND AER
• Pilot control systems
• Panels & displays Auxiliary
Oxygen systems Power Unit (APU)
• Seats
• Windshield
OS PA
wiper systems
ROSP
46%
ER
Original Services
AE
€7,663 MILLION equipment 31%
OS
39% Original
Y
equipment
S
24,204
TE
12%
75%*
EMPLOYEES
M
Services S
25%
€1,922 MILLION
Evacuation slides T
Exterior and life rafts AIRC R A F
lighting R S 13,928
Landing gears Anti-icing & de-icing Civil Helicopter Military INTERIO
Cargo Lavatories, EMPLOYEES
Braking & landing
containers water & waste aviation turbines aviation
control systems Inerting & fuel systems 66% 16% * including retrofit activities
Wheels and carbon and pallets Nacelles 18%
brakes and components Engines
Power transmission Engine control systems (FADEC)
Galleys & equipment systems Power distribution and generation * including retrofit activities
Safran products have common features that contribute to the resilience of its business model:
its position as a tier-one supplier to airframers and airlines; high technology content;
Leadership positions and leadership positions in its main business segments.
in its main business segments
▲ ▲ ▲
NO. 1 WORLDWIDE
(1) A full-fledged engine manufacturer(1), Safran supplies a wide range of aircraft To ensure passenger safety and optimize
Safran supplies airframers with engines equipment including landing and comfort, Safran develops cabin interiors
for commercial aircraft, military aircraft, braking systems, nacelles, and related (overhead bins, lavatories, galley and
regional transport aircraft, business jets electrical systems and engineering catering equipment, etc.) passenger
and helicopters. solutions. and crew seats, water and waste
To increase cost efficiency and share Defense: Safran provides solutions management systems, in-flight
risks, engine manufacturers develop and services in optronics, avionics, entertainment systems (RAVE™), and
their engine programs in partnership. navigation systems, tactical drones, interior refits for commercial aircraft.
AEROSPACE AIRCRAFT EQUIPMENT/ AIRCRAFT
Safran has primarily partnered with electronics and critical software for Safran’s aircraft interiors business
PROPULSION DEFENSE/AEROSYSTEMS INTERIORS
GE since the 1970s, when they set up civil and defense markets. addresses both airframers (under the
the 50-50 joint venture CFM International, Aerosystems: Safran is one of the world's SFE(2) model) and airline companies
engines powering single-aisle landing gear cabin interiors for regional which develops the CFM56® and LEAP® leading players in aerosystems, supplying (BFE(3) model).
mainline commercial jets(2) wheels and carbon brakes and business aircraft engines. This partnership has been equipment that assures essential aircraft
helicopter turbine engines for 100+ seater civil aircraft cabin liners, extended through to 2040. Safran also functions and aircraft safety: safety
electrical wiring galleys, contributes to access to space through systems (evacuation slides, oxygen
trolleys, its 50% stake in the ArianeGroup joint masks, etc.); cockpit systems; and fluid
evacuation slides and oxygen systems containers,
venture, prime contractor for the Ariane management systems (fuel, pneumatic
onboard water and waste
management systems
5 and Ariane 6 launchers. and hydraulic circuits).
(1) A full-fledged engine manufacturer is present in all engine components and all propulsion market segments.
(1) Source: Safran. (2) Supplier Furnished Equipment: equipment specified and purchased by the airframer.
(2) In partnership with GE, under the CFM International joint venture. (3) Buyer Furnished Equipment: equipment specified and purchased by the airline.
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GROUP PROFILE GROUP PROFILE
EUROPE
FRANCE (excl. France)
A LEADING
GLOBAL PLAYER
55% 11%
Since its creation in 2005, Safran has expanded internationally. 43,315 8,800
With around 78,900 employees in 27 countries, EMPLOYEES EMPLOYEES
the Group has extended its footprint beyond its European base
63 14 20 27 8 3
and is now present in North and South America, Africa,
the Middle East, Asia and Oceania.
Leveraging its global footprint,
ASIA
the Group establishes strong OCEANIA
and sustainable relationships with
the majority of aerospace players
and airlines, reflecting its desire
to supply its customers promptly 3,405
4%
from local bases.
AMERICAS EMPLOYEES
8 8 2
24%
18,469
EMPLOYEES
70 31 8 AFRICA
MIDDLE EAST
GEOGRAPHIC SPREAD
OF EMPLOYEES AND SITES
6%
AT END-2020
—
Percentage of employees 4,903
% of employees in the total Group workforce EMPLOYEES
—
Number of sites(1)
10 3 1
R&D and Service and Commercial and
production activities maintenance activities administrative activities
(1) Each site corresponds to a legal entity covering one or more tertiary, production, service or maintenance sites.
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ECOSYSTEM ECOSYSTEM
A LOOK BACK AT OUR HISTORY OWNERSHIP STRUCTURE
(in %)
With a rich history spanning over 100 years, Share capital at December 31, 2020
Safran has made high technology its hallmark. Number of shares: 427,235,939
2018
7.3 0.1 Takeover and merger
Employees Treasury of Zodiac Aerospace
shares by Safran. Rebranding
11.2 under the Safran name
TRENDS IN THE SAFRAN SHARE PRICE of all former Zodiac
1905 French
AND THE EURO STOXX 50 INDEX State Aerospace businesses.
Société des Moteurs Gnome (in %) (May 11, 2005 to March 25, 2021)
is founded in the Paris suburb of 81.4
Gennevilliers. Gnome rotary engines Free float
become the standard for planes
around the world.
1000
SAFRAN: +654% 2017
1912
Creation of Société des Moteurs
EURO STOXX 50: +29% Business
combination
Le Rhône, Gnome’s main competitor — agreement between
before being taken over by its rival. Safran and Zodiac
Aerospace. Disposal
800 of the detection,
1924 identity and security
businesses.
Creation of Société d’Applications
Générales d’Électricité et de
Mécanique (Sagem), that will mainly 2016
manufacture cameras and artillery
equipment and go on to design the Inclusion of “Safran”
world’s first infrared guidance system in the corporate name
for air-to-air missiles. 600 of all its subsidiaries.
Creation of ArianeGroup
with Airbus.
2008
1945
Extension of
Gnome & Rhône is nationalized and
the partnership
renamed Snecma (Société Nationale 2013
with GE until 2040.
d’Étude et de Construction
de Moteurs d’Aviation). 400 Acquisition of
Goodrich’s electrical
systems business.
2005
1945-2002
Safran is formed from
Several aerospace companies join the merger of Snecma
Snecma: Hispano-Suiza, a specialist and Sagem.
in power transmission for aircraft
engines, followed by Messier-
200 2020
Hispano-Bugatti, a specialist
in landing gear. Worldwide stock-
market downturn
In 2000, wiring specialist Labinal and resulting from the
its helicopter engine manufacturer Covid-19 crisis.
subsidiary Turbomeca join Snecma.
In 2002, nacelles specialist
Hurel‑Dubois joins Snecma.
0
1974
Snecma becomes a civil aircraft
engine manufacturer through
a cooperation agreement with Trends in the Safran share price since May 2005 Trends in the EURO STOXX 50 index since May 2005
GE for the manufacture
of the CFM56 engine. -200
5
6
9
21
8
20
7
10
14
16
19
18
13
15
12
17
0
0
0
0
0
11
0
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
/2
/
1/
1/
1/
1/
1/
1/
1/
1/
1/
1/
1/
1/
1/
1/
1/
25
11
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
5/
3/
1/
1/
1/
1/
1/
1/
1/
1/
1/
1/
1/
1/
1/
1/
1/
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
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ECOSYSTEM ECOSYSTEM
STAKEHOLDER BENEFITS –
OUR CONTRIBUTIONS
In 2020, Safran maintained its essential activities for all its customers.
Throughout the crisis, Safran’s CSR(1) approach proved its worth Civil society
as a key asset for short-, medium- and long-term value creation.
The Group sought to minimize the impacts of the crisis on its employees and
Academia, local
stakeholders, while contributing to a safer, more sustainable world, where air transport community, associations
is more environmentally friendly, comfortable and accessible. and Non-Governmental
Organizations (NGOs)
Main expectations
Youth training; exchanges between Key points
business and academic worlds; •T echnological roadmap preserved
consideration of environmental and despite the crisis, thanks to
Expectations shared by all stakeholders, consistent social challenges in the Group government support.
with Safran’s absolute priorities: strategy and throughout the value • Ambitious climate strategy with
chain. three focuses: technological
Aviation safety breakthrough in next-generation
Safran contribution engines, massive development of
A
mbitious climate strategy
Youth training; school presentations sustainable fuels, and electric
of Safran’s businesses; support on hybridization for propulsion systems.
developing educational programs; • More than 5,000 interns, work-
Employees sustained R&D to prepare for the study program participants and
Business community Public partners and employee future of the aerospace industry and PhD students across Europe in
representatives the development of new products 2020.
and equipment contributing to • Sponsorships and foundations on
Customers (airframers, and mid-sized companies) in the decarbonizing the aviation industry. professional and social integration.
Government bodies
airlines, etc.) pursuit of operational excellence,
and local authorities Main expectations
Suppliers and sub-contractors competitive performance and carbon
European and international bodies Safeguarding of jobs and business;
footprint reduction, in order to offer
Partners (industrial companies, Certification authorities motivating career paths; regular skills
customers the very best products
research laboratories, etc.) development; commitment to workplace
and services.
Main expectations health and safety and the environment;
Main expectations Ethical business conduct, internal and and compliance with national and Financial community
Key points
Customers: safe, reliable, efficient, external CSR commitments. international labor conventions.
• S afran holds the Responsible
available and innovative products Safe products that comply with
Purchasing and Supplier Relations
and services. international standards. Safran contribution Institutional investors, individual Key points
Label(2) since 2014.
Suppliers and subcontractors: Contribution to the European Green Rapid adaptation to the crisis; shareholders and employee • P ublication and fulfillment of
• € 8 billion in purchasing from
relationships rooted in fulfillment Deal. commitments on maintaining staff shareholders, financial analysts, financial targets in 2020, despite
suppliers (48.5% of Group revenue).
of reciprocal commitments, trust employability; ongoing employee financial rating agencies the unprecedented crisis impacting
• 42% of purchasing volume sourced
and shared long-term vision. Safran contribution training; expertise retained; active and the aerospace industry.
in France in 2020, including 83%
Partners: pursuit of continuous Systematic communication of the constructive employee dialogue; steadily Main expectations • Performance recognized by the
from SME and mid-sized companies.
innovation, and protection of their business ethics culture to all our decreasing accident rates; new Attractive shareholder value creation main non-financial rating agencies.
• 75% of R&T(3) expenditure focused
intellectual property. employees and suppliers; sustained international employee shareholding and transparency in company • Communications reinforced with
on environmental efficiency.
R&D. An ambitious climate strategy. plan in 2020. management, financial and alignment of climate reporting to
• More than 1,000 initial patent
Safran contribution non-financial commitments, long-term TCFD recommendations(4).
requests per year worldwide.
Trust-based relationships renewed Key points Key points strategy and implementation, and • Safran assigned its first long-term
with each generation of aircraft; • In 2012, Safran became the first CAC 40 • Signature of an Activity Transformation inclusion of CSR criteria. credit rating in February 2021: BBB+
reliable, environmentally-responsible company to obtain “anti-corruption” Agreement with all trade unions in (with stable outlook).
products that create value. certification from the French Agency France in order to protect jobs. Safran contribution
Payment terms met (any potential for the Diffusion of Technological •7 .25% of share capital held by current Accurate, precise and fair information
delays following the March 2020 Information (ADIT). and former employees in 2020. accessible to the financial community;
lockdown in France were caught up •4 3.5% of buyers were trained in • Frequency rate of lost-time work regular presentation of the Group’s
during 2020). responsible purchasing methods in 2020. accidents: 2.0 (number of accidents multi-year objectives at Capital
M o b i l i z at i o n a n d eve r yd ay • 30% reduction in greenhouse gas per million hours worked) in 2020. Markets Days; availability for the
commitment with suppliers and emissions across operations by 2025 • Approx. one million training hours entire financial and non-financial
subcontractors (especially SMEs vs. 2018. worldwide in 2020. community.
(1) Corporate social responsibility.
(2) The Responsible Purchasing and Supplier Relations Label replaces the Responsible Supplier Relations Label.
(3) Research and Technology.
(4) Task Force on Climate-related Financial Disclosures.
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ECOSYSTEM ECOSYSTEM
SAFRAN’S CSR (1) STRATEGY: Key objectives for 2025
ENGAGE FOR THE FUTURE To fulfill its ambitions and create value, Safran has set objectives for 2025 that will enable the Group to track progress annually
for each pillar in the CSR roadmap. These objectives can also be found on page 51, in the overall table of key performance
Through its commitments and the related actions, Safran’s CSR strategy indicators, marked with the symbol CSR .
– Engage for the Future – is a reflection of the Company’s corporate identity
PILLAR 2025 OBJECTIVE 2019 2020
and contributes to the Group’s core purpose.
Decarbonize Scope 3 (product usage):
aerospace 75% of R&T investment focused on environmental efficiency
Choose technologies (engines and equipment) contributing 75% 75%
A CSR approach co-constructed “Engage for the Future”, to ultra-efficient aircraft for 2035, targeting carbon neutrality for 2050,
with all stakeholders a new CSR strategy with 100% sustainable fuels
3% -31%
Scopes 1 and 2: 30% reduction in CO2 emissions vs. 2018
(623,619 t CO2eq.) (1) (414,988 t CO2eq.)
Safran’s CSR strategy – Engage for the - i nnovation and eco-design of products “Engage for the Future” was developed 100% of facilities to have achieved the five zero targets roadmap(2) * *
Future – sets out commitments and services; in line with the Group’s core purpose, Be Maintain the number of training hours per employee per year(3) 26 13
addressing stakeholder expectations. It - technological developments; as defined in 2020, and actively an exemplary
was developed from an update to the -c ustomer satisfaction and trust; Frequency rate of lost-time work accidents below 2.5(4) 3.2 2.0
contributes to it through its objectives, employer
materiality matrix of non-financial - business ethics and the fight against commitments and actions. It is aligned 100% of employees worldwide to benefit from a minimum level of health
* *
challenges plotted in early 2020, along corruption; cover (medical, optical and dental)
with the UN Global Compact, of which
with input from working groups formed - skills development and talent retention; Safran has been a signatory since 2014, 22% of women among senior managers 12% 13%
with Group employees. -h ealth and safety in the workplace; and actively contributes to progress Embody 100% of senior managers and exposed and affected people trained
- 66%
- attractiveness of Safran and recruitment toward 12 of the 17 UN Sustainable responsible in anti-corruption(5)
pdate to the materiality matrix
U of talent; Development Goals (SDGs) set out industry 100% of senior managers and exposed and affected people trained
resulting from consultation with more - quality and safety of products and * *
below. in export control(6)
than 70 external stakeholders services.
80% of purchases made from suppliers that have signed
(suppliers, customers, etc.) and 600 the Safran's responsible purchasing charter(7)
- 40%
internal stakeholders. Nine challenges onsultation with more than
C
100% of sites certified “Gold” to internal HSE standards 50% 60%
for Safran were pinpointed: 160 Group employees, across over
- reduction of atmospheric emissions 30 business lines in all of the geographic Increase the waste recovery ratio (objective to be calculated in 2021) 68.3% 70.5%
and the carbon impact linked to the regions where Safran operates. Affirm our Increase the number of new PhD students in the company per year (> 65) 63 (8)
36
use of products and services; commitment
to citizenship At least one social or professional integration initiative run by each Safran site * *
* Measured across the whole scope in 2021.
CORE PURPOSE
(1) 2019 emissions figures, which included estimated data for fourth-quarter 2019, were revised in 2020 to reflect the actual data.
“Thanks to the commitment of our employees, proven innovation and operational excellence, (2) Zero non-recycled paper in 2021, zero machines or equipment running unnecessarily in 2022, zero single-use plastic cups or dishes in 2023, zero catering
products from extracontinental geographic areas in 2024, and zero non-eco-friendly green spaces in 2025.
Safran designs, builds and supports high-tech solutions to contribute to a safer, more sustainable world, (3) Compared to 2019. Excluding employees on long-term absence.
where air transport is more environmentally friendly, comfortable and accessible. (4) Number of accidents per million hours worked.
Décarboner Être un employeur Incarner l’industrie Affirmer (5) Purchasing, HR, Sales, Legal, Finance, Audit & Internal Control, Compliance & Business Ethics, Risks and Communications Departments, with customers,
We also
Décarboner
l’aéronautique apply our
exemplaire skills to develop
Être un employeur Décarboner
Incarner l’industrie Être un
l’aéronautique
responsable
Affirmer
solutions
employeur
son engagement
exemplaire responsablethat meet
Incarner l’industrie
Décarboner
l’aéronautique
Affirmer
strategic
Être un employeur
son engagement
exemplaire
needs,
Incarner l’industrie
l’aéronautique
responsable
such as defense
Affirmer
exemplaire
son engagement
responsable and son
access to space.”
engagement suppliers and partners concerned.
sociétal
sociétal sociétal
sociétal (6) People exposed and affected in all Group departments.
(7) Or using an equivalent responsible purchasing charter.
(8) Average new PhD students over three years (2017-2019).
1 2 3 4 Non-financial ratings
Decarbonize Be an exemplary Embody Affirm our commitment
aerospace employer responsible industry to citizenship A dedicated CSR
Be recognized as a leader Be considered as an employer Be the benchmark in our Get involved with our local governance 2019 2020
▲
in the decarbonization of choice by our employees production methods and communities and contribute
of the aviation sector and the talents of the sector throughout our value chain to their development
55/100 Robust level
The CSR strategy is led by the Executive
1. Make carbon 4. Accelerate training 7. Uphold the highest 10. Be at the • 1 st company out of 20 in the aerospace and
▲
neutral aircraft in the skills and jobs standards of ethics forefront of innovation Committee and steered by the Executive Rating reviewed defense industry ranking in Europe
every two years.
the R&T priority of tomorrow to protect citizens Vice President, Corporate Human and • 1st out of 44 worldwide
Social Responsibility, who draws on the
2. Reduce CO2 5. Ensure health and 11. Develop work of the CSR Department in defining
8. Strengthen C (Awareness level) A- (Leadership level)
▲
emissions throughout safety of employees, responsible supply partnerships for the CSR strategy, its roadmap and its
Rating from “F” to “A”
our value chain improve the quality chain management training and research rollout. The department works with all (A being the highest).
of life at work and and support suppliers Group companies and departments to
maintain a thriving
social dialogue ensure that the CSR strategy is in place
28.0 – Medium risk 24.9 – Medium risk
across the whole of the Group and
The rating evaluates ESG risk • 6th out of 82 in the • 4th out of 88 in the
▲
engages all employees on its Group-wide level, with the lowest rating aerospace and defense aerospace and defense
3. Involve employees 6. Encourage equal 9. Respect 12. Enhance commitments. CSR challenges are corresponding to the best industry industry
in the reduction of opportunities and the environment professional non-financial performance.
their carbon footprint promote diversity and natural resources and social integration presented to and monitored by the
Board of Directors and the Executive
Committee each year. A rating A rating
▲
Rating from “CCC” to “AAA”
(AAA being the highest).
(1) Corporate social responsibility.
S A F R A N 2 0 2 0 I N T E G R AT E D R E P O R T I 14 15 I S A F R A N 2 0 2 0 I N T E G R AT E D R E P O R T
ECOSYSTEM ECOSYSTEM
OUR MARKETS
Despite the impact of the Covid-19 crisis on the aerospace market
over the coming years, the underlying air traffic development fundamentals
remain solid and should continue to drive strong long-term growth
in the global commercial aircraft fleet.
FOCUS ON SAFRAN’S
MILITARY ACTIVITIES
Over and above the electronic
Civil aviation activities of Safran Electronics
& Defense, all Group subsidiaries
are present in the military sector,
which accounted for approximately
The Covid-19 crisis has had an emand in regions enjoying strong
d Estimates point to a total of around 24% of Group revenue in 2020.
unprecedented impact on air traffic: the economic growth (in particular China, 34,500 new planes over the next Products notably include
ICAO(1) estimates a 60% drop in the South-East Asia and India), and 20 years. This dynamic is especially the M88 engines powering
number of passengers in 2020. renewal of the existing fleet (mainly pronounced in the short- and the Rafale, military helicopter
Nevertheless, the underlying air traffic in North America and Europe). medium-haul aircraft segment, which turbine engines, TP400(1) engines
growth fundamentals, for the medium expects 22,400 new planes over the powering the A400M transport
plane, electrical wiring for the
and long term, remain: High growth in air traffic proved resilient same period. In addition, airframers
Rafale, landing gear, tactical
t he increasing accessibility and against previous global economic crises Airbus and Boeing report very high
drones and auxiliary power units
popularity of air travel spurred by (in 2001 and 2008), and Safran expects order backlogs despite the crisis (7,184 (APUs). Safran also holds 50%
falling prices; a return to 2019 traffic levels somewhere and 4,997 respectively, at the end of of ArianeGroup, which develops
higher load factors to win market share between 2023 and 2025, followed by December 2020). The same trend has launchers for nuclear deterrence.
and increase profitability in airline sound growth, despite the increasing also been observed in the aftermarket,
company operations; weight of ecological impact on air with strong growth driven by the
transport. increasing in-service fleet size.
Defense and space
CIVIL AVIATION, GLOBAL PROJECTIONS
A clear and ongoing upward trend in was formed to co-finance collaborative
The long-term growth outlook remains strong, despite the short- and medium-term impact of the Covid-19 defense and space budgets has been research and development programs,
crisis on air traffic. observed worldwide over recent years, with a budget of €7 billion over the
in a context of persistent or heightening period covered by the upcoming
tension in many regions. European Union multi-annual financial
21,000 Global aircraft capacity (measured in ASK) until 2040*: +2.8 % In Europe, the initiatives taken in recent framework (2021-2027). Prospects on
18,000 Global aircraft traffic (measured in RPK) until 2040*: +2.9 % years by the European Commission and new space projects are advanced by a
member states have proved successful, record budget of €13.2 billion for 2021-
15,000 with co-financing for cooperative 2027, plus confirmation of a firm intention
-57% ASK** programs topping €500 million in 2019- to strengthen European sovereignty in
12,000 -66% RPK**
2020. The European Defense Fund (EDF) space.
9,000
6,000
3,000
X 2.5 Air traffic X 1.8
0
1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040 Business aviation and helicopters
62.8% 82.6 % 64.8 % 84.2%
Business aviation was less impacted in different contexts, with usage in
Global aircraft capacity (ASK) Global air traffic (RPK) Load factor
than commercial aviation by the Covid-19 military, healthcare and public service
RPK: Revenue passenger kilometers, in billions (= number of occupied seats multiplied crisis in 2020. Growth prospects for the remaining robust. Overall, the impact
by the total distance traveled by the global fleet). business aircraft fleet, already limited was less pronounced than in commercial
ASK: Available seat kilometers, in billions (= number of available seats multiplied by the distance
traveled by the global fleet).
before the crisis, nevertheless appear aviation, with a 25% drop in flight
uncertain. volumes at the worst of the crisis, with
Source: Safran Aircraft Engines. At the end of 2020, there were around a swift return to normal expected. Some
* Annual growth (reference year: 2019). 21,700 business aircraft in service plus 51,000 helicopters were in service
** In 2020 vs. 2019 (source: International Air Transport Association).
some 500 in storage. The crisis impacted worldwide in 2020.
the helicopter market to different extents
(1) International Civil Aviation Organization. (1) Through the EPI (EuroProp International) consortium.
S A F R A N 2 0 2 0 I N T E G R AT E D R E P O R T I 16 17 I S A F R A N 2 0 2 0 I N T E G R AT E D R E P O R TSTRATEGY AND BUSINESS MODEL STRATEGY AND BUSINESS MODEL
AEROSPACE INDUSTRY
TRANSFORMATION
Safran operates in a changing industrial landscape,
3 5
hit by the short-term impact of the Covid-19 crisis.
Shifts in vertical integration Stronger role
and consolidation patterns of national authorities
UNDERLYING TRENDS STILL STRONG Environmental challenges
Towards carbon neutral aviation Collapse of the Boeing/Embraer merger program. After the wave of equipment
for 2050 deal in 2020 marks a halt in the airframer manufacturer and supply-chain mergers
consolidation trend initiated in 2017, in 2018-2019, further consolidations
1 when Airbus took over the A220 might occur given the crisis impacting
(formerly the Bombardier C-Series) the commercial aviation industry.
Stronger role of
national authorities Technological breakthroughs
Traffic resumption, border and next-generation aircraft
reopenings, air safety, support 5 2 Breakthrough innovations,
for the aviation sector entry-into-service scenarios
4 3
Shifts in vertical integration
Geopolitical risks and consolidation patterns
and global competition Though air transport is today one of the
safest means of transport in the world,
the two Boeing 737 MAX accidents, in
2018 and 2019, sharpened certification
authorities’ attention on safety
throughout the aircraft life cycle. The
flight re-authorization process begun
2 in 2020 revealed intensified expectations
on flight safety, a fundamental
challenge shared by all Group companies.
Technological breakthroughs That aside, the crisis has marked a
and next-generation aircraft reinforcement of the roles played by
national authorities in the aviation sector,
as regards the management of border
Innovation has been a cornerstone of hydrogen, etc. Innovations here will pave openings, health measures for
the aerospace sector from the outset. the way to engine architectures, passengers, support for airlines, and aid
Today’s aircraft are five times more fuel concepts, production methods, services, for the aerospace industry.
efficient than those of the 1950’s, chiefly players and uses (particularly VTOL(1)).
because of engine improvements, and At the same time, the Covid-19 crisis
civil aviation is one of the world’s safest creates uncertainty in airframer
means of transport. schedules for forthcoming aircraft
To meet the climate challenge, disruptive generations.
innovations are needed in forthcoming 4
platforms: digitalization, connectivity,
1
autonomy, hybrid and/or electric Geopolitical risks
propulsion, distributed propulsion, and global competition
materials, processes, sustainable fuels,
Environmental
challenges
The Covid-19 crisis comes at a time of Lastly, aircraft leasing companies,
geopolitical and commercial tensions, investors and finance companies remain
which are affecting the aviation sector major players in the aviation ecosystem,
The crisis confirmed expectations with
and the aerospace industry in various contributing to the resilience of the
regard to climate change, especially for
ways: tensions over the resumption crisis-hit sector. In 2020, more than 50%
the aviation sector, which must step up
of international flights during the of short- and medium-haul civil aircraft
efforts on decarbonization (pages 24
crisis, flight re-authorization delays, delivered were financed by leasing
to 27).
measures restricting license or export companies.
authorizations, etc.
(1) Vertical Take-Off and Landing aircraft.
S A F R A N 2 0 2 0 I N T E G R AT E D R E P O R T I 18 19 I S A F R A N 2 0 2 0 I N T E G R AT E D R E P O R TSTRATEGY AND BUSINESS MODEL STRATEGY AND BUSINESS MODEL
OUR AMBITIONS
The major ecosystem trends outlined previously point to a return to solid growth CFM56 – LEAP engines
for the sector, which will be required to meet major technological challenges leaders on the short- and medium-haul segment, a key asset for Safran
on decarbonization, while upholding safety and competitive performance.
In this segment, CFM International (a 50-50 joint venture between Safran Aircraft Engines and GE) has a market share of
around 70% thanks to 40 years of commercial success.
Safran aims to become the world’s • coverage of all sub-segments of the By focusing on both operating excellence
leading aircraft equipment supplier aerospace and defense sector (regional and the investment needed to lead in LONG-TERM A LARGE CFM56 FLEET LEAP, FOLLOWING THROUGH
within the next 15 years. To achieve this aircraft, short and medium haul, long state-of-the-art technology, the Group PROSPECTS IN SERVICE ON THE CFM56 SUCCESS STORY
goal, the Group draws in particular on: haul, business jets, helicopters, military is ideally placed to emerge from the The propulsion business generates With an in-operation base(1) of 31,865 The successor to the CFM56 is the hugely
aircraft), to reduce sensitivity to crisis in a stronger position and cross a significant service activities, mainly engines at the end of 2020 (including innovative LEAP engine, which consumes
business model building on:
a variations in business cycles; new threshold in business growth and comprising the sale of spare parts and some 23,000 CFM56-5B/-7B), the 15% less fuel than its predecessor, the
• products with business cycles of two key priorities: climate change and value creation.
maintenance, repair and overhaul (MRO) CFM56 is the biggest commercial CFM56. The LEAP is a commercial
different maturities (from just a few aviation safety; services. Given the size of the engine success in the history of civil aviation. success, with an order backlog (2)
years for an aircraft seat and up to a clear strategy drawing upon three fleet in service, Safran has substantial It will continue to generate service exceeding 9,600 units at the end of 2020.
40 years for an engine); key Safran assets: sustainable growth potential. The Group has been activities for Safran over the next
• service and aftermarket businesses innovation, operating excellence and developing long-term service contracts 20 years. The fleet of second-generation It has been selected for three aircraft:
(including spare parts and long-term responsible conduct; for a number of years, in response to CFM56 engines (-5B/-7B) is young LEAP-1A for the Airbus A320neo,
contracts), that now generate nearly “Engage for the Future”, a CSR strategy customer demand, which now apply to (roughly 50% under 10 years, and only which came into service in August
half of its revenue. These services with four pillars: decarbonize the LEAP engine. Aftermarket services 10% over 20 years), and boasts proven 2016 (61% market share(3));
ensure recurring revenue streams, aerospace, be an exemplary employer, for LEAP engine will gradually take over in-service reliability, which means LEAP-1B for the Boeing 737 MAX,
margins with smooth time-spreads, embody responsible industry and from the CFM56 engine from 2025. withdrawal and part-out risks remain which came into service in May 2017(4)
and improved visibility; affirm our commitment to citizenship. relatively low. (100% market share);
LEAP-1C for the COMAC C919 (China,
exclusive Western source).
AEROSPACE PROPULSION
CFM56 (-5B/-7B) FLEET BY NUMBER OF SHOP VISITS PERFORMED
Adapt production in phase
with the ramp-up in airframer demand
Be on the cutting edge of green aviation No shop visit ~ 50%
performed
Consolidate the position of full-fledged with no
engine manufacturer(1) 1 shop visit 2020 shop visit
Prepare the civil and military propulsion
performed ~ 25% ~ 23,000
More than 2 shop visits engines
technologies of the future with 1
performed shop visit
Profit from growth in service activities
thanks to a large operation base Source: CFM data
AIRCRAFT EQUIPMENT/ of still young civil engines
DEFENSE/AEROSYSTEMS
Become the world’s leading aircraft
equipment supplier
GEOGRAPHIC DISTRIBUTION OF THE FLEET
Be the leader in systems and equipment A CLEAR CFM56 IN-OPERATION BASE(1)
OF AIRCRAFT POWERED BY CFM56 ENGINES*
for more electrical aircraft,
Including propulsion hybridization
ROADMAP 35,000
35,000
33,000
33,000
Capitalize on business lines consistent
with French and European self-reliance, 31,000
31,000
leveraging proprietary technologies 29,000
29,000 31,865
31,865 32%
32%
Asia-Pacific**
Asia-Pacific**
27,000
27,000 ar*ar* CFM56
CFM56
yeye
Keep a leading global position
AIRCRAFT INTERIORS 25,000
25,000 p epr er End 2020
End 2020
.6%.6%
in onboard safety systems 28%28%
23,000
23,000
+4+4 North
North
America
America
Restore the operational excellence 21,000
21,000 27%
27%
Europe
Europe
and competitiveness of this business 19,000
19,000
Propose innovative solutions 17,000
17,000 4%4% 5%5%
Latin America
Latin America
for our customers in clean, 15,000
15,000 Middle East
Middle East 4%4%
Africa
Africa
connected and sustainable cabins
20290
2020
20
20
2008
20098
20109
20019
2010
2014
2013
2014
2015
2016
2018
8
12
13
15
2016
2017
17
20011
20121
2 1
0
201
200
2 1
20
20
20
20
20
20
20
Build on our strong position on the market
with a broad, modular product range * Weighted* average
Weighted
* Weighted average
annual average
growth annual
rate growth
annual rate
growth rate * Source: Cirium - Aircraft fitted with CFM56 engines in service
Source: CFM and parked at end of 2020.
Return to world-class ** Including 18% in China
financial performance
(1) In-operation base is equal to engines delivered less engines dismantled or scrapped.
(1) Safran is present in all engine components and all segments (2) On the basis of pending orders and cancellations.
of the propulsion market. (3) Firm orders at December 31, 2020.
(4) Boeing 737 MAX grounded from March 2019, with return to service authorized by the US certification agency in November 2020 and by its Canadian and
European counterparts in January 2021.
S A F R A N 2 0 2 0 I N T E G R AT E D R E P O R T I 20 21 I S A F R A N 2 0 2 0 I N T E G R AT E D R E P O R TSTRATEGY AND BUSINESS MODEL STRATEGY AND BUSINESS MODEL
A RESILIENT BUSINESS MODEL SERVING OUR CUSTOMERS
Trends Our resources(1) Our business model Our impacts(1)
serving our customers
HUMAN CAPITAL HUMAN CAPITAL
Around 78,900 employees Attractive working conditions
in 27 countries and labor relations model
2.7% of payroll spent on training 49% of employees are
(France) Company shareholders
Recognized governance and together hold 7.3%
of the share capital
Environmental
challenges INTELLECTUAL CAPITAL
Towards €1.2 billion total R&D expenditure Our business A balanced INTELLECTUAL CAPITAL
model business portfolio
carbon neutral 16% of Group employees in R&D 45,000 intellectual
aviation (including R&T) property titles
for 2050
INDUSTRIAL CAPITAL INNOVATION, DESIGN
2020 R&D expenditure: €1.2 billion
46% AEROSPACE
PROPULSION
INDUSTRIAL CAPITAL
276 sites in the world serving €250 million of synergies
—
our customers expected in 2022, following
Technological
breakthroughs
€449 million in industrial ORIGINAL EQUIPMENT SALES 42% AIRCRAFT
EQUIPMENT,
the acquisition of Zodiac
Aerospace
and next-generation
investments 2020 revenue: €9.2 billion (56%) DEFENSE AND
Agile supply chain
AEROSYSTEMS
aircraft Structuring alliances and
—
Breakthrough partnerships, including the CFM SERVICES
innovations,
entry-into-service
International joint venture
formed with GE in 1974 and
2020 revenue: €7.3 billion (44%) 12% AIRCRAFT
INTERIORS
FINANCIAL CAPITAL
Fulfillment of financial targets
scenarios renewed until 2040 set in July 2020 during
the Covid-19 crisis
Prompt cost adjustment
FINANCIAL CAPITAL
capacity
A full order backlog Faced with 32.5% organic
3 assets
Shifts in vertical A growing base in operation fall in adjusted revenue
integration (up approximately 4.6% annually (with respect to 2019):
and consolidation
patterns
for short- and medium-haul
engines) Two • Recurring operating
margin of 10.2%
One of the strongest financial
signatures in the industry absolute priorities ASSET NO. 1 ASSET NO. 2 ASSET NO. 3
• Free cash flow
of €1,073 million
A stable shareholder base SUSTAINABLE OPERATIONAL RESPONSIBLE • A disciplined M&A policy
(employees, French State, INNOVATION EXCELLENCE CONDUCT
long-term institutional investors) 14.27% annual growth in TSR(3)
Geopolitical (page 30) (page 34) (page 36)
from 2005 to 2020
risks and global A strong financial structure CLIMATE CHANGE
competition (net debt/EBITDA(2) of 1.13) (page 24) Stock market performance
up 654% (from May 11, 2005
A foreign exchange risk hedging —
to March 25, 2021)
policy providing visibility
Decarbonize Be Embody Affirm our
aerospace an exemplary responsible commitment SOCIAL AND
Stronger role SOCIAL AND employer industry to citizenship ENVIRONMENTAL CAPITAL
of national authorities ENVIRONMENTAL CAPITAL
AVIATION SAFETY LEAP: -15% CO2 emissions
Traffic resumption, 75% of R&T investment focused (page 28) and -50% NOx emissions
border reopenings, on reducing our environmental
4 CSR pillars
air safety, footprint RESPONSIBLE SUPPLIER
support for RELATIONS label
Training in responsible purchasing
the aviation sector and good conduct charter 1st CAC 40 company
certified “anti‑corruption”
by the ADIT(4)
(1) All figures refer to 2020 except where noted. (3) Total Shareholder Return corresponds to dividends plus the change in the share price.
(2) EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) is the sum of recurring operating income plus (4) French Agency for the Diffusion of Technological Information (Agence pour la diffusion de l’information technologique – ADIT).
net recurring and non-recurring amortization, provisions and depreciation.
S A F R A N 2 0 2 0 I N T E G R AT E D R E P O R T I 22 23 I S A F R A N 2 0 2 0 I N T E G R AT E D R E P O R TSTRATEGY AND BUSINESS MODEL STRATEGY AND BUSINESS MODEL
PRIORITY
SAFRAN’S CLIMATE STRATEGY
NO. 1
Safran intends to lead the way towards decarbonization of the aviation sector,
through a climate strategy with two focuses:
SAFRAN’S CLIMATE STRATEGY reducing emissions from its operations;
reducing emissions from the use of its products, its essential mission.
Climate change sets a major and systemic challenge for civil aviation.
Safran’s climate strategy addresses the challenge in order to offer customers innovative Progress in climate reporting
solutions at a competitive cost. With its position in most aircraft-system segments,
and all energy systems in particular, the Group spearheads the technological
response to climate change.
2020(1) 2021(1) 2022(1)
Scopes 1 & 2 Scopes 1 & 2 Scope 3
AN AMBITIOUS COMMITMENT FOR THE AVIATION SECTOR
Objectives Objectives reviewed and made more ambitious Full declaration for all
AND SAFRAN’S VISION TO ACHIEVE IT •R
eduction of 8% and 18% • Reduction of 30% by 2025 vs. 2018 categories, notably for
in 2025 vs. 2018 the use of products across
• In line with 1.5°C trajectory for industry the Group scope
• In line with 2°C trajectory (based on SBTi methodology(2))
CO2 EMISSIONS for industry (based on Reduction objectives
FROM GLOBAL CIVIL AVIATION A 90% reduction in CO2 emissions SBTi methodology(2)) Scope 3 for Scope 3 emissions
per passenger kilometer Extended category declarations:
by 2050 will be
Scope 3
• Purchases of goods and services
▲
▲
reachable through: Category declarations
No • Freight
• Business travel
action • Employee commuting
enewing
R • Waste treatment
the fleet Initial partial declaration of Scope 3 emissions,
from use of products – direct emissions, from * Universal Registration Document.
40% Introducing
technological breakthroughs
engines: 41.9 Mt CO2eq. in 2019, 20.6 Mt CO2eq.
in 2020
(1) Reporting year (prior-year URD).
(2) While Safran is not yet
SBTi-certified, it did apply
in the efficiency of new-generation TCFD(3) the methodologies and emission
CO 2 emissions
reduction trajectories
aircraft and engines Climate chapter in 2020 URD* presented in recommended by this organization
accordance with TCFD recommendations for setting its objectives.
(3) Taskforce on Climate-related
10% Improving
air traffic management
Financial Disclosure.
and operations
-50%
for CO2 40% Incorporating
sustainable fuels
Reduction in CO2 emissions from operations
emissions* -90%
... while also reducing other pollution
(noise, NOx, particles, etc.). Safran takes a committed and ambi- In early 2021, Safran stepped up its Milmort (Belgium) and Sendayan
2015 2010 2020 2030e 2040e 2050e tious stance on reducing the carbon ambition and objectives on reducing (Malaysia) sites. Feasibility studies
* Compared to 2005. footprint of its production methods, greenhouse gas emissions from its will be conducted with partners in
through its low-carbon project. operations. The new objective aligns 2021 to continue the installation,
with an emissions reduction trajectory notably in the United States;
Safran brought in a low-carbon project compatible with a global warming choosing low-carbon energy sources,
Civil aircraft in operation account for 2% to 3% of global CO2 emissions from at the end of 2018, with a dedicated scenario of 1.5°C by the end of the as in Mexico, with a solar power
human activities(1). Considering the effects of emissions other than CO2 (vapor organization relayed through each of century. energy contract for power supplies
trails, for example), scientists estimate that aircraft in service are responsible for SAFRAN COMMITMENT the Group’s tier-one companies. Direct (Scope 1) and indirect (Scope 2) to all Group sites, and in the United
about 3.5% of global warming(2). Because of the significant expansion expected in At the 2020 Annual General The first phase of the project involves emissions: 30% reduction by 2025(1). Kingdom, with a wind power supply
air transport in the long term, the necessary transition to sustainable aviation is Meeting, Safran made the reducing direct (Scope 1) and indirect contract;
an absolute priority for Safran. following commitment in support (Scope 2) emissions from energy con- Some of the assets employed to meet phase-in of sustainable fuels for civil
In 2008, the aviation sector took up a voluntary commitment on halving global of sustainable fuels: “Safran sumption in our operations. our objectives are as follows: engine tests: Safran is committed to
CO2 emissions by 2050 compared to 2005 (ATAG)(3) to bring a 90% reduction in notably undertakes to support The second project phase, launched reducing sites’ energy consumption, using 10% of sustainable fuels by the
average emissions per passenger kilometer across the worldwide fleet, taking the launch by the governments in early 2020, concerns part of chiefly by improving the energy end of 2021 and 35% by 2025.
and, in particular, the European Safran’s indirect emissions (referred efficiency of buildings (Valence site,
into account the expected growth in air traffic over the period.
Union, of investment plans and In 2020, Safran also introduced an
to as Scope 3 emissions): from logis- France);
regulatory measures aiming to
AMBITION: LOW-CARBON AVIATION BY 2030-2035, tics operations, purchases of goods developing disruptive solutions for internal carbon price for its investment
promote the availability and
TOWARDS CARBON NEUTRALITY BY 2050 and services, and employee travel. heat generation at our sites, by con- projects, to swing decisions in favor of
utilization of sustainable fuels
The aviation sector commitments are consistent with the Paris Agreement on for aviation. This will have to be An initial evaluation of these emissions versions such as replacing gas boilers solutions including decarbonization
keeping the global temperature rise below 2°C. Our objective is achievable and done in a sustainable way, taking was undertaken in 2020, prior to with biomass boilers; actions. By the end of 2020, 20% of
should involve all players in the sector (industry, airlines, air traffic control, airports, into consideration the situation setting reduction objectives in 2021. on-site production and self-con- the program of actions needed for
government authorities). of the aerospace industry and, sumption(2): solar photovoltaic reaching the 2025 objective had been
in particular, of our airline production facilities have been achieved (measured as the quantity of
customers after the end installed at the Gloucester (United greenhouse gas emissions to be
of the Covid-19 crisis.” Kingdom), Montluçon (France), reduced).
(1) Data from IAE (International Energy Agency), ICCT (International Council on Clean Transportation). (1) Compared to CO2 emissions in 2018, i.e., 219,790 t CO2eq. for Scope 1 and 383,186 t CO2eq. for Scope 2 (2018 emissions figures were revised in 2020 to
(2) The Contribution of Global Aviation to Anthropogenic Climate Forcing for 2000 to 2018, David S. Lee et al., Atmospheric Environment, 2020. reflect the actual data).
(3) Air Transport Action Group. (2) Consumption of electricity produced at Safran sites for its own needs.
S A F R A N 2 0 2 0 I N T E G R AT E D R E P O R T I 24 25 I S A F R A N 2 0 2 0 I N T E G R AT E D R E P O R TYou can also read
