Q1 2022 Revenue Olivier ANDRIES - Chief Executive Officer - Safran
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Q1 2022 Revenue April 29, 2022 Olivier ANDRIES Chief Executive Officer Pascal BANTEGNIE Chief Financial Officer
Disclaimer & foreword
FORWARD-LOOKING STATEMENTS
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 full impact of the Russo-Ukrainian conflict.
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.
ADJUSTED DATA
All revenue figures in this presentation represent adjusted data(1) (except where noted). 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 aircraft programs revalued at the time of the Sagem-
Snecma merger. With effect from the first half 2010 interim financial statements, the Group decided to restate:
the impact of purchase price allocations for business combinations, particularly amortization and depreciation charged against intangible assets and property, plant and equipment recognized or remeasured at the time of the transaction and amortized or depreciated over
extended periods due to the length of the Group’s business cycles and the impact of remeasuring inventories, as well as
gains on remeasuring any previously held equity interests in the event of step acquisitions or asset contributions to joint ventures
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
all mark-to-market changes on instruments hedging future cash flows are neutralized
The resulting changes in deferred tax have also been adjusted.
ORGANIC GROWTH
Organic variations were determined by excluding the effect of changes in scope of consolidation and the impact of foreign currency variations.
(1) See slide 18 for bridge with consolidated revenue
2 SAFRAN - Q1 2022 Revenue / April 29, 2022
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
01. Q1 2022 HIGHLIGHTS
Summary
AIR TRAFFIC RECOVERY
Improving trends except in Russia and China (at lowest ever)
Expect return to 2019 level by early 2023
SOLID GROWTH IN REVENUE IN Q1 2022
22% y-o-y (17% organic)
Driven by all activities, notably aftermarket
IMPACT OF SANCTIONS AGAINST RUSSIA
Safran is complying with all applicable regulations and sanctions
All exports and services to Russian customers suspended
and joint ventures’ operations halted in Russia
INCREASING PRESSURE ON SUPPLY CHAIN AND INFLATION
FY 2022 OUTLOOK CONFIRMED
4 SAFRAN - Q1 2022 Revenue / April 29, 2022
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
Q1 2022 market environment
GLOBAL NARROWBODY CAPACITY GEOGRAPHICAL FOCUS
Narrowbody air traffic growth stalled vs. Q4 2021 Q1 2022: worldwide CFM engine cycles 75% of 2019 level
Q1 2022 ASK*: 75% vs Q1 2019
North America: CFM cycles close to 2019 level in Q1-22, with
Month of March impacted by severe China downturn a strong increase in load factor
Europe (incl. CIS): CFM cycles at 70% in Q1-22
100 NB ASK (% vs same period in 2019) Trending up since end January and the ebb of omicron wave
2020 Q2-Q4 average: 38% 2021 average: 63% 2022 Q1: 75% Reaching c.75% of 2019 level end of March
80 o/w Russia at c.40% of 2019 level
60
China: CFM cycles at c.65% in Q1-22 with a downward trend
40 End March 2022, cycles at lowest ever (c.20% of 2019)
Increase in incidence rate led to stringent lockdowns according
20 to zero-Covid policy
0
Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
2020 2021 2022
* ASK: available seat-kilometers
5 SAFRAN - Q1 2022 Revenue / April 29, 2022
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
Q1 2022 business highlights
PROPULSION & SPACE EQUIPMENT & DEFENSE / AIRCRAFT INTERIORS
Q1 2022 CFM deliveries
Euroflir™ 510 sight to equip Tiger Mk3 combat helicopter
239 LEAP engines (up 51 units)
15 CFM56 engines (down (11) units)
China selects Cassiopée™ Alpha (flight data decoding
and analysis system) for flight data analysis on all its
Air France-KLM enters into exclusive negotiations with
commercial aircraft
CFM International for the engine configuration of its
future Airbus A320neo family fleet
A leading Middle East airline selects Safran to equip its
Greece acquires 6 additional new Rafale aircraft A350 business class seats
First down payment expected in H1 2022
INNOVATION
10 year engine operational maintenance agreement
renewed with French state for their helicopter fleet
Safran 1st French company in the EPO(1) Patent Index
(1,600 engines)
2021
Arianespace signs unprecedented contract with Amazon
for 18 Ariane 6 to deploy Kuiper constellation
(1) EPO: European Patent Office
6 SAFRAN - Q1 2022 Revenue / April 29, 2022
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
Climate strategy: ambitious decarbonization objectives
(1) Audited data
7 SAFRAN - Q1 2022 Revenue / April 29, 2022 (2) Science-Based Targets initiative
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
Climate strategy: Q1 2022 highlights
NEW DEMONSTRATION PROGRAM IN GREEN AVIATION
CFM-Airbus collaboration on an hydrogen demonstration
program
Objective to ground and flight test a direct combustion engine
fueled by hydrogen
Hydrogen combustion capability is one of the key technologies to
develop and mature as part of the CFM RISE program
INVESTING IN TECHNOLOGY
Safran Corporate Ventures investment in Cranfield Aerospace
Solutions Ltd (“CAeS”)
Focus on the unlocking of commercial hydrogen-electric propulsion flight
Contribution to making Safran a competitive player for the development of
fuel cells for aircraft
8 SAFRAN - Q1 2022 Revenue / April 29, 2022
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
Q1 2022 revenue
Adjusted revenue(1)
in €M
Strong organic growth in all divisions
+22% 4,071
3,342
Good increase in Services, in particular civil
+17%
aftermarket:
org.
up 53 % y-o-y (in USD); down 19.5% sequentially
consistent with FY outlook (+25-30%)
Q1 2021 Q1 2022
Q1 2022 sales growth in line with FY 2022 outlook
(1) See slide 18 for bridge with consolidated figures
9 SAFRAN - Q1 2022 Revenue / April 29, 2022
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 Safran02. Q1 2022 REVENUE
Fx hedging
(In $bn)
$32.6bn hedge book as of April 2022
12 (up from $31.4bn as of January 2022)
Estimated net exposure
11 The hedge book includes barrier options
10 with knock-out triggers ranging from
9 $1.2150 to $1.30, representing a risk to
the size of the book and to targeted
7.5
hedge rates from 2022 onwards in case of
sudden and significant exchange rates
fluctuations
€/$ Q1 2021 Q1 2022
2021 2022e 2023e 2024e 2025e Average
$1.21 $1.12
€/$ hedge spot rate
rate target
1.16 1.15 1.14-1.16 1.14-1.16 1.14-1.16
Note: Approx. 45% of Safran US$ revenue are naturally hedged by US$ procurement
11 SAFRAN - Q1 2022 Revenue / April 29, 2022
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 SafranQ1 2022 revenue
(In €M)
21.8% Organic: +16.9%
Strong increase in services +28% in all divisions
Lower yet positive growth in OE +8%
3,907 184 (20) 4,071
3,342 565
Currency: +5.5%
Reflecting a stronger USD vs Euro
Scope: (0.6)%
Organic Disposal from Safran Cabin of EVAC in June 2021
16.9% and SVS Oklahoma (Enviro Systems) in
November 2021
Q1
Q1 2021
2021 Q1 2022 Currency Changes Q1 2022
Q1 2022
at Q1 2021 impact in scope
scope and
exchange rates
12 SAFRAN - Q1 2022 Revenue / April 29, 2022
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 SafranQ1 2022 revenue per activity
Organic trends drivers
Adjusted data Organic
Q1 2021 Q1 2022 Change
(In €M)
Change Aerospace Propulsion
• Civil aftermarket up +53% y-o-y driven by a strong increase in CFM56 spare
Aerospace Propulsion 1,561 1,942 24.4% 18.8% parts and to a lesser extent high thrust engines spare parts and services
contracts
Equipment & Defense 1,464 1,716 17.2% 12.3%
• LEAP deliveries (+51 units) outpacing decrease in CFM56 deliveries
Aircraft Interiors 313 409 30.7% 29.4%
• M88 deliveries down (3) engines
Others 4 4 - - Equipment & Defense
• Services up +31% notably thanks to dynamics in spares, MRO and carbon
Safran 3,342 4,071 21.8% 16.9%
brakes
• OE less dynamic due to low WB build rates
Aircraft Interiors
• Strongest divisional growth given low comparison basis in Q1 2021
• Increase both in services (in Seats and Cabin) and OE (notably in Cabin)
13 SAFRAN - Q1 2022 Revenue / April 29, 2022
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 Safran03. FY 2022 UPDATE
FY 2022 environment: impacts of Russia-Ukraine conflict
Suspension of all commercial exports (products and services) to Russia and all operations in Russia
Loss of activity amounts to c.2% of sales and estimated c.70bps on margin
Main programs: Superjet 100, MC-21, Kamov 62 & Kamov 226
c.1,000 CFM56/LEAP engines on A320/737 fleet
Increasing pressure on supply chain and Russia-Ukraine conflict-induced inflation
Further inflation on raw materials, freight and energy: an additional estimated c.80 bps impact on margin
Safran sources c.50% of its titanium needs from VSMPO; 2022 supplies now secured; alternative sources being secured
Additional and vigorous cost savings, commercial measures and deferral of some expenses
are implemented to offset the c.150bps impact of on Safran’s 2022 recurring operating margin
Balance sheet exposure, for Safran and companies accounted for under the equity method,
to be further assessed as the Russia-Ukraine conflict evolves:
ArianeGroup: Roscosmos’ decision to suspend Soyouz launches through Arianespace
Shannon Engine Support: 12 CFM56 & LEAP leased engines stranded in Russia
15 SAFRAN - Q1 2022 Revenue / April 29, 2022
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 SafranFY 2022 outlook confirmed
SAFRAN EXPECTS TO ACHIEVE FOR FY 2022(1)
Adjusted revenue of €18-18.2bn (at a €/$ spot rate of 1.14 versus 1.18 previously)
Adjusted recurring operating margin of c.13.0%
Free Cash Flow generation of c.€2.0bn
Key watch items remain
Traffic recovery pace (China)
Supply chain / inflation
Geopolitical environment
(1) At current perimeter
16 SAFRAN - Q1 2022 Revenue / April 29, 2022
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 SafranAPPENDIX
Q1 2022 consolidated and adjusted revenue
Hedge accounting Business combinations
Q1 2022
Consolidated revenue Amortization of Adjusted revenue
(In Euro million) Re-measurement of Deferred hedging PPA impacts - other
intangible assets -
revenue gain (loss) business combinations
Sagem/Snecma
Revenue 4,094 (23) - - - 4,071
18 SAFRAN - Q1 2022 Revenue / April 29, 2022
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 SafranNumber of products delivered on major aerospace programs
Number of units delivered Q1 2021 Q1 2022 % Number of units delivered Q1 2021 Q1 2022 %
LEAP engines 188 239 27% 787 landing gear sets 11 - (100)%
CFM56 engines 26 15 (42)% A350 landing gear sets 9 10 11%
High thrust engines 70 48 (31)% A330neo nacelles 4 12 200%
Helicopter engines 133 110 (17)% A320neo nacelles 128 141 10%
M88 engines 15 12 (20)% Small nacelles (biz & regional jets) 94 117 24%
A350 lavatories 55 71 29%
Business class seats 363 346 (5)%
A320 emergency slides 797 1,106 39%
787 primary power distribution system 55 8 (85)%
19 SAFRAN - Q1 2022 Revenue / April 29, 2022
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 SafranOE / Services revenue split
Q1 2021 Q1 2022
REVENUE
Adjusted data
(in Euro million) OE Services OE Services
Aerospace Propulsion 620 941 710 1,232
% of revenue 39.7% 60.3% 36.6% 63.4%
Equipment & Defense 991 473 1,070 646
% of revenue 67.7% 32.3% 62.4% 37.6%
Aircraft Interiors 230(1) 83 288(1) 121
% of revenue 73.5% 26.5% 70.4% 29.6%
(1) Retrofit is included in OE
20 SAFRAN - Q1 2022 Revenue / April 29, 2022
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 SafranDefinitions 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. 21 SAFRAN - Q1 2022 Revenue / April 29, 2022 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
22 SAFRAN - Q1 2022 Revenue / April 29, 2022
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