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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 / FY 2015 EARNINGS / FEBRUARY 25, 2016 /
/ February 25, 2016 /
Full-year 2015 Earnings
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.
1 / FY 2015 EARNINGS / FEBRUARY 25, 2016 /
/ 01/
Philippe Petitcolin - CEO
FY 2015 Highlights
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.
2 / FY 2015 EARNINGS / FEBRUARY 25, 2016 /
FY 2015 financial highlights
Growing adjusted revenue, including positive $ impact, mainly driven by Aerospace services and Security
FY 14 FY 15
15,355 17,414 +13.4%
Adjusted recurring operating income at 14.0% of revenue
FY 15
2,089
2,432
+16.4%
Adjusted net profit (group share) at €3.55 per share
FY 14 FY 15
1,248
1,482 +18.8%
(€M) (€M)
(€M)
FY 14
Proposed 2015 dividend up 15.0%
FY 14 FY 15
1.20 1.38
(€)
+15.0%
Low net debt level (12.7% gearing)
Dec. 31, 2014 Dec. 31, 2015
(1,503)
(748)
(€M)
FCF representing 40% of adjusted recurring operating income
FY 14 FY 15
740
974 +31.6%
(€M)
3 /
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.
FY 2015 EARNINGS / FEBRUARY 25, 2016 /
Excellent progress of LEAP
LEAP development proceeding according to plan
LEAP-1A: Engine certified on November 20, 2015 by both the FAA
and EASA. Flawless flight test program on A320neo and A321neo to
date. 540 hours logged in 220 flights since May 19, 2015. Zero engine
issues - all operating conditions. Engine is on specifications. EIS mid-
year.
LEAP-1B: Engine certification on track. Flawless first flight on 737
MAX on January 29, 2016. Start of one-year flight test certification
program. 18 flights within 3 weeks. Engine is on specifications. EIS in
2017.
LEAP-1C: Engine certification on track. C919 roll out on November 2,
2015. First flight planned for 2016.
Preparing for EIS and production ramp-up
First commercial deliveries of LEAP in 2016
LEAP supply chain mostly based on CFM56 supply chain
Building new and enhanced facilities, including:
2 new assembly lines dedicated to LEAP in Villaroche, France
A 3rd production plant of 3D woven carbon fan blades in Querétaro, Mexico,
to meet rising production rates and to enhance LEAP supply chain
First flight of the Boeing 737MAX
powered by LEAP-1B
Comac C919 roll-out
powered by LEAP-1C
First flight of A321neo
Powered by LEAP-1A
4 /
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.
FY 2015 EARNINGS / FEBRUARY 25, 2016 /
Capturing growth in Propulsion
Commercial leadership of CFM engines confirmed
13,252 engines (firm orders and commitments) at year-end
1,399 orders and commitments for LEAP and 736 orders for CFM56 in 2015
Excellent performance of CFM56
Record production rate: 1,612 deliveries in 2015
Increasing market share on A320ceo
Continuing momentum for LEAP
LEAP total firm orders and commitments surpassed 10,000 engines in February
after a good start to 2016
70%+ market share for future narrow-bodies, including 53% on A320neo
Orders from Egypt and Qatar for Rafale fighters powered by Safran’s
M88 engines
Helicopter turbines development proceeding to plan
Certification by EASA of the Arrius 2R powering the Bell Jet Ranger 505 X;
commercial deliveries starting in 2016
First flight of Arrano 1A engines on Airbus Helicopters H160 (sole source)
Rafale
Arrano 1A
5 /
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.
FY 2015 EARNINGS / FEBRUARY 25, 2016 /
Continuing momentum in civil aftermarket
Civil aftermarket up 18.9%* in 2015, in line with
guidance
More, higher value shop visits on recent CFM56
Positive trend in GE90 aftermarket
Positive global outlook for the airline industry in 2016
Passenger demand expected to be up 6.9% according to
IATA
Airlines profitability benefitting from lower oil price
Civil aftermarket to grow by a percentage in
the high single digits* in 2016
Growth driven by recent CFM56
High comparison base
*In USD
Maintenance,
Saint-Quentin-en-Yvelines, France
Maintenance,
Casablanca, Morocco
6 /
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FY 2015 EARNINGS / FEBRUARY 25, 2016 /
Strong execution in Aircraft Equipment
Successful ramp up of deliveries of accessory drive trains, landing
and wiring systems for A350
Growing shipments of wiring and landing gear systems for 787
Record production rates of thrust reversers, accessory drive
trains, wiring and landing systems for A320
Maintaining leadership in carbon brakes
Multiple contracts for carbon brakes: 737MAX, A320neo, 787, A350...
Increasing capacity to meet growing demand including the successful start
up of production in the new plant in Malaysia inaugurated beginning 2015
Bolstering partnership with Rolls-Royce in accessory gearboxes
Creation of Aero Gearbox International, a company jointly-owned by Safran
and Rolls Royce, that will supply accessory drive trains for all of Rolls
Royce’s future civil aircraft engines, starting with the Trent 7000 for the
A330neo
Landing gear of A350
Wiring for 787
Braking system for A320
7 /
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FY 2015 EARNINGS / FEBRUARY 25, 2016 /
Scoring commercial successes in Defence
Key systems and equipment on Rafale fighters
Supplying FADEC, inertial navigation systems and gyros for the fly-by-wire
flight control systems for the Egyptian and Qatari orders of Rafale
Supplying AASM Hammer missiles as part of the Rafale’s weapons suite
for Egypt and Qatar
Excellent performance of PASEO, a new generation of combat vehicle
sights
2 major contracts signed to supply PASEO to more than 2,000 systems for
the French army (Scorpion program) and international markets
Also selected by the French Army (Scorpion program) to provide optronics
equipment for remotely controlled turrets
Selection of the Patroller system, Safran’s long endurance tactical drone,
by the French defence procurement agency (DGA) in 2016
Safran will supply 14 Patroller systems with deliveries starting in 2018, as
well as the related support activities
Electronics: FADEC International* selected for the control system of the
GE9X powering the 777X, in partnership with GE Aviation**
Good order intake (France and exports)
Maintaining technological differentiation through R&D investment
Paseo sight
Patroller
*JV between
Safran and Bae
**Under the
FADEC Alliance
JV
8 /
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.
FY 2015 EARNINGS / FEBRUARY 25, 2016 /
Market leadership in Civil ID Unique ability to deliver large-scale turnkey solutions and operation services
Strong momentum in Public Private Partnerships (Chile, Albania, Netherlands)
Deployment of Civil ID solutions to secure and ease electoral campaigns in
Africa (Ivory Coast, Chad, Egypt)
Driver license issuance solutions to 85% of U.S. citizens (70M+ IDs issued per
year)
Pursuing development in digital ID programs for governments (launch of the
SecureIdentity platform in the UK for citizens to access government online services)
Expansion in Commercial ID Strategic partnerships (US, Brazil, etc.) to capture EMV migration of payment cards
Entering the mobile payment activity with acquisition of specialist Airtag
Strengthening in digital ID services (contract with Airtel in India for enrolment and
access to online services, based on Aadhaar national biometric identification
system)
Growth leverage in Public Security Leadership in enrolment services in the U.S., where MorphoTrust enrolled 2M+
travellers in the TSA pre-Check program
Large contracts in border control (e-Border contract in UAE with deployment of a
multi-biometric system in 5 airports)
Civil ID
Commercial ID
Public Security
Good performance in Security
9 /
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.
FY 2015 EARNINGS / FEBRUARY 25, 2016 /
Investing in our future
2015 total R&D effort of €2.1bn
2015 self-financed R&D decreased by
€108M to €1.36bn (7.8% of sales) in 2015 Lower spending on LEAP, A350
2015 split of spending in line with
business roadmap: c.50%: LEAP (3 applications), Silvercrest,
A350, helicopter next gen turbines, GE9X,
A330neo
c.30%: R&T in preparation of the future
(mostly next gen engines and electrical
technologies)
c.20%: Defence, Security, others…
2016 self-funded R&D to drop by €100-
€150M driven by a decline in capitalized
R&D Lower level of capitalized R&D as LEAP will
enter into service
Increase in expensed R&D by around €100M
After peaking in 2014, continuing decline in R&D
In €M
Total self-funded R&D
Capitalized R&D
€495M
Total R&D effort €1,356M
€2,057M
€1,464M
€644M
€1,990M
10 /
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FY 2015 EARNINGS / FEBRUARY 25, 2016 /
Silvercrest update
Major tests successfully performed: icing, bird ingestion…
More than 4,000 hours of accumulated testing (500 hours on FTB)
Complementary developments to achieve the targeted specifications and a
revised schedule have been agreed with Dassault Aviation
The current schedule provides for engine certification early in 2018, 18 months later than
the previous schedule and in line with the indication given in October 2015
Very confident that the technical solutions to obtaining the desired specifications have
been identified
Once implemented, they ensure that we offer customers an engine which meets their
requirements and remains the most competitive of its kind with respect to the market it
addresses
Citation Longitude redefinition
In November 2015, Cessna announced changes to its range of business jets, including a
redefinition of the Longitude and a different choice of engine appropriate for the smaller
design
Safran confirms that the effect of the developments on the group’s financial
performance is expected to be limited and spread over several years
Flight test of Silvercrest on FTB
Ground test of Silvercrest
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11 / FY 2015 EARNINGS / FEBRUARY 25, 2016 /
/ 02/
Bernard Delpit – Group CFO
FY 2015 Results
12 /
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FY 2015 EARNINGS / FEBRUARY 25, 2016 /
Foreword
All figures in this presentation represent adjusted data
Safran’s consolidated income statement has been adjusted for the impact of:
purchase price allocations with respect to business combinations. Since 2005, this restatement concerns the amortization charged against
intangible assets relating to aircraft programmes revalued at the time of the Sagem-Snecma merger. With effect from the first-half 2010 interim
financial statements, the Group has decided to restate the impact of purchase price allocations for business combinations. In particular, this
concerns the amortization of intangible assets recognized at the time of the acquisition, and amortized over extended periods, due to the length
of the Group's business cycles, along gains or losses remeasuring the Group’s previously held interests in an entity acquired in a step
acquisition or assets contributed to a JV.
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 foreign currency derivatives hedging future cash flows is neutralized.
The resulting changes in deferred tax have also been adjusted
Recurring operating income
It excludes income and expenses which are largely unpredictable because of their unusual, infrequent and/or material nature such as
impairment losses/reversals, capital gains/losses on disposals of operations and other unusual and/or material non operational items.
13 /
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FY 2015 EARNINGS / FEBRUARY 25, 2016 /
Fx volatility
Continued Fx volatility during FY 2015
Translation effect: foreign currencies translated into € Positive impact from $
Impact on Revenue and Return on Sales
Transaction effect: mismatch between $ sales and € costs
is hedged Positive impact from $
Impact on Profits
Mark-to-market effect €(2,485)M on fair value of financial instruments
Impact on consolidated “statutory” income statement
Hedge rate
FY 2014 FY 2015
$1.26 $1.25
Average spot rate
FY 2014 FY 2015
$1.33 $1.11
Spot rate
Dec. 31,
2014
June 30,
2015
Dec. 31,
2015
$1.21 $1.12 $1.09
14 /
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FY 2015 EARNINGS / FEBRUARY 25, 2016 /
Consolidated and adjusted income statements
FY 2015 reconciliation
(In €M)
Consolidated
data
Currency hedging Business combinations
Adjusted
data Re-
measurement
of revenue
Deferred
hedging
loss / gain
Amortization
of intangible
assets -
Sagem/Snecma
merger
PPA impacts -
other business
combinations
Revenue 18,100 (686) - - - 17,414
Other operating income and expenses (15,272) 8 (5) 89 152 (15,028)
Share in profit from joint ventures 45 - - - 1 46
Recurring operating income 2,873 (678) (5) 89 153 2,432
Other non-recurring operating income and
expenses (796) - - 133 (35) (698)
Profit (loss) from operations 2,077 (678) (5) 222 118 1,734
Cost of debt (28) - - - - (28)
Foreign exchange gains (losses) (3,248) 678 2,485 - - (85)
Other financial income and expense (111) - - - - (111)
Financial income (loss) (3,387) 678 2,485 - - (224)
Income tax expense 508 - (806) (75) (30) (403)
Share in profit from associates 4 - - - - 4
Gain on disposal of Ingenico shares 421 - - - - 421
Profit (loss) from continuing operations (377) - 1,674 147 88 1,532
Attributable to non-controlling interests (47) - - (3) - (50)
Attributable to owners of the parent (424) - 1,674 144 88 1,482
15 /
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FY 2015 EARNINGS / FEBRUARY 25, 2016 /
FY 2015 profit from operations
14.0% recurring operating income margin, up 0.4pt
(In €M) FY 2014 FY 2015
Revenue 15,355 17,414
Recurring operating income
% of revenue
2,089
13.6%
2,432
14.0%
Total one-off items (107) (698)
Capital gain (loss) on disposals - -
Impairment reversal (charge) (45) (641)
Other infrequent & material non operational items (62) (57)
Profit from operations
% of revenue
1,982
12.9%
1,734
10.0%
Including
€(654)M Silvercrest
€(16)M helicopter
programme
€(28)M restructuring and
others
16 /
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FY 2015 EARNINGS / FEBRUARY 25, 2016 /
FY 2015 income statement
* Based on 416,413,368 shares
** Based on 417,569,031 shares
FY 2015 net profit up 18.8%
(In €M) FY 2014 FY 2015
Revenue 15,355 17,414
Other recurring operating income and expenses (13,311) (15,028)
Share in profit from joint ventures 45 46
Recurring operating income
% of revenue
2,089
13.6%
2,432
14.0%
Total one-off items (107) (698)
Profit from operations
% of revenue
1,982
12.9%
1,734
10.0%
Net financial income (expense) (165) (224)
Income tax expense (522) (403)
Share in profit from associates 18 4
Gain on disposal of Ingenico shares - 421
Profit for the period attributable to non-controlling interests (65) (50)
Profit attributable to owners of the parent
EPS (in €)
1,248
3.00*
1,482
3.55**
Of which cost of debt of
€(28)M
Apparent tax rate of
26.7%
Post-tax capital gain from
placements of Ingenico
Group shares
17 /
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FY 2015 EARNINGS / FEBRUARY 25, 2016 /
Impairment of assets related to the Silvercrest program
Complementary developments to achieve the targeted specifications and a revised
schedule have been agreed with Dassault Aviation. The current schedule provides for
engine certification in the spring of 2018, 18 months later than the previous schedule
and in line with the indication given in October 2015
In November 2015, Cessna announced changes to its range of business jets, including
a redefinition of the Longitude and a different choice of engine appropriate for the
smaller design
On the basis of revised programme assumptions, notably higher development
expenses, lower volumes and a later entry into service, Safran has decided to
depreciate all programme-related intangible assets and other programme-specific
assets resulting in a one-off, non-cash charge of Euro (654) million
Post-tax capital gain on the sale of Ingenico shares
Sale of Safran’s entire remaining stake in Ingenico Group: 5.5 million shares
representing about 9.1% of Ingenico Group’s capital
Safran received total proceeds of Euro 606 million and recorded a post-tax capital gain
of Euro 421 million
One-off items
18 /
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FY 2015 EARNINGS / FEBRUARY 25, 2016 /
FY 2015 revenue
Currency
impact FY 2015
at constant
FY 2014
structure
Acquisitions &
activities
newly
consolidated,
disposals
Organic
variation FY 2015
at constant
FY 2014
structure and
exchange rates
FY 2015 FY 2014
+3.9%
organic
15,355
+13.4%
(in €M)
15,953
62 17,352
598
1,399 17,414
Organic growth: +3.9%
Driven by momentum in Aerospace services (notably civil aftermarket up 18.9% in $) and in Security (+11%)
Currency impact: +9.1%
Significant positive translation effect of USD. Positive translation impact from GBP
Positive effect of improved $ hedged rate
External growth: +0.4%
Eaton, Dictao…
19 /
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FY 2015 EARNINGS / FEBRUARY 25, 2016 /
FY 2015 recurring operating income
FY 2015
Currency
impact
FY 2015
at constant
FY 2014
scope
Changes in
scope
FY 2014
(In €M)
2,372 2,436
+13.5%
organic
Variation
excluding
currency
impact and
changes in
scope
FY 2015
at constant
FY 2014 scope
and exchange
rates
2,432 283 64 (4)
13.6%
RoS
14.0%
RoS
+16.4%
2,089
Main profitability drivers
Strong growth of Aerospace services, notably civil aftermarket
Contribution of CFM56 OE
Organic growth in Identification and business solutions activities in Security
Increased performance of corporate holding
Positive currency effect, notably from USD
20 /
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FY 2015 EARNINGS / FEBRUARY 25, 2016 /
Research & Development
Decrease of self-funded cash
R&D effort as planned, at 7.8% of
sales
Self-funded R&D declined notably
for LEAP and A350
Falling capitalised costs, as
expected, driven by lower LEAP
and A350 spending; Silvercrest
fully expensed since April 1, 2014
(In €M) FY 2014 FY 2015 Variation
Total R&D (1,990) (2,057) (67)
External funding 526 701 175
Total self-funded cash R&D (1,464) (1,356) 108
as a % of revenue 9.5% 7.8% (1.7)pt
Tax credit 151 165 14
Total self-funded cash R&D after tax credit (1,313) (1,191) 122
Gross capitalized R&D 644 495 (149)
Amortised R&D (78) (95) (17)
P&L R&D in recurring EBIT (747) (791) (44)
as a % of revenue 4.9% 4.5% (0.4)pt
21 /
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FY 2015 EARNINGS / FEBRUARY 25, 2016 /
FY 2015 results by activity
(In €M) FY 2015 Propulsion Equipment Defence Security Holding
& others
Revenue 17,414 9,319 4,943 1,266 1,878 8
Year-over-year growth in % 13.4% 14.3% 11.2% 3.7% 22.7% na
Recurring operating income 2,432 1,833 466 64 151 (82)
as a % of revenue 14.0% 19.7% 9.4% 5.1% 8.0% na
Record level of recurring operating income driven by Aerospace, Security
Strong improvement in performance of Holding by €93M
Cost reduction
Higher level of shared services provided on behalf of, and invoiced to, subsidiaries explaining their profit evolution
22 /
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FY 2015 EARNINGS / FEBRUARY 25, 2016 /
Aerospace Propulsion
Revenue
Strong growth in civil aftermarket
Good contribution from helicopter turbines and military engine support activities
Increase in civil aircraft engines sales
Recurring operating income
Excellent contribution of civil aftermarket
Good performance of helicopter turbine support contracts
Positive impact of CFM56 OE
Increase in R&D charges
(In €M) FY 2014 FY 2015 Change Organic
Change
Revenue 8,153 9,319 +14.3% +6.0%
Recurring operating income 1,633 1,833 +12.2%
% of revenue 20.0% 19.7% (0.3) pts
One-off items (9) (619)
Profit (loss) from operations 1,624 1,214
% of revenue 19.9% 13.0%
23 /
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FY 2015 EARNINGS / FEBRUARY 25, 2016 /
Aircraft Equipment
Revenue
Higher deliveries for A350 (landing gear, wiring) and A320 (thrust reversers, landing gear, wiring) and
modest increase in shipments for 787 (landing gear, wiring)
Lower volumes on A380 (nacelles) and A330 (thrust reversers, landing systems)
Growing contribution of services thanks to carbon brakes and landing gear activities
Recurring operating income
Temporary OE headwinds: lower OE deliveries for A380 and A330, higher OE deliveries for less mature
programs (notably A350), temporary pricing pressures as strong cost reduction and productivity actions
have been put in place to mitigate the impacts and drive margin improvements
Favourable impact from services, notably supported by high returns in carbon brakes and good
contribution of landing gear
(In €M) FY 2014 FY 2015 Change Organic
Change
Revenue 4,446 4,943 +11.2% (0.9)%
Recurring operating income 426 466 +9.4%
% of revenue 9.6% 9.4% (0.2)pt
One-off items (58) (43)
Profit (loss) from operations 368 423
% of revenue 8.3% 8.6%
24 /
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FY 2015 EARNINGS / FEBRUARY 25, 2016 /
Defence
Revenue
Optronics: higher contribution from sights for combat vehicles and submarines offset the expected negative impact of the end of FELIN infantry combat system deliveries to the French army
Avionics: lower volumes of inertial navigation and flight control systems, partially compensated by the growing contribution of support activities and aircraft information systems revenue
Recurring operating income
End of FELIN deliveries partially compensated by new contracts
Unfavourable products mix (mostly infrared goggles)
Sustained R&D charges to maintain technological leadership
Investments to improve industrial performance weighed temporarily on profitability
(In €M) FY 2014 FY 2015 Change Organic
Change
Revenue 1,221 1,266 +3.7% (1.6)%
Recurring operating income 71 64 (9.9)%
% of revenue 5.8% 5.1% (0.7)pt
One-off items 3 (10)
Profit (loss) from operations 74 54
% of revenue 6.0% 4.3%
25 /
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FY 2015 EARNINGS / FEBRUARY 25, 2016 /
Security
(In €M) FY 2014 FY 2015 Change Organic
Change
Revenue 1,530 1,878 +22.7% +11.0%
Recurring operating income 134 151 +12.7%
% of revenue 8.8% 8.0% (0.8) pt
One-off items (25) (18)
Profit (loss) from operations 109 133
% of revenue 7.1% 7.1%
Identification & Security
Broad-based growth from public sector customers in Europe (France, Holland, Albania), the Americas (US
Federal contracts, Chile) and in the Middle East Africa region
Improving trend in smartcards for telco (product mix) and banking customers (volumes)
Detection
Revenue up thanks to the strong increase in CTX tomographic equipment shipments and to the success of
Itemiser 4DX (new trace detection system)
Positive currency effect, notably from the $
Investments in new commercial offers to address new markets, notably in digital identity, weighed
temporarily on margin.
Continued cost reduction actions to drive profitability improvements
26 /
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FY 2015 EARNINGS / FEBRUARY 25, 2016 /
Target 1.25 1.24 1.22 1.17-1.20 1.15-1.20
Fx hedging: $20.6bn Hedge portfolio* (Jan 28, 2016)
($bn)
€/$ hedge rate
*Approx. 45% of Safran US$ revenue are naturally hedged by US$ procurement
2016 & 2017 fully hedged
Yearly exposure: $7.4bn to $8.0bn
Increasing level of net USD exposure for 2016-19 in line
with the growth of businesses with exposed USD revenue
7.4 7.5 7.7
4.3
2.3
3.7
5.7
2015 2016 2017 2018 2019
2018
$4.3bn achieved through forward sales
and short dated knock out option
strategies to rise to a maximum of $8.0bn
at a target rate between $1.17 and $1.20 as
long as €/$<1.25 up to end 2016
Knock out options barriers set at various
levels between $1.20 and $1.45 with
maturities up to 2 years
2019
$2.3bn achieved through forward sales
and short dated knock out option
strategies to rise to a maximum of $8.0bn
at a target rate between $1.15 and $1.20 as
long as €/$<1.25 up to end 2017
Knock out options barriers set at various
levels between $1.19 and $1.45 with
maturities up to 1 years
27 /
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FY 2015 EARNINGS / FEBRUARY 25, 2016 /
Estimated impact on recurring operating income
of targeted €/$ hedge rates
EBIT impact
vs previous
year (in €M)
€/$
hedge
rate
€250M to €500M of tailwind over 2016-2019e
Fx hedging: benefiting margins over 2016-2019e
Up to 100M
Up to 250M
28 /
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FY 2015 EARNINGS / FEBRUARY 25, 2016 /
Free Cash Flow
(in €M) FY 2014 FY 2015
Adjusted net profit 1,248 1,482
Depreciation, amortization and provisions 906 1,688
Others 314 (357)
Cash from operating activities before
change in WC 2,468 2,813
Change in WC (111) (60)
Capex (tangible assets) (674) (758)
Capex (intangible assets)* (943) (1,021)
Free cash flow 740 974
Slight increase in WC to
cope with rising assembly
rates in aerospace partly
offset by advance payments,
as planned
* Of which €495M capitalised R&D in 2015 vs €644M capitalised in 2014
Of which amortization of
tangibles and intangibles for
€681M, provisions (net) for
€133M and depreciation for
€874M
+14%
Healthy increase in cash
from operations despite
higher expensed R&D
• Lower capitalized R&D
• Higher tangible and
intangible (ex-R&D)
investments due to the
transition to new engine
programs
+32%
29 /
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FY 2015 EARNINGS / FEBRUARY 25, 2016 /
Net debt position
Cash flow from operations
equals 1.17x recurring EBIT
2014 final dividend (€0.64/share)
and 2015 interim dividend
(€0.60/share)
“Acquisitions/Divestments &
Others” includes:
€606M of proceeds from the sale
of Ingenico Group shares
€(117)M of foreign exchange
differences on USPP
* Includes €(23)M of dividends to minority interests
(in €M)
(1,503)
Dividends*
Net debt at Dec 31, 2014
Cash flow from ops
Acquisitions /Divestments
& others
Net debt at Dec 31, 2015
Change in WC R&D
and Capex
€974M Free Cash Flow
2,813
(60)
(1,779)
(540)
193
(1,499)
321
(748)
30 /
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FY 2015 EARNINGS / FEBRUARY 25, 2016 /
Gross debt and liquidity
Gross debt repayment schedule (Dec. 31, 2015)
Gross
debt
€2,628M
Cash & equiv.
€1,845M
+
Debt hedging
instruments €35M
Net debt €748M
April 2014 private placement - €200M, maturity 2024, no covenant
USPP - $1.2bn, maturities 2019, 2022 & 2024; subject to 1 covenant (net debt/EBITDA <2.5)
OCEANE (issued on January 8, 2016) - €650M, maturity 2020, zero coupon
Committed & undrawn financing resources:
Credit line - €2.52B, maturity Dec. 2020 – no
covenant
31 /
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FY 2015 EARNINGS / FEBRUARY 25, 2016 /
Balance sheet highlights
OWC almost stable
at €1,042M (6.0% of
revenue)
Slight increase in provisions
mostly linked to service
contracts
(In €M) Dec 31,
2014
Dec 31,
2015
Goodwill
Tangible & Intangible assets
Investments in joint ventures and associates
Other non current assets
Operating Working Capital
Net cash (debt)
3,420
8,464
771
674
1,025
(1,503)
3,590
8,593
765
1,403
1,042
(748)
Shareholders’ equity - Group share
Minority interests
Non current liabilities (excl. net cash (debt))
Provisions
Other current liabilities / (assets) net
6,266
225
1,549
3,329
1,482
5,627
266
1,411
3,456
3,885
32 /
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FY 2015 EARNINGS / FEBRUARY 25, 2016 /
Customer financial guarantees
(In $M) Dec. 31,
2014
Dec. 31,
2015
Total guarantees 52 50
Estimated value of pledges 20 19
Net exposure on these guarantees 35 32
Provisions 29 23
Decrease of the level of total guarantees
Outstanding risk of the portfolio (net exposure) well covered by the provisions booked in Safran’s
accounts
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33 / FY 2015 EARNINGS / FEBRUARY 25, 2016 /
/ 03/
Outlook
34 /
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FY 2015 EARNINGS / FEBRUARY 25, 2016 /
Equity shareholding
Free float continued to increase
As of Dec. 31, 2014
French State
22.0% Public
63.5%
Employees
14.4%
Treasury shares
0.1%
As of Dec. 31, 2015
French State
15.4% Public
70.9%
Employees
13.6%
Treasury shares
0.1%
35 /
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FY 2015 EARNINGS / FEBRUARY 25, 2016 /
2015 dividend
A proposal for a dividend payment
to parent holders of €1.38 at next
AGM on May 19, 2016
€0.60 interim dividend already
paid in 2015 (€250M)
€0.78 to be paid in 2016
(€326M)
Ex-dividend date: May 23, 2016
Payment date: May 25, 2016
€1.38/share dividend payment subject to shareholders’ approval, up 15%
152 202 256 400 467 500 576
Total
dividend
distribution
(€M)
152
154
202
0.50 0.38
0.62
102
Final
Dividend
distribution
(€M)
Dividend
per share
(€)
Interim
dividend
distribution
(€M)
0.96
129
271
200
267
1.12 1.20
267
233
1.38
326
250
36 /
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FY 2015 EARNINGS / FEBRUARY 25, 2016 /
2016 key assumptions
Healthy increase in aerospace OE deliveries
Civil aftermarket growth by a percentage in the high single digits
Start-up costs of series Leap production
Reduction of self-funded R&D of the order of €100M - €150M with a greater drop in
capitalised amounts
Less spending on LEAP, A350, helicopters, as they come closer to
certification and entry into service
Expensed R&D to rise by around €100M
Sustained level of tangible capex, including expansions, new production capacity
and tooling, around Euro 850 million, as requested by production transitioning and
ramp-up
Profitable growth for the security business
Continued benefits from productivity improvement
37 /
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FY 2015 EARNINGS / FEBRUARY 25, 2016 /
FY 2016 outlook
Adjusted revenue expected to increase by a percentage in low single
digits at an estimated average rate of USD 1.11 to the Euro
Adjusted recurring operating income likely to increase by around 5% and
a further increase in margin rate at a hedge rate of USD 1.24 to the Euro
The hedging policy largely isolates adjusted recurring operating income from
current EUR/USD variations except for the part generated in USD by activities
located in the US, subject to the translation effect when converted into Euro
Free cash flow expected to represent more than 40% of the adjusted
recurring operating income, an element of uncertainty being the rhythm of
payments by state-clients
Safran’s 2016 outlook is applicable to the Group’s structure as of December 31, 2015 and does not take into account the
impact in 2016 of the finalisation of the regrouping of its space launcher activities with those of Airbus Group in their joint
venture, Airbus Safran Launchers (ASL). Guidance will be revised as necessary upon finalisation of Phase 2 of the operation.
Safran expects the contribution of its space launchers activities to ASL to be accretive to adjusted recurring operating margin.
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38 / FY 2015 EARNINGS / FEBRUARY 25, 2016 /
/ 04/
Questions & Answers
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39 / FY 2015 EARNINGS / FEBRUARY 25, 2016 /
/ 05/
Additional information
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40 / FY 2015 EARNINGS / FEBRUARY 25, 2016 /
FY 2014: R&D by activity
(In €M) FY 2014 Propulsion Equipment Defence Security
Total self-funded cash R&D (1,464) (894) (308) (133) (129)
as a % of revenue 9.5% 11.0% 6.9% 10.9% 8.4%
Tax credit 151 58 46 35 12
Total self-funded cash R&D after tax credit (1,313) (836) (262) (98) (117)
Gross capitalized R&D 644 475 122 26 21
Amortised R&D (78) (25) (37) (11) (5)
P&L R&D in recurring EBIT (747) (386) (177) (83) (101)
as a % of revenue 4.9% 4.7% 4.0% 6.8% 6.6%
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41 / FY 2015 EARNINGS / FEBRUARY 25, 2016 /
FY 2015: R&D by activity
(In €M) FY 2015 Propulsion Equipment Defence Security
Total self-funded cash R&D (1,356) (875) (229) (119) (133)
as a % of revenue 7.8% 9.4% 4.6% 9.4% 7.1%
Tax credit 165 66 46 37 16
Total self-funded cash R&D after tax credit (1,191) (809) (183) (82) (117)
Gross capitalized R&D 495 357 98 24 16
Amortised R&D (95) (27) (40) (21) (7)
P&L R&D in recurring EBIT (791) (479) (125) (79) (108)
as a % of revenue 4.5% 5.1% 2.5% 6.2% 5.8%
42 /
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FY 2015 EARNINGS / FEBRUARY 25, 2016 /
Aerospace OE* / Services revenue split
Revenue
Adjusted data (in Euro million)
FY 2014 FY 2015 % change
OE Services OE Services OE Services
Propulsion
% of revenue
4,073
50.0%
4,080
50.0%
4,334
46.5%
4,985
53.5%
6.4%
22.2%
Equipment
% of revenue
3,166
71.2%
1,280
28.8%
3,463
70.1%
1,480
29.9%
9.4%
15.6%
* All revenue except services
43 /
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FY 2015 EARNINGS / FEBRUARY 25, 2016 /
Quantities of major aerospace programmes
Number of units delivered
2014 2015 % change
CFM56 engines 1,560 1,612 3%
High thrust engines 690 695 1%
Helicopter engines 832 625 (25)%
M88 engines 26 12 (54)%
787 landing gear sets 118 127 8%
A350 landing gear sets 16 32 x2
A380 nacelles 112 104 (7)%
A330 thrust reversers 162 130 (20)%
A320 thrust reversers 506 564 11%
Small nacelles (biz & regional jets) 688 711 3%
44 /
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FY 2015 EARNINGS / FEBRUARY 25, 2016 /
Definition
Civil aftermarket (expressed in USD)
This non-accounting indicator (non audited) comprises spares and MRO
(Maintenance, Repair & Overhaul) revenue for all civil aircraft engines for
Snecma and its subsidiaries and reflects the Group’s performance in civil
aircraft engines aftermarket compared to the market.
45 /
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FY 2015 EARNINGS / FEBRUARY 25, 2016 /
Disclaimer
The forecasts and forward-looking statements described in this document are
based on the data, assumptions and estimates considered as reasonable by the
Group as at the date of this document. These data, assumptions and estimates
may evolve or change as a result of uncertainties related in particular to the
economic, financial, competitive, tax or regulatory environment. The occurrence
of one or more of the risks described in the registration document (document de
référence) may also have an impact on the business, financial position, results
and prospects of the Group and thus affect its ability to achieve such forecasts
and forward-looking statements. The Group therefore neither makes any
commitment, nor provides any assurance as to the achievement of the forecasts
and forward-looking statements described in this document
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46 / FY 2015 EARNINGS / FEBRUARY 25, 2016 /