Safran Sa · EURONEXT:SAF
Safran Sa — Non-Deal Roadshow (May 2013)
31 slides from Safran Sa's roadshow presentation, May 2013
Slide 1: Tier 1 supplier in Aerospace, Defence & Security
Save The Date Capital Market Day CMD’13 June 16, 2013 in Paris Tier 1 supplier in Aerospace, Defence & Security Investor meetings / May 2013 / 0 / Q3 INVESTOR REVENUE MEETINGS 2011 / OCTOBER / MAY 2013 21, / 2011 / Ce document et les informations qu’il contient sont la propriété de Safran. Ils ne do
Slide 2: Tier 1 supplier in Aerospace - Defence - Security
Tier 1 supplier in Aerospace - Defence - Security 2012 revenue by activities Aircraft Equipment FY 2012 27% Revenue €13,560M Aerospace 10% Defence Recurring op. income €1,471M (10.8% of revenue) Propulsion 52% €13,6Bn Net income - Group share €999M (€2.41/share) 11% Security Free Cash Flow €564M Net
Slide 3: Leading market positions
Leading market positions Aerospace Defence Security #1 ww #1 Europe #1 ww Single aisle engines Optronics Biometric and ID solutions Helicopter turbines Landing gear #3 ww A leader in aviation markets Wiring Inertial navigation systems Detection Power transmission #2 ww Space Propulsion Engine nacell
Slide 4: FY 2012 financial highlights
FY 2012 financial highlights Growing adjusted revenue with strong Adjusted recurring operating income FCF was 38% of adjusted recurring performance in Aerospace and Security at 10.8% of revenue operating income +15.5% 13,560 11,736 +23.7% 1,471 1,189 +6% 532 564 (€M) (€M) (€M) FY 11 FY 12 FY 11 FY 1
Slide 5: FY 2012 results by activity
FY 2012 results by activity Holding (In €M) FY 2012 Propulsion Equipment Defence Security & others Revenue 13,560 7,005 3,691 1,315 1,546 3 Year-over-year growth in % 15.5% 14.6% 19.2% 4.0% 23.8% na Recurring operating income 1,471 1,099 287 81 145 (141) as a % of revenue 10.8% 15.7% 7.8% 6.2% 9.4%
Slide 6: 3 key themes
/ 3 key themes / Q1 2013 highlights & FY 2013 outlook Investing in technology and capacity Strategic moves 5 / INVESTOR MEETINGS / MAY 2013 / 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 préal
Slide 7: Q1 2013 highlights & FY 2013 outlook
/01/ Q1 2013 highlights & FY 2013 outlook 6 / INVESTOR MEETINGS / MAY 2013 / 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.
Slide 8: Increasing OE production rates
Increasing OE production rates Short-to medium-haul aircraft 737: up to 42 aircraft per month A320: up to 42 aircraft per month Main drivers: Boeing 737 Airbus A320 air traffic growth and fleet replacement Long-haul aircraft A330: up to 120 aircraft per year A380: up to 30 aircraft par year Airbus A
Slide 9: CFMI: replacing a blockbuster by another blockbuster
CFMI: replacing a blockbuster by another blockbuster LEAP-1A LEAP-1B LEAP-1C Dual source Single source Single western source A320neo 737 MAX C919 2016 2017 2016 About 10,000 engine orders (firm orders & commitments) of which over 4,500 for LEAP (as of April 2013) 8 / INVESTOR MEETINGS / MAY 2013 / C
Slide 10: Q1 2013 financial highlights
Q1 2013 financial highlights Strong civil aviation business Original equipment up 13% in aerospace +9.5% 3,404 (Propulsion and Equipment) Solid growth in civil aftermarket (+10.0% in $) driven by first 3,108 overhaul of 2nd generation CFM56 and resumption of growth in widebody engines Military aviat
Slide 11: Q1 2013 revenue by activity
Q1 2013 revenue by activity Adjusted data Main growth drivers Change Change (in €M) Q1 2012 Q1 2013 Positive aerospace OEM volumes reported organic as well as improving aftermarket trends, both in military and civil Aerospace Propulsion 1,585 1,831 15.5% 15.3% businesses Increase of landing gear (78
Slide 12: FY 2013 revenue outlook is upgraded
FY 2013 revenue outlook is upgraded The FY 2013 outlook revenue guidance is upgraded to take into account Q1 revenue dynamics and the contribution of the newly-acquired business of Goodrich Electrical Power Systems (€120M in revenue for 9 months in 2013) Adjusted revenue expected to increase by a pe
Slide 13: 2013 key assumptions are unchanged
2013 key assumptions are unchanged Healthy increase in aerospace OE deliveries Boeing 737, A330, regional jets... Civil aftermarket increase in the high single digits Mainly driven by recent CFM56 engines Incremental R&D cash effort of around €200M (vs. 2012) Mainly LEAP and Silvercrest development
Slide 14: Healthy prospects
Healthy prospects Revenue Recurring operating income ~15 % of ~€15bn revenue €13,6bn 11 % of €10bn revenue +7 % €1.5bn 7 % of +15 % revenue €0.7bn Healthy investment (capex/R&D) opportunities 13 / INVESTOR MEETINGS / MAY 2013 / Ce document et les informations qu’il contient sont la propriété de Safr
Slide 15: Investing in technology and capacity
/02/ Investing in technology and capacity 14 / INVESTOR MEETINGS / MAY 2013 / 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.
Slide 16: Investing in technology and capacity
Investing in technology and capacity 3D woven composite fan blades for the LEAP engine Joint facilities with Albany in Rochester (US) and in Commercy (France) to start operations in 2015 Safran Composites R&T centre New R&T site in Le Bouchet (France) adjacent to Herakles R&T centre Modernisation of
Slide 17: Investing in our future
Investing in our future 2012 total R&D effort of €1.6bn Self-financed R&D of €1.1bn (8.1% of sales) Acceleration of LEAP milestones Development of 2nd Silvercrest application In €M 1800 Split of programs reflects upcoming opportunities €1.6bn c.30%: LEAP (3 applications) and Silvercrest (2 applicati
Slide 18: Main R&D increase from engines development
Main R&D increase from 2 engines development LEAP engine Development on track, on schedule, on cost (First engine to test (FETT) expected in H2 2013) Over 4,500 orders and commitments to date (1,096 in 2012, of which half for Boeing 737 MAX) Silvercrest engine FETT in November 2012; flight tests in
Slide 19: Strategic moves
/03/ Strategic moves 18 / INVESTOR MEETINGS / MAY 2013 / 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.
Slide 20: Further strategic steps
Further strategic steps Safran divested part of its stake (12.57% of share capital) in Ingenico for proceeds of €287M. Safran remains a significant shareholder (10.2% of share capital, 16.6% of voting rights) Safran completed the acquisition of Goodrich Electrical Power Systems for approx. €300M Ele
Slide 21: Key terms of the Safran/Rolls-Royce transaction
Key terms of the Safran/Rolls-Royce transaction 1. Safran to acquire: Rolls-Royce’s 50% share in the RTM322 programme Intellectual property rights (IPR) related to this programme Rolls-Royce’s 50% share in the RRTM joint-venture 2. A transition period to ensure continuity of service Upon closing, Tu
Slide 22: The RTM322 programme
The RTM322 programme A 2,100-2,600 shp engine 1,100 engines delivered (end 2012) Backlog of 260 engines (end 2012) 900,000 Eq. Flying Hours (end 2012) In service with 21 operators EH-101 MERLIN APACHE NH90 RTM322 engine on 3 platforms - Extensive on-field experience 21 / INVESTOR MEETINGS / MAY 2013
Slide 23: Potential opportunities for Turbomeca
Potential opportunities for Turbomeca Growth from existing military Mid- to long-term growth platforms 2015 - 2030 New market penetration Existing platforms in the 8-13t range (NH90, EH101 Merlin, Apache) Growth from new civilian and military platforms Over 300 additional engines Around 3,500 engine
Slide 24: Strategic rationale for Safran
Strategic rationale for Safran Strong rationale Allow a more streamlined organization, more efficient business processes and greater agility in the market place to the benefit of customers Provide business development autonomy benefit allowing strengthening market penetration with existing and futur
Slide 25: Financial aspects and transaction process
Financial aspects and transaction process Financial aspects Rolls-Royce RTM322 programme share: annual revenue of approx. €85M; majority services After this transition period, Safran expects the benefits of owning the entire programme to represent an additional contribution of over €30M per annum op
Slide 26: Annexe
/ Annexe / Additional information 25 / INVESTOR MEETINGS / MAY 2013 / 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.
Slide 27: Short term volatility, short/medium term inevitable catch-up
Short term volatility, short/medium term inevitable catch-up 2020 : 30,000 engines / 1,000 million flight hours 35 000 600 30 000 CFM56 spare parts revenue potentially 500 to double by 2020 25 000 400 20 000 2010 : 20,000 engines / 500 million flight hours 300 15 000 200 10 000 100 5 000 0 0 CFM eng
Slide 28: Fx hedging: finalising 2015 and further increasing 2016
Fx hedging: finalising 2015 and further increasing 2016 Approx. 50% of Safran US$ revenue naturally hedged by US$ procurement Hedge portfolio, April 15, 2013 Total: $15.2bn 2013 and 2014 are fully Estimated exposure needs hedged In US$ bn 2015 hedging almost finalized 6 5.0 5.2 ~5.2 ~5.2 $4.4bn achi
Slide 29: Fx hedging: benefiting margins over 2013-15
Fx hedging: benefiting margins over 2013-15 Estimated impact on recurring operating income of targeted €/$ hedge rates €/$ 400 EBIT impact hedge vs. previous rate 350 year (in €M) 1.4 1.37 300 300 1.35 1.32 250 1.29 1.3 1.28 200 200 155 1.26 <1.26 1.25 135 150 1.2 c.90 100 100 c.60 1.15 c.30 50 n/a
Slide 30: 2012 dividend
2012 dividend A proposal for a dividend payment to c.400 parent holders of €0.96 at next AGM Dividend on May 28, 2013 distribution (€M) €0.31 interim dividend already 256 paid in 2012 (€129M) 202 152 €0.65 to be paid in 2013 104 (c.€270M) o/w interim dividend 129 102 distribution 32 Ex-dividend date
Slide 31: 30 / INVESTOR MEETINGS / MAY 2013 /
30 / INVESTOR MEETINGS / MAY 2013 / 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.