Excellent 2019 Performance

• FY 2019 revenue at Euro 24,640 million, up 17.1% on a reported basis and up 9.3% on an organic basis
• Recurring operating income at Euro 3,820 million up 26.4% on a reported basis and up 24.6% on an organic basis
• Operating margin improvements across all divisions, 20.6% (+140bp) in Propulsion, 13.1% (+60bp) in Aircraft Equipment, Defense and Aerosystems and 5.7% (+250bp) in Aircraft Interiors. As a result, Group operating margin at 15.5% (+110bp)
• Free cash flow generation at Euro 1,983 million, 51.9% of recurring operating income despite the Boeing 737MAX grounding

Consolidated data

• Consolidated revenue was Euro 25,098 million
• Consolidated recurring operating income at Euro 3,824 million
• Consolidated profit from operations at Euro 3,837 million
• Consolidated profit for the period attributable to owners of the parent at Euro 2,447 million
• Free cash flow at Euro 1,983 million

The Board of Directors of Safran (Euronext Paris: SAF), under the Chairmanship of Ross McInnes, at their meeting in Paris on February 26, 2020, adopted and authorised the publication of Safran's financial statements and adjusted income statement for the full-year period ended December 31, 2019.

• All figures in this press release represent adjusted [1] data, except where noted. Please refer to the definitions and reconciliation between full-year 2019 consolidated income statement and adjusted income statement. Please refer to the definitions contained in the Notes on page 12 of this press statement;
• Aerosystems and Aircraft Interiors (former Zodiac Aerospace activities) are fully consolidated in Safran's financial statements from March 1, 2018;
• Organic variations exclude changes in scope (notably the contribution of Aerosystems and Aircraft Interiors in January and February 2019) and currency impacts for the period;
• Safran disclosed a new presentation of segment information as of June 30, 2019 (see press release of July 1, 2019).

• LEAP-1A: 55 airlines are operating 632 aircraft powered by LEAP-1A engines totalling over 5.5 million flight hours so far.
• LEAP-1B: before the grounding of the 737MAX, 54 airlines were operating 387 aircraft powered by LEAP-1B engines totalling over 1.7 million flight hours so far.
• LEAP-1C: The 6th COMAC C919 test aircraft made its first flight on December 27, 2019.

• EASA (European Aviation Safety Agency) Type Certification for its Ardiden 1U engine, installed on India's LUH (Light Utility Helicopter)2;
• EASA Type Certification for its Aneto-1K engine, as fitted to the Leonardo AW189K. Intended for super-medium and heavy helicopters, the Aneto family produces between 2,500 and 3,000 shp. This is the first certification for Safran new range of high thrust turbines.

• first class, business class and premium economy class for A350;
• business class for Boeing 787;

• Growth in Propulsion (+10.8%) was supported by OE volumes (civil and military) as well as services (civil aftermarket and military support activities);
• Aircraft Equipment, Defense and Aerosystems sales increased by 7.4% thanks to nacelles (services and OE), avionics activities and landing systems support activities;
• Aircraft Interiors revenue (+8.8%) was supported by OE sales for Seats and Passenger Solutions and by services from all the activities.

• Propulsion growth of 21.9% mainly came from civil aftermarket and military activities;
• Aircraft Equipment, Defense and Aerosystems recurring operating income increased by 16.6% thanks to services activities and continuous improvement of industrial performance;
• The strong growth of Aircraft Interiors recurring operating income (+140.7%) was supported by OE and services activities from Seats as well as Passenger Solutions, and cost production decrease over all businesses.

• Net adjusted financial income of Euro (89) million, including cost of debt of Euro (33) million;
• An adjusted tax expense of Euro (1,012) million (27% apparent tax rate);

• 2020: the firm coverage of the estimated net exposure is USD 9.7 billion (compared with USD 9.5 billion in October 2019). The targeted hedge rate is now set at USD 1.16 (vs. USD 1.16 to USD 1.18 previously)
• 2021: the firm coverage of the estimated net exposure is USD 7.9 billion (compared with USD 8.4 billion in October 2019). The targeted hedge rate is expected to be between USD 1.14 and USD 1.16 (vs. USD 1.15 to USD 1.18 previously).
• 2022: the firm coverage of the estimated net exposure is USD 6.5 billion (same amount as in October 2019). The targeted hedge rate is expected to be between USD 1.12 and USD 1.14 (vs. USD 1.15 to USD 1.18 previously).
• 2023: Safran initiated firm coverage of USD 4.0 billion (compared with USD 2.2 billion in October 2019). The targeted hedge rate is expected to be between USD 1.10 and USD 1.12.

• The assumption of an annual production of around 1,400 LEAP based on an average production of 10 LEAP-1B engines per week over the year;
• And the agreement between CFM International and Boeing for the payments of its engines.

• At an estimated average spot rate of $1.13 to the Euro in 2020, adjusted revenue is expected to decrease in the range 0% to (5)% compared with 2019. Similar variation in organic terms;
• Adjusted recurring operating income is expected to grow around 5% at a hedged rate of USD 1.16 to the Euro;
• Free cash flow is expected to be higher than in 2019.

• Decrease in aerospace OE deliveries (civil and military engines);
• Civil aftermarket growth in the high single digits, as long as disruption created by the coronavirus on air traffic does not extend beyond Q1-2020;
• Transition CFM56 - LEAP: neutral impact on Propulsion adjusted recurring operating income variation;
• Equipment/Aircraft Interiors: slight organic growth of sales in Equipment and organic decrease of sales in Aircraft Interiors. Continued improvement in the adjusted recurring operating income of these two divisions;
• Decrease of R&D expenses in the range of Euro 50 to 100 million. Positive impact on adjusted recurring operating income after activation and amortisation;
• Stable level of tangible investments between 2019 and 2020.

• 2022 ambitions, as communicated on November 29, 2018 during the Capital Markets Day (CMD), were based on assumptions that will need to be updated to reflect the impact of the 737MAX grounding;
• Due to strong performance across Safran's businesses, the year 2019 was higher than the trajectory taken into account in the 2018-2022 CMD objectives;
• New assumptions will recognize the improvement of the targeted hedge rates over the period;
• Mid-term ambitions will be updated after the 737MAX return to service and new ramp-up are clarified

• OE revenue grew 13.5% (10.1% organically), despite the impact of the 737MAX grounding on LEAP-1B engines deliveries; total narrowbody engines deliveries (CFM56+LEAP) reached 2,127 units (-35 vs. 2018). M88 engines deliveries amounted to 62 units in 2019 compared with 23 in 2018. Helicopter turbines OE deliveries decreased compared to 2018.
• Services revenue increased by 14.2% (in €, 11.4% organically) and represented 56.9% of sales. Civil aftermarket revenue (in USD) grew 9.9% (in USD) thanks to continuous higher spare parts sales for the latest generation of CFM56 engines and widebody platforms and a higher contribution of services contracts. Military services as well as helicopter turbines support activities contributed positively during the year.

• OE revenue grew 16.7% (or 6.8% organically) in 2019 mainly driven by increased volumes of A320neo and A330neo nacelles, wiring and avionics. Deliveries of nacelles for LEAP-1A powered A320neo intensified and reached 602 units in 2019 (438 units in 2018). The ramp up of A330neo nacelles continued with 92 nacelles delivered in 2019 compared to 18 units in 2018. OE revenue was sustained by the ramp up of the wiring for the Boeing 787 program. OE sales were also supported by avionics (FADEC for LEAP, flight control and on-board information systems) and Defense (sighting systems) activities.
  As previously flagged, lower A380 nacelles volumes as well as A320ceo thrust reversers negatively impacted OE sales.
• Services revenue grew 16.3% (8.7% organically) in 2019, driven by continuing momentum in carbon brakes, landing gear, and nacelles support activities (mainly for A320neo). Safran Aerosystems activities (safety and fluid systems) also contributed to the full year growth.

• OE revenue grew 30.8% (or 7.7% organically) in 2019. Sales increased thanks to the ramp up of business class seats programs (Fusio and Polaris), A350 toilets deliveries and Connected Cabin (IFE) for Passenger Solutions. Lower volumes for galleys in Cabin impacted the growth.
• Services revenue grew 36.4% (11.9% organically) in 2019, mainly driven by Safran Seats aftermarket and to a lesser extent by Safran Cabin and Passenger Solutions activities.

• Q1 2020 revenue April 29, 2020
• Annual general meeting May 28, 2020*
• H1 2020 earnings July 30, 2020

* Based on the weighted average number of shares of 430,911,810 as of December 31, 2018.
** Based on the weighted average number of shares of 429,723,372 as of December 31, 2019.
*** Based on the weighted average number of shares after dilution of 436,335,631 as of December 31, 2018.
**** Based on the weighted average number of shares after dilution of 434,976,733 as of December 31, 2019.

IFRS16 impact at the beginning of period of Euro (529) million.

• 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 charged against intangible assets recognized at the time of the transaction and amortized 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.

(1) Remeasurement of foreign-currency denominated revenue net of purchases (by currency) at the hedged rate (including premiums on unwound options) through the reclassification of changes in the fair value of instruments hedging cash flows recognized in profit or loss for the period.
(2) Changes in the fair value of instruments hedging future cash flows that will be recognized in profit or loss in future periods (a negative &eeuro;175 million excluding tax), and the impact of taking into account hedges when measuring provisions for losses on completion (a negative €1 million at December 31, 2019).
(3) Cancellation of amortization/impairment of intangible assets relating to the remeasurement of aircraft programs resulting from the application of IFRS 3 to the Sagem-Snecma merger.
(4) Cancellation of the impact of remeasuring assets at the time of the Zodiac Aerospace acquisition for €315 million excluding deferred tax and cancellation of amortization/impairment of assets identified during other business combinations.