Part I - Civil engines - Safran...LEAP-1A/-1C LEAP-1B CFM56-5B CFM56-7B CMD’13 / JUNE 16, 2013 / 13 / Ce document et les informations qu’il contient sont la propriété de Safran

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 / CMD’13 / JUNE 16, 2013 /

Part I - Civil engines

2 /


LEAP, the reference in the single aisle market

Pierre Fabre - Chairman & CEOSnecma

/ June 16, 2013 /

3 /


CFM: backlog equal to 7 years of productionAs of April 30, 2013

4,600+engines

~4,800engines

CFM56 & LEAP orders & commitments backlog : 9,400+ engines

04-2

013

CMD’13 / JUNE 16, 2013 /

4 /


Growth likely to continue for the next 20 years

2012-2031E worldwide aircraft deliveries

Market outlook confirmed: about 20,000 narrow body aircraft to be delivered in the next 20 years

0

5000

10000

15000

20000

25000

2011

Twin aisle

Singleaisle

Regional

In-service fleet(# of aircraft)

Singleaisle

19,500Twin aisle7,300

Regional3,000

Turboprop2,600

Main driversGrowth from low cost airlines & emerging countriesReplacement (mainly U.S.)

Turboprop

CMD’13 / JUNE 16, 2013 /

5 /


LEAPA320neo 696 aircraft (50% market share)

737 MAX 1,235 aircraft Comac 380 aircraft

2,311 aircraft

PW1000GA320neo 709 aircraft (50% market share)CSeries 195 aircraft MC-21 168 aircraft

1,072 aircraft

PW1000G 1,072 aircraft 32%

LEAP win rate (orders & commitments)

As of April 30, 2013

A320neo 696

737 MAX 1,235

Comac 380 MC-21

168

CSeries 195

A320neo 709

LEAP 2,311 aircraft 68%

4,600+ LEAP engines, over $50 billion at list price

CMD’13 / JUNE 16, 2013 /

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Meeting performance requirements with CFM reliability

Life cycle maint. costNoise

New regulation

compliant(chapter 14)

50% lower

vs. CAEP 6

Fuel efficiency NOx Reliability

15%better SAME AS CFM56

… BEST IN INDUSTRY

Combining technology, experience & execution

CMD’13 / JUNE 16, 2013 /

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LEAP program key milestones

1st flightDesign freeze

1st engine to test FAR33 EIS

Flying test bed

Comac C919

LEAP-1C

Design freeze

1st engine to test

Flying test bed FAR33

1st flightEIS

Airbus A320neo

LEAP-1A

Design freeze

1st engine to test

Flying test bed FAR33

1st flightEIS

Boeing 737 MAX

LEAP-1B

LEAP development on time, on budget

CMD’13 / JUNE 16, 2013 /

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2009 2010 2011 2012 2013

Low Pressure Turbine

Fan

First runPerformanceAero2.5 lb.bird4.0 lb.bird

Crosswindacoustics

Blade-out6.0 lb.bird

EnduranceFull compositeBlade-Out(blades and case)

Fan blade-out Multip. birding.ServiceabilityRig HCF/LCF

LPT rigAcoustics

Dual spool rigLPT rigsLoad opt.

Core Core 2 Core 3Core 1(phase 1)

Core 1(phase 2)

Test program on time… LEAP ready for FETT

GEnx (Ph. 1) GEnx (Ph. 2)

Mascot 2:Performance,cross wind, acoustics

28 engines 40 thousand cycles

CMD’13 / JUNE 16, 2013 /

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CFM has a unique, accomplished supply chain

1,500 engines produced per year

2.5 days assembly time

25 plants with state of the art facilities

33 years no engine-caused aircraft delivery delays

25,000 engines built in 33 years

CMD’13 / JUNE 16, 2013 /

10 /


CFM experience supporting successful ramp-up

CFM56 LEAP

0

500

1,000

1,500

2,000

'02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13E '14E '15E '16E '17E '18E '19E '20E

1,24

3

1,70

0

732

1,44

2

0 to 1,700 LEAP engines in 5 years

+100% production rate increase in 10 years

# engines

CMD’13 / JUNE 16, 2013 /

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Safran and GE investing in new and enhanced manufacturing facilities New facilities

Main enhancement of facilities (85,000m² added)

Greenville, South CarolinaOpened 2010Turbine blades

Ellisville, MississippiOpened 2012Composites

Regensburg, GermanyOpened 2009TiAl airfoils

Rutland, VermontAirfoils

Durham, North CarolinaLEAP assembly

Auburn, AlabamaOpening 2013LEAP components

Queretaro,MexicoRotating partsAssembly

Villaroche, FranceAssembly

Suzhou,ChinaRotating partsAssembly

Evry-Corbeil, FranceHPC Airfoils, CombustorsRotating parts

Rochester, New HampshireOpening 2014LEAP fan blades & casing

Commercy, FranceOpening 2015LEAP fan blades & casing

CMD’13 / JUNE 16, 2013 /

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Managing the supply chain

From CFM56 to LEAP 2016-2019 gradual transition

LEAP supply chain Based on current CFM56 supply chain Supplier partnerships established Make-or-Buy decisions made Internal production capacity upgraded

and expanded, including new facilities Dual sourcing for each Part Number

Supply chain readiness support program rolled out (LS2R)* To support suppliers and deploy efficient methodologies and processes

to mitigate risks To ensure a continuous and balanced workload consistent with suppliers’ industrial

capacity profiles To secure industrialization of new parts by suppliers

A strong plan to manage the industrial ramp-up

* LEAP Suppliers Rate Readiness

0200400600800

10001200140016001800

2014 2015 2016 2017 2018 2019 2020

LEAP-1A/-1C LEAP-1B CFM56-5B CFM56-7B

CMD’13 / JUNE 16, 2013 /

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13 / CMD’13 / JUNE 16, 2013 /

LEAP performance, execution and technology

Proven engine performanceLowest cost and highest revenue generating aircraft availability

Low execution risk21 CFM EIS: on time, on spec

Leading technologyat EIS and for growthSimple architecture and continued technology investment

14 /


Q3 REVENUE 2011 / OCTOBER 21, 2011 /

Modelling spare parts usage

Ghislaine Doukhan - VP Material Services, Snecma

/ June 16, 2013 /

15 /


CFM56 fleet status

Annual engine delivery rates

As of Dec, 31, 2012

23,403 engines in service and 7,000+ to be delivered by end of 2017

0

500

1 000

1 500

2 000

'00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13E '14E '15E '16E '17E

Deliveries

To Be Delivered

CMD’13 / JUNE 16, 2013 /

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Forecasting spare parts business opportunity:the historical “technical” model

Engine constraintsTheoretical

Aging

Manual adjustments

Past

Historical model since 80’s based on technical behaviour of the engine

Forecast globally in line with reality up to 2006

Several adjustments were introduced to take into account numerous operational conditions (routes, environment, rating…)

However, still insufficiently accurateA new model was required

CMD’13 / JUNE 16, 2013 /

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Dedicated project decided in 2011 Analysis concluded that

maintenance behaviour could differ from one airline to another, impacting new spare parts sales

Segment behaviour also varies according to economic context and air traffic

New model based on airlines segmentation Differentiate segments according

to maintenance behaviour Simulate airlines’ reaction to

changing macro-economic environment

Forecasting spare parts business opportunity:the new “behaviour” model

Economics

Engine constraints

Air traffic forecast

Airlines maintenance behaviour

Maintenance contracts

Theoretical aging

CMD’13 / JUNE 16, 2013 /

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Forecasting spare partsAirlines maintenance behaviour segmentation

Allocate the customer base to segments with distinct maintenance behaviour Long/short term financial horizon Propensity to purchase OEM parts Reaction to economic context

More than 30 parameters statistically analysed

Customer base segmented into 10 categories

CMD’13 / JUNE 16, 2013 /

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Forecasting spare partsAirlines maintenance behaviour segmentation

Main input for behaviour model

Monitoring of our customers Reveal global trends Alerts for potential changes impacting us

Focus commercial actions Support customers in difficulty Keep them on the “right road”

Better anticipation of behaviourWe can adjust our offering to customers

Legend

1.000 CFM

engines

OE

M S

olu

tion

s o

rien

ted

Financial capacity-

-+

+

CMD’13 / JUNE 16, 2013 /

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Maintenance behaviour for each segment Depends on air travel market Depends on economic situation

Forecasting spare parts The “behaviour” model principle

Engine inservice

Engine inservice

TechnicalexpertiseTechnicalexpertise

CustomerbehaviourCustomerbehaviour

ShopVisit

ShopVisit

Shopsexperience

Shopsexperience

Maintenancecontracts

Maintenancecontracts

CustomerbehaviourCustomerbehaviour

Sparepartsusage

Sparepartsusage

Technical engine data

Customer / Market data

CMD’13 / JUNE 16, 2013 /

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2008 2009 2010 2011 2012 2013E 2014E 2015E

# of shop visits

CFM shop visit forecast (worldwide)

Forecasting spare parts: the new “behaviour” model validated on past performance

Technical model was revised yearly on the basis of actual performance; thus, same trend was kept as no particular customer behaviour input into the model

Backtesting of the behaviour model shows:

Better accuracy Capacity to forecast

diverse trends

Illustration of CFM worldwide SV forecast: one of the key indicator for revenue calculation

From one year to another, up to 15% difference with the technical model, less than 3% with the behaviour model

Behaviour model

Actual

Technical model(2008 view)

CMD’13 / JUNE 16, 2013 /

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Forecasting spare partsOutcome of the new model (CFM56 spare parts forecast)

Expected CFM56 spare parts revenue profile

CFM56 spare parts revenue to increase consistently and to peak by around 2025E

Revenue should double from 2010 dip before 2020E

1st generation CFM56 spare parts potential to fade out within 5 years from now

The new model confirms 2025 horizon“Behaviour” model adds increased visibility on the short term

2x3x

2010 dip

x

CMD’13 / JUNE 16, 2013 /

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Forecasting spare partsYoung engine fleet to drive higher aftermarket needs

CFM56 engine fleet: age distribution (as of Dec 31, 2012)

40% of the CFM56 engine fleet have been in service less than 8 years64% of the CFM56 engine fleet have been in service less than 15 years

0

2 000

4 000

6 000

8 000

10 000

12 000

0 - 7 years 8 - 14 years 15 - 21 years 22 - 28 years 29 - 35 years

Nb of engines

1st Generation

2nd Generation

CMD’13 / JUNE 16, 2013 /

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Forecasting spare partsAlternative spare parts markets

* DER : DEsignated airworthiness Representative – Non OEM Repairs

PMA (Parts Manufactured Approval): not a threat anymore Minimal penetration on 2nd generation CFM56 engine - hard to develop/qualify PMA market uncertainty regarding new FAA requirements about global qualification and influencing

hardware Loss of engine resale value

Used parts: a limited option Established on CFM56-3 (737 Classic): allowing customers to keep their engines flying at a lower

cost (and purchase new spares for specific needs or highly worn parts) Slowly growing in CFM56-5A (A320) and -5C (A340). Slowed by DER* or documentation concerns Still very limited on -5B/-7B specific parts (<5%). No increase expected before 2015-20 since

demand for parts grows much faster than expected USM availability. CFMM well positioned.

CFM Materials (CFMM): OEM-labelled USM provider in support of customers Main participant in CFM Used Serviceable Materials (36% estimated global market share) Very strict documentation and quality policy to ensure full compliance with OEM recommendations Allow customers to benefit from OEM expertise and network at lower price than new Ensure repair volumes go to Snecma/GE repair shops Capture best USM to serve Snecma and GE MRO customers

CMD’13 / JUNE 16, 2013 /

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T&M: Time & Material CFM is paid at the time of the actual shop visit on the basis

of an agreed-upon scope of material and labour⇒ income, expenses and cash impact coincide

MSA: Material Service Agreement CFM guarantees commercial conditions of parts supply

to airline/MRO providers

RPFH: Rate Per Flight Hour CFM receives a fixed sum per flight hour based on estimated cost

to perform engine maintenance to meet performance and availability guarantees⇒ decoupling of revenue & cash-in with costs & cash-out

ESPO (Engine Service Per Overhaul): fraction of revenue booked progressively and remainder booked at the time of SV

ESPH (Engine Service Per Hour): revenue booked progressively

Service agreementsA variety of aftermarket options tailored to needs

Service programmes aiming to support airlines on a predictable cost per engine flight hour basis, to enable accurate forecasting of operating costs, reduced cost of ownership, and improved asset utilisation

CMD’13 / JUNE 16, 2013 /

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Service agreements CFM56 shop visits distribution per MRO shop

More than 30% of CFM SVs should be done in GE/Snecma shops and ~65% of the world SVs should be performed with a CFM Services agreement

0%

20%

40%

60%

80%

100%2012 2014 2016 2018 2020 2022 2024 2026 2028 2030

% of CFM SVs

Other SVs SVs done by other shops with CFM agreements SVs under GE, Snecma, CFM Services engine overhaul contracts

CMD’13 / JUNE 16, 2013 /

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Long Term Service Agreements: LEAP status

Engines sold to airlines99% LEAP-1A A320neo covered* by RPFH contracts

66% LEAP-1B 737 MAX covered* by RPFH contracts

⇒ hence average 76%

~2,000 LEAP aircraft sold (A320neo & 737 MAX)

423 to lessors (22%) ⇒ Services agreements to be decided later with end users (airlines)

1,540 to airlines: almost all of them ask for specific terms and conditions on services during sales campaign

Almost 100% of LEAP orders to be covered by CFM long term service contracts (excl. lessors)

= Visibility & spare parts market protected*Signed or under discussion

76% 24%

RPFH* MSA*

78%

22%

Airlines Lessors

CMD’13 / JUNE 16, 2013 /

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Shifting to “Civil aftermarket” as main indicator

“CFM56 spare parts revenue” was too narrow a definition to measure Safran’s performance

Maintenance contracts require inclusion of MRO and Used Serviceable Material components Additional civil engines are becoming significant contributors (GE90) LEAP will start to contribute from 2016

“Civil aftermarket” as main indicator Includes spares and MRO (Maintenance,

Repair & Overhaul) revenue

Includes all civil aircraft engines for Snecma and its subsidiaries (CFM56, GE90, SaM146, CF6… and soon LEAP)

Better reflects the Group’s performance in civil aircraft engines aftermarket compared to the market

Civil aftermarket: a better bellwether for Safran

Civil aftermarket

FY 2012: +9.4%Q1 2013: +10.0%FY 2013 guidance: high single digit growth

CMD’13 / JUNE 16, 2013 /

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Conclusion

The behaviour model Understands volatility and better forecasts short term Allows sales team to adjust offerings to airlines Optimises CFMM strategy to protect the spare part market Confirms aftermarket trends at 2025 horizon

High confidence in aftermarket potential

Increasing long term maintenance contracts Gradual shift in business model Civil aftermarket is the right indicator going forward

CMD’13 / JUNE 16, 2013 /


30 / CMD’13 / JUNE 16, 2013 /Q3 REVENUE 2011 / OCTOBER 21, 2011 /

Silvercrest

François Planaud - EVP Commercial engines, Snecma

/ June 16, 2013 /

31 /


Silvercrest

The new generation business jet engine

Designed to power Super Midsizeup to Long Range Business Jets

A Snecma engine, based on the company’s

long-standing expertise in commercial and military aircraft engines

Delivering significant performance benefits

CMD’13 / JUNE 16, 2013 /

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Business jets current fleet: 19,259 aircraft

2012 world fleet, distribution by segments

SMS, Large and Super Large/Long Range represent 26% of the global fleet

Source Amstat, Nov 2012

5,032 5,032 aircraftaircraft Competitive Competitive

engine engine technologiestechnologies Early 60sEarly 60s

Early 70s Early 70s

Early 90sEarly 90s

Early 00sEarly 00s

CMD’13 / JUNE 16, 2013 /

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Market dynamics and deliveries forecast

Demand drivers: range and speed, cabin comfort, environmentally friendly

Market shifting towards higher- end segments: more resilient to cycles, driven by globalisation requiring long range trips

Strong growth expected in new and emerging markets

Deliveries: 20 year outlook (2012-2031E)

Total: 22,300 deliveries 8,000+ aircraft (36% of total aircraft)

to be delivered in SMS to Super Large segments

Generating 46% of sales

Entry to MidSize49 %

Ultra Long Range15 %

Super MidSize12 %

Large13 %

Super Large11 %

CMD’13 / JUNE 16, 2013 /

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Silvercrest differentiating technologies

High Pressure CompressorHigh pressure ratio – 3D Aero designLow stage count: 4 axial blisks, 1 new generation impeller

High Pressure TurbineSingle Stage - 3D Aero designAdvanced coolingActive Clearance Control

FadecNew generation Engine Control Unit

OperationsCFM reliability and maintenance standardsReal time health monitoring

Booster3D Aero design

High efficiency Fan42,5’’ - Wide Chord Blades3D Aero design

Low Pressure TurbineHigh efficiency 3D Aero design4 stages

CMD’13 / JUNE 16, 2013 /

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Delivering significant performance benefits

Thrust range: 9,500 - 12,000 lbf

Fuel efficiency and CO2 emissions

15% Lowerthan current engines

NOx

50% marginversus CAEP/6 standards

Noise

New regulation compliant (Chapter 14)

Support services

24/7 worldwideReal time in-flight monitoring

CMD’13 / JUNE 16, 2013 /

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Silvercrest timeline

2006Core design & development

2008Core testing

2010Full-scale enginedevelopment

2012First engineground test

2013Start offlight tests

2015Engine certification

Selection on Cessna Citation Longitude

2017Entry Into Service

Selection by an undisclosed customer

CMD’13 / JUNE 16, 2013 /

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Development programme well on track

First Engine To Test (FETT)

Maximum take-off thrust and full rotating speed demonstrated

Healthy engine characteristics

Development Program ongoing

8 engines for ground and flight tests

Flying Test Bed (FTB) by end 2013 on a modified Gulfstream GII

Preparing series production

CMD’13 / JUNE 16, 2013 /

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A dedicated support organisation

Regional Service Centres will provide direct support to customers

Asia Asia & South Pacific

France Europe, Africa, Middle East, India

USA North & South America

Capabilities: customer 24/7 support, spare parts distribution, Mobile Repair Teams, training, etc.

CMD’13 / JUNE 16, 2013 /

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Silvercrest: main elements of business model

Target 25-30% market share 2,000+ aircraft (4,000+ Silvercrest engines)

Business jet aviation specifics Typical utilisation profiles (annual cycles) are different from commercial

aviation. This is reflected in engine sales conditions agreed with airframers Aftermarket sales mainly through long term per the hour maintenance

contracts

Total self-funded R&D to reach ~ €700M For 2 applications (2010-2017E) Already spent 50%+ of these costs; most of it being capitalised

IRR in line with global Group targets

CMD’13 / JUNE 16, 2013 /

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Silvercrest: the new standard in the business jets market

The most advanced Business Jet engine…

…for the highest potential market segment in business jet aviation …

…already selected on 2 platforms.

CMD’13 / JUNE 16, 2013 /


41 / CMD’13 / JUNE 16, 2013 /Q3 REVENUE 2011 / OCTOBER 21, 2011 /

Helicopters

Olivier Andriès - Chairman & CEO Turbomeca

/ June 16, 2013 /

42 /


Over €1.2bn revenue (2012)

6,000 worldwide staff

2,500 customers in 155 countries

33% global market share (# engines delivered over 2007-2011 - source Safran)

1,012 engines produced (2012)

1,382 engines repaired (2012)

18,200 turbines in operation

Turbomeca: world leader in helicopter engines

CMD’13 / JUNE 16, 2013 /

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The largest family of turboshaft engines for all classes of helicopters

44 /


2,500 operators around the world

One to 350 helicopters

75% of operators have less than 5 aircraft

Fleet sizesThe full range of missions

Military

UtilityPolice / Parapublic

Emergency

Oil & Gas

VIP & Corporate

Charter & Tourism

Breakdown of Turbomeca engines

CMD’13 / JUNE 16, 2013 /

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Long-term growth in helicopter market (2012-2031E)

Annual worldwide helicopter market(Safran estimates)

Today►30% new requirements

►70% replacements

►Driven by western countries

Tomorrow►70% new requirements

►30% replacements

►Driven by developing countries

2020

2031

Annual demand: up to 2,500 helicopters in the next twenty years

CMD’13 / JUNE 16, 2013 /

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Develop power solutions for heavy helicoptersDevelop power solutions for heavy helicopters

Power new platformsPower new platforms

Turbomeca assets and strategy

Capture business in emerging marketsCapture business in emerging markets

Best-in-class power solutions for

light and medium helicopters

Best-in-class power solutions for

light and medium helicopters

Strong position withStrong position with

Established relations with

developing countries

Established relations with

developing countries

Strengthen loyalty through Support-By-the-Hour (SBH®)Strengthen loyalty through Support-By-the-Hour (SBH®)Direct access to operatorsDirect access to operators

AssetsAssets StrategyStrategy

CMD’13 / JUNE 16, 2013 /

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Dynamic product roadmap

Ardiden 3

1,000 shp 2,000 shp 3,000 shp

Arriel 2 Makila 2

10 tons

Tech3000

Enhancement of existing fleet

Tech 600

Differentiating offer, SFC double digit improvement

Arrius 2

►► Tomorrow: New models

►►► Next Gen: with Demonstrator

Arrano

6 tons

1,00

01,

000

2,00

0

3,00

0

2,00

0

3,00

0

RTM 322MTR390► Now: Continuous Improvement

CMD’13 / JUNE 16, 2013 /

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Towards the 3,000 shp engine

CMD’13 / JUNE 16, 2013 /

49 /


Established relations in emerging markets

Well positioned for current and future competitions

CMD’13 / JUNE 16, 2013 /

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Turbomeca Support By the Hour (SBH®) contracts

SBH® account for 40% of support sales

5 to 10 year contracts provide mutual benefits Customers: cost predictability, guaranteed

fleet availability Turbomeca: recurring revenue

Prevailing model within high-utilisation sector (Oil & Gas, Emergency)

Gaining momentum with the military

1.3 million flight hours per year

► French MoD (1,400 engines - 10 years)► UK MoD (411 RTM322 engines - 6 years)► US Army (600 engines - 5 years)► US Coast Guard (200 engines - 5 years)► Oil & Gas: CHC, Bristow, Bond, etc.► EMS: Air Methods, ADAC, DRF, etc.

CMD’13 / JUNE 16, 2013 /

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Turbomeca set for growth

CMD’13 / JUNE 16, 2013 /

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Q&A sessionCivil engines

53 /


Documents

Part I - Civil engines - Safran...LEAP-1A/-1C LEAP-1B CFM56-5B CFM56-7B CMD’13 / JUNE 16, 2013 / 13 / Ce document et les informations qu’il contient sont la propriété de Safran