SAFRAN (EPA:SAF) - Safran reports on business developments of first months of 2020 at its 2020 Annual General Meeting. All the resolutions are adopted by shareholders

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28/05/2020 17:01

PRESS RELEASE

Safran reports on business developments of first months of 2020 at its 2020
Annual General Meeting.

All of the resolutions approved by the Board of Directors are adopted by
shareholders.

Paris, May 28, 2020

The Annual General Meeting of Shareholders of Safran (Euronext Paris: SAF) met
today behind closed doors at the Company's head office, under the chairmanship
of Ross McInnes, Chairman of the Board of Directors.

The Annual General Meeting was broadcast live on Safran's website and relayed
via conference call.

Ross McInnes, Chairman of the Board of Directors, and Monique Cohen, Chair of
the Appointments and Compensation Committee, presented subjects relating to
corporate governance and corporate officers' compensation. Olivier Andries,
Safran's future Chief Executive Officer, also took the opportunity to introduce
himself to shareholders.

At the Annual General Meeting, Chief Executive Officer Philippe Petitcolin and
Group Chief Financial Officer Bernard Delpit presented the Group's business
activity and results for 2019, along with the adaptation plan put in place to
address the Covid-19 crisis. They also reported on business developments of the
first four months of 2020 and on the Group's liquidity position.

1. Update on industrial operations and the measures taken by Safran in response
to the crisis

Amid a global downturn in deliveries for new aircraft, Safran now estimates
that less than 1,000 LEAP engines will be delivered in 2020.
The Group's aim is to significantly reduce its costs and to lower the breakeven
point for its businesses in order to benefit from the recovery when it
occurs.

Safran has acted swiftly to adapt to this new environment. The adaptation plan
already put in place at the beginning of the year in response to the shutdown
of production for the 737 MAX has been significantly stepped up. This plan
involves:
- Adjusting the workforce to the needs of the business as confirmed by
   customers:
   - Employees furloughed in all countries where this is possible: 35% on a
     worldwide basis (40% in France) as of May 18, 2020;
   - Reduction in the number of employees under permanent employment contracts
     (hiring freeze, lay-offs) across all Group businesses;
   - Non-renewal of all short-term contracts.
- Scaling back purchasing programs in line with the decline in deliveries.
- Reducing new investments (Capex) by almost 60% compared to 2019.
- Reducing R&D expenses by 30% compared to 2019.
- Reducing operating expenses (Opex) by more than 20% compared to 2019(1).

(1) Excluding purchases and including R&D expenses.

2. Update on business developments and on the Group's liquidity position

As expected, the impacts of the Covid-19 crisis observed in March (20.4% drop
in year-on-year revenue) accentuated markedly in April, with Group revenue down
around 50% on April 2019.

However, free cash flow generation was positive over the first four months of
the year.
At April 30, 2020, cash and cash equivalents amounted to EUR3.248 billion
(unaudited data).
Safran has a EUR2.52 billion undrawn credit facility available until December
2022. This facility serves as a back-up for the NEU CP commercial paper
program, under which EUR1.976 billion was outstanding at April 30, 2020. The
maximum amount available under the NEU CP program was increased from EUR2.5
billion to EUR3.0 billion.

On April 22, Safran set up a EUR3 billion bridge loan with a syndicate of
French and international banks. On May 15, it refinanced EUR800 million of this
loan by issuing seven-year convertible bonds(2) paying an annual coupon of
0.875%, with a conversion premium of 40% (exercise price of EUR108.23).
To continue securing its long-term sources of funds and extend the maturity of
its debt, Safran is planning to issue benchmark bonds on the US private
placement market (USPP) in the near future, subject to market conditions.

3. Key messages

* The Group's current baseline scenario is for a gradual recovery.

In the short term, airlines on one hand and the aerospace industry on the other
hand are likely to benefit from various forms of government support.
Over the longer term, prospects remain good for Safran, particularly since its
fleet of second-generation CFM56 engines is relatively young (approximately 57%
of CFM56-5b/7b engines are less than 10 years old) and efficient in the current
context.

* The main thrusts of the Group's strategy remain relevant.

Safran intends to consolidate its position as a fully-fledged engine
manufacturer, continue its development in the equipment sector, pursue its
niche strategy in defense, and reclaim its position as a front-ranking player
in aircraft interiors.

Safran's commitment to green aviation is even more necessary.

The cost-cutting plan rolled out by Safran maintains the environmental
priorities of its R&T and Innovation roadmap. Safran continues to work on the
next generation of low-carbon aircraft and, together with its partner GE, on
the successor to the LEAP engine which offers equivalent or superior fuel
savings to the CFM56 engine.
As an illustration of its commitment, Safran undertakes to support the launch
by the European Union and its Member States of investment plans and regulatory
measures aiming to promote the availability and utilization of sustainable
fuels for aviation. This will have to be done taking into consideration the
situation of the aerospace industry and of Safran's customers after the end of
the Covid-19 crisis.

* More generally, Safran contributes to the UN Sustainable Development Goals
for 2030.

Safran's commitments here cover 12 of the 17 goals and correspond to actions
taken by the Group consistent with its business activities and the priority
challenges in its materiality matrix(3).

(2) "OCEANE" bonds convertible into new shares and/or exchangeable for existing
shares.
(3) Full details of Safran's sustainability performance can be found in Chapter
5 of its 2019 Universal Registration Document and in its 2019 Integrated Report
available on its website.

These include:

o Fostering gender equality in the workplace, with the aim of raising the
  proportion of senior female managers to 16% in 2023.
o Combating corruption: Safran became the first CAC 40 company to obtain "anti-
  corruption" certification from the French Agency for the Diffusion of
  Technological Information (ADIT).
o Maintaining sustainable, responsible relationships with subcontractors and
  suppliers: roll-out of an external duty of care plan with commitments from
  suppliers to sign Safran's responsible purchasing charter. Safran also holds
  Responsible Supplier Relations accreditation.

4. Voting results

All of the resolutions submitted to the Annual General Meeting and approved by
the Board of Directors were adopted.

Shareholders therefore approved:

* the financial statements for the year ended December 31, 2019 and the
appropriation of profit for the year. As announced on March 26, no dividend
will be paid in respect of 2019;

* the appointment of Patricia Bellinger as an additional independent Director.
Ms Bellinger will also sit on the Appointments and Compensation Committee
further to a decision by the Board of Directors;

* the appointment of two new Directors representing employee shareholders (Anne
Aubert and Marc Aubry), to replace the previous employee-shareholder Directors
whose term of office has expired. Further to a decision of the Board of
Directors, Marc Aubry will also sit on the Audit and Risk Committee, replacing
Gérard Mardiné;

* all resolutions concerning corporate officers' compensation (2019
compensation, information regarding compensation, compensation policies for
2020, Directors' compensation package);

* the new authorization allowing Safran to repurchase its own shares at a price
not exceeding EUR165 per share;

* the proposed amendments to the bylaws.

At the end of the Annual General Meeting, the proportion of independent
Directors on the 18- member Board stood at 64.3%(4), and the proportion of
women Directors was 42.8%(5).

The voting results of the Annual General Meeting will be posted on the Group's
website at www.safran- group.com (Finance/Annual General Meeting).

(4) In accordance with the AFEP-MEDEF Corporate Governance Code, Directors
representing employee shareholders and Directors representing employees are not
taken into account in these calculations.
(5) In accordance with the law, Directors representing employee shareholders
and Directors representing employees are not taken into account in these
calculations.

Safran is an international high-technology group, operating in the aircraft
propulsion and equipment, space and defense markets. Safran has a global
presence, with more than 95,000 employees and sales of 24.6 billion euros in
2019. Working alone or in partnership, Safran holds world or European
leadership positions in its core markets. Safran undertakes Research &
Development programs to meet fast-changing market requirements, with total R&D
expenditures of around 1.7 billion euros in 2019.
Safran is listed on the Euronext Paris stock exchange and is part of the CAC 40
and Euro Stoxx 50 indices.

For more information: www.safran-group.com / Follow @Safran on Twitter

Press

Catherine MALEK: catherine.malek@safrangroup.com / +33 1 40 60 80 28 /
+33 6 47 88 03 17

Investor Relations

Cécilia Matissart: cecilia.matissart@safrangroup.com / +33 1 40 60 82 46 /
+ 33 6 49 44 60 34
Florent Defretin : florent.defretin@safrangroup.com / + 33 1 40 60 27 30 /
+ 33 7 20 26 19 11
Aurélie Lefebvre : aurelie.lefebvre@safrangroup.com / + 33 1 40 60 82 19 /
+ 33 6 80 16 24 98

IMPORTANT ADDITIONAL INFORMATION

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 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.

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SAFRAN (EPA:SAF) - Safran reports on business developments of first months of 2020 at its 2020 Annual General Meeting. All the resolutions are adopted by shareholders

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