Safran S.A.

Philippe Petitcolin - Chief Executive Officer Bernard Delpit - Chief Financial Officer

Christian Laughlin - Sanford Bernstein Olivier Brochet - Credit Suisse Tristan Sanson - Exane BNP Paribas Zafar Khan - Société Générale S.A. Rami Myerson - Investec Jaime Rowbotham - Morgan Stanley Andrew Gollan - Berenberg Bank Christophe Menard - Kepler Cheuvreux Celine Fornaro - Bank of America Merrill Lynch David Perry - JPMorgan Chase & Co.

Good morning everybody. Bernard and I are extremely pleased to present our 2015 results which are really, really good.

So the sales are up 13.4%. Organic growth of the revenue is 3.9%.

Aerospace service is up 20.6% in euro, benefiting from strong growth in the civil aftermarket, which is up 18.9% in dollars. The Security confirmed a very strong revenue trajectory with 22.7% up and 11% organic.

As all our business grew all of them are doing extremely well. The recurring operating income performance is also improving.

The ROC grew by 16.4%, representing 14% of the revenue. And the organic growth of the recurring operating income is 13.5%.

We had a healthy increase in the net profit of 18.8%. We are going to propose a dividend of €1.38 per share, which is an increase of 15% compared to 2014.

And the free cash flow is at a level of €974 million representing 40% of our recurring operating income. Let’s look at the activities starting with the LEAP.

The LEAP development continues to make very good progress. We are on track for entry into service as expected.

If we look at the LEAP-1A, on November 20 last year, we completed a major step forward for the LEAP-1A, which was certified by both the FAA and the EASA. Since its beginning in May 2015 the flight-test program on the A320neo and the new A321neo has been proceeding flawless, with 440 hours logged in 220 flights.

The engine is on spec and the entry into service is planned as expected for midyear. If we look at the LEAP-1B, the LEAP-1B completed the first flight on time, something we started four years ago with Boeing.

On the day we said with Boeing on January 29, 2016, making the start of the one-year flight-test certification program. The engine is on track for certification and the entry into service is planned for 2017.

Just one comment on the production side, we continue to be focused on the execution and to quickly have the entry into service and the production ramp-up. The first commercial deliveries of the LEAP will start in 2016 for the A320neo and the production will steadily increase over the next five years.

Going to the business in Propulsion, commercial leadership of CFM engine is confirmed. We have 13,252 engines, firm orders and commitments at year end in the backlog.

And we received orders and commitments for 1,399 LEAP and 736 CFM56 engines in 2015, so again in 2015 a lot of orders for the CFM56. We record a production rate of 1,612 deliveries in 2015, it’s the highest ever production of CFM56.

And our market share over the last two years of the CFM is in the range of 75%. So over the last two years the booking of CFM56 has a market share of 75% for the A320ceo.

So for Boeing, of course, we are at 100%, for Airbus over the last two years 75%. The LEAP backlog surpassed the 10,000 engines in February of this year after a very good start at the beginning of the year in terms of booking.

And our market share for the LEAP is over 70% for all the future narrow-bodies including 53% for the neo. On the military side, we received orders from Egypt and Qatar for the Rafale fighters powered by our M88 engines.

And for turbine helicopters our development plan to replace and to update all our products is doing very well. Let’s talk about the civil aftermarket now.

Civil aftermarket grew 18.9% in 2015 in line with our guidance. The 2016 outlook is expected to increase by a percentage in the high-single-digits in 2016.

That’s our guidance for 2016 in this civil aftermarket. After the record year of 18.9% in 2015 we maintain the percentage in the high-single-digits for 2016.

In aircraft equipments, we delivered on our commitments to support the production rate increase of our customer’s program. Rising production rates for A350, 787, A320 program were done extremely well by all our aircraft equipment businesses.

The momentum in our carbon brakes, activity remains excellent. To meet this increasing demand, we are expanding our capacity of our new plant in Malaysia.

More or less, we have the requirements of an increase of 100 tonnes per year of carbon in order to meet the demand of our customers. Finally, we are reinforcing our world-leading position in accessory gearboxes, thanks to the creation of Aero Gearbox International in partnership with Rolls-Royce.

In the defense sector, our defense division recorded several major commercial successes in 2016. We logged orders for €1.4 billion.

On top of the M88 engines, Safran also supplied key equipment on the Rafales with different division, including inertial navigation systems, gyro for the fly-by-wire flight control system. And as part of the weapons suite, we also got contracts to supply the AASM missiles to both Egypt and Qatar.

In optronics we signed two major contracts to supply the PASEO, our new generation of combat vehicle sights to more than 2,000 systems. And finally, the Patroller system, the Safran long endurance - sorry, tactical drone was selected by the French defense procurement agency.

We will supply 14 Patroller systems, with deliveries starting in 2018, as well as the related support activities. And we have great, great expectations for export markets for this new product.

In Security, we recorded a year of strong organic growth and we executed on its development strategy. In civil ID, we maintained our leadership.

Our public-private partnerships, for instance, in Chile, Albania, Netherlands, we’re very successful. We started deployment to secure election processes in Ivory Coast, Chad and Egypt.

In the U.S. we issued 85% of the driver license for U.S.

citizens. And we are also developing our offer in digital civil ID for governments.

We launched the SecureIdentity platform in the UK, a new digital identity service enabling the UK citizens and the residents to benefit from easier and faster access to public services. And finally, for the ones in this call who travel in the U.S., the TSA pre-check program continues to grow.

Our MorphoTrust is the only supplier of this service. And we enrolled more than 2 million U.S.

travelers as of today. And the target, if I correctly remember, is in the range of 25 million.

R&D, the self-funded R&D declined as we said by more than €100 million in 2015. We expect self-financed R&D to continue to decrease in 2016 by €100 million to €150 million, driven by lower capitalized R&D as the lead engines will enter into service.

Expensed R&D will rise by about €100 million due to lower capitalization and higher amortization, and an increase of the research and technology with R&T. I remind you that we spend around €400 million per year in research and technology every year.

And we have decided to increase this amount by another €50 million in 2016 to prepare our future. I really think that we have to be ready with the right technologies at the end of 2018, 2019, 2020, for the range of 2020, 2025 timeframe.

And we have to put the resources and the money to prepare ourselves. One update on the Silvercrest, the major tests successfully performed.

The development, the complementary developments to achieve targeted specification and revised schedule has been agreed with Dassault Aviation. We went through a phase of understanding of all the problems.

We are now in the verification phase until midyear. Then we will validate for the building of engines before yearend.

Flight test will start before yearend on the FTB, on the flying test bed, then on the Falcon 5X for the certification of the engine early 2018. This problem is behind us technologically and in terms of engineering.

I will let now Bernard present the financial results and I will come back for the guidance of 2016. Bernard?

Thank you, Philippe. As an introduction two messages on my side.

We met all our financial targets. And the underlying business is very solid.

And four key figures: 4% organic growth; EPS €3.55, up 18%; dividend progression 15% to €1.38; and cash generation trend to €1 billion, up 32%. Let me now move to the usual FX volatility slide.

You are all aware of FX volatility; mostly during the first half of 2015. You will find on Slide 13 the usual translation, transaction and mark-to-market impact on Safran’s P&L.

The latest one has an important impact on our statutory accounts with a non-cash €2.5 billion charge that is taken into account. And you can see that on Page 14.

I will just circle three figures, the €3.2 billion ForEx exchange gains which is negative, driving the bottom line consolidated data at €424 million negative. But as always, we comment adjusted data.

And the bottom line is a profit of almost €1.5 billion. On Page 15, below the strong 14% recurring operating income margin we have €698 million one-off items.

We mentioned in October the review of the Silvercrest program. We have impaired all intangibles and other one-offs relates to structuring costs plus one helicopter program.

On Page 16, below profit from operations, three comments from my side. The €224 million financial expenses primarily reflect the conversion of U.S.

dollar denominated provisions. Cost of debt is very limited and is down by the way.

It’s only €28 million this year. Corporate tax is down due to the one-off I just mentioned.

And apparent tax rate is also down from 28.7% to 26.7% due to future lower corporate tax in France with an impact on deferred taxes. And finally, EPS stands at €3.55, up 18.3%.

I won’t go into the details of Slide 17 considering Philippe has already walked you through the situation of Silvercrest and that we already discussed in July the Ingenico capital gain. Just to tell you, that we have run the impairment test of Silvercrest in a very conservative way, and it ended with reaching reserve of all intangible assets.

I’m on Page 18 now. Regarding the very strong revenue increase of 13.4%, the key message here is that it comes from propulsion services, up 18.9% in US dollars; and from Security, up 23%, including 11% on organic growth.

It was 8% for Security organic growth at the end of June. On Page 19, we have a 13.5% increase in organic terms for the EBIT, for a 3.9% organic increase in revenue.

So it’s improving again. It brings EBIT margin to 14%, up 40 bps.

Scope impact is negative due to subsidiaries brought. We have discussed financials in 2015.

And when excluding the purchase of a start-up in the Security, it leaves the profitability of the acquisitions of 2014 to 6%, which is not what we are looking for but is not a negative, you can see apparently on this side. Other comments, the currency impact comes from the USD.

Other currencies I think in marginal impact on the recurring income. And the 13.5% organic growth is driven by aerospace services, CFM56 OE and security.

And we will review that business-by-business. Three words on research and development: First, we keep total R&D at a high level, but a larger part of that had been sold or externally expended.

Second, the self-funded R&D is down for €108 million, which is in line with the €100 million decrease we guided in July. And third, on the other hand, capitalized R&D dropped by €149 million, driven by LEAP and A350 development.

And on the other hand, amortization trends to €100 million. So as a result, R&D was a headwind for 2015 profit and it will be more in 2016.

Page 21, as we will review each business, the only thing I wanted to say on Page 21 is the decrease in the business’s EBIT margin. It is apparently contradictory with the overall improvement of the group margin of 40 bps.

It comes from the large FX impact on sales and also from an increase in the invoicing of the corporate center to each business. At constant FX and invoicing, the margin of Propulsion stands at 21.4% and the margin of equipment at 10.1%.

Two or three words regarding Aerospace Propulsion on Page 22, Aerospace Propulsion made stellar results in 2015 with 14.3% increase in revenues including 6% organic and 12.2% increase in recurring operating income, one-off items relate to Silvercrest, of course. Where it was very good results driven by services, up 22% in euros and civil engines.

Only military engine and helicopter turbines were softer. The first one being explained by exports contract that was detrimental to domestic deliveries and sales; the second one, helicopter turbines being affected by the situation in this market.

Let’s also mention the strong impact of expensed R&D, almost €93 million. That’s almost 100 bps in terms of EBIT margin.

Page 23, regarding Aircraft Equipment, the Aircraft Equipment begin - started some improvements in the second half of 2015. Organic growth in revenues was positive in the second half and it explains why we finish at 0.9% negative, where it was 1.2% negative at the end of June.

Recurring operating income grew 9.4% over the year, including 1.2% on organic basis. It would be even better before corporate center higher invoices.

Unfavorable trends came from nacelles volumes, both OE and services; and also from prices on wiring. Positive trends on the other hand are very good in carbon brakes and landing systems.

Regarding defense, 2015 was a challenging year for defense with the very expected end of the FELIN contract in optronics with the French Army. Alone it represents €60 million negative in terms of sales.

EBIT is also impacted by sustained R&D charges. It represents 6.2% of sales for defense, for an average 4.5% across the Safran book.

As explained in July, second half was better than first half, with operating margin catching up from 2.4% in June to 5.1% at the end of December. That means a 7.5% margin in the second half alone.

This seasonal impact is every year. In terms of Security, very good commercial performance in Security with 22.7% increase in sales, including 11% organic.

All segments experienced positive organic growth, especially detection up 17%. Identity and security business grew in the region of 10% organically.

EBIT margin grew 12.7% and stands at 8% of sales. Margins are very good in detection, weaker for business solutions, other margins being flat compared with 2014.

Some words - I’m on Page 26, on hedging. There has been some debate around the hedging policy of Safran.

We changed the way to express it, only mentioning targets here. 2016 and 2017 are now fully hedged.

And as shown these treatments have improved the rate from 1.25 to 1.24 in 2016 and 1.22 in 2017. 2018 and 2019 are not fully hedged yet.

Our options will allow to right to €8 billion each year, with knock-out options set at various levels between 1.20 and 1.45. And the target hedge rate now is between 1.17 and 1.20 for 2018 and 1.15 and 1.20 for 2019.

The other comments that 2018 and 2019 reflect, in fact the average spot rate of 2015 is an average - it was an average 1.11, plus the cost of carry to 2018 and 2019, which is between €0.05 and €0.07, and it explains the level of our target rate in 2018 and 2019. And on Slide 27, it reflects the benefits in terms of EBIT that you will find from this improved hedge rate trajectory.

In terms of free cash flow, I’m on Page 28. We also met our objectives of cash generation.

Cash from operating activities is above 14%, reflecting EBIT growth. Limited change in working capital with various impact.

Inventories grew due to FX, but advance payments from export contracts helped. CapEx reached €758 million.

It includes tooling. And intangible CapEx increased to above €1 billion, almost 50% coming from capitalized R&D, with the rest coming from entry-ticket products.

And free cash flow stands at €974 million, up 32%. So that, plus the capital gain from Ingenico disposal explained why we halved the debt of Safran, which stands at €748 million at the end of the year.

Very flexible liquidity management, on Page 30, we took advantage in the last month of 2015 to restructure our credit line for €2.5 billion at excellent conditions. And you saw that we also benefit from the window of opportunity at the beginning of 2016 to issue a convert for few opportunistic reasons very efficiently.

Just two words on Page 31 on the balance sheet, to say that non-current assets, current liabilities reflect the impact of derivatives mark-to-market. That’s why the figures have changed.

On Page 32, limited financial guarantees to our customers, and they are all asset-backed so no real impact on P&L. And that’s it for me.

Thank you. I leave the floor to Philippe for the 2016 outlook.

Thank you. Thank you, Bernard.

Just to point, Page 34 regarding our equity shareholding. The free float increased subsequent to two placings by the French state in 2015 totaling 6.6% of the capital.

The French state sold 6% of Safran’s share capital to institutional investors. They are placing on March 3 and November 30, 2015.

And at the end of 2015 the French state held 15.4% of the Safran share capital compared to 22% of the year prior. The free float is 70.9%, almost 71%, of Safran.

In terms of dividend, the 2015 dividend, as I said already, a dividend payment of €1.38 per share will be proposed to the shareholdings vote at the next annual general meeting on May 19, 2016. This is an increase of 16% over last year.

Talking about 2016, what are the main key assumptions? Page 36, a healthy increase in the aerospace OE deliveries; civil aftermarket growth by the percentage, as we already said, is in the high-single-digits.

Startup costs of the LEAP production being taken into consideration. And reduction of the self-funded R&D in the other of €100 million to €150 million with a greater drop in the capitalized amounts.

So having said that, the outlook for 2016 is the following: the adjusted revenue expected to increase by a percentage in the low-single-digit at an estimated average rate of $1.11 for the euro, which is basically what we have today; and adjusted recurring operating income likely to increase by around 5%; and a further increase in the margin rate at a hedge rate of $1.24 for the euro; and finally, the free cash flow expected to represent more than 40% of the adjusted recurring operating income. This is our presentation.

We are now available - Bernard and I - for the Q&A. Thank you very much for listening.

Thank you. Good morning gentlemen.

Just one question for me regarding the civil aftermarket and trends that you saw, particularly in the back-end of the year, with respect to - if you could just kind of characterize, with respect to unit volumes of engines flowing through the shops directionally were trends up, down, flat versus last year, and then scope of work, that is just amounts invested in material for the overhaul on average, understanding that there’s a wide range around this. Thanks.

Well, thank you, Christian. If we look at the shop visits, because you could start like that, the shop visits increased in 2015 in the range of 7% to 8% compared to last year.

So this is - which is one element, which is now confirmed. And if you look at the variation within this 7%, we have an increase of 14% in the latest generation of CFM this last 5B and 7B.

The material, the old engines decreased by 12%. So the average is 14% more on the new engine, 12% less in the old engines, and for a total of 7%.

And another information, we could give you is the first generation of engines are 22% of the shop visit in terms of value. And 29% of the spares revenue in 2015 are expected.

So we have reduction in the old one, but they don’t generate a lot of business and in the new one we have a nice increase. If we look at the variation at the end of the year, don’t forget that the end of 2014 was extremely, extremely high.

So we keep increasing the performance for the second part of the year, but of course compared to the first part of the year it’s a bit less. In fact, if you look at the values on the civil aftermarket, I look at the second half - the second half is over 11% in terms of value.

So we are still in a very, very dynamic market. And our forecast for 2016 is something we believe strongly 100% we will do.

Okay. That’s helpful.

Thank you.

Yes. Good morning.

I will touch upon Silvercrest please and the aftermarket as well, and a quick one on FX, if I may. On Silvercrest is it possible to get a sense of whether you had to add some provisioning in 2015 to what you’ve already done for basically some compensation to the airframer beyond your contractual agreement.

That’s my first question. On aftermarket, a very simple one, what was the growth in Q4 and where did it slow the most.

And the third one, on FX, there has been an improvement in your achieved rate for 2016 and 2017. Did it - or did you have a deterioration in your 2018 rate versus the previous situation.

You did not disclose the range, but did it deteriorate, which would be effectively a pull forward of the - of future margin.

Olivier, I will start to answer your questions and Bernard will complete the answers especially on the FX. Regarding the Silvercrest, we are back to the contract.

And as we said already, we have taken in 2015 everything which may be requested by the contract. There is nothing in addition to the contract and I don’t understand why we would have any kind of provision outside of the contract.

We have a contract. We are back on track.

We have an engine which is already starting to fly, but not with 100% of the changes I mentioned a bit earlier when I gave you an outlook on the program. The engine with everything will be flying before the end of this year.

And we are 100% conformed to our duty. Regarding the question on the spare parts and on the civil aftermarket, as I just said to Christian, there is not a reduction in the second-half of 2016.

But the increase compared to the second-half of 2014, it is lower than the first-half. And again, the only reason is that the second-half of 2014 was extremely high.

Again if you take Q3 and Q4, compared to Q3 and Q4 of 2014 for the civil aftermarket, we are at - with an increase of 11.3%. I took the two quarters, because sometimes between September and October you may have some mismatched orders placed more in September or October.

But if you take on a period of six months, which is basically the essence of your question, we are over 11%; which is in line and which is totally in line with what we said at the year ago. And we confirmed in July and we confirmed again in October.

We told you we would be for the year of 2015 in the high teens and we are in the high teens. We are 18.9%, for me it is the high teens.

So we knew what would happen. We are in line with everything we forecasted a year ago.

So for us it is absolutely no surprise. We are in line and we are now telling you that we will be in the high-single-digits for 2016.

I will Bernard answer the question regarding the FX.

So for the FX as you mentioned, Olivier, we have improved 2016 and 2017 hedge rate. Maybe we were conservative in the way to express it before.

And it’s absolutely not at the detriment of 2018 and 2019 hedge rate. The previous guidance was below 1.20.

We are well below 1.20 in the new guidance here. So the answer is clearly no.

It has not - the improvement in 2016 and 2017 is not detrimental to 2018 and 2019.

Okay. Thank you very much.

Yes, good morning, everyone. It’s Tristan Sanson from Exane.

I have three topics I want to check with you. The first one is on your perception of the aircraft retirement risk going forward 2016 and beyond, especially given the backdrop of the ramp-up of the neo and the MAX.

What is your view on the risk attached to that and the circulation of your service material? Is it under control?

Is it an open risk? Second question would be on the M88 engine.

We had fairly low delivery numbers in 2015 but it’s fairly volatile from one year to another. Can you tell us how many engine you expect to deliver in 2016.

And did you start on your side ramping up to two or three months, as was indicated by Dassault in the last few months. Are you still planning one aircraft a month in your near-term schedule?

And the third topic, I’m sorry to ask the question, but I’m going to do go to M&A. The market - at least, the financial market is heating up a bit on the idea for an acceleration of consolidation among equipment makers, whether it’s in the U.S.

or probably in Europe. And in France, you’re going to have a lot of question about what’s going on at one of your peers.

So can you remind us your acquisition policy throughout the transition phase to the LEAP? Are you going to stick to small bolt-on acquisition in order to keep management’s focus on that industrial challenge or do you want to give yourself the opportunity to be opportunistic?

Thank you.

Tristan, regarding your first question on retirements of aircraft, we don’t see an increase in terms of retirement of aircraft today. There is a quantity of aircraft, which are on order and which are going to be delivered in the next coming years.

It’s really coming basically from the increase in passenger traffic that is expected in the next coming years. I remind you of some data from IATA, the international airline association.

The increase in the passenger traffic in 2015 was 6.5% and the forecast for 2016, this year is 6.9%. So we don’t foresee really a reduction of the lifecycle of the aircraft.

It happened a couple of years ago. We are stabilized today and we don’t see, at least from our window, a further drop in this lifecycle of the aircraft.

The second question is on the M88. Maybe I will let Bernard, answer this question regarding the quantity of M88, which have been delivered.

It’s basically related to the export sales. Bernard?

Yes, that’s exactly that. I mean, in 2014 we had the entire deliveries was dedicated to the French army.

And as we keep now the volumes for export in trust for some years now, for Egypt and Qatar mainly, that’s why we have less deliveries and less in the sales of 2015.

But they have been produced.

They have been produced, but from an accounting point of view, we have a course of prepayment, but we have not sales in our book. I think it will be the same, and I don’t have the exact figure in terms of deliveries for 2016, but it will be almost the same.

We will come back to deliveries to the French army in the future. But from now until 2018, 2019 the M88 will be - must be dedicated to export contracts.

Regarding your - to complete this answer, yes, we are preparing ourselves, not only for the engine, but for all the systems we provide on the Rafale to withstand the ramp-up, which is requested by Dassault going from one to two and three aircraft amount in the 2018-2019 timeframe. So, yes, we are preparing ourselves, and we are investing, especially in tooling, in order to support this rate increase requested by Dassault.

But you will not see the result of this rate increase up until 2017 in terms of deliveries, because the timing between the time that we produce the engine and the time the Rafale is delivered to export customers is different from the way we deal with the French air force and the French navy. Regarding the consolidation and the impact of the LEAP ramp-up, with the potential M&A activity that Safran could have in the next coming months, there is absolutely no impact.

They are two separate activities. We have the operational activity, which are very well prepared.

We are in the ramp-up. We know and we have meetings and we prepare ourselves in terms of industrialization, in terms of contract, in terms of production, and we may come back on this subject, if you like, later on.

And the M&A is at another part of the company. And there will be absolutely no impact, no influence, whatsoever between the operational constraints and the operational objectives we have, and the potential M&A activity we may do in 2016.

Okay. So the answer is that you can stay opportunistic.

That’s very clear. Thank you very much.

Yes.

Thank you very much, good morning. I have two areas that I’d like to explore, please.

First one is on the LEAP, and you say that the engine is on specification. What I’d like to know, and I hope you will help us with this, is to understand what the performance is like - and this is on the 1A, because that’s the one where you’ve been doing all your testing, against what you have promised the airframers and the airlines.

So in terms of the fuel performance and the weight, where are you now compared with what you have promised your customers? That’s the first question, so maybe I’ll let you answer that and then I can ask the next one.

Yes, I mean, Zafar, we are perfectly on line. We promised our customers a saving - a fuel saving in the range of the 15% and a weight guaranteed.

We are at spec - we are totally at spec. And to even confirm or put more weight on my answer, if you look at the A321, Airbus has even decided to use our engines for the first flight of the A321, which was not supposed to happen.

They are not supposed to be the first engine to fly the A321, and it happened a couple of weeks ago. So, yes, the customer, Airbus - we are not talking about airlines, it’s too early - but Airbus is extremely satisfied with the performance, the overall performance of our engine in terms of fuel saving and in terms of meeting the specifications, including the weight.

That’s excellent news. Thank you.

Just slightly more controversially, if I look at the margins across the group, and I must compliment you on the performance of the propulsion division, the margins are excellent and we’ve seen a very, very good improvement there over the past few years. But I’m afraid I can’t say the same for any of the other divisions.

So let me take each division by turn. Equipment, if I look at your margins, which incidentally were down this year, and I compare those with any of your competitors, and given you are very strong in your market positions, you’re one or two in most of your products, I think a sub-10% margin really should not be acceptable.

That’s on the equipment side. If I then take security, huge organic growth.

Detection, which is probably still high-teen margin, if I strip that out, then all the other businesses are making, what I would describe as pretty awful margins. And then the Defence business.

This should by all accounts be a 10% margin business. You’re achieving half of that margin.

And I guess, the question I must ask you there, and Tristan asked about the M&A, but are you really the right owners of this business Do you have the critical math. So I apologize for being critical on these, but I would welcome your comments on this.

And I think it would be a healthy discussion if we could go through each of these divisions and where you can get to and over what timeframe.

Yes. No, you don’t have to apologize, Zafar, because this is something I tried to cover the first time I met all of you in this kind of phone discussion in July last year.

I came to, not to the same conclusion as you do, but I perfectly understand your point. If you talk - let’s go one-by-one, because you made a very clear statement on each of our businesses.

If you talk about the equipments, if we compare apple-and-apple with last year, Bernard told you that last year in 2014, we were at 9.6%. It’s true that we are 9.4% this year, but if we keep the same FX and if we do not overweight with some holding cost and compare really the same thing, we would be at 10.1%.

So we are a bit over 10%. It is not enough, and I agree.

In fact in the equipments we have three main businesses. We have one which is doing extremely well in terms of performance, which is landing system, because we have a very good position with the carbon brakes.

We are the number one in the world in carbon brakes. I told you a bit earlier we produce over 1,000 tonnes of carbon a year, and we have an increase - just for our market share which is over 50% of the world total request for carbon of 100 tonnes a year.

We increased our production by 100 tonnes a year. So you see where we are going, and we are doing extremely well.

The two other businesses are not doing so well. The first one is the wiring, the electrical systems.

We accepted I believe a bit too early some price reduction imposed by our big customers, especially Boeing and Airbus. And we accepted that, where we do not master all the costs, because the components cost is coming from outside and we are not in charge of satisfying these components.

The customers, Airbus and Boeing, are in charge of that. So it’s difficult to have the leverage on the supplies of connectors and wires, and so on.

So we are working on this, and we are doing better and we are going to do better even more in 2016. The last one is the nacelle business.

And in the nacelle business, we have a very low-service business, because we provide parts, especially to some of our competitors, but we are not at the tier one in many areas. For the A320neo, we are tier one.

For the A320neo, we are tier one. So we are taking a larger share of the service business.

And in 2017 and especially in 2018, the nacelle business is going to be a great business after 10-years where we had difficulties. In the Defence - in the security business, it’s true that the margin is not at the level you would like to see it.

We got in 2014, a very large contract which brought some very nice contract. We didn’t have the same ones in 2015.

We have one area, which is just at breakeven, which are the chips. So we have to keep working on the chips and be profitable on the chips.

The rest of the businesses are doing fine. I tell you that the business we have in biometry are very good businesses and they provide a good profit.

In the Defence, we got - we were maybe a bit too soft. And we had a very nice contract, which was called the FELIN for the French army, providing a large amount of sales and profit.

This contract ended a year-ago in 2014. And we are in the stage of replacing this contract with new businesses, new products, especially in the optronics and navigation systems, which are going to take a bit of time before being very well profitable.

I’m putting a lot of pressure on all these businesses. All of them are going to improve their performance in 2016.

I have introduced over the last couple of months with Bernard, a rolling forecast, where we see - a rolling forecast, every month we have a three months update of what’s going to happen in the next three months, business-by-business, half an hour, each of the businesses for a full afternoon for us. And we are very much proactive.

So we don’t wait to see what happens during the quarter to discuss and decide what to do in order to modify the guidance or modify the way we work, which we really push extremely hard very early in order to be proactive, and I tell you it’s working. I do exactly the same thing at the holding company.

The holding cost, the holding of Safran is decreasing a lot in 2015. So, yes, we do our job and I can guarantee you that in all these businesses, equipment, security and Defence, we will come - we will not be the top of the class in 2016, but we are going to improve our position in order to be extremely proud of our people and our businesses by 2017 or 2018.

I’m sorry. I’ve been a bit long, Zafar.

No. I think that was very comprehensive.

I really appreciate that. Thank you.

Good morning, gentlemen. Hello?

Yes.

Good morning, Rami.

Good morning. Just a few questions from me.

On engine part out, I’d be curious to know - I assume you track the part-outs of your engines. Have you seen - what are the trends been in 2015 in installed base relative to 2014.

Has it slowed or has it increased? And a slightly technical question, but we’ve seen the move of the HQ costs, from HQ to the divisions.

It would be helpful if you could provide the splits of how much has moved into each of the divisions, just so that we can model going forward?

Regarding, Rami, regarding your first question, we didn’t see a big change in these engines, which are splitted. And we - there are still quantity of engines, which goes through this process, but over the last six to nine months, we didn’t see any kind of change.

And I believe your question is, do we have a big increase in these engines’ figures through this process. No.

The number remains very, very small. Regarding the second question.

I understand that question is how much more invoicing have we made from the corporate center to businesses. Is that right?

Yes. In the past it was about €180 million.

Now it’s come down to €80 million. Where has that €100 million gone?

We have additional invoices from the corporate center to the businesses for €64 million in 2015, [ph] and the rest is that we cut cost at the corporate center.

And was that all into propulsion equipment or was it split across the businesses?

No, it’s across the business. We have different rules to share the cost of the corporate center on the different businesses.

The idea of invoicing more has to do with the tax environment in France, but also with fine management of our cost. And the idea is again to cut costs at the corporate center level.

Thank you. And just one on the aftermarket, the previous Capital Market Day in 2013, you talked about double-digit, or the guidance implied double-digit aftermarket growth through a period.

Is the slow aftermarket growth next year just a mean reversion after a few years of good growth or does it reflect deliveries six, seven years ago?

No. But at a point you cannot keep increasing by 20% or 30% every year.

So, again, we compare 2016 with 2015, which is extremely high, because, as we just said, 2015 is 18.9% higher than 2014. So, yes, we forecast another increase in the high-single digits, but we are in line, really in line with our model and with what we are forecasting.

So we are extremely pleased and not conservative, but we know that the quantity of shop visits, we are expecting in 2016 is in line with our forecast. It’s basically the quantity of shop visits should increase in the range of 5%.

So that’s a high number and this number would reflect in high-single digit in terms of sales.

Great. Thank you very much.

Morning, gentlemen. Two questions for Bernard, please.

The first is on the FX hedging. I’m pleased to see on Slide 27, that you now acknowledge a potential €500 million tailwind to EBIT from FX.

I just wondered, how quickly will you look to lock in the rate for 2018 in the next three months, or next six months, or by the 2016 year-end? And then the second question, Bernard, relates to the dividend.

Given the strength of Safran’s balance sheet, given the strong free cash flow generation in 2015, and the guidance for over €1 billion in 2016, and given the fact that the regular dividend policy means that you paid out around €170 million of the €600 million of disposable proceeds from the Ingenico sale, I just wondered was there any consideration given at all to a special dividend at this point in time? I was just interested to know how you’re thinking about the capital structure of the group.

Thanks.

Thank you for those two interesting questions. Regarding FX, I think we will gradually lock the hedge rate in the coming months.

As we have said and written in Page 26, we have knock-out options barriers between $1.20 and $1.45 within maturities up to two years. So it will take some months before we can definitely lock the hedge rate of 2018.

And more again for 2018, I think we would like to wait, let’s say, some one or two years before having a final picture for 2019. Regarding dividend, well, the idea is to have a very predictable policy in terms of payout ratio.

And the 40% is what we have for now many years. You have some exceptionals in both directions, one-off negative, but also the Ingenico disposal.

So the idea was to keep exactly the same methodology to calculate the dividend and to keep the same payout ratio. It doesn’t mean that we rule out different policies, but it’s clearly what we have done in 2015 - or 2016.

Okay. Thanks.

Good morning. Andrew Gollan, Berenberg.

Two questions please from me. Firstly, back to Silvercrest, can you tell us if there’s any or what the cash costs might be related to this in terms of the rectification, extra engineering et cetera.

And secondly, back to the LEAP program again, in terms of the ramp-up there, are you seeing or are you feeling any kind of pull forward in terms of the rate of increase, rate of ramp-up, given the pressures on your competitor and their struggles to get to their ramp-up in the early stages?

But - thank you for these two questions. On Silvercrest, we do not disclose this kind of amount of money you are requesting.

It’s part of the engineering, it’s an overall picture. You see that we meet 100% of the forecast we gave in terms of guidance for 2015, and of course these costs are also included in the guidance we give for 2016.

Regarding the LEAP, and the potential problems of competition, we have not seen at this stage, as of today, any request at Airbus - because our competitor is only present at Airbus. We have no competitors, as you know, at Boeing.

At Airbus, we have not seen any move, as of today, from our customer regarding potential impact and so a pull-forward request for our products, being either the CFM for more A320ceo or trying to push us to provide LEAP either earlier or in higher quantities than the ones, which have been negotiated between our two companies.

Okay, thank you. I will just sneak in one more, if I may.

Just following up Zafar’s question, and thanks for your response to that. Regarding Defence, the second half margin, I think it was 7.5%.

And that’s well ahead of where the margins have been any time recently. So in terms of our planning, is that a reasonable rate to assume going forward given the mix of new businesses that you’ve talked about and the shifts from the old programs to new?

Partially - only partially, I would love to say, yes, but it’s only a partial answer to this margin. Don’t forget that in this business, in the Defence business, it’s a bit seasonal.

So, I mean, the budget of governments are always a bit heavier, higher at the end of the year than at the beginning of the year. Difficult at the beginning of the year, it’s more open.

And sometimes you have opportunities at the end of the year. So we usually - if we look at the history, the margin during the second half of the year in the Defence business, it is usually higher than the first half.

So yes and no, to answer your question. Yes, I hope that what we are doing is already showing some product in the numbers, but this business is also a seasonal business.

And part of the good performance or the better performance of the second half is also attributed to this part of this seasonal business.

That’s great. That’s very clear.

Thank you very much.

Yes, good morning. I had three questions.

The first one is on the Silvercrest again, sorry for that. But the provisions that you took, were they all cashed-out already.

It’s just that element I wanted to have. The second question was related to Zafar’s question as well.

Thank you for the explanation, and thanks for the efforts to improve the profitability in the other division and propulsion. I was just looking at 2016, FX will bring 2% growth in EBIT.

So it means that we’re going to have EBIT progressing ex-FX by 3%. So it sounds that the efforts that you are putting in the other divisions, are not necessarily yielding yet results, but they will.

Could you give us some - I mean, which division will probably see margin improvement first in 2016. And I would assume 2017 could be very strong as well or could be better actually in that improvement.

And the final question is on the impact of the aftermarket for M88, and more broadly speaking, fighter jet engines. My understanding is that the French planes are - I mean, it’s not only French planes, but planes, fighter jets are flying quite extensively at the moment.

So you should see an impact on aftermarket or have you already seen that impact in 2015. That was just a question about where we should look at it going forward, or when?

Thank you, Christophe. Regarding the first question, it’s quick, it’s no.

The cash-out on the provision on Silvercrest is not done. Regarding your second question on the FX, it’s impact on the profitability of 2016, it seems to me that you missed the point on the increased R&D for 2016.

We told you that, in terms of expense, R&D at the EBIT level we have an increase of €100 million. So don’t forget to take this €100 million into consideration when you do your math.

Regarding the last point on the M88, yes, you are absolutely right. I mean, the planes are flying, and not only in France.

There are some areas of the world, where we have some Mirage 2000s for example, which are also flying a lot. So you refer to the Rafale, you are correct on the Rafale, but we have also some other machines, which are also flying a lot.

And I’m thinking basically about the Rafale, think about the Middle East, for example, they fly a lot today. So, yes, this flying mode of our military machines are generating an additional business, and as you know, it’s a very good business of product support and spare parts for these machines.

Usually it takes quite a bit to produce these parts. The lead time - average lead time is in the range of 12-months.

So we have started to see some of the impact, but most of the impact is going to come.

If I just - if I can just add one figure, military - I mean, services for military engines are up 3% in terms of sales in 2015.

But 2016 is going to be a lot higher.

Thank you very much.

Thank you. Good morning, gentlemen.

So I’ve got one main question, which would be on the free cash flow, I just to understand that your confidence on the 2016 number, which is around €1 billion. And if in that number you also assume some military customer prepayments again.

And how should we think of the trajectory of this free cash flow either in terms of conversion rate or absolute numbers going forward after 2016? And my second question would be on the helicopter business.

In propulsion, if you’ve seen any slowdown or reduction in your services in 2015, and how should we think about that in 2016? Thank you.

Celine, I will take the first question on free cash, first. As you mentioned, free cash takes into account prepayments for export contract.

We don’t disclose the number, but it has been taken into account in our 2016 guidance.

Regarding the second question on the helicopters propulsion, as you could see we delivered in 2014, 832 engines and only 625 in 2015, so it’s a reduction of 25%. So, yes, we are affected by the reduction for sales of helicopters, but do not forget one point.

In our business, two-third of the business is on the services, so the services business is going now. So, yes, the OE business is down, because there are less helicopters produced by our customers, but our OE business is up, even with a big slowdown in the oil industry.

So we remain quite confident in the business of helicopters, because outside of the oil industry, service business is good.

And, sorry, just to go back on your cash comments, so I assume that if you build in those prepayments for 2016, they are probably on contracts that you’ve already won. First question.

And then you didn’t really answer on the - how to think about the cash flow beyond 2016. Thanks.

Well, for beyond 2016, I would like to keep that for the Capital Market Day, but let’s say that the idea is to be above 2014, and to trend to above 2015 during the next years. Regarding prepayments, we had some prepayments in our 2015 cash flow.

We will have some more in 2016, including a new contract.

May we have the last question?

Yes, good morning, gentlemen. Thanks for taking my questions.

I’ve got a few please. The first one please, Bernard, I’ve just got a little bit confused, exactly on the Propulsion margin, because at one point in your speech, you talked about 21.4% on the old perimeter, but I think there was some FX in there as well.

But you talked about the HQ, the reallocation only being €64 million I think, in the Q&A? Can you just tell us, if you hadn’t made the change in the perimeter, and the way you’ve reported, so just on the old basis, what would Propulsion EBITDA have been as an absolute number, please?

Yes. So, David, what you’ve seen is 19.7% EBIT margin in 2015, taking in account FX and everything, including new invoices from the headquarters.

The calculation…

Proportion, proportion.

And the proportion of the invoices from the headquarters, the 21.4% would be the Propulsion EBIT margin at constant FX rate and constant invoicing from headquarters.

So if you hadn’t made the change, just to make it a bit easier for us, what would the - on a like-for-like basis compared to last year’s €1.633 billion, what would the absolute EBIT have been in Propulsion?

I couldn’t give right now in absolute terms. I just gave the calculation in terms of a margin.

So it means that in terms of margins, starting from, let’s say, 20% in 2014, it would have been at 21.4% in 2015, without new expenses from the corporate center and at constant rate. And I would say that the majority of the €64 million of new expenses that have been invoiced from the corporate center to the businesses have been allocated to the Propulsion, because it’s the largest business.

Okay. And could you just tell us, second question, in your guidance for 2016, could you give us guidance for Propulsion, is that possible?

What you think the Propulsion margin will be?

For the Propulsion, just refer to what we told you in July and again in October. Our objective is to remain in the high teens.

So we will remain in the high teens.

Okay. Just moving on, please, to LEAP.

Could you just tell us for LEAP A, do you have a firm date yet for the first delivery, and how many do you expect, how many engines do you expect to deliver this year, please?

We don’t disclose this kind of information. The customer does that.

If you want to know when we will deliver the machines - because it’s not only the engine, the engines are going to be delivered during the second quarter of 2016. When are the airplanes going to be delivered, it is a decision of Airbus, it’s not our decision.

So I cannot - even if I know, when Airbus wants to do it, I’m not allowed to tell you, when it is going to happen. In terms of quantity of engines, David, we are going to build and deliver in 2016, it’s a bit over 100 engines, which are going to be delivered to customers in 2016.

So when you say customers, for you the customer is Airbus?

It’s Airbus - it’s Airbus. Yes, yes, yes.

Okay.

Yes, it’s Airbus.

Okay. And then my last one if I may, please.

Just wondered if you had any update on your thinking on IFRS 15 and what it may mean, I know it’s probably still work in progress, but any thoughts would be helpful?

Yes, it is work in progress, and we’ll try to give our first thoughts during the Capital Market Day on London in the March 14. There are many moving parts, and we’ll try to pave the way for thinking of that.

But it’s too early David, I’m sorry for that. But we’ll try to make some clarification on how it works.

This is a tricky thing. And remember, please that it is applicable only in 2018, so I hope you can wait for March to have some clarification on that.

Okay. Thanks.

Okay. Thank you, everybody.

Thank you for listening to this presentation on our results 2015. Have a nice day and hope you will continue to enjoy working with us.

Thank you very much.