Part II - Innovation & continuous improvementPart II - Innovation & continuous improvement Ce document et les informations qu’il contient sont la propriété de Safran. Ils ne doivent

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.

0 / CMD’11 / DECEMBER 13, 2011 /

Part II - Innovation & continuous improvement


1 / CMD’11 / DECEMBER 13, 2011 /

Video clipSystems electrification


2 / CMD’11 / DECEMBER 13, 2011 /Q3 REVENUE 2011 / OCTOBER 21, 2011 /

Safran R&TE.Bachelet - Corporate Senior Vice President Research & Technology

/ December 13, 2011 /


3 / CMD’11 / DECEMBER 13, 2011 /

R&T drivers for Safran businesses

è Environment§ Aviation greenhouse gas emission reduction§ Aircraft noise reduction§ Green operations and green products life cycle

è Cost of energy and commodities§ Volatility and upward trend of fuel prices§ Emerging renewable energy sources

è Needs for mobility§ Air traffic growth§ Airport congestion§ Demand for seamless air transport operations

è Security demand§ Air transport and critical sites§ Border control§ Transactions

Create customer value through innovation


4 / CMD’11 / DECEMBER 13, 2011 /

R&T: Safran stakes

è Propulsion : prepare technologies for next aircraft & rotorcraft generations§ Short term: LEAP technologies and performance improvement for narrowbody aircraft

A320neo, B737MAX, C919. Turbo engines for the new helicopters§ Long term: new powerplant architectures for 2025+ aircraft and rotorcraft

è Aircraft systems: prepare technologies and systems for more electrical aircraft§ Solution provider on the entire electrical chain from generation to distribution§ New business opportunities through innovative electrically based functions: Green Taxiing…

è Security: improve performance and expand usage of our technology portfolio§ Technologies for expanding biometric-based services§ Smart integration of technologies for an efficient high throughput airport check-point of

people and luggage

è Defence & Space : develop affordable technologies for future missions§ Integration of innovative and cost effective functions for optronics and navigation systems§ Competitive solid and liquid propulsion for the future European space systems


5 / CMD’11 / DECEMBER 13, 2011 /

R&T: typical topics

Defence & SecurityPropulsion Equipments

Image ProcessingRead Out Circuit

Hemispherical ResonantGyrometer

Multi-biometrics

ExplosiveXR detector

Landing gearcomposite brace

Carbon-carbonbrake

Flight ControlEMA

CompositeRTM fan blade

LEAP

AeroMechanical Simulation

Open rotor Green taxiingCheck point of the future


6 / CMD’11 / DECEMBER 13, 2011 /

Scientific Council

Scientific partnerships

CNRSONERA

Georgia TechSingapore

Technology partnerships

CEAAIRBUSTechnology institutes

Transverse technology

domains

Material & Processes

Turbo machinery

Electric Systems

Mechanical modelling & simulation

Systems & Electronics

Energetic materials

Business UnitsR&T teams

SnecmaTurboméca

Techspace AeroSPS/SMEAircelle

Hispano SuizaLabinal

Messier Bugatti-DowtySagemMorpho

InnovationResearch & Technology

Technology ReadinessReview 1-3 Technology Readiness Review 3-6 Business readiness

.

.

....

Green TaxingE-Power

......

§ A strong strategic steering process§ A decentralized execution§ A comprehensive partnerships networks from base science technology and product demonstrations

From R&T to innovation: Safran organization


7 / CMD’11 / DECEMBER 13, 2011 /

An expanding international R&D base

World

Europe

A step by step approach


8 / CMD’11 / DECEMBER 13, 2011 /

R&T: 56% paid by 3rd parties

FY2011E

è Human resources§ 2,000 Safran engineers and scientists§ More than 150 PhD students in partner Universities Labs

è Patent score§ 590 patents filed in 2010, total portfolio of 16,000 patents§ Safran 5th in INPI scoreboard (France), 1st ASD company § Safran 9th in US Patent Board Aerospace & Defence

1,000 M€ 400 M€

37% 63%

CorporateExternal

Tax Credit

Development R&T

44%19%

Net Corporate

France 29%Europe 5%RoW 3%



The electrical revolutionD.Godart - Vice President Safran Innovation

/ December 13, 2011 /


10 / CMD’11 / DECEMBER 13, 2011 /

The more electrical aircraft is emerging

Systems electrification: from A380 onwards

B737

1967

A380

2007

B787

2009

Future short range

2025

Hydraulic

Pneumatic

Electrical

Electrically-powered functions

§ Cabin equipment§ Avionics

§ Wing anti-icing§ Engine start &

controls

§ Flight ctrls§ Landing gear

§ Wing anti-icing§ Engine start and

controls

§ Cabin equipment§ Avionics

§ Flight ctrls§ Landing gear§ Thrust reverse

§ Brake

§ Back-up flight ctrls§ Thrust reverse

The path to systems electrification

Current aircraft / 100-180 pax

Electrical power

~180 kW

Pneumaticpower

~700 kW

Hydraulic power

~200 kW

Next Gen aircraft / 100-180 pax

Optimized electrical power generation & distributionAll technical & commercial loads

~800 kW


11 / CMD’11 / DECEMBER 13, 2011 /

Aircraft electrification: a game changer

è Replacement of hydraulic and pneumatic energies by electrical energy requires mutualisation of Power Electronics between different loads

1- Electrical generators integrated in aircraft engines

3- Mutualised power electronics for loads:• Landing Gear• Green Taxiing• Engine systems• Flight Controls• Etc…

2- Energy transport (Wiring system)

The optimized electrical network

Safran, as a world leader in engines, power electronics, electrical wiring and equipment (loads),will be a leader for the next generation of “electrical aircraft”


12 / CMD’11 / DECEMBER 13, 2011 /

Safran innovation: accelerated breakthrough concepts to commercial reality

Concepts and Ideas

Technical and market-readymature products

Hybrid Power

Propulsive and non-

propulsive

Actuation Systems

All-electrical systems

Electrical Backbone

From generators to load power electronics

Green Taxiing System

Engine-free displacement

Technologies(R&T)

Safran organization is in place to turn step-change ideas into success

Safran visionof Markets

evolutions & needs


13 / CMD’11 / DECEMBER 13, 2011 /

More electrical aircraft: market analysisReplacement of pneumatic & hydraulic components by electrical components, increasing the price of electrical network shipset

Hydraulic

Pneumatic

Electrical

2.4

0.8

1.8

2.1

0.6

0.7

Short range example

Current totalsystems shipset

Base case

Full electrification

High case

Expected evolution of electrical network shipset($M)

More Electric Aircraft evolution opens wide areas of business for Safran innovative products, in terms of retrofit of existingand for new aircraft programs

Safran playing field

Significant revenue opportunities with Entry-in-Service of new short range aircraft

More electric aircraft induced activity ($M) - estimated

New single-aisle EIS



Green taxiingO.Savin - Executive Vice President Green Taxiing System JV

/ December 13, 2011 /


15 / CMD’11 / DECEMBER 13, 2011 /

What’s the concept?

è Located in the main landing gear wheels, the eGTS will allow to: 1. Push-back the aircraft2. Taxi under APU generated electrical power without the main engines

running

è A more electric airplane§ Thanks to new breakthrough innovations & technologies§ Thanks to a complete integrated system (cockpit to wheel)

è The electric green taxiing system (eGTS) offers to airlines significant DOC reduction & environmental benefits:§ Reduces fuel use§ Reduces airport emissions§ Minimises need for ground tug§ Reduces other Direct Operation Costs (brakes; engine...)

Safran introducing the right concept at the right time

APU: Auxiliary Power UnitDOC: Direct Operating Cost


16 / CMD’11 / DECEMBER 13, 2011 /

è Safran/Honeywell have signed an MoU for eGTS development§ Provides an accelerated time to market for green taxiing§ Partnership includes joint system development, production, marketing and support§ JV to provide a superior product and global customer support

è Partnership provides systems expertise and early availability of eGTS § Honeywell Avionics and APU system breadth§ Safran landing gear, Wheels & brakes systems breadth§ Complementary capabilities in electric power products and systems integration

Landing Gear Wheels & BrakesBrakes cooling fan Power Electronics APU WiringLG Control System

Two market leaders ... combining their strengths on 50/50 JV

Safran & Honeywell: able, credible and committed

APU: Auxiliary Power Unit


17 / CMD’11 / DECEMBER 13, 2011 /

EE BayMotor Controller and Converters2

5 PDP / Motor Controller Power Feeders

Main Landing GearWheels with Driver Motor in Hubs

1

to APU generator

Cockpit Interface Cable8

3

Pilot InterfaceUnit

7

Power Feeder from APU Generator

4Power Feeders to MLG Drive Motors6

Power Distribution Panels

Global view of the system

A revolutionary concept requiring extensive system integration


18 / CMD’11 / DECEMBER 13, 2011 /

What market is targeted?

Short range fleet operation

(% of Short Range Aircraft in Fleet)

Hub congestion & size(Average Taxi Time > 20 mine.g. LHR, AMS, CDG, JFK, ORD, LAX)

Annual Cycles(Annual utilization > 1,500 cycles)

Hig

h

Low

Low

High

Low

High

A new concept suitable for the big majority of single aisle market


19 / CMD’11 / DECEMBER 13, 2011 /

The best time to marketè Potential market for narrow body (2016-30)§ Between 8,500 and 9,000 aircraft (forward fit and retrofit)§ Corresponding to approximately $5bn market opportunity for the JV

è Estimated schedule

Schedule supports demo test mid 2013 and Enter in Service 2016

01-201001-2010

Development phase

01- 201101- 2011 01-201201-2012 01-201301-2013 01-201401-2014 01- 201501- 2015 01-201601-2016

Demo Test

First Flight EIS

01-201701-2017

Initial Dev. phase Development phaseDesign Trade Off


20 / CMD’11 / DECEMBER 13, 2011 /

[HC: Hydrogen]

REDUCED EMISSIONSImproved on time performanceTaxi to hangar and repositioningEngine maintenance cost savingsIncreased gate autonomyReduced brake wearREDUCED FUEL BURN

Electric TaxiReduction %

total NOx 61%total CO 97%total HC 98%total fuel 75%Reductions based on 19 min net taxi time using eGTS vs. 70% single engine taxi In & 50% single engine taxi out on a single aisle aircraft

Significant emission reductions at Airports

Net fuel savings in 750NM sector~ 3% of block fuel savings

134 tons Fuel Savings Per Year

$208,000 Direct Operating Cost SavingsPer aircraft , assuming 65% e-GTS utilization

Improves overall fuel burn

0

50

100

150

200

250

$208K

134 tons

Substantial benefits to airlines and environment


21 / CMD’11 / DECEMBER 13, 2011 /

Strong interest from OEMs and airlines

è Aircraft OEM manufacturers § Embraer: most interested, contributes to DOC reduction goal§ Airbus: assessing potential for A320neo and eventually A30X§ Boeing: the JV is candidate for B737 Eco-Demonstrator in 2013

è Most of the airline customers verbatim …§ The eGTS is totally consistent with the airlines& airframers expectations “EGTS has big impact on fuel savings and we

are very much focused on that”; “Green issues are becoming more and more important for us.”

“…if Flt Ops, Ground Ops & Engineering happy, would likely order EGTS”

“…would order if investment criteria met and comfortable with risk”

“We are focused on fuel reduction and is currently assessing a number of fuel saving measures with less or much less benefit than what would provide."

“Very interesting…like the concept…a real benefit is increased flexibility on pushback”

“Green taxi will happen” “We are focused on reducing taxi fuel consumption”

lower fue l burn

reliable,les s ris k

tomorrowte chnology

today’smaintenance

cos t

lower no is e & emis s ions



An agile GroupD.Vercherin - Senior Vice President for Industry

/ December 13, 2011 /


23 / CMD’11 / DECEMBER 13, 2011 /

Safran industrial policy: MAKE

è MAKE§ New technologies (composites for B787, LEAP…)§ Core technologies (carbon brakes…)§ Core industrial processes (propulsion compound for launcher...)

è Working continuously to improve performance§ Cycle / inventory reduction (cash)§ Cost reduction (EBIT and cash)

è 4 main industrial platforms, close to our markets§ North America (U.S., Canada, Mexico)§ South East Asia, focused on China§ Europe§ North Africa (Morocco)

è Capex§ Europe: New technologies, modernised plants, higher efficiency§ Rest of the world: Capacity growth, proximity with our customers

Landing gears

Wiring


24 / CMD’11 / DECEMBER 13, 2011 /

è France: new sites or modernisation of existing ones§ 2010: Turbomeca at Bordes, Sagem at Massy§ 2011: Sagem at Montluçon, Turbomeca at Buchelay, Labinal at Villemur§ 2012: Messier at Bidos, Safran’s Advanced Composite plant

è Mexico and North America: new sites or sites extension§ 2010: Snecma and Messier Bugatti Dowty - Queretaro, extended in 2012§ 2012: Labinal - Denton and Chihuahua, New Snecma Services in Queretaro§ 2013 - 2015: Snecma - Composite plant for LEAP

è Morocco: new sites / sites extension§ 2010-11-12: Aircelle, Labinal, Morpho

è India§ 2012-13: New Snecma plant

è China: new sites§ 2011: Aircelle - JV with XAIC at Xi’an§ 2012: Labinal

Main sites: 2010 to 2015

Queretaro, Mexico

Montluçon, France

Bordes, France


25 / CMD’11 / DECEMBER 13, 2011 /

Safran industrial policy: BUY

è Suppliers are key to Safran performance§ Represent more than 60% of products content§ Bring cost reduction performance§ Support our growth in Low Cost and $ countries

è Pushing hard for more mature suppliers§ Mastering their processes and bringing innovation§ Able to jointly develop new products with Safran§ Willing to have long term relationships and share programs risks§ Able to provide finished parts and to manage sub-tiers supply chain§ Moving to low cost and $ countries§ Complying with environmental constraints (Reach, …)

è Corporate shared service centre for non production purchases - about €2bn - in place since November 2010 to accelerate cost reductions


26 / CMD’11 / DECEMBER 13, 2011 /

Safran developing $ and LCC sources

Safran BUYShare of $ and Low Cost countries

Safran MAKE + BUYShare of $ and Low Cost countries


27 / CMD’11 / DECEMBER 13, 2011 /

Continued international growth

62%

38%

InternationalFrance

Note: includes L-1 ID & SME

58,400 employees in 2011E

U.S.Mexico

U.K.India

BelgiumMoroccoCanada

GermanyChinaBrazil

…


28 / CMD’11 / DECEMBER 13, 2011 /

Continued international growth

Production Workforce in $ / Emerging zones (MAKE)

Brazil, Russia, China, Morocco, India, Poland

USA, Mexico


29 / CMD’11 / DECEMBER 13, 2011 /

Continued growth for international sites

USA & Canada

China

India

6,700

8,800

Mexico

2,600

600

>2,600

1,600

>2,800

Morocco2,150

Staff 2020

2010

3,500

2,700

130300

Middle East


30 / CMD’11 / DECEMBER 13, 2011 /

Safran footprint

Europe

Morocco

USA

Mexico

Colombia

Brasil

Uruguay

Canada

South Africa

UEA

Japan

Malaysia

Vietnam

Philippines

Singapore

AustraliaIndia

China

Messier

Sagem

Morpho

Messier

Labinal

Messier Snecma

Morpho

Morpho

Morpho

Morpho

Turbomeca

Labinal

Aircelle

SESSES

Morpho

Aircelle

Messier Snecma

Aircelle Turbomeca

Messier

Morpho

Sagem

Labinal

Turbomeca

Sagem

Morpho

SnecmaSnecma

Turbomeca

Turbomeca

Turbomeca

Turbomeca

Turbomeca

Turbomeca

Turbomeca

Snecma



Transforming the GroupY.Leclere - Executive Vice President, Chief Transformation Officer/ December 13, 2011 /


32 / CMD’11 / DECEMBER 13, 2011 /

Safran+ overview

5 corporate projects

50 companies major projects

Over 1,000 field-based actions

Gross savings distribution by category

(FY2011E)

22%

24%

26%

15%

13% R&D Productivity

OperationProductivitySupply ChainProductivityBoost Services

General &Administration


33 / CMD’11 / DECEMBER 13, 2011 /

R&D productivity: software development & maintenance

è The Morpho Core Platform (MCP) projectMake it once, use it for all customers

è Using the Morpho Collaborative Software factory§ Automation of daily software builds and tests§ Global sharing of produced software between all

team members regardless of their physical location

MCPMCP

Improving productivity up to 30% for future products


34 / CMD’11 / DECEMBER 13, 2011 /

R&D productivity: Design-to-Cost projects

è 15 "Design-to-Cost" projects launched in 2011

è Focused training delivered to 300 engineers by Safran Corporate University

è DTC project at Messier-Bugatti-Dowty on single-aisle family§ Take advantage of the long standing experience of in-service

equipments to improve new generation§ 112 opportunities evaluated, potential gross savings 14%

identified so far

è DTC project at Turbomeca on TM 800§ 210 opportunities evaluated, potential gross savings 13%+

identified so far

è DTC project at Aircelle + Sagem on C919 thrust reverser§ First action on an electrical system targeting a positive trade off

vs. hydraulic


35 / CMD’11 / DECEMBER 13, 2011 /

R&D productivity: Aircelle

è A full implementation of several levers § Design To Cost § Manage toll gates and industrialization issues§ 3,000h training§ Monitoring through « Earned Value Management »

è Stake§ Over 40% reduction on development costs for new

programs

⇒ Savings essential to enable Aircelle to fund several simultaneous developments and to enhance profitability

15% R&D productivity in 2011 & 2012


36 / CMD’11 / DECEMBER 13, 2011 /

Field-based actions: employee-driven innovation

Sagem - Fougères facility (France)(# of ideas per person per year)

Fully engage the passion, talent, and collective intelligence of the workforce

è Innovation Challenge§ Competition among 100 projects per year covering all Group activities§ Selection by a group of experts


37 / CMD’11 / DECEMBER 13, 2011 /

Operation productivity: Lean Sigma (Group level)

Note: the term Black Belt refers to project leaders, skilled in the use of statistical methods and interpersonal communication, and dedicated to using Six Sigma methods to ensure customer satisfaction. Green Belts require less training than Black Belts and take responsibility for leading fewer projects.

Over 150 BB and 750 GB certified to date


38 / CMD’11 / DECEMBER 13, 2011 /

LES DIRECTIVES DU CONTRÔLE DE GESTIONOperations productivity: Lean Sigma

Gross savings: +35% in cycle, +25% in productivity

è Engines project « Pulse line »§ Improvement initiated for years, now at world-class

performance level thanks to a break-through Lean Sigma project

§ Reorganization of CFM56 assembly line, with all contributors (assembly operators, supply chain team…)

§ First step : from single assembly cells to a “stepping line”. Second step from 11 workstations to 5, (takt-time)


39 / CMD’11 / DECEMBER 13, 2011 /

Operations productivity: Lean Sigma (nacelles & thrust reverser)

3861Le HavreA380 thrust reverser

910Le HavreA320 thrust reverser

55 74Le HavreComposite structure A380

60103Le HavreRear Exhaust A380 T900

3749CasablancaBR710 reverser

in daysin days

H2 2011H1 2010Facility(Aircelle)

Product

Significant improvements on new products

Production lead time


40 / CMD’11 / DECEMBER 13, 2011 /

Q&A sessionInnovation & continuous improvement


41 / CMD’11 / DECEMBER 13, 2011 /

Part II - Innovation & continuous improvementPart II - Innovation & continuous improvement Ce document et les informations qu’il contient sont la propriété de Safran. Ils ne doivent

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