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2010

25.02.2010
Safran reports solid full-year results for 2009 with a recurring operating margin of 6.7 % of revenue

PRESS RELEASE

Safran is confident that recurring operating income should increase moderately in 2010

All figures in this press release represent Adjusted(1) data. Please refer to definitions provided in the Notes on pages 10 and 11 of this press release.

Key numbers for the year 2009

• Full-year 2009 revenue was Euro 10,448 million, up 1.2% year-on-year on a reported basis, down 2.9% on an organic basis.
• Recurring(2) operating income at Euro 698 million (6.7% of revenue). Profit from operations of Euro 663 million (6.3% of revenue) at a hedged rate of USD1.42 to the Euro, including one-off items (capital gain, impairment charge, repayment waiver) for a net of Euro (35) million.
• Net income - group share up 47% from 2008 at Euro 376 million (Euro 0.94 per share).
• Strong free cash flow generation of Euro 818 million with net debt of Euro 498 million as of December 31, 2009.
• A dividend payment of Euro 0.38 per share will be proposed to the shareholders’ vote at the next Annual General Meeting on May 27, 2010.
• For full-year 2010, Safran expects revenue to be similar to 2009 and is confident that recurring operating income should increase moderately (at a targeted hedge rate of USD 1.46 to the Euro). Free cash flow is expected to represent approximately half of the recurring operating income.

Key business highlights for the year 2009

• Safran celebrated the delivery of the 20,000th CFM56 engine, the world’s best-selling commercial aircraft engine.
• Safran and GE (CFM and Nexcelle) were selected as COMAC partners on China’s C919 aircraft program. COMAC opted for an integrated propulsion system including the new advanced LEAP-X engine itself and the nacelle.
• Significant commercial success in Defence with new contract awards (e.g. 16,454 Felin soldier systems for the French Army) which boosted the order backlog to 2 years of revenue.
• Increased commercial momentum from newly-acquired companies in Security: Safran was selected by Lockheed Martin to provide fingerprint identification technology for the FBI’s next generation identification system and by IBM to supply and maintain a biometric management solution for British travel and identity documents, as well as by Israeli Airport Authority for new generation integrated Computed Tomography and diffraction X-ray inspection.

* * * * *

Paris, February 25, 2010 - The Supervisory Board of Safran (NYSE Euronext Paris: SAF) chaired by Francis Mer met in Paris on February 24, 2010. The financial statements for the full-year 2009 approved by the Management Board were submitted to the Supervisory Board.

Executive commentary

CEO Jean-Paul Herteman commented:

“Safran recorded a solid performance for 2009 in an unsettled civil aerospace environment. This achievement, which resulted from a strict control of the cost base combined with a sizeable reduction of operating working capital, demonstrates the resilience of its business model.

From a strategic perspective, Safran reached a key milestone with the selection of CFM’s next generation LEAP-X engine to power the Chinese C919 aircraft, together with the integrated nacelle system. This program places the Group favourably for the future development of the worldwide single aisle fleets. Furthermore, our growing and improved high tech Security portfolio positions Safran to capture growth from increased public investments in secured identification of people access control and in luggage checking reinforcements. In addition, significant new orders in optronics boosted the backlog in Defence.

Looking forward, we are confident that our recurring operating income should increase moderately in 2010, thanks to on-going cost improvements and despite a mild currency headwind. We expect that the latter part of the year will see airlines resume spending on services, even though the first half of 2010 is likely to harbour some of the uncertainties of 2009.

Beyond that, in the absence of any global economic relapse, our operating profitability should be supported by more favourable hedge rates in 2011-2013 as well as the high growth potential of the services for our later generation aviation products and of our security businesses.”

Full-year 2009 results

Safran delivered solid operational performance in full-year 2009, enabling to meet or exceed its guidance on both financial metrics it had indicated for 2009.

Revenue guidance met. For full-year 2009, Safran’s revenue was Euro 10,448 million, compared to a reported Euro 10,329 million in 2008, a 1.2% year-on-year increase - within the guidance it had indicated. Group revenue increased by 1.5% on a restated pro forma basis[3] and declined by 2.9% organically.

Full-year 2009 revenue decreased by Euro 302 million on an organic basis, primarily resulting from a decline in aerospace original equipment revenue while services revenue remained resilient. The Group’s revenue was particularly buoyed by the Security business which reported a double digit organic growth and by the Defence business, notably in avionics. However on a restated pro forma basis, this was offset by a favourable currency impact and by the positive impact of acquisitions and activities newly consolidated.

Organic revenue was determined by deducting from 2009 figures the contribution of Security activities acquired in 2008 and 2009 when compared to 2008 scope of consolidation and the contribution of activities newly consolidated in 2009 and by applying constant exchange rates.

Hence, the following calculations were applied:

The favourable currency impact in revenue of Euro 255 million for full-year 2009 was mostly a combination of an improvement in the Group’s hedged rate (USD1.42 to the Euro vs. USD1.45 in the year ago period) and of the improved average rate (USD1.38 to the Euro vs. USD1.48) on sales which are naturally hedged (sales and purchases in the same currency).

Margin on recurring operating income exceedeed guidance. For full-year 2009, Safran’s recurring operating income was Euro 698 million (6.7% of revenue) - above the operating margin guidance of close to 6% it had indicated. It was up 5.9% on the 2008 restated pro forma figure of Euro 659 million, 6.4% of revenue.

The restated pro forma improvement of 5.9% in recurring operating income was achieved, despite the adverse impact (-13.8%) on organic performance of uneven trading conditions in aerospace, thanks to productivity improvements and cost adjustments together with the favourable currency impact (Euro 95 million) and positive impact from acquisitions and activities newly consolidated (Euro 35 million).

Recurring operating income was determined by deducting from 2009 reported figures the net of one-off items of Euro (35) million: a Euro 7 million capital gain on Cinch disposal, a negative impact of impairment charges (Euro (70) million) booked on the Boeing 787 landing systems activity and a positive impact of Euro 28 million from a repayment waiver from industrial partners.

Hence, the following calculations were applied:

Net income - group share grew by 47% year-over-year. The net income attributable to equity holders of the parent was Euro 376 million or Euro 0.94 per share, compared to Euro 256 million (Euro 0.63 per share) in 2008. In addition to the rise in recurring operating income, this improved performance reflects the one-off impact of losses and restructuring charges of the Communications business in 2008.

• Net financial expense was Euro 174 million, including Euro 38 million of cost of net debt and the unwinding effects on assets and liabilities for Euro 118 million (mainly provisions and repayable advances).
• Tax expense came in at Euro 98 million, including current tax expense of Euro 64 million.

Balance sheet and cash flow

Net debt reduced year-over-year. The net debt position was Euro 498 million as of December 31, 2009 compared to Euro 635 million as of December 31, 2008. The reduction in net debt of Euro 137 million, despite the net acquisitions of Euro 551 million, primarily reflects the high level of operating profitability this year (cash from operations of Euro 1,042 million) and a reduction in working capital of over Euro 200 million. This improvement in working capital is mainly due to a reduction in inventories and was achieved despite the implementation in France of the Economic Modernization Act (LME) which reduced supplier payment times and had an adverse impact of an estimated Euro 150 million on payables. Moreover, Safran also resumed the factoring of CFM receivables in 2009 for a total of Euro 143 million.

With cash and marketable securities of Euro 2.08 billion and the availability of secured and undrawn facilities amounting to Euro 1.1 billion as of December 31, 2009, Safran is adequately funded, notably in anticipation of a bank facility repayment of Euro 500 million in January 2010. Furthermore, Safran issued a 5-year bond of Euro 750 million in November 2009 in order to extend its debt maturity and diversify its funding sources.

A dividend payment of Euro 0.38 per share will be proposed to the shareholders’ vote at the next Annual General Meeting on May 27, 2010. Dividend cash-out is expected to be around Euro 150 million in 2010. If approved, the dividend will be paid on June 4, 2010 (ex-dividend date: June 1, 2010).

Research & Development

The self-funded R&D effort before research tax-credit was Euro 686 million or 6.6% of revenue in 2009, slightly down compared to Euro 708 million (6.8% of revenue) in 2008. The decrease was mainly due to the tailing off of R&D development programs on the SaM146 engine and the A380 equipment. On the contrary, Research & Technology increased in Aerospace Propulsion to prepare the LEAP-X engine development. Spending also grew in optronics and navigation activities within Defence. Safran filed around 500 new patents in 2009, for a total of 13,000 active patents in its portfolio.

Outlook

Despite a slightly less favourable currency hedge, the Group expects full-year 2010 revenue to be similar to 2009 and is confident that recurring operating income should increase moderately at a targeted hedge rate of USD 1.46 to the Euro. Free cash flow is expected to represent approximately half of the recurring operating income.

The full-year 2010 outlook is based on the following underlying assumptions:

• A targeted hedged rate of USD1.46 to the Euro (currently achieved: USD1.47).
• A forecast 4-5% increase in global air traffic.
• A stabilization or slight decrease in original equipment commercial aviation business.
• A slight growth in sales in services, back ended (H2 2010).
• Strong and profitable growth for the Security business.
• On-going Safran+ plan to enhance profitability and reduce overheads.

Business commentary

Aerospace Propulsion

Full-year 2009 revenue declined by 2.2% at Euro 5,673 million on a reported basis, (2.4)% on a restated pro forma basis or (5.1)% on an organic basis, compared to the year-ago period.

OEM CFM56 engine deliveries at 1,263 units broadly matched record 2008 deliveries of 1,268 units, with 345 units delivered in the fourth quarter in 2009, a 35% increase from the fourth quarter of 2008 which was impacted by the Boeing strike. Net orders of 795 units were down from an historically high level in 2008, but the total CFM backlog remains very satisfactory with more than 5 years of production. Revenue from OEM helicopter engines was slightly down, as a result of negative volume and mix conditions although this was partly offset by better pricing terms. Space propulsion revenue was moderately up with higher deliveries of missile engines.

On a full-year 2009 basis, service revenue share significantly increased from 46.9% to 49.2% of Aerospace Propulsion revenue, benefiting from a robust contribution from military and helicopter engines, as well as from recent high-thrust civil engines. Worldwide CFM International spare parts revenue was down 4.6% in USD terms, highlighting a strong quarter to quarter volatility as experienced in previous crisis. The estimated* total number of shop visits for CFM-equipped civil aircraft decreased to 2,273 as compared to 2,415 in 2008. The related revenue impact was partly offset by a favourable mix towards a higher proportion of second generation engines with higher material revenue per shop visit. The second generation engines shop visits increased by more than 10% and, therefore growth in spares revenue is expected to resume at a healthy pace in due course. [(*) shop visit numbers are estimates; these can be revised marginally in the future as airlines finalise reports].

Full-year 2009 recurring operating income was Euro 628 million (11.1% of revenue), up 5.7% on a restated pro forma basis compared to Euro 594 million in 2008 (10.2% of revenue). This significant improvement despite a volatile aerospace environment and slightly lower volumes resulted from a strong military activity in spares, a tight control of fixed costs and purchasing costs, significant productivity improvements and a favourable currency impact. It also benefited from the ramp-up of recent Support-By-The-Hour maintenance contracts, primarily in helicopter engines.

Aircraft Equipment

The Aircraft Equipment segment reported full-year 2009 revenue of Euro 2,767 million, down 3.1% on a reported basis, (0.3)% on a restated pro forma basis or (4.8)% on an organic basis, compared to the year-ago period.

Labinal, Messier-Bugatti and Messier Services reported growth in revenue while other businesses saw a low single digit reduction in revenue. The large nacelle business benefited from a record high deliveries of A320 thrust reversers at 486 units and a continued ramp-up in deliveries of A380 nacelles (84 units this year), while the number of deliveries of small nacelles for business and regional jets fell to 321 units from 618 in 2008, a 48% volume drop. Deliveries of landing gear systems slipped by 17%, mainly in the business jet segment and with the phase-out of the A340 program, while Messier-Dowty delivered to Boeing the first units for its 787 Dreamliner. Messier-Bugatti continued to grow its installed base by 12% for a total of 4,100 aircraft and reinforced its #1 worldwide position with an estimated 47% market share on the sole fleet equipped with carbon brakes.

On a full-year 2009 basis, service revenue share slightly increased from 31.2% to 31.8% of Aerospace Equipment revenue, benefiting mainly from landing gear and braking systems.

Full-year 2009 recurring operating income was Euro 73 million (2.6% of revenue), up 17.7% on a restated pro forma basis compared to Euro 62 million in 2008 (2.2% of revenue). The improvement resulted from a favourable currency impact, a robust contribution from Messier Services on landing gears and from the ramp-up of large nacelles for Airbus. It was partially offset by weaker conditions in the regional and business jets segment, which notably impacted the nacelle business. The recurring operating income also included a Euro 15 million loss at completion on the B787 landing systems.

Defence

Full-year 2009 revenue was up 11.6% at Euro 1,061 million on a reported basis, 3.9% on a restated pro forma basis or 3.0% on an organic basis, compared to the previous year. Avionics revenue grew over 10% on a restated pro forma basis, reflecting the delivery ramp-up of guidance systems (AASM and Mistral missile programs) and strong service activity. Optronics revenue was flattish on a restated pro forma basis, with positive sales momentum in infrared binoculars and in land sight services.

The activity recorded very strong orders, in particular in optronics, boosting the backlog to almost 2 years of sales at end 2009.

Full-year 2009 recurring operating income at Euro 9 million (0.8% of revenue) included the impact of a Euro 35 million loss at completion on the A400M navigation systems, as well as the significant cost increment to create Safran Electronics. Consequently, it was down 77.5%, compared to a restated pro forma Euro 40 million (3.9% of revenue) in 2008.

Security

The Security activity reported full-year 2009 revenue of Euro 904 million, up 30.1% on a reported basis, 38.0% on a restated pro-forma basis or 11.4% on an organic basis, compared to the year-ago period. Organic growth was driven by identification solutions with the implementation of long-term government contracts in emerging countries and the deployment of biometric passports in France.

Full-year 2009 recurring operating income was Euro 55 million (6.1% of revenue), including a PPA impact (Purchase Price Allocation) of Euro (31) million. It doubled compared to restated pro-forma Euro 27 million (4.1% of revenue) in 2008 which included a PPA impact of Euro (8) million. The organic improvement in profitability resulted from a good contribution of identification solutions in emerging countries as well as from a tight control of fixed costs; while the positive volume effect in the Smart cards activity was offset by lower pricing conditions.

Newly acquired companies Sdu-I, Printrak and GE Homeland Protection had an impact on revenue of Euro 204 million in 2009:

• Twelve months of Sagem Identification (formerly Sdu-I): Euro 105 million.
• Nine months of MorphoTrak (formerly Printrak): Euro 32 million.
• Four months of MorphoDetection (formerly GE Homeland Protection): Euro 67 million.

These three companies had an impact on recurring operating income of Euro 21 million in 2009, or Euro 52 million before PPA.

In 2008, Sagem Identification which was consolidated for the last four months of the year had a revenue impact of Euro 24 million and an impact of Euro (1) million in recurring operating income.

Upcoming events

Q1 2010 revenue : April 22, 2010
Annual General Meeting : May 27, 2010
H1 2010 results : July 28, 2010

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Safran will host today a press meeting open to journalists only at 9:00 a.m. Paris time at Pavillon Kléber, 7 rue Cimarosa in Paris.

Safran will host today an analysts and investors meeting at 10:30 a.m. Paris time at Pavillon Kléber, 7 rue Cimarosa in Paris. The conference can also be accessed by call at +33 1 72 00 13 60 from France and +44 203 367 9457 from the UK. A replay will be available until March 8, 2010 at +33 1 72 00 15 01 (access code 269652#) and +44 203 367 9460 or +1 877 642 3018 (access code 269649#).

The press release, presentation and consolidated financial statements are available on the website at www.safran-group.com.

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Key figures

Notes

(1) Adjusted data In order to provide meaningful comparable information, the consolidated income statement has been adjusted for:

(i) the impact in financial income (loss) of the mark-to-market of foreign currency derivatives, in order to better reflect the economic substance of the Group’s overall foreign currency risk hedging strategy:

• Revenue net of purchases denominated in foreign currencies is measured using the effective hedging rate, i.e., including the costs of the hedging strategy;
• The recognition of the mark-to-market of unsettled hedging instruments at the closing date is neutralized.

(ii) the amortization charged against intangible assets relating to aeronautical programs, revalued at the time of the Snecma-Sagem merger in accordance with IFRS 3.

In 2009, the Group decided to change the method for reporting the adjustment concerning the mark-to-market of hedging instruments that were unsettled at the reporting date. Previously, only the "effective" portion of the mark-to-market of such instruments was deferred until settlement, with the "ineffective" portion recognized in adjusted financial income (loss). Given that the Group’s hedging strategy includes optional hedging instruments and optimization measures combined with highly volatile market inputs used to mark-to-market, this presentation does not appear to be appropriate to reflect the Group’s economic performance. Consequently, all mark-to market changes relating to unsettled hedging instruments at the closing date are neutralized.

2009 reconciliation between statutory consolidated statements and adjusted consolidated statements:

The reader is reminded that consolidated financial statements are audited by the Group’s statutory auditors, including Adjusted revenue and Adjusted profit from operations provided in the note to consolidated financial statements related to operating segments. Adjusted data, other than Adjusted revenue and Adjusted profit from operations, are verified with respect to an overall reading of the information that will be provided in the 2009 reference document.

The audit procedures on the consolidated financial statements have been completed. Audit opinion will be issued after the Supervisory board’s meeting on April 13, 2010, once verification of the board’s report and review of subsequent events after February 24, 2010 have been performed.

(2) Recurring operating income In order to better reflect the current economic performance, this subtotal named “recurring operating income” excludes income and expenses which are largely unpredictable because of their unusual, infrequent and/or material nature such as: impairment losses/reversals, capital gains/losses on disposals of operations and other unusual and/or material non operational items.

(3) 2008 restated pro forma data The restated pro forma data is the 2008 restated data (see Note (4)) for which the 3 months of Monetel business (Security activity) sold in April 2008 is excluded. The Monetel business contributed for Euro 40 million in revenue and Euro 7 million in profit from operations in 2008.

[4] 2008 restated data The restated data reflects:

• The reclassification of certain activities further to the internal reorganization realized between the branches in the first quarter 2009.
• The reclassification of the financial component of the pension costs (Euro 14 million in 2008) from profit from operations to financial result (change in presentation decided in 2009).
• The change in method for reporting the adjustment concerning the mark-to-market of hedging instruments that were unsettled at the reporting date. Refer to Note (1) for more details.

* * * * *

Safran is a leading international high-technology group with three core businesses: Aerospace (propulsion and equipment), Defence and Security. Operating worldwide, the Safran group has 54,900 employees and generated revenue of 10.4 billion euros in 2009. Working alone or in partnership, Safran holds world or European leadership positions in its core markets. The Group invests heavily in Research & Development to meet the requirements of changing markets, including expenditures of 1.1 billion euros in 2009. Safran is listed on NYSE Euronext Paris and is part of the SBF 120 and Euronext 100 indexes. For more information, www.safran-group.com

PRESS RELEASE

20.04.2010
Safran first quarter revenue 2010 in line with full-year outlook for stable revenue

All figures in this press release represent Adjusted(1) data.

Key numbers for the first quarter 2010

• First-quarter 2010 revenue was Euro 2,426 million, down 2.5% on a reported basis, down 3.0% on an organic basis, compared to a first quarter 2009 base which was strong in aerospace.
• Solid revenue contribution from Defence (Optronics) and Security (Detection).
• Aerospace Propulsion reported fairly stable revenue. Decline in revenue of Aircraft Equipment was primarily attributable to lower volumes in nacelles and landing systems, in particular in business and regional jet segments and as a consequence of A380 aircraft delivery slippages.
• Services (spares and MRO) share of revenue remained stable at 48% in Aerospace Propulsion and increased to 34% in Aircraft Equipment.
• Outlook for full-year 2010 is confirmed.

Key business highlights for the first quarter 2010

• Safran inaugurated two new plants in Queretaro, Mexico to produce parts for the CFM56 engines powering the B737, and main parts for the landing gear on the A320, A330 and B787.
• Positive trends in services for Aerospace Equipment. Messier-Bugatti carbon brakes chosen to retrofit Aeromexico B737NG fleet. Aircelle signed a comprehensive thrust reverser maintenance contract for Trent700 engines on Garuda Indonesia’s A330 jetliners.
• Continued commercial momentum in Defence, notably in portable optronics equipment such as infrared binoculars and sight equipment.
• Security driven by cutting-edge technologies: TSA-certified explosive trace detection system now commercially available for identification of complex explosive substances. Safran announced the deployment of the world’s first automatic narcotics detection system at London’s Heathrow Airport. The Group was also selected by Israeli Airport Authority for new generation integrated Computed Tomography and diffraction X-ray inspection.

Paris, April 20, 2010 - Safran (NYSE Euronext Paris: SAF) today reported its revenue for the first quarter of 2010.

For the first quarter of 2010, Safran’s revenue was Euro 2,426 million, compared to Euro 2,487 million in the year-ago period, a 2.5% year-over-year decrease. Group revenue organically declined by 3.0%. Organic revenue was determined by deducting from 2010 figures the contribution of Security activities acquired in 2009 and by applying constant exchange rates. Hence, the following calculations were applied:

Acquisitions had an impact of Euro 51 million on revenue in the first quarter of 2010, which mainly included the consolidation of:

• MorphoTrak (formerly Printrak): Euro 8 million
• MorphoDetection (formerly GE Homeland Protection): Euro 44 million

The adverse currency impact of Euro (37) million for first-quarter 2010 was mostly a combination of a mild deterioration in the Group’s hedged rate (USD1.46 to the Euro vs. USD1.45 in the year ago period) and a significant deterioration of the average spot rate (USD1.38 to the Euro vs. USD1.32) on sales which are naturally hedged (sales and purchases in the same currency).

Executive commentary

CEO Jean-Paul Herteman commented:

“ Safran recorded first quarter revenue in line with our annual forecast of broadly stable sales in 2010. As expected, the aerospace market remained volatile in the first three months of the year. However we believe that improvements are definitely on the horizon: renewed traffic growth for passenger and freight, aircraft manufacturers plans to increase narrowbody airplanes production rates in outer quarters and a return to service of a significant number of CFM56-equipped aircraft.

Based on the performance for the first quarter of the year and current positive trends in our markets, we confirm our full-year guidance for 2010 and our renewed confidence in our outlook for 2011 and beyond. ”

Business commentary

Aerospace Propulsion

Revenue for the first quarter of 2010 was down 1.7% at Euro 1,311 million, and in fact fairly stable on an organic basis (-0.4%), compared to the year-ago period. Revenue evolution was driven by a higher pace of CFM56 and space engines deliveries, as well as a fast-growing aftermarket activity in both military engines and high-thrust recent civil engines. It was offset by a mildly adverse currency impact, lower helicopter engine deliveries and CFM56 spare parts revenue compared to an exceptionally high first quarter last year.

OE CFM56 engine deliveries were up 8% at 324 units compared to 301 units in first quarter 2009 which represented a low volume base following the Boeing strike. CFM56 orders saw a robust first-quarter 2010 at 282 units. OE high-thrust engines deliveries were up 4% driven by the commercial success of the GE115 engine that powers the B777 aircraft. OE deliveries were slightly down in both military and helicopter engines.

For the first quarter 2010, service revenue share remained stable at 48% of Aerospace Propulsion sales, with a robust contribution from military, as well as from high-thrust recent civil engines. Worldwide CFM International spare parts revenue was down 25% in USD terms, but compared to a very strong first quarter 2009.

With international traffic growth in the high single digits for passenger and in the mid twenties for freight in first-quarter 2010, the total number of grounded planes equipped with CFM56 engines reduced from 468 at end of December 2009 to 416 at the end of March 2010, confirming a return to active service of a significant number of CFM56-equipped aircraft during the quarter.

Aircraft Equipment

The Aircraft Equipment segment reported first-quarter 2010 revenue of Euro 633 million, down 9.6%, or 6.5% lower on an organic basis, compared to the year-ago period. The decline in revenue was primarily attributable to a continuing decline starting in second-quarter 2009 of the business and regional jet segments which impacted the nacelle, landing system and harnessing businesses. The nacelle activity recorded a significant drop in small nacelles deliveries (down 38%), as well as lower deliveries of A380 nacelles (9 units in the first quarter 2010 compared to 19 nacelles in the year-ago period) due to aircraft delivery slippages. A volume drop of 26% in landing systems deliveries, notably due to a weak business jet segment, was recorded over the period. These impacts were partially mitigated in first-quarter 2010 by a solid performance in services (landing gear, brakes, wheels) in both military and civil activities.

For the first three months of 2010, service revenue share increased to 34% of Aerospace Equipment sales, benefiting from a strong contribution from landing gear and carbon-brakes systems.

Defence

First quarter 2010 revenue was up 2.9% at Euro 245 million, showing 3.7% organic growth, compared to the same period last year. The performance was mainly driven by 2-digit growth in the Optronics activity on the basis of a robust order backlog (Felin soldier integrated equipment suites, long-range infra-red goggles). This trend was partly mitigated by a mild decline in the Avionics activity with less volume in navigation programs.

Security

The Security activity reported three-month 2010 revenue of Euro 223 million, up 9.3% on a reported basis, which was partly due to the consolidation of Printrak and GE Homeland Protection. Organic slowdown of 17.5% was registered as a result of the expected phasing of certain long-term government contracts in the Identification activity, notably the contract related to the electoral census of the population for the Ivory Coast and the passport contract in France. The smart cards activity recorded slightly growing revenue driven by a healthy volume increase in the banking and telecommunication market segments.

Upcoming events

• Annual General Meeting : May 27, 2010
• H1 2010 Results : July 28, 2010

Safran will host today an audio webcast for analysts and investors at 8:00 a.m. Paris time (7:00 a.m. London), which can be accessed at +33 1 72 26 06 12 from France and at +44 161 601 8912 from other countries. A digital replay will be available until July 20, 2010 at +33 1 72 28 01 39, +44 207 075 3214 or +1 866 828 2261; access code is 317008#.

Key figures

Notes

(1) Adjusted Data To reflect the Group’s actual economic performance and enable it to be monitored and benchmarked against competitors, Safran prepares an adjusted income statement alongside its consolidated financial statements.

Particularly, Safran recognizes, all changes in the fair value of its foreign currency derivatives in “financial income (loss)”, in accordance with the provisions of IAS 39 applicable to transactions not qualifying for hedge accounting.

Accordingly, Safran’s consolidated income statement is adjusted for the impact in financial income (loss) of the mark-to-market of foreign currency derivatives, in order to better reflect the economic substance of the Group’s overall foreign currency risk hedging strategy:

• revenue net of purchases denominated in foreign currencies is measured using the effective hedging rate, i.e., including the costs of the hedging strategy;
• the recognition of the mark-to market of unsettled hedging instruments at the closing date is neutralized.

Safran is a leading international high-technology group with three core businesses: Aerospace (propulsion and equipment), Defence and Security. Operating worldwide, the Safran group has 54,900 employees and generated revenue of 10.4 billion euros in 2009. Working alone or in partnership, Safran holds world or European leadership positions in its core markets. The Group invests heavily in Research & Development to meet the requirements of changing markets, including expenditures of 1.1 billion euros in 2009. Safran is listed on NYSE Euronext Paris and is part of the SBF 120 and Euronext 100 indexes.

PRESS RELEASE

01.06.2010
Ordinary and extraordinary shareholders’ meeting - All of the resolutions were adopted Dividend payment of €0.38 per share

Paris, May 27, 2010

Safran’s Ordinary and Extraordinary Shareholders’ Meeting, chaired by Mr Francis Mer, took place today at the CNIT conference center in Paris La Défense on May 27, 2010.

All of the resolutions submitted to shareholders for approval at the meeting were adopted by a large majority.

Safran shareholders approved the 2009 consolidated financial statements and decided on the payment of a dividend of €0.38 per share.

Financial agenda

• Ex-dividend : June 1st, 2010
• Payment of the dividend : June 4, 2010
• 2010 interim results : July 28, 2010

* * * * *

Safran is a leading international high-technology group with three core businesses: Aerospace (propulsion and equipment), Defence and Security. Operating worldwide, the Safran group has 55,000 employees and generated sales exceeding 10.4 billion euros in 2009. Working alone or in partnership, Safran holds world or European leadership positions in its core markets. The Group invests heavily in Research & Development to meet the requirements of changing markets, including expenditures of 1.1 billion euros in 2009. Safran is listed on NYSE Euronext Paris and its share is part of the SBF 120 and Euronext 100 indexes.

PRESS RELEASE

11.07.2010
Statement from Safran

Paris, 11 July 2010

Safran confirms that a letter was addressed to the Chairman of the Supervisory Board of Zodiac proposing that the two groups examine the merits of bringing their activities together.

At this point, Safran acknowledges the reaction of Zodiac’s Board while remaining convinced of the obvious logic from an industrial and a strategic perspective, for all stakeholders involved, of bringing the businesses together in the context of the inevitable trend towards consolidation of first tier aerospace equipment firms.

* * * *

Safran is a leading international high-technology group with three core businesses: Aerospace (propulsion and equipment), Defence and Security. Operating worldwide, the Safran group has 55,000 employees and generated sales exceeding 10.4 billion euros in 2009.

Working alone or in partnership, Safran holds world or European leadership positions in its core markets. The Group invests heavily in Research & Development to meet the requirements of changing markets, including expenditures of 1.1 billion euros in 2009. Safran is listed on NYSE Euronext Paris and its share is part of the SBF 120 and Euronext 100 indexes.

PRESS RELEASE

28.07.2010
Safran reports improved half-year results for 2010 with a recurring operating margin of 8.2% of revenue

Leading to an upward revision of full-year outlook.

All figures in this press release represent Adjusted(1) data. Note that Adjusted income statement now excludes the PPA entries related to all major acquisitions, notably in Security (Euro 23 million in first-half 2010, compared to Euro 7 million in first-half 2009). Restated full-year 2009 and first-half 2009 income statements are provided in the Annex. Please also refer to definitions and reconciliation between H1 2010 consolidated income statement and adjusted income statement provided in the Notes.

Key numbers for first-half 2010

• First-half 2010 adjusted revenue was Euro 5,197 million, up 0.9% year-on-year, or -2.2% on an organic basis.
• Adjusted recurring[2] operating income at Euro 428 million (8.2% of revenue)) at a hedge rate of USD1.45 to the Euro, up 23% year-on-year (based on the current definition of Adjusted income; i.e. excluding PPA). There were no one-off items, therefore profit from operations was Euro 428 million.
• Adjusted net income - group share up 8% from H1 2009 restated at Euro 223 million (Euro 0.56 per share).
• Free cash flow generation of Euro 188 million leading to net debt of Euro 573 million as of June 30, 2010, despite high negative effect of French MoD payment delays which rose by Euro 241 million since December 31, 2009.
• Full-year 2010 guidance upgraded : Safran expects revenue to be similar to 2009, recurring operating margin to trend towards the 8% range (at a targeted hedge rate of USD 1.44 to the Euro) and free cash flow to represent at least half of the recurring operating income (assuming that French MoD payment delays are significantly resorbed).

Key business highlights for first-half 2010

• Safran inaugurated four new sites to increase its industrial efficiency : in France, a new Turbomeca facility in Bordes to produce helicopter engines and a new R&D centre in Massy to offer world-class expertise in electronics and safety-critical software, as well as two new plants in Queretaro, Mexico to produce parts for CFM56 engines powering the B737, and main parts for landing gear on the A320, A330 and B787.
• The Aerospace Propulsion service share of revenue remained globally stable at 49.0%, softness of CFM56 aftermarket being offset by strengths in military, helicopter and high-thrust engines services. The service share in Aircraft Equipment slightly increased from 31.3% to 32.6% of revenue..
• CFM International announced new orders for more than 825 CFM56 engines, as well as associated long-term services contracts, at 2010 Farnborough Air Show with a total value of more than $7.3 billion - list price (LAN Airlines, Air Lease Corporation, Air China, GECAS, Air Arabia, China Eastern Airlines, …).
• Continued commercial momentum in Defence, notably in portable optronics equipment such as infrared binoculars and sight equipment.
• New contract wins in Security : Secure travel documents for Dutch government, a turnkey biometric solution for Malaysia’s ID document system, a secure driver license system for the state of North Carolina (USA).

* * * * *

Paris, July 28, 2010 - The Supervisory Board of Safran (NYSE Euronext Paris: SAF) chaired by Francis Mer met in Paris on July 27, 2010. The financial statements for the first-half 2010 approved by the Management Board were submitted to the Supervisory Board.

Executive commentary

CEO Jean-Paul Herteman commented:

“ Safran’s environment continued to improve in the first half of 2010. We saw encouraging economic signs, including increases in airline passenger traffic and freight loadings, decreases in number of parked aircraft and decisions from airframers to increase narrowbody airplanes production rates in outer quarters. In Security, public investments in people identification and in luggage checking reinforcements continued to increase.

We are increasing the Group’s operating margins towards the 8% range and realizing benefits from over two years of Safran+ cost-savings. The improvement in the Aircraft Equipment branch was particularly encouraging as it reflects the turnaround in the nacelle activity. We are seeing particularly solid results from Aerospace Propulsion thanks to good cost control, strength in military, helicopter and high-thrust engines services despite continued softness in CFM56 aftermarket. We are also originating new business in Security at attractive margins.

Our first-half performance leads us to review our full-year ambitions, the balance of opportunities versus the challenges is such that some upside is likely. We will continue to optimize our hedging portfolio on a 3-year rolling basis and maintain our cost reduction effort. We are confident we are on track for solid earnings growth in future years. ”

First-half 2010 results

Safran delivered solid operational performance in first-half 2010 enabling to upgrade the full-year outlook.

Slightly growing revenue. For first-half 2010, Safran’s revenue was Euro 5,197 million, compared to a Euro 5,149 million in the same period a year ago, a 0.9% year-on-year increase. Group revenue declined by 2.2% organically.

First-half 2010 revenue increased by Euro 48 million on a reported basis, highlighting growth of nearly 10% in the Defence business (notably in optronics), and in Security (primarily in detection). It also resulted from a mild decline in aerospace original equipment revenue while services revenue remained resilient. On an organic basis, revenue declined by Euro 114 million as a result, essentially of the anticipated lower revenue of a particularly large Identification program in the Ivory Coast now tailing off.

Organic revenue was determined by deducting from 2010 figures the contribution of Security activities acquired in 2009 when compared to 2009 scope of consolidation and by applying constant exchange rates. Hence, the following calculations were applied:

The favourable currency impact in revenue of Euro 38 million for first-half 2010 reflected a global positive translation effect on the revenue exposed to foreign currencies, notably in USD, Australian dollar and Brazilian real. It was partly offset by a negative transaction impact with a mild deterioration in the Group’s hedged rate (USD1.45 to the Euro vs. USD1.43 in the year ago period).

Recurring operating margin up by 1.5 point. For first-half 2010, Safran’s recurring operating income was Euro 428 million (8.2% of revenue), up 23.3% compared to first-half 2009 restated figure of Euro 347 million, 6.7% of revenue. After taking into account the slight adverse currency impact (Euro 6 million) and positive impact from acquisitions (Euro 23 million), organic improvement was Euro 64 million or 18.4% year-over-year.

All four activities contributed to this solid improvement realizing the benefits of over two years of Safran+ savings, as well as SG&A, R&D and productivity improvements. Aerospace services and detection in security were the most buoyant businesses, while losses were significantly reduced in the nacelle activity.

There were no one-off items during the first-half 2010 period:

Adjusted net income - group share grew by 8% year-over-year. The adjusted net income attributable to equity holders of the parent was Euro 223 million or Euro 0.56 per share, compared to Euro 207 million (Euro 0.52 per share) in first half-2009 restated. In addition to the rise in recurring operating income, this improved performance reflects:

• Net financial expense was Euro 136 million, including Euro 20 million of cost of net debt.
• Tax expense came in at Euro 70 million.

The reconciliation between H1 2010 consolidated income statement and adjusted income statement is provided and commented on in the Notes.

balance sheet and cash flow

Slight increase in net debt. The net debt position was Euro 573 million as of June 30, 2010 compared to Euro 498 million as of December 31, 2009, a slight increase of Euro 75 million. Free cash flow generation of Euro 188 million was driven by the high level of operating profitability (cash from operations of Euro 573 million) offset by an increase in working capital needs of Euro 131 million. The negative change in working capital resulted from the payment delays from the French Ministry of Defence of Euro 269 million at June 30, 2010 (vs. Euro 28 million at December 31, 2009) due to a new IT system implementation. A dividend of Euro 152 million was paid in June (€0.38 per share).

With cash and marketable securities of Euro 1.4 billion and the availability of secured and undrawn facilities amounting to Euro 1.1 billion as of June 30, 2010, Safran is adequately funded.

Research & Development

The self-funded R&D effort before research tax credit was Euro 291 million or 5.6% of revenue in first-half 2010, stable compared to first-half 2009. It reflects the tailing off of R&D development programs on the SaM146 and TP400 engines offset by new developments taking place on LEAP-X and Silvercrest engines. The impact on operating income after tax credit was down Euro 36 million compared to last year, as a result of higher tax credit, lower depreciation and amortization and higher capitalized expenses.

Outlook

Bearing in mind the uncertainty of the timing of a recovery for CFM aftermarket and a slightly less favourable USD currency hedge (targeted hedge rate of USD 1.44 to the Euro vs. USD 1.42 in 2009), first-half solid performance leads to an upward revision of the full-year 2010 outlook (based on the current definition of Adjusted income; i.e. excluding PPA):

• Revenue is expected to be similar to 2009.
• Recurring operating margin is expected to improve towards the 8% range (at a targeted hedge rate of USD 1.44 to the Euro).
• Free cash flow is expected to represent at least half of the recurring operating income (assuming that French MoD payment delays are significantly resorbed).

The full-year 2010 outlook is based on the following underlying assumptions:

• A 5%+ increase in global air traffic.
• A stabilization in original equipment commercial aviation business.
• A moderate growth in sales in aerospace services, back ended (H2 2010).
• Strong and profitable growth for the Security business.
• On-going Safran+ plan to enhance profitability and reduce overheads.

Currency hedges

The Group has put in place currency hedges for the next 3 years. At July 26, 2010, the firm hedging portfolio amounted to USD 13.7 billion. Taking advantage of recent Euro weakness, the portfolio has been optimized to reduce operational headwinds in 2010 (new target of USD 1.44 to the Euro compared to USD 1.46 previously) and increase the favourable impact in 2012 and 2013. The mid-term target was lowered to USD 1.30 to the Euro versus a previous objective of USD 1.35 providing long term opportunity for stronger performance.

Business commentary

Aerospace Propulsion

First-half 2010 revenue was flat at Euro 2,763 million, or a small decline of 0.7% on an organic basis, compared to the year-ago period revenue at Euro 2,769 million. Revenue evolution resulted from a higher pace of CFM56 and space & missile engine deliveries, as well as a fast-growing aftermarket activity in military, helicopter and recent high-thrust civil engines. It was offset by lower helicopter and military engine deliveries and continued softness in CFM56 spare parts revenue.

OEM CFM56 engine deliveries at 636 units were up by 39 units compared to the same period a year ago. After a successful Farnborough air show, total 2010 CFM56 orders now stand at 1,135 engines (July 21). Revenue from OEM helicopter engines was slightly down, as a result of negative volume and mix conditions although this was partly offset by better pricing terms. Space & missile propulsion revenue was particularly high in the first half of the year. SaM146 regional jet engine received EASA certification on June 23, paving the way for Sukhoi Superjet 100 entry into service and the certification of the TP400 engine for the A400M is progressing well.

On a first-half 2010 basis, service revenue share was flat at 49.0% of Aerospace Propulsion revenue, benefiting from a robust contribution from aftermarket: military and helicopter engines, as well as from recent high-thrust civil engines. The aftermarket revenue growth was offset by worldwide CFM International spare parts revenue down 25% in USD terms, highlighting soft and volatile airlines spending in maintenance. The estimated* total number of shop visits for CFM-equipped civil aircraft decreased to 1,011 as compared to 1,174 in first-half 2009. It is generally expected that a reversal of this trend should occur in late 2010 or early 2011. (*) shop visit numbers are estimates; these can be revised marginally in the future as airlines finalise reports.

First-half 2010 recurring operating income was Euro 311 million (11.3% of revenue), up 15% on a restated basis compared to Euro 271 million in the year-ago period (9.8% of revenue). This significant improvement despite a soft CFM aftermarket environment resulted from a strong military and high-thrust engines activity in spares and the ramp-up of recent Support-By-The-Hour maintenance contracts, primarily in helicopter engines. Profits were also driven by R&D efficiency, Safran+ cost reduction efforts and the benefits of a more efficient production tool on higher OE CFM56 volumes. The currency impact had a slight adverse impact on profitability.

Aircraft Equipment

The Aircraft Equipment segment reported first-half 2010 revenue of Euro 1,374 million, down 2.8%, or (4.4)% on an organic basis, compared to the year-ago period.

The decline in revenue was primarily attributable to a continuing decline of the business and regional jet segments which impacted the nacelle, landing system and harnessing businesses. The nacelle activity recorded a significant drop in small nacelles deliveries (down 27%), as well as lower deliveries of A380 nacelles (28 units in the first-half 2010 compared to 41 nacelles in the year-ago period) due to aircraft delivery slippages at the end of 2009. Other large nacelle business benefited from higher deliveries, notably driven by the A330 and A320. The first-half 2010 saw a solid performance in services (landing gear, brakes, wheels) in both military and civil activities.

On a first-half 2010 basis, service revenue share slightly increased from 31.3% to 32.6% of Aerospace Equipment revenue, benefiting mainly from landing and braking systems.

First-half 2010 recurring operating income was Euro 68 million (4.9% of revenue), up 45% on a restated basis compared to Euro 47 million in the year-ago period (3.3% of revenue). The improvement resulted from tangible turnaround in the nacelle activity, notably lower production costs on A380 and a favourable product mix (A330). It was also driven by a robust contribution from Messier Services on landing systems, and better volume and conditions on B787 harnessing activity.

Defence

First-half 2010 revenue was up 9.2% at Euro 558 million, or up 8.7% on an organic basis, compared to the previous year. The performance was mainly driven by 2-digit revenue growth in the Optronics activity on the basis of a robust order backlog (Felin soldier integrated equipment suites for French Army, long-range infra-red goggles on export markets). This trend was partly mitigated by a flattish Avionics revenue with less volume in navigation programs due to continuing production difficulties.

First-half 2010 recurring operating income at Euro 28 million (5.0% of revenue) was up compared to a restated Euro 19 million (3.7% of revenue) in first-half 2009 thanks to higher profits in Optronics while Avionics continued to experience industrialization issues.

Security

The Security activity reported first-half 2010 revenue of Euro 479 million, up 10.4% compared to the year-ago period. On an organic basis, it is down 17.7% compared to first-half 2009, but up 13.3% compared to first-half 2008 reflecting the lumpiness of this business. The newly-acquired detection business had a robust performance in explosive detection solutions in the aviation market and made progress in new markets such as military and critical infrastructure. Revenue growth also benefited from a favourable translation currency impact from Brazilian real and Australian dollar. Organic decline was mainly due, as anticipated, to the very low revenue booked for the identification contract in Ivory Coast which compares unfavourably to a significant level in first-half 2009. The smart cards activity record double-digit growth in volume, partly mitigated by pricing pressure.

First-half 2010 recurring operating income was Euro 61 million (12.7% of revenue), up 53% compared to Euro 40 million (9.2% of revenue) in the year-ago period. The incremental contribution of identification solutions and smart cards activity was fully offset by the impact on profits of lower revenue of the identification government contract in Ivory Coast. The improvement was therefore exclusively due to the contribution of newly-acquired activities.

Upcoming events

Q3 2010 revenue : October 22, 2010
FY 2010 results : February 24, 2011

* * * * *

Safran will host today a conference call open to analysts and journalists at 9:00 am which can be accessed at +33 1 72 00 13 68 from France and +44 203 367 9459 from the UK. A replay will be available until August 11, 2010 at +33 1 72 00 15 00, +44 203 367 9460 and +1 877 642 3018 (access code 270406#).

The press release, presentation and consolidated financial statements are available on the website at www.safran-group.com.

* * * * *

Key figures

Notes

(1) Adjusted data To reflect the Group’s actual economic performance and enable it to be monitored and benchmarked against competitors, Safran prepares an adjusted income statement alongside its condensed interim consolidated financial statements.

Safran’s interim consolidated income statement has been adjusted for the impact of:

• purchase price allocations with respect to material business combinations. Since 2005, this restatement concerns the amortization charged against intangible assets relating to aeronautical programs that were revalued at the time of the Sagem-Snecma merger. With effect from the first-half 2010 interim financial statements, the Group has decided to restate the impact of purchase price allocations for all material business combinations (and not only those relating to the Sagem-Snecma merger). In particular, this concerns the amortization of intangible assets recognized at the time of the acquisition, and amortized over extended periods, justified by the length of the Group’s business cycles;

• the mark-to-market of foreign currency derivatives, in order to better reflect the economic substance of the Group’s overall foreign currency risk hedging strategy:
   revenue net of purchases denominated in foreign currencies is measured using the effective hedging rate, i.e., including the costs of the hedging strategy,
   the recognition of all mark-to-market changes on non-settled hedging instruments at the closing date is neutralized, including the “ineffective” portion with effect from the publication of the 2009 financial statements, given that the Group’s hedging strategy includes optional hedging instruments and optimization measures combined with highly volatile market inputs used to mark to market.

H1 2010 reconciliation between consolidated income statement and adjusted consolidated income statement:

H1 2010 consolidated net result was a net loss of Euro 973 million, highly impacted by the large adverse change in the mark-to-market of derivative hedging instruments (Euro 1.8 billion). This change in mainly due to the high volatility observed on the Euro/USD exchange rate. The hedging instruments portfolio was marked-to-market using 1.23 at June 30, 2010 closing exchange rate, against 1.44 as of December 31, 2009.

Readers are reminded that only the interim consolidated financial statements are reviewed by the Group’s Statutory Auditors. The interim consolidated financial statements include revenue and operating profit indicators set out in the adjusted data section of Note 5, “Segment information”. Adjusted financial data other than the data provided in Note 5, “Segment information”, are subject to verification procedures applicable to all of the information provided in the interim activity report.

(2) Recurring operating income In order to better reflect the current economic performance, this subtotal named “recurring operating income” excludes income and expenses which are largely unpredictable because of their unusual, infrequent and/or material nature such as: impairment losses/reversals, capital gains/losses on disposals of operations and other unusual and/or material non operational items.

* * * * *

Safran is a leading international high-technology group with three core businesses: Aerospace (propulsion and equipment), Defence and Security. Operating worldwide, the Safran group has 55,000 employees and generated sales exceeding 10.4 billion euros in 2009. Working alone or in partnership, Safran holds world or European leadership positions in its core markets. The Group invests heavily in Research & Development to meet the requirements of changing markets, including expenditures of 1.1 billion euros in 2009. Safran is listed on NYSE Euronext Paris and its share is part of the SBF 120 and Euronext 100 indexes. For more information, www.safran-group.com

Annex

As a consequence of the changes in definition and in presentation of Adjusted data as of December 31, 2009 and June 30, 2010, the full-year and first-half 2009 adjusted income statements have been restated in order to provide comparable data for future results. These restatements aim to meet investors expectations and provide better transparency.

In the first half 2010, the Group decided to adjust its consolidated income statement for the impacts of the purchase price allocation entries for all major business combinations (especially those related to the acquisitions in the Security business) and not only those related to the Sagem-Snecma merger. In accordance with IFRS 3 and IFRS 3R standards, the Group recognizes, among other impacts, material intangible assets with a long useful life, justified by the long economic cycles of the Group’s activities, what doesn’t enable to reflect the Group’s actual economic performance and be benchmarked against competitors.

In 2009, the Group decided to change the method for reporting the adjustment concerning the mark-to-market of hedging instruments that were unsettled at the reporting date. Previously, only the "effective" portion of the mark-to-market of such instruments was neutralized until settlement, with the "ineffective" portion recognized in adjusted financial income (loss). Given that the Group’s hedging strategy includes optional hedging instruments and optimization measures combined with highly volatile market inputs used to mark to market, this presentation does not appear to be appropriate to reflect the Group’s economic performance. Consequently, all mark-to market changes relating to unsettled hedging instruments at the closing date are neutralized. The published adjusted 2009 half-yearly consolidated income statement didn’t take into account this change in the method.

As from the 2009 annual reporting period, the Group decided to present the financial component for pensions within financial items and no longer as an operational item. The published 2009 half-yearly consolidated and adjusted income statements didn’t reflect this change in presentation.

As from the 2009 annual reporting period, the Group decided to present an intermediary sub-total, “recurring operating income” within the operating income for a better view of the Group’s operating performance. This sub-total excludes income and expenses which are largely unpredictable because of their unusual, infrequent and/or material nature. This sub-total was not presented in the published 2009 half-yearly consolidated financial statements.

To summarize, first-half and annual 2009 adjusted results which shall serve as a basis of comparison have been restated for:

(i) Purchase price allocation entries impacts for major acquisitions (especially in the Security business). (ii) The change in presentation related to the financial component of pension charges. (iii) The “ineffective” portion of the mark-to-market of unsettled derivatives hedging instruments. (iv) The presentation of a “recurring operating income” sub-total.

KEY ADJUSTED FIGURES: H1 2009 RESTATED

H1 2009 reconciliation between consolidated income statement and adjusted consolidated income statement.

KEY ADJUSTED FIGURES: FY 2009 RESTATED

FY 2009 reconciliation between consolidated income statement and adjusted consolidated income statement.

PRESS RELEASE

30.08.2010
Statement from Safran

Paris, 30 August 2010

Following certain information published in the press this morning, Safran would like to reiterate the statements made in its press release of 11 July (see below), and states that the Group is not in the process of preparing an offer for Zodiac.

Safran indicates that there have been no new developments since the previous press release. The Group remains convinced of the industrial and strategic logic of bringing together the activities of both groups, for all stakeholders involved.

From the press release issued by Safran on 11 July 2010:

Safran confirms that a letter was addressed to the Chairman of the Supervisory Board of Zodiac proposing that the two groups examine the merits of bringing their activities together.

At this point, Safran acknowledges the reaction of Zodiac’s Board while remaining convinced of the obvious logic from an industrial and a strategic perspective, for all stakeholders involved, of bringing the businesses together in the context of the inevitable trend towards consolidation of first tier aerospace equipment firms.

* * * *

Safran is a leading international high-technology group with three core businesses: Aerospace (propulsion and equipment), Defence and Security. Operating worldwide, the Safran group has 55,000 employees and generated sales exceeding 10.4 billion euros in 2009. Working alone or in partnership, Safran holds world or European leadership positions in its core markets. The Group invests heavily in Research & Development to meet the requirements of changing markets, including expenditures of 1.1 billion euros in 2009. Safran is listed on NYSE Euronext Paris and its share is part of the SBF 120 and Euronext 100 indexes.

PRESS RELEASE

14.01.2010
Club Sagem has informed Safran that it will not extend the collective agreement for ownership of Sagem (now Safran) shares which expires in March 2010

Paris, January 14, 2010

Club Sagem has informed Safran that the collective lock-up period for ownership of Sagem (now Safran) shares, which was signed on March 29, 2004 between Club Sagem and 3,386 employees or their beneficiaries, will not be extended beyond its initial six-year duration which expires on March 29, 2010. At that date, each party will recover its ability to manage its share holding as it sees fit.

According to data supplied by Club Sagem and to the best of its knowledge, this agreement is estimated to represent 8.6% of Safran’s equity and 13.4% of voting rights at December 31, 2009.

To date and to the knowledge of the group, there are no other lock-up periods that are due to expire in the years to come, which could make a significant amount of shares available. Indeed, shares becoming available upon the maturity of group savings plans that are reserved for employees* represent an annual total of less than 1% of equity.

(*) Company mutual funds available to all French companies within the group, in particular, those implemented by the former Snecma and the former Sagem.

* * *

Safran is a leading international high-technology group with three core businesses: Aerospace (propulsion and equipment), Defence and Security. Operating worldwide, the Safran group has 54,500 employees and generated sales exceeding 10 billion euros in 2008. Working alone or in partnership, Safran holds world or European leadership positions in its core markets. The Group invests heavily in Research & Development to meet the requirements of changing markets, including expenditures of 1.2 billion euros in 2008. Safran is listed on NYSE Euronext Paris and is part of the SBF 120 and Euronext 100 indexes. For more information, www.safran-group.com

PRESS RELEASE

20.09.2010
Safran enters into a definitive agreement with L-1 Identity Solutions for the purchase of L-1 biometrics and ID management solutions businesses

Paris, France, September 20 2010 - Safran (NYSE Euronext Paris: SAF) announced today that it has entered into a definitive agreement with L-1 Identity Solutions (NYSE: ID), a leading identity management provider in the United States, for Safran to acquire the operating and holding company of L-1 and its biometric and enterprise access solutions, secure credentialing solutions and enrollment services businesses, for a total cash amount of USD 1.09 billion. These businesses had 2009 revenue of USD 436 million and recorded a backlog of USD 1.1 billion at end of 2009. The transaction would create an industry-leading provider of solutions for the fast-growing high-tech homeland security market and generate strong growth in revenue and earnings, while yielding significant operating synergies.

Prior to this agreement and as a condition to the transaction, L-1 entered into a definitive agreement to sell its government consulting services business for USD 295 million to a third party, and therefore this business would be excluded from the transaction with Safran.

Overview of the transaction
Under the terms of the agreement with L-1, Safran would acquire 100 % of L-1’s shares, with the following characteristics:

• L-1 shareholders would receive USD 12.00 per L-1 share in cash, an implied premium of 31.2 % over L-1’s 30-day average closing price of USD 9.14 for the period ending on September 17 2010;
• The estimated Enterprise Value of the business acquired by Safran is USD 1.19 billion, taking into account L-1’s estimated net debt at closing of approximately USD 100 million which includes the cash proceeds from the prior sale of the government consulting services business;
• The run-rate operating cost synergies are expected to represent approximately USD 30 million, which would be fully realized within 18 months from the closing of the transaction;
• The transaction, thanks to operating synergies, is expected to be accretive to Safran’s earnings from year one, excluding non cash and one-off items and purchase accounting adjustments (PPA);
• Safran intends to fully finance the acquisition with existing cash on hand; and
• The boards of directors of both L-1 and Safran have unanimously approved the transaction.

Creates an industry-leading provider of solutions for hightech homeland security
Following the closing, Safran intends to operate L-1 as part of its existing security business, Morpho, in accordance with US national security regulation, to create an industry-leading provider of solutions for high tech homeland security. Benefits would include:

• A highly complementary combination of security technology and products that would offer enhanced ID solutions with best-of-class products in all their offerings;
• A combination of the best ID management solutions and detection of illicit and dangerous materials providing an offer of the highest standards for travel security;
• A broad geographical fit with balanced operations in around 40 countries and approximately Euro 1.35 billion in 2009 pro-forma1 revenue (comprised of USD 436 million from L-1’s businesses);
• A combination of outstanding teams, that would share a strategic vision and be positioned to address the high growth and attractive potential of global biometric and identity management requirements; and
• A combination of deep experience from both firms in serving in the United States and elsewhere, with the highest standards of quality, high profile public and governmental customers.

Commitment to U.S. stakeholders
With more than 4,000 employees working at 40 locations across 18 states, Safran’s sales to U.S. customers represented approximately Euro 2.5 billion in 2009 revenue. It should be noted that CFM International, founded in 1974, is a company equally-owned by Safran and GE and the most successful venture in the history of civil aviation. The two companies agreed in 2008 to extend their cooperation until 2040. Safran is a long standing and trusted partner, having served for decades a large spectrum of key contributors to the U.S. economy such as Boeing, Lockheed Martin, as well as eight out of the ten largest U.S. airlines and notable U.S. government agencies, including the U.S. Armed Forces (the Army, Navy, Air Force, Marine Corps and Coast Guard), the FBI, a significant number of law enforcement organizations and entities in U.S. cities and states, and the U.S. Transportation Security Administration - among others. L-1 would benefit from Safran’s technology, extended geographical reach, financial and management capabilities to further assist the company in accelerating the growth of its strong business in the United States and expansion in global key territories.

This transaction builds on Safran’s previous successful transactions in 2009 in this sector in the United States: the acquisitions of Motorola’s Printrak biometrics business (merged with Morpho US biometrics activities to become MorphoTrak) and of GE’s Homeland Protection unit1 (rebranded Morpho Detection). The combined activities of Morpho and L-1 would have generated 2009 pro forma sales to U.S. customers of more than USD 700 million with around 2,200 employees in the United States.

Following this transaction, Safran would continue to strengthen the combined R&D teams. In doing so, the companies expect to build the next generation of excellence in biometrics and ID management and enhance the combined group’s competitiveness in all territories, for the benefit of customers.

Jean-Paul Herteman, Chief Executive Officer of Safran, said: “ I have a deep respect for L-1’s business and its contribution to the security industry. We are all highly impressed with the quality and expertise of L-1’s teams throughout the United States and we are looking forward to working with them to bring L-1 and Morpho together. This will allow us to grow L-1’s business, while expanding the reach of L-1’s services to other key territories around the world. With this acquisition, Safran’s pro forma 2011 revenues from its security business, focused on detection, biometrics and identity management is likely to exceed 15% of the Safran’s global revenue. The expected organic growth of these activities should enable the group to reach its 20% revenue target for its security business swiftly. Furthermore, this constitutes a significant step in the implementation of Safran’s clearly defined strategy to be a leader in the field of mission critical high tech tier one players in the group’s three businesses: Aerospace, Defence and Security. ”

“I am extremely proud of L-1’s accomplishments and the role we have played in the development of multi-modal biometric technologies and in helping establish the identity management market over the last four years," said Robert V. LaPenta, Chairman, President and CEO of L-1 Identity Solutions. “Safran will provide a strong global reach and a more comprehensive portfolio of solutions and services in order to leverage the industry’s best set of collective experience and solutions, all to the benefit of our customers and partners worldwide. Safran’s commitment to furthering the standards of quality and excellence in engineering innovation will ensure that we can continue to lead the market in developing superior identity management solutions."

The transaction is subject to L-1’ shareholder and regulatory approvals, including review by the U.S. Antitrust Authorities, the Committee on Foreign Investment in the United States (CFIUS), as well as the satisfaction of other customary closing conditions.

* * *

RBC Capital Markets Corporation and Société Générale Corporate and Investment Banking are acting as joint financial advisors and Weil, Gotshal, Manges and Kaye Scholer are acting as international legal counsels to Safran. The Chertoff Group is serving as a strategic advisor to Safran. The complete terms and conditions of the agreement will be filed with the U.S. Securities and Exchange Commission.

Safran will host a conference call today open to analysts and journalists at 9:00 am CET which can be accessed at +33 1 72 00 09 82 from France, +44 207 107 1613 from the U.K. and + 1 866 907 5923 from the US. A replay will be available at +33 1 72 00 15 00 (access code 270935#).

The press release and the presentation are available on the website at www.safran-group.com.

^{(1) Safran’s security business (including annualized Morpho Detection (formerly GE HLP) and MorphoTrak (formerly Printrak) businesses) and Laser biometric and enterprise access solutions, secure credentialing solutions and enrollment services businesses
(2) Morpho Detection is co-owned by Safran (81% stake) with GE (19% stake)
(3) Excluding the government consulting services business, to be sold prior to the acquisition}


* * *

About Safran
Safran is a leading international high-technology group with three core businesses: Aerospace (propulsion and equipment), Defence and Security. Operating worldwide, the Safran group has 55,000 employees and generated sales exceeding 10.4 billion euros in 2009. Working alone or in partnership, Safran holds world or European leadership positions in its core markets. The Group invests heavily in Research & Development to meet the requirements of changing markets, including expenditures of 1.1 billion euros in 2009. With a market capitalization of approximately USD 10 billion, Safran is listed on NYSE Euronext Paris and its share is part of the SBF 120 and Euronext 100 indexes.
For more information: www.safran-group.com

About Morpho
Morpho, a high-technology company in the Safran group, is one of the world’s leading suppliers of identification, detection and e-document solutions. Morpho is specialized in personal rights and flow management applications, in particular based on biometrics, a sector in which it is the world leader, as well as secure terminals and smart cards. In the US, Morpho develops various biometric technologies for both law enforcement and civil agencies such as New York State Division of Criminal Justice Services, U.S. Drug Enforcement Agency, New York Police Department Central Records Division, FBI Latent Laboratory, FBI Criminal Justice Information Services, U.S. Army Crime Lab.
For more information: www.morpho.com

About L-1
L-1 Identity Solutions, Inc. (NYSE: ID) protects and secures personal identities and assets. Its divisions include Biometrics / Enterprise Access and Secure Credentialing solutions, as well as Enrollment and Government Consulting services. With the trust and confidence in individual identities provided by L-1, international governments, federal and state agencies, law enforcement and commercial businesses can better guard the public against global terrorism, crime and identity theft fostered by fraudulent identity. L-1 Identity Solutions has more than 2,200 employees worldwide and is headquartered in Stamford, CT.
For more information, visit www.L1ID.com

PRESS RELEASE

04.10.2010
Planned agreement between Safran and SNPE for the acquisition of SNPE Matériaux Energétiques

Paris, October 1, 2010

Safran (NYSE Euronext Paris: SAF) has announced its intention of setting up a commercial and industrial collaboration framework agreement with SNPE to strengthen the solid propulsion industry, a key to the long-term viability of European launch vehicles and missiles. The project calls for the acquisition by Safran of SNPE Matériaux Energétiques (SME) and its subsidiaries, including a 50% stake in Roxel, and a 40% stake in Regulus, but not including Eurenco. In 2009, these businesses generated sales (non-audited) of 270 million euros.

The businesses to be acquired by Safran represent a total enterprise value of 296 million euros, for an estimated revenue multiple in 2011 of approximately 1x, and an EBITDA (earnings before interest, taxes, depreciation and amortization) multiple of about 6x, excluding subsequent operational synergies.

After completion of discussions between the two groups, and following consultation procedures with employee representative bodies, the transaction could be finalized during the first half of 2011, pending regulatory authorizations based on a favorable recommendation by the French Commission des Participations et des Transferts (CPT).

Creating a world leader in solid propulsion Safran, via its subsidiary Snecma Propulsion Solide (SPS), is the European leader in the design and construction of solid rocket motors (SRM). SNPE, through its subsidiary SME, is the European leader in energetic materials for propulsion. This project is designed to create a world leader in solid propulsion, based on a simplified industrial model.

The combined solid propulsion business consolidated within Safran would represent nearly 3,000 employees, a Research & Development unit with over 600 scientists and engineers, and annual revenues estimated at more than 650 million euros in 2011.

Safran will finance this transaction using available cash. It will have an accretive effect on the Group’s results right from the first year, before the accounting entries concerning the purchase price allocation (PPA). SNPE will give Safran a specific guarantee concerning environmental liabilities due to past operations.

Jean-Paul Herteman, CEO of Safran, said: “I am particularly pleased to announce this project between Safran and SNPE. It should enable us to create a new center of excellence in our Group, one that will have a very positive technological impact on our other businesses, especially concerning solid propulsion and composite materials. We will do everything in our power to ensure that the people in the companies joining the Safran group will be integrated as harmoniously as possible.”

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About Safran
Safran is a leading international high-technology group with three core businesses: Aerospace (propulsion and equipment), Defence and Security. Operating worldwide, the Safran group has 55,000 employees and generated sales exceeding 10.4 billion euros in 2009. Working alone or in partnership, Safran holds world or European leadership positions in its core markets. The Group invests heavily in Research & Development to meet the requirements of changing markets, including expenditures of 1.1 billion euros in 2009. With a market capitalization of approximately USD 10 billion, Safran is listed on NYSE Euronext Paris and its share is part of the SBF 120 and Euronext 100 indexes.
For more information, www.safran-group.com

PRESS RELEASE

22.10.2010
Safran reports solid third-quarter 2010 revenue growth.

Full-year 2010 outlook confirmed

All revenue figures in this press release represent Adjusted[1] revenue. Please refer to definitions contained in the Notes on page 7 of this press release. 1

Key numbers for third quarter 2010

• Third quarter 2010 adjusted revenue was Euro 2,593 million, up 8.8% on a reported basis, up 0.5% on an organic basis, compared to third-quarter 2009.
• 2-digit revenue contribution from Equipment (Landing systems), Defence (Optronics) and Security.
• The Aerospace Propulsion services slightly grew with share of revenue up from 52.5% to 53.5%. It mainly resulted from a slight uplift in CFM56 aftermarket and continued good performance in military, helicopter and high-thrust engines services. Services in Aircraft Equipment were flat but share in revenue decreased from 33.2% to 29.0% of revenue as a result of strong growth in Original Equipment.
• Outlook for full-year 2010 is confirmed.

Key numbers for nine-month 2010

• Nine-month 2010 adjusted revenue was Euro 7,790 million, up 3.4% on a reported basis, down 1.4% on an organic basis, compared to nine-month 2009.

Key business highlights for third quarter 2010

• Acquisitions: Safran entered into a definitive agreement with L-1 Identity Solutions, a leading identity management provider in the U.S., for Safran to acquire the operating and holding company of L-1 which include its biometric and enterprise access solutions, secure credentialing solutions and enrollment services businesses, for a total cash amount of USD1.09 billion. Labinal entered into an agreement to acquire Harvard Custom Manufacturing for USD135 million. Located in Salisbury, Maryland, HCM produces electrical wiring systems for industry leaders in the commercial and military aerospace industry. Safran announced an agreement to acquire SNPE’s subsidiary Matériaux Energétiques (SME) and its subsidiaries, for Euro 296 million.
• Safran inaugurated a new assembly plant in Bidos, France, to ensure a successful ramp-up for new landing gear programs (B787, A350 XWB, A400M).
• Defence: Safran and Elbit Systems established a JV for tactical unmanned aircraft systems.
• Security: Morpho and Mahindra Satyam selected as one the three key partners for the initial phase of a program set to deliver India’s next generation Unique Identification Number Program to 200 million residents.
  
  
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  Paris, October 22, 2010 - Safran (NYSE Euronext Paris: SAF) today reported its revenue for the third quarter of 2010.

Executive commentary

JCEO Jean-Paul Herteman commented:

“Safran recorded a solid performance during the third-quarter 2010, highlighting strong double-digit growth in 3 out of its 4 main businesses. We saw encouraging signs in CFM56 aftermarket with revenue in CFM56 spares up 16% sequentially, giving us confidence that the low point might be behind us. Aircraft Equipment delivered a good performance, notably thanks to the landing systems on the B787 programme.

We’ve announced two highly synergetic strategic moves to strengthen our position in core markets. The L-1 acquisition in Security is a complementary fit geographically and in terms of product offering (particularly its biometric technologies) and bolsters our position in the U.S.. We’ve also agreed with SNPE for the acquisition of SNPE Matériaux Energétiques (SME). Both transactions are expected to close in the course of the first-half 2011.

Based on the performance for the first nine months of the year and current positive trends in our markets, we confirm our full-year guidance for 2010 and our renewed confidence in our outlook for 2011 and beyond. ”

Third-Quarter 2010 revenue

Solid growing revenue. For the third quarter 2010, Safran’s revenue was EUR 2,593 million, compared to a EUR 2,384 million in the same period a year ago, a 8.8% year-on-year increase. Group revenue slightly increased by 0.5% organically.

Third-quarter 2010 revenue increased by Euro 209 million on a reported basis, highlighting growth of 14.5% in Aircraft Equipment (primarily landing systems), 29.6% in the Defence business (notably in optronics) and 35.4% in Security (across all businesses). It also resulted from a mild decline in Aerospace Propulsion revenue, with a lower original equipment revenue while services revenue slightly improved.

On an organic basis, third-quarter 2010 revenue increased by Euro 12 million. Organic revenue was determined by deducting from 2010 figures the contribution of Security activities acquired in 2009 when compared to 2009 scope of consolidation and the contribution of activities newly consolidated in 2010 and by applying constant exchange rates. Hence, the following calculations were applied:

The favourable currency impact in revenue of Euro 112 million for third quarter 2010 reflected a global positive translation effect on the revenue exposed to foreign currencies, notably in USD, Australian dollar and Brazilian real. The Group’s average spot rate was USD1.29 to the Euro in third-quarter 2010 vs. USD1.43 in the year ago period.

Business commentary

Aerospace Propulsion

Third-quarter 2010 Aerospace Propulsion revenue reported a mild decline at Euro 1,329 million, down 1.1%, or -6.0% on an organic basis, compared to the year-ago period revenue at Euro 1,344 million. Revenue evolution resulted from continued good performance, although at lower growth rates, in aftermarket activity in military, helicopter and recent high-thrust civil engines and higher deliveries in military engines. It was offset by weak CFM56 spares revenue as well as lower CFM56 new engine deliveries in the quarter. It was also offset by lower OEM helicopter engines deliveries while space & missile propulsion revenue was flat.

OEM CFM56 engine deliveries at 294 units in third-quarter 2010 were down by 27 units as a consequence of delays from a flood incident in a factory in Poland. This impact should be mitigated during the fourth quarter of 2010. After a successful Farnborough air show, total 2010 CFM56 orders now stand at 1,293 engines, representing more than one time the current annual production.

On a third-quarter 2010 basis, service revenue share was slightly up at 53.5% of Aerospace Propulsion revenue, benefiting from a good contribution from aftermarket in military and helicopter engines, as well as from recent high-thrust civil engines. The worldwide CFM International spare parts revenue was down 16% in USD terms compared to third-quarter 2009, but up 16% compared to second-quarter 2010. CFM aftermarket remained soft highlighting continued volatile airlines spending in maintenance. The estimated* total number of shop visits for CFM-equipped civil aircraft decreased to 535 as compared to 586 in third-quarter 2009. (*) shop visit numbers are estimates; these can be revised marginally in the future as airlines finalise reports

These figures exclude any impact from the acquisition of SME which is expected to close during first-half 2011.

Aircraft Equipment

The Aircraft Equipment segment reported third quarter 2010 revenue of Euro 696 million, up 14.5%, or 7.6% on an organic basis, compared to the year-ago period at Euro 608 million.

Strong revenue evolution was primarily attributable to strong activity in landing and wiring systems, notably for the B787 programme. This performance was also achieved thanks to a stabilization of the business and regional jet segments where small nacelle deliveries were almost flat. However, the nacelle activity recorded lower deliveries of A380 nacelles (17 units compared to 23 nacelles in the year-ago period) due to aircraft delivery slippages. Other large nacelle business (A330 and A320) had a good contribution to revenue. Revenue growth also benefited from a favourable currency impact from USD.

On a third-quarter 2010 basis, service revenue was flat with solid activity in landing and braking systems but its share decreased from 33.2% to 29.0% of Aerospace Equipment revenue.

Defence

Third-quarter 2010 revenue was up 29.6% at Euro 280 million, or up 18.0% on an organic basis, compared to the previous year of Euro 216 million. The performance was mainly driven by 2-digit revenue growth in the Optronics activity on the basis of a robust order backlog (Felin soldier integrated equipment suites for French Army, long-range infra-red goggles on export markets). This trend was partly mitigated by a flattish Avionics revenue with higher deliveries of inertial gyrolasers offset by lower Flight Control systems. Safran Electronics had a positive impact on revenue despite slightly lower volumes of FADEC deliveries.

Security

The Security activity reported third-quarter 2010 revenue of Euro 279 million, up 35.4% compared to the year-ago period of Euro 206 million, or up 4.7% on an organic basis. The newly-acquired detection business had a robust performance in explosive detection solutions in the airport market. Revenue growth also benefited from a favourable translation currency impact from Brazilian real, USD and Australian dollar. The smart cards activity recorded a good growth in volume primarily in the telecommunications market segment, partly mitigated by pricing pressure.

These figures exclude any impact from the acquisition of L-1 Identity Solutions which is expected to close during first-half 2011.

Currency hedges

The Group has put in place currency hedges for the next 3 years. At October 15, 2010, the firm hedging portfolio amounted to USD12.6 billion. The Group continued to optimize its hedging portfolio: 2010 and 2011 net exposures have been revised downwards to reflect Safran’s improved USD cost base.

(*) For 2012, USD3.1 billion was achieved at a hedge rate of USD1.34 to the Euro, this position is expected to rise to USD4.5 billion as long as the Euro/USD rate remains below USD1.65 for the balance of 2010 and most of 2011.

Equity structure

A regulatory filing was made by Areva which significantly reduced its stake from 7.4% to 2.0%. As a result, and combined with a reduction in the Employees share, the free float has increased to 46.7% at October 12, 2010 from 38.1% at December 31, 2009.

Upcoming events

• FY 2010 results : February 24, 2011
• Q1 2011 revenue : April 22, 2011
• AGM : May 26, 2011
  
  
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Safran will host today a conference call open to analysts at 9:00 am which can be accessed at +33 1 72 00 13 68 from France and +44 203 367 9453 from the UK. A replay will be available until January 22, 2011 at +33 1 72 00 15 00, +44 203 367 9460 and +1 877 642 3018 (access code 271284#).

The press release and presentation are available on the website at http://www.safran-group.com

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Key figures

Notes

Adjusted data To reflect the Group’s actual economic performance and enable it to be monitored and benchmarked against competitors, Safran prepares an adjusted income statement alongside its consolidated financial statements.

Particularly, Safran recognizes, all changes in the fair value of its foreign currency derivatives in “financial income (loss)”, in accordance with the provisions of IAS 39 applicable to transactions not qualifying for hedge accounting.

Accordingly, Safran’s consolidated income statement is adjusted for the impact in financial income (loss) of the mark-to-market of foreign currency derivatives, in order to better reflect the economic substance of the Group’s overall foreign currency risk hedging strategy:

• revenue net of purchases denominated in foreign currencies is measured using the effective hedging rate, i.e., including the costs of the hedging strategy;
• the recognition of the mark-to market of unsettled hedging instruments at the closing date is neutralized.

Third-quarter 2010 and nine-month 2010 reconciliation between consolidated revenue and adjusted revenue.

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Safran is a leading international high-technology group with three core businesses: Aerospace (propulsion and equipment), Defence and Security. Operating worldwide, the Safran group has 55,000 employees and generated sales exceeding 10.4 billion euros in 2009. Working alone or in partnership, Safran holds world or European leadership positions in its core markets. The Group invests heavily in Research & Development to meet the requirements of changing markets, including expenditures of 1.1 billion euros in 2009. Safran is listed on NYSE Euronext Paris and its share is part of the SBF 120 and Euronext 100 indexes.
For more information, www.safran-group.com

PRESS RELEASE

19.11.2010
Statement from Safran

Paris, November 18, 2010

Since last June, Safran has deepened its understanding which fully confirmed its analysis of the industrial merits of a combination with Zodiac Aerospace, as well as the strategic benefits induced by technological complementarities.

The Group had proposed to the Chairman of the Supervisory Board and the Chief Executive Officer of Zodiac jointly to examine the merits of a friendly combination.

Following several contacts and under current circumstances, the conditions for a friendly combination are not met. In harmony with its corporate culture, Safran will not make an offer for Zodiac.

Safran will pursue its external growth strategy in all its businesses, as already demonstrated with the previously announced transactions in 2010 involving SNPE Matériaux Energétiques in the field of solid rocket propulsion, as well as L-1 Identity Solutions in biometric solutions, in the wake of eminently successful integration of major businesses in the past such as Turbomeca and Labinal in the Propulsion and Aircraft Equipment activities respectively.

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Safran is a leading international high-technology group with three core businesses: Aerospace (propulsion and equipment), Defence and Security. Operating worldwide, the Safran group has 55,000 employees and generated sales exceeding 10.4 billion euros in 2009.
Working alone or in partnership, Safran holds world or European leadership positions in its core markets. The Group invests heavily in Research & Development to meet the requirements of changing markets, including expenditures of 1.1 billion euros in 2009.
Safran is listed on NYSE Euronext Paris and its share is part of the SBF 120 and Euronext 100 indexes.

PRESS RELEASE

23.11.2010
Labinal acquires Harvard Custom Manufacturing

Paris, November 22, 2010

Labinal, Inc. has successfully completed the acquisition of Harvard Custom Manufacturing in Salisbury, Maryland. The company is now officially operating as Labinal Salisbury, Inc., a subsidiary of the Safran group and will be consolidated into the Safran group by the end of the year.

“We are confident that this new acquisition will increase our capacity to contribute to the success of our customers. Harvard Custom Manufacturing and Labinal, Inc. have a shared objective - to ensure absolute customer satisfaction. We remain dedicated to this objective with the merger of the Salisbury location into the Labinal North America Wiring Division”, said Jorge Ortega, VP and General Manager of the Division.

The current workforce of approximately 800 will transition to Labinal employment effective November 22, 2010. Marc Renick will retain his current role as General Manager for the Salisbury location.

With a global workforce of 9,000 employees, including the Salisbury location, Labinal has expanded both its product and service offering and capacity to meet the aerospace market’s growing demand for high quality, cost effective wiring systems design, fabrication, and installation services. Labinal supports the world’s major aerospace manufacturers in both commercial and military applications.

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About Labinal
One of the Safran group’s high tech companies, Labinal is a world leader in the field of electrical wiring systems – and studies in their engineering and associated technology – for the aviation, space and defense markets. The company’s unmatched expertise is founded on decades of design, development and manufacturing success with long-term partnerships with the leading aerospace companies. Labinal’s industrial activities, market segment oriented and customer-driven, are organized in four Divisions: Europe Wiring, North America Wiring, Safran Engineering Services and Labinal Services.

PRESS RELEASE

09.12.2010
Safran signs with 13 banks a Euro 1.6 billion credit facility with a 5-year maturity

Paris, December 9, 2010

Safran (NYSE Euronext Paris: SAF) signed on December 8, with a large group of 13 banks*, a revolving credit facility for an amount of Euro 1.6 billion, maturing in December 2015.

The operation was significantly oversubscribed at close to Euro 2 billion, enabling Safran to increase the size of the facility to Euro 1.6 billion from Euro 1.0 billion at launch, which underlines banks’ confidence in the credit quality of Safran. The facility is for general corporate purposes.

This operation allows Safran to stretch the maturity profile of its committed backup facility maturing in January 2012 and reinforces the Group’s strong liquidity for the next 5 years.

(*)

• The "Mandated Lead Arrangers and Bookrunners": Crédit Industriel et Commercial (groupe Crédit Mutuel-CIC), Groupe Crédit Agricole (acting through Caisse Régionale de Crédit Agricole Mutuel de Paris et d’Ile de France and Crédit Agricole Corporate & Investment Bank), HSBC France, The Royal Bank of Scotland plc and Société Générale Corporate & Investment Banking (the corporate and investment banking division of Société Générale).
• The "Mandated Lead Arrangers": Banco Santander, S.A., The Bank of Tokyo-Mitsubishi UFJ, Ltd., BNP Paribas and Commerzbank Aktiengesellschaft.
• The "Arrangers": Citibank International Plc, Deutsche Bank Luxembourg S.A and ING Commercial Banking.
  
  
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  Safran is a leading international high-technology group with three core businesses: Aerospace (propulsion and equipment), Defence and Security. Operating worldwide, the Safran group has 55,000 employees and generated sales exceeding 10.4 billion euros in 2009. Working alone or in partnership, Safran holds world or European leadership positions in its core markets. The Group invests heavily in Research & Development to meet the requirements of changing markets, including expenditures of 1.1 billion euros in 2009. Safran is listed on NYSE Euronext Paris and its share is part of the SBF 120 and Euronext 100 indexes.

PRESS RELEASE

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