Jean-Paul Herteman, Safran’s Chairman and CEO | © Eric Drouin
Once again, the year ended on a very high note for Safran. How do you see these results?
First and foremost, our success in 2013 makes me incredibly appreciative of the engagement and professionalism shown by the nearly 67,000 people in our Group. But our success is also the result of Safran’s deep and successful transformation in recent years. We have carried out a number of in-depth reforms, including refocusing our businesses for greater economic efficiency, enhancing social unity, and building an ensemble which is more than the sum of its parts. We have also made structural investments, especially planning ahead for the successor to the CFM56 by renewing our partnership with GE until 2040 and overseeing the development of the next-generation engine, LEAP, so it will be at least as successful as the CFM56. We have also made Morpho a true world-class enterprise for high-tech security solutions. These changes have borne fruit, inspiring the trust of our shareholders. Inside the Group as well, they foster confidence, unity and dynamic performance, backed by very constructive labor-management relations and an employee shareholding rate of 15%, which ranks Safran second among companies in the French stock market index, CAC 40.
Would you say this growth has been largely shared?
Absolutely. In seven years we’ve paid out 1.6 billion euros in dividends to Safran shareholders, and 1.5 billion euros in profit-sharing and incentive payments to make sure our employees share the fruits of their work. However, the trademark of our success, and perhaps the achievement we are most proud of, is that over the last three years we have created a net total1 of 3,700 jobs in France, equal to about 10% of our domestic workforce, and a total of 8,900 worldwide. And don’t forget that each job created generates two to three times more direct employment at our subcontractors. These figures clearly indicate our active contribution to the strong economic and social development of our host countries, not to mention that our dynamic international performance ensures growth and employment for France.
So you are in fact confident about the Group’s future?
You mean that we can go higher, and become stronger in the next five to ten years? We can and we must. In fact, we enjoy a combination of particularly favorable factors to meet these goals. First, we are operating in long-term growth markets, whether civil air transport, security or even defense: while the defense budgets in Western countries are on the decline, those of emerging countries offer new prospects. Secondly, we have the financial resources to meet our ambitious goals. We will generate free cash flow exceeding one billion euros per year, less the hefty investments made for the historic transition between the CFM56 and its successor, LEAP. If appropriate external growth opportunities arise, we will be able to seize them. Above all, we have the necessary human resources, in large part due to major recruiting efforts in recent years. These efforts mean we have been able to ensure the long-term viability of our skills and expertise – which is the key to our future success. Another major advantage is that we can plan ahead for the next ten years. Not that we are beyond the reach of any major economic disturbances that may arise, but our CFM56 engine fleet – the largest in the world – is still young, and thus harbors considerable potential for support services, which makes our business model extremely robust and resilient. In other words, it is my firm conviction that we will be just as successful, or even more in the next five to ten years, as in the last five to ten years.
(1) At constant size, excluding acquisitions and divestments.