2014 BUSINESS AND CORPORATE SOCIAL RESPONSIBILITY REPORT CONTENTS

2 Challenges 4 A new governance structure for Safran 6 Interview with 8 Corporate governance 12 Leadership positions in each of our core businesses

04 AIMING FOR TECHNOLOGICAL AND OPERATIONAL EXCELLENCE 36 Tomorrow’s factory 38 2014 highlights

01 REDUCING THE ENVIRONMENTAL IMPACT OF AIR TRANSPORT 16 “ More electric” aircraft 18 2014 highlights

05 CREATING VALUE WITH OUR STAKEHOLDERS 44 A global, responsible corporate citizen 48 Ethics and integrity 52 Shareholders 54 Human resources 60 Health, safety and environment 62 Suppliers 64 Philanthropy and foundations 66 Sponsorship 02 MAKING OUR LIVES SAFER AND EASIER 24 Identity security across 06 BENCHMARKS the board 68 Financial indicators 26 2014 highlights 72 Stock market indicators 74 CSR indicators

The e-accessible version of the 2014 business and corporate social responsibility report can be read 03 POWERING ACCESS TO SPACE directly on desktop computers, tablets or smartphones without having to download an app. 32 The conquest of space Go to our website: www.safran-group.com/group or scan the QR code. 33 2014 highlights CHALLENGES EXPANDING MOBILITY MODES Safran invents solutions that improve INNOVATE TO RISE the circulation and security of people, goods and data, while also enhancing the economic and environmental TO THE CHALLENGES performance of the air transport OF A FAST-CHANGING industry. WORLD

Safran is a leading international high-technology group and Tier-1 supplier of systems and equipment for aerospace, defense and security. Operating SUPPORTING worldwide, Safran has 69,000 employees and gen- erated sales of 15.4 billion euros in 2014. Through SOCIAL its global presence Safran not only enhances com- PROGRESS petitiveness, but also builds industrial and commer- Preserve natural resources and protect the environment, support modernization of cial relations with the world’s leading prime countries and contribute to stable societies… In today’s fast-changing world, Safran contractors and operators, while providing fast, local delivers concrete solutions to adapt the way service to customers around the world. Working we live to these major social challenges. alone or in partnership, Safran holds world or European leadership positions in its core markets. To keep pace with these changing markets and rise to current and future challenges, Safran invents inci- sive technology solutions, and undertakes extensive SHAPING research and development programs, representing TOMORROW’S expenditures of 2 billion euros in 2014. WORLD Maintain leadership, design new ways of working and collaborating, explore new horizons… Safran is investigating new paths for research and experimentation, marking a break with today’s technologies, so that we can conceptualize the full range of possibilities.

2 I SAFRAN BUSINESS AND CORPORATE SOCIAL RESPONSIBILITY REPORT I 3 A NEW GOVERNANCE STRUCTURE FOR SAFRAN

ON APRIL 23, 2015, DURING THE BOARD OF DIRECTORS MEETING FOLLOWING THE ANNUAL GENERAL MEETING OF SHAREHOLDERS, PHILIPPE PETITCOLIN WAS NAMED CHIEF EXECUTIVE OFFICER OF SAFRAN, AND ROSS McINNES WAS NAMED CHAIRMAN OF THE BOARD. THEY SUCCEED JEAN-PAUL HERTEMAN, WHO HELD BOTH FUNCTIONS.

From left to right: Ross McInnes, Jean-Paul Herteman and Philippe Petitcolin.

4 I SAFRAN BUSINESS AND CORPORATE SOCIAL RESPONSIBILITY REPORT I 5 INTERVIEW

“SAFRAN HAS THE ASSETS NEEDED TO RISE TO MAJOR CURRENT AND FUTURE CHALLENGES”

PHILIPPE PETITCOLIN CHIEF EXECUTIVE OFFICER

After 27 years with our Group, businesses, including respect for cus- several major contracts for national o! ering of aircraft electrical systems, you are now replacing Jean-Paul tomers, a focus on innovation, and the ID programs. and meet our strategic goal of achiev- Herteman as Chief Executive strength of teamwork. Today, it’s up We are continuing to invest in the ing a presence in all aspects of secure Officer. What’s your state of mind to me to perpetuate the values inher- defense business to maintain our tech- identifi cation, both physical and digital. as you take on this task? ited from my predecessors, while also nological di! erentiation against the We will continue to invest heavily in It’s with both pride and confi dence that bolstering Safran’s performance and backdrop of a demanding geopolitical research and innovation so we can o! er I succeed Jean-Paul Herteman. competitiveness, to ensure the growth context. The fi rst export contracts for our customers the breakthrough, and I’m proud because I am inheriting a of our enterprise for everyone’s benefi t. the Dassault Aviation Rafale fi ghter, for even disruptive technologies that add powerful group in great health, with instance, guarantee sustained business signifi cant value, while carving out a a wealth of exceptional technologies How do you see Safran today? in the coming years. position on upcoming programs. With that make a di! erence to our daily Safran has confi rmed its position as a We have also started the process to the recent opening of our corporate lives. Safran boasts excellent results, technology benchmark and leader in merge our space propulsion business Research and Technology center, as shown by our order backlog of our core markets. with Group’s launcher business Safran Tech, we now have a powerful 64 billion euros, plus a very healthy Our aviation business is posting strong to help ensure the long-term viability of facility that allows us to centralize and fi nancial situation and the exemplary growth. While the CFM56® engine still Europe’s independent access to space. direct our research e! orts, and thus performance of our share. Our reve- has a backlog of 4,169 orders and Our recent major successes in each of accelerate breakthroughs in strategic nues continue to grow, rising 7% over commitments, and dynamic service our core markets clearly illustrate the markets. Furthermore, we have created 2014, and our profi t margin jumped 17% business, its successor, the advanced strength of Safran. an entity dedicated to big data, Safran from the previous year. LEAP® , is already the best- Analytics, to support the development I am confi dent because Safran has the selling engine while still under develop- What are the main challenges that of innovative and personalized services assets needed to rise to major current ment in the history of aviation, with face Safran? in all of our business lines. and future challenges: the all-out com- more than 8,900 orders and commit- First, we have to ensure on-time delivery Working in concert with our partners mitment of our 69,000 employees, ments at April 30, 2015. Systems and of current products, while handling the and shareholders, my aim is to further investments in R&D equal to 13% of equipment from Safran are used on all ramp-up for new products and success- improve Safran’s performance and sales, state-of-the-art industrial facili- current major aircraft programs, espe- fully completing developments in pro- competitiveness, so we can deliver ties, a full slate of continuous improve- cially Airbus and jetliners, and gress. In particular, we have to gear up even better service to our customers, in ment actions and more. our aircraft equipment service business for production and then the delivery of line with the corporate social responsi- I am also fully aware of my own respon- is also showing sustained growth. our new LEAP and Silvercrest® engines, bility values that underpin our strategy. sibilities. Because of my career that Our security business has resumed as well as equipment and systems cho- took me to a number of Safran com- profi table growth. Thanks in particular sen for a number of new aircraft, such panies, I discovered the strong val- to our unrivaled expertise in biome- as the on the Airbus A330neo. ues that are shared by our di! erent tric identifi cation systems, we won We also have to develop our complete

6 I SAFRAN BUSINESS AND CORPORATE SOCIAL RESPONSIBILITY REPORT I 7 CORPORATE GOVERNANCE

EXECUTIVE COMMITTEE

The!Safran!Executive!Committee!comprises!the!following!persons!(as!from!June!"#$!%&"#)'

01 02 03 01 PHILIPPE PETITCOLIN 06 JEAN-PAUL ALARY 14 JEAN-LUC BÉRARD CHIEF EXECUTIVE OFFICER CEO, AIRCELLE EXECUTIVE VP, HUMAN RESOURCES 07 OLIVIER ANDRIÈS CEO, SNECMA 15 ÉRIC DALBIÈS EXECUTIVE VP, 02 STÉPHANE ABRIAL 08 ANNE BOUVEROT STRATEGY AND M&A SENIOR EXECUTIVE VP, CEO, MORPHO INTERNATIONAL (as from August 1, 2015) 16 PASCALE DUBOIS AND PUBLIC AFFAIRS EXECUTIVE VP, 09 BRUNO EVEN COMMUNICATIONS 04 05 03 BERNARD DELPIT CEO, TURBOMECA SENIOR EXECUTIVE VP, 17 JEAN-JACQUES ORSINI 10 VINCENT MASCRÉ FINANCE EXECUTIVE VP, CEO, MESSIER-BUGATTI-DOWTY PERFORMANCE AND 04 PIERRE FABRE 11 ALAIN SAURET COMPETITIVENESS SENIOR EXECUTIVE VP, CEO, LABINAL POWER SYSTEMS R&T AND INNOVATION 12 PHILIPPE SCHLEICHER 05 ALEX FAIN CHAIRMAN AND CEO, HERAKLES CORPORATE SECRETARY 13 MARTIN SION CEO, SAGEM

06 07 08 09

10 11 12 13

14 15 16 17

8 I SAFRAN BUSINESS AND CORPORATE SOCIAL RESPONSIBILITY REPORT I 9 CORPORATE GOVERNANCE BOARD OF DIRECTORS BOARD

The!Safran!Board!of!Directors!comprises!"*!members!offering!a!wide!range! COMMITTEES of!complementary!areas!of!expertise!in!Safran’s!strategic!business!sectors'!The!members! Two!committees!prepare! of!the!Board!include+!one!State!representative!and!two!directors!proposed!by!the!State/! the!Board’s!deliberations! two!employee!shareholder!representatives!and!two!employee!representatives'! and!submit!proposals! More!than!half (") !of!the!directors!are!independent!and!one-third (") !are!women' for!consideration!by!the!Board' 02 03 04 05

Audit and Risk “THE CEO AND I WILL BE Management Committee

06 07 08 09 The!Audit!and!Risk WORKING HAND IN HAND TO Management!Committee examines!financial statements!and!provides ENSURE SAFRAN’S CONTINUOUS follow-up!on!questions concerning!the!generation and!control!of!financial and!accounting!data'! GROWTH AND IMPROVEMENT” 10 11 12 13 In!addition$!it!oversees!the efficiency!of!the!Group’s ROSS McINNES internal!control!and!risk CHAIRMAN OF THE BOARD management!systems' Committee!members+

ODILE DESFORGES 14 15 16 17 (CHAIRMAN) In"its"succession"plan"for"Jean-Paul"Herteman#" 01 MARC AUBRY the"Safran"Board"of"Directors"has"opted" MONIQUE COHEN for"a"two-pronged"governance"structure#" splitting"the"positions"of"the"Chief"Executive" CHRISTIAN HALARY Officer"and"the"Chairman"of"the"Board$" ÉLISABETH LULIN The"Board’s"responsibility"is"to"define"our" DANIEL MAZALTARIM corporate"strategy#"designate"corporate" ASTRID MILSAN officers#"control"management"and"oversee" 01 ROSS McINNES, 07 JEAN-LOU CHAMEAU 11 PATRICK GANDIL the"quality"of"the"information"provided"to" CHAIRMAN 08 MONIQUE COHEN 12 CHRISTIAN HALARY shareholders"and"markets#" via "financial" OF THE BOARD Nomination and 09 ODILE DESFORGES, 13 VINCENT IMBERT statements#"or"concerning"major" 02 CHRISTIAN STREIFF, Remuneration CHAIRMAN OF THE operations$" VICE CHAIRMAN 14 XAVIER LAGARDE Committee AUDIT AND RISK OF THE BOARD MANAGEMENT 15 ÉLISABETH LULIN The!Nomination!and This"type"of"management"structure" 03 PHILIPPE PETITCOLIN, COMMITTEE Remuneration!Committee 16 DANIEL MAZALTARIM is"applied"by"nearly"one-third"of"the" CHIEF EXECUTIVE assists!the!Board!in 10 JEAN-MARC FORNERI, OFFICER 17 ASTRID MILSAN selecting!its!members! companies"in"the"French"stock"market"index" CHAIRMAN OF THE and!corporate!officers$! CAC"'*"and"about"+*/"of"companies"in"the" 04 MARC AUBRY NOMINATION AND and!draws!up! British"index"FTSE";**$"It"also"addresses" REMUNERATION 05 GIOVANNI BISIGNANI recommendations Safran’s"current"needs#"namely"to"maintain" COMMITTEE 06 FRÉDÉRIC BOURGES concerning!the the"required"continuity#"consolidate"our" compensation! stability#"and"perpetuate"our"successes$" of!corporate!officers'

Philippe"Petitcolin"and"I"have"very" Committee!members+ complementary"career"paths"and"an" JEAN-MARC FORNERI in-depth"knowledge"of"Safran"that" (CHAIRMAN) facilitates"communications"and" GIOVANNI BISIGNANI decision-making$"We"will"be"working" hand"in"hand"to"ensure"Safran’s" FRÉDÉRIC BOURGES continuous"growth"and"improvement$ JEAN-LOU CHAMEAU XAVIER LAGARDE ASTRID MILSAN (1) According to the calculation criteria in the AFEP-MEDEF code. CHRISTIAN STREIFF

10 I SAFRAN BUSINESS AND CORPORATE SOCIAL RESPONSIBILITY REPORT I 11 LEADERSHIP POSITIONS IN EACH OF OUR CORE BUSINESSES

AIRCRAFT PROPULSION AND SPACE AIRCRAFT EQUIPMENT DEFENSE SECURITY

No. 1 worldwide No. 1 worldwide No. 1 worldwide No. 1 worldwide in engines for mainline commercial jets with more in landing gear, wheels and carbon brakes (3) in fl ight controls in biometric ID solutions (based on fi ngerprint, than 100 seats (in partnership with GE) No. 1 worldwide No. 1 worldwide iris and facial recognition) No. 1 worldwide in aircraft electrical interconnection systems in engine control units (1) No. 1 worldwide in helicopter turbine engines No. 1 worldwide No. 1 in Europe in automated fi ngerprint identifi cation systems (AFIS) No. 1 worldwide in power transmissions (3) for!tactical!drones$!optronic!systems! No. 1 worldwide in launch vehicles (1) and!inertial!navigation in!computed-tomography!(CT)!explosive!detection A world leader systems!(EDS)!for!checked!luggage No. 4 worldwide in nacelles in military aircraft engines No. 4 worldwide in smart cards

Aircraft engines: After the best-selling CFM56, Safran and GE, through Landing and braking systems: Safran designs, produces and sup- Optronics: Safran is in charge of the FELIN infantry soldier modern- Civil identifi cation: Safran helps governments protect citizens’ unique CFM International, the 50/50 joint company between Snecma (Safran) ports landing gear, wheels, carbon brakes and related systems for civil ization system, o< ering enhanced observation, communications, mobility identity through complete identity management solutions and secure and GE, have launched the LEAP, which will power the Airbus A320neo, and military fi xed and rotary-wing aircraft. These systems are used on and other capabilities. We design portable observation systems and ID documents. We are also developing authentication platforms to Boeing 737 MAX and Comac C919. Our SaM146 regional (2) many di< erent aircraft, including the Airbus A320, A350 XWB, A380 optronic (electro-optical) systems for land vehicles, aircraft and sub- provide secure online services. powers the Sukhoi Superjet 100 and we are developing the Silvercrest : and A400M, the Boeing Next-Generation 737, 737 MAX, 767, 777 and marines. We also make the Sperwer tactical drone, we’re developing Digital ID and smart transactions: Safran is a world leader in digital for business jets. In the military sector, Safran makes the M88 engine for 787 Dreamliner, the Rafale, Eurofi ghter Typhoon, F-18, etc. the Patroller™ long-endurance drone, and we o< er high-performance identity solutions and secure online transactions, thanks to our strong the Rafale fi ghter and the TP400 for the Airbus A400M military space optics (for Helios, Meteosat, Spot and other satellites). Engine systems and equipment: Safran provides all the nacelles authentication software platforms, smart cards and secure elements. transport, through the Europrop International GmbH consortium. Safran for the . Working alone or in partnership with GE, Safran Avionics: Safran o< ers inertial or hybrid navigation systems, along These technologies are used by the banking and telecom sectors. also o< ers complete maintenance, repair and overhaul (MRO) services is developing nacelles for LEAP engines (Airbus A320neo and Comac with sensors. We are the prime contractor for the AASM Hammer for its engines. Public safety: Because of our unrivaled expertise in multibiometric C919), for the Airbus A330neo engines and for the Silvercrest® and GE guided missile, deployed by Rafale fi ghters. We also supply the seekers identifi cation technologies, explosives and narcotics detection systems Helicopter turbine engines: Safran makes the Arrius and Arriel Passport business jet engines. for the Mistral and MICA IR missiles, and we are developing the seeker and road safety solutions, Safran helps police forces and other law engines for light to medium and is developing We also o< er mechanical power transmission systems for civil and and sight for the upcoming MMP medium-range missile system. Safran enforcement organizations protect people. the Arrano for helicopters in the 4- to 6-ton class (H160). Our engines military airplanes, as well as helicopters. is developing various fl ight control systems for ’ new power the Tiger and the Dhruv, and we have designed the Ardiden 3 H160. Our Cassiopée o< ering groups a wide range of fl ight data analysis Critical infrastructures: Safran helps protect high-risk facilities by Electrical systems and engineering: Safran has developed expertise for new helicopters in the 6- to 8-ton class (Ka-62 and AC352). We also services. o< ering advanced detection and biometric access control systems. in all aircraft electrical systems, including power generation, distribution make the Makila and RTM322 engines for heavy helicopters (Super and conversion, wiring, load management and ventilation. We provide Electronics and safety-critical software: Safran provides process- Transport and border control: Safran ensures the security of airports Puma and NH90). Safran makes turbine engines for all major helicopter wiring harnesses and electrical cabinets for many di< erent Airbus and ing units and printed circuit boards for the Airbus A380 and A400M, and other transportation sites through our detection and border control manufacturers (Airbus Helicopters, Bell Helicopter, Sikorsky, Boeing models, and we are developing the electrical distribution system Boeing 787, Rafale, the NH90 and Caracal helicopters, and other aircraft, solutions. AgustaWestland, HAL, Kamov, AVIC, etc.), and provides associated for Embraer’s KC-390 transport. We also o< er engineering services, which handle engine control, fl ight control, landing and braking func- MRO services. covering aerostructures, mechanical systems and onboard software. tions and more. We are developing sophisticated new safety-critical Space: Safran makes the European launcher Ariane 5 (1) and is devel- software for di< erent onboard systems. oping its successor, Ariane 6 (1) . We are prime contractor, along with Avio, for the rocket motors on the fi rst stage of Vega (1) . Safran also makes satellite equipment, including plasma thrusters, liquid propellants, pyrotechnic devices, etc.

(1) Through Airbus Safran Launchers, the 50/50 joint company between Safran and Airbus Group, announced in 2014 and officially created in January 2015. (1) For commercial aircraft, in partnership with BAE Systems. (2) Through PowerJet, a 50/50 joint company between Snecma (Safran) and NPO Saturn. (3) For mainline commercial jets with more than 100 seats.

12 I SAFRAN BUSINESS AND CORPORATE SOCIAL RESPONSIBILITY REPORT I 13 SAFRAN AT A GLANCE

An aircraft takes o! every 2 seconds somewhere in the world powered by CFM56 engines from Snecma and GE (1) . REDUCING THE 17,000 nacelles produced by Aircelle outfit jet engines in service. ENVIRONMENTAL More than 40,000 landings per day IMPACT OF AIR performed by aircraft with Messier-Bugatti-Dowty landing systems.

About 500 km of electrical wiring TRANSPORT from Labinal Power Systems for each Airbus A380. Safran develops cutting-edge materials and rd 63 successful mission in a row for Ariane 5 technologies to help reduce the environmental at the end of 2014, thanks to Herakles and Snecma’s engines. footprint of air transport and address the world’s More than 2 million smart cards growing demand for mobility. We’re a partner in large- a day produced by Morpho. scale research programs, such as Clean Sky, to develop 3,000 combat aircraft aircraft that are quieter, cleaner and more economical. worldwide use inertial navigation systems from Sagem. These programs are designed to meet the requirements of airlines and the ambitious objectives set by the 1 out of every 4 turbine helicopters Advisory Council for Aviation Research and innovation worldwide powered by Turbomeca (2) . in Europe (ACARE). Over 700 million fl ight-hours logged by Hispano-Suiza power transmissions.

12,000 propulsion components made by Techspace Aero have been launched into space, with 100% reliability.

(1)Through CFM International, a 50/50 joint company. 01 (2) Estimated figure from Turbomeca.

14 I FOCUS

SCAN THE QR CODE TO LEARN MORE ABOUT PILOT DAYS

1. Demonstration of the electric taxiing “MORE ELECTRIC” system during Pilot PILOT DAYS: A SUCCESSFUL FIRST FOR EGTS™ Days in . Safran organized its first Pilot Days from March 4 to 6, 2014, 2. In May 2014, AIRCRAFT Safran finalized the bringing together representatives of partner airlines, Airbus and acquisition of Eaton about 30 pilots from around the world. The aim was to Aerospace’s electrical distribution Birth of a world leader demonstrate the operational advantages of the EGTS electric business. taxiing system, and allow these pilots to test a system prototype on Safran created Labinal Power Systems in January 2014 to con- 3. Roll-out of the Safran’s own Airbus A320 test aircraft. Forward, reverse, tight turns solidate our expertise in aircraft electrical systems and meet Embraer KC-390. and even pirouettes… pilots checked out the functions of this new the economic and ecological challenge of air transport in the electric taxiing system under real conditions. During subsequent st 21 century. The expanded new company comprises Goodrich workshops they shared their impressions and suggestions, which Electrical Power Systems, a leading supplier in power genera- will be used to further enhance the system. According to tion, acquired in 2013, and a key new acquisition in 2014, Eaton Messier-Bugatti-Dowty’s CEO Vincent Mascré, “Their very positive 2 Aerospace’s electrical distribution business, allowing Safran to feedback clearly indicates the growing interest in this technology, cover all aspects of aircraft electrical systems. and confirms the strategic importance and business outlook for our innovative system.” EGTS™: electric taxiing system picks up speed UP TO UP TO Developed by Safran and Honeywell, the EGTS electric taxiing system allows aircraft to taxi without having to use their jet engines. This system is already supported by Airbus, Air France, easyJet and other partners, and new agreements were signed in 2014, for instance with Indian airline Go Air, which is taking part in EGTS assessments, and Mexican carrier Interjet, which % % is studying its performance at high-altitude airports. The part- 75REDUCTION IN CO" EMISSIONS 4FUEL SAVINGS PER ners also signed an agreement with China Aviation Energy and DURING TAXIING WITH EGTS. FLIGHT CYCLE WITH EGTS. Emissions Solutions (CAEES) to deploy this system on the Chinese market. 3

Electricity gains ground in the air Labinal Power Systems supplies the primary and secondary electrical distribution systems on Embraer’s latest military trans- “The ‘more electric’ aircraft addresses a dual societal and economic port, the KC-390. Xi’an Aircraft also chose Labinal Power Systems to develop the main and auxiliary power generation challenge, namely to reduce the environmental footprint of air transport systems on its upcoming MA700 turboprop. In addition, Safran provides the ground and flight propulsion systems for the Airbus and allow airlines to reduce their costs. With the creation of Labinal Power E-Fan 2.0 electric aircraft. And Hispano-Suiza (Safran) is teaming up with GE to develop the IGGB = (Integrated Generator Systems, Safran is now organized to maintain its position as a leader GearBox), which combines an electrical power generator and transmission in a single unit. in this transformation during the upcoming decades.” 1 ALAIN SAURET, CEO OF LABINAL POWER SYSTEMS

16 I SAFRAN BUSINESS AND CORPORATE SOCIAL RESPONSIBILITY REPORT I 17 LEAP SAFRAN CHOSEN AS SUPPLIER ON TAKES OFF! AIRBUS A330NEO It was another record year for the CFM56 and LEAP aircraft engines. With more than 26,500 Aircelle (Safran) will supply the nacelles CFM56 already delivered, this engine still recorded over 1,500 orders in 2014, on the Airbus A330neo, the reengined and production reached an all-time high of 1,550. version of the Airbus A330ceo widebody Its successor, the LEAP, is now the best-selling aircraft engine under development in history. twin, for the Trent 7000 engine developed It recorded over 2,700 orders in 2014, bringing the total to nearly 8,500 at the end of the by Rolls-Royce. This new program will call year. New customers include Comair, Delta, Flydubai, Lufthansa, Nok Air, SunExpress, on Aircelle’s long-standing experience in Turkish Airlines and VietJetAir. Powering the Airbus A320neo, Boeing 737 MAX and Comac the design and production of large CFM INTERNATIONAL C919, the LEAP will start production in 2015, and by 2020 it will reach an unprecedented nacelles for the Airbus A330ceo and CELEBRATES production rate of 1,800 per year. Ground tests of the first complete engine started in A380, along with its proven expertise in TH September 2013 and the LEAP made its first flight on October 6, 2014 on a Boeing 747 40 ANNIVERSARY composite materials, acoustic treatments flying testbed (FTB) in California. The results of these initial tests show that performance In February 2014, Safran and and system architecture. In the words of th and reliability are fully in line with commitments. Certification is scheduled for 2015. GE celebrated the 40 Aircelle’s CEO Martin Sion*, “This major anniversary of CFM business win confirms Aircelle’s status as International, the 50/50 joint company between Snecma a world leader in aircraft engine nacelles.” (Safran) and GE. The *Until June 14, 2015. ceremony was attended by Jean-Paul Herteman, Chairman and CEO of Safran*, David Joyce, President and FIRST FLIGHT OF CEO of GE Aviation and Jean-Paul Ebanga, President AIRBUS A320NEO and CEO of CFM International. The two major engine-makers The first production Airbus A320neo, equipped with landing gear by signed the original agreement Messier-Bugatti-Dowty (Safran), was rolled out on July 1, 2014 and creating CFM International in 1974, then in 2008 renewed made its first flight in late September, from the Toulouse-Blagnac air- their agreement until 2040. port. The A320neo’s landing gear offers higher performance thanks to This partnership has proven new surface treatments (anti-corrosion coatings and paint), increasing decisive, in particular giving mean time between overhauls to 12 years. This new landing gear has birth to one of the most also been fitted to the “classic” Airbus A320ceo since the end of 2014. striking success stories in the history of aviation, the CFM56 Nacelles by Aircelle (Safran) will outfit the LEAP-powered version of turbofan engine. With the the Airbus A320neo. upcoming LEAP engine, this unique partnership is about to start a new chapter in its long history. *Until April 23, 2015. A NEW LARGE TURBOFAN NEW-GENERATION ACTIVE FOR THE SIDE STICK UNIT Safran is participating in the design of the GE9X engine that Sagem (Safran) unveiled the prototype of its will power the 777X, Boeing’s new long-range widebody twin. new active side stick control unit for civil Snecma will make the fan and exhaust cases of 3D woven airplanes and helicopters at the NBAA RTM (Resin Transfer Molding) composites, along with the business aviation trade show in the United States. Incorporating a number of innovative composite fan blades ( via CFAN, its 50/50 joint company solutions, this side stick unit features high with GE). Techspace Aero will make the low-pressure com- reliability and robustness. It has been pressor and fan disk. “Our participation in the GE9X program undergoing testing for several months in confirms GE’s confidence in Techspace Aero, already a part- conjunction with leading airlines and aircraft % ner on the GEnx, F110, CF34-10 and Passport engines,” said manufacturers, confirming that it matches crew training and flight safety requirements. 15reduction in fuel Yves Prete, President and CEO of Techspace Aero. Aircelle consumption with LEAP. will also provide the titanium exhausts for the new engine.

18 I SAFRAN BUSINESS AND CORPORATE SOCIAL RESPONSIBILITY REPORT I 19 SAFRAN AND ARRIUS 2R: FIRST FLIGHT TESTS OF SILVERCREST " BIZJET ROLLS-ROYCE TEAM UP ON FIRST FLIGHT ENGINE POWER TRANSMISSIONS The new Arrius 2R turboshaft engine from Following a successful in May Turbomeca (Safran), intended for the Bell 505 Jet In October 2014, Hispano-Suiza (Safran) and Rolls-Royce signed 2014, the Silvercrest ! business jet engine Ranger X helicopter, logged its first ground test in is continuing flight tests in San Antonio, the definitive agreement to create a joint venture specialized in April and its first flight in November 2014. Rated in Texas on a Gulfstream GII flying testbed. the design, development, production and support of power trans- the 500 shaft horsepower (shp) class, the Arrius 2R Ground and flight tests are used to validate missions for all of Rolls-Royce’s future commercial aircraft engines. promises high reliability – up to 3,000 hours the engine’s performance and support In particular, the company will contribute to the Trent 7000 engine between overhauls – and a twin-module design the development of the aircraft. This is a that will power the Airbus A330neo. “This agreement is strategic that reduces fuel consumption and operating costs. flagship program for Safran, as Snecma CEO for both partners, and it will enable Hispano-Suiza to ensure its Pierre Fabre* explains: “We have carved Certification is slated for the end of 2015. long-term position in the power transmission market,” says out a major position in the super-midsize segment of the business jet market, Hélène Moreau-Leroy, CEO of Hispano-Suiza. representing potential sales of 8,000 aircraft from now until 2030.” THANKS TO SAFRAN *Until June 14, 2015. AN AIRCRAFT LANDS FIRST DELIVERY OF SOMEWHERE IN XWB THE WORLD EVERY The Airbus A350 XWB was certified by the European and Amer- TWO SECONDS ican aviation authorities, respectively EASA and FAA, and the first aircraft was delivered to Airways in 2014. As a lead Messier-Bugatti-Dowty (Safran) delivered its 6,000 th single-aisle supplier to Airbus, Safran contributes to the performance of this commercial jet landing gear set to Airbus in 2014. It was also new long-range widebody twinjet. Four Safran companies are selected by Boeing as one of the wheel and carbon brake sup- major suppliers: Messier-Bugatti-Dowty for the landing and pliers on the 737 MAX, which has already recorded more than braking systems; Sagem for the onboard information system; 1,750 orders. A number of airlines have also chosen these Labinal Power Systems for the electrical interconnection system Messier-Bugatti-Dowty products: Zhejiang Loong Airlines and for the fuselage, engine pylons and tail; and Hispano-Suiza for Spirit Airlines for their Airbus fleets; China Eastern Airlines for the power transmission on the Rolls-Royce Trent XWB engine, 165 Airbus A320s; Garuda for 25 ATR 72s; in partnership with Rolls-Royce. for 60 Airbus A320ceos; , Xiamen Airlines and SilkAir % for their Boeing 737 Next-Generation jets, etc. Air Canada and Estimated40 share of the global helicopter Thai Airways opted for Messier- Bugatti-Dowty’s electric brakes fleet to be replaced by 2035. on their Boeing 787s. Source: Turbomeca (Safran). SAFRAN AND AVIC BOLSTER PARTNERSHIP ARRANO CONFIRMS In November 2014, Snecma (Safran) and South PERFORMANCE POTENTIAL Aviation Industry Co. Ltd. (part of the AVIC The Turbomeca (Safran) Arrano turboshaft engine, group) signed a framework agreement in Zhuhai, designed for single-engine helicopters in the 2-3 ton class, China to create a joint venture concerning tur- and twin-engine machines in the 4-6 ton class, and boprop engines for commercial airplanes. Even- selected by Airbus Helicopters as the exclusive engine on tually counting about 50 engineers, this 50/50 the H160, logged a successful first ground test in February 2014. “The Arrano is the most innovative turboshaft engine joint venture will design, test and produce power in its class,” claims Olivier Andriès, CEO of Turbomeca*. turbines and flame rings. It joins the many “It reduces fuel consumption by 10 to 15%, decreases the partnerships established by Safran and AVIC environmental footprint in general, optimizes maintenance over the last 30 years. operations and reduces total cost of ownership.” *Until June 14, 2015.

20 I SAFRAN BUSINESS AND CORPORATE SOCIAL RESPONSIBILITY REPORT I 21 CUSTOMER SERVICE Our service business keeps us in close contact with customers. We offer a wide range of specific and comprehensive service packages to guarantee our customers’ business con- tinuity and reduce their operating costs. In the maintenance, repair and overhaul (MRO) sector, Aircelle (Safran) signed in 2014 a 10-year support contract for the nacelles on jetliners operated by . It was also chosen to provide support services for the nacelles and thrust revers- ers on SaM146 engines powering Interjet’s Sukhoi Superjet 100 regional jets. To keep pace with this growing business, Aircelle Europe Services (AES) opened a new 4,500 square meter facility in France, doubling its operational capacity. Messier-Bugatti-Dowty (Safran) MAKING OUR LIVES SFCO2 ®: will also bolster its position in the landing gear maintenance market, after the acquisition REDUCING FLEET of Hydrep, a leader in MRO services for the landing gear on regional and business aircraft, MANAGEMENT COSTS as well as helicopters. Messier-Bugatti-Dowty also signed a 10-year contract with British SAFER AND EASIER Airways in 2014 to handle landing gear overhauls on its entire Airbus A320 fleet. Safran companies Snecma We continue to support our differentiation-based strategy by offering increasingly inno- and Sagem have teamed up vative services. For example, Turbomeca’s (Safran) SBH = (support-by-the-hour) service to offer airlines an innovative new service called SFCO2 !, offering is posting strong growth, notably with the signature of a major agreement with Biometric identifi cation, secure ID documents and designed to reduce their ADAC Luftfahrt Technik GmbH. British helicopter operator Bristow has adopted the same fuel consumption and CO 2 business model for its AgustaWestland AW189 helicopters fitted with the e-APU60 aux- transactions, detection of hazardous or illicit emissions, and therefore iliary power unit from Microturbo (Safran), designed to meet the power needs of the new operating costs. Snecma generation of more electric aircraft. substances… Safran’s innovative solutions enhance is offering this service under its EngineLife ! brand, while Given the massive data flows between interconnected aircraft systems, Safran’s engines Sagem has included it in and equipment are now very much a part of the digital maintenance generation. For exam- people’s daily lives, improve the security of countries, Cassiopée, an innovative ple, several Group companies have set up a platform, within the scope of the Monitoring “constellation” of flight data Services program, to host operating data and offer new secure, online support applications airports and high-value sites, and facilitate police work. services designed to optimize to customers. Turbomeca’s BOOST™ – Bank Of Online Services and Technologies – service fleet management and reduce maintenance costs. calls on this platform to help helicopter operators optimize maintenance schedules for We also make vital contributions to the e@ ciency of more efficient fleet management. many countries’ armed forces – air, land and sea – based on our proven expertise in the enabling technologies needed for optronics, avionics, navigation and safety-critical software.

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IDENTITY MORPHO (SAFRAN) ACQUIRES DICTAO Morpho fi nalized the acquisition of Dictao, SECURITY a software publisher recognized for its security and digital trust applications, in August 2014. ACROSS This acquisition refl ects Safran’s development strategy for its security business. The two companies’ business lines are highly THE BOARD complementary, enabling them to o< er complete, secure digital identity solutions for both the public and private markets, including Morpho, world leader in biometric identification banks, insurance fi rms and other companies. and ID documents The combination of these strengths generates Morpho (Safran) is the long-standing world leader in bio- strong growth potential, especially in metric identification systems, with proven expertise in indi- international markets because of Morpho’s vidual identity protection through systems that have amply global network. proven their reliability. We have worked with INTERPOL since 2 1999, and in the last two years we supplied the international police organization with our latest-generation automatic 1. Morpho, the world leader in automatic fingerprint fingerprint identification system (AFIS). We have also won identification systems (AFIS). a number of contracts in the ID document production market. 2. August 2014: acquisition In Chile, for example, we produced secure ID documents that of Dictao is finalized. allow citizens of this country to travel to the United States 3. The new Chilean passport, without a visa. And in India, within the scope of the Aadhaar “We now cover the entire produced by Morpho. program, more than 700 million residents have now received a unique ID number, providing secure access to a number of range of identity security, services, including opening a bank account, receiving a pass- port, social benefits, etc. whether physical or digital, Even more secure digital identity and we aim to offer the same 3 To deliver digital security on a par with its physical counter- part, in 2014 Morpho acquired Dictao, a French software security and ease-of-use NEARLY publisher and supplier of secure online transaction solutions. In the booming mobile payment sector, Morpho received when checking a passport EMVCo security certification for its “SIMply NFC Evolution” family of NFC (near field communications) SIM contactless as when authenticating products, making it a safe, reliable platform, compatible with all leading NFC payment systems and applications. an online transaction.” BILLION 3.2ELECTRONIC ID DOCUMENTS SHOULD BE ISSUED PHILIPPE PETITCOLIN, CEO OF MORPHO* 1 WORLDWIDE IN THE NEXT FIVE YEARS (2015-2019). *Until July 31, 2015. Source: ABI Research.

24 I SAFRAN BUSINESS AND CORPORATE SOCIAL RESPONSIBILITY REPORT I 25 RAFALE EXPORT INERTIAL NAVIGATION CONTRACTS SYSTEMS FOR THE INDIAN TAKE OFF NAVY

Dassault Aviation chalked up its first export Sagem (Safran) applies a wide range of advanced technologies – gyros, contracts for the Rafale fighter, with orders accelerometers, MEMS (micro-electromechanical systems), etc. – to for 24 Rafales each from and Qatar develop and produce the inertial sensors that are key to today’s navi- during the first half of 2015. India has also gation and stabilization systems. At the 2014 Defexpo trade show in announced its intention of acquiring New Delhi, Sagem and the Indian state-owned company BEL (Bharat 36 Rafales. Safran provides a wide range Electronic Limited) signed a Memorandum of Understanding for the of systems and equipment on France’s joint production of navigation sensors, inertial navigation systems and front-line multirole fighter: the M88 engine optronic systems for surface ships and submarines deployed by the from Snecma, landing systems from Indian navy. At the end of the year, Sagem signed a development contract Messier-Bugatti- Dowty, inertial navigation with French defense procurement agency DGA (Direction générale de system from Sagem, wiring from Labinal l’armement) covering MEMS-based inertial navigation sensors. Power Systems, etc.

AN EXPANDED MARKET FOR JIM LR INFRARED BINOCULARS

Developed and produced by Sagem (Safran), JIM LR (long range) binoculars include a number of functions in a single, portable package: day/night infrared vision, rangefinding, magnetic compass, GPS, laser pointer and data transmission. With the latest contracts won in 2014, SAFRAN HEADS THE CIVIL there are now more than 7,000 JIM LR PATROLLER™ DRONE binoculars in service or under order DRONE PROJECT IN FRANCE worldwide. “In 2014, Sagem was named head of a ‘civil drone’ project INTEGRATES CIVIL under the auspices of the French Ministry for the Economy, AIRSPACE Industry and Digital Data, designed to structure and From October 26 to November 7, 2014, high performance, and designed for both " develop the national industry Sagem (Safran) carried out nearly two military and homeland security missions BLUENAUTE CONQUERS THE SEAS for civil drones. Sagem brings dozen flight tests of the new Patroller™ (police, customs, border patrol, civil th to the table its experience as both Sagem (Safran) delivered its 200 BlueNaute® shipborne inertial drone, validating its integration in civil security, etc.). Fitted with an advanced a drone manufacturer and leading navigation system, mainly designed for commercial ships and airspace in compliance with civil aviation “see and avoid” system, it combines traf- contributor to commercial governmental missions, in 2014. Based on patented hemispherical aircraft, especially production regulations. These tests also helped fic sensors (including an infrared optro- resonator gyro (HRG) technology, BlueNaute ! offers proven high of guidance and flight control demonstrate the drone’s ability to per- nic sensor) and a collision risk estimation reliability and flawless operational availability. This rugged new systems, as well as safety-critical, form airport approaches under air traf- system capable of commanding auto- system is especially appreciated for some of today’s most mission-specific equipment, fic control procedures, without impacting matic avoidance flight paths. This secure, demanding missions, including offshore oil exploration and maritime integration of drones in civil either traffic or flight safety — a first in autonomous system is a key to drones policing. The Royal Norwegian Navy selected BlueNaute ! last year airspace, and certification.” Europe! The Patroller™ is a multi-sensor, being able to share civil airspace with to modernize six vessels. BRUNO EVEN, CEO OF SAGEM* 1-ton class drone, combining safety and their manned counterparts. *Until June 14, 2015. 26 I SAFRAN BUSINESS AND CORPORATE SOCIAL RESPONSIBILITY REPORT I 27 MORPHO, SECURE MOBILE FIRST COMPANY NFC PAYMENTS IN THE WORLD CERTIFIED FOR CAIXABANK TO ISO 14298 CaixaBank customers can now use their mobile phones to make payments, thanks A Morpho (Safran) production site in the Netherlands received the to Morpho’s (Safran) Trusted Service highest certification from Intergraf in 2014 for the management Management (TSM) services. With this of secure printing procedures. A number of steps are required to meet system, remote transactions are secure the requirements of the ISO 14298 standard: logical security, physical billion 2.8ID documents delivered by Morpho (Safran) and, for the first time in Europe, they can security, quality and financial security. as of December 31, 2014. integrate the Visa payment application, This world first is further proof of Morpho’s ongoing commitment to and bank card data in customers’ SIM guaranteeing the highest level of security and reliability throughout cards, all with very high-level security. This the printing process for all customers, whether private or public. marks the largest commercial deployment of a mobile NFC payment system in Europe, in terms of customer coverage and the number of contactless payments. A SECURE BIOMETRIC TABLET

Morpho (Safran) officially launched MorphoTablet™ at the Mobile World Congress in Barcelona in February 2014. A secure, multifunction bio- metric terminal, developed by France and India within the scope of the Aadhaar program, MorphoTablet™ features the latest biometric ID tech- nologies, in particular a high-definition camera for facial recognition, and a fingerprint reader certified by the FBI. MorphoTablet™ also reads contact or contactless smart cards, and offers 3G, Wi-Fi and Bluetooth connectivity. Its integrated cryptographic and security options heighten its protection of both transactions and sensitive data. MorphoTablet™ was designed for a host of applications, including: ID checks in public, elections, payment distributions, school and medical exams, access POLYCARBONATE control, etc. It addresses many different markets as well, including gov- TO FIGHT FAKE ID ernments, police forces, banks, insurance firms and service providers. DOCUMENTS In 2014, Egypt made widespread use of MorphoTablets™ for its consti- tutional referendum and presidential election, to authenticate eligible Morpho (Safran) delivered voters, as well as to calculate voter participation rates in real time. STEREO LASER IMAGE AND latest-generation e-passports to Panama in 2014, featuring a MULTIBIOMETRICS TO ENSURE datapage in polycarbonate, now the most secure material on the market. ID DOCUMENT SECURITY Panamanian citizens will enjoy secure identity documents, CONTACTLESS INTERPOL now counts some 40 million fake passports in its database, combined with protection of their mainly produced by substituting photos. To fight this threat, Morpho personal data. The Slovak Republic IDENTIFICATION IN LESS (Safran) has developed an innovative security feature, the Stereo Laser also chose Morpho to handle its THAN A SECOND Image (SLI®). This technology reproduces a 3D photo of the ID holder national e-ID card program. Morpho will turn out some two million on the document, thereby making it impossible to copy. The Dutch At the Global Identity Summit in September 2014, polycarbonate-based cards over the government chose this technology in March 2014 for all new ID cards next three years. Featuring an Morpho (Safran) announced the market launch of Finger and passports for Dutch citizens. And in November 2014 Morpho signed integrated, contact-based On the Fly®, the fastest contactless fingerprint reader in the a contract with AOI Electronics to manufacture Egypt’s national e-ID cryptographic controller, these world. Using advanced imaging technologies, this innovative cards. These cards will offer a host of features, including an electronic cards will enable citizens to take system can simultaneously read the fingerprints on four signature and biometric authentication, using the integrated “Match- advantage of online government fingers of a moving hand in less than a second – a technol- on-Card” technology, which checks that the user’s fingerprints match services with full security. ogy that could well revolutionize ID checks at borders, in those on the data embedded in the card. airports and at heavily frequented high-value venues.

28 I SAFRAN BUSINESS AND CORPORATE SOCIAL RESPONSIBILITY REPORT I 29 DETECTION: SAFRAN’S SYSTEMS ENSURE AIR TRANSPORT SAFETY In 2014, Morpho (Safran) launched Itemiser = 4DX, a new-generation explosive trace detector (ETD) that was evaluated by the European Civil Aviation Conference (ECAC) and POWERING declared compliant with European Union standards. Using a non-radioactive source, it offers advanced explosive detection capabilities. Itemiser = 4DX is light, portable, user- friendly and easy to install. Morpho has already delivered more than 5,000 Itemiser = DX ACCESS family explosive trace detectors worldwide. Airlines such as Lufthansa and airports such as Frankfurt chose Morpho security solutions SAFRAN ONCE AGAIN once again in 2014 to improve their detection capability without disturbing passenger or TO SPACE cargo traffic. The airline JetBlue acquired MobileTrace = portable explosive and narcotics SELECTED BY TSA trace detectors to improve passenger throughput. E-CAT (Credential Morpho’s family of CTX™ computed-tomography explosive detection systems (EDS) for Authentication Technology), checked luggage continues to be the most widely used in the world, with nearly 2,000 units Safran powers access to space, a strategic market the latest ID document in service. authentication system that ensures national independence, global developed by MorphoTrust USA, was chosen by the Transportation Security telecommunications, scientifi c progress (from Earth Administration (TSA) of the United States in August 2014, observation to space exploration) and much more. for the country’s airports. This new technology is used to scan passengers’ ID documents, automatically check the different embedded security elements, and compare that data with data from Secure Flight, the TSA’s own surveillance system.

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Safran’s technologies contributed to the success of the European Space Agency’s Rosetta mission, which sent the Philae lander to the surface of the comet 67P/Churyumov-Gerasimenko on November 12, 2014, more than 500 million kilometers from Earth. The mission actually THE CONQUEST started back on March 2, 2004, when an Ariane 5 rocket, powered by three Safran powerplants, including the ® main stage cryogenic engine, boosted the Rosetta space probe into a liberation trajectory. OF SPACE Reosc, a subsidiary of Sagem (Safran), supplied infrared filters for the probe and the lander, used in the photos taken by both of these space- To ensure the competitiveness of Europe’s space industry, Safran craft. Philippe Schleicher, Chairman and CEO of Herakles (Safran), adds: and Airbus Group announced the creation of a 50/50 joint venture “The creation of Airbus “We made the silicon carbide coating for the mirrors on Rosetta’s Osi- on December 3, 2014, called Airbus Safran Launchers (ASL). This ris camera, the pressure transducers for its propellant tanks, and the new company will develop lower-cost launchers to consolidate Safran Launchers and high-gain antenna deployment systems, via our subsidiary Pyroalliance.” Europe’s leadership in the space transport industry. This initiative is largely supported by the French president. the start of the Ariane 6 A full-fledged industrial challenge Each partner brings specific areas of expertise to this venture: program mark launchers for Airbus Group and rocket propulsion systems for 6 OUT OF 6 FOR Safran. The primary aims of ASL are to maintain the Ariane 5 a decisive turning point launcher’s exceptional quality and reliability, while also developing ARIANE 5 IN 2014 a more competitive family of launch vehicles. Initially, Airbus Safran in the history of the The Ariane 5 launch on December 6, 2014, Launchers will consolidate civil launcher programs, and eventually lofting two telecommunications satellites the company will combine all industrial assets of Safran and Airbus European space industry. from the Guiana Space Center in Kourou, Group concerning propulsion and launchers, along with the asso- French Guiana, marked the sixth launch ciated employees and stakes in related companies (1) . They set the foundations of the year and the 63 rd successful mission Ariane 6, Airbus Safran Launchers’ primary focus for a major industrial in a row for Europe’s heavy launcher. The Ariane 6 launcher program, officially approved by the Safran contributes to every stage of this European Space Agency (ESA) on December 2, 2014, will be at and strategic project, launcher, including a number of key tech- the heart of this new alliance. Following a five-year development nologies: cryogenic propulsion, solid pro- period, the first launch is planned for 2020. The design of this the only guarantee of pulsion, inertial reference unit, pressure new launcher has been optimized: the boosters are based on transducers, etc. P120 solid rocket motors produced by Herakles (Safran) (2) and sustained independence Avio through their 50/50 joint venture, Europropulsion. This same rocket motor will also be used on the first stage of a new version and competitive access of the Vega light launcher. Ariane 6’s main stage will feature a cryogenic propulsion system inspired by that on the current to space for Europe.” = HIGH-PERFORMANCE MIRRORS FOR GAIA Ariane 5 ECA, powered by the upgraded Vulcain 2.1+ engine MARC VENTRE, made by Snecma (Safran) (2) . The upper stage will be fitted with DEPUTY CHIEF EXECUTIVE OFFICER, Europe’s Gaia satellite has been operational in orbit since January 8, 2014, fulfi lling = a restartable cryogenic engine, . This principle of leveraging OPERATIONS OF SAFRAN*, AND its mission of mapping a billion stars in 3D to an unprecedented accuracy of synergies on all stages is one of the key factors that should enable CHAIRMAN OF THE BOARD OF AIRBUS 1/100,000 of an arc-second. This impressive feat is made possible by the two main reducing the average cost per Ariane 6 launch by 40%, versus its SAFRAN LAUNCHERS silicon carbide mirrors, polished by Reosc, a subsidiary of Sagem (Safran). Because predecessor. *Until April 23, 2015. of the extreme hardness of silicon carbide, this marked a world fi rst: it took nearly a year and a half to polish the two concave mirrors, each measuring (1) Pending regulatory authorizations and consultations with employee unions. (2) Through Airbus Safran Launchers, the 50/50 joint company between Safran and 150 cm long by 60 cm wide, to a surface precision of less than 10 nanometers. Airbus Group, announced in 2014 and officially created in January 2015. Reosc then deposited a silver-based coating on the substrate to provide refl ectivity, amply demonstrating its expertise in advanced fabrication processes, and consolidating its leadership in high-performance space optics.

32 I SAFRAN BUSINESS AND CORPORATE SOCIAL RESPONSIBILITY REPORT I 33 WORLD RECORD FOR A SATELLITE PLASMA THRUSTER The PPS®1350-E plasma thruster from Snecma (Safran) set a new world record with an endurance test totaling 6,700 hours, completed in July 2014. The stakes are huge for Safran, which has developed and produced these electric propulsion systems for satellites for over twenty years. For a given payload, electric propulsion reduces the weight of a telecom- AIMING FOR SAFRAN AND THALES munications satellite by 40%, which means that the satellite can use smaller and less ALENIA SPACE SIGN expensive launchers, a decisive business criteria these days. Unlike conventional chemical AGREEMENT FOR propulsion systems, geostationary telecom satellites fitted with these plasma thrusters TECHNOLOGICAL ® use electrical energy from their solar arrays to handle stationkeeping and/or orbital posi- PPS 5000 THRUSTER tioning duties. Safran’s PPS®1350 family of plasma thrusters has already been chosen for With support from French the Alphabus satellite platform, a collaborative European program. space agency CNES and the AND OPERATIONAL general investment commission CGI, Snecma is now developing the ! EXCELLENCE latest-generation PPS 5000 thruster, rated at 5 kW, for next-generation satellites. This new thruster will handle propulsion duties on the Safran maintains a razor-sharp focus on excellence to new-generation Spacebus satellite platforms with consolidate our leadership positions and spur growth. “all electric” propulsion, following a contract signed We continuously focus on R&D, new partnership with Thales Alenia Space France in May 2014. The PPS !5000 was also arrangements and continuous improvement across chosen last year by to handle all functions, along with signifi cant capital expenditures orbital maneuvers on the Eurostar 3000 platform. in France and around the world to make sure we deliver local support to all our customers.

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1. Aircelle plants are TOMORROW’S expanding the use of robots. 2. High-pressure compressor guide vanes in the Silvercrest® regional jet engine, produced FACTORY by the additive manufacturing process.

3. Using a tablet to simplify State-of-the-art production plants assembly at Snecma’s Villaroche plant. We invest heavily to develop our production facilities and 2015PLANNED DATE FOR MAKING THE FIRST 2 incorporate advanced technologies. For instance, the PRODUCTION-STANDARD PARTS USING THE ADDITIVE Turbomeca (Safran) plant in Bordes is organized by product MANUFACTURING PROCESS. lines and centers of expertise to reduce production cycles. And new digital technologies are naturally revolutionizing ADDITIVE MANUFACTURING CAN our plants. The robots have landed at Aircelle (Safran), improv- REDUCE DEVELOPMENT TIME BY 60%! ing both quality and working comfort. Snecma’s (Safran) Additive manufacturing is a process that makes parts plant in Villaroche, near Paris, has introduced tablets, robots, by building up successive layers, based on a 3D model. electronically-controlled bolt tighteners, etc., innovations For metal parts, a metallic powder is sintered, or which will shortly be expanded to other plants. These new melted, by a laser beam. Safran is firmly convinced tools and methods are also transforming job requirements, of the advantages of this technology, and is expanding but Safran University provides the training courses needed its application across the Group. In 2014, for example, for employees to adapt to these changes. Microturbo (Safran) used the process to make prototypes of complex parts — rotating parts in Investing in the future particular — for the hot section of a gas turbine. The engine made with these parts underwent its first Safran invests in the development of innovative services and bench firing test in just 18 months, versus 24 to production processes, the key to our drive to build tomorrow’s 30 months with a conventional development process. factory. For example, the Fab Lab, launched by Snecma in Snecma, Turbomeca and other Group companies are June 2014, is dedicated to the development of innovative also taking advantage of this very promising services for airlines, based on digital data. It reflects Safran technology. “big data” development strategy, which represents a concrete 3 growth driver. By processing this wealth of data, generated by wired production plants and a vast fleet of products in service, Safran can improve internal processes and product quality and offer customers personalized new services that will reduce their operating costs. We created a corporate “Digitized, robotized, wired… tomorrow’s plant will take full advantage division in 2015, Safran Analytics, tasked with helping all of our companies deploy this strategy. of automation and digital tools to enhance performance, flexibility and competitiveness. From design to production, the entire value chain will be transformed. And Safran is already gearing up for this revolution.” 1 MARC VENTRE, DEPUTY CHIEF EXECUTIVE OFFICER, OPERATIONS*

*Until April 23, 2015.

36 I SAFRAN BUSINESS AND CORPORATE SOCIAL RESPONSIBILITY REPORT I 37 SAFRAN TECH, SAFRAN AND VALEO: OPEN INNOVATION, ENHANCING TRANSPORT A CENTER OF RESEARCH THE KEY TO SUCCESS To encourage research and collective SAFETY performance, we work with & TECHNOLOGY top-flight academic partners in The 2014 Eurosatory defense show and the Mondial de l’automobile France and worldwide. (international auto show) provided excellent opportunities to present In 2014, for example, we renewed the first concrete results of the partnership inked in 2013 by Safran and EXCELLENCE our framework agreement with three auto parts giant Valeo. At Eurosatory, Safran showcased a sensor array French research institutions, designed for armored vehicles, giving optimized all-weather vision. At In 2014, Safran completed the installation in Saclay (near Paris) of a new site. It mainly hosts CNRS (scientific research center), Safran Tech, the Group’s new Research & Technology center, inaugurated in early 2015. Onera (aerospace research center) the auto show, Valeo introduced the InBlue “smart key”, embedded in SENSORS: Safran Tech is designed to accelerate breakthroughs in three main areas: aircraft systems; and the CEA (atomic and alternative a smartphone, which offers remote unlocking, starting, geo-location energies commission), ensuring SAFRAN TEAMS UP digital technology; and materials, processes and sensors. and fuel level and tire pressure monitoring of cars. privileged access to the best Sagem (Safran), Valeo and Ulis were also selected by the French inter- Safran Tech is a state-of-the-art facility featuring a materials characterization lab, additive scientific resources in France. Our WITH THE CEA ministerial fund to develop a low-cost camera allowing the safe driving manufacturing cell, computer center, simulation bench and more. It will eventually house network of partners also Safran has teamed up with some 300 researchers, and is tasked with fostering the emergence of disruptive techno- encompasses universities and of all types of vehicles. Their task is to design a sensor capable of the French Alternative engineering schools. We have detecting obstacles even under the worst weather conditions for both Energies and Atomic logies that can be applied in Safran’s businesses. stepped up our collaboration with civil applications (automobiles) and military use (combat vehicles, Energy Commission CEA Located in the heart of France’s leading science and technology cluster, this new site will these institutions, especially via the robots, drones). to create a joint lab with also house major R&T partners, from academia and industry, working through joint labs or creation of chairs at the École des about 20 engineers and in shared platforms. Mines de Paris and Télécom researchers, some based ParisTech engineering schools, while at Safran Tech, others at creating new links with institutions CEA-Tech in Grenoble. One such as Pierre et Marie Curie of their main challenges is to University. We also partner two develop innovative sensors newly created technology research for aerospace, defense and centers, Antoine de Saint-Exupéry security applications. For (aerospace) and M2P (advanced example, this research team metallurgy). will be working on fi ngerprint We continue to form partnerships detection, navigation in international markets, for example systems and temperature, in Italy with the Scuola Normale vibration, crack and corrosion Superiore di Pisa , for exoskeleton monitoring. technologies, and in India with two leading microelectronics institutes, for research into new-generation digital cores, and fault identification modules embedded in chips. In Morocco, we’re working with the government to develop R&T capabilities and support the development of an aviation industry. Last but not least, in 2014 Safran created an investment fund to support innovative startups in our areas of excellence.

€ billion R&D2 expenditures in 2014 equaled 13% of sales.

38 I SAFRAN BUSINESS AND CORPORATE SOCIAL RESPONSIBILITY REPORT I 39 SAFRAN WEAVES A SAFRAN’S EXPERTS

COMPOSITE WEB – IN 3D! Safran has established a network of Composites are lighter and stronger than previously used materials, driving a revolution 900 experts, appointed because of their in aviation, especially by improving environmental performance. At Safran, we have been proven scientific excellence, who play a exploiting these advantages since the 1980s, especially for aircraft engine nacelles, and major role in implementing the Group’s we continue to expand their scope of use. In 2014 we opened three new facilities dedicated innovation strategy. At an experts con- to composites. One is a research center, Safran Composites, located in Itteville (France), vention in October 2014, they reviewed and dedicated to the design and development of tomorrow’s composite parts, enabling their role in the Group and discussed the us to maintain our leading position in this area. The state-of-the-art machinery and equip- three major advances to which the net- TWO PLANTS ment at this research center, including the fabrication of prototypes, will help us continue work made a major contribution: hemi- DEDICATED the development of our proprietary 3D woven composite technology, and explore new spherical resonator gyros (HRG), TO COMPOSITES paths to innovation. 3D woven composite fan blades, and com- puted-tomography detection systems. Twin plants have been built in Rochester, New Hampshire (United States) and Commercy (France), to make composite parts for LEAP, the new-generation engine from CFM International, the 50/50 joint company between WHEN INNOVATION GOES Snecma (Safran) and GE, set to power the new generation of HAND IN HAND WITH TALENT single-aisle commercial jets. Built by Safran and the U.S. The 2014 Innovation Awards was once again a highlight in Safran’s company Albany International innovation drive. This annual contest rewards the most promising inno- as partners, each of these vations from all Safran employees and facilities around the world. From plants spans some 28,000 employee-driven innovation to disruptive technologies, for both prod- square meters and will employ 400 to 500 persons when they ucts and services, all initiatives are encouraged and spotlighted. hit cruise speed. They make In 2014, 70,400 employee ideas were implemented, more than one per the 3D woven composite fan employee! Furthermore, for the second year in a row, reflecting its open blades and cases for this new innovation strategy, Safran invited suppliers to participate in this contest. engine, innovative parts that help reduce the LEAP’s fuel The Grand Prize went to Snecma (Safran) and partner Aubert & Duval consumption by 15% compared for the creation of a new, ultra-high-performance material for the turbine with the latest CFM56 models. shafts on the LEAP and Silvercrest = engines. The company LISI AER- OSPACE earned the Lean-Sigma award for its performance management system, which helped optimize Safran’s supply chain.

A NEW TECHNOLOGY CLOSER TO OUR CUSTOMERS BREAKTHROUGH FOR A wide range of local services is a top priority for Safran, which invested in both industrial and commercial capabilities THE LEAP ENGINE! in 2014. For example, Microturbo enhanced its responsiveness last year by opening a new facility in Toulouse (France) for Snecma (Safran) has signed a contract with Mecachrome for repairs and surface treatment. Messier-Bugatti-Dowty built a production of low-pressure turbine blades of titanium alu- new plant for carbon brake disk production and minide (TiAl) for the LEAP engine. Stronger and lighter than refurbishment in , Aircelle opened a the nickel-based alloys traditionally used on these parts, TiAl integration facility for the Airbus A320neo in Germany, and Safran opened two sales offices, in Malaysia and , is one of the breakthrough technologies on this engine, along helping us move even closer to our customers. with 3D woven composites.

40 I SAFRAN BUSINESS AND CORPORATE SOCIAL RESPONSIBILITY REPORT I 41 TOPFor the fourth year in a row,100 in 2014 Safran was named one of the Top 100 Global Innovators by Thomson Reuters. CREATING VALUE

NETWORKING WITH OUR

Share knowledge and best practices, facili- tate information access, operate in project STAKEHOLDERS mode… the enterprise network set up by Safran in 2014, using a social network type technology, will foster collaborative working across the Group. First results are very prom- At Safran, we have long made corporate social ising: more than 20,000 employees are now connected, via some 400 communities. responsibility (CSR) an integral part of our development strategy, because our growth depends on both our operational performance and satisfying all our SHARED SERVICES stakeholders. We aim for exemplary corporate behavior CENTERS EXPAND Safran’s Shared Services Centers (SSC), on a par with the excellence of our products, to help designed to improve the efficiency of our support functions, are spreading create value in all countries where we operate. both in France and worldwide. The Recruiting-Careers-Mobility SSC recruited some 80% of the new Group’s management staff in France in 2014. And the cornerstone for a new building in Blagnac, southwest France, was laid in September, to group several entities, including some SSC branches THE LEAN-SIGMA CULTURE in this region. Safran has long applied the Lean-Sigma approach, underpinning con- tinuous improvement across the Group. This approach combines the Lean management system and the Six Sigma quality improvement method. It applies to all areas of our enterprise. In addition to the Green Belts and Black Belts who manage projects, fully two-thirds of our employees have now taken an introductory course in the Lean- Sigma approach. Safran’s maturity in this area makes it a leader in Lean Engineering and Lean Office among all French companies. Sev- eral associated initiatives have also been implemented to improve our agility and thereby simplify operations. For example, a new system dubbed “Safran Way” will be deployed to support excellence in all 05 processes.

42 I FOCUS

SCAN THE QR CODE TO LEARN MORE ABOUT SAFRAN’S CSR CHALLENGES DIAGRAM A GLOBAL, “For Safran, exemplary performance is more than just a goal. RESPONSIBLE It’s an imperative every step of the way. Our training and accident reduction actions in 2014, along with our efforts to increase CORPORATE diversity, reflect our firm resolve to apply this commitment CITIZEN at all of our facilities around the world.” STÉPHANE ABRIAL, DEPUTY CHIEF EXECUTIVE OFFICER, CORPORATE OFFICE* Corporate social responsibility (CSR) is a pivotal part of Safran’s corporate strategy. Perfectly complementing our technological *Until April 23, 2015. excellence, CSR underpins our sustainable, harmonious growth, to benefit everybody concerned by our activities.

Dedicated CSR governance Safran’s CSR policy is embodied at the very highest level by Philippe Petitcolin, CEO. It is formally expressed through six strategic CSR objectives, and is deployed under the direction of Stéphane Abrial, the Deputy Chief Executive Officer, Corporate OBJECTIVES TO GUIDE Office*, who sponsors this policy within the Executive Committee. 6 SAFRAN’S CSR STRATEGY Safran’s Diversity and CSR manager is the corporate coordinator, and chairs a steering committee with members from the depart- Safran has defi ned six strategic objectives, based on ments concerned. Correspondents at all Group entities support major actions identifi ed in the ISO 26000 standard the policy’s deployment. concerning the social responsibility of organizations:

Challenges diagram – Develop innovative products and processes with minimal environmental impact. To ensure continuous improvement, in 2014 Safran drew up a diagram summarizing all CSR challenges, to prioritize these – Aim for excellence in the safety and protection challenges in terms of their pertinence for Safran and its of people and property. stakeholders. – Develop people’s potential. – Foster the involvement of suppliers and partners A global commitment in this initiative. Having signed the United Nations Global – Sustain a culture of integrity. Compact, Safran achieved an advanced ranking right from the first year (3 out of 4). – Guarantee optimum communications with Signing the Global Compact confirms our all stakeholders. commitment to environmental protection and responsible business practices.

*Until April 23, 2015.

44 I SAFRAN BUSINESS AND CORPORATE SOCIAL RESPONSIBILITY REPORT I 45 FOCUS

EMPLOYEES • 69,000 employees in nearly 60 countries. • Steady growth in workforce since 2011: 15%. SAFRAN CREATES VALUE • More than 8,200 persons hired in 2014, including over 2,200 net jobs created. • Women account for 26% of the total workforce and 34% of new hires in 2014. • Over 1.6 million hours of training provided in 2014. WITH ITS STAKEHOLDERS • In Europe, 1 out of every 6 employees takes responsibility for a young person being trained (intern or student in work-study program). Figures at December 31, 2014 (unless specifi ed otherwise) • 60% of employees are Safran shareholders.

SOCIAL PARTNERS • Three new Group-wide agreements were signed in France in 2014, concerning: professional training; coverage for accidental death and invalidity; the hiring and continued employment of disabled persons. CUSTOMERS • Safran posted sales of €15.4 billion in 2014, with nearly 85% in export markets. • High-tech solutions meeting the needs of a wide variety of customers: SCHOOLS, UNIVERSITIES, LABORATORIES – civil and military airplane and helicopter manufacturers; – airlines; • Safran has solid Research & Technology partnerships with the – space agencies; CNRS, CEA and Onera research organizations in France, and we work – armed forces (army, navy, air force) and police forces; with several technology research institutes and a number of university – telecom operators; laboratories worldwide. – airports, public transport; • More than 280 Safran employees act as “ambassadors” to their – banks, etc. alma maters (37 schools and universities). • Our roots and technology/industrial core are in France and Europe, with extensive deployment in the Americas, Africa and the Asia-Pacifi c. LOCAL, FEDERAL, REGIONAL GOVERNMENTS Because of this global presence, we give our customers fast, local • €674 million capital expenditures in 2014. service, with best-in-class expertise. • Safran helps energize the regions where it operates, in conjunction with • Customer satisfaction, Safran’s primary goal: listening carefully to local training and placement organizations. our customers, and anticipating, understanding and addressing their requirements. PLUS: Local communities. SHAREHOLDERS (Institutional, individual and employee shareholders) • Capital shareholding at March 31, 2015: – Public 67.8% ASSOCIATIONS – French State: 18% – Employees: 14.1% • Since 2005 Safran has provided support for nearly – Treasury shares: 0.1% 480 philanthropy projects, either directly or through our corporate • More than 500 meetings and conference calls with portfolio foundations. managers and fi nancial analysts in 2014, in France and abroad. MEDIA • Safran ranks 2nd among CAC 40 companies according to its level of employee shareholding. @ • Safran fosters relations with a wide network of journalists, with • 3 meetings for individual shareholders organized in 2014, in addition international media accounting for a growing share. to the Annual General Meeting and 6 plant visits. • Starting a few years ago, Safran and its companies communicate directly with their communities via social networks (Twitter, SUPPLIERS, SUBCONTRACTORS AND PARTNERS Facebook, LinkedIn, Viadeo, YouTube). • Purchasing volume: €9.2 billion in 2014, equal to 60% of sales. PLUS: Surrounding communities, non-governmental • Support for suppliers to help adapt their organization and facilities organizations (NGO). to changing market requirements. • Improved workload visibility to allow suppliers to plan ahead. FINANCIAL ANALYSTS

PLUS: Insurance fi rms, trade associations (Gifas, UIMM, ICAO), • More than 20 fi nancial analyst fi rms track the Safran share on a regular basis. professionals in the same sector. RATINGS AGENCIES • Safran sends concrete data and the results of its CSR actions to non-fi nancial ratings agencies.

46 I SAFRAN BUSINESS AND CORPORATE SOCIAL RESPONSIBILITY REPORT I 47 ETHICS AND INTEGRITY

TRADE COMPLIANCE: A HIGH-LEVEL IMPERATIVE

Safran’s unstinting commitment receive appropriate training and Economic Forum’s Partnering to honesty and integrity provides timely information, with seminars Against Corruption Initiative (PACI). a decisive competitive advantage. organized to foster the sharing of Safran chairs the international ethics best practices. The TCOs act as committee at Medef (the French Rigorous internal processes “ethical authorities”, working closely employers’ association) and we take Safran’s zero tolerance policy with the Group’s anti-fraud part in various working groups for towards corruption is reflected in a committee. the French aerospace industry risk prevention and trade compliance association Gifas, the Aerospace and program that spans the full range of A commitment without borders Defence Industries Association of laws, organizations, products and Safran has signed the UN Global Europe (ASD), the international markets. The principles and Compact, clearly illustrating our total chamber of commerce (ICC), the procedures underpinning the fight commitment to promoting ethics circle of business ethics, etc. All against corruption are formally and integrity in our trade relations, Safran companies have signed the CORINNE LAGACHE expressed in our Ethical Guidelines and encouraging this mindset among “Common Industry Standards for SAFRAN VICE PRESIDENT, TRADE COMPLIANCE and a Responsible Lobbying Charter. all employees and partners. Safran Anti-Corruption” protocol, under the AND EXPORT CONTROL We also deploy an ad hoc program is also a member of the steering auspices of the ASD. that includes procedures for committee of the International “The effectiveness of our trade compliance and ethics program approving and monitoring Group Forum on Business Ethical Conduct was underscored in 2014 during the certification audits. business partners, as well as rules (IFBEC) for the Aerospace and concerning gifts and hospitality Defense Industry and the But we remain extremely vigilant, and we continue to apply a zero- given or received by employees. consultative committee of the tolerance policy, which depends on the consolidation of our internal A network of 38 trade compliance Business and Industry Advisory officers (TCO) and 83 trade Committee (BIAC) to the OECD. We and external structures, and the total commitment of corporate compliance managers oversees the are also a partner in Safeguarding management.” strict application of these procedures Aviation & Travel Value Chains, a in all Group companies. Employees project implemented by the World

A PROACTIVE COMMITMENT RAISING AWARENESS NEW CERTIFICATIONS The UN Global Compact, signed by Safran, brings together AT ALL LEVELS In December 2012, Safran was the first companies from around the world, united by a shared commitment All employees concerned have taken company in the French stock market index to the fundamental principles behind sustainable development Safran’s “fight against corruption” training CAC 40 to be certified to anti-corruption and fair trade. As a signatory to this pact, in December 2014 Safran courses, which are backed by an e-learning standards by French agency ADIT (Agence took part in the 10 th anniversary celebration of the 10 th principle, tool and newsletters tracking legal changes. pour la diffusion de l’information concerning the fight against corruption. This event was an excellent Safran’s trade compliance department technologique) . Two Group companies – opportunity to review the results of actions already applied and has provided extensive information on this Sagem and Morpho – were then certified talk about upcoming challenges, including the fight against corruption subject to both corporate management in 2014, and four more expect certification in emerging countries, harmonizing international standards, and management committees at all in 2015: Snecma, Turbomeca, pooling actions and more. subsidiaries. Messier-Bugatti-Dowty and Herakles.

48 I SAFRAN BUSINESS AND CORPORATE SOCIAL RESPONSIBILITY REPORT I 49 ETHICS AND INTEGRITY

EXPORT CONTROL IN COMPLIANCE WITH REGULATIONS

With nearly 85% of our sales regulations, etc. From the operational control are correctly applied and that generated in international markets, standpoint, it is applied in all Group the commitments made by Safran Safran is subject to a wide range of companies and their own subsidiaries, corporate management are met. regulations concerning our import via a network of more than However, Safran must continually and export activities, along with strict 520 specialized staff, who meet for adapt to changes in regulations. compliance with all sanctions and a seminar once every two years. For example, we take an active role embargos. in Gifas and ASD working groups, Demanding standards which involve all entities concerned. An effective organization Safran’s demanding oversight Safran deploys an oversight standards are a solid advantage organization to ensure legal for our companies in earning RUSS SPITTLER compliance, defined and supervised certification from the French defense COUNSEL, GLOBAL TRADE & COMPLIANCE, by the corporate Trade Compliance procurement agency DGA (Direction SAFRAN USA and Export Control department. This générale de l’armement) following organization is based on nine areas the transposition into French law of NEARLY “Ensuring transparency and integrity in global trade of compliance, including deployment the European directive concerning of an ad hoc organization, defense equipment transfers within are central to Safran’s mission and customers. development by each company of an the European Union. Three Safran That’s why Safran and its subsidiaries work together internal control program, training and companies have already been information, authorization request certified, and two more certifications with governments and customers to create a transparent management, technology are under way. Audits are regularly % and therefore secure marketplace.” transfer control, processing performed to ensure that the 85OF SAFRAN’S SALES ARE of non-compliance with applicable compliance standards for export GENERATED IN EXPORT MARKETS.

AN EXPANDING EVERYBODY’S NETWORK BUSINESS! At December 31, 2014, More than 12,000 Safran Safran counted 69 entities employees have already taken handling imports or exports, training courses about our with 70 export control officers export control standards. and more than 500 managers All new hires take an online and correspondents in course as soon as they join all operating departments Safran. concerned.

50 I SAFRAN BUSINESS AND CORPORATE SOCIAL RESPONSIBILITY REPORT I 51 SHAREHOLDERS

BOLSTERING RELATIONS WITH SHAREHOLDERS

Safran simultaneously provides corporate management, members of (including former employees): 14.4% complete and accurate information the Executive Committee and heads of total share capital at December 31, to all shareholders, in strict compliance of operations to present Safran’s 2014, the second highest rate among with all current laws and regulations. strategy and recent developments. CAC 40 companies. Furthermore, The latest “Capital Market Day” was 60% of employees own shares. Diversified institutional held in June 2013, just before the Paris Over the last few years, Safran has shareholding Air Show. Throughout 2014, Safran promoted employee shareholding Safran’s institutional shareholding organized more than 500 meetings as a pillar of its culture. This policy structure is more international than and conference calls in France and is built on both permanent employee the average at companies in the abroad with both financial analysts savings plans, including employer CAC 40 (French stock market index). and portfolio managers. matching funds, and occasional Our institutional shareholders are actions, such as the “Safran Sharing” distributed as follows: 39% in North Local support for individual operation rolled out in 13 countries PETER CAMPBELL America, 25% in the shareholders in 2014. SAFRAN VICE PRESIDENT, INVESTOR RELATIONS and Ireland, 23% in France and 13% in A majority of individual shareholders, the rest of the world. Safran regularly who held 6% of Safran’s share capital “The job of the Investor Relations department is to foster relations of organizes events so that financial at the end of 2014, are French. Safran mutual trust with the financial community and individual shareholders. analysts and institutional investors organizes frequent information can meet corporate management. meetings and plant visits, reserved We regularly organize events that allow analysts and institutional This is especially the case during to these shareholders. shareholders to meet corporate management. In addition, to develop publications of annual, half-year and quarterly financial results. In addition, Employee shareholding, a pillar local relations with individual shareholders, Safran organizes meetings Safran organizes special “Capital of the Safran model and plant visits solely for these shareholders.” Market Days” for financial analysts Safran stands out through its high and institutional investors, allowing rate of employee shareholding

A PIVOTAL PART OF CORPORATE EMPLOYEE SHAREHOLDING: MEETING INDIVIDUAL STRATEGY SAFRAN RANKED 2 ND AMONG SHAREHOLDERS A new Safran/Albany International plant dedicated to the CAC 40 COMPANIES In addition to the Annual General production of composite parts for new-generation aircraft In line with French law, Safran employees benefitted Meeting in Paris, Safran organized three engines was inaugurated in Rochester, New Hampshire special meetings for individual from a shareholding offer in 2014, “Safran Sharing”, in March 2014. Both institutional shareholders and financial shareholders in 2014, in Bordeaux, Lyon entitling them to purchase 10% of the shares divested analysts were invited to this event, a major milestone by the French government in 2013. This operation and Caen. Continuing our annual in the run-up to the start of LEAP engine production. This tradition, Safran also offered plant visits maintained Safran’s employee shareholding rate inauguration reflected the importance of Safran’s capital to members of the Shareholders’ Club at over 14%, consolidating the Group’s 2 nd place in investments to build foundations for the future, and provided so they could get a first-hand look this area among CAC 40 companies. an excellent opportunity for discussions on our strategy. at the diversity of our business sectors.

52 I SAFRAN BUSINESS AND CORPORATE SOCIAL RESPONSIBILITY REPORT I 53 HUMAN RESOURCES

SCAN THE QR CODE TO LEARN MORE ABOUT SAFRAN DISCOVERY DAY

RECRUITING AND ONBOARDING NEW HIRES DEVELOPING TALENT Safran Discovery Day 2014 was held on the new Safran Campus in Massy, near Paris, and welcomed more than 2,000 recently hired employees from around the world to give them a better understanding of the Since 2011 Safran has added more Favoring the employment for training programs in 2014, and Group. Roundtable discussions addressed different of young people than 30,000 new employees. one out of every six employees professions, technologies, markets, values, career Enriched by this new talent pool, we Safran welcomes a number of interns has been involved in welcoming them opportunities and more, and included meetings are now tackling the challenge of and apprentices every year, and and supporting their development. with management and talks between employees. integrating them and overseeing we have also undertaken a “shared In addition to this flagship event, Safran has also set up an integration program to help new employees their professional development. apprenticeship” program, allowing OVER these young people to split their deepen their understanding of the Group. Talent, a guarantee of future work time between a Group success company and a subcontractor. ENGINEERING STUDENTS Safran continued to recruit in 2014, Through the association Frateli , LIKE SAFRAN! with over 8,200 new hires, for all Safran supports employees who In 2014, Safran was ranked the second and business sectors and job categories mentor promising youngsters. fifth most preferred employer of French engineering These efforts are being deployed students in surveys by Trendence and Universum, in our Group, and at all levels of 8NEW EMPLOYEES,200 WORLDWIDE IN 2014. qualification. In late 2014 Safran both in France and in our respectively. launched a communications international markets, in particular NEARLY campaign spotlighting our thanks to a European agreement SAFRAN AMBASSADORS technicians and line workers, to on the professional integration of With new agreements signed in 2014, Safran’s network facilitate hiring in these sectors. young people, signed by Safran of “ambassadors” now works with 37 schools and universities in France, and numbers more than 280 Group We are highly focused on earning in 2013, as well as through special employees. Their mission is to promote Safran and its job the loyalty of our employees and partnerships in countries where opportunities, and detect top talents at their supporting their career development. Safran is a major player, such as alma maters. Brazil and Morocco. In Europe, nearly 6YOUNG, PEOPLE400 WELCOMED FOR 6,400 young people were welcomed TRAINING PROGRAMS IN EUROPE IN 2014.

KÉVIN ANQUETIN MARILYN BISHOP APPRENTICE MACHINE OPERATOR, MESSIER-BUGATTI-DOWTY HR DIRECTOR, POWER DIVISION, LABINAL POWER SYSTEMS UK “The shared apprenticeship program was both “The Safran Discovery Day gave me an enriching and rewarding. It allowed me to discover unprecedented opportunity to meet a number the machine operator’s job from several angles, of colleagues. It also helped me to better and taught me about different facets of this job, understand Safran’s past, present and future. which is great for an apprentice.” I’m impressed at being part of an enterprise with such a wealth of potential.”

54 I SAFRAN BUSINESS AND CORPORATE SOCIAL RESPONSIBILITY REPORT I 55 HUMAN RESOURCES

SCAN THE QR CODE TO LEARN MORE ABOUT WOMEN AT SAFRAN

CONSOLIDATING AND AURORE FERRANT ROCKET MOTOR TEST AND INTEGRATION DEPARTMENT MANAGER, HERAKLES DEPLOYING OUR SOCIAL MODEL NAMED RISING STAR IN THE WOMEN IN INDUSTRY AWARDS FOR 2014 “Difference is enriching! Cultivating, or even As a responsible employer, Safran professions, we support the hiring Affirming our social model better promoting our difference will bolster our future has made human development a top and continued employment Firmly convinced that employees priority. Our diversity policy, our of seniors. We are also actively are our primary asset, we give them innovation. As Albert Camus said, ‘diversity commitment to promoting gender involved in the professional a stake in our growth through is the home of art’.” equality and a strengthened social integration of disabled persons. In a constructive labor-management model underpin this strategy. 2014, some 3.7% of our workforce in dialog, and an equitable system France were people with disabilities. for sharing the fruits of performance, Diversity, a source of wealth including profit-sharing and incentive We consider diversity a key driver Supporting gender equality payments, and employee for performance and innovation, Safran’s commitment to equal shareholding. a firm conviction expressed day after opportunity is applied internationally, day by a concrete commitment in line with the non-discrimination to equal opportunity. principles of the International Labour Safran encourages the social and Organization and the United Nations professional integration of people Global Compact. from underserved communities. We promote gender equality in GUILLAUME MORNAND For example, we signed the recruiting and career development. PLANT GENERAL MANAGER, SNECMA XINYI AIRFOIL CASTINGS CO. Enterprises & Neighborhoods Charter These in-house actions are extended LTD, CHINA initiated by the French Ministry through initiatives with outside for Urban Affairs, and we are organizations, such as the “Safran’s social responsibility applies worldwide. involved in projects launched by association Elles bougent (“Women So we have to set an example in China, various associations and institutes on the Move”) in France, and the of higher education. Women’s Forum, Women in where we hired disabled employees at Guiyang, Based on our awareness of the Engineering network and IAWA % who were experts in their field.” importance of transmitting (International Aviation Womens 34OF NEW HIRES IN 2014 knowledge, especially in technical Association) on a global scale. WERE WOMEN.

WOMEN IN INDUSTRY AWARD WINNERS RENEWED AGREEMENT Two Safran employees won Women in Industry awards at the ON EMPLOYMENT ceremony held in September 2014. Organized by the business and OF DISABLED PERSONS industry magazine L’Usine Nouvelle , these awards recognize exceptional women in a sector where men are still a large majority. Safran signed a new Group-wide agreement in 2014 concerning Aurore Ferrant, winner of the Rising Star award for her rapid the employment of disabled persons. progression through the ranks, and Fabienne Lacorre, winner of the This agreement is designed to bolster Woman in R&D award for her deep investment in the development actions launched in 2012, mainly of the LEAP engine, clearly symbolize the success of Safran’s concerning hiring, support and long-standing policy in favor of gender equality and equal continued employment. opportunity.

56 I SAFRAN BUSINESS AND CORPORATE SOCIAL RESPONSIBILITY REPORT I 57 HUMAN RESOURCES

SCAN THE QR CODE TO LEARN MORE ABOUT SAFRAN UNIVERSITY

ALLOWING ALL EMPLOYEES SAFRAN CAMPUS, TO SHAPE THEIR OWN A UNIFYING VENUE The Safran Campus in Massy, near Paris, opened its doors in September 2014, mainly as the home of Safran CAREER PATH University. With an amphitheater holding up to 450, plus a hotel with 80 guest rooms, the Campus is an unexcelled venue for meetings, discussions and learning. Operational excellence and the leadership and management At Safran, each employee shapes It now hosts a number of key Group events, including ongoing enhancement of employee capabilities. The use of digital his or her own career path. We “Discovery Days” to orient new hires, conferences for our skills are two major drivers of Safran’s applications, including online lectures have deployed a job forum for our teams and customer seminars. The Campus is a veritable melting pot that fosters diversity and mobilizes our competitiveness, which is why we and virtual classes, facilitates employees, covering all Group employees around shared values. greatly encourage both training and the acquisition of knowledge and companies and all countries in which mobility. helps reconcile the concurrent need we have a significant presence. HIGH MANAGEMENT STANDARDS for training and business continuity. Furthermore, a Europe-wide framework Safran has unveiled its Leadership Model: a set of A training policy keyed to Safran’s agreement covering skills and career leadership standards listing the behaviors expected challenges Balancing people’s professional development is now being negotiated, of Group management staff. We have asked all managers Safran University is the cornerstone objectives and Safran’s needs for an expected signing in 2015. to position themselves in relation to this model and of our ambitious training policy. Based Quite simply, mobility enhances to develop their managerial skills to maximize team in Massy (near Paris), Dallas and adaptability, fosters an open mind performance and thus contribute to collective success. Beijing, Safran University offers and facilitates skills development. OVER employees the world over training Safran therefore offers all employees ONLINE TRAINING courses that match their current and a multitude of professional Safran has gone digital, offering employees a host of future career development plans. opportunities, including mobility innovative learning tools (online lectures, virtual classes, etc.), along with traditional classroom training. Three types of programs are offered, between different countries, The online trend facilitates learning, as well as the allowing employees to bolster their companies and job families international deployment of Safran’s training courses. professional expertise, maintain their – all possible in a global enterprise MILLION employability, and develop their like ours. 1.6HOURS OF TRAINING PROVIDED IN 2014.

CARLOS URURAHY ÉLODIE DE RIDDER HEAD OF QUALITY, SMS, RISK & HSE, TURBOMECA ASIA-PACIFIC PRODUCTION LINE MANAGER, SAGEM “My transfer from Brazil to Singapore really enhanced “The Gateway training courses at Safran University my career path. Between the opportunities offered helped me develop my cross-functional skills and by my company, the encouragement from my managers consolidate my professional future. I found that and great ideas and tips from my colleagues, my job it enhanced my working methods, and my personal gets more interesting by the day. I’m proud to work and team performance. Today, I have more confidence for Safran!” in myself.”

58 I SAFRAN BUSINESS AND CORPORATE SOCIAL RESPONSIBILITY REPORT I 59 HEALTH, SAFETY AND ENVIRONMENT

ANTICIPATE OCCUPATIONAL HEALTH AND SAFETY: AND PROTECT A TOP PRIORITY Within the scope of the improvement plan, “ExcellenSSE” (SSE is the French acronym for HSE), Safran organized a first HSE convention Anticipation and protection are the conditions, Anact, and oversees its Limiting environmental impact in December 2014, bringing together HSE managers and professionals foundations of Safran’s health, safety employees’ health. In fact, Safran is stepping up to reduce from all Group companies. This international convention focused on two main subjects, namely ergonomics and the daily role of managers. and environment (HSE) policy. Our the Group’s own HSE guidelines the environmental footprint of our Highlights included the signature by all participants of three commitments are set down in an incorporate Anact’s requirements. industrial activities. From eco-design commitments inspired by the Safran Leadership Model, and HSE HSE charter supported at the highest One of the major initiatives in this to recycling, and from reducing awards given to facilities that have reached the highest maturity level level of the Group, by Philippe area, the agreement signed by Safran energy consumption to reusing in their region, according to the 28 standards in Safran’s HSE Petitcolin, CEO. concerning prevention of stress waste, we are rolling out reference system. in the workplace, gave rise improvement plans at all facilities, Safety is everybody’s business to an observatory dedicated to reflecting our focus on environmental REACH, AN ENVIRONMENTAL PRIORITY Safran met its 2014 goal of reducing the detection and monitoring of excellence and confirming our Safran anticipated the application of the European regulation the lost-time accident rate, based individual and collective psychosocial position as a responsible enterprise. REACH – Registration, Evaluation, Authorization and restriction of on proactive measures, greater risks. An ergonomics plan concerning CHemicals – covering the use of chemical substances. In particular, we are studying possible replacements for substances such as awareness by managers and adapted workstations is strictly hexavalent chrome and cadmium, which will shortly be banned. everybody’s continuous efforts. applied, and nearly 150 coordinators Some solutions are already being deployed. We also emphasize continuous were trained in 2014. One specific improvement at all levels by grading target is musculoskeletal problems WASTE-EATING BACTERIA our facilities according to their HSE due to repetitive gestures, which In April 2014, Herakles (Safran) inaugurated a new biological maturity, as “gold”, “silver” or account for some 70% of workplace waste treatment station, the only one of its kind in Europe, using “bronze”, based on regular audits. illnesses. These actions are also being bacteria to break down into harmless byproducts ammonium developed in international facilities perchlorate, the main ingredient in solid propellants powering Closely tracking occupational health to guarantee the same strict risk launch vehicles and missiles. Safran works closely with the French management approach wherever 1MANAGERS,000 RECEIVE HSE TRAINING agency for improved working Safran operates. EVERY YEAR.

SUMIT CHAKRAVARTY JEAN-FRANÇOIS THIBAULT HUMAN RESOURCES MANAGER, MORPHO NOIDA, INDIA GROUP ADVISOR, ERGONOMICS PROGRAM, SAFRAN “As a result of consistent and boundless efforts “Just two years after launching our Ergonomics to commit to the highest HSE standards, the Morpho program, most of our industrial facilities worldwide Noida production plant in India was awarded have now reached level 2 out of 4 in our standard. Safran’s bronze maturity ranking in November 2014. This achievement clearly shows our ability to make Noida is the first Morpho factory in the Asia-Pacific ergonomics a timely part of the drive for excellence region to earn this certification.” designed to protect employee health and contribute to Safran’s industrial performance.”

60 I SAFRAN BUSINESS AND CORPORATE SOCIAL RESPONSIBILITY REPORT I 61 SUPPLIERS

SCAN THE QR CODE TO LEARN MORE ABOUT SAFRAN INNOVATION AWARDS 2014 GRAND PRIZE TEAMING UP TO BUILD “We were pleased to sign Safran’s SUSTAINABLE PERFORMANCE “A supplier to Safran for ‘First Circle’ charter to bolster nearly 20 years, we formed our relationship of mutual trust Safran’s purchasing policy reflects Awards”, an annual contest that a commitment by signing the a partnership with them and respect. This type of special link our focus on industrial excellence recognizes the most promising Responsible Purchasing charter. We and establishing sustainable, innovations and the best improvement encourage our suppliers to design for the development of really helps create shared and balanced and mutually beneficial initiatives at Safran. We also organize environmentally-friendly products the LEAP. This co-innovation sustainable value.” relations with our suppliers. regular “Tech Days”, enabling and processes, and to pay attention suppliers to talk with our experts. to security, transparency and agreement reflects the spirit DENIS HUGELMANN CEO, AUBERT & DUVAL Working towards a common goal integrity. Since the end of 2013, of teamwork between our We are fully aware that suppliers Maximizing potential about 200 buyers have received play an important role in our success. While we have the same demanding training in these areas. Furthermore, two companies.” We therefore foster relations based performance requirements for all as part of a Group-wide agreement SYLVAIN ACCORSINI on mutual trust, demanding subcontractors, we provide special designed to support the employment CHAIRMAN AND CEO OF MÉCAFI reciprocal expectations and a joint support to encourage the of disabled persons, Safran has “We decided to set up our first European striving for performance. We involve development of our high-potential pledged to develop its business with (1) our suppliers right from the outset suppliers, especially the small and the sheltered sector. By 2017, this polyacrylonitrile (PAN) precursor of new programs so we can develop medium-size (SME) businesses in agreement should reach total plant in France to guarantee supply innovative solutions together and France that represent nearly half of purchases of 8 million euros (1) . and meet growing demand for carbon plan ahead for workloads. We also all suppliers. As a member of the (1) Sales to sheltered workshops and adapted work with them to develop association Pacte PME (“SME Pact”), enterprises, excluding raw materials. fibers. Hexcel is supporting Safran for improvement and development plans, which seeks to strengthen ties and encourage them to deploy between small and large companies, the ramp-up in LEAP production rates.” proven improvement initiatives, we also contribute to investment (1) The raw material in carbon fibers. such as QRQC (Quick Response funds that support the French THIERRY MERLOT Quality Control), a method used to aerospace industry. VICE CHAIRMAN AND CEO OF HEXCEL EUROPE, ASIA AND MIDDLE EAST resolve quality issues. Our suppliers are also partners in Safran’s open Responsible purchasing € BILLION innovation approach, and are eligible Safran has asked suppliers to PURCHASING9.2 VOLUME IN 2014, to participate in our “Innovation embrace our CSR policy, and to make EQUAL TO 60% OF SALES.

SAFRAN RECOGNIZED “FIRST CIRCLE”, A FIRST IN MOROCCO FOR SUPPLIER RELATIONS A NEW SUPPLIER Safran has operated in Morocco for 15 years and is supporting the Safran launched an initiative in 2013 to earn INITIATIVE development of a strong aviation the “Responsible Supplier Relations” label for all In 2014, a dozen suppliers joined of our companies. The following year, the aircraft industry. In 2014, for the first our “First Circle”, designed to establish time, Safran organized a meeting engine production purchasing department at a preferred relationship between Safran of 100 current or potential suppliers Snecma was the first Safran entity to receive this and selected industrial partners. They label from the French Ministry of the Economy, in Casablanca, attended by the will participate in various strategic Moroccan Minister of Industry, Industry and Digital Data, clear recognition projects, ranging from R&T to Commerce, Investment and of the sustainable, balanced relations established production. with our suppliers. Digital Economy.

62 I SAFRAN BUSINESS AND CORPORATE SOCIAL RESPONSIBILITY REPORT I 63 PHILANTHROPY AND FOUNDATIONS

INSPIRING CALLINGS In conjunction with the association Planète Sciences , Safran has created fun and educational workshops to raise interest in science and promote aerospace and technical jobs among youngsters. In 2014, these workshops welcomed nearly 1,800 participants.

SUPPORTING EQUAL OPPORTUNITY For the third year in a row, Safran sponsored the Performance Series of Legends, a concert to benefit the Duke Ellington School of the Arts , the only public high school in Washington, DC offering professional arts training to talented SUPPORTING students, combined with academic THE INTEGRATION courses to prepare them for OF YOUNG PEOPLE higher education. A dozen young adults sponsored by the Frateli association visited Aircelle’s (Safran) plant in DEVELOPING Le Havre (France). This association, EXPERTISE supported by Safran’s Foundation for Integration for the last seven The Safran Foundation for years, allows Safran employees to Integration is a partner in the mentor promising students from association Watever , which modest backgrounds as they start helps unqualified young university. adults develop their expertise in composite materials for naval construction in Bangladesh.

RECOGNIZING MUSICAL TALENT Young pianist Selim Mazari was awarded the Safran Foundation EMPOWERING for Music prize in 2014 based MUSIC on a competition organized in conjunction with the Armed STUDENTS Forces Museum . Safran supports the association This distinction recognizes the Le Poème Harmonique in the most promising artists from the creation of a string orchestra national conservatory for music composed of grammar school and dance in Paris. students in Rouen (France).

64 I SAFRAN BUSINESS AND CORPORATE SOCIAL RESPONSIBILITY REPORT I 65 SPONSORSHIP

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Higher sales, improved profi tability, record order book, a healthy cash fl ow to debt ratio… Safran’s performance is truly exceptional. Building on our business and tech- nological success, plus 69,000 highly motivated people around the world, Safran maintains a razor-sharp focus L’OISEAU BLANC: THE SEARCH CONTINUES on bolstering our market positions, meeting future Safran participated in the sixth series of searches for L’Oiseau Blanc . Flown by famous aviators Nungesser challenges and delivering sustainable growth. and Coli, this aircraft disappeared in 1927 while attempting to make the fi rst transatlantic fl ight from Paris to New York. The “White Bird” is a strong symbol for Safran, because it was powered by an engine made by Lorraine-Dietrich, one of Safran’s predecessor companies.

LAST RACE… AND A NEW BEGINNING After nine years of adventure, emotions and success with Safran, skipper Marc Guillemot – one victory and two second place fi nishes in the Transat Jacques Vabre , two third-place fi nishes in the Route du Rhum , third in the Vendée Globe , holder of the record for a North Atlantic crossing – fl ew the Group’s colors for the last time during the Route du Rhum race, from mainland France to Guadeloupe, in November 2014. His successor is Morgan Lagravière, and Marc Guillemot will work with this young skipper to help him prepare for the 2016 Vendée Globe solo, round-the-world race, aboard a brand-new Open 60 IMOCA class monohull racing yacht. This transition refl ects Safran’s values of engagement, teamwork and transmitting knowledge. The Safran Sailing Team has also expanded, adding the young skipper Gwénolé Gahinet, co-sponsored by Safran and the clothing company Guy Cotten on the 06 Figaro Bénéteau circuit.

66 I FINANCIAL INDICATORS

RECORD RESULTS IN 2014 SUSTAINED INVESTMENT IN THE FUTURE

SALES 13,560 14,363(1) 15,355 SALES BY BUSINESS 10% 8% 53% INCREASE IN A SHARP RISE INCREASE IN TOTAL RESEARCH (adjusted data, millions of euros) +6.9% SECTOR USD-DENOMINATED IN OPERATING CAPITAL & DEVELOPMENT COMMERCIAL ENGINE CASH FLOW EXPENDITURES EXPENDITURES Safran posted adjusted sales The aviation and space SERVICE BUSINESS of 15,355 million euros in businesses logged strong 2014, a year-to-year increase growth in 2014, including of 6.9% (5.8% on an organic a 7.4% increase for propulsion basis). This strong growth and 8.7% for aircraft refl ects performance in the equipment. The defense aerospace business (original +11.3% +27% +38% €2 billion and security businesses equipment and services), a returned to the growth path resilient performance by the last year, after a slight The sustained momentum of Safran posted operating Safran invested Safran’s R&D spending hit a peak defense business (avionics), decrease in 2013, rising 2% the commercial engine service cash fl ow of 2.5 billion euros 674 million euros in 2014 in 2014, equal to 13% of sales. The and a dynamic security and 3.2%, respectively. business is driven in large part in 2014, a sharp rise from the to gear up for the increase over the previous year’s business (identifi cation). 29% by the fi rst shop visits of more previous year, mainly due to transition to the LEAP total of 1.8 billion euros primarily (1) Restated to reflect impact recent CFM56 engines, dynamic performance by its engine, to support the refl ects the ramp-up in LEAP Aerospace Propulsion of IFRS 11. and the GE90. aerospace business. production startup engine development and testing. Aircraft Equipment Security Because of this signifi cant of new technologies 2012 2013 2014 Defense increase, Safran was able to and to augment our increase its free cash fl ow, production capacity. while also making unprecedented investments in its development. A STEADY INCREASE IN PROFITABILITY

RECURRING OPERATING 1,444 (1) 1,780 (2) 2,089 NET INCOME 979 (1) 1,193 1,248 INCOME +17.4% (GROUP SHARE) +4.6% (adjusted data, millions of euros) (adjusted data, millions of euros)

Safran posted adjusted The Group share of adjusted recurring operating income net income amounted to “Safran once again posted a strong increase in sales and income in 2014, of 2,089 million euros in 2014, 1,248 million euros in 2014, an increase of 17.4% and equal or 3.00 euros per share, primarily driven by our dynamic commercial aviation business, especially to 13.6% of adjusted sales. compared with 1,193 million This rise was mainly due to euros in 2013 (2.87 euros per services. A pertinent hedging policy also contributed to these good results.” strong growth in our aerospace share), which included a business (propulsion and 131 million euro capital gain ROSS McINNES, DEPUTY CHIEF EXECUTIVE OFFICER, FINANCE* equipment) and profi table from the sale of Ingenico growth in the security sector. shares. In addition to the *Until April 23, 2015. (1) Restated to reflect impact growth in recurring operating of revised IAS19 standard. income, this total also includes (2) Restated to reflect impact of IFRS 11. net fi nancial fees of 165 million euros and a tax charge 2012 2013 2014 2012 2013 2014 of 522 million euros. (1) Restated to reflect impact of revised IAS19 standard.

68 I SAFRAN BUSINESS AND CORPORATE SOCIAL RESPONSIBILITY REPORT I 69 FINANCIAL INDICATORS

NEW STRATEGIC ACQUISITIONS, EXCEPTIONAL BUSINESS PERFORMANCE A HEALTHY CASH FLOW TO DEBT RATIO

ORDER BOOK AT ALL-TIME HIGH 48.5 55 (1) 64 CFM INTERNATIONAL’S (billions of euros) +16.4% ACQUISITION OF EATON AEROSPACE’S ELECTRICAL DISTRIBUTION UNPRECEDENTED ORDER BOOK AND INTEGRATED COCKPIT SOLUTIONS BUSINESSES Safran booked 23 billion euros worth of orders in 2014, 2.2 billion euros more than in 2013, refl ecting the market’s NEARLY dynamic performance. The Group’s consolidated order book stood at €197 million 64 billion euros at December 31, 2014, versus 55 (1) billion euros the previous 13,000 With the acquisition of Eaton Aerospace’s capabilities in electrical distribution, year, an increase exceeding 16%. Safran extends its expertise in aircraft electrical systems and can now o< er This fi gure does not include the future ENGINES manufacturers complete packages for tomorrow’s “more electric” aircraft. business to be generated by CFM56 These businesses were consolidated in Safran’s fi nancial statements starting spare parts and services (when supplied CFM International logged 2,717 fi rm on May 9, 2014. The electrical distribution business was consolidated within on the basis of Time & Material contracts). orders and commitments for the LEAP the Aircraft Equipment branch, while integrated cockpit solutions were included The service business will generate in 2014, along with 1,527 for the CFM56. in the Defense branch. signifi cant revenues and margins The total order book now amounts over the coming years. The two businesses have about 350 employees at two main locations in 2012 2013 2014 to nearly 13,000 engines, including the United States: Costa Mesa, California, and Sarasota, Florida. (1) Restated to reflect the impact of IFRS 11. almost 8,500 LEAPs.

NET DEBT 932 1,089 1,503 (adjusted data, millions of euros) +38% OUTLOOK FOR 2015 Safran o< ers very solid fi nancial foundations, enabling us to fi nance our development. We generated free cash fl ow of 740 million euros last year, equal (1) to 35% of recurring operating income, despite unprecedented investments to meet For the financial year 2015, Safran forecasts the following : the operational challenges resulting from our business success. • A rise in adjusted sales of 7 to 9% (at an estimated average exchange rate of $1.20/€1.00). At December 31, 2014, Safran had cash and cash equivalents of 1.63 billion euros, as well as confi rmed and non-drawn credit facilities for 2.55 billion euros. • An increase in adjusted recurring operating income of slightly over 10% (at a hedged currency exchange Our net debt stood at 1.5 billion euros at December 31, 2014. rate of $1.26/€1.00). • Free cash flow equal to 35 to 45% of adjusted recurring operating income.

(1) The outlook for 2015 concerns the Group in its current structure, and does not take account of the potential impact in 2015 of the finalization of the consolidation of our launch vehicle operations with those of Airbus Group in the 50/50 joint company, Airbus Safran Launchers.

2012 2013 2014

70 I SAFRAN BUSINESS AND CORPORATE SOCIAL RESPONSIBILITY REPORT I 71 STOCK MARKET INDICATORS

CHANGE IN SHAREHOLDING STRUCTURE FROM 2013 TO 2014 SAFRAN SHARE PRICE January 1, 2010 to February 25, 2015

400 SAFRAN SHARE Safran CAC 40 CAPITAL SHAREHOLDING STRUCTURE 350 €63.03 The Safran share at December 31 +360% is listed in 300 Compartment A of Following the divestment of shares by Euronext Paris, and is the French State in 2013, and in compliance 250 eligible for Deferred 62.8% 63.5% with French law, 3.6 million shares were Payment Service proposed to Safran employees in 2014 within 200 (SRD). the scope of a special “Safran Sharing” 2013 2014 subscription o< er. A total of 16,000 persons 150 in 13 countries purchased 1.7 million shares. Name: SAFRAN Safran’s large number of employee shareholders, 100 22.4% 22% ISIN code: which boosts employee motivation and loyalty, FR0000073272 is a factor in ensuring our stability. 50 The Group also benefi tted from a new increase 14.7% 14.4% 4,882 points +24% Abbreviation: SAF in its fl oat and improved liquidity. 0 0.1% 0.1% Public Index: CAC 40 –50 French State Employees 2010 2011 2012 2013 2014 2015 Treasury shares

CAPITAL SHAREHOLDING STRUCTURE AS OF MARCH 31, 2015 DIVIDEND PER SHARE 0.50 0.62 0.96 1.12 1.20 (euros) +7.1% SAFRAN INVESTOR RELATIONS The payment of a dividend of €1.20/share (an increase of 7.1% 2, boulevard du Général-Martial-Valin over 2013) was submitted for a 75724 Paris Cedex 15 - France vote by the Annual General On March 3, 2015, the French State sold 4% of Safran’s share capital, bringing its current stake to 18%. Investor and Analyst contact Meeting of Shareholders on E-mail: [email protected] April 23, 2015. In line with Individual shareholder and general practice at Safran, the Shareholders’ Club contact payout rate was approximately PUBLIC FRENCH STATE EMPLOYEES TREASURY E-mail: [email protected] 40% of adjusted net income. SHARES An interim payment of €0.56/ For further information on share was made in December the Shareholders’ Club, go to: www.safran-group.com 2014, with the balance of 67.8% 18% 14.1% 0.1% €0.64/share to be paid as from April 29, 2015. (France only) 2010 2011 2012 2013 2014

72 I SAFRAN BUSINESS AND CORPORATE SOCIAL RESPONSIBILITY REPORT I 73 CSR INDICATORS

STRONG GROWTH IN THE WORKFORCE, ONGOING EFFORTS TO SUPPORT IN FRANCE AND WORLDWIDE RESPONSIBLE PRACTICES

TOTAL WORKFORCE 62,500 66,300 69,000 EMPLOYEES BY 50% 21% LOST-TIME ACCIDENT 3.5 3.7 2.8 +4% JOB TYPE RATE (1) –25% Safran created more than NEARLY 2,200 net jobs in 2014, The breakdown by job type Safran has set a goal since 2008 26% including 1,150 in France. refl ects Safran’s industrial of signifi cantly improving its women in the Group’s total workforce, More than 8,200 new foundations and the occupational safety record, and 34% women among new hires in 2014. employees joined the Group extensive resources aiming for a lost-time accident in 2014. This sustained pace dedicated to Research rate of less than 3 in 2014 of hiring supports the launch & Development. Our people and under 2 by 2017. The of new programs, and also leverage their excellence deployment of the continuous ensures the transition and innovative mindsets improvement plan between generations. not only in production “ExcellenSSE” enabled us to OVER 1.6 MILLION and design, but also meet the fi rst objective, as hours of training provided in 2014. in support functions. the rate of accidents involving more than a day o< work 29% Production dropped to 2.8 in 2014, R&D Other a 25% reduction over 2013. 2012 2013 2014 (1) Ratio of the number of accidents with more than a day off work 2012 2013 2014 to a million hours worked. OVER 12,000 employees given local export control training 69,000 EMPLOYEES worldwide since 2010. IN NEARLY 60 COUNTRIES

EUROPE RESPONSIBLE 3.6 3.8 4.0 60% 48,300 PURCHASING (1) +5.3% of employees worldwide are shareholders, 70% (millions of euros) of total including 87% in France. workforce In France, Safran is steadily increasing its purchasing volume from sheltered workshops and adapted enterprises. The development of responsible NEARLY AMERICAS purchasing practices is an 480 AFRICA AND 14,000 projects supported by Safran’s corporate MIDDLE EAST ASIA – PACIFIC integral part of our CSR policy. 20% foundations for integration and music, or by direct of total 2,900 3,800 (1) Amounts purchased from sheltered workforce 4% 6% workshops and adapted enterprises, corporate philanthropy actions since 2005. of total of total excluding raw materials. workforce workforce

2012 2013 2014

74 I SAFRAN BUSINESS AND CORPORATE SOCIAL RESPONSIBILITY REPORT I 75 LEARN MORE ABOUT SAFRAN

PUBLICATIONS Fundamentals See Safran’s key fi gures and businesses in a concise handbook. Safran Magazine Printed twice a year, the Group’s magazine features expert viewpoints, insights on our businesses, interviews, photo reports and much more.

WEBSITE We have revamped the corporate website, go to: www.safran-group.com

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Safran Corporate Communications Graphic design and production: Document printed by Numéricopy (France) on Oxygen Pure Silk FSC 300 g and 150 g paper. Photo credits : Front cover Philippe Stroppa / Snecma / Safran – Adrien Deneu / Morpho / Safran – Éric Drouin / Safran – p. 3 2015 Thinkstock – Sébastien Rieussec / Morpho/ Safran – Yagi Studio – p. 5 Christel Sasso / CAPA Pictures / Safran – p. 6 Franck Juery / CAPA Pictures / Safran – p. 8 Franck Juery / CAPA Pictures / Safran – Thomas Laisné / Safran – Vincent Rustuel / Aircelle / Safran – Éric Drouin / Snecma / Safran – Roberto Frankenberg / Safran – Gérard Uféras / Safran – Pierre Soissons / Labinal / Safran – Thierry Mamberti / Safran – Antoine Meysonnier / CAPA Pictures / Safran – p. 10 Gérard Uféras / Safran – p. 11 Franck Juery / CAPA Pictures / Safran – Thierry Mamberti / Safran – Helmy Alsagaff / CAPA Pictures / Safran – p. 12 Philippe Stroppa / Safran – p. 13 Éric Drouin / Safran – Piotr Redlinski / CAPA Pictures / Safran – p. 16 Céline Sadonnet / Master Films / Safran – p. 17 Edward Linsmier / CAPA Pictures / Safran – Embraer – p. 18 US Chamber of Commerce – Thierry Mamberti / Safran – p. 19 Éric Drouin / Safran – Airbus S.A.S. 2014 – photo by S. Ramadier – p. 20 Mark Woolcott / CAPA Pictures / Safran – Jacques Witt / SIPA Press – p. 21 Alain Ernoult / Snecma /Safran – 2015 Bell Helicopter Textron Inc. – Thomas Garza / Turbomeca / Safran – p. 22 Daniel Linares / Sagem / Safran – Éric Drouin / Snecma / Safran – p. 24 David Peart / CAPA Pictures / Safran – p. 25 Gajus / Fotolia – Adrien Deneu / Morpho / Safran – p. 26 Philippe Wodka-Gallien / Sagem / Safran – p. 27 Daniel Linares / Sagem / Safran – p. 28 Adrien Deneu / Morpho / Safran – Bevis Fusha / Morpho / Safran – p. 29 Adrien Deneu / Morpho / Safran – Sebastian Piramowicz / Morpho / Safran – p. 30 Morpho / Safran – Piotr Redlinski / CAPA Pictures / Safran – p. 33 ESA / CNES / Arianespace – ESA /J. Huart – Daniel Linares / Sagem / Safran – p. 34 Philippe Stroppa / Snecma / Safran – Éric Drouin / Snecma / Safran – p. 36 Matteo / Safran – p. 37 Éric Drouin / Safran – Daniel Linares / Sagem / Safran – p. 38 Thierry Mamberti/ Safran – Éric Drouin / Safran – p. 39 A. Paringaux / Safran – Valeo – p. 40 Éric Drouin / Safran – Philippe Stroppa / Safran – Rudy Burbant / CAPA Pictures / Safran – p. 41 Éric Drouin / Safran – Thierry Mamberti / Safran – Goldbeck / Aircelle – p. 42 Philippe Stroppa / Snecma / Safran – Thierry Mamberti / Safran – p. 44 Antoine Kienlen / Safran – Philippe Stroppa / Aircelle / Safran – p. 45 David Peart / CAPA Pictures / Safran – Peter Taylor / CAPA Pictures / Safran – p. 46-47 Grégoire Hénon – Luis Prado – p. 49 Christophe Petit-Tesson / CAPA Pictures / Safran – 2015 Thinkstock – p. 50 Thierry Mamberti / Safran – Adam Wiseman / CAPA Pictures / Safran – p. 51 Jessica Chou / CAPA Pictures / Safran – Philippe Stroppa / Safran – p. 52 Porter Gifford / CAPA Pictures / Safran – p. 53 Wladimir Simitch / CAPA Pictures / Safran – Anaël Barrière / CAPA Pictures / Safran – p. 54 Laurent Pascal / CAPA Pictures / Safran – p. 55 Antoine Denoix / Safran – 2015 Thinkstock – Éric Forterre / Safran – Luca Sage / CAPA Pictures / Safran – p. 56 L’Usine Nouvelle – p. 57 Anaël Barrière / CAPA Pictures / Safran – Patrick Wack / CAPA Pictures / Safran – Philippe Stroppa / Aircelle / Safran – p. 58 David Teng / CAPA Pictures / Safran – p. 59 Philippe Stroppa / Safran – Arthur Nobre / CAPA Pictures / Safran – Wladimir Simitch / CAPA Pictures / Safran – p. 60 P. Vishwanatan / CAPA Pictures / Safran – p. 61 Thierry Mamberti / Safran – Philippe Stroppa / Snecma / Safran – François Laforêt / Equivox / Safran – Christophe Petit-Tesson / CAPA Pictures / Safran – p. 63 Christophe Petit-Tesson / CAPA Pictures / Safran – Dominique Couineau / CAPA Pictures / Safran – Laurence Papoutchian / CAPA Pictures / Safran – Pierre Soissons / Labinal / Safran – p. 64 Aircelle / Safran – Association Watever – Thierry Mamberti / Safran – p. 65 Bnpix / Safran – Nielsen Photography – Benjamin Girard – p. 66 Olivier Blancher / DPPI / Safran.

CFM, CFM56, LEAP and the CFM logo are trademarks of CFM International, a 50/50 joint company between Snecma (Safran) and GE. SAFRAN 2, boulevard du Général-Martial-Valin – 75724 Paris Cedex 15 – France Tél.Phone: : +33 +33 (0)1 (0)1 40 40 60 60 80 80 80 80 www.safran-group.com