2019 UNIVERSAL REGISTRATION DOCUMENT Including the Annual Financial Report CONTENTS EXTRACT FROM THE INTEGRATED REPORT 2 5 NON-FINANCIAL SAFRAN AT A GLANCE 3 PERFORMANCE 241 EDITORIAL 4 5.1 Organization and management of non‑financial performance 242 GROUP PROFILE 6 5.2 Key non‑financial risks 246 ECOSYSTEM 12 5.3 Business ethics, export and customs controls 251 STRATEGY AND BUSINESS MODEL 18 5.4 Responsible purchasing 256 5.5 Climate and environment 258 CORPORATE GOVERNANCE 40 5.6 Health and safety 265 PERFORMANCE AND VALUE CREATION 46 5.7 Human resources 268 5.8 Social dialogue 275 5.9 Social impact 276 5.10 Methodological note and ITP report 278 5.11 Cross‑reference table for the Non‑financial Information Statement 284 PRESENTATION 1 OF THE GROUP 49 6 1.1 Safran overview 50 CORPORATE GOVERNANCE 287 1.2 Group businesses 54 6.1 Safran’s corporate governance structure 288 1.3 Competitive position 74 6.2 Membership structure of the Board Research and development 74 1.4 of Directors 291 1.5 Industrial investments 81 6.3 Operating procedures and work of Sites and production plants 83 1.6 the Board of Directors and the Board Safran performance and quality policy 84 1.7 Committees 324 6.4 Application of the AFEP‑MEDEF Corporate Governance Code 334 6.5 Directors’ interests in the Company’s share capital 334 2 REVIEW OF OPERATIONS IN 2019 6.6 Compensation policy and compensation AND OUTLOOK FOR 2020 87 packages for corporate officers 335 6.7 Cross‑reference table for the corporate 2.1 Comments on the Group’s performance governance report prepared in accordance in 2019 based on adjusted data and outlook with Article L.225‑37 of the French for 2020 89 Commercial Code 361 2.2 Comments on the consolidated financial statements 108 2.3 Comments on the parent company financial statements 110 INFORMATION ABOUT 7 THE COMPANY, THE SHARE CAPITAL AND SHARE OWNERSHIP 365 3 FINANCIAL STATEMENTS 115 7.1 General information and bylaws 367 3.1 Group consolidated financial statements 7.2 Information on share capital 373 at December 31, 2019 116 7.3 Share ownership 378 3.2 Statutory Auditors’ report on the 7.4 Relations with shareholders 382 consolidated financial statements 191 7.5 Stock market information 384 3.3 Parent company financial statements at December 31, 2019 196 3.4 Statutory Auditors’ report on the financial statements 219 8 ANNUAL GENERAL MEETING 387 8.1 Agenda 389 8.2 Report of the Board of Directors on 4 RISK FACTORS 223 the resolutions proposed to the Annual General Meeting and text of the proposed 4.1 Risk management 225 resolutions 390 4.2 Internal control system 227 8.3 Statutory Auditors’ report 414 4.3 Risk factors 229 4.4 Insurance 239 9 ADDITIONAL INFORMATION 419 9.1 Persons responsible 421 9.2 Statutory Auditors 422 9.3 Historical financial information 422 9.4 Documents on display 423 9.5 Cross‑reference tables 423 9.6 Glossary 431 2019 UNIVERSAL REGISTRATION DOCUMENT INCLUDING THE ANNUAL FINANCIAL REPORT The Universal Registration Document is available on the website at www.safran-group.com The Universal Registration Document in French was filed on March 31, 2020 with the French financial markets authority (Autorité des marchés financiers – AMF) as competent authority under Regulation (EU) 2017/1129, without prior approval pursuant to Article 9 of said Regulation. The Universal Registration Document may be used for the purposes of an offer to the public of securities or admission of securities to trading on a regulated market together with any amendments, if applicable, and a securities note and summary approved by the AMF in accordance with Regulation (EU) 2017/1129. The English language version of this report is a free translation from the original, which was prepared in French. In all matters of interpretation, views or opinions expressed in the original language version of the document in French take precedence over the translation. 1 I SAFRAN 2019 UNIVERSAL REGISTRATION DOCUMENT EXTRACT FROM THE INTEGRATED REPORT SAFRAN AT A GLANCE 2019 KEY FIGURES rd Global aerospace nd Global aerospace group, excluding equipment supplier* 3 airframers* 2 €24,640 million €3,820 million €2,665 million REVENUE(1) RECURRING OPERATING PROFIT(1) up 17.1% (up 9.3% on organic INCOME (1) (Group share) basis) on 2018 up 26.4% (up 24.6% up 34.5% on 2018 on organic basis) on 2018 UNDERSTANDING €1,983 million €4,114 million €695 million €1,725 million 95,443 FREE CASH FLOW NET DEBT ACQUISITIONS OF TOTAL R&D EMPLOYEES up 11.3% on 2018 PROPERTY, PLANT (including customer- (at December 31, SAFRAN (2) AND EQUIPMENT funded R&D) 2019) OUR ACTIVITIES AEROSPACE AIRCRAFT EQUIPMENT/ AIRCRAFT PROPULSION DEFENSE/AEROSYSTEMS INTERIORS BREAKDOWN OF REVENUE(1) BY SEGMENT €12,045 million €9,256 million €3,321 million BREAKDOWN OF RECURRING OPERATING INCOME(1) BY SEGMENT €2,485 million €1,209 million €188 million BREAKDOWN OF RECURRING OPERATING MARGIN(1) BY SEGMENT 20.6% 13.1% 5.7% * Classifi cation criteria: revenue – Source: Safran. (1) Adjusted data. See page 90 of the 2019 Universal Registration Document for a reconciliation of the consolidated income statement with the adjusted income statement and a breakdown of the adjustment. (2) Net of the cash infl ow from the disposal of a tertiary property complex in the Paris region. SAFRAN 2019 UNIVERSAL REGISTRATION DOCUMENT I 2 1 I SAFRAN 2019 INTEGRATED REPORT SAFRAN AT A GLANCE 2019 KEY FIGURES rd Global aerospace nd Global aerospace group, excluding equipment supplier* 3 airframers* 2 €24,640 million €3,820 million €2,665 million REVENUE(1) RECURRING OPERATING PROFIT(1) up 17.1% (up 9.3% on organic INCOME (1) (Group share) basis) on 2018 up 26.4% (up 24.6% up 34.5% on 2018 on organic basis) on 2018 €1,983 million €4,114 million €695 million €1,725 million 95,443 FREE CASH FLOW NET DEBT ACQUISITIONS OF TOTAL R&D EMPLOYEES up 11.3% on 2018 PROPERTY, PLANT (including customer- (at December 31, AND EQUIPMENT(2) funded R&D) 2019) OUR ACTIVITIES AEROSPACE AIRCRAFT EQUIPMENT/ AIRCRAFT PROPULSION DEFENSE/AEROSYSTEMS INTERIORS BREAKDOWN OF REVENUE(1) BY SEGMENT €12,045 million €9,256 million €3,321 million BREAKDOWN OF RECURRING OPERATING INCOME(1) BY SEGMENT €2,485 million €1,209 million €188 million BREAKDOWN OF RECURRING OPERATING MARGIN(1) BY SEGMENT 20.6% 13.1% 5.7% * Classifi cation criteria: revenue – Source: Safran. (1) Adjusted data. See page 90 of the 2019 Universal Registration Document for a reconciliation of the consolidated income statement with the adjusted income statement and a breakdown of the adjustment. (2) Net of the cash infl ow from the disposal of a tertiary property complex in the Paris region. 3 I SAFRAN 2019 UNIVERSAL 1 I SAFRAN REGISTRATION 2019 INTEGRATED DOCUMENT REPORT EDITORIAL Thanks to the commitment of our employees, proven innovation and operational MESSAGE FROM THE CHAIRMAN excellence, Safran designs, OF THE BOARD OF DIRECTORS builds and supports high-tech solutions to contribute to a safer, AND THE CHIEF EXECUTIVE OFFICER more sustainable world, where air transport is more environmentally friendly, ROSS McINNES comfortable and accessible. Chairman of the Board of Directors We also apply our skills to develop solutions that meet strategic needs, such as defense PHILIPPE PETITCOLIN and access to space. Chief Executive O cer Faced with the health crisis posed methods and the development by the coronavirus (Covid-19) of a common culture, further epidemic, Safran is taking every enhancing Safran’s consistency possible measure to help slow and e ciency. the spread of the virus and protect the health of its employees. The space and defense sectors also At the same time, it is making had a fruitful year, with progress on continued industrial operations the Ariane 6 program and prime for its customers a priority. contractorship on the engine Safran is in robust shape, and demonstrator program for the the commitment of its 95,000 next-generation European fi ghter employees is unfaltering. aircraft, in partnership with Philippe Petitcolin MTU Aero Engines. Such In 2019, the Group showed once developments ensure sustained again that the trust of its customers, front-runner positioning for Safran partners and shareholders is in the decades to come. Safran is geared up to leading high-tech solutions to contribute to well-founded. the way towards decarbonization a safer, more sustainable world, By honing competitive performance Safran strengthened its position of the aerospace industry. where air transport is more across all Group divisions, we faced With positions in all aircraft-system environmentally friendly, comfortable as the number-three aerospace group up well to fi erce market conditions, (excluding airframers)(1) worldwide, segments, and energy systems in and accessible. We also apply our and proved our capabilities for particular, we can tackle this issue skills to develop solutions that meet with revenue increasing by 17.1% on adaptation. a reported basis (9.3% organically) from many di erent technological strategic needs, such as defense and to reach €24.6 million, and recurring In 2019, Safran also began angles. Some 75% of Safran’s R&T access to space." budget goes to direct or indirect operating income coming in at a managerial transition with In 2020, against the backdrop measures for reducing the €3.8 billion, of which 51.9% was the Board of Directors appointing of the Covid-19 epidemic, Safran environmental impact of air transport. converted into free cash fl ow. Olivier Andriès to serve as Chief will continue to draw strength from Safran’s low-carbon project also Executive O cer from January 2021.