SAFRAN (EPA:SAF) - Safran takes actions to adapt to the current crisis

Transparency directive : regulatory news

26/03/2020 20:40

PRESS RELEASE

Safran takes actions to adapt to the current crisis:

* Enhanced adaptation plan
* 2020 guidance withdrawn
* Cancellation of 2019 dividend proposal with cash impact of EUR1bn
* New EUR3bn credit line

Paris, March 26, 2020

The Board of Directors of Safran (Euronext Paris: SAF) under the Chairmanship
of Ross McInnes, met on March 26, 2020 to consider an action plan prepared by
Executive Management in response to the impact of the Covid-19 pandemic.

Executive commentary

CEO Philippe Petitcolin commented:
"In this critical period, our attention is focused on taking care of our
employees and monitoring our customers and suppliers. While preserving cash in
the very short term, we are preparing to re-establish and strengthen operations
when the situation recovers. As demonstrated in past crisis thanks to its
agility and resilience, I am convinced that Safran will overcome these
challenges and further consolidate its position in the future."

Adaptation plan

The Group regularly and proactively coordinates the efforts of all subsidiaries
and sites in all countries in order to ensure priorities in reaction to the
crisis:

* Protection of employees through specific organization of working practices;
* Response to customer needs, particularly for delivery schedules;
* Resilience and flexibility of the supply chain;
* Managing the Group's cash and liquidity, while low debt is already an asset

Executive Management welcomes the mobilization and responsiveness of all
employees, giving confidence in the company's ability to meet current
challenges.

Chinese plants are already fully operational and European sites are gradually
restarting.

The actions implemented since December 2019 in response to Boeing's decision to
shut down the Boeing 737MAX assembly line are now enhanced. Very significant
measures are implemented such as a pause in Capex, the definition of new
objectives for R&D and the reduction of direct and indirect costs. Safran will
also use all schemes set up by governments, particularly short time working.

2020 guidance

Given the unprecedented nature of the situation and the remaining uncertain
impact for its customers of worldwide measures taken to contain the pandemic,
Safran is withdrawing its 2020 guidance previously announced.

When impacts on the business and the adjustment measures can be assessed with
sufficient precision, Safran will share them with the financial community.

2019 Dividend

Safran's Board of Directors has decided not to propose to the Annual General
Meeting of shareholders the payment of a dividend in 2020 for the 2019
financial year.

The previously announced dividend of EUR 2.38 per share reflected Safran's very
good performance in 2019 and the outlook for 2020 as it prevailed last February
when the Board met. Based on the number of shares in circulation, the payment
of the dividend would have represented an outflow of around EUR 1 billion in
June 2020.

In a spirit of responsibility vis-à-vis Safran's stakeholders, this decision
preserves the Group's resources in order to protect employees, maintain
continuity of its operations, notably for its suppliers, support its customers
and ensure liquidity in uncertain times.

Annual General Meeting

Safran's Annual General Meeting will be called on May 28, 2020 at the Safran
Campus - 32, rue de Vilgénis, 91300 Massy (France).

The date, venue and conditions of shareholder attendance are likely to change
for public health reasons and/or regulatory/legal reasons. In particular, it
may be necessary to hold the Meeting behind closed doors, without any
shareholders being physically present.

We will therefore strongly encourage shareholders to vote by post (or online
before the Meeting), or to give proxy to the Chairman of the Meeting.

We will also invite shareholders to regularly check the 2020 Annual General
Meeting section of the Company's website to obtain the latest information:
https://www.safran-group.com/finance/assemblee-generale.

Liquidity

As of December 31, 2019, the Group's net financial debt was as follows:

* Cash and cash equivalents at EUR2,632M,
* interest-bearing financial liabilities at EUR(6,779)M,
* and debt hedging instruments at EUR33M.

Between January 1, 2020 and March 24, 2020, net financial debt improved by
around EUR 900m (data not audited). To date, cash and cash equivalents amount
to EUR3.1bn (unaudited data), of which EUR 2.8bn (unaudited data) are available
immediately or within 90 days.

Safran's commercial paper program (NEU CP) outstanding is EUR1,802M and EUR419m
subscribed by a corporate mutual fund of the Group savings plan, maturing end
of April to mid-May 2020.

Two debt instruments will mature in 2020: a floating rate bond with a nominal
amount of EUR500M on July 13th and another fixed-rate debt with a nominal
amount of EUR99M on July 27th, representing a total of EUR599M.

Safran is in the process of setting up of a new credit line of EUR 3 billion,
with a term of up to two years, in addition to its current Revolving Credit
Facility of EUR 2,520 million currently undrawn and available until December
2022,

Based on these elements and taking into account the withdrawal of the 2019
dividend, the Group has sufficient liquidity to fund continuity of operations.

Given the performance of Safran's share price, Safran's Board of Directors will
consider a new share buyback program when conditions permit.

Safran is an international high-technology group, operating in the aircraft
propulsion and equipment, space fense markets. Safran has a global presence,
with more than 95,000 employees and sales of 24.6 billion euros in 2019.
Working alone or in partnership, Safran holds world or European leadership
positions in its core markets. Safran undertakes Research & Development
programs to meet fast-changing market requirements, with total R&D expenditures
of around 1.7 billion euros in 2019.

Safran is listed on the Euronext Paris stock exchange and is part of the CAC 40
and Euro Stoxx 50 indices.
For more information: www.safran-group.com / Follow @Safran on Twitter

Press
Catherine MALEK: catherine.malek@safrangroup.com / +33 1 40 60 80 28

Investor Relations
Cécilia Matissart: cecilia.matissart@safrangroup.com / +33 1 40 60 82 46 /
+ 33 6 49 44 60 34
Jean-François Juéry: jean-françois.juery@safrangroup.com /
+ 33 1 40 60 27 26 / + 33 7 88 04 20 14

Florent Defretin : florent.defretin@safrangroup.com / + 33 1 40 60 27 30 /
+ 33 7 20 26 19 11
Aurélie Lefebvre : aurelie.lefebvre@safrangroup.com / + 33 1 40 60 82 19 /
+ 33 6 80 16 24 98

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