H1 2021: recovery of sales in Q2 and continued discipline on costs and cash. FY 2021 outlook confirmed

PRESS RELEASE

H1 2021: recovery of sales in Q2 and continued discipline on costs and cash. FY 2021 outlook confirmed.

Paris, July 28, 2021

• H1 2021 earnings still affected by the effects of the crisis, bottoming out in Q1
• FY 2021 outlook confirmed implying a meaningful H2 ramp-up. Free cash flow target raised

Adjusted data

• Revenue at Euro 6,876 million, down (21.6)% on a reported basis and down (17.3)% on an organic basis
• Recurring operating income at Euro 659 million down (30.4)% on a reported basis and down (29.3)% on an organic basis
• Operating margin impacted across all divisions. Group operating margin down in H1 2021 at 9.6% but improved versus H2 2020
• Free cash flow generation at Euro 701 million

Consolidated data

• Revenue was Euro 6,769 million
• Recurring operating income at Euro 351 million
• Profit from operations at Euro 156 million
• Profit for the period attributable to owners of the parent at Euro 674 million
• Free cash flow at Euro 701 million

The Board of Directors of Safran (Euronext Paris: SAF), under the Chairmanship of Ross McInnes, at their meeting in Paris on July 28, 2021, adopted and authorised the publication of Safran's financial statements and adjusted income statement for the six-month period ended June 30, 2021.

Foreword

• All figures in this press release represent adjusted [1] data, except where noted. Please refer to the definitions and reconciliation between H1 2021 consolidated income statement and adjusted income statement. Please refer to the definitions contained in the Notes on page 11 of this press statement.
• Organic variations exclude changes in scope and currency impacts for the period.

1

Executive commentary

CEO Olivier Andriès commented:

"Safran's results for the first half of 2021 remain affected by the effects of the crisis and an unfavorable basis of comparison in Q1. They also show a start of the recovery in the second quarter. As anticipated, the second half of the year will be essential to see if the effects of the anticipated strong recovery in air traffic in Q3 and Q4 are reflected in the full-year results. We are preparing for the recovery while maintaining strong discipline on costs and cash in line with the efforts achieved in 2020."

Air traffic data in H1 2021

The recovery in traffic was mixed during the first half of 2021 and remained soft with global upsurge in new Covid-19 variants during the first months of the year. The vaccine rollout across the world led to a traffic rebound through the second part of the semester but at a different pace across regions.

• Narrowbody ASK1 in H1

After starting the year at around 50% of their 2019 levels, narrowbody ASK reached a trough in February. From March on, narrowbody ASK have been improving. In June, narrowbody ASK were at 59.4% versus 2019.

• Most recent trends in narrowbody traffic

Since June, trends in traffic compared to 2019 show strong improvement in Europe and stability in North America after a steady increase since the end of February. In Asia excluding China, the deteriorating sanitary situation resulted in decreasing traffic, with CFM engines cycles down by (71)% compared to 2019. In China, weekly cycles of CFM engines were lower than 2019 in June but have regained their 2019 levels mid-July.

• Weekly CFM engines flight cycles

As of July 18, 2021, weekly cycles compared to the same week in 2019:

• CFM56 fleet cycles are down (35)% improving from (46)% at April 25, 2021;
• LEAP fleet cycles are up 101% improving from 56% at April 25, 2021.

Safran continues to adapt

To cope with the uncertainty in the pace of air traffic recovery, Safran is pursuing the efforts started in 2020:

• Continuing decrease in labor costs consolidating savings achieved in FY 2020

1. Headcount decrease from 31st December 2020: 2,250 (including temporary workers);

1. Short time working continued in H1 2021 but halved compared to last year: 7.9% on average worldwide and 10.4% on average in France in the first five months, aligned with FY 2021 assumptions.

 Continuous industrial footprint rationalization:

1. Site closures announced at Aircraft Interiors (Bellingham and Ontario (US)) and Electrical & Power (Santa Rosa (US));

• 1. Industrial plan optimization (Electrical & Power and Nacelles).
• Cost control still very tight in H1:
• 1. R&D Expenses down (5)% compared to H1 2020 and flat compared to H2 2020;

1. OPEX in H1 2021 down (13)% versus H1 2020 and still 28% below H1 2019 level despite an increase compared to H2 2020 notably due to lower short time working;

O CAPEX commitments kept under control, allowing a decrease in cash out compared to H1 2020.

1 Available Seat Kilometers

2

Key business highlights

1- Aerospace Propulsion

Narrowbody engine deliveries

At the end of June 2021, combined shipments of CFM56 and LEAP engines reached 448 units, compared with 534 in H1 2020.

In H1 2021, CFM International delivered:

• 399 LEAP engines compared with 450 engines in the year ago period;
• 49 CFM56 engines (as planned) compared with 84 engines in H1 2020.

CFM International LEAP-1A engines has been selected to power IndiGo's fleet of 310 new Airbus A320neo, A321neo, and A321XLR aircraft. This agreement includes 620 new installed engines and associated spare engines, as well as a multi-year service agreement.

United Airlines announced that it will expand its Boeing 737 orders by purchasing an additional 200 737 MAX jets powered by CFM International LEAP-1B engines.

On June 14, 2021, GE Aviation and Safran announced a bold technology development program targeting more than 20% lower fuel consumption and CO2 emissions compared to current LEAP engines as well as ensuring 100% compatibility with alternative energy sources such as sustainable aviation fuels. The CFM RISE (Revolutionary Innovation for Sustainable Engines) program will demonstrate and mature a range of new, disruptive technologies for future engines that could enter service by the mid-2030s.

Safran and GE Aviation also signed an agreement extending the CFM International 50/50 partnership to the year 2050, declaring their intent to lead the way for more sustainable aviation in line with the industry's commitment to halve CO2 emissions by 2050.

Civil aftermarket 2

H1 2021 civil aftermarket revenue was down (25.5)% in USD terms due to:

• Lower spare parts sales for the latest generation of CFM56 engines, slightly down compared to H2 2020 which benefited from year-end sales;
• Decrease in high thrust engines spare parts;
• Slight decrease in service contracts activity.

In Q2, civil aftermarket revenue rebounded by 55% compared with Q2 2020 and by 15% compared with Q1 2021.

Helicopter turbines

Safran received FAA type certification for its Arrano 1A engine, installed in the Airbus H160 helicopter. The engine is now certified in both Europe and United States.

2- Aircraft Equipment, Defense and Aerosystems

Safran has been chosen by Singapore Airlines (SIA) to provide wheels and carbon brakes for its entire fleet of Boeing 777-9 through a tailored brake landing Service contract (31 aircraft are currently on order). Safran currently supports wheels and carbon brakes for 126 Airbus and Boeing aircraft at SIA and Scoot, the low-cost airline of the SIA Group, including A320, A350, 737-800 NG, 737-8 MAX and 787.

Safran signed a 12-year NacelleLife™ service contract with Corsair for the nacelles of its 5 Airbus A330neo. With this contract, the Group commits to the repair of the nacelles and the general service of the thrust reverser at the time of their programmed removals with the support of its network of experts for on-site nacelle inspections and its Maintenance, Repair and Overhaul (MRO) centres.

2 Civil aftermarket (expressed in USD): this non-accounting indicator (non-audited) comprises spare parts and MRO (Maintenance, Repair & Overhaul) revenue for all civil aircraft engines for Safran Aircraft Engines and its subsidiaries and reflects the Group's performance in civil aircraft engines aftermarket.

3

Safran launches Geonyx M, a new inertial unit for fast boats and amphibious vehicles. It complements the Geonyx land range as well as the Argonyx and Black-Onyx ranges intended respectively for first-rank surface vessels and submarines.

3- Aircraft Interiors

Despite a low point which in all likelihood has been reached for Aircraft Interiors' revenue in H1 2021, Safran is regaining customer interest in its products and achieved several commercial successes, in particular with:

• A German airline to provide the crew rest areas (LDMCR - Lower Deck Mobile Crew Rest) and Skylounge Core business class seats of its future fleet of 16 A330neo aircraft;
• A Middle East airline to provide Vue new business class seats for its Boeing 737 MAX;
• An Indian airline to provide linefit Z200 economy class seats for 75 A320/A321.

First-half 2021 results

H1 2021 revenue amounted to Euro 6,876 million, a decrease of (21.6)%, or Euro (1,891) million, compared to the year ago period. Changes in scope had a net impact of Euro (4) million. The net impact of currency variations was Euro (366) million, reflecting a negative translation effect on non-Eurorevenues, notably USD. The average EUR/USD spot rate was 1.21 to the Euro in H1 2021, compared to 1.10 in the year-agoperiod. The Group's hedge rate was flat at USD 1.16 to the Euro in H1 2021, compared to H1 2020. On an organic basis, revenue decreased by (17.3)% which is made by a (34.6)% drop in Q1 2021 and a 10.0% growth in Q2 2021.

Q2 2021 revenue improved by 6.0% on an organic basis compared to Q1 2021, coming from all divisions.

H1 2021 recurring operating income3 reached Euro 659 million, down (30.4)% compared to H1 2020. It includes scope changes of Euro (4) million as well as a negative currency impact of Euro (7) million. On organic basis, recurring operating income decreased by (29.3)% due to lower volumes and despite savings from the adaptation plan. One-offitems, which amounted to Euro (195) million, are related to impairment for several programs (Euro (180) million) and to restructuring costs (Euro

1. million). The Group recurring operating income margin stood at 9.6% of sales, above H2 2020 underlying margin, which was at 8.2%.

H1 2021 Adjusted net income - Group share was Euro 269 million (basic EPS of Euro 0.63 and diluted EPS of Euro 0.61) compared with Euro 501 million in H1 2020 (Basic EPS of Euro 1.18 and diluted EPS of Euro 1.14).

It includes:

• Net adjusted financial loss of Euro (84) million, including foreign exchange losses of Euro (28) million and cost of debt of Euro (51) million;
• An adjusted tax expense of Euro (100) million (26.2% apparent tax rate);

The reconciliation between H1 2021 consolidated income statement and adjusted income statement is provided and commented in the Notes on page 12.

• Operating income before capital gains or losses on disposals / impact of changes of control, impairment charges, transaction and integration costs and other items.

4

• Aerospace Propulsion

First-half2021 revenue was Euro 3,249 million, down (19.7)% compared to Euro 4,047 million in 2020. On an organic basis, revenue decreased by (15.7)% compared to H1 2020. Q2 2021 revenue showed a 8.5% organic improvement compared to Q1 2021.

• OE revenue dropped by (15.6)% (or (11.1)% organically) compared with H1 2020, due to lower narrowbody engines deliveries (LEAP and CFM56).
  Installed engines deliveries decreased compared to H1 2020 and spare engines remained flat compared to the year ago period. High thrust engines volumes were down by 30% during the first half 2021 compared to H1 2020.
  As planned, M88 engines deliveries were up and amounted to 31 units in H1 2021 compared with 19 in H1 2020 notably thanks to export contracts. Helicopter turbines OE sales faced a slight headwind during the first-half of the year.
• Services revenue decreased by (22.2)% (in Euro, or (18.5)% organically) and represented 60.1% of sales. Civil aftermarket revenue decreased during the first half 2021 by (25.5)% (in USD). This drop was mainly due to lower spare parts sales for the latest generation of CFM56 engines and for widebody platforms. Military services also faced a headwind compared to the year ago period due to a high comparison basis created by an export contract in H1 2020. Helicopter turbines support activities (Per Hour contracts as well as Time & Material) contributed positively during the semester.

Recurring operating income was Euro 504 million, a decrease of (27.9)% compared with Euro 699 million in H1 2020. Recurring operating margin dropped from 17.3% to 15.5%, close to end of year 2020 margin. The decrease in profitability was driven by the lower level of sales and despite the effect of the adaptation plan's measures and an exceptional positive impact from repayable advances.

• Aircraft Equipment, Defense and Aerosystems

First-half2021 revenue was Euro 2,972 million, down (18.3)% compared with Euro 3,638 million in the year ago period. On an organic basis, revenue was down (13.9)% compared to H1 2020. Q2 2021 revenue slightly improved (+3.0% organic) compared to Q1 2021.

• OE revenue decreased by (20.1)% (or (15.6)% organically) in H1 2021 mainly driven by wiring and power distribution activities, landing gears for Boeing 787 and A350 and nacelles for A330neo. Deliveries of nacelles for LEAP-1A powered A320neo increased at 264 units in H1 2021 (248 units in H1 2020). Aerosystems (fluid, evacuation, oxygen) and Avionics activities impacted negatively the division sales, partially offset by an increase in Fadec activities and in fuel control systems. Defense activities (notably sighting, guidance systems and optronics) decreased slightly during H1 2021.
• The decline in services of (14.5)% (or (10.3)% organically) in H1 2021 was driven by carbon brakes, landing gear MRO activities, nacelles support activities and to a lesser extent Aerosystems. Defense services activities increased during the first half of the year.

Recurring operating income was Euro 270 million, a decrease of (21.3)% compared to Euro 343 million in H1 2020. Recurring operating margin was at 9.1% from 9.4% in H1 2020. The decrease in profitability during H1 2021 was driven by lower sales and despite a positive impact from the adaptation plan's measures and lower R&D impact on P&L.

5