PART I.

CIVIL ENGINES

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 CFM56
LEAP TRANSITION

Olivier ANDRIÈS
CEO, Snecma

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 LEAP – BEST IN CLASS-
Fuel efficiency NOx Noise Reliability Maint. cost

15% 50% New Same as CFM56

better lower regulation
vs. CFM56 vs. CAEP 6 compliant … best in industry
(chapter 14)
99.98% Departure reliability

 Technology
 Materials
• New Composites Performance
• New Alloys
& reliability
 Experience
 Execution
Potential for
 Full Technology Pipeline
Improvement

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 LEAP – MARKET SHARE

As of February 29, 2016

CFM LEAP CFM LEAP

5,217 AC
• A320neo 1,571 a/c (55% m.s.) 737MAX
74%
• 737 MAX 3,129 a/c 737 MAX
• C919 517 a/c C919
C919
5,217 a/c
C-Series
C-Series
MC-21
MC-21
PW1000G Series A320neo
• A320neo 1,264 a/c (45% m.s.) A320neo A320neo
A320neo PW1000G
1,843 AC
• C Series 403 a/c 26%
• MC-21 176 a/c
1,843 a/c

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 100 CUSTOMERS, ALL AROUND THE WORLD

A320neo 737 MAX C919

1,571 AC announced 3,129 AC announced 517 AC announced
29 customers 67 customers 21 customers

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 LEAP – RIGHT ON TRACK

2012 2013 2014 2015 2016 2017 2018

Design 1st engine
FTB 1st flight EIS
freeze to test
LEAP-1A
Airbus A320neo

Design 1st engine

FTB 1st flight EIS
freeze to test

LEAP-1B
Boeing 737 MAX

Design 1st engine

FTB Roll out 1st flight EIS
freeze to test
LEAP-1C
Comac C919

Engine development schedule unchanged for 5 years!

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 LEAP – A THOROUGH TESTING PROGRAM

 9,100 hours and 19,500 cycles

of Engine testing
• Fan Blade Out, Ingestions
(birds, water, hailstones, ice slabs),
Icing, Block test, Cross wind,
Vibration endurance, HP and LP
Module Aeromechanics…

 2,000 Engine Flight Hours

accumulated
• Flying Test Beds
• A320neo/A321neo
• 737 MAX

Proven Performance

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 LEAP-1A
 Engine testing (1A/1C):
5,300 hours, 13,900 cycles

Program  A320neo First Flight in May 2015

Execution  A321neo First Flight in Feb 9,
2016
 Flight test campaign:
3 aircraft, more than 220 flights
and 550 flight hours, excellent
engine behaviour

 Engine certified: Nov 2015

Performance
 Performance at spec @ EIS

Agenda  Entry Into Service mid 2016

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 LEAP-1B
 Engine testing: 3,800 hours,
5,600 cycles
Program  737MAX flight test campaign:
2 aircraft, first flights on Jan 29
Execution and March 4, 2016
 35 flights and 89 flight hours
already accumulated, excellent
engine behaviour

Performance  Performance at spec @ EIS

 737 MAX flight test campaign

Agenda supporting 2017 EIS

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 LEAP-1C

Program  Engine testing (1A/1C):

Execution 5,300 hours, 13,900 cycles
 C919 roll-out Nov 2, 2015

Performance  Performance at spec @ EIS

Agenda  C919 first flight: expected 2016

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 LEAP – RAMP UP

NUMBER OF ENGINES PRODUCED

 CFM56 production record level in 2016

 LEAP production will reach a 30%

higher rate

2,000+
 Everything in place to manage

1,650+
1,612
a smooth transition and ramp-up

 Large volumes and steep ramp-up are

an opportunity to get costs down faster
2015 2016e
2016 2017e
2017 2018e
2018 2019e
2019 2020e
2020 2021e
2021 2022e
2022 2023e
2023 2024e
2024

LEAP CFM56

Full transition in 4 years

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 LEAP – RAMP UP

 100% of suppliers are well known vendors and aero suppliers –

80% are common with CFM56

 Redundancy and/or buffer stock for 100% of parts

 85% of parts are double sourced

 Suppliers Selection - based on three main criterias: Supply Chain performance,

Growth capacity (including financial criteria) and economic performance

 Leveraging Safran, GE and worldwide suppliers footprint

 Developing brand new plants for new technologies, Lean Manufacturing built in

Strong plan and actions in place to manage ramp-up

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 LEAP – RAMP UP

EXTENDING THE FOOTPRINT SNECMA INTERNAL SHOPS EXTENSION

LOCATION SIZE COUNTRY SPECIALISATION STATUS

Gennevilliers 1,500 m2 France Precision forging

Le Creusot 4,000 m2 France Turbine disk machining

Commercy 27,000 m2 France 3D composites RTM

Villaroche 40,000 m2 France Logistics for assembly and spares

Suzhou 19,000 m2 China Machining and assembly

Querétaro 31,000 m2 Mexico 3D composites RTM and assembly

Rochester 31,000 m2 USA 3D composites RTM

Rzeszow 9,300 m2 Poland Turbine blade and booster spool machining

launched achieved

Over 162,000 m2 of extensions and new buildings in Europe, Asia and Mexico between 2012 and 2016

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 LEAP – RAMP UP

EXTENDING THE FOOTPRINT SUPPLIERS SHOPS EXTENSION

SIZE COUNTRY SPECIALISATION
60,000 m² France Part & Blade Machining, Bearings, Casting
50,000 m² Europe Part Machining & Casting
75,000 m² USA Casting & Equipment
40,000 m² Mexico Composites, Equipment, Blade Machining
20,000 m² Japan Blade Machining
50,000 m² China Part Machining

Close to 300,000 m2 of extensions and new buildings worldwide from 2015 to 2018

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 LEAP – SAFRAN PULSE LINE

 Concept similar to CFM56

assembly (operational since 2009)
• 3 parallel assembly lines composed
of 5 working stations / 1 shift of lead time
per station
• Latest technologies including engine rotation
(Safran patent)
1400
1,200
1200 # engines
 Main milestones 1000
 Suppliers’ selection: Feb 2015 800

 Design freeze: Sept 2015 600

400
• 1st Line delivery: July 2016
200
• 2nd Line delivery: Jan 2017 0
2016 2017 2018 2019 2020 2021 2022
• 3rd Line delivery: 2019
Safran
SN Assembly Load Pulse Line Capacity

3 lines, capacity of 450 engines / year / line

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 LEAP – RAMP UP
A ROBUST ROUTE TO SERIAL MODE:
PRODUCT A DEDICATED PROJECT TO ASSESS AND MITIGATE GLOBAL RISKS
AHEAD OF EIS FOR LEAP RAMP UP (SINCE 4Q2012)

 220 suppliers Tier 1 and 25 Tier 2 ROUTE TO SERIAL MODE  Up to 60 dedicated people
• ROUTE TO SERIAL MODE  10 Safran locations  Global control
worldwide, common
methodology and tool to all
• SPI  50 Safran shops  Risk consolidation from In suppliers and Safran Shops,
House and suppliers analysis common dashboard
• SPRED  6 Centres of Excellence including
including CFM56/LEAP transition
Quality Teams  In place up to end of ramp up
• RUN@RATE leading to an action plan
to reach full rate
 1,200 parts numbers per engine
• TECHNOLOGIES model  Complete coverage through
analysis of 59 families of parts
MATURATION  250 baselines (refreshed every
6 months)  Risk abatement Plan Monitoring

LEAP internal rate readiness LEAP supplier rate readiness

INTERNAL EXTERNAL
SUPPLY CHAIN SUPPLY CHAIN

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 LEAP – RAMP UP
A ROBUST INDUSTRIALIZATION
PRODUCT BASELINE CONTENTS MONITORING
AHEAD OF EIS SPI: standard milestones
Right to left planning Load capacity analysis
based on critical parameters
and statistical analysis
• ROUTE TO SERIAL MODE
All parts and all sources
• SPI covered, 25 milestones
• SPRED
Action plan
• RUN@RATE MANUFACTURING
• TECHNOLOGIES
CONCESSION CONTROL
MATURATION
SPRED: Reduction of
concession rate through blue
print revision and process
improvement
Expected production capability
already reached, ahead of the
Outputs Risk analysis ramp up

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 LEAP – RAMP UP
A ROBUST WHAT IS RUN@RATE?
PRODUCT
AHEAD OF EIS
 Running at future production rate today Simulating future
• Five sets/week for 2 weeks in 2015 production rate during
• ROUTE TO SERIAL MODE • Will conduct annually for four years… early ramp-up
• SPI repeating at next higher rate each time

• SPRED  Used within CFM & with Suppliers

• RUN@RATE • 70 sites total in 2015
• TECHNOLOGIES  Designed to stress the system
MATURATION
 Applies to all facets… materials,
production line, logistics
 Designed to make us look ahead
• Mitigate risks we will face in the future
• Implement lessons learned

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 LEAP – RAMP UP
A ROBUST 3-D printed Fuel
PRODUCT Nozzles
Improved alloy:
AHEAD OF EIS Titanium Aluminide
LPT blades

• ROUTE TO SERIAL MODE

• SPI
• SPRED
• RUN@RATE
• TECHNOLOGIES
MATURATION

Improved alloy:
Rene65 LPT disks
3D Woven Carbon
Fiber Composite Fan Ceramic Matrix
blades and Fan case Composite HPT shrouds

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 LEAP – RAMP UP
A ROBUST EXEMPLE OF MATURATION FOR NEW TECHNOLOGIES:
PRODUCT 3D WOVEN CARBON FIBER COMPOSITES FAN BLADE
AHEAD OF EIS  1990’s: Technology and process evaluation
 2000-2003: Joint Technical Development Program with our partner Albany IP
• Goal: test and validate the technology to make a reliable and cost effective Fan Blade
• ROUTE TO SERIAL MODE
• Materials, mechanical properties and process capability
• SPI
 2004 -2006: coupons, partial part and engine test performed with an aero design
• SPRED • 7 Bird strike tests done with woven Fan Blades
• RUN@RATE  2007 - 2012: Mature Technology in a lab with Albany to improve robustness of process and design
• TECHNOLOGIES compliance
MATURATION  2012 - 2015: Construction of two new plants dedicated to 3D woven Carbon Fiber Technology
 2014 - 2015: Delivery of first production parts and LEAP-1A Certification
 2016: LEAP ramp up starts, construction of an additional manufacturing plant in Mexico

Over 2,500 3D woven carbon fiber fan blades produced for maturation
ahead of production ramp up

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 MORE THAN 40 LEAP CUSTOMERS IN SERVICE
WITHIN THE NEXT 3 YEARS
Rigorous preparation:
 Extensive work with airframers to leverage the Flight
Test Campaign
 Documentation / Engine Shop Manual ready
 Tooling validated
 Expert FSE (Field Support Engineers) Program
 Dedicated EIS readiness program with each
Customer, including comprehensive training
 EIS support stress tests with LRU (Line Replaceable
Unit) providers
 MRO network ready

Ready to support our customers

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 CFM56 - LEAP
AFTERMARKET
François PLANAUD
Executive Vice President Services and MRO, Snecma

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 CFM INSTALLED BASE EVOLUTION

 CFM fleet in service to grow by 4%+ annually

Nb of engines
CFM Fleet in service
over the next decade 40,000

• 25,000 CFM56 engines in operation today

• More than 27,000 CFM56 engines will be in 30,000
operation in 2018

20,000
 New generation LEAP engines will relay
CFM56
• LEAP brings additional fleet growth potential 10,000

 By 2025, 11,000+ engines expected to

be added to the fleet in service 0

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 CFM56 GEN 2 FLEET STILL VERY YOUNG

CFM56 Engine Fleet as of 2015

Nb of engines
15,000
Age distribution

CFM56 Gen 2  In 2015:

CFM56 Gen 1
10,000 • 50% of CFM56 fleet is below 10 years
• Average age of CFM56 Gen 2 fleet
in service is below 8 years

5,000
 In 2025:
• Average age of CFM56 Gen 2 fleet
in service remains below 15 years
0
[0-8 [ [8-16 [ [16-24 [ [24-32+

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 CFM56 GEN 2 MAINTENANCE ACTIVITY STILL GROWING

As of 2015 As of 2020 As of 2025

19,000 + 22,000 + 18,500 +

Gen 2 Gen 2 Gen 2
in service in service in service

No shop visit performed on engine One shop visit or more

 2015: more than 60% of CFM56 Gen 2 in service have never had a shop visit
 2025: the proportion is still close to 25%

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 SPARE PART CONSUMPTION FORECAST MODEL
• Workscope
• Statistical laws • Module exposure
• Engine deliveries • Technical events • Scrap rate
• Fleet aging • Life limited parts
• Airworthiness
Technical data
Shops
experience
Product
technical
expertise
Engine Shop Maintenance Spare
in service visit contracts parts
usage
Customer data
Customer /
Customer data Market data

• Fleet evolution
• Market analysis Major model output
• Airline activity and • Specific SV schedule
perspectives • Maintenance strategy

A comprehensive combination of technical and market inputs

Deterministic parameters strong drivers for first shop visit

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 CONTINUALLY ADAPTING THE SPARE PART CONSUMPTION
FORECAST MODEL
 More than 30 parameters statistically analyzed
 Customer base segmented into 10 categories
OUT
BRICs
airlines
IN
Low Profitability Established High end Mature Airlines
Legacies Legacies Legacies Low Cost from China

Financially Successful Struggling

driven 2nd Tier 2nd Tier Freight Military
Low Cost Airlines Airlines

 Segmentation updates since 2013, driven by market evolution:

• Some North American airlines, exiting Chapter 11 and benefiting from low fuel prices moved from low profitability
to established legacies
• High level of orders, deliveries and traffic growth in China lead to a specific forecast and analysis
• Redistribution of BRICs airlines across existing segments

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 SHOP VISIT OUTLOOK

Worldwide CFM fleet shop visits

 Maximum shop visit activity
4,000
on CFM56 around 2025
3,000
 CFM56 Gen 2 shop visit activity
will grow by 50%+ over the next
ten years 2,000

1,000

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 TIMELINE OF SPARE PARTS CONSUMPTION

Fleet-wide analysis:
Fleet-wide analysis: lifetime revenue
lifetime consumption profile
profile for CFM56 Gen 2 engine
for CFM56 Gen 2 engine
 Most spare parts consumption
on CFM56 Gen 2 engines
is generated in the first 18-20
years of operation

10
10 2020

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 CFM56 SHOP VISIT RANK DISTRIBUTION

2015 2020 2025

Gen 2 Gen 2 Gen 2

Shop visits Shop visits Shop visits

Shop visit # 1 Shop visit # 2 Shop visit # 3+

 2015: shop visits #1 and #2 are the main drivers, representing

more than 80% of CFM56 Gen 2 maintenance activity
 2025: shop visits #1 and #2 will still represent 2/3 of activity

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 PROSPECTS FOR FUTURE CFM56 AFTERMARKET

Expected CFM56 spare parts  Main contributors to spare parts

Expectedconsumption profile
CFM56 spare parts
revenue profile consumption are now Gen 2 engine models
 In 2016, consumption is expected to have
CMD'2013 doubled since 2010, supported by a very
favorable environment in 2014 and 2015
2010 dip
2x 3x • Oil price decrease
• Traffic growth

 Trend grows faster and peaks higher than

2007 2010 2013 2016 2019 2022 2025 2028
2013 view, mainly due to greater CFM56
success in recent years

Forecast model confirms growth outlook for CFM56 spare parts

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 USED PARTS MARKET

 Used parts
• The spare part forecast model anticipates the increased use of Used Serviceable Material
• CFM Materials (a Snecma & GE joint venture) is prepared to address the future availability
of used material for CFM56 Gen 2 engines
• Used material is also an opportunity to reduce material costs in RPFH service agreements

Typical engine program life cycle

Growth Core Mature

CFM56
Gen 2
CFM56 Gen 1
LEAP
Production Parts & Services

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 MARKET TRENDS:
RATE PER FLIGHT HOUR SERVICE AGREEMENTS
 An increasing customer driven evolution towards “per hour” long-term service
agreements Active installed fleet of CFM
• Airlines favor predictable operating costs and long term visibility engines (estimate)
 Services product portfolio evolution 30,000

• 10% of CFM56 fleet covered by RPFH* contracts from Safran, expected to remain stable T&M
25,000 RPFH*
• On LEAP, 22% of orders to date include a CFM RPFH contract
― Assumption: 50 to 60% of the fleet to be supported under RPFH agreement 20,000
― Possible reversion to Time & Material maintenance in the second part of engine life,
and later in the program 15,000

 Gradual transition 10,000

• LEAP fleet will represent ~18% of combined CFM fleet by 2020
5,000
 Opportunities for the engine OEM as an MRO provider
• Maintenance cost & reliability key parameters in LEAP engine design and proven
0
architecture choice
• Deep knowledge of the engine and its maintenance costs over time through customer
support activities
• Continuous maintenance costs improvements over program life
*RPFH = Rate per flight hour contracts

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 RPFH SERVICES CONTRACT MANAGEMENT

OFFERS CONTRACTS
• Enhanced pricing model • Contract expertise
• Operators proximity • Responding to customer demand with
bespoke offers

CUSTOMER
EXPERIENCE EXECUTION
• Contract management & evolution • OEM Product expertise
• Fleet management and time on wing
• Cost optimization optimization
• CFM56 and GE90/GP7200 RFPH • Cost effective workscopes & repair
contracts background development
• Extended industrial capabilities

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