Demonstrations would become almost the norm for this season of general meetings and Safran has not escaped it, with that of CGT employees contesting the agreements signed at the end of last year with management and increases deemed insufficient. Nothing, however, that disturbed the holding and smooth running of the AGM, the shareholders being gathered at the Palais des Congrès in Issy-les-Moulineaux. She did not gather the crowds. After a short film, the CEO, Olivier Andriès, gave his presentation on the 2021 financial year and the group’s assumptions on the recovery of traffic – return to the level of 2019 in 2023 for short/medium-haul and a pace of production of 2,000 Leap engines next year.
The group continued its adaptation efforts last year and developed its portfolio with the acquisition of Orolia in particular – which allows geolocation even in the event of a failure of the GPS constellations as currently in northern Europe – and the agreement signed for the takeover with Airbus and ACE capital of Aubert et Duval from Eramet, an operation which should be completed in the fall. Safran has confirmed that it has suspended all of its exports to Russia following the sanctions, which should cost it 2% of turnover and 0.7% of margin. In addition, ” this exacerbates the problems of the supply chain, already strained with the shock of the Covid. The sharp increase in raw materials, transport and energy beyond what had been budgeted represents an additional impact of 0.8% margin “, explained the leader. He nevertheless confirmed all of the objectives for the year.
Here we go again for 99 years
There was also a lot of talk about the CSR approach and the decarbonization of aviation, through the voice of Olivier Andriès or Patrick Pelata, administrator in charge of monitoring climate issues, an approach in which the company is massively committed, relying on ” four pillars and 12 commitments, 13 of the 17 UN goals and 15 key targets for 2025 “. It will invest 4 billion euros between 2022 and 2025, of which 75% for decarbonization, with an acceleration: sustainable fuels, hydrogen, synthetic fuel, electric motor, etc. Safran is one of only two players in the world to control the entire electrical chain on board aircraft, thanks in particular to the acquisition of Zodiac. One of the first challenges for the engine manufacturer is also to attract and retain talent. The objective is to have 22% of executive women in the group in 2025, compared to 12% in 2020.
All the resolutions were adopted, including the dividend of 0.50 euro, which represents a distribution rate of 28%, compared to 22% in 2021 and historically 40%. The group took into account the contribution to the effort of the employees and the direct contributions of the State to calibrate the return to the shareholders. However, the chairman of the board of directors confirmed that the group intends to return next year to its historical distribution policy and study the return to shareholders as and when the uncertainties are lifted. The renewal of the directorship of Didier Domange, chairman of the supervisory board of Zodiac Aerospace until the latter’s takeover by Safran in 2018, has not been requested. The number of directors was therefore reduced from 18 to 17. The penultimate resolution aimed to extend the life of the company by 99 years.
Delays at CFM
On the occasion of the questions and answers, Olivier Andriès indicated that ” titanium is not part of the scope of the sanctions decided by European countries against Russia. So, today, we continue to supply ourselves from our Russian supplier who continues to deliver to us. We started the year with a 50% dependence on Russian titanium. But, even before February 24, we had decided to increase our stocks and are covered until the end of 2022. We are gradually desensitizing ourselves from Russian titanium “. The acquisition of Aubert and Duval is part of this desensitization effort. Concerning this company, the manager specified that “ Aubert et Duval is also a fabricator and a blacksmith. As we are also blacksmiths, it was decided with Airbus and ACE that Safran will ensure the operational management of the company. “. Synergies should thus be developed. He assured that the quality problems previously encountered by the former Eramet subsidiary had partly been dealt with and that the buyers had received the appropriate insurance to be covered.
Finally, on the delays in delivery of CFM International (a joint venture between Safran and General Electric which produces commercial aircraft engines) mentioned in the press, ” that’s right, we are a few weeks behind in delivering engines to Airbus and Boeing. This illustrates that we are in a situation where the chain of suppliers is tense, particularly in the United States. Suppliers have had to adapt to the crisis, have lost skills and find it difficult to recruit today and therefore to leave very quickly, particularly in the United States. It’s not linked to social unrest in France “. The engine manufacturer and his partner will obviously do their utmost to make up for this delay.