Part I - CFM 0 / CMD 11 / DECEMBER 13, 2011 /

Transcription

1 Part I - CFM 0 / CMD 11 / DECEMBER 13, 2011 /

2 A successful CFM P.Fabre - Chairman & CEO Snecma / December 13, 2011 / 1 / CMD 11 Q3 REVENUE / DECEMBER 2011 / OCTOBER 13, 2011 / 21, 2011 /

3 What CFM is ŁWorld s most successful aviation joint venture 34 aircraft applications ~22,700 engines delivered 8,415 engines in backlog (including 2,760 LEAP) ŁWorld s largest commercial aircraft engine manufacturer powering 55% of all aircraft ordered / CMD 11 / DECEMBER 13, 2011 /

4 The principles of CFM Ł A well-defined field of applications Engines in the 18,000- to 50,000-pound thrust range Ł A 50/50 joint company Ł A lean organization Ł Revenue sharing, rather than profit sharing Revenue from sales of engines and spares is split 50/50 Profit is a function of each parent company s own efficiency Ł Work is split 50/50 with well-defined responsibilities - no overlap Engine design, development, and production by module and function Customer interface is shared on a geographic basis Ł All work is performed by dedicated CFM people from Snecma and GE organizations 3 / CMD 11 / DECEMBER 13, 2011 /

5 A true 50/50 Joint Venture Engine sales, design, development, production & support, and services since / CMD 11 / DECEMBER 13, 2011 /

6 CFM strengths Ł Snecma and GE Backed by the strength of two world leaders Ł Simple organization, customer focused Ł Responding to customer requirements Ł Value-driven technology The right products at the right time Ł World-class customer & product support 5 / CMD 11 / DECEMBER 13, 2011 /

7 CFM by the numbers (through December 2011) Ł $22 billion in 2011 orders 2,193 total engines to date Commercial, military, and spare engines; at list price vs. 1,585 total orders in ,465 total orders & commitments; ~22,700 engine delivered Ł Strong customer base Ł ~500 customers / operators Ł ~9,500 CFM56-powered aircraft in service (a CFM powered-aircraft lands every 2s) 6 / CMD 11 / DECEMBER 13, 2011 /

8 CFM outlook Annual engine orders & Production rates Orders Production Through 10/31/11 Planned Production 0 '01 '02 '03 '04 '05 '06 '07 ' another record year for orders as production continues to increase '09 '10 '11 '12E '13E '14E 7 / CMD 11 / DECEMBER 13, 2011 /

9 A history of innovation Driving the industry Intro FADEC & 3D Aero Tech Insertion CFM56-7BE 1% better fuel burn Repair technology Reliability/durability upgrades ~1% better fuel burn 2 nd Gen 3-D aero Combustor 1% better fuel burn Lower maint cost LEAP Lower maint cost Lower emissions LEAP 15% lower fuel consumption 50% lower NOx db lower noise CFM56 reliability CFM56-5C CFM56-5B/3 CFM56-5B/P CFM56-7BE CFM56-5A CFM56-7B/3 CFM56-2 CFM56-3 CFM56-7B 1982 CFM technology evolution ~ / CMD 11 / DECEMBER 13, 2011 /

10 Together for the long term Ł GE and Snecma have renewed the CFM 50/50 partnership agreement to the year 2040 Ł All engines in the 18,000 to 50,000-pound thrust class will be within the CFM product line Ł 2008 agreement provides for integrated services (MRO) offerings on future engines above and beyond the traditional spare parts LEAP will maintain CFM leadership for next-generation aircraft 9 / CMD 11 / DECEMBER 13, 2011 / Ce document et les informations qu il contient sont la propriété CFM, de CFM56, Safran. LEAP, Ils ne LEAP56, doivent pas and être the copiés CFM logo ni communiqués are trademarks à un of tiers CFM sans International, l autorisation a 50/50 préalable joint company et écrite de between Safran. Snecma and General Electric Company

11 A giant LEAP into the future C.Goubet - Executive Vice President CFM / December 13, 2011 / 10 / CMD 11 Q3 REVENUE / DECEMBER 2011 / OCTOBER 13, 2011 / 21, 2011 /

12 Powering all leading narrow body aircraft Engine Manuf. A320 A320 neo B737 B737 MAX C919 CFM Ł CFM on all major narrow body aircraft Ł Performance, maintainability and reliability advantages got it there Ł Winning on all aircraft, in all regions with industry leading airlines CFM, the airframers & operators choice 11 / CMD 11 / DECEMBER 13, 2011 /

13 ABC 3 letters for a complete family [LEAP: Leading Edge Aviation Propulsion] LEAP-1A LEAP-1B LEAP-1C A320neo MAX 2017 C Dual source Single source Single western source LEAP, engine of reference for the market, certified by / CMD 11 / DECEMBER 13, 2011 /

14 The value for Safran The number of shortmedium range aircraft will double in the next 20 years Ł LEAP potential market estimate Up to 2,000 aircraft for C919 More than 4,000 aircraft for A320neo More than 4,000 aircraft for B737MAX Current backlog of 1,380 aircraft ($30 billion among which $15 billion for Safran) Ł Total value for Safran $170 billion at list price for CFM among which $85 billion for Safran Source: Safran 13 / CMD 11 / DECEMBER 13, 2011 /

15 The choice of the new performance standard Ł Committed to deliver the best engine Performance, Retention Emissions Reliability Maintenance cost LEAP SFC (& CO 2 ) NOx Noise Reliability 15% b e t t e r vs. CFM56 50% l o w e r vs. CAEP 6 norm -75% noise footprint vs. CFM56 Maint. cost Best in industry Continuing CFM56 tradition SFC: Specific Fuel Consumption Less fuel, fewer emissions, exceeding new environmental regulations 14 / CMD 11 / DECEMBER 13, 2011 /

16 LEAP, the added value for the customer And, as the engine of reference, the guarantee of the best residual market value m i l I i o n f l i g h t h o u r s Fuel efficiency $8M vs. current engine Noise $1.5M vs. current engine CO 2 $1.2M vs. current engine Reliability No compromise CFM experience & execution 21 EIS on time, on spec Continuing investment Customer support network Maint. commonality Existing parts logistics Training commonality Average savings over an aircraft life cycle (vs. CFM56-5B and CFM56-7B) Assumptions: Nominal environment; 3200 hrs/yr; 1.7hr FL; 750nm; $3/gal; 0% fuel escalation; EU noise charges on 20% of flights, 15yr NPV 8% 15 / CMD 11 / DECEMBER 13, 2011 /

17 Excellence in execution Fan First run Performance Aero 2.5 lb bird 4.0 lb bird Crosswind Acoustics Endurance Blade out 6.0 lb bird Full composite (blades & case) LPT LPT rig Dual spool rig Core Core 1 (Ph. 1) Core 1 (Ph. 2) Core 2 Core 3 Architecture freeze Tollgate passed Excellent results Module efficiency demonstrated, technology matured 16 / CMD 11 / DECEMBER 13, 2011 /

18 Composite fan blades & case certifiable Ł Full-scale engine test Ł Extensive tests completed Performance Operability / crosswind Aeromechanics Acoustics 2,000 endurance cycles Full composite endurance Full composite Blade Out 17 / CMD 11 / DECEMBER 13, 2011 /

19 Core engine program continuing on-schedule Ł e-core 1 completed testing 2010 Very successful test program Met, or exceeded, all test objectives Ł e-core 2 is on test Planning over 200 test hours Ł e-core 3 planned for 4Q 2012 Final tune-up prior to start of certification program 18 / CMD 11 / DECEMBER 13, 2011 /

20 Full LEAP Low Pressure Turbine Rig test Ł Goal: to validate LEAP technology and innovations 3D advanced optimized airfoils 3D shape platforms Blade and vane alignment Reduced trailing edge thickness Ł Results Very high efficiency level confirmed Test outcome matching simulation expectations Maturation program on schedule for reliability at EIS 19 / CMD 11 / DECEMBER 13, 2011 /

21 CFM s legacy - Look beyond CFM56 Gen1-3 -5A -5B Development of -7B CFM56 Gen2 (8% improvement over 12 years) new products -1A LEAP (2015) In-service products -1B continuous Improvement -1C Pursuing the material revolution Several % of fuel burn during lifetime LEAP 2 (2020) 3 rd gen. 20 / CMD 11 / DECEMBER 13, 2011 /

22 A commitment to deliver CFM The best engine solution for narrowbodies Today and tomorrow Tradition of outstanding performance and reliability 21 / CMD 11 / DECEMBER 13, 2011 /

23 A powerful OEM market G.Meheust - Executive Vice President Sales & Marketing Snecma / December 13, 2011 / 22 / CMD 11 Q3 REVENUE / DECEMBER 2011 / OCTOBER 13, 2011 / 21, 2011 /

24 Growing transport demand Regular Worldwide Passenger Network 2011 Outlook: Traffic (RPK) RPK or ASK (billions) Ł World passenger regular network traffic (RPK) to grow ahead of GDP Source: Safran 23 / CMD 11 / DECEMBER 13, 2011 /

25 2011: record year in engine orders CFM engines (CFM56 + LEAP) ,715 25,179 25,929 27,422 31, TOTAL backlog CFM56 and LEAP 8,415 engines ,535 1, ,704 Leap Comac * Leap 737 Max * ,121 2,221 1, Leap Neo * CFM56 ordered engines CFM56 Cumulative * After Dubai Air show including commitments , Oct Years Backlog: more than 6 years of production 24 / CMD 11 / DECEMBER 13, 2011 /

26 Market share: single aisle aircraft on current CFM56 As of November 2011 Cumulative aircraft firm orders CFM 73% IAE 19% PW 3% RR 5% 2011 aircraft firm orders CFM56 87% V % CFM56 - Airbus CFM56 - Boeing 3,762 aircraft 8,140 aircraft CFM56 - Airbus CFM56 - Boeing 182 aircraft 483 aircraft Growing our market share 25 / CMD 11 / DECEMBER 13, 2011 /

27 Market share: aircraft orders on future applications As of December 2011 (>100pax) LEAP A320neo B737MAX C a/c 700 a/c 215 a/c ,380 aircraft CFM LEAP 68% PW 1000 Series 32% PW1000G A320neo Cseries MC a/c 143 a/c 128 a/c aircraft Orders and Commitments > 100 Pax LEAP, the customers preferred choice (again) 26 / CMD 11 / DECEMBER 13, 2011 /

28 The customers choice A320neo B737MAX C919 Virgin America 30 SAS 30 GECAS 60 ILFC 40 CIT 15 Republic 80 Air Asia 200 Garuda 10 Total 465 aircraft American Airlines 100 Lion Air 201 ACG 35 Undisclosed 364 Total 700 aircraft Air China 20 China Southern 20 China Eastern 20 Hainan 20 CDB 10 GECAS 10 ICBC 45 Sichuan 20 Bank of Com 30 China a/c Leasing 20 Total 215 aircraft 1,380 aircraft; 2,760 LEAP engines; $30 billion at list price (As of Dec. 2011) 27 / CMD 11 / DECEMBER 13, 2011 /

29 Worldwide engine backlog (CFM56 + LEAP) Fleet renewal Americas 41% Europe 19% Market growth Asia / Pacific 33% Africa / Middle East 7% Total backlog CFM56 & LEAP: 8,415 engines 28 / CMD 11 / DECEMBER 13, 2011 /

30 CFM global footprint Total aircraft units (50 PAX and above) Source: Ascend U.S. 6,176 Europe 4,652 1,379 China 1,543 CFM powered 1, Latin America 1,113 Middle East India CFM powers 41% of aircraft fleet in service; 45% on aircraft on order 29 / CMD 11 / DECEMBER 13, 2011 /

31 Huge success of CFM long term services offerings 8000 CFM56 & LEAP under Rate Per Flight Hour (RPFH) contract CFM Engine under RPFH contract < GE/Snecma agreement opens up growth in service offerings 30 / CMD 11 / DECEMBER 13, 2011 /

32 LEAP: key factors for success Ł Best performing narrowbody engine Best fuel burn, lowest deterioration (2.4% better vs. PW1000G) Best maintenance costs (20% longer time on wing vs. PW1000G) Best revenue generating engine (30% fewer delays, faster turns) Ł Lowest risk in execution 21 CFM service entries on-time on-spec / ~22,700 engines delivered 550 millions hours of CFM operating experience with 99.98% reliability Incorporating GE90/GEnx/CFM learning and demonstrated technologies Ł Best technology at Entry-in-Service and for growth Simple efficient architecture (fewer frames, bearings, systems) Designed for revenue generation (operability, maintainability, reliability) Unmatched innovations (i.e. maintenance-free fan module, efficient 22:1 Pressure Ratio, High Pressure Compressor, ) and continuous technology investment (aero, material, cooling improvement pipeline) LEAP, engine of reference for the market 31 / CMD 11 / DECEMBER 13, 2011 /

33 Understanding the aftermarket M.Brioude - Vice President, MRO Operations Snecma / December 13, 2011 / 32 / CMD 11 Q3 REVENUE / DECEMBER 2011 / OCTOBER 13, 2011 / 21, 2011 /

34 Overview of aircraft engine services Ł Until deregulation, engine services were limited to the sale of spare parts Airlines were maintaining their equipment for themselves and/or 3 rd parties MRO was an obligation rather than a business (warranty, ) Ł Competitive pressure on the whole system resulting from deregulation has reshuffled the cards Airlines focused on their own core business: selling seat-miles, divesting MRO facilities OEMs took over most of the MRO business, seeing an opportunity to compensate for lower margin on OEM sales Ł Today, a good OEM service policy is a win-win combination of spare part sales and maintenance/repair services allowing: Airlines to enjoy maintenance costs that are competitive, predictable and manageable OEMs to extract value from the sale of the product through its service life Ł Visibility for both parties: airlines and engine manufacturers 33 / CMD 11 / DECEMBER 13, 2011 /

35 Overview of CFM56 aftermarket Services providers What CFM provides Value for CFM CFM parent companies shops (50% market share) Airlines shops (30%) Independent shops (20%) Full fledged MRO services Spare parts Spare parts Repair services Spare parts Repair services CFM 100% market share CFM 96% of spare parts market share = Whatever the customer choice, Snecma/GE can provide a full range of MRO services or spare parts only 34 / CMD 11 / DECEMBER 13, 2011 /

36 CFM56 engine maintenance contracts Ł CFM offers to all CFM56 operators/owners and to other CFM MRO services providers a full range of services Ł Maintenance contracts and Material solutions (i.e. sophisticated spare parts supply) designed to meet customer needs Ł Scope of the contracts may includes Engine Line Operation Services, engine overhaul, spare parts/used parts supply and full engine parts repair Full engine fleet services «$ per hour» (ESPH) to operators Ł manageability & predictability Material Services Agreement (MSA) to other CFM MRO providers From One time shop stop to long term CFM global solution 35 / CMD 11 / DECEMBER 13, 2011 /

37 Aircraft and engine maintenance schedule Ł Aircraft maintenance: less time on the ground is more time in revenue service Longer interval between routine checks Ł Engine maintenance, «On-condition» maintenance policy On Wing engine management œ Engine key parameters real-time monitoring Off wing engine maintenance œ Performance restoration or LLPs replacement œ Introduction configuration Kit-upgrade: reliability and performance improvements Engines under an independent maintenance schedule vs. aircraft. On condition maintenance provides customer operations benefit 36 / CMD 11 / DECEMBER 13, 2011 /

38 CFM parts, the only reliable partner for the maintenance CFM global solution PMA providers Ł All CFM parts are designed, developed, tested, repaired and substantiated as part of an integrated system for reliability and safety 3,000+ individual parts, 40 sub-systems & Sub-assemblies, 8 main engine modules Ł Alternate material parts and repair options Systematics & Standard, tubes and brackets: low technology parts Flowpath parts on 1st gen. CFM 2D aero design and few 3D aero 1st gen. CFM56-3 LLP s but nothing available for 2nd gen. CFM56-5B/7B on the market place Ł Few options but need different suppliers with limited market recognition An engine is a totally integrated aerodynamic, structural, heat transfer and acoustic system not one piece at a time!!!! 37 / CMD 11 / DECEMBER 13, 2011 /

39 CFM global solution: TRUEngine label Ł TRUEngine program for identifying engines that have been maintained in accordance with CFM-issued recommendations Ł Qualification in TRUEngine program based on maintenance records from its most recent shop visit A free program no cost to qualify or receive benefits Ł TRUEngine designation facilitates CFM s ability to provide optimal customer support TRUEngine enhances value and increases marketability 38 / CMD 11 / DECEMBER 13, 2011 /

40 CFM TRUEngine program status 6, additions Qualified Engines 1,930 4,490 30%+ Lessor owned 6,100+ qualified engines 65 customers worldwide and growing TRUEngine surpasses 30% of CFM56 fleet 39 / CMD 11 / DECEMBER 13, 2011 /

41 A global MRO network Wales United States Mexico France Belgium Morocco China GE shop visit centres Safran shop visit centres Malaysia Brazil Customer proximity for a better service 40 / CMD 11 / DECEMBER 13, 2011 /

42 Timing of a shop visit (2 nd generation CFM56-5B/7B) EIS 1 st SV 2 nd SV 3 rd SV Economic lifetime of an engine is about 25 years 7-9 years Future intervals depend on LLP s constraints & performance restoration during the previous SV Ł Engine workscope is first proposed by the shop and then subject to customer approval Scope defined based on engine revenue data and configuration In compliance with airworthiness requirements FAA, EASA, CAAC Ł A shop visit lasts 7 to 9 weeks Engines under maintenance are replaced by spare/leased engines for the aircraft to continue its operation in the mean time Spare parts lead time from 2 to 3 weeks Timing and content are not accurately predictable, backlog visibility is limited 41 / CMD 11 / DECEMBER 13, 2011 /

43 Shop visit cost (2 nd generation CFM56-5B/7B) Ł Engine 1 st shop visit cost range ($1M to $4M+) is due to: Targeted level of performance restoration and used/new spare parts & repairs pooling Engine thrust rating/derate in operation, flight leg, pay-load Condition of operation: temperature, altitude, sand dust or pollution Proximity to LLP s maturity / stub life policy Ł First shop visit cost mainly driven by material content 65% Material cost (w/o LLP s), 25% Repair cost, 10% Routine and Engine Test Ł Full LLP s change by a new set at a cost of $2.3M provides full engine life recovery LLP s mandatory removal: 20 to 30kcycles Ł First «on wing» average life demonstrated on 2 nd gen. engines models may reach 25khours/15kcycles: 7 to 9 years of operations More than x2 what was demonstrated on 1 st gen. engine models Cost is driven by timing, which is a function of customer priorities, including cash usage 42 / CMD 11 / DECEMBER 13, 2011 /

44 Young engine fleet to drive higher aftermarket needs CFM56 engine fleet: age distribution (as of Feb. 2011) Nb of engines st generation 2nd generation 0-7 years 8-14 years years years years 39% of the CFM56 engine fleet have less than 8 years of operations 68% of the CFM56 engine fleet have less than 15 years of operations 43 / CMD 11 / DECEMBER 13, 2011 /

45 Fleet distribution to drive higher number of shop visits CFM56 fleet shop visits distribution (as of Feb. 2011) Nb of egnines Without SV 1st generation 2nd generation 1 SV 2 SVs 3 SVs 4 Svs 5 SVs and more 8,000 2 nd gen. engines in operation have not yet had their 1 st SV 2 nd gen. engines shop visits CAGR expected at 11% for the 4 coming years 44 / CMD 11 / DECEMBER 13, 2011 /

46 Short term volatility, short/medium term inevitable catch-up : 20,000 engines / 500 million flight hours 2020 : 30,000 engines / 1,000 million flight hours CFM56 spare parts revenue potentially to double by CFM engines Global spare parts revenue (in $ base in 2000) 45 / CMD 11 / DECEMBER 13, 2011 / 12 E 14 E 16 E 18 E 20 E

47 Q&A session CFM 46 / CMD 11 / DECEMBER 13, 2011 /

48 47 / CMD 11 / DECEMBER 13, 2011 /