Zodiac Aerospace: Q1 2017/2018 sales revenues

Q1 2017/2018 sales revenues

Plaisir, December 13, 2017 - Zodiac Aerospace's sales were down -6.9% on a like-for-like basis for the first quarter of its fiscal year 2017/2018 (September to November).

On October 30^th 2017, the Group expected a slight decline in sales, which is broken down into a further increase of Aerosystems activities, at a similar pace to the previous year, a stabilization of the Cabin activities, and a decline in Seats business, impacted by past operational performance. Sales for the first quarter are in line with this scenario, with the exception of the Cabin branch, which is experiencing a weak start due to some customers' decision in the VIP and business jets markets to postpone their orders.

Zodiac Aerospace reported sales of €1,077.5m, decreasing by -10.4% on a reported basis, impacted by a negative foreign exchange rates of -3.5 points. There was no impact from consolidation scope.

Sales revenue for the first quarter of the 2017/2018 fiscal year

Aerosystems activities (45.2% of total revenue) reported a growth in revenues of +5.1% on a like-for-like basis and +1.5% on a reported basis, amounting to €487.1m. Aerosystems benefited from a good start of the year on IFE's activities, compared to a weak start in 2016/2017, and from a good performance in Power Systems, Oxygen and Evacuation activities. After-sales activities also contributed significantly to the growth of the quarterly sales.

Aircraft Interiors activities (54.8% of total revenue) sales stood at €590.4m, down by -14.9% on a like-for-like basis and by -18.3% on a reported basis.

• Zodiac Seats branch reported €236.9m sales in Q1, down by -20.4% in organic and by -22.7% on a reported basis. As expected, the Seats branch remains penalized by the impact of its poor past operational performance.
• Zodiac Cabin branch reported a -10.6% organic decrease of its sales. This weak activity during the first quarter, below the Group's expectations, is due to postponements of orders by some customers, in the VIP and business jets markets. On a reported basis quarterly sales decreased by -15.0% to €353.5m.

Currency hedge

For 2017/2018, Zodiac Aerospace has hedged 91% of estimated EUR/USD exposure at 1.0952 $/€ (spot rate), 54% of USD/CAD, 68% of USD/GBP, 87% of USD/MXN and 65% of USD/THB exposure.

As a reminder, the sensitivity of the current operating margin rate is estimated at 168 basis points for 10 cents change in the euro / dollar exchange rate (transaction impact).

Outlook

As published in the presentation of its annual results on October 30^th, Zodiac Aerospace continues its industrial recovery and transformation.

On a like-for-like basis the Group confirms its expectation to post a slight decrease in sales for 2017/2018, excluding forex and scope effects, which breaks down into a further increase in Aerosystems activities, at a similar pace to the previous year, a stabilization of Cabin activities over the next 3 quarters and a further decline in Seats business, impacted by past operational performance. Current operating income should rise sharply. As for the sales, the current operating income for the second half of the year should be significantly higher than the first half. Operational Cash Flow generation is expected to remain strong, particularly as a result of ongoing actions to reduce inventories, which should lead to an increase in industrial investments.

On December 7, Safran filed with the Autorité des Marchés Financiers (AMF) a draft tender offer on a principal basis, complemented on a subsidiary basis by a public exchange offer, targeting the shares of Zodiac Aerospace.

About Zodiac Aerospace
Zodiac Aerospace is a world leader in aerospace equipment and systems for commercial, regional and business aircrafts and for helicopters and spacecraft. It develops and manufactures state-of-the-art solutions to improve comfort and facilities on board aircrafts and high-technology systems to increase aircraft performance and flight safety. Zodiac Aerospace has approximately 35,000 employees worldwide and generated revenue of €5.1bn in 2016/2017. www.zodiacaerospace.com

IMPORTANT ADDITIONAL INFORMATION

This press release is not intended to and does not constitute an offer to sell or the solicitation of an offer to subscribe for or buy or an invitation to purchase or subscribe for any securities or the solicitation of any vote or approval in any jurisdiction in connection with the proposed acquisition of Zodiac Aerospace (the "Transaction") or otherwise, nor shall there be any sale, issuance or transfer of securities in any jurisdiction in contravention of applicable law.
The tender offer in connection with the Transaction is subject to obtaining of required regulatory and other customary authorizations. These materials must not be published, released or distributed, directly or indirectly, in any jurisdiction where the distribution of such information is restricted by law.
Safran and Zodiac Aerospace filed with the French Market Authority ("AMF") a prospectus project and other relevant documents with respect to the tender offer to be made in France. Pursuant to French regulations, the documentation with respect to the tender offer which, as filed, states the terms and conditions of the tender offer is subject to the review by the AMF. Investors and shareholders in France are strongly advised to read the prospectus project and related offer materials regarding the tender offer referenced in this communication, as well as any amendments and supplements to those documents as they should contain important information regarding Safran, Zodiac Aerospace, the contemplated transactions and related matters.
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 (Aggregate at end of period compared with the same period of last year)

*Excluding Trains and Airbags businesses