Welcome to the Safran Full Year 2019 Results. At this time, I would like to turn the conference over to your host, Philippe Petitcolin, Safran's CEO; and Bernard Delpit, Group CFO. Mr. Petitcolin, please go ahead.

Thank you. Thank you very much, and good morning, everyone. Thank you for joining us for this fiscal year 2019 earnings presentation of Safran. As usual, the press release, presentation and consolidated financial statements are available on our website. In 2019, we delivered very strong organic growth, further high margin expansions across all our divisions and a good cash flow generation in the context of the MAX grounding. Our challenge in 2020 is to further demonstrate our ability to adapt to the situation. I will come back on this point later. Let me sum up the key events of the past year. Operational performance was solid. Safran enjoyed another year of strong organic revenue growth, up 9.3%. Due to strong performance across all the Safran businesses, 2019 represented an exceptional year. Despite of the 737 MAX grounding, we shipped 1,736 LEAP engines versus 1,118 in 2018, a number which is very close to our initial target, and will continue to decrease our cost of production. We have recorded 1,968 new orders and commitments for the LEAP. The ex Zodiac businesses integration continued and we delivered the expected synergies, which allows me to confirm the €250 million targeted for 2022. On the financial side, we delivered very strong results in all divisions. I will come back on our detailed results in a few moments. The buyback program of €2.3 billion launched in 2017 is now fully executed. The free cash flow conversion to our recurring operating income was good despite the MAX grounding. Lastly, we continue to prepare the future of Aerospace with new key strategic partnerships, with MTU of Germany for the next-generation of European fighter engine and with Airbus and there to develop the distributed hybrid propulsion aircraft demonstrator. Looking at the financials on Slide 6. Safran's performance in 2019 was excellent. I remind you that 2019 figures include 12 months contribution of Zodiac Aerospace versus 10 months in 2018. The adjusted revenue reached €24.6 billion, up 17.1% and up 9.3% on an organic basis. Adjusted recurring operating income stood at €3.8 billion, up 26.4%, representing 15.5% of sales, which are 110 basis points up and up 24.6% on an organic basis. Adjusted net profit grew 34.5% to reach €2.6 billion, basic EPS grew 34.8% at €6.2 per share. Operations generated almost €2 billion of free cash flow, an 11.3% increase in spec of the grounding of the 737 MAX. This represents a 52% conversion to our recurring operating income, slightly above our - I remind you was around 50% [ph] The net debt position is €4.1 billion. I remind you that it includes the impact of IFRS 16 on our opening balance sheet for a negative impact of €529 million. Going to Slide 7. An update of the CFM56 LEAP transition. Regarding the LEAP power engine confirmed its status of engine of choice for airlines, at the end of December, the total of this backlog reached 15,614 engines. At January 31, 2020, our market share on A320 neo family is 60.5%. With regards to production, we delivered 1,736 LEAP in 2019, of which 420 units in Q4 2019. LEAP-1A and Leap-1B before the burning of the MAX have accumulated together 7.2 million of flight hours. For the CFM56 engine, the proactive rundown continued as planned, 391 units we have shipped in 2019, a 62% decrease compared with 2018. Finally, our civil aftermarket revenue was up 9.9% in U.S. dollars, driven by spare part sales. On Slide 8, a few words on our equipment, Defense and Aerosystems division. For the last quarter of 2019, the net sale business has continued to benefit from the ramp-up of the A320neo family and a A330neo, and for a strong growth in its service activities. Safran has been selected for the complete nacelle of the new Gulfstream Aerospace G 700 new Bizjet. Carbon brakes benefited from aircraft growth in 2019, and we signed new contracts covering 850 additional aircraft. In Electronics and Defense, we signed major contracts, notably with a Swiss Army for infrared and night vision goggles and with the NATO Support and Procurement Agency for our long-range multifunctional thermal Imager. In Electrical and Power unit, we were pleased to install our engine U.S. electric motors on the hybrid-electric aircraft developed by GOLD.IO that started to fly. Lastly, in Aerosystems, we reached the threshold of €5 million live debt. I remind you that Safran is the world leader in emergency evacuation technologies with a complete range of products, life vest, evacuation slides and rafts. Let's turn to Aircraft Interior on Slide 9. As I mentioned each quarter, this division is improving, which is good sign that customers confidence has returned. But we have to continue our efforts, particularly in the context of an organic decrease anticipated in 2020, which is a result of the non-offerability with Airbus in 2017. If we focus on Q4, some very good news for each unit. In cabin, we have been awarded by a major Asian Airline the galleys for its large fleet of future A330neo. We have also been selected by Turkish Airlines to provide our new Hybrite Trolleys lines. You see, we have been selected by several major Asian Airlines and Pacific Airlines to provide first class, business class and premium economy class for wide-bodies. Lastly, in our new passenger solutions activity, we welcomed several new contracts on IFE and connectivity solutions. We now enjoy a customer base of more than 50 airlines. To conclude this first part, a couple of words on our R&D on Slide 10. Total R&D, including R&D sold to customers reached €1.7 billion. The R&D expenses were €1,337 million representing 5.4% of our sales. The R&D and innovation stood at €442 million, up 7% on an organic basis. For 2020, as indicated in our guidance, R&D expenses will decrease to reflect the adaptation plan that we implemented at the beginning of the year with non-priority expenses postponed, no NMA spending but increasing, I insist on this one, increasing efforts on R&D and innovation to prepare the future and notably to address the challenges of climate change. Now Bernard for the financial portion of the presentation results. Bernard-Pierre Delpit: Thank you, Philippe. Good morning to everyone. I'm on Slide 12 with three brief remarks: First, 2019 results are established considering IFRS 16 rules. I already presented the impact in the opening balance sheet. It's €529 million debt in the 1st of January. Second, ex Zodiac activities are now consolidated for 12 months, it was 10, there were 10 months in 2018. Third, we changed our segment information in July last year as part of the reorganization of equipment and Aerosystems businesses. And today, of course, presentation is made under this new format. Slide 13 and 14, a few words on FX and hedging. Average spot rate was 1.12 in 2019, it was 1.18 average last year, creating a positive translation effect of nearly €700 million on revenues. Hedge rate was 118% in 2019, same as in 2018. And the mark-to-market effect was a non-cash gain of €175 million, resulting from a change in fair value of the portfolio of engine instrument compared with dollar spot rate at 1.12 at close. This mark-to-market effect is restated in adjusted data, so it does not impact earnings. But I draw your attention on the meaning of this mark-to-market effect. It says that the average hedge rate of the portfolio is just slightly above 112 which is good news for the future. And that is exactly what Slide 14 is telling us. Total portfolio is now €28.1 billion with existing instruments it allows to fully hedge 2020, 2021, almost entirely '22 and '23 is already hedged for €4 billion. Considering the features of our instruments with barriers set at different levels of the spot rate between 1.16 and 1.33, we can improve our targeted hedge rate to 1.16 in 2020 in the range of 1.14 to 1.16 in '21 from 1.12 to 1.14 in '22, and from 1.10 to 1.12 in '23. And as you know, $0.01 improvement in the high-grade is worth €70 million EBIT. On Slide 15, is the bridge between consolidated and adjusted data. It is exactly the same methodology year-on-year. I circled two usual restatements. The first one is the €175 million financial gain from the mark-to-market of our portfolio of hedging instruments. And it's restated in our adjusted data. The second one is the PPA amortization, 315 out of the 354 circled here are coming from the Zodiac acquisition. In '16 - Slide 16, sorry, is the P&L for Safran in 2019. And as I will comment on revenue and recurring operating income in the next slide, I will only draw your attention on other items. Sharing profit from joint ventures decreased in 2019, mainly due to a lower contribution of ArianeGroup notably because of the flight deferrals to 2020. One-off items were slightly positive for €13 million in 2019. It was negative for €115 million in 2018. We booked capital gains generated by a building disposal and the device divestiture of a subsidiary of Zodiac in the U.S. and also the depreciation of one intangible assets. We also supported some restructuring costs in 2019. Net financial income was negative for €89 million. It was negative for €211 million in 2018. It reflects, first, a lower cost of debt. Thanks to the more favorable credit conditions and the restructuring of the hedging of our USD debt. And it also reflects a foreign exchange loss of only €9 million. It was €86 million negative in 2018, mainly due to the almost near FX impact on USD denominated balance sheet items. Income tax charge was €1,012 billion representing an apparent tax rate of 27%. So our adjusted net income group share was to be €665 million. EPS was €6.20, an increase of 35% in 2019. On Slide 17, adjusted revenue has reached €24,640 billion in 2019, up 17.1%. It includes €929 million of change in scope, mainly due to the additional contribution for two months from ex Zodiac activities. A positive currency impact of €704 million, notably due to the strengthening of euro - dollar, sorry, against EUR and achieved a 9.3% organic growth coming from all our businesses, organic growth is 10.8% in propulsion, 7.4% in equipment and 8.8% in Aircraft Interior. Recurring operating income, Slide 18 grew from €3,023 billion in 2018 to €3,820 billion in 2019, up 26.4%. It includes two month additional contribution of ex Zodiac activities for €41 million. On an organic basis, recurring operating income grew 24.6%. It comes from growth from both OE and services and cost reductions in all activities, mitigated by higher R&D charge to the P&L as expected and the negative impact of €98 million from the CFM56 LEAP transition. A short comment at that stage on the CFM56 LEAP transition. We ended in the upper range of the target given at the beginning of 2019. The contribution of fleet slightly improved as the 12% decrease in unit cost, balanced volumes increase and the net negative impact comes from the sharp decrease in CFM56 deliveries. Provisions for retrofit plants have also in booked, offsetted by a stronger mix of spare engine in 2019. Slide 19, a few words on R&D, total R&D was €1,725 billion, of which €1,337 million [ph] for R&D expenses. This represents a €111 million increase. Amortization and depreciation of R&D increased by €52 million, mostly due to the depreciation of an asset for the A380 program. As a result, R&D in P&L stood at €1.1 billion, almost stable at 4.5% of sales and creating an additional €143 million negative impact on the recurring operating income. Slide 20 gives an overview of business performance. A quick word on corporate center. The recurring operating income is negative €62 million. It was €80 million negative in 2018. We expect to keep it like that in 2020. Page 21, propulsion. The performance in 2019 was very strong. Revenue stood at €12,045 billion, up 13.9%. OE revenue grew 13.5% despite the impact of the 737 MAX grounding on Leap-1B deliveries. Total narrowbody engines deliveries almost stable, whereas M88 engines delivered amounted to 62 units, they were 23 last year. Services revenue increased, notably due to civil aftermarket revenue growth, but also from military MRO and helicopter services sales. As our total services revenue in propulsion were up 14.2%. The civil aftermarket growth of 9.9% comes from past 7% up in services 7% up. Recurring operating income grew at €2,485 billion, with an operating margin at 20.6%. The profitability of this division benefited from a higher contribution of civil aftermarkets, military activities and the helicopter services. Merger business enjoyed a strong contribution in H1 as we booked at once, revenue and margin at completion-related to contract with the French DoD. Slide 22, the Equipment division. 2019 performance was also very strong, €9,256 billion sales, up 16.5%. It was driven by a strong momentum in OE for nacelles for the A320neo and A330neo, from the 787 program for wiring and landing gear. But it also comes from services, which grew 8.7% on an organic basis, mostly for nacelles and carbon brakes. Lower A380 volumes negatively impacted OE sales in this division. Profitability improved at €1,209 billion or 13.1% of sales, up 60 basis points. I would like to underline here that on an organic basis, recurring operating income increased by more than 100 basis points with an operating margin at 13.6%, thanks to continuous cost reductions in all businesses, productivity actions and aftermarket growth. Slide 23, Aircraft Interiors with cabin seats and Passenger Solutions. 2019 revenue were €3,321 billion compared to €2,511 billion in the year ago period. On an organic basis, revenue grew 8.8%. All activities contributed, especially seats. OE was up 7.7%, driven by business seat program, targets activities and in fight entertainment. Services up 11.9%, mainly driven by seats, aftermarket and in-flight entertainment as well. Recurring operating income increased by more than €100 million at €188 million. Operating margin increased from 3.2% in 2018 to 5.7% in 2019. Cash generation, Page 24, free cash stands at €1,983 billion, that's 52% of recurring operating income or 75% of net income, which is very good in the context of the MAX grounding. EBITDA stands at €4,968 billion, up 33%. We have a headwind coming from working capital for almost €900 million in 2019 due to inventories up for almost €600 million. Receivables up also due to the MAX, and as we did not receive any prepayments from customers. This slide also shows a tight control on CapEx. CapEx is a total of €1,162 billion for total amortization of depreciation of €1 billion. So we keep our capital base at the same level. Page 25 is the net debt bridge. The net debt at the end of December 2019 reached €4,114 billion. It reflected growing free cash generation. Our shareholding policy, including 2018 dividend paid in May and completion of the buyback program, now fully executed, which represented more than €1 billion in 2019 and €2.3 billion as a total since we launched the program. It also includes changes in liabilities from long-term lease agreements. On Page 26, the highlights of the balance sheet. Nothing really to mention here, except that operating working capital while a negative contributor to free cash generation due to receivables and inventories. Page 27 is our dividend proposal to the next AGM for 2019 results. We will propose a €2.38 per share. It's a 30% increase versus the €1.82 of last year. Thank you for your attention. And now I'll leave the floor to Philippe for the 2020 guidance.

Thank you. Thank you, Bernard. On Slide 29, our outlook for 2020. To take into account Boeing’s decision of 737 MAX production held starting in January 2020. And an estimated return to service by mid-2020. Safran set its 2020 outlook using the assumption of an annual production of around 1,400 LEAP based on an average production of 10 Leap-1B engines per week over the year. And the agreement between CFM International and Boeing was a payment of its engine. Safran has implemented an adaptation plan to adjust to this situation, it includes savings on die cost, other rates, hiring free and a reduction in R&D and CapEx for 2020. On this basis, the adjusted revenue is expected in 2020 to decrease in the range of zero to a max of 5% compared with 2019, at an estimated average spot rate of €1 - at $1.13. And the situation is about the same in organic terms. There is no change between this number and organic terms. The adjusted recurring operating income is expected to grow around 5% at a hedge rate of $1.16 to the euro, which represents around 150 basis points of improvement. The free cash flow is expected to be higher than in 2019. Going to Slide 30, this outlook is based notably on the following assumptions: decrease of aerospace OE deliveries, civil and military engines; civil aftermarket growth is a high single-digit as long as disruption created by the coronavirus on air traffic does not extend beyond Q1 2020. Transition CFM56 neutral impact on propulsion, adjusted recurring operating income. Equipment, aircraft interior, slight organic growth in equipment and organic decrease in net aircraft interiors. But a continued improvement in the recurring operating income in these two divisions. A decrease of R&D expense in the range of €50 million to €100 million. Positive impact on recurring operating income after activation and amortization, and a stable level of tangible investments between 2019 and 2020. This is the end of our formal presentation between Bernard and me. Thank you for your attention, and we are now at your disposal for any Q&A. Any questions?

[Operator Instructions] And we have our first question from Olivier Brochet from Credit Suisse.

Good morning, Philippe, Bernard. I would have actually three quick questions, if I may. The first one on the agreement that you have with Boeing on the payment. Just to check that it is for all production that you will be doing or if it is only partial? And whether there is any imbalance throughout the year or whether it will be at a rate of 10 per week as you've flagged? Second question is on shareholder returns and buybacks and dividend. How do you think of it in the context that we have at the moment? What recommendation do you have for the board on that? And third, it's probably a detail on the Patroller accident. You've not mentioned it in the presentation. Is there any financial impact? Is it in the €21 million of one-offs that we can see in the aircraft equipment business? Thank you.

Okay. Thank you, Olivier. I will try to answer the first question and the last one, I will let Bernard answer the second one on the buyback and maybe give more details if I don't give enough on this first question. Regarding the agreement with Boeing, of course, it is a confidential agreement, so we cannot give you the details of this agreement. And it's a CFM agreement with Boeing. But all the engines which are going to be delivered in 2020 will be fully paid, net paid. And there is also in this agreement, a portion for the engines which have been delivered in 2019, which will be also paid between 2020 and 2021. So it's a complete payment of the engines by 2021. Regarding the question on the Patroller, we know what happened in terms of failure of the system during this fly test. We are now doing our job in order to keen all this system and make it completely in line with the requirement of our customer. And there will be absolutely no specific cost included in 2020. All of this has been provisioned and all the costs which are needed to bring back this system at the state of the art already in our books. Bernard-Pierre Delpit: Yes, some more stable here. On the Boeing agreement, we are talking of price net of progress, right? So it's surprised without anything on prepayments. So it's only a net price, if I may. And the payment of 2020 engine is in the free cash guidance. It's not the case for 2019 engines, which is something specific. On the buyback, our proposal to the Board was to not to start a new buyback program in 2020 as we have a lot of uncertainty around some of the key elements of our business. But it's something that we will re-discuss with the Board at some stage. Because we think that our cash generation will continue to be very, very strong. But now that we have completed the €2.3 billion buyback program for the Zodiac acquisition, let's make a pose, and we'll review the situation in 2020. But it's not something that we're going to start right now. For the Patroller accident, as Philippe said, we have taken all the consequences of the accident in the 2019 results. It's not only on the one-off that you mentioned, but it's part of the current business, and current cost and additional costs that we will bear are taken into account in 2019.

Thank you very much.

So we have another question from Robert Stallard from Vertical Research. Go ahead.

Thanks so much. Good morning.

Morning, Robert.

Philippe, a question for you, perhaps, on the aerospace aftermarket and the potential impact of this coronavirus. Where do you think the biggest vulnerability could be looking at propulsion or equipment? Have you seen any early signs of airline customers pushing out retrofits in the interiors business?

No. We have seen so far, absolutely no sign related to the – to this coronavirus situation. We have estimated for the year of 2020 that this peak of the situation will be done by the end of March. In fact, we hope, we looked at what happened on the fast in 2003, and we saw it was a kind of lead shape. It started to decrease very fast and came back as fast as it started to decrease. So it's a really sharp V shape of this virus in 2003. And when we look so far at the situation in 2020, we don't have any signs of reduction, for example, in the aftermarket, as you mentioned, of our businesses. If we look at what is going on in the aerospace, commercial industry, domestic flights in China have been reduced. Long flight on widebodies have been reduced in with some of European and American Airlines or Middle East airlines, but it's quite limited. The biggest impact today is domestic impact in China. And again, because you have about between 60% and 80% of the flights, which are concerned in China for domestic flights, but it has a limited impact so our - and when you look at the airlines, if you look at all the international airlines, the whole plan to restart their flights progressively between end of February and end of March. And when you look at the Chinese, we started already because to give you an example, we were at 80% of cancellations, a couple of weeks ago. Last week, we were only at 68%. And so they are recovering also. So we wish that by the end of March, again, that's what we have taken in our assumptions, we are back to normal. But so far, we have seen no impact on our spare part business, for example.

Okay. And then maybe one for Bernard, if I may. On the progress payments related to the 737 MAX. Can you size and what the negative impact was in 2019? And what the anticipated impact could be in 2020 and beyond? Thank you. Bernard-Pierre Delpit: Okay. In 2019, I would say that, 40% of the €700 million negative impact on free cash due to the grounding is more or less due to the absence of any prepayments, right? And in our assumption, we think that in 2020, at least, airlines won't review prepayment. So we haven't taken any in our 2020 guidance.

Okay. Thanks so much.

So we have another question from George [ph] from Bernstein. Go ahead, sir.

Hi. Thank you for taking my question. So just more on the cash costs for the math in 2020. How much of a headwind do you think is timing related and will be pushed out to 2021 at MAX deliveries ramp up versus how much of the headwind do you think is onetime cost from disruption that will essentially be lost and not recoup? And related to that, what is Safran doing to ensure the health of the LEAP supply chain? As the smaller suppliers navigate through the production dispenser? Thank you. Bernard-Pierre Delpit: George, if I may. We have, in December, we - with our partner, GE, looked at the minimum production, we needed to have in order to have an industrial cost of our products. And we came to the conclusion that we needed around 10 engines a week in order to have a cost of production, which would be an industrial cost and not a kind of prototype costs. And so this is the base of the discussion, we are with Boeing, and we came to an agreement with them where we would support the assembly line of Boeing by providing them starting in January with 10 engines a week for the full year of 2020. Of course, we are working end-to-end with Boeing and if there is a need for further expansion of production, we will look at it, carefully with our supply chain and see how we could react and how fast we could react to the requirement of Boeing. But this is the base we have today. And as Boeing - Bernard just said, we came to an agreement with Boeing, where all these engines would be fully paid by going between 2020 and 2021. Any other questions?

Yes. We have another question from Harry Breach from MainFirst. Please go ahead.

Yes, morning. Morning, Philippe. Morning, Bernard. Can I just ask you a couple. Firstly, with the reduced production rate on LEAP. I think previously, you were indicating expected gross profit breakeven around 2023 with LEAP. Can you give us any feeling about how far to the right that the breakeven might have moved? Second, could you give us any feeling about spare engine mix? And how that might be changing in 2020, and '21 versus '19? And then maybe just finally, has there been any change in the supply chain situation, both in regard to tightness in forging and casting, supply and any sort of late deliveries there? And secondly, whether any of your suppliers are affected by any coronavirus-related shutdowns and whether that's an impact?

Okay. Harry, I'll take the first one on the LEAP breakeven. But of course, the reduced volumes have an impact on the learning curve. We think that LEAP unit costs will stabilize in 2020, where we expected a new decrease if we have been on the same learning curve. So it should delay the breakeven, but not more than what is delayed in the ramp-up of the MAX. So we are not yet ready to give any new horizon, but I think it's going to be a little bit later. Bernard-Pierre Delpit: For the spare engine, Harry, as you know, the spare engines we provide today is a mix between the CFM56 and the LEAP spare engines. CFM56 is going to remain at a very nice level, we believe in 2020, even if it's a bit less it is our forecast today, it'd be less than 2019, but it would remain, nevertheless, at a very high level. For the LEAP we believe that compared to the forecast, we had a couple of months ago, we will have a need for more LEAP-1A and a bit less of LEAP 1B and it's understandable. The airlines are not going to take spare engines, if they don't have the airplanes line. So all in all, I believe it's going to be a little bit less in 2020 compared to 2019. It's too early to tell you exactly if it's very little or just little or bit more than little. Again, our forecast today is a reduction - slight reduction of CFM56 spare, an increase of LEAP-1A and a decrease of Leap-1B, which is, again, understandable. Regarding the supply chain, and the forging part suppliers that you mentioned, which were an important factor in our decisions of supporting and not some additional requirements of our customers. Today, we are in discussions with Airbus, which is requesting us to increase our production of LEAP-1A. And of course, we are more optimistic to find an agreement with Airbus and an additional increase of their requirements based on the fact that the total capacity of our forging base is today more open to this additional quantities that we are going to request from them. So in terms of supply chain, the big guys are supporting the requirements from Airbus. And for the smaller ones, we try really to support them the best we can because it could be a little bit retail. They have some financial situations which are not so good for some of them, and we are supporting them the best we can, in order to avoid any big problem for them. Regarding your final question on the coronavirus impact on our supplier base. As of today, I have been - I have seen nothing coming from our supply base in terms of reduction or shortages, which could have been impacted by coronavirus. If I look at my supply chain in China, for example, we have between 40% and 108% of the workforce, which are back to - in our suppliers' plants. In our own plant, we have, for your information, between 74% and 95% last week of people present in our plan. So - and we - in our plans, I am 100% sure there is nobody impacted by this virus with our suppliers. Our suppliers claims that they have none either. So I told them. And so far, we have seen no impact on our supply chain coming from this coronavirus.

Great. Thank you very much.

So we have another question from Tristan Sanson from Exane BNP Paribas. Please go ahead.

Yes. Good morning, Philippe and Bernard. Three question on my side, please. The first one is a catch-up or flow up on the cash dynamics in 2020. So you had an impact of the MAX grounding in 2019, that it had €100 million per month. Can you - can tell where we stand actually in your 2020 outlook? What implicit, is this 100 someone going to zero? Or is it still a small negative? That's the first question. The second, in your press release, you're hinting at a change in 2022 dynamics and the need over time to revisit your midterm forecast. And talking about key drivers here, including the much better contribution to be expected from FX, the better organic momentum in '19. And the headwind on Macaroni, but the wage phrase makes me feel that the revision risk is actually rather positive, positive change. It's the right way to see this? And the third question is on aftermarket dynamics in 2020. Can you tell us how you see the mix of aftermarket growth to evolve between a number of shop visits, workscope and pricing? And third question, do you expect a change in aircraft retirement patterns in 2020? And the availability of used service materials, which affect pricing over time? Thank you. Bernard-Pierre Delpit: Okay. Tristan, I will start with the cash question. Frankly, I don't look at 2020 as I looked at 2019. Now we are in a new situation where we have adapted both our own cost and the supply chain. So there is nothing like a €100 million headwind from free cash for LEAP or for the MAX every month in 2020. So we expect that as 2020 lift will be paid, there is - there will be a limited, very limited negative cash situation due to the Leap-1B. But for the rest, it's over. We are - we have reset, I would say, the situation for the free cash flow. Regarding the midterm situation, well, it's too early to tell. But as you said, I mean, the starting point in 2019, well above what we took in consideration last year, first. Second, as you said, FX has materially improved. So all those two elements are quite positive for the situation. Okay, of course, we would review the new ramp-up of the back. But when you do the math, in 2020, with a small decrease in sales and a 5% increase in EBIT. It means that in terms of return on sales, right, we are already in 2020, right in the middle of the target for '22, which is a way to say, even with the uncertainty of aftermarket because of the virus, because of the MAX, because over everything, I would see that as a positive landscape for updating our midterm targets.

Tristan, I will try to answer your last question on the aftermarket and shop visits. As you can see on our guidance, we forecast high single-digit grow in this business, which will be splitted in three main items. First one, the quantity of shop visits which is going to grow between 3% to 5%. It's difficult to predict precisely the quality of shop visits, which will happen, but we think it's going to be between 3% and 5%. A cost per shop visit, which is going to be also extremely good, that's what we anticipate. We have seen in 2019 shop visit, which has a very large scope, especially on the low-pressure turbine, which is now coming into maintenance. And the last item, of course, is the price list, which is also has an impact on the aftermarket. So we are quite confident that this high single-digit for cash is going to be met. If I look at what happened in 2019, we had a large number of CFM5b coming for shop visit. We were a bit more disappointed by the 7b, but we understand why the 7b, all the airlines, which have today 737 NG and most of them are waiting for some MAX, I've been trying to keep their NG flying as much as they could. So we - and when we look at the 5B and the 7b, they did not really follow the same flow. So I am quite optimistic for 2020. I hope that this 7b we didn't see in 2019 will come in 2020. So all in all, it means that the price list, the quality and the scope of shop visit, we think that this high single-digit growth is something really achievable.

That’s very clear. Thank you very much.

So we have another question from Jeremy Bragg from Redburn. Please go ahead, sir.

Good morning, guys. Couple of questions from me, please. Firstly, to follow-up on the medium-term guidance that Tristan asked about and that you talked to very eloquently, Bernard. Can I just ask also another component of that was the assumption of higher CapEx and R&D for NMA, which Boeing has basically stepped away from? So firstly, I wondered if you could comment on that. And second question was on the aftermarket, please, sorry to keep going back on this, but I'm kind of guessing that high single-digit aftermarket growth for this year, assumes no impact from COVID-19, i.e., you said, Philippe, that you haven't really seen any impact so far. And basically, it gets fixed by the end of the first quarter and it's business as usual. So the questions around that would be, what would the sensitivity be on another quarter or of delay? Or putting it another way, what happened in 2003 to your aftermarket when you had SARS, please? And then the final one, probably my bad math, but kind of struggling a bit to get the component parts of the organic growth guidance to total to the group because if my reckoning fewer LEAP deliveries, 1,400 versus 1,736, probably lowest revenues by 2 to 3 percentage points only at the group level, proportion aftermarket is up high single-digit as usual. Equipment revenues are going to be up, interiors is declining, but that's kind of difficult to square, certainly with the lower end of your guidance of a 5% negative organic growth. So I'm just sort of questioning the conservatism around there? Sorry for the long questions, and thank you. Bernard-Pierre Delpit: Okay. I will take the first one on medium term. You get it right. I mean, we have previously the NMA in our R&D expenses in our midterm, So now the situation is uncertain. The CEO of Boeing has clearly said that they are starting then to think about this new aircraft, so we will post each situation and if need to put some new cost for the new aircraft we will do so. But for the moment its clearly something that is like a saving that we see the previous midterm outlook.

To answer the second quarter on the aftermarket, and consequences of this virus, we are in this guidance of high single digit, included a small impact which is coming from China mainly. We know that if you look at our business as you know, we are really on the short and major ones aircraft, what you call the wide-bodies. The wide-bodies outside of China today have not been impacted at all by the virus and we don’t expect them to be impacted on the large scale. So if you look at China, if China start to gain to fly and that’s what we are seeing today because if you look – they are the best in short and medium range narrowbody, about thousand flights a day schedule. We are seeing 80% of cancellation in February, we are now at 60 date and we see a recovery of this flight day after day. So we think that by the end of March, they should be back not maybe at 1% or 8%, but they would be at the level where we will not see any more impact in our businesses. So we are including in this guidance of high single digit, some conservative related to the short medium-range reduction to flight in China until the end of March. This is what we did. And again, looking at thus far, as I said already, it was a sharp V with a reduction quite important, but very, very limited and recovery of this reduction in a very short period of time. So we'll see what happens, but this is what we have taken. And again, we think that based on the data we have today, it is the best assumption we could take. Talking about the conservatism of our guidance in terms of sales minus 5%. Again, we have two main customers, Airbus and Boeing. Boeing is, as we just said, has a requirement for engines, which is now very, very well and – and we know exactly what we have to do. We have signed an agreement, and we know what we have to produce. And so I don't believe there is any risk with Boeing. They could have an opportunity if Boeing decided to ask for more engines in 2020. And again, we would see with our partners GE, with our supply chain how fast we could react to an additional requirement, and we work daily with Boeing in a very good - we have an excellent relationship with them in terms of trying to adapt to the needs of our customers. And with Airbus, we have additional requirements. Airbus wants us to supply more and more engines. So I don't see a risk on the average side. Wide-bodies for our equipment business, we believe that what we have today in terms of objectives and requirements from our customers are reaffirmed. We know that the reduction of the A380. We know reduction in A330. We know reduction in the 3.7%. So all of this have been included in our budget. So I don't expect any risk. Additional risks may come from services, if some airlines are in trouble and delays on MRO, not only engines, but also on equipment. But it should have a limited impact. So we really believe we are on the safe side by saying that we are going to have sales in 2020, which are going to be between 0% and minus 5% compared to the one we achieved in 2019. That's our thinking, and our – really what we believe today for 2020. Sorry, a bit long term.

No, it’s okay. My question was long also. Thank you very much.

Thank you.

So we have another question from Sandy Morris from Jefferies. Go ahead.

Thank you and good morning, Look, very swiftly. I thought we were actually going to stop making CFM56 in 2019. Have you changed your minds?

No. We have not changed our mind. We had orders from our customers, which are still delivering some CEO and some P-8 on the military side for Boeing. So we have the military and we are going to keep your information Sandy, we are going to keep producing for years, the CFM56, mainly for the - from Boeing, which is military version of the 737 NG. In addition to that, we have some requirements for spare engines. Nice requirements for a lot of spare engines. So - no, we are happy to continue to produce the CFM56, and it's going to last for the next coming years. I remind you that we produced 391 in 2019. I would say that we are going to produce between 100 and 200, out of my head in 2020.

Yes. No, sorry, it was just something I thought I'd picked up. But yes, it's still a big engine program in 2019. And then I'm not quite sure how to ask this because the obvious answer is, just we can listen to what you say, and not to what GE says. But why was GE anticipating a $1.4 billion cash impact in its first half from the MAX? Is this agreement reached with Boeing very recent? So between GE's results and yours?

It's impossible for me to answer this question. I'm sorry, but it's not that I don't want to answer, but I'm not a GE person, and I don't know exactly what they did, and now the presence, their financial results. So no, I cannot answer this question. I just - I am in charge of Safran. I can still in name of Safran and I can give you that our impacts of our businesses and our customers' decisions on Safran's, the only thing I can do.

No. Look, that's perfectly fair. But I kind of felt obliged to ask less something had changed. That will be from me for now. Thank you so much gentlemen.

Thank you.

So we have another question from Andrew Humphrey from Morgan Stanley. Please go ahead.

Hello. Thank you for taking my questions. Just a couple, if I may. One is on equipment around the midterm plans. I think you've spoken very clearly about factoring in new production rates from your main customers. I wanted to ask about potential margin impact of those lower rates. Clearly, we've still got a decent amount of margin to make up over the next couple of years to make those targets. How has your thinking changed there, if it has? And what additional actions could you take to reduce costs in that business? And the second question is on cash for 2020. You've clearly kind of done a very good job there through a combination of internal cost control and negotiation with your customers to get that rate of cash burn on the 1b down. The question really is what challenges could that present to you in terms of ramping the rate back up longer term as and when you need to? Yes, I'll stop there.

Okay. I will take the first one on the equipment division, we haven't changed our mind regarding the kind of operating margin that we can have - we can reach on the equipment division, so nothing new here. Of course, it will depend on volumes from both the new ramp-up of the MAX and the volumes in the wide-bodies, but it's too early to tell. But I guess that there is no news to share with you on that. Bernard-Pierre Delpit: No, it's a continuous improvement plan. We have in our equipment division. As you know, we started all of this in 2015, and we set goals and objectives to our teams to improve by a minimum of 100 basis points year after year the performance. And as of today, we have been able to achieve and even better than that year after year. And the machine is on, and I expect that we are going to continue. Of course, higher you get more difficult it is. But the momentum is well understood by everybody. And I am still very optimistic for 2020. I'm not 100% sure we are going to reach the 100 basis points with all the situation coming from outside, that we just discussed, but we do our best to get as close as possible to this 100 basis points. Again, it could be a bit less than that, but we - the team is really working hard in each division and even the ones which are coming from the ex Zodiac have understood the way we were and the way we need to get rid of. On the cash of 2020, I'm not sure I fully understood your question, Andrew. We feel very comfortable with the target we gave you. And I am not anticipating any change of the guidance for the years after 2020 based on this outlook for 2020.

Yes, sorry. It was more the longer-term question around capacity and industrial footprint. And I guess, ensuring that you have - a blueprint or the infrastructure there to ramp back up…

Yes…

In terms of either the short and the long term.

Yes. If you look at the provision, we were set up to produce more than 2,000 LEAPs per year. So this capacity is on for the equipment. It is the same thing. I believe today that we have the right setup in terms of production between what we do internally and what we buy outside in order to support requirements of our customers which are going to come in the next few years. So I don't anticipate any kind of problem on this situation and this type of requirements, which may come in the coming years. Last question, please?

So we have no further questions, sir.

Perfect. It's always like this when you ask for the last question, there is no more question. Thank you very much for attending this session. And I wish you have a nice day. Thank you very much.

Ladies and gentlemen, this concludes today's conference. Thank you for your participation. You may now disconnect.