Withdraws 2020 Guidance, Cancels 2019 Dividend Proposal
The Board of Directors of Safran, under the Chairmanship of Ross McInnes, met on March 26, 2020 to consider an action plan prepared by Executive Management in response to the impact of the Covid-19 pandemic.
"In this critical period, our attention is focused on taking care of our employees and monitoring our customers and suppliers. While preserving cash in the very short term, we are preparing to re-establish and strengthen operations when the situation recovers," said Safran CEO Philippe Petitcolin. "As demonstrated in past crisis thanks to its agility and resilience, I am convinced that Safran will overcome these challenges and further consolidate its position in the future."
The Group regularly and proactively coordinates the efforts of all subsidiaries and sites in all countries in order to ensure priorities in reaction to the crisis:
- Protection of employees through specific organization of working practices;
- Response to customer needs, particularly for delivery schedules;
- Resilience and flexibility of the supply chain;
- Managing the Group's cash and liquidity, while low debt is already an asset
Executive Management welcomes the mobilization and responsiveness of all employees, giving confidence in the company's ability to meet current challenges. Chinese plants are already fully operational and European sites are gradually restarting.
The actions implemented since December 2019 in response to Boeing’s decision to shut down the Boeing 737MAX assembly line are now enhanced. Very significant measures are implemented such as a pause in Capex, the definition of new objectives for R&D and the reduction of direct and indirect costs. Safran will also use all schemes set up by governments, particularly short time working.
Given the unprecedented nature of the situation and the remaining uncertain impact for its customers of worldwide measures taken to contain the pandemic, Safran is withdrawing its 2020 guidance previously announced.
When impacts on the business and the adjustment measures can be assessed with sufficient precision, Safran will share them with the financial community.
Safran’s Board of Directors has decided not to propose to the Annual General Meeting of shareholders the payment of a dividend in 2020 for the 2019 financial year.
The previously announced dividend of € 2.38 ($2.63) per share reflected Safran’s very good performance in 2019 and the outlook for 2020 as it prevailed last February when the Board met. Based on the number of shares in circulation, the payment of the dividend would have represented an outflow of around € 1 billion in June 2020.
In a spirit of responsibility vis-à-vis Safran’s stakeholders, this decision preserves the Group's resources in order to protect employees, maintain continuity of its operations, notably for its suppliers, support its customers and ensure liquidity in uncertain times.
Safran's Annual General Meeting will be called on May 28, 2020 at the Safran Campus – 32, rue de Vilgénis, 91300 Massy (France).
The date, venue and conditions of shareholder attendance are likely to change for public health reasons and/or regulatory/legal reasons. In particular, it may be necessary to hold the Meeting behind closed doors, without any shareholders being physically present. Safran will therefore strongly encourage shareholders to vote by post (or online before the Meeting), or to give proxy to the Chairman of the Meeting.
Safran will also invite shareholders to regularly check the 2020 Annual General Meeting section of the Company’s website to obtain the latest information:
(Source: Safran news release)
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