2025 Interim Financial Report

Foreword

RECONCILIATION OF THE CONSOLIDATED INCOME STATEMENT WITH THE ADJUSTED INCOME STATEMENT

The impact of these adjustments on first-half 2025 income statement items is as follows:

(1)     Remeasurement of foreign-currency denominated revenue net of purchases (by currency) at the hedged rate (exchange rate effectively obtained over the year under hedging strategies, including premiums on settled options) through the reclassification of gains/losses recognized in profit or loss on unwinding the hedging relationship.

(2)     Changes in the fair value of instruments hedging future cash flows that will be recognized in profit or loss in future periods (a negative €4,808 million excluding tax), and the impact of taking into account hedges when measuring provisions for losses on completion (a negative €18 million at June 30, 2025).

(3)     Cancellation of amortization/impairment of intangible assets relating to the remeasurement of aircraft programs resulting from the application of IFRS 3 to the Sagem-Snecma merger.

(4)     Cancellation of the impact of remeasuring assets at the time of the Zodiac Aerospace acquisition for €89 million excluding deferred tax and cancellation of amortization/impairment of assets identified during other business combinations.

(in € millions)

First-half

2024

consolidated  data

Remeasurement  of revenue⁽¹⁾

Deferred hedging gain/loss⁽²⁾

Amortization of intangible assets -

 Sagem-Snecma merger⁽³⁾

PPA impacts other business combinations⁽⁴⁾

First-half

2024 adjusted data

Revenue

13,204

(157)

-

-

-

13,047

Other operating income and expenses

(11,287)

(4)

1

21

134

(11,135)

Share in profit from joint ventures

51

-

-

-

11

62

Recurring operating income

1,968

(161)

1

21

145

1,974

Other non-recurring operating income and expenses

(24)

-

-

-

-

(24)

Profit from operations

1,944

(161)

1

21

145

1,950

Cost of net debt

84

-

-

-

-

84

Foreign exchange gain/loss

(1,961)

161

1,681

-

-

(119)

Other financial income and expense

1

-

-

-

-

1

Financial income (loss)

(1,876)

161

1,681

-

-

(34)

Income tax benefit (expense)

38

-

(434)

(5)

(34)

(435)

Profit for the period

106

-

1,248

16

111

1,481

Profit (loss) for the period attributable to non-controlling interests

(49)

-

-

-

-

(49)

PROFIT FOR THE PERIOD

ATTRIBUTABLE TO OWNERS OF THE PARENT

57

-

1,248

16

111

1,432

(in € millions)

First-half 2024 adjusted data

First-half 2025 adjusted data

Revenue

13,047

14,769

Other income

208

210

Income from operations

13,255

14,979

Change in inventories of finished goods and work-in-progress

871

761

Capitalized production

235

245

Raw materials and consumables used

(7,819)

(8,325)

Personnel costs

(3,939)

(4,333)

Taxes

(194)

(239)

Depreciation, amortization and increase in provisions, net of use

(614)

(521)

Asset impairment

57

(145)

Other operating income and expenses

60

12

Share in profit from joint ventures

62

76

Recurring operating income

1,974

2,510

Other non-recurring operating income and expenses

(24)

(37)

Profit from operations

1,950

2,473

Cost of net debt

84

77

Foreign exchange gain (loss)

(119)

(80)

Other financial income and expense

1

35

Financial income (loss)

(34)

32

Profit before tax

1,916

2,505

Income tax expense

(435)

(851)

PROFIT FOR THE PERIOD

1,481

1,654

Attributable to:

◼ owners of the parent

1,432

1,587

◼ non-controlling interests

49

67

Earnings per share attributable to owners of the parent (in €)

Basic earnings per share

3.37

3.80

Diluted earnings per share

3.27

3.80

Segment breakdown of adjusted revenue

(in € millions)

First-half 2024

First-half 2025

% change

% change in scope

% change currency

% change organic

Propulsion

6,461

7,541

+16.7%

+0.8%

-1.0%

+16.9%

Equipment & Defense

5,170

5,609

+8.5%

+1.2%

-0.7%

+8.0%

Aircraft Interiors

1,411

1,616

+14.5%

-

-1.0%

+15.5%

Holding company & Others

5

3

-31.0%

-

-

-31.0%

TOTAL GROUP

13,047

14,769

+13.2%

+0.9%

-0.9%

+13.2%

Segment breakdown of adjusted recurring operating income

(in € millions)

First-half 2024

First-half 2025

% change

Propulsion

1,285

1,758

36.8%

% of revenue

19.9%

23.3%

Equipment & Defense

657

703

7.0%

% of revenue

12.7%

12.5%

Aircraft Interiors

10

27

170.0%

% of revenue

0.7%

1.7%

Holding company & Others

22

22

-

TOTAL GROUP

1,974

2,510

27.2%

% of revenue

15.1%

17.0%

2025 revenue by quarter

(in € millions)

First-quarter 2025

Second-quarter 2025

First-half 2025

Propulsion

3,684

3,857

7,541

Equipment & Defense

2,783

2,826

5,609

Aircraft Interiors

788

828

1,616

Holding company & Others

2

2

4

TOTAL GROUP

7,257

7,512

14,769

Equipment & Defense

1.3                        FIRST-HALF 2025 RESULTS BASED ON CONSOLIDATED DATA

Consolidated recurring operating income

Income tax benefit (expense)

The Group reported an income tax expense of €2,059 million as of June 30, 2025, compared to an income tax benefit of €38 million for first-half 2024.

Group tax (current and deferred) is calculated by using the projected annual rates in each of the Group’s tax jurisdictions, adjusted for the main permanent differences identified.

In France, the 2025 French Finance Act published on February 14, 2025 introduced a temporary exceptional surtax on the profits of large companies. This surtax is based on the average current tax due in respect of 2024 and 2025, before offsetting tax reductions, tax credits and all tax receivables.

Safran is liable for this surtax at a rate of 41.2%.

Safran has fully recognized the portion of this surtax based on 2024 earnings as well as the portion based on 2025 earnings as of June 30, 2025. The total exceptional surtax recorded in the financial statements as of June 30, 2025 was €261 million.

Recognition of this surtax brings the Group's effective tax rate to 28.73% in the consolidated financial statements. However, as this surtax is currently considered temporary for 2025, the deferred tax rate for French entities has been maintained at 25.83%.

(in € millions)

Dec. 31, 2024

June 30, 2025

Goodwill

4,937

4,864

Property, plant and equipment and intangible assets

12,576

12,600

Investments in joint ventures and associates

1,894

1,861

Right-of-use assets

653

728

Other non-current assets

3,425

1,065

Derivatives (positive fair value)

956

1,406

Inventories and work-in-progress

9,491

10,329

Contract costs

884

935

Trade and other receivables

10,572

11,621

Contract assets

2,503

2,743

Cash and cash equivalents

6,514

6,707

Other current assets

607

1,232

TOTAL ASSETS

55,012

56,091

(in € millions)

Dec. 31, 2024

June 30, 2025

Equity

10,725

13,778

Provisions

3,008

2,831

Borrowings subject to specific conditions

287

276

Interest-bearing liabilities

3,788

2,411

Derivative liabilities

8,818

4,514

Other non-current liabilities

922

179

Trade and other payables

9,802

10,637

Contract liabilities

16,421

18,031

Other current liabilities

1,241

3,434

TOTAL EQUITY & LIABILITIES

55,012

56,091

(in € millions)

First-half 2024

Full-year 2024

First-half 2025

Recurring operating income

1,968

4,186

2,468

Other non-recurring operating income and expenses

(24)

6

(37)

Depreciation, amortization, provisions (excluding financial)

723

1,601

817

EBITDA

2,667

5,793

3,248

Income tax and non-cash items

(307)

(1,067)

(458)

Cash flow from operations

2,360

4,726

2,790

Changes in working capital

(140)

7

(168)

Acquisitions of property, plant and equipment

(512)

(1,044)

(525)

Acquisitions of intangible assets

(93)

(172)

(103)

Capitalization of R&D expenditure

(152)

(328)

(160)

Free cash flow

1,463

3,189

1,834

Dividends paid

(965)

(970)

(1,269)

Divestments/acquisitions and others

23

(855)

(434)

NET CHANGE IN CASH AND CASH EQUIVALENTS

521

1,364

131

Net cash at beginning of period

374

374

1,738

Net cash at end of period

895

1,738

1,869

On July 21, Safran acquired Collins Aerospace's flight control and actuation activities which are mission critical systems for commercial and military aircraft, and helicopters. With this

transaction, Safran becomes a global leader in flight control and actuation systems and is well-positioned for next-generation platforms.

Free cash flow of €1,834 million was mostly driven by the increase in cash flow from operations and slightly offset by higher capital expenditure of €788 million (€757 million in first–half 2024) notably directed towards additional MRO and OE production capacities. The negative €168 million impact of

Net debt and financing

changes in working capital mainly reflects an increase in inventories partly offset by advance customer payments

(notably for Rafale).

As of June 30, 2025, Safran’s balance sheet exhibits a

€1,869 million net cash position (vs €1,738 million at December 31, 2024), as a result of a strong free cash flow generation, mostly offset by a dividend payment (of which €1,216 million to shareholders of the parent company) and share repurchases for cancellation for a total of €713 million.

Cash and cash equivalents stood at €6,707 million (vs €6,514 million at December 31, 2024).

1.5              CURRENCY HEDGES

On April 1, 2025, Safran proceeded with the early redemption of its bonds convertible into shares initially due April 1, 2028. In that respect, Safran delivered 3,798,287 existing treasury shares to bondholders who exercised their conversion rights (i.e., 93% of the bonds) and paid €49 million in cash. This soft call had a €721 million positive impact on net debt and no dilutive impact on existing shareholders.

The hedging portfolio amounts to USD 55 billion in June 2025 (USD 54.1 billion in March 2025).

◼ 2025 hedge rate is USD 1.12, for an estimated net exposure of USD 14 billion.

◼ 2026, 2027 and 2028 are fully hedged: targeted hedge rate of USD 1.12, for an estimated net annual exposure of USD 14 billion.

◼ 2029 is partially hedged: USD 5 billion out of an estimated net exposure of USD 14 billion.

This business will be consolidated within Safran Electronics & Defense starting from August 1, 2025. In 2024, it generated revenue of around USD 1.55 billion and EBITDA of approximately USD 130 million.

The enterprise value of the acquired business amounts to USD 1.8 billion. The acquisition will be accretive to Safran's earnings per share from year one and is expected to generate approximately USD 50 million in annual pre-tax run-rate cost synergies by 2028.

1.7               FULL-YEAR 2025 OUTLOOK

In line with regulatory requirements, Safran simultaneously completed the sale of its North American electro-mechanical actuation activities, which generated revenue of around USD 65 million in 2024, to Woodward.

The impact of both transactions on Group revenue is estimated to be between €600 and €700 million over the last five months of 2025.

Safran upgrades its full-year 2025 outlook, at constant scope, which excludes the contribution of Collins Aerospace's actuation & flight controls business as well as any potential impact of tariffs:

◼ revenue growth: up low-teens (versus around 10%);

◼ recurring operating income: €5.0 - €5.1 billion (versus €4.8 €4.9 billion);

◼ free cash flow: €3.4 - €3.6 billion (versus €3.0 - €3.2 billion), of which €(380) - €(400) million estimated impact from the French corporate surtax and subject to payment schedule of some advance payments and the rhythm of payments by state-clients.

This outlook is based notably, but not exclusively, on the following assumptions:

◼ LEAP engine deliveries: up 15% to 20% compared to 2024;

◼ "Spare parts" revenue (in USD): up mid to high-teens (versus low-teens);

◼ "Services" revenue (in USD): up mid to high teens (versus mid-teens);

◼ €/USD spot rate of 1.10;

◼ €/USD hedge rate of 1.12.

The main risk factor is the supply chain production capability.

As a reminder, on June 14, 2021, Safran issued 4,035,601 bonds convertible into new shares and/or exchangeable for existing shares, due April 1, 2028 (2028 OCEANEs). The background, terms and conditions, purpose and impact of the 2028 OCEANE bond issues are presented in section 3.1, Notes 6.3.3 and 6.2.3.2 of the 2024 Universal Registration Document, and section 2, Note 6.2.3 of this interim financial report. The reports of the

Board of Directors and the Statutory Auditors on the 2028 OCEANEs are presented in section 8.4 of the 2021 Universal Registration Document.

On February 28, 2025, Safran announced that it would redeem all 2028 OCEANE bonds outstanding on April 1, 2025 ahead of term on that date. Bondholders had the option of requesting the

exercise of their conversion right pursuant to the terms and conditions of the 2028 OCEANE bonds until the seventh trading day (exclusive) preceding the early redemption date, i.e., until March 20, 2025 (inclusive).

At the early redemption date, 3,764,425 of the 4,035,601 total 2028 OCEANE bonds issued had been tendered for conversion, giving rise to the delivery of 3,798,287 existing shares. The 271,176 bonds still outstanding were redeemed at their par value, i.e., €180.89 per bond, for a total amount of €49.1 million.

As of June 30, 2025, there were therefore no outstanding 2028 OCEANE bonds.

(in € millions)

Note

First-half 2024

First-half 2025

Revenue

5.1

13,204

14,865

Other income

5.2.1

208

210

Income from operations

13,412

15,075

Change in inventories of finished goods and work-in-progress

867

761

Capitalized production

235

245

Raw materials and consumables used

5.2.2

(7,822)

(8,320)

Personnel costs

5.2.3

(3,932)

(4,334)

Taxes

(194)

(239)

Depreciation, amortization and increase in provisions, net of use

5.2.4

(765)

(652)

Asset impairment

5.2.5

56

(145)

Other recurring operating income and expenses

60

12

Share in profit from joint ventures

6.1.5

51

65

Recurring operating income

1,968

2,468

Other non-recurring operating income and expenses

5.2.6

(24)

(37)

Profit from operations

1,944

2,431

Cost of net debt

84

77

Foreign exchange gains (losses)

(1,961)

4,628

Other financial income and expense

1

35

Financial income (loss)

5.3

(1,876)

4,740

Profit before tax

68

7,171

Income tax benefit (expense)

5.4

38

(2,059)

PROFIT FOR THE PERIOD

106

5,112

Attributable to:

◼ owners of the parent

57

5,045

◼ non-controlling interests

49

67

Earnings per share attributable to owners of the parent (in €)

5.5

Basic earnings per share

0.13

12.07

Diluted earnings per share

0.13

12.07

(in € millions)

Note

First-half 2024

First-half 2025

Profit for the period

106

5,112

OTHER COMPREHENSIVE INCOME

Items to be reclassified to profit

182

(737)

Translation adjustments

155

(629)

Remeasurement of hedging instruments

(3)

12

Income tax related to components of other comprehensive income to be reclassified to profit

1

(3)

Share in other comprehensive income of equity-accounted companies to be reclassified to profit (net of tax)

6.1.5

29

(117)

Items not to be reclassified to profit

57

24

Actuarial gains and losses on post-employment benefits

76

33

Income tax related to components of other comprehensive income not to be reclassified to profit

(19)

(9)

Share in other comprehensive income of equity-accounted companies not to be reclassified to profit (net of tax)

-

-

Other comprehensive income (expense) for the period

239

(713)

TOTAL COMPREHENSIVE INCOME FOR THE PERIOD

345

4,399

Attributable to:

◼ owners of the parent

293

4,340

◼ non-controlling interests

52

59

(in € millions)

Note

Dec. 31, 2024

June 30, 2025

Goodwill

6.1.1

4,937

4,864

Intangible assets

6.1.1

7,947

7,820

Property, plant and equipment

6.1.2

4,629

4,780

Right-of-use assets

6.1.4

653

728

Non-current financial assets

6.1.6

1,073

802

Investments in equity-accounted companies

6.1.5

1,894

1,861

Non-current derivatives (positive fair value)

6.4

4

-

Deferred tax assets

2,349

263

Other non-current financial assets

3

-

Non-current assets

23,489

21,118

Current financial assets

6.1.7

243

526

Current derivatives (positive fair value)

6.4

952

1,406

Inventories and work-in-progress

9,491

10,329

Contract costs

884

935

Trade and other receivables

10,572

11,621

Contract assets

2,503

2,743

Tax assets

364

706

Cash and cash equivalents

6.4.1

6,514

6,707

Current assets

31,523

34,973

TOTAL ASSETS

55,012

56,091

(in € millions)

Note

Dec. 31, 2024

June 30, 2025

Share capital

6.2

85

85

Consolidated reserves and retained earnings

6.2

10,758

8,092

Profit (loss) for the period

(667)

5,045

Equity attributable to owners of the parent

10,176

13,222

Non-controlling interests

549

556

Total equity

10,725

13,778

Provisions

6.3.1

1,835

1,972

Borrowings subject to specific conditions

6.4.3

287

276

Non-current interest-bearing financial liabilities

6.4.2

3,788

2,411

Non-current derivatives (negative fair value)

6.4

15

3

Deferred tax liabilities

911

168

Other non-current financial liabilities

6.1.6

11

11

Non-current liabilities

6,847

4,841

Provisions

6.3.1

1,173

859

Current interest-bearing financial liabilities

6.4.2

988

2,427

Trade and other payables

9,802

10,637

Contract liabilities

16,421

18,031

Tax liabilities

105

755

Current derivatives (negative fair value)

6.4

8,803

4,511

Other current financial liabilities

6.1.7

148

252

Current liabilities

37,440

37,472

TOTAL EQUITY AND LIABILITIES

55,012

56,091

At December 31, 2023

85

4,688

(1,848)

1

500

4,640

(288)       3,444

355

11,577

511 12,088

Comprehensive income (expense) for the period

-

-

-

(3)

182

-

     75           57

18(1)

293

52

345

Acquisitions/disposals of treasury shares

-

-

(512)

-

-

(44)

        -              -

-

(556)

-

(556)

Dividends

-

-

-

-

-

(911)

        -              -

-

(911)

(54)

(965)

Treasury shares delivered through conversion of 2027

OCEANE bonds

-

-

1,201

-

-

(177)

        -              -

-

1,024

-

1,024

Share buyback commitments

-

-

-

-

-

(250)

        -              -

-

(250)

-

(250)

Other movements,

including

appropriation of profit

-

-

-

-

-

3,444

- (3,444)

41(2)

41

-

41

At June 30, 2024

85

4,688

(1,159)

(2)

682

6,702

(213)

57

378

11,218

509

11,727

Comprehensive income (expense) for the period

-

-

-

(7)

186

-

(53)

(724)

15

(583)

45

(538)

Acquisitions/disposals of treasury shares

-

-

4

-

-

252

-

-

-

256

-

256

Dividends

-

-

-

-

-

-

-

-

-

-

(5)

(5)

Increase/decrease in share capital

-

(750)

-

-

-

-

-

-

-

(750)

-

(750)

Other movements,

including

appropriation of profit

-

-

-

-

-

-

-

-

35(2)

35

-

35

At December 31, 2024

85

3,938

(1,155)

(9)

868

6,954

(266)

(667)

428

10,176

549 10,725

Comprehensive income (expense) for the period

-

-

-

12

(739)

-

34

5,045

12(1)

4,340

59      4,399

Acquisitions/disposals of treasury shares

-

-

(504)

-

-

(146)

-

-

-

(650)

     -    (650)

Dividends

-

-

-

-

-

(1,216)

-

-

-

(1,216)

(52)  (1,268)

Treasury shares delivered through conversion of 2028

OCEANE bonds

-

-

630

-

-

35

-

-

-

665

     -      665

Share buyback commitments

-

-

-

-

-

(137)

-

-

-

(137)

     -    (137)

Increase/decrease in share capital

-

-

-

-

-

-

-

-

-

-

     -           -

Other movements,

including

appropriation of profit

-

-

-

-

-

(667)

-

667

44(2)

44

     -        44

AT JUNE 30, 2025

85

3,938

(1,029)

3

129

4,823

(232)

5,045

460   13,222

556 13,778

(in € millions)

Note

First-half 2024

First-half 2025

I. CASH FLOW FROM OPERATING ACTIVITIES

Profit attributable to owners of the parent

57

5,045

Depreciation, amortization, impairment and provisions

7.1

766

705

Share in profit/loss from equity-accounted companies (net of dividends received)

6.1.5

(37)

(51)

Change in fair value of currency and interest rate derivatives

6.4

1,680

(4,785)

Capital gains and losses on asset disposals

(13)

2

Profit attributable to non-controlling interests

49

67

Other

7.1

(142)

1,807

Cash flow from operations, before change in working capital

2,360

2,790

Change in working capital

7.1

(140)

(168)

Total I

2,220

2,622

II. CASH FLOW USED IN INVESTING ACTIVITIES

Capitalization of R&D expenditure

6.1.1

(152)

(160)

Payments for the purchase of intangible assets, net

(93)

(103)

Payments for the purchase of property, plant and equipment, net

(512)

(525)

Payments for the acquisition of investments or businesses, net

7.2

(189)

(147)

Proceeds arising from the sale of investments or businesses, net

18

14

Proceeds (payments) arising from the sale (acquisition) of financial assets, net

(57)

(87)

Other movements

-

-

Total II

(985)

(1,008)

III. CASH FLOW USED IN FINANCING ACTIVITIES

Change in share capital – owners of the parent

-

-

Change in share capital – non-controlling interests

-

-

Acquisitions and disposals of treasury shares

6.2.1-7.3

(574)

(707)

Repayment of borrowings and long-term debt

7.3

(744)

(148)

Increase in borrowings

6.4.2

11

14

Change in repayable advances

6.4.3

(9)

(13)

Change in short-term borrowings

6.4.2-7.3

49

756

Dividends and interim dividends paid to owners of the parent

6.2.4

(911)

(1,216)

Dividends paid to non-controlling interests

(54)

(53)

Total III

(2,232)

(1,367)

Effect of changes in foreign exchange rates

Total IV

20

(54)

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

I+II+III+IV

(977)

193

Cash and cash equivalents at beginning of period

6,676

6,514

Cash and cash equivalents at end of period

6.4.1

5,699

6,707

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

(977)

193

NOTE 1

NOTE 2 NOTE 3

NOTE 4

Basis of preparation of the financial statements

Scope of consolidation

Significant events of the period

Segment information and adjusted data

20

22

24

24

NOTE 5 NOTE 6

NOTE 7

NOTE 8

Notes to the income statement

Notes to the balance sheet

Notes to the cash flow statement

Additional information

26

32

51

52

NOTE 1                                     BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS

1.1           Accounting policies

This amendment has no impact on the Group's consolidated financial statements.

Standards, interpretations and amendments published by the IASB but not yet adopted by the European Union as of June 30, 2025 or not yet effective as of January 1, 2025

Effective date

Amendments to IFRS 9                               Amendments to the Classification and Measurement of Financial

and IFRS 7                                             Instruments

January 1, 2026

Amendments to IFRS 9                               Contracts Referencing Nature-dependent Electricity

January 1, 2026

Annual Improvements to IFRS   IFRS annual improvements process (IFRS 1, IFRS 7, IFRS 9, Accounting Standards – Volume 11              IFRS 10 and IAS 7)

January 1, 2026

IFRS 18                                                     Presentation and Disclosure in Financial Statements

January 1, 2027⁽¹⁾

IFRS 19                                                     Subsidiaries without Public Accountability: Disclosures

January 1, 2027⁽¹⁾

1.2.2         Changes in the legislative framework

In France, the 2025 French Finance Act published on February 14, 2025 introduced a temporary exceptional surtax on the profits of large companies.

This surtax is based on the average current tax due in respect of 2024 and 2025, before offsetting tax reductions, tax credits and all tax receivables.

Safran is liable for this temporary exceptional surtax at a rate of 41.2% (see Note 5.4 “Income tax”).

1.2.3

None.

Changes in legal interpretation

◼

measurement of the recoverable amount of non-current assets: as part of impairment tests, including goodwill, program assets, development expenditure and other (see Note 6.1 “Non-current assets”);

◼

capitalization of development expenditure (see Note 6.1.1 “Goodwill and other intangible assets”);

◼

measurement of the recoverable amounts of investments in equity-accounted companies (see Note 6.1.5 “Investments in equity-accounted companies”);

◼

measurement of revenue and profit (loss) on completion of performance obligations for which revenue is recognized on a percentage-of-completion basis using the cost-to-cost method (see Note 5.1 “Revenue”);

◼

measurement of provisions and contract liabilities relating to performance warranties, losses on completion, losses arising on delivery commitments, and other liabilities under sales contracts (see Note 5.1 “Revenue” and Note 6.3.1 “Overview of provisions”);

◼

fair value measurement of purchase price components and intangible assets acquired as part of a business combination (see Note 2.1 “Changes in scope of consolidation”);

◼

the assumptions used to measure pension and other postemployment benefit obligations and share-based payment plans (see Note 6.2.2 “Share-based payment” and Note 6.3.2 “Analysis of pension and other post-employment benefit obligations”);

◼

measurement of provisions for disputes and litigation (see Note 8.3 “Disputes and litigation").

1.5                Main accounting impacts of climate change

NOTE 2                SCOPE OF CONSOLIDATION

(in € millions)                                                                                                                                                                                                                                      Fair value at acquisition date

NOTE 3                           SIGNIFICANT EVENTS OF THE PERIOD

United States tariffs and their potential consequences

The segment information presented below is based on internal reporting used by Executive Management to assess performance and allocate resources to the various business segments.

Executive Management represents the chief operating decision-maker within the meaning of IFRS 8.

The Group's subsidiaries are organized around tier-one entities (“consolidation sub-groups”).

These sub-groups are in turn organized into operating segments based on the type of products and services they sell.

SEGMENTS PRESENTED

Safran manages its operations based on three operating segments:

◼ Propulsion: The Group designs, develops, produces and markets propulsion and mechanical power transmission systems for commercial aircraft, military transport, training and combat aircraft, civil and military helicopters, and drones. This segment also includes maintenance, repair and overhaul (MRO) activities and the sale of spare parts.

◼ Equipment & Defense: Safran covers the full life cycle of systems and equipment for civil and military aircraft and helicopters. The Group is involved in landing gear and brakes, nacelles and reversers, avionics (flight controls and onboard information systems), security systems (evacuation slides and oxygen masks), onboard computers and fuel systems.

◼

◼

It also operates at the different phases of the electrical cycle and provides electrical power management systems and associated engineering services. It includes all activities serving the aerospace, naval and land defense markets, including optronic equipment and sights, navigation equipment and sensors, modernized infantry, and drones. This segment also includes maintenance, repair and overhaul (MRO) activities and the sale of spare parts.

Aircraft Interiors: this segment includes all operations related to the buyer-furnished equipment (BFE) market, whose direct customers are mostly airline companies. It also includes all activities related to supplier-furnished equipment (SFE) specified and purchased by the airframer. The Group designs, develops, manufactures and markets, for example, aircraft seats for passengers (First, Business and Economy Class) and crew, as well as cabin equipment, overhead bins, class dividers, passenger service units, cabin interior solutions, chilling systems, galleys, and electrical inserts and trolleys. This segment also includes complex cabin equipment and passenger comfort-focused solutions such as water distribution, lavatories, ventilation systems, and in-flight entertainment and connectivity (IFEC).

Holding company and other: In “Holding company and other”, the Group includes Safran SA’s activities and holding companies in various countries.

BUSINESS SEGMENT PERFORMANCE

INDICATORS

To make it easier to track and compare its operating and financial performance, the Group prepares an adjusted income statement in addition to its consolidated financial statements and presents key indicators in its management report, defined as follows:

◼ Adjusted revenue corresponds to revenue net of purchases in foreign currencies at the hedged rate resulting from the exchange rate effectively obtained over the year under hedging strategies, including premiums on settled options.

◼ Adjusted ROI corresponds to recurring operating income adjusted for (i) entries recorded in connection with business combinations (impact of asset remeasurements and the depreciation, amortization and impairment of assets measured as part of the purchase price allocation

◼

in accordance with IFRS 3), (ii) the impact of the mark-tomarket of foreign currency derivatives in order to better reflect the economic substance of the Group's overall foreign currency risk hedging strategy: remeasurement (by currency) of foreign-currency denominated revenue net of purchases at the hedged rate (exchange rate effectively obtained over the year under hedging strategies, including premiums on settled options) through the reclassification of any gains/losses recognized in profit or loss on unwinding the hedging relationship.

Adjusted profit attributable to owners of the parent corresponds to consolidated profit for the period attributable to owners of the parent adjusted for the above-mentioned items and for the neutralization of all mark-to-market changes on foreign currency derivatives hedging future cash flows. The resulting changes in deferred tax have also been adjusted.

(in € millions)

Propulsion

Equipment Aircraft  & Defense Interiors

Total operating segments

Holding company and other

Total adjusted  data

Currency  hedges

Impacts of business combinations

Total consolidated  data

Revenue

6,461

5,170

1,411

13,042

5

13,047

157

-

13,204

Recurring operating income (loss)⁽¹⁾

1,285

657

10

1,952

22

1,974

160

(166)

1,968

Other non-recurring operating income and expenses

1

(12)

(9)

(20)

(4)

(24)

-

-

(24)

Profit from operations

1,286

645

1

1,932

18

1,950

160

(166)

1,944

Free cash flow

1,355

105

(135)

1,325

138

1,463

-

-

1,463

(1)     o/w raw materials and consumables used

(4,242)

(2,847)

(940)

(8,029)

210

(7,819)

(3)

(7,822)

o/w personnel costs

(1,438)

(1,706)

(508)

(3,652)

(287)

(3,939)

7

(3,932)

(in € millions)

Propulsion

Equipment Aircraft  & Defense Interiors

Total operating segments

Holding company and other

Total adjusted  data

Currency  hedges

Impacts of business combinations

Total consolidated  data

Revenue

7,541

5,609

1,616

14,766

3

14,769

96

-

14,865

Recurring operating income (loss)⁽¹⁾

1,758

703

27

2,488

22

2,510

118

(160)

2,468

Other non-recurring operating income and expenses

-

(8)

(29)

(37)

-

(37)

-

-

(37)

Profit (loss) from operations

1,758

695

(2)

2,451

22

2,473

118

(160)

2,431

Free cash flow

1,785

214

(68)

1,931

(97)

1,834

-

-

1,834

(1)     o/w raw materials and consumables used

(4,412)

(3,169)

(1,017)

(8,598)

273

(8,325)

5

-

(8,320)

o/w personnel costs

(1,605)

(1,869)

(548)

(4,022)

(311)

(4,333)

(1)

-

(4,334)

The Safran Group primarily sells:

ORIGINAL EQUIPMENT AND RELATED PRODUCTS AND SERVICES

Original equipment engines and spare engines, serial production equipment and spare parts

Revenue from sales of engines, equipment and spare parts is recognized upon transfer to the customer, i.e., upon delivery.

Development work may be carried out prior to production and is often inseparable from serial production. Any total or part contributions from customers in respect of such work are therefore initially recorded in the balance sheet as contract liabilities when they are received, and subsequently recognized in "Original equipment and equipment sales" as the goods are delivered.

Financing for development work which is independent of serial production (i.e., representing a separate performance obligation) is recognized in revenue upon the transfer of control over the development work (at a specific point in time, or on a percentage-of-completion basis (cost-to-cost method) if control is transferred over time).

The revenue recognized is net of any discounts granted in any form whatsoever, including warranties resembling trade discounts and any products or services granted free of charge which do not represent separate performance obligations, and net of all penalties.

Downpayments from customers are included in contract liabilities when they are received and taken to revenue when control of the products to which they relate is transferred.

Sales of contracts with multiple elements

Contracts with multiple elements are contracts that include the sale of specific development work as well as the sale of both goods and services.

In general, for these contracts:

◼ the specific development work or customization assignments for a given contract and customer do not represent a separate performance obligation. Costs associated with the development and installation are initially recognized in assets within contract costs if they are recoverable, and subsequently expensed over the contract term;

◼ financing received from the customer for the development work or customization assignment is recognized as revenue as and when the various performance obligations under the contract are satisfied;

◼ revenue generated on the serial production and service portion of the contract is recognized either on delivery of the goods, or on a percentage-of-completion basis (cost-to-cost method), depending on the nature of the performance obligation.

SALES OF SERVICES

Sales of service agreements

Certain maintenance and support contracts require a fleet of engines or various equipment to be kept in flying condition. These contracts are billed based on the number of flight hours or landings for the engines/equipment concerned.

The Group accounts for contracts on a percentage-ofcompletion basis (cost-to-cost method).

Rate-per-flight-hour (RPFH) contracts for engines include estimates of future costs related to the engine's commissioning date, as well as potential contingencies to cover the risks associated with the engine’s behavior in the various environments in which it is used by airlines, its time on wing, and the time required to carry out maintenance operations, depending on available capacity. Assumptions are updated in line with technical milestones based on the maturity of the engines and with the experience acquired in terms of engine maintenance costs. In the case of agreements for LEAP engines, profit recognized was previously close to zero pending key technical milestones which will have a major impact on the life of engines under the wing. The introduction in 2025 of the new high-pressure turbine blade for LEAP 1A is a major technical milestone, reducing the risks associated with estimating future costs and consequently the degree of uncertainty applied to these estimates, resulting in an increase in the percentage of profit recognized for these agreements.

Amounts billed to customers which have not yet been recognized in revenue are included within contract liabilities (deferred income) at the end of the reporting period.

In contrast, revenue which has been recognized but which has not yet been billed is recorded within contract assets in the balance sheet.

Forecast contract margins are reviewed regularly, and any necessary adjustments are generally reflected immediately in the income statement (“catch-up method”).

When the total costs that are necessary to cover the Group’s risks and obligations under the contract are likely to exceed total contract revenue, any contract costs recognized within assets are written down and a provision for losses on completion recognized for the remaining amount of the loss.

Sales of time and materials service contracts

Revenue is recognized on a percentage-of-completion basis (cost-to-cost method) when control is transferred over time, or once the performance obligation has been satisfied if control is transferred at a point in time.

SALES OF STUDIES

Revenue is recognized on a percentage-of-completion basis (cost-to-cost method) when control is transferred over time, or once the performance obligation has been satisfied if control is transferred at a point in time.

OTHER

Safran may also recognize revenue on certain secondary activities.

(in € millions)

Propulsion

Equipment & Defense

Aircraft Interiors

Holding company and other

Total

DESCRIPTION OF PRODUCTS/SERVICES

Sales of original equipment and other equipment

2,474

3,107

989

-

6,570

Spare parts and services

4,970

2,252

618

-

7,840

Sales of studies

92

197

10

-

299

Other

84

68

1

3

156

TOTAL REVENUE

7,620

5,624

1,618

3

14,865

TIMING OF REVENUE RECOGNITION

At a point in time

6,085

4,949

1,600

3

12,637

Over time

1,535

675

18

-

2,228

TOTAL REVENUE

7,620

5,624

1,618

3

14,865

(in € millions)

Propulsion

Equipment & Defense

Aircraft Interiors

Holding company and other

Total

DESCRIPTION OF PRODUCTS/SERVICES

Sales of original equipment and other equipment

2,317

2,970

863

-

6,150

Spare parts and services

4,107

2,030

532

-

6,669

Sales of studies

90

140

18

1

249

Other

70

61

1

4

136

TOTAL REVENUE

6,584

5,201

1,414

5

13,204

TIMING OF REVENUE RECOGNITION

At a point in time

5,201

4,623

1,402

5

11,231

Over time

1,383

578

12

-

1,973

TOTAL REVENUE

6,584

5,201

1,414

5

13,204

(in € millions)

First-half 2024

First-half 2025

Research tax credit

88

92

Other operating subsidies

100

96

Other operating income

20

22

OTHER INCOME

208

210

(in € millions)

First-half 2024

First-half 2025

Raw materials, supplies and other

(2,953)

(3,136)

Bought-in goods

(117)

(117)

Changes in inventories

426

365

Contract costs

85

77

Sub-contracting

(2,800)

(2,415)

Purchases not held in inventory

(380)

(628)

External service expenses

(2,083)

(2,466)

RAW MATERIALS AND CONSUMABLES USED

(7,822)

(8,320)

(in € millions)

First-half 2024

First-half 2025

Wages and salaries

(2,493)

(2,724)

Social security contributions

(973)

(1,072)

Statutory and optional employee profit-sharing

(232)

(284)

Other employee costs

(234)

(254)

PERSONNEL COSTS

(3,932)

(4,334)

(in € millions)

First-half 2024

First-half 2025

NET DEPRECIATION AND AMORTIZATION EXPENSE

◼ intangible assets

(341)

(353)

◼ property, plant and equipment

(291)

(302)

◼ right-of-use assets

(60)

(64)

Total net depreciation and amortization expense

(692)

(719)

Net (additions to) reversals from provisions

(73)

67

DEPRECIATION, AMORTIZATION AND INCREASE IN PROVISIONS, NET OF USE

(765)

(652)

(in € millions)

First-half

2024

First-half 2025

First-half

2024

First-half 2025

Intangible assets, property, plant and equipment, and right-of-use assets

(1)

(2)

1

2

Financial assets

-

(8)

2

1

Contract costs

-

(3)

9

5

Inventories and work-in-progress

(298)

(388)

372

292

Receivables

(43)

(67)

14

23

Contract assets

-

-

-

-

ASSET IMPAIRMENT

(342)

(468)

398

323

To give a clearer picture of the Group's operating performance, items which are largely unpredictable because of their unusual, infrequent and/or material nature are included on the operating income line, "Other non-recurring operating income and expenses".

This mainly includes:

◼ impairment losses recognized against goodwill and impairment losses or reversals of impairment losses recognized against intangible assets relating to programs, projects or product families, including for equity-accounted companies;

◼

◼

◼

transaction costs and capital gains and losses on disposals of operations;

gains on remeasuring any previously held equity interests in the event of step acquisitions or disposals or transfers made to joint ventures;

other unusual and/or material items not directly related to the Group’s ordinary operations, in particular restructuring costs.

(in € millions)

First-half 2024

First-half 2025

Capital gains and losses on asset disposals

-

-

Asset impairment net of reversals

(10)

(21)

Other non-recurring items

(14)

(16)

OTHER NON-RECURRING OPERATING INCOME AND EXPENSES

(24)

(37)

Financial income (loss) can be analyzed as follows:

COST OF NET DEBT

Interest expense corresponds essentially to the amount of interest recognized on interest-bearing financial liabilities. Interest income relates to interest earned on cash investments meeting the definition of cash and cash equivalents.

FOREIGN EXCHANGE GAINS AND LOSSES

Foreign exchange gains and losses include:

◼ the gain or loss on foreign currency hedging instruments which reflects changes in the fair value of these instruments attributable to operating cash flows that will be recognized

◼

in profit or loss in future periods. The fair value of the portfolio reflects the immediate liquidation value of the portfolio at the closing rate for the period, compared with the average exchange rate for the portfolio, even though currency hedges are intended to be unwound at the time of future dollar receipts;

the foreign exchange gain or loss which reflects the loss on unwinding currency derivatives hedging operating cash flows recognized in profit or loss in the period. This foreign exchange gain or loss reflects the difference between the exchange rate of the EUR/USD currency derivatives unwound and the average EUR/USD exchange rate observed during the period.

OTHER FINANCIAL INCOME AND EXPENSE:

Other financial income and expense are set out in the table below:

In first-half 2025, the €4,808 million gain on foreign currency hedging instruments reflects changes in the fair value of these instruments attributable to operating cash flows that will be recognized in profit or loss in future periods.

5.4         Income tax

Index

First-half 2024

First-half 2025

NUMERATOR (in € millions)

Profit for the period attributable to owners of the parent

(a)

57

5,045

Diluted profit for the period attributable to owners of the parent

(a’)

58

5,045

DENOMINATOR (in shares)

Total number of shares

(b)

427,260,541

423,632,587

Number of treasury shares held

(c)

6,881,845

4,496,367

Number of shares excluding treasury shares

(d)=(b-c)

420,378,696

419,136,220

Weighted average number of shares (excluding treasury shares)

(d’)

424,913,983

417,934,731

Potentially dilutive ordinary shares

(e)

12,866,187

-

Weighted average number of shares after dilution

(f)=(d’+e)

437,780,170

417,934,731

RATIO: EARNINGS PER SHARE (in €)

Basic earnings per share

(g)=(a*1 million)/(d’)

0.13

12.07

Diluted earnings per share

(h)=(a'*1 million)/(f)

0.13

12.07

(in € millions)

Dec. 31, 2024 Net

Changes in scope of consolidation⁽¹⁾

Impairment

Price adjustments and allocation to identifiable assets and liabilities⁽²⁾

Effect of changes in foreign exchange rates and other

June 30, 2025 Net

Safran Aircraft Engines

392

123

-

-

(13)

502

Safran Helicopter Engines

306

-

-

-

-

306

Safran Aero Boosters

47

-

-

-

-

47

Other Propulsion

1

-

-

-

-

1

Safran Electronics & Defense

838

-

-

(100)

32

770

Safran Nacelles

213

-

-

-

-

213

Safran Engineering Services

74

-

-

-

-

74

Safran Electrical & Power

744

-

-

2

(25)

721

Safran Landing Systems

190

-

-

-

-

190

Safran Aerosystems

750

-

-

-

-

750

Safran Seats

588

-

-

-

-

588

Safran Cabin

794

-

-

-

(92)

702

GOODWILL

4,937

123

-

(98)

(98)

4,864

INTANGIBLE ASSETS

Software is recognized at acquisition cost or production cost and amortized on a straight-line basis over its useful life (between one and five years).

Patents are capitalized at acquisition cost and amortized over their useful life, i.e., the shorter of the period of legal protection and their economic life.

Contributions paid to third parties in connection with aircraft programs (participation in certification costs, etc.) are considered as acquired assets and are therefore capitalized unless the program proves unprofitable. These contributions are amortized on a straight-line basis over the term of the program.

In the case of business combinations, intangible assets (customer relationships, technology, brands, etc.) are recognized at their fair value at the date control is acquired and are amortized on a straight-line basis over their useful life.

RESEARCH AND DEVELOPMENT COSTS

Research costs are recognized as expenses in the period in which they are incurred. Development expenditures are capitalized if they meet all of the criteria set out in IAS 38. In the Group, development expenditures are capitalized once Executive Management has taken the decision to launch the program (technical feasibility, proven profitability, existence of a market, etc.).

Development expenditures cannot be capitalized before the completion of this milestone.

Capitalization of development expenditures ceases as soon as the product to which the expenditures relate is brought into service or the criteria for capitalization are no longer met.

Capitalized development expenditures are stated at production cost and amortized primarily using the straight-line method as from the initial delivery of the product, over a useful life not exceeding 20 years.

(in € millions)

Dec. 31, 2024

June 30, 2025

Gross

Amortization / impairment

Net

Gross

Amortization / impairment

Net

Aircraft programs

2,327

(2,020)

307

2,324

(2,044)

280

Development expenditure

7,923

(3,953)

3,970

7,985

(4,070)

3,915

Commercial agreements

920

(336)

584

911

(352)

559

Software

887

(765)

122

986

(786)

200

Trademarks⁽¹⁾

721

-

721

721

-

721

Commercial relationships

2,156

(999)

1,157

2,089

(1,008)

1,081

Technology

1,359

(943)

416

1,412

(960)

452

Other

1,070

(400)

670

1,023

(411)

612

OTHER INTANGIBLE ASSETS

17,363

(9,416)

7,947

17,451

(9,631)

7,820

(in € millions)

Gross

Amortization/ impairment

Net

Other intangible assets at Dec. 31, 2024

17,363

(9,416)

7,947

Capitalization of R&D expenditure⁽¹⁾

160

-

160

Capitalization of other intangible assets

36

-

36

Acquisitions of other intangible assets

32

-

32

Disposals and retirements

(3)

2

(1)

Amortization

-

(353)

(353)

Impairment losses recognized in profit or loss

-

(21)

(21)

Reclassifications

3

-

3

Changes in scope of consolidation

131

-

131

Foreign exchange differences

(271)

157

(114)

OTHER INTANGIBLE ASSETS AT JUNE 30, 2025

17,451

(9,631)

7,820

(in € millions)

Dec. 31, 2024

June 30, 2025

Gross

Depreciation / impairment

Net

Gross

Depreciation / impairment

Net

Land

231

-

231

229

-

229

Buildings

2,517

(1,475)

1,042

2,472

(1,438)

1,034

Technical facilities, equipment and tooling

7,459

(5,422)

2,037

7,498

(5,505)

1,993

Assets in progress, advances

1,032

(39)

993

1,211

(41)

1,170

Site development and preparation costs

103

(59)

44

107

(60)

47

Buildings on land owned by third parties

94

(53)

41

172

(106)

66

Computer hardware and other equipment

815

(574)

241

840

(599)

241

PROPERTY, PLANT AND EQUIPMENT

12,251

(7,622)

4,629

12,529

(7,749)

4,780

(in € millions)

Gross

Depreciation/ impairment

Net

Property, plant and equipment at Dec. 31, 2024

12,251

(7,622)

4,629

Internally produced assets

50

-

50

Additions

485

-

485

Disposals and retirements

(47)

42

(5)

Depreciation

-

(302)

(302)

Net impairment losses recognized in profit or loss

-

-

-

Reclassifications

(9)

4

(5)

Changes in scope of consolidation

82

(37)

45

Foreign exchange differences

(283)

166

(117)

PROPERTY, PLANT AND EQUIPMENT AT JUNE 30, 2025

12,529

(7,749)

4,780

NON-CURRENT ASSET IMPAIRMENT TESTS

Depreciable/amortizable property, plant and equipment and intangible assets are tested for impairment whenever there is evidence that they may be impaired.

Impairment tests seek to compare an asset’s recoverable amount to its net carrying amount. If the carrying amount is higher than the recoverable amount, the asset is written down to its recoverable amount. The recoverable amount of an asset or a group of assets is the higher of its fair value less costs to sell and its value in use.

Impairment tests are performed at least once a year for depreciable/amortizable non-current assets which have not yet begun to be depreciated or amortized. Non-current assets are tested for impairment whenever there is evidence that they may be impaired.

CASH-GENERATING UNITS AND IMPAIRMENT TESTS

Non-current assets, and particularly goodwill acquired in a business combination, are allocated to cash-generating units (CGUs)⁽¹⁾.

Two types of CGUs are defined within the Group:

◼ CGUs corresponding to programs, projects, or product families associated with specific assets and liabilities: development expenditures, property, plant and equipment used in production;

◼ CGUs to which goodwill is allocated, corresponding to the business segments monitored by Group management and relating chiefly to the Group’s main subsidiaries.

In the event of a sale or restructuring of the Group’s internal operations which affects the composition of one or more of the CGUs to which goodwill has been allocated, the allocations are revised using a method based on relative value. This method takes the proportion represented by the business sold or transferred in the cash flows and terminal value of the original CGU at the date of sale or transfer.

IMPAIRMENT TESTS PERFORMED ON ASSETS

ALLOCATED TO PROGRAMS, PROJECTS

OR PRODUCT FAMILIES

The value in use of other assets allocated to programs, projects or product families is determined as follows:

◼ Expected future cash flows are projected over the life of the development programs or projects, capped at 40 years, and are discounted at the benchmark rate. Certain programs

◼

◼

◼

◼

or projects are also subject to a specific risk premium. This long timeframe better reflects the characteristics of the Group’s operating cycles (aircraft and defense), where assets tend to have a long useful life.

Impairment is recognized where a loss in value is identified. It may be reversed if the loss in value subsequently decreases, in which case the amount of the reversal is based on revised estimates of the asset’s recoverable amount.

IMPAIRMENT TESTS PERFORMED ON CGUS AT BUSINESS SEGMENT LEVEL

The Group uses value in use to determine the recoverable amount of an asset or group of assets.

The value in use of the CGUs was determined based on the following method:

Expected future cash flows for all CGUs are determined over an estimated 10-year period. The projections are drawn from the medium-term business plan, as prepared in the second half of 2024 for the next four years, and for the following six years are based on the best estimate of the long-term scenario. They take into account orders and delivery schedules, airframers’ production rates, IATA forecasts, the impacts of decarbonization and any other available information. The projections take into account general economic data, specific inflation rates for each geographic area, a USD exchange rate based on available market information and mid- to long-term macroeconomic assumptions.

A terminal value is also used, calculated by reference to normative cash flows representing long-term business activity, which usually corresponds to the last year of available forecasts plus an estimated growth rate for the activities concerned.

Cash flows are discounted at a rate that reflects current market assessments of the time value of money and the risks specific to the asset (or group of assets). This rate corresponds to the weighted average cost of capital (WACC) after tax. The use of a post-tax rate applied to post-tax cash flows results in recoverable amounts similar to those obtained by applying pre-tax rates to pre-tax cash flows. The value in use of CGUs is equal to the sum of these cash flows.

In the event of a proven loss in value of the CGU, impairment is recognized against goodwill and cannot be reversed.

All property leases together with the Group’s main leases of groups of assets (vehicles, handling equipment, etc.) are accounted for in accordance with IFRS 16. The Safran Group opted for the exemption provided by IFRS 16 to not apply the standard to short-term, low-value leases. These agreements are therefore recognized in operating expenses.

The Group analyzes its “3/6/9”-type commercial leases every year and, where necessary, adjusts the lease terms.

The discount rate used is determined either by using the interest rate implicit in the lease, or by using the incremental borrowing rate, defined as the estimated rate of interest that

Safran would have to pay on the market to borrow over a term identical to the average term of the lease liability upon signature of the lease.

For euro-denominated debt, the rate used for a given maturity is the average of indicative euro bond market yields for Safran as provided by a sample of banks. For all other currencies, the rate used for a given maturity is the euro rate described above, swapped into the desired currency.

These incremental borrowing rates are revised every six months for all new leases.

(in € millions)

Dec. 31, 2024

June 30, 2025

Gross

Depreciation / impairment

Net

Gross

Depreciation / impairment

Net

Right-of-use assets relating to property

1,020

(412)

608

1,048

(415)

633

Right-of-use assets relating to transport equipment

17

(7)

10

18

(7)

11

Right-of-use assets relating to other assets

44

(9)

35

95

(11)

84

RIGHT-OF-USE ASSETS

1,081

(428)

653

1,161

(433)

728

(in € millions)

Gross

Depreciation/ impairment

Net

Right-of-use assets at Dec. 31, 2024

1,081

(428)

653

Increases

167

-

167

Disposals and retirements

(20)

13

(7)

Depreciation

-

(64)

(64)

Reclassifications

(14)

22

8

Foreign exchange differences

(53)

24

(29)

RIGHT-OF-USE ASSETS AT JUNE 30, 2025

1,161

(433)

728

In the balance sheet, investments in equity-accounted companies are initially recognized at fair value. Goodwill arising on the allocation of the purchase price is included in the carrying amount of investments in equity-accounted companies.

The income statement item "Share in profit from joint ventures" includes the following items:

◼ the Group's share in the profit or loss of these companies;

◼ any identified impairment losses. If the Group's share in the losses of equity-accounted companies exceeds the carrying amount of its investment in those companies, the

Group discontinues recognizing its share in future losses. After the Group’s interest is reduced to zero, a provision is booked for additional losses where the Group has a legal or constructive obligation or has made payments on behalf of the associate.

Gains or losses on internal acquisitions or disposals involving equity-accounted associates and joint ventures are eliminated in the amount of the Group’s investment in these companies. In the case of sales of engines and equipment, the elimination of the Group’s share in profit or loss is charged in full to "Raw materials and consumables used".

◼

Fadec International LLC: digital engine control systems;

◼

HMS      Laser:      holding      company      and     its      subsidiary

CILAS: manufacture of military lasers;

◼

Lynred: manufacture of infrared detectors;

◼

Safran Martin-Baker France: manufacture of ejectable seating;

◼

SAIFEI: electrical wiring;

◼

Xi’an Cea Safran Landing Systems Co. Ltd: landing gear maintenance;

◼

A-Pro: repair of landing gear for regional and business jets.

Investments in equity-accounted companies at Dec. 31, 2024

1,894

Share in profit (loss) from ArianeGroup

(8)

Share in profit from other joint ventures

74

Dividends received from joint ventures

(14)

Foreign exchange differences

(133)

Other movements⁽¹⁾

48

INVESTMENTS IN EQUITY-ACCOUNTED COMPANIES AT JUNE 30, 2025

1,861

(in € millions)

Dec. 31, 2024

June 30, 2025

Non-current assets

1,613

1,595

Current assets

7,152

7,122

of which: cash and cash equivalents

1,523

1,538

Non-current liabilities

(1,288)

(1,310)

of which: non-current financial liabilities

(324)

(319)

Current liabilities

(7,715)

(7,642)

of which: current financial liabilities

(76)

(42)

Non-controlling interests

15

18

Net assets of ArianeGroup (excl. goodwill and PPA) – Attributable to owners of the parent (based on a 100% interest)

(223)

(217)

Equity share in net assets of ArianeGroup (excl. goodwill and PPA) (based on a 50% interest)

(112)

(108)

Purchase price allocation, net of deferred taxes

157

145

Safran equity share – Net assets of ArianeGroup

45

37

Goodwill

1,174

1,174

CARRYING AMOUNT OF INVESTMENT IN ARIANEGROUP

1,219

1,211

(in € millions)

June 30, 2024

June 30, 2025

Revenue

1,056

1,200

Depreciation and amortization

(72)

(71)

Cost of borrowings

(5)

(4)

Interest income

20

18

Income tax expense

(3)

(1)

(in € millions)

June 30, 2024

June 30, 2025

Profit (loss) for the period attributable to ArianeGroup

(54)

7

Other comprehensive income

-

(1)

Total comprehensive income (expense) attributable to ArianeGroup

(54)

6

Safran equity share – Profit (loss) for the period

(27)

3

Amortization of purchase price allocation, net of deferred taxes

(11)

(11)

Safran equity share – Profit (loss) of ArianeGroup

(38)

(8)

Safran equity share – Other comprehensive income

-

(1)

Safran equity share – Comprehensive income (expense) of ArianeGroup

(38)

(9)

Equity investments in non-consolidated companies are classified at fair value through profit or loss.

The fair value of listed investments corresponds to their market value. The fair value of unlisted investments corresponds to their acquisition cost, provided that this approximates their fair value. If this is not the case, an appropriate valuation technique (e.g., value in use) is used.

Loans to non-consolidated companies are classified at amortized cost. They are written down in accordance with the general impairment approach set out in IFRS 9 only if there is a risk of non-recovery.

(in € millions)

Dec. 31, 2024

June 30, 2025

Payables on purchases of property, plant and equipment and intangible assets

144

110

Payables on purchases of investments

4

142

OTHER CURRENT FINANCIAL LIABILITIES

148

252

(in € millions)

Dec. 31, 2024

June 30, 2025

Gross

Impairment

Net

Gross

Impairment

Net

Non-consolidated investments

544

(150)

394

469

(141)

328

Loans to non-consolidated companies

79

(27)

52

99

(52)

47

Loans to employees

34

-

34

33

-

33

Deposits and guarantees

22

-

22

17

-

17

Investments that do not qualify as cash and cash equivalents

404

-

404

155

-

155

Other

178

(11)

167

232

(10)

222

OTHER NON-CURRENT ASSETS

1,261

(188)

1,073

1,005

(203)

802

(in € millions)

Dec. 31, 2024

June 30, 2025

Payables on purchases of property, plant and equipment and intangible assets

11

11

Payables on purchases of investments

-

-

OTHER NON-CURRENT LIABILITIES

11

11

(in € millions)

Dec. 31, 2024

June 30, 2025

Gross

Impairment

Net

Gross

Impairment

Net

Loans to non-consolidated companies

142

(7)

135

172

(16)

156

Loans to employees

3

-

3

4

-

4

Deposits and guarantees

5

-

5

9

-

9

Investments that do not qualify as cash and cash equivalents

-

-

-

275

-

275

Other

100

-

100

82

-

82

OTHER CURRENT FINANCIAL ASSETS

250

(7)

243

542

(16)

526