Safran (SAF) H1 2024 earnings summary

Executive summary

• H1 2024 revenue rose 19% year-over-year to €13,047 million, with recurring operating income up 41% to €1,974 million and operating margin at 15.1% of sales, driven by strong aftermarket and services activity and breakeven in aircraft interiors.

• Free cash flow reached €1,463 million, with net income up 37% to €1,432 million (EPS €3.37 basic, €3.27 diluted).

• Supply chain constraints, especially in LEAP engine high-pressure turbine blades, impacted deliveries, but full-year guidance and outlook were reaffirmed.

• Agreement signed to acquire Preligens, an AI leader, for €220 million, with closing expected Q3 2024.

• Aircraft Interiors reached operating breakeven, with strong growth in business class seat deliveries.

Financial highlights

• Adjusted revenue: €13,047 million (+19% year-over-year); recurring operating income: €1,974 million (+41%); operating margin: 15.1%.

• Net income attributable to owners: €1,432 million (+37%); basic EPS: €3.37; diluted EPS: €3.27.

• Free cash flow: €1,463 million, supported by strong operations but impacted by higher capex and working capital build-up.

• Capex increased to €757 million, mainly for OE, MRO capacity, and low-carbon initiatives.

• R&D expenses before tax credits: €646 million (+12%); total R&D: €936 million.

Outlook and guidance

• FY 2024 guidance confirmed: revenue around €27.4 billion, recurring operating income close to €4.0 billion, free cash flow around €3.0 billion.

• LEAP engine deliveries expected flat to +5% vs. 2023 (previously +10–15%); civil aftermarket revenue (USD) now expected up mid-twenties percent.

• Share buyback plan to continue, with about half of the €1 billion program to be executed in 2024.

• Main risk factor remains supply chain production capabilities.

• Free cash flow guidance for the year is €3 billion, with H2 expected to generate €1.5 billion.