Dassault Aviation (AM) H1 2024 (Q&A) earnings summary

Executive summary

• Order intake surged to €5,134M in H1 2024, driven by 18 Rafale for Indonesia and strong Falcon demand, with a record backlog of €41.2B (306 aircraft).

• Ongoing discussions for the next phase of a fighter demonstrator project, with phase II expected to begin in 2026, pending political and governmental decisions.

• Prioritization of Rafale production for France and export markets in response to geopolitical tensions and government directives.

• Full order backlog for Rafale aircraft, with a focus on timely deliveries despite previous minor delays and ongoing supply chain challenges.

• Continued investment in industrial infrastructure, modernization, and expansion of MRO network in Asia, South America, and North America.

Financial highlights

• Adjusted net sales: €2,538M in H1 2024 (up from €2,295M in H1 2023), with 59% export share.

• Adjusted net income: €442M (margin 17.4%), up from €405M (margin 17.6%) year-over-year; adjusted EPS €5.62.

• Operating income: €170M (margin 6.7%), up from €151M (margin 6.6%) year-over-year.

• Available cash increased to €8,786M as of June 30, 2024, mainly due to advances on Rafale Export contracts.

• Self-financed R&D: €200M in H1 2024, down from €247M in H1 2023, mainly for Falcon 10X.

Outlook and guidance

• 2024 revenue expected to increase versus 2023, targeting ~€6B, with 35 Falcon and 20 Rafale deliveries.

• No specific guidance on future deliveries beyond 2024, but optimism remains for meeting order commitments and capacity to accept new orders.

• Anticipation of increased sales from new Falcon 6X and 10X models, with a strategic shift from older aircraft.