Safran (SAF) H1 2024 earnings summary

Executive summary

• H1 2024 revenue grew 19% year-over-year to €13,047 million, with recurring operating income up 41% to €1,974 million and EBIT margin at 15.1% of sales, driven by strong aftermarket and services activity; Aircraft Interiors reached operating breakeven.

• 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 is reaffirmed.

• Acquisition agreement signed for Preligens, an AI leader, to enhance group agility and defense/space tech capabilities; closing expected Q3 2024.

• Share buyback program of €1.0 billion launched, with €560 million repurchased in H1 2024.

Financial highlights

• Adjusted revenue: €13,047 million (+19% year-over-year); recurring operating income: €1,974 million (+41%); EBIT margin: 15.1% (+230bps).

• Net income to parent: €1,432 million, up 37%; basic EPS: €3.37; diluted EPS: €3.27.

• Free cash flow: €1,463 million; net cash position: €895 million as of June 30, 2024.

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

• R&D expenses before tax credits: €646 million (5.0% of revenue); capitalized R&D €151 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; civil aftermarket revenue (USD) now expected up mid-twenties percent.

• H2 2024 expected to generate €1.5 billion free cash flow.

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