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.

• Civil aftermarket revenue rose nearly 30%, driven by services, while Aircraft Interiors reached 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 impacted LEAP engine deliveries, but full-year guidance was reaffirmed.

• Agreement signed to acquire Preligens, an AI leader, to enhance aerospace and defense capabilities.

Financial highlights

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

• EBIT margin expanded to 15.1% (up 2.3 points year-over-year); net income: €1,432 million (+37%).

• 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: €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.

• Cash flow guidance maintained, but timing of advance payments and inventory depletion in H2 are key variables.

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