Safran (SAF) Q3 2024 TU earnings summary

Executive summary

• Revenue grew 17.4% in the first nine months of 2024, with Q3 revenue up 14% year-over-year, driven by strong services and a 26.2% increase in civil aftermarket in USD.

• Full-year 2024 revenue guidance updated to EUR 27.1 billion, with recurring operating income outlook raised to EUR 4.1 billion.

• Supply chain bottlenecks, especially in LEAP engine deliveries, impacted original equipment sales and narrowbody OE deliveries.

• Major business wins include VietJet Air's order for over 400 LEAP-1B engines, new defense contracts in Serbia, India, and Korea, and Arrano 1A helicopter engine certification in China.

• Portfolio expanded with the completed acquisition of Preligens (AI technology) and announced acquisition of CRT (MRO), closing expected by end of 2024.

Financial highlights

• Q3 2024 revenue reached EUR 6.6 billion, up 14% year-over-year; 9M 2024 revenue at EUR 19.686 billion, up 17.4% year-over-year.

• Civil aftermarket revenue up 20.5% in Q3 (USD), with LEAP and CFM56 spare parts as key drivers.

• Equipment & Defense Q3 revenue up 16.3% to EUR 2.5 billion; Aircraft Interiors Q3 revenue up 28% to EUR 771 million.

• Organic revenue growth in Q3 was 13.8%, with EUR 800 million incremental revenue year-over-year.

• Services accounted for 65.9% of Propulsion Q3 revenue and 40.4% of Equipment & Defense.

Outlook and guidance

• 2024 revenue guidance revised to EUR 27.1 billion (from EUR 27.4 billion); EBIT forecast raised to EUR 4.1 billion.

• Free cash flow guidance maintained at EUR 3 billion, with improved confidence due to advance payments and stable inventories.

• LEAP engine deliveries expected to be down 10% in 2024, reflecting ongoing supply chain issues.

• Civil aftermarket revenue in USD to rise mid-twenties percent.

• Cash forecast remains subject to customer advances and inventory management.