Safran revenue rises 18.1% year on year in Q1 2024

Safran has reported a rise in revenue of €6.2bn ($6.55bn) for the full year 2023, with “double-digit revenue growth in all business and civil aftermarket benefitting from the continued good dynamics in air traffic and an increasing contribution of CFM flight hour contracts,” highlighted CEO Olivier Andriès. However, although LEAP engine deliveries remain stable, the company has revised its CFM growth projections from 20%-25% to 10%-15%. The propulsion business sector increased by 15.4% in the quarter thanks to strong civil aftermarket activity (up 27.3% in revenue), with Safran noting that ‘this strong growth came in particular from LTSA [long term service agreement] from CFM56 and LEAP engines, a trend that should subside from the second quarter onward’. Equipment and defence original equipment sales also registered a 26.7% increase year-over-year, with volumes up for landing gears on the A320neo, A350 and 787, as well as power and wiring, avionics and engine nacelles. Although aircraft and interiors revenues increased by 23.8%, they still remained 10% below 2019 levels. Despite the segment’s sales being primarily driven by seat sales, business class seat deliveries were down to 242 units from 324 in Q1 2023. Leap engine deliveries were stable at 367, down from 366 units in Q1 2023, ‘reflecting the soft start of the year of aircraft production’. CFM56 engines were also down 20% year-on-year from 15 to 12. Electrical systems deliveries were also impacted by lower 737 MAX shipments. Safran expects its revenue for the full year 2024 to be in the region of €27.4bn ($29.4bn) with a free cash flow of around €3bn ($3.22bn), subject to payment schedule of some advance payments. This assumes a rise of 10%-15% of LEAP engine deliveries, down from a previous expectation of 20%-25%. Depending on market conditions and shareholder approval, Safran is looking to complete its €141 million ($151 million) share buyback tranche in 2024, with a proposed maximum repurchase price of €400 ($429) per share. A $1bn share buyback for cancellation will subsequently be executed between 2024 and 2025.