Safran reports excellent first half to 2019 – FY outlook gets major upgrade

Safran S.A., the French multinational aircraft engine, rocket engine, aerospace component and defense company, has reported better-than-expected results for the first six months of 2019. Commenting on the results, Safran CEO Philippe Petitcolin said: “H1 results have confirmed the trajectory of vigorous growth observed in Q1, with very strong revenue and profitability increase trending above initial full-year guidance across all divisions. The CFM56/LEAP transition is well on track despite an uncertain context. We target to manufacture around 1,800 LEAP engines at the end of 2019, with LEAP-1B deliveries depending on our client needs. The impact of the 737 MAX grounding on Safran free cash flow is a timing issue and should reverse in the following quarters.”

Safran reported revenue at €12,102 million, up 27.3% on a reported basis and up 14.2% on an organic basis. Recurring operating income was €1,883 million up 35.9% on a reported basis and up 34.6% on an organic basis. Operating margin improvements across all divisions, 20.8% (+180bp) in Propulsion, 12.9% (+100bp) in Aircraft Equipment, Defense and Aerosystems and 5.2% (+190bp) in Aircraft Interiors. As a result, Group operating margin improvement, 15.6% (+100bp). Free cash flow generation at €1,177 million, 63% of recurring operating income despite the Boeing 737 MAX grounding.

Safran upgraded 2019 revenue and recurring operating income outlook: Based on an assumption of return to service for Boeing 737MAX in Q4, free cash flow to recurring operating income is expected to be in the range 50% to 55%

Consolidated revenue was €12,315 million. Consolidated recurring operating income at €1,877 million. Consolidated profit from operations at €1,909 million. Consolidated profit for the period attributable to owners of the parent at €1,432 million. Free cash flow at €1,177 million. (€1.00 = US$1.10 at time of publication.)

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