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Safran publishes first-half results
On July 28, 2017, Safran published its first-half results, including adjusted revenue of more than 8 billion euros, an increase of 2.4% over the previous year on an organic basis.
The Aerospace Propulsion business posted revenue for the period of 4,691 million euros, an increase of 0.9% on an organic basis, driven by service business for both civil and military programs. The commercial engine service business saw an 8.4% increase in revenue (in US dollars) compared with the first half of 2016, primarily due to spare parts sales and services for the CFM56 and GE90 engines.
At the Paris Air Show this summer, CFM recorded orders for 1,063 engines (including 980 LEAP), along with LEAP and CFM56 service contracts, worth a total of US$18.8 billion at list price. As of June 30, 2017, the LEAP order book (including commitments) stood at 13,113 engines.
The ramp-up in LEAP production is continuing. A total of 147 engines were sold to Airbus and Boeing during the first half of 2017, compared with 11 engines a year earlier.
The Aircraft Equipment activities generated revenue of 2,715 million euros, a 4.2% increase over the first half of 2016 on an organic basis. Deliveries of electrical systems and landing gear for the Airbus A350 showed strong growth, while, as expected, 21 A380 nacelles were delivered, versus 56 during the same period a year ago. Several new contracts for carbon brakes were signed, in particular with Lion Air for 222 Boeing 737 MAX, Norwegian for 107 Boeing 737 MAX, Aeromexico for 60 Boeing 737 MAX, IAG for 74 A320neo, Vueling for 42 A320neo and Singapore Airlines for 47 A350 jetliners.
The Defense business generated revenue of 624 million euros, an increase of 5.8% on an organic basis, driven by higher sales of military products. An increase in sales of guidance systems, drones and electro-optical equipment, especially in export markets, offset a decline in avionics business, which was mainly impacted by lower demand for helicopter flight control systems.
Given this performance, Safran confirms all its objectives for the full year 2017. The Group forecasts a 2 to 3% rise in revenue for 2017, recurring operating income similar to that of 2016, and cash flow equal to at least 45% of adjusted recurring operating income, an element of uncertainty being the rhythm of payments by state-clients.
Safran finalized the divestment of its Detection business on April 7th, and its Identity & Security business on May 31, 2017, completing the strategic recentering announced during Capital Markets Day 2016. These divestments have generated income of 3.1 billion euros, with a capital gain of 766 million euros. Safran now operates exclusively in the Aerospace & Defense sector, and is focused on its own goals of strong growth and high profitability.
Safran and Zodiac Aerospace announced the new terms for their planned merger on May 24, 2017. Pending residency conditions, investors may find additional information on the Safran website: www.safran-group.com.