(Update: details on Leap engines and delivery delays, growth in service activities for civil engines, proposed renewal of management mandates, share price)
PARIS (Agefi-Dow Jones)–Engine and aerospace maker Safran on Friday raised its outlook for the current fiscal year after a surge in third-quarter revenue, despite ongoing supply chain disruptions.
The manufacturer is now targeting adjusted revenue of around 19 billion euros this year, compared to a previous range of 18.2 billion to 18.4 billion euros, as well as free cash flow above 2.4 billion euros, against a forecast of 2.4 billion euros previously.
Safran also anticipates a current operating margin of around 12.6% this year, in order to take into account the new euro-dollar spot exchange rate of 1.05 and the return of 100% of the profit-sharing to French employees. At the initial exchange rate of 1.18, Safran specified that this margin would be slightly higher than 13%, against a previous objective of around 13%.
Safran delivered these outlooks during its third quarter business update. Over the period from July to September, deliveries of Leap engines reached 347 units, bringing the number of deliveries to 812 in the first nine months of 2022. This engine, developed within CFM International, a joint venture between Safran and General Electric, equips the A320neo of Airbus and the 737 MAX of Boeing.
“If CFM still delivers below the demand of aircraft manufacturers, this delay in deliveries has stabilized”, commented Olivier Andriès, the general manager of Safran, during a conference call with journalists. The manager expects deliveries “below 1,200 units” in 2022.
Regarding 2023, Olivier Andriès has maintained the delivery target of 2,000 units, even if he recognizes that this will represent a “challenge”.
Revenues supported by the resumption of air traffic
In the third quarter, Safran’s consolidated sales amounted to 5.05 billion euros. In adjusted data, which the group favors for the presentation of its results, turnover amounted to 4.85 billion euros, up 29.9% over one year in published data and 17. 9% on an organic basis compared to the third quarter of 2021.
According to a consensus compiled by FactSet, analysts expected an average turnover of 4.67 billion euros.
Indicator followed by analysts and expressed in dollars, the turnover of the activities of services for civil engines increased by 36% over one year.
“Third quarter revenue benefited from strong air traffic during the summer season and the anticipated purchase of spare parts for CFM56 engines, as well as increased deliveries of Leap engines,” said commented Olivier Andriès, quoted in a press release.
“Strong commercial momentum continues amid continued supply chain disruption and rising inflation which we are managing with an increased focus on pricing and continued focus on operational performance,” added the leader. .
In the first nine months of the year, in adjusted data, Safran’s sales amounted to 13.41 billion euros, up 26.4% year-on-year on a reported basis and 17 .5% on an organic basis compared to the third quarter of 2021.
On the sidelines of this publication, Safran indicated that its board of directors intended to renew Ross McInnes and Olivier Andriès in their respective roles as chairman and chief executive officer, at the end of the 2023 general meeting.
At 12:05 p.m., the Safran share gained 2.3% to 113.60 euros, achieving one of the best performances in the CAC 40, which fell 0.3% at the same time.
-Vincent Alsuar, Agefi-Dow Jones; +33 (0)1 41 27 47 39; [email protected] ed: VAT – VLV
– SAFRAN FINANCIAL COMMUNICATIONS:
https://www.safran-group.com/fr/finance/publications/communiques-financiers/Communiqu%C3%A9s%20financiers
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October 28, 2022 06:06 ET (10:06 GMT)