Half Year 2024 Safran SA Earnings Call Transcript
Key Points
- Safran SA (SAFRF) reported a solid EBIT margin of 15.1%, a substantial expansion of 230 basis points.
- The company achieved remarkable cash generation close to EUR1.5 billion.
- Revenue grew by 19% year on year to EUR13 billion, with a 41% increase in recurring operating income.
- Safran SA (SAFRF) signed significant contracts, including the largest ever LEAP-1A engine order from Avolon and helicopter engine support contracts with Chinese group GDAT.
- The company reached important milestones, such as the certification of the LEAP-powered Airbus A321XLR and the successful maiden flight of Ariane 6.
- Safran SA (SAFRF) faced persisting supply chain constraints, leading to a drop in LEAP engine deliveries in Q2.
- There is pressure on cash flow related to some customer advances.
- The company experienced a significant drop in yield at the high-pressure turbine blade supplier, impacting LEAP engine deliveries.
- Aircraft interiors, despite reaching operating breakeven, still have excessive cash consumption due to engineering expenses and working capital requirements.
- The company is cautious about further risks down the road, notably on cash, while navigating a challenging supply chain environment and softer demand.
Good morning, everyone. Thank you for joining us to Safran's first-half 2024 call. I'm here with Pascal. Let us go straight to the key highlights for the quarter.
We post today's solid H1 results. EBIT margin reaching 15.1%, a substantial expansion of 230 basic points with notably aircraft interiors reaching operating breakeven, and a remarkable cash generation close to EUR1.5 billion. Air traffic trends remain strong with at the end of H1, narrow body at 113% of 2019 level and wide body getting close to their 2019 level at 6% below. It supports aftermarket demand across all our businesses.
Civil aftermarket is up by close to 30% boosted by services. Leave deliveries were down in Q2 as we are facing persisting supply chain constraints. Our primary objective is to manage continuously supplier performance in order to meet our customer commitment. We confirmed today our full-year guidance with high confidence in EBIT guidance and some pressure on cash flow related to some customer advances.
On M&A, we signed an
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