Safran Sa · EURONEXT:SAF

Safran Sa — Safran Sa Ord — H1 2024 Earnings Presentation

28 slides from Safran Sa's earnings presentation, Jul 31, 2024

  1. Slide 1: H1 2024 results

    V1 – 9/07 DRAFT H1 2024 results July 31, 2024 Olivier ANDRIES Chief Executive Officer Pascal BANTEGNIE Chief Financial Officer

  2. Slide 2: Disclaimer & foreword

    Disclaimer & foreword FORWARD-LOOKING STATEMENTS This document contains forward-looking statements relating to Safran, which do not refer to historical facts but refer to expectations based on management’s current views and assumptions and involve known and unknown risks and uncertainties that could

  3. Slide 3: Key highlights

    Key highlights  Solid performance in H1 2024  19% revenue growth  Civil aftermarket +29.9% (in $)  Soft LEAP deliveries in Q2  15.1% EBIT margin, (+230bps), o/w Aircraft Interiors operating breakeven  €1.5bn cash generation  FY 2024 outlook confirmed  Unlocking supply chain constraints  Por

  4. Slide 4: H1 2024 financial performance

    H1 2024 financial performance Adjusted revenue(1) Adjusted recurring operating income(1) Free cash flow generation in €M in €M and margin(2) in €M 1,974 13,047 +41% +19% 1,397 1,463 1,463 10,945 15.1% 12.8% H1 2023 H1 2024 H1 2023 H1 2024 H1 2023 H1 2024 (1) See slide 7 for bridge with consolidated

  5. Slide 5: Business highlights

    Business highlights Skyjacker counter-drone system Gulfstream G700 EIS Maiden flight of Ariane 6 Commercial wins Airbus A321XLR 5 SAFRAN - H1 2024 Results / July 31, 2024 This document and the information therein are the property of Safran. They must not be copied or communicated to a third party wi

  6. Slide 6: H1 2024 Results

    H1 2024 RESULTS S SAFRAN

  7. Slide 7: Consolidated and adjusted income statements

    Consolidated and adjusted income statements Change in Mark-to-Market of instruments hedging future cash flows CURRENCY HEDGING BUSINESS COMBINATIONS Consolidated Adjusted H1 2024 reconciliation (In €M) data Re-measurement Deferred hedging Amortization of intangible PPA impacts – other data assets of

  8. Slide 8: Estimated net exposure ($bn) and FX hedging

    FX Estimated net exposure(2) ($bn)  2024 hedge rate set at $ 1.12 13 13 13 13 12 (1-cent improvement from 2023)  $54.4bn hedge book(1) as of June 2024 ($51.7bn as of March 2024) Spot rate €/$ H1’23 H1’24 2024e 2025e 2026e 2027e 2028e Average spot rate 1,08 1.08 June 30th rate 1,09 1.07 €/$ hedge r

  9. Slide 9: H1 2024 income statement

    H1 2024 income statement (In €M) H1 2023 H1 2024 Revenue 10,945 13,047 +19% Other recurring operating income and expenses (9,609) (11,135) Share in profit from joint ventures 61 62 Recurring operating income 1,397 1,974 +41% % of revenue 12.8% 15.1% Total one-off items (57) (24) Profit from operatio

  10. Slide 10: H1 2024 revenue

    H1 2024 revenue (In €M)  Organic: +18.7%  Strong growth in services (+22%) in all 19.2% divisions  Solid growth in OE (+16%) attributable to Equipment & Defense and Aircraft Interiors 1,043 12,993 6 48 13,047 10,945 1,005  Currency: +0.1%  €/$ spot rate unchanged at 1.08 Organic  Scope: +0.4%

  11. Slide 11: H1 2024 recurring operating income

    H1 2024 recurring operating income (In €M) 41.3%  Recurring operating income up €577M 1,940 1,974 543 35 1,397 (1)  Operating margin up by 230bps 15.1%  Main drivers 12.8% Organic  Growth in services across the board 38.9%  OE ramp-up in Equipment and Aircraft Interiors  Management of overhead

  12. Slide 12: Aerospace Propulsion

    Aerospace Propulsion  Civil engines (In €M) H1 2023 H1 2024 Change Organic Change  OE deliveries  664 LEAP (down 121 units yoy, -15% ; Q1 flat yoy and Q2 -30% yoy) Revenue 5,677 6,461 13.8% 14.0%  High-thrust engines: 91 units (up 8 units vs. H1’23)  Civil aftermarket revenue growth (up 29.9% i

  13. Slide 13: Equipment & Defense

    Equipment & Defense  Equipment (In €M) H1 2023 H1 2024 Change Organic Change  Significant increase in OE volumes  Nacelles (G700, A320neo) Revenue 4,100 5,170 26.1% 23.1%  Landing gears (787, A320neo)  Electrical systems (787, A320neo) Recurring operating income 466 657 191 OE: 26.9%  Avionics

  14. Slide 14: Aircraft Interiors

    Aircraft Interiors  Strong organic revenue growth, but still 14% (In €M) H1 2023 H1 2024 Change Organic Change below H1 2019 revenue Revenue 1,163 1,411 21.3% 26.6%  Cabin Recurring operating income (100) 10 110 OE: 23.5%  Solid growth both in OE and services % of revenue (8.6)% 0.7% 9.3pts Servi

  15. Slide 15: H1 2024 Free Cash Flow

    H1 2024 Free Cash Flow (In €M) H1 2023 H1 2024 Recurring operating income 1,397 1,974 One-off items (57) (24) Stable level with amortization at €542M, Amortization, provisions and depreciation (excl. financial) 610 571 depreciation at €(47)M and provisions at €76M EBITDA 1,950 2,521 Income tax and n

  16. Slide 16: Share repurchase programs and debt management

    Share repurchase programs and debt management  €560M of shares repurchased in H1 2024 (2.9 m shares)  To finalize the hedging of the potential dilution related to the 2028 OCEANEs and for long term incentive plans  Launch of the €1.0 billion share buyback for cancellation to be carried out in 202

  17. Slide 17: H1 2024 net cash evolution

    H1 2024 net cash evolution (In €M) Net cash Net cash at Dec 31, 2023 €1,463M Free Cash Flow at June 30, 2024 S&P: A-, stable outlook 2,360 (140) Change in WC (757) R&D 961 and Capex 895 (171) (965) (193) 374 Dividends(1) M&A Others Cash flow (574) 2027 convertible from ops bonds soft call Net Cash D

  18. Slide 18: FY 2024 Outlook

    FY 2024 OUTLOOK S SAFRAN

  19. Slide 19: FY 2024 outlook confirmed

    FY 2024 outlook confirmed SAFRAN EXPECTS TO ACHIEVE FOR FY 2024(1) (€/$ spot rate of 1.10 and hedge rate of 1.12)  Revenue around €27.4bn  Recurring operating income close to €4.0bn  Free Cash Flow around €3.0bn subject to schedule of some advance payments Watch item: Supply chain production capa

  20. Slide 20: Appendix

    APPENDIX S SAFRAN

  21. Slide 21: Number of products delivered on major aerospace programs

    Number of products delivered on major aerospace programs Number of units delivered H1’23 H1’24 Units % Number of units delivered H1’23 H1’24 Units % LEAP engines 785 664 (121) (15)% A320neo landing gear sets 271 304 33 12% CFM56 engines 24 28 4 17% A320neo nacelles 275 297 22 8% High thrust engines

  22. Slide 22: OE / Services revenue split

    OE / Services revenue split H1 2023 H1 2024 REVENUE Adjusted data (in Euro million) OE Services OE Services Aerospace Propulsion 2,385 3,292 2,431 4,030 % of revenue 42.0% 58.0% 37.6% 62.4% Equipment & Defense 2,426 1,674 3,152 2,018 % of revenue 59.2% 40.8% 61.0% 39.0% Aircraft Interiors 763(1) 400

  23. Slide 23: H1 2024: Research & Development

    H1 2024: Research & Development (In €M) H1 2023 H1 2024 Change Total R&D (862) (936) (74)  R&D expenses at €646M in H1 2024 R&D sold to customers 287 290 3  R&T self-funded expenses at €333M (€262M in H1 2023) up 27%, focused on decarbonation (RISE program) R&D expenses (575) (646) (71)  Developm

  24. Slide 24: H1 2024: Research & Development by activity

    H1 2024: Research & Development by activity Aerospace Equipment & Aircraft (In €M) H1 2024 Propulsion Defense Interiors R&D expenses (646) (296) (251) (99) as a % of revenue 5.0% 4.6% 4.9% 7.0% Tax credit 88 37 48 3 R&D expenses after tax credit (558) (259) (203) (96) Gross capitalized R&D 151 45 58

  25. Slide 25: Balance sheet as of June 30, 2024

    Balance sheet as of June 30, 2024 (In €M) Dec 31, 2023 June 30, 2024 Goodwill 4,706 4,687 Tangible & Intangible assets and right of use 12,533 12,989 Investments in joint ventures and associates 1,928 1,923 Other non current assets 2,126 3,240 Operating Working Capital (3,450) (3,256) Net cash (debt

  26. Slide 26: Liquidity as of June 30, 2024

    Liquidity as of June 30, 2024  Net cash positive June 30, 2024  Cash and cash equivalent of €5,699 million (down €(977) million vs. December 31, 2023) Undrawn revolving credit facility €2,000M  On February 9, 2024, Safran reimbursed with cash in hand the $505 million matured last tranche of USPP

  27. Slide 27: Definitions

    Definitions  Civil aftermarket (expressed in $)  This non-accounting indicator (non-audited) comprises spares and MRO (Maintenance, Repair & Overhaul) revenue for all civil aircraft engines for Safran Aircraft Engines and its subsidiaries and reflects the Group’s performance in civil aircraft engi

  28. Slide 28: SAFRAN - H1 2024 Results / July 31, 2024

    28 SAFRAN - H1 2024 Results / July 31, 2024 This document and the information therein are the property of Safran. They must not be copied or communicated to a third party without the prior written authorization of Safran

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