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• Revenue: EUR27.3 billion, up 18% year-over-year.

• Recurring Operating Profit: EUR4.1 billion, up 30%.

• Operating Margin: Expanded by 150 basis points to 15.1%.

• Free Cash Flow: EUR3.2 billion.

• Dividend Proposal: EUR2.90 per share, up 32% from last year.

• Net Income: EUR3.1 billion, representing EUR7.37 per share, up 52%.

• Propulsion Revenue: EUR13.7 billion, up 15%.

• Equipment & Defense Sales: EUR10.2 billion, up 17.7%.

• Aircraft Interiors Sales: EUR3 billion, up 25.2%.

• Net Cash Position: EUR1.7 billion at the end of 2024.

• Share Repurchase: 6.5 million shares repurchased for EUR1.3 billion.

• Warning! GuruFocus has detected 2 Warning Sign with BOM:509631.

Release Date: February 14, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Safran SA (SAFRF) achieved record levels in revenues, profits, and cash flows for 2024, with a significant 18% revenue growth to EUR27.3 billion.

• The company improved its operating margin by 150 basis points, reaching 15.1%, demonstrating strong operational excellence.

• Safran SA (SAFRF) completed the acquisition of CRT, a US MRO leader, and divested its 50% share of Roxel, indicating strategic portfolio management.

• The LEAP-1A engine achieved FAA and EASA certification for a new high-pressure turbine durability kit, enhancing its durability and profitability.

• Safran SA (SAFRF) is on track with its sustainability goals, dedicating 88% of its EUR700 million research and technology budget to environmental efficiency and increasing its EcoVadis rating to 65 out of 100.

Negative Points

• Original Equipment (OE) deliveries were down 10% due to supply chain constraints, impacting lead volumes.

• Despite strong aftermarket growth, the company faces ongoing supply chain issues that are expected to persist into 2025.

• The Aircraft Interiors division, although back to profitability, is still 5% below the record levels of 2019.

• The company is exposed to potential tariff impacts due to its global supply chain, particularly concerning parts crossing borders between the US, Mexico, and Canada.

• Safran SA (SAFRF) faces challenges in managing inventory and customer advance payments amidst a volatile market environment.

Q & A Highlights

Q: Can you provide more details on the revised spares guidance and what has changed from the previous outlook? A: Olivier Andries, CEO: We have slightly revised our guidance for spare parts, increasing the volume of shop visits and engine inductions. However, our assumptions regarding scope and pricing remain unchanged.

Q: Given the strong cash flow performance in 2024, how does this affect your long-term free cash flow guidance? A: Pascal Bantegnie, CFO: We exceeded our expectations for free cash flow in 2024 and have raised our 2025 guidance. While our cumulative cash guidance of EUR15 billion to EUR17 billion may seem conservative, we prefer to proceed cautiously due to various moving parts, such as LEAP engine deliveries and supply chain constraints.