Safran SA - ADR

Record Financial Performance in 2024: Safran reported revenues of EUR 27.3 billion, an 18% increase year-over-year (YOY), with a recurring operating profit of EUR 4.1 billion, up 30%. The recurring operating margin reached 15.1%, reflecting a 150 basis point expansion, significantly driven by strong aftermarket activity, particularly a 25% growth in the civil aftermarket.

Positive Spare Parts Outlook: Guidance for spare parts growth has been upgraded to "high single-digit plus," suggesting potential for double-digit growth in 2025. This is attributed to increased shop visits and engine inductions, with mid-single-digit growth expected for shop visits and around 2,300 expected in 2025.

Challenges in Original Equipment (OE) Deliveries: OE deliveries for LEAP engines are projected to be down 10% in 2024 due to supply chain constraints, though Equipment & Defense and Aircraft Interiors segments are experiencing growth. The supply chain remains a risk as pressure persists, complicating ramp-up plans, especially for LEAP engines.