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Safran managed strong Q3 growth and delivered solid sales figures, supported by its capacity to increase prices coupled with the strong momentum in the aftermarket. The company nonetheless left its FY23 guidance unchanged to reflect the impact of lower-than-expected LEAP engine sales, an increasing share of LEAP engines in the aftermarket and headwinds from raw material inflation.
Companies: Safran (SAF:EPA)Safran SA (SAF:PAR)
AlphaValue
Safran delivered good but below consensus H1 figures supported by a strong commercial recovery. Revenues grew by 28% and recurring operating income by 33% but, due to the ongoing weakness in the Interiors business, the group’s margin of 12.8% was a miss compared to 13.4% expected. However, the company raised FY23 guidance, thanks to the weakness in the USD, and announced a €1bn share buy-back programme to be completed by the end of 2025.
Safran provided a favourable trading update with Q1 revenues at €5.3bn, +29.4% yoy. Growth was mainly fuelled by the Propulsion (+34.9% yoy) and Aircraft Interiors (+37.7% yoy) activities. However, despite the strong performance this quarter, Safran has not upgraded its FY23 guidance, partly because of the increasing share of LEAP contracts on the top line.
Safran published FY results in line with consensus. Both adj revenue €19,035m (+25% yoy) and recurring operating income €2,408m (+33% yoy) stood 1% above the consensus. On an organic basis, 2022 revenue increased by 15.8%, supported by strong spare parts sales and aftermarket services across all the segments, thanks to the air traffic recovery in the past year. FCF was €2.7bn, exceeding expectations, supported by customer advance payments notably relating to the Rafael and LEAP.
Safran managed strong Q3 growth and delivered solid sales and FCF figures. Its capacity to increase prices coupled with the required additional content in the aftermarket led to an increase to the company’s sales and FCF guidance. On the margins side, we see several headwinds that could impact the business in the coming quarters. But overall, a strong performance.
Safran delivered a solid beat and upgraded guidance. However, the beat was mainly linked to a strong FX effect and prepayments associated with the Rafales contracts. In terms of operations, despite the slower than expected deliveries of its engines linked to production delays, the aftermarket activities were stronger than anticipated and offset this headwind. Safran is well positioned to benefit from the air traffic recovery.
Companies: Safran SA (SAF:PAR)Safran SA (0IU8:LON)
Safran has proved it can navigate bad weather. Despite a damaged supply chain due to the Ukraine war, China air traffic at its lows and cost increases, Safran has reiterated its FY22 guidance and is confident that 2023 will reach 2019 levels. However, there are some worrying headwinds that could see thinner margins.
Safran published results which were globally in line with consensus on all metrics. The positive surprise came from its FCF generation, which has been high driven by a positive working capital linked to prepayments of the recent massive Rafales contracts and low capex. Safran would have been well set for growth, if it weren’t for Russia.
At its CMD, Safran revealed its technological roadmap up to 2025 as well as its new financial targets up to 2025. Although the sales CAGR growth of 10% is below the market’s expectations and our estimates, we believe that Safran is still well set to surf on the recovery of aviation, with limited short-term catalysts but strong fundamentals.
Safran published a strong set of Q3 results driven by growth in all its segments. The biggest driver was Aerospace propulsion due to strong sales of LEAP and the aftermarket. As a result, the guidance has been adjusted upwards in terms of sales and FCF.
Safran has published mediocre results with no surprises. Revenues and profits are in line with consensus in all segments, with a narrow-body ASK still lagging the 2019 levels at 60%. Safran is betting on serious cost management to mitigate its losses.
The impressive decline in sales yoy was expected, as the first quarter of 2020 was not impacted by the pandemic. Guidance remains unchanged, in a highly unstable environment.
Safran’s FY 20 result beat estimates. However, the guidance is a clear miss compared to both our estimates and the consensus. The good momentum seen in Q4 20 is currently wiped out by the spread of variants of Coronavirus as well as the easing pace of recovery in China.
Safran’s third-quarter revenue was in line with market expectations. Despite a still-challenging environment, activity saw a modest rebound in Q3. Thanks to the rapid adaptation of the company to its new environment and the effective implementation of the adaptation plan, FY20 guidance was maintained.
Companies: Safran SA
Safran posted H1 20 results above consensus with, notably, a better than expected operational performance and good FCF generation. Management also gave new 2020 targets, broadly in line with the current Street expectations as regards revenues and recurring operating margin, while the statement about positive FCF generation in H2 was reassuring.
Research Tree provides access to ongoing research coverage, media content and regulatory news on Safran SA. We currently have 83 research reports from 5 professional analysts.
The FY24 year-end update is very upbeat signalling trading being materially ahead of expectations, with a better-than-expected profit out turn and stronger cash generation. It continues to strengthen margins through efficiencies and investment in modern equipment. The order book remains close to record levels providing a robust view of future forecasts. In FY24E we upgrade EPS by 11% and in FY25E a significant upgrade of 27.6%. It looks capable of declaring a dividend in FY25 as well as manageme
Companies: Renold plc
Cavendish
FY23 results show very strong growth over FY22, driven by strong Structural Steel activity, with results slightly ahead of upgraded profit expectations, while stronger than expected cash flow resulted in an unexpectedly generous dividend of 33p (offering a FY23 yield of 7.0%). The group now has net cash of £22.1m and is debt free and is therefore in a strong position for potential M&A activity. Following the recent £90m of new orders to increase the order book to record levels we conservatively
Companies: Billington Holdings Plc
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Plant Health Care announced it has signed a distribution agreement with AMVAC, an American Vanguard Company, to support commercialisation of novel fertiliser products incorporating Plant Health Care's Harpinαβ in China starting in 2024. The novel product combines Harpinαβ technology with an AMVAC fertiliser and is expected to help growers improve crop quality and yield as part of an integrated and environmentally responsible crop production programme. AMVAC continues to evaluate Plant Health Car
Companies: Plant Health Care PLC
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Canaccord Genuity
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SP Angel
Acquisitions have been an important element of Severfield management’s growth strategy, with the aim of adding new products, sectors and regions to what we have identified as exciting long-term organic opportunities. In this Spotlight report, we focus on the group’s targeted M&A approach, highlighting three significant deals.
Companies: Severfield Plc
Progressive Equity Research
Another Good Year of Diversified Growth with More to Come in 2024 CCapital have released their Q1 operating results. Overall, revenue has come in slightly lower than expected at $80.2m vs TamE of $85.9m but is largely tracking in line with our FY24 annual estimate and we note the company has maintained guidance. Drilling revenue for this quarter was impacted by a fall in utilisaztion rates as well as general remobilisation geographically but we expect a strong recovery throughout the year as k
Companies: Capital Limited
Tamesis Partners
Severfield’s trading update indicates that FY23 results are expected to slightly exceed market expectations and the company ends the year with a record UK and Europe order book. Furthermore, with a positive trading outlook and net debt coming in lower than expected, Severfield has announced a £10m share buyback, highlighting the cash-generative nature of the company and management’s confidence in its position. The stock trades on an FY25 P/E of less than 6x and yields 7%, which we believe appear
Edison
Invinity’s update on discussions with strategic investors reveals interest from multiple parties. While this has slightly delayed finalising an agreement it increases the potential for a better outcome. Although details are unknown at this stage, we think there is enough in the statement to be comfortable that any agreements will be consistent with the company’s strategy of growing market share in core markets and using a licencing and royalty model in other markets.
Companies: Invinity Energy Systems PLC
Longspur Clean Energy
Liberum
Severfield’s full-year results to March will be ‘slightly above’ the Board’s expectations, according to today’s trading update, with net debt significantly better. We maintain our PBT estimates for both forecast years, which are ahead of consensus, but reduce our net debt for FY24E. Record orders were boosted by the steel specialist’s European operations, after last year’s Voortman acquisition, while the Indian JV has seen ‘another step up in profitability’. The group has also launched its first
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