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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 84 research reports from 6 professional analysts.
Supreme’s FY24 trading update confirms a record performance in the 12 months to 31 March 2024. Organic revenue and profit growth across all four divisions has driven Group revenue +45% YOY to £225m, with FY24 adj. EBITDA almost doubling to ‘at least £38m’, driving record levels of cash generation. Supreme is actively exploring complementary M&A, supported by a debt free balance sheet. Trading on an undemanding FY25 PE of just 6.7x, with a 3.4% yield, we believe downside risks are more than price
Companies: Supreme PLC
Zeus Capital
Companies: FOG PHC FEN BBSN ELIX
Cavendish
Shore Capital
Companies: MPE TRI VNET BVXP HVO
Vianet has published a positive trading update for FY24 with turnover up 7.6% to £15.18m, a 3.5 percentage point increase in gross margin YoY, and adjusted EBITA ahead of market expectations. Net debt continues to fall and closed FY24 at £1.52m (£2.1m at 30 September 2023), demonstrating strong free cash flow generation, even without the benefit of the £0.9m tax receipt received in 1H24, which augers well for a final dividend. The company reported a new contract with Wilcomatic Wash Systems, the
Companies: Vianet Group plc
Capital Access Group
Companies: James Latham Plc
SP Angel
Vianet’s FY24 trading update shows FY24 revenue +1% ahead of our previous forecast, adjusted EBITA +2% ahead, EFCF and net debt +£0.6m ahead, and a strategic new customer win with prominent forecourt operator Wilcomatic. A robust FY25 pipeline and outlook leads us to reiterate our FY25E forecasts at this point, with the update highlighting: strong progress renewing and winning new customers on 3-5 year contracts as they migrate from 3G to Vianet’s advanced 4G LTE solutions; the successful integr
Headlam Group has laid out an ambitious long-term revenue target of between £900m and £1bn, as it seeks to grow its share of the UK floor coverings distributor market. Despite a challenging backdrop due to the low level of residential housing transactions, management is seeking to expand each of its sales channels: Trade Counters, Larger Customers, Regional Distribution and Europe & Other. The FY23 results reflected the more challenging environment and the group trades at a discount to its long-
Companies: Headlam Group plc
Edison
The focus of Hardman & Co Research is on the nine quoted Infrastructure Investment Companies (IICs) and on the 22 Renewable Energy Infrastructure Funds (REIFs): the stocks analysed are all members of the Association of Investment Companies (AIC). We are updating our publication of January 2023, assessing both the lacklustre share price performances during 2023 and the key issues, including interest rates, inflation and power prices. As a 31-strong group, its combined market capitalisation is no
Companies: AEIT ROOF DGI9 INPP GSF SEIT USFP HICL ORIT BSIF TRIG NESF SEQI HEIT GRP GCP FSFL 3IN AERI PINT RNEW BBGI GSEO DORE TENT GRID CORD HGEN AEET
Hardman & Co
Norcros has announced the sale of its Johnson Tiles UK business to the current management team for a consideration of £1.0m, with a further modest earnout based on the equity value of the business, both payable in April 2028.
Companies: Norcros plc
Renewi’s FY24 trading update was in line with management’s expectations and its improved cash generation is reassuring for investors. Attention is now likely to turn the strategic review of the UK Municipals with management stating that they remain on track to update markets by the end of June. This could lead to an exit of key liabilities and leave Renewi as an attractive circular economy investment with strong market positions and organic growth plans, which should assist in generating value,
Companies: Renewi Plc
Companies: CLA STM GLN FXPO KAV GWMO CEY BHP THX EEE
24th April 2024 * A corporate client of Hybridan LLP ** Arranged by type of listing and date of announcement *** Alphabetically arranged **** Potential means Intention to Float (ITF) has been announced Dish of the day Admissions: Delistings: What’s baking in the oven? ** Potential**** Initial Public Offerings: Reverse Takeovers: 16 April 2024: Electric Guitar (ELEG.L) Concurrent with its Admission to trading on AIM, Electric Guitar is proposing to acquire the entire issued share capital of 3radi
Companies: FTC AGL SRT SOU G4M AOM SUP
Hybridan
Companies: Ilika plc
Liberum
Companies: Gattaca plc
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