Safran is a world leading aerospace company, and its main business consists of making civil aircraft engines. The company also produces other aviation, space and defence equipment. Safran has leading market shares in all such markets.
Stake in Safran
Since 2006, FFP has held a stake of more than 5% in Zodiac Aerospace and was one of its biggest shareholders. Having been at the company’s side for 12 years, FFP supported Zodiac Aerospace’s merger with Safran.
In February 2018, FFP tendered its entire Zodiac Aerospace equity to Safran’s public tender offer. Post merger and having invested a further €31 million in Safran shares, FFP now owns 0.8% of Safran. The shares received from the public offer are preferred shares that must be retained until February 2021.
F&P, a 50/50 joint venture between FFP and Fonds Stratégique de Participations, can appoint one Safran board director and is represented by its chairman Robert Peugeot, who also represents F&P on Safran’s Audit and Risk Management Committee.
2020 update coming soon
Safran reported 2019 adjusted revenue of €24.6 billion, a year-on-year 9.3% like-for-like increase. Adjusted underlying operating profit came in at €3.8 billion (15.5% of revenue), up 24.6%. 2019 free cash flow was €2.0 billion and net debt was €4.1 billion at 31 December 2019.
From April 2019, total production of civil aviation turbojets was hit by a plunge in Boeing 737 Max aircraft production after they were grounded the previous month. As a result, CFM engine (LEAP and CFM56) full year 2019 deliveries edged down to 2,127. However, the CFM56-LEAP transition continued and LEAP engines accounted for 80% of all 2019 deliveries, up from 52% the previous year. LEAP orders and purchase intentions have held up well and order backlog consists of 15,614 engines in total.
Aerospace Propulsion division revenues came to €12.0 billion, up 10.8% like for like. Underlying operating profit totalled €2.5 billion yielding a 20.6% margin.
Aircraft Equipment, Defence & Aerosystems division revenue was €9.3 billion yielding a 13.1% margin.
Finally, the Aircraft Interiors division continued to restructure and posted €3.3 billion revenue, up 8.8% like for like. Underlying operating profit was €188 million and a 5.7% margin, a 2.5bp increase.
2020 update coming soon
2020 operational margin
Total backlog of LEAP engines