Safran's revenue and market capitalization

  •   DEHOUI Lionel

Founded in 2005 and based in Paris, Safran is a major French industrial and technological company. It has a strong international presence, particularly in the aerospace and defence sectors. In 2020, the company was not spared the difficulties that affected the entire aeronautical sector due to the coronavirus pandemic. This logically affected its financial performance. Here are the main points to remember about the group's results for the year as a whole and for the first three quarters of the 2021 financial year.  

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Overall performance in 2020

For the full twelve months of fiscal year 2020, Safran reported revenues of €16,498 million. It reported a decline of 33.0% (or €8,142 million) compared to the previous year. On an organic basis, the decline was 32.5%. This underperformance illustrates the decline in business activity in all divisions of the company.

8,767 million, down 27.6% year-on-year. 7,731 million, down 38.3% year-on-year. In the fourth quarter, revenue fell by 32.5% (compared to Q4-2019) to €4,349 million.

For fiscal year 2020, the aircraft engine and equipment manufacturer recorded a current operating profit of €1,686 million. 1,686 million, a decrease of 55.9% compared to the previous year. As for the margin, it stood at 10.2% of turnover, compared with 15.5% a year earlier. In H1 2020, this result amounted to EUR 1,050 million with a margin of 12.0%.

In H2 2020, the company's current operating profit amounted to EUR 636 million. This corresponds to an underlying margin of 8.2%. For the full year 2020, adjusted net income (group share) was €844 million, compared to €2,665 million for FY 2019.

For the full year 2020, Safran generated free cash flow of €1,073 million with €901 million in H1 and €172 million in H2. This free cash flow generation is derived from an operating cash flow of €1,874 million. At the end of December 2020, the company had net debt of €2,792 million, compared to €4,114 million at the same time a year earlier.    

This reduction in debt was driven by free cash flow generation. It was also helped by the fact that no dividend will be paid in 2020 for the 2019 financial year.

 

Results for the first half of 2021

In the first half of 2021, Safran's business continued to be impacted by the Covid-19 pandemic. This logically affected its financial performance during this period. For the first six months of this year as a whole, the group generated adjusted revenues of €6.876 billion. 6.876 billion. This is a year-on-year decline of 21.6% on a reported basis.

On an organic basis, sales were down 17.3% compared to H1-2020. In the second quarter alone, the company's revenues increased by 10% on a like-for-like basis. In H1-2021, the civil engine services business reported a 25.5% decline in revenue. In contrast, it increased by 55% in Q2.

For the first half of 2021, the industrialist recorded an adjusted net profit (group share) of 269 million euros, compared to 501 million euros in H1-2020. 501 million in H1-2020, a year-on-year decline of 46.3%. 659 million in H1-2021, down 30.4% on a reported basis.

On an organic basis, the decline was 29.3%. The decline was due to lower volumes. This was despite savings from the adaptation plan. The current operating margin stood at 9.6% of sales, compared to 10.8% at the same time last year.

In the first half of 2021, the aerospace equipment supplier posted free cash flow generation of €701 million, compared with €901 million in H1-2020.

 

Third quarter 2021 business update

In the third quarter of 2021, the Safran group benefited from the reopening of borders and the recovery in air traffic during the summer to improve its financial performance. Over this period, the company's sales amounted to €3.734 billion, up 10.4% compared to Q3 2021.

On an organic basis, sales were up 11.6% year-on-year. Compared to the second quarter of 2021, sales were up 4.5% on an organic basis. Between July and September, the manufacturer recorded a remarkable recovery in its aerospace propulsion services business.

These grew by 27.8% year-on-year. For their part, the civil engine services activities saw their revenues increase by 43.8% in Q3-2021. Compared to the previous quarter, they increased by 24%. On the other hand, in the first nine months of 2021, Safran's revenues fell. It reached 10.6 billion euros, down 12.7% year-on-year.

 

About Safran's dividend and market capitalisation

The Safran group is one of the companies that pays a coupon to its shareholders. The shareholders held their General Meeting on 26 May 2021. At this meeting, the Board of Directors proposed to pay a dividend of 0.43 euros per share for the year 2020.

In addition, Safran has a strong presence in the financial markets. Safran is one of the most popular shares among investors. The company is listed on the Paris Stock Exchange's Euronext market. It is also included in the French CAC 40 index. At the end of December 2021, its market capitalisation is estimated at more than 40 billion euros.

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