Safran's profit jumped in 2023, driven by the ramp-up in production imposed by aircraft manufacturers and profitable service activities, but the group sees its ambitions slowed down by the difficulties of certain suppliers to keep up.
The equipment and engine manufacturer's net profit jumped 72% in 2023, to 2.03 billion euros in adjusted data, according to a press release published Thursday.
In published data, it even stands at 3.44 billion euros, with the French group notably reducing in its adjustments more than 1.6 billion euros linked to the depreciation of the value of its foreign exchange derivatives portfolio.
Its turnover increased by 21.9%, to 23.2 billion euros.
“These remarkable results accompany a year of strong recovery in all of our markets, including very strong commercial momentum in civil aviation
,” said Safran CEO Olivier Andriès during a conference. telephone.
Global air traffic for medium-haul, Safran's main market, has exceeded its pre-Covid level.
Service activity for civil engines has thus jumped by a third: as their planes fly more, companies have a greater need for spare parts and maintenance operations.
Safran is counting on further growth
of “around 20% of turnover”
in 2024 for this activity.
The increased speed of aircraft manufacturers to meet the needs of companies to renew their fleet with aircraft that consume less, and therefore emit less CO2, and to prepare for the doubling of global air traffic expected by 2050, also benefits Safran for
“
original equipment
”
activities
, that is to say the production of new engines.
The engine manufacturer thus produced, in 2023, 1,570 Leap engines, which equip all Boeing 737 MAX, and 60% of Airbus A320 neo.
This is 38% more than the previous year.
However, Safran planned to produce 1,700 examples of its flagship engine at the start of 2023 and had to revise its objective of between 1,600 and 1,650 engines in the fall.
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Titanium and steel
“This reflects persistent difficulties in the supply chain
,” said Olivier Andriès.
“We thought that things would perhaps ease during the year but we still remain in a situation which remains very difficult and which will continue in 2024
,” according to him.
This is due to difficulties in supplying certain raw materials, notably titanium and steel, which are slowing down the production of forging and foundry parts for engines.
“Recruitment issues also remain difficult for a number of our suppliers who are small or medium-sized companies or for American suppliers
,” he explained.
For this year, Safran is counting on an increase
“between 20% and 25%”
in deliveries of Leap engines, therefore below the 2,000 deliveries that the group expected in 2020 before the pandemic torpedoed the aeronautical sector.
To do this, it relies on ramp-up projections from Boeing, which currently produces nearly 38 B737 MAXs per month and intends to manufacture 50 by 2025-2026, and from Airbus, which plans to go from 48 to 75 monthly A320s by 2026. The decision of the FAA, the American civil aviation regulatory agency, not to authorize a ramp-up of Boeing until further notice after new failures at the aircraft manufacturer could however darken this perspective.
“Depending on the date of the lifting of the suspension, there will potentially be an impact on deliveries of Leap-1B (engine model for the MAX, editor's note) but I do not know how to quantify it at today's time. 'today'
, recognized Olivier Andriès.
The group's other divisions are also growing.
The “Equipment and Defense”
activity
grew by 17.3% and that of
“Aircraft Interiors”
(cabins, seats and on-board entertainment) jumped by a third and is on the way to becoming profitable again.
For 2024, Safran expects a turnover of around 27.4 billion euros, a current operating profit
“close to 4 billion euros”
and a free cash flow
“of around 3 billion euros »
.