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21 June 2022

Safran

Author: Thomas J. Zoretich , Drawn From: Defense & Aerospace Companies Briefing

  • The pandemic driven decline in commercial aerospace had a dramatic impact on Safran’s operations and financial performance. The pandemic and delivery suspension of the 737 MAX cut revenues by almost one-third in 2020. By the close of 2021 total company revenues declined even further, resulting in a 38% drop from pre-pandemic 2019 to end of year 2021.
  • Profitability was even harder hit. Operating Income fell by more than 50% over the two year period, 2019-2021 Margins were down significantly as a result. Management worked aggressively to lessen the overall decline. As the company comes out of the pandemic, management will continue to reposition itself, continue its cost-cutting pro-ram, and streamline its industrial footprint.
  • The early evidence of the rebound is apparent, as seen in Safran’s first quarter 2022 financial report. After two years of declining revenues, the company reported significant growth at the end of its first quarter 2022.
  • For the first quarter, company revenues totaled €4.1 billion, 22% higher than the €3.3 billion during the first quarter of 2021. All three business segments reported strong increases, Aerospace Propulsion up 24%, Equipment and Defense up 17% and Aircraft Interiors up 31%.
  • For the full year 2022, management is projecting that revenues will be between €18-18.2 billion, with and operating margin of 13%. At this level, revenues will be up appreciably from 2021’s €15.3 billion, but still down from the pre-pandemic level of €24.6 billion in 2019.

About the Author

Thomas J. Zoretich

Thomas J. Zoretich

Tom is Chief Economist and Director of Corporate Analysis at Teal Group. He provides strategic and market analysis for clients in commercial aerospace and defense, including major U.S. and European prime contractors. He writes and edits Teal Group's Defense and Aerospace Companies Briefing, which analyzes the performance, outlook, and strategies of 50 aerospace and defense companies in the United States, Europe, Asia and South America. In addition, he is co-author of Teal's annual World Military Unmanned Aerial Systems: Market Profile and Forecast and World Civil UAS Market Profile and Forecast.

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