Safran sees revenue and profitability back-loaded towards year end for FY2021

Safran announced (25-Feb-2021) the following FY2021 outlook:

• Recent slowing of air traffic recovery in several regions has generated uncertainty, notably with a risk of delayed recovery of civil aftermarket;
• Back-end loaded activity and profitability for FY2021;
• Adjusted revenue to decrease in a range in the low single digits in organic terms. If currency is at an estimated spot rate of USD1.22 to the EUR then adjusted revenue expected to decrease a range in the high single digits;
• Adjusted recurring operating margin to increase above 10%, at least a 30pp improvement versus 2H2020;
• Free cash flow generation to stay at least at the same level as in 2020 despite strong uncertainties regarding working capital evolution;
• Original Equipment segment:
  • LEAP deliveries of more than 800;
  • CFM56 deliveries to be halved as expected;
  • Lower deliveries in widebody programme, reflecting 787 production rate adjustments by Boeing and the impact of deferrals of retrofit activities for the Aircraft Interiors segment;
• Services segment:
  • Civil aftermarket estimated growth in the high single digits (in USD terms);
  • Other services revenue to decrease in the low single digits (in organic terms);
• Recurring operating income:
  • Increasing recurring operating margin in Propulsion;
  • Stable recurring operating margin in Aircraft Equipment, Defence and Aerosystems;
  • Recurring operating margin negative but improving throughout the year in Aircraft Interiors;
• Continuing and extending manufacturing footprint optimisation;
• Slight increase in R&D expenses but impact almost neutral on recurring operating income;
• Stability in capex outflows, thanks to the 2020 decrease in capex commitments despite an increase in 2021 commitments (related to strategic priorities and differed investments in 2020). [more - original PR]