French aerospace and defence group Safran raised its full-year guidance after first-half revenue rose 19% to €17.6 billion, with strong demand for defence electronics adding to growth across the business.
Recurring operating profit rose 29% to €3.24 billion, taking the adjusted operating margin to a record 18.4%, while free cash flow reached €2.6 billion. Safran’s propulsion business remained the main earnings driver, helped by a 27.9% increase in civil engine spare-parts sales in dollar terms.
Safran raised its full-year recurring operating profit guidance to €6.4 billion-€6.5 billion from €6.1 billion-€6.2 billion, while increasing its free cash flow target to €4.7 billion-€4.9 billion. It now expects revenue growth in the mid-teens, compared with its previous low-to-mid-teens forecast.
Within its Equipment and Defence business, revenue rose 14%, with defence activities including inertial navigation systems, electro-optical sensors and AASM-Hammer precision-guided weapon kits contributing to growth. Safran does not report defence revenue separately. The division’s recurring operating profit rose 29% to €907 million, although this includes its wider aerospace equipment activities.
Chief Executive Olivier Andriès said defence was showing “particularly strong momentum”, adding that the Eurosatory defence exhibition had confirmed the depth of demand that Safran was converting into major wins and partnerships.
Safran is expanding defence production capacity in response to the demand, including a new facility in Germany for navigation and positioning equipment and investment in its French optronics operations. More than 80% of its defence electronics backlog is international, according to the business, highlighting the extent to which the business is benefiting from demand beyond France.
Safran’s defence business remains smaller than its civil aerospace activities, but the company is increasingly investing in defence production capacity as military demand grows.
The results add to a broader trend across Europe’s aerospace and defence sector, where rising military spending is reaching suppliers of the electronics, navigation and weapons systems that underpin larger platforms, alongside the major defence contractors themselves.
Recent earnings stories include: BAE Systems, Leonardo, Hensoldt, Dassault Aviation.
