Safran 2010 Net Income Rises 29%, Sees Margin of More Than 10% by 2012
Safran SA, Europe’s second-largest maker of aircraft engines, said profit rose 29 percent last year as it benefited from growth in defense. The company forecast its operating margin would top 10 percent by 2012.
The Paris-based company, which builds commercial aircraft engines jointly with General Electric Co. for Airbus SAS A320 and Boeing Co. 737 models, reported adjusted net income of 508 million euros ($700 million), or 1.27 euros a share, compared with a restated 395 million euros, or 99 cents, in 2009. Revenue rose 3 percent to 10.8 billion euros.
Sales were buoyed by 17 percent growth in Safran’s defense businesses, particularly optronics, which included long-range, infrared goggles for the French military and export markets, the company said.
“The year 2010 was more than a time of transition for Safran,” Chief Executive Officer Jean-Paul Herteman said in an e-mailed statement. “It marked our emergence from a challenging period and the group is again on the path for development.”
Safran said it will ask shareholders to approve an increase in the dividend to 50 cents a share, from 38 cents, at the company’s annual meeting on April 21.
The company predicted next year’s sales will increase by at least 5 percent, with operating profit rising at least 20 percent. Those forecasts don’t take into account any contributions from the planned purchases of L-1 Identity Solutions Inc. and SNPE Materiaux Energetiques.
Growth in Demand
The 2011 forecast includes 10 percent to 15 percent growth in demand for commercial aerospace services, strong recovery in demand for aircraft equipment, higher research-and-development spending, and “prudent” assumptions in the short term on deliveries of the Airbus A380, where Safran provides cabling, and Boeing’s 787, for which Safran provides the landing gear.
The company said its operating profit margin -- 8.2 percent in 2010 -- can rise to more than 10 percent by 2012 with more favorable exchange rates, potential growth in services for aerospace products, development of security services, and the global recovery in demand for aircraft engines and equipment.
Results are adjusted for the effect of re-evaluating currency hedges and purchase-price allocations, as well as accounting for assets and liabilities in acquisitions. Safran said 2009 results were restated to reflect changes in definition and presentation of adjusted data as of June 30, 2010.
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