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Safran SA: Company Strategy & Performance Analysis

Safran SA: Company Strategy & Performance Analysis

Summary

Safran S.A. (Safran) is a French multinational aircraft engine, rocket engine, aerospace-component, defense, and security company, formed by the merger between the aircraft and rocket engine manufacturer and aerospace component manufacturer group SNECMA and the security company SAGEM in 2005. The products developed by the company include helicopter turbines, mechanical, hydro-mechanical and electromechanical equipment for the aeronautics industry, military avionics and aeronautic system engines and parts for civil and military aircraft, defense and security equipment, navigation equipment, optronic systems, biometric identification systems and secure transaction terminals.

The company leverages on its strong service portfolio to drive revenue. It’s offering includes shop maintenance, on-site maintenance, repairs/spares parts, asset management, and consulting services. The company’s aircraft engines offers a complete range of engine services, including performance restoration, replacement of life-limited parts, and inspection and maintenance of the entire engine. It also offers components and subassemblies. The company's strong service offering enabled it to drive the MRO revenue.

MarketLine Premium’s company strategy reports provide in-depth coverage of the performance and strategies of the world’s leading MRO companies. The report details company operations in key geographies and offers a comprehensive analysis of each firm’s growth strategy and financial performance. The reports benchmark company performance via key indicators, including order, order backlog, operating expense, operating income, net income, and MRO revenue.

Key Highlights

Order backlog to drive future growth

Safran S.A posted strong order backlog of US$69.2 billion in 2016, as compared to US$65.2 billion in 2015. The backlog increased at 6.1% basis in 2016 despite a challenging market. The overall backlog (CFM56 + LEAP) represents more than 13,800 engines at December 31, 2016. The LEAP engine reported 1,801 firm orders and purchase commitments in 2016. The backlog for LEAP stood at 11,563 orders and purchase commitments at the end of the year for the A320neo, Boeing 737 MAX and COMAC C919 programs.

MRO service portfolio enables the company to support revenue

In 2016, the MRO revenues from the Aircraft equipment segment increased at a growth of 10.3% from US$1,639.7 million in 2015 to US$1,808.7 million in 2016. The growth in revenue was attributed to higher CMF fleet in service. Similarly, the MRO revenue from Aerospace Propulsion segment increased at 6.9% from US$3,873.4 million in 2015 to US$4,142.5 in 2016, owing to the increased nacelle service activity.

Increased deliveries of equipments driving aircraft equipment segment

The net sales of Aircraft Equipment segment increased from US$5,487.7 million in FY2015 to US$5,688.1 million in FY2016, an increase of 3.7% over 2015. On an organic basis, the revenue increased by 3.5% and service revenue accounted for 31.8% of sales of the segment’s revenue. OE revenue grew by 1.4%, driven by the delivery of A350 wiring and landing gear shipsets, LEAP nacelles for the A320neos, and wiring and landing gear for the A320ceo and A320neo.

Scope

  • Company Snapshot - Details key indicators and rankings of Safran S.A. in terms of revenue, net income, and operating income.
  • Company SWOT Analysis - Outlines Safran S.A.’s strengths, weaknesses, and opportunities and threats facing the company.
  • Growth Strategies - Provides an overview of Safran S.A.’s corporate goals and strategic initiatives and evaluates their outcomes.
  • Company Performance and Competitive Landscape - Analyses the company’s performance by geographical segment and provides a peer comparison on parameters such as revenue and market share.
  • Key Developments - Showcases Safran S.A.’s recent corporate events and initiatives.
  • ICT Spending Prediction - Details how the company allocates its ICT budget across the core areas of its business, specifically hardware, software, IT services, communications and consulting.
Reasons to buy
  • How does Safran SA rank among its peers in terms of revenue and market share?
  • What are Safran SA’s main growth strategies and how successful has the company been at implementing them?
  • How has the company performed since 2014?
  • How has Safran SA performed in comparison to its main competitors?
  • What are Safran SA’s strengths and weaknesses and what opportunities and threats does it face?


Company Snapshot
Company SWOT Analysis
Growth Strategies
Company Performance
Competitive Landscape
Deals
Key Developments
ICT Spending Predictions
Financial Summary
Appendix

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