France’s Safran group anticipates “significant” further growth in revenues and profits for 2015, after announcing positive 2014 results largely built on booming sales by its primary customers, Airbus and Boeing. At a February 25 press conference in Paris, Safran announced that revenues for last year grew by 6.9 percent to €15.4 billion ($17.4 billion) while adjusted net income climbed by 4.6 percent to €1.2 billion ($1.4 billion). The group’s adjusted recurring operating income grew by 17.4 percent to €2.1 billion ($2.4 billion).
The bedrock for much of this strong financial performance is the CFM International aero engines joint venture between Safran subsidiary Snecma and GE Aviation. In its 40th anniversary year, CFM achieved orders for 4,244 turbofans valued at more than $50 billion at list prices (representing a 63-percent increase on 2013). This tally included 1,527 of the existing CFM56 engines and 2,717 of the new Leap engines selected to power the competing Airbus A320neo and Boeing 737 Max narrowbodies, as well as the C919 being developed by Comac of China.
“It is a pleasure to be leaving the group in such a good state and with such solid prospects,” said Jean-Paul Herteman, who is set to retire as the group’s chairman and CEO on April 23. He will be replaced by Ross McInnes as chairman, with Philippe Petitcolin having been named the next CEO.
According to Herteman, the backlog of Leap orders now stands at more than 8,500 engines and CFM expects that by 2019 it will have completed production of legacy CFM56 turbofans. Beyond that, Safran expects the CFM56s to continue to feed the group’s bottom line from maintenance activities in support of a massive installed base. Safran’s revenues from customer service and support increased by 11.3 percent in 2014.
Safran’s results were further boosted by strong sales in activities such as landing gear manufacturing. Another growth area for the future should come from Snecma’s joint role with GE in providing the GE9X engine for Boeing’s new 777X twinjet. Meanwhile, Safran subsidiary Aircelle will be providing engine exhaust systems for the engines. Separately, Rolls-Royce selected Aircelle to provide nacelles for the Trent 700 engines it is supplying for the new A330neo.
Meanwhile, Safran engineers are embarking on the next phase of flight testing for the new Silvercrest engine selected by Dassault for its new Falcon 5X jet and by Textron Aviation for its Citation Longitude. The company declined to say how many examples of the Silvercrest these airframers have ordered so far.
During 2014, Safran invested almost €2 billion ($2.3 billion) in research and development and €700 million ($793 million) in opening new manufacturing facilities. With peak levels of investment in both the Leap and Silvercrest engine programs now reached, spending levels in these areas should be lower in 2015.