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Investing.com -- Safran (EPA:SAF) shares rose more than 3% on Thursday after the company raised its full-year guidance and reported first-half results that beat expectations, driven by strong aftermarket sales in its propulsion business.
Adjusted EBIT for the first half of 2025 rose 27% to €2.51 billion, above consensus estimates by 5%.
Group revenue increased 13% to €14.77 billion, in line with forecasts. Free cash flow reached €1.83 billion, also 5% ahead of expectations.
The propulsion segment posted a 17% year-over-year revenue increase to €7.54 billion. EBIT in the division rose 37% to €1.76 billion, helped by a 340 basis point margin expansion.
Aftermarket sales in the second quarter supported the improvement, with civil spare parts up 18.6% and services up 24.6% from a year earlier.
Group EBIT margin climbed to 17% in the first half, from 15.1% a year ago. The propulsion margin rose to 23.3%. Safran cited stronger pricing and volume in aftermarket sales as key drivers.
In the equipment division, revenue rose 8% to €5.61 billion, while EBIT slipped to €703 million, with a margin of 12.5%, down slightly due to a tough comparison with prior-year one-offs.
The interiors business generated €1.62 billion in revenue, up 15%, with EBIT at €27 million. Margin improvement in the interiors segment was limited to 100 basis points, below expectations.
Safran raised its full-year revenue growth outlook to the low teens percentage range, up from about 10%.
EBIT is now expected between €5 billion and €5.1 billion, up from €4.8 billion to €4.9 billion.
Free cash flow guidance was lifted to €3.4 billion-€3.6 billion, compared with €3 billion-€3.2 billion previously.
The forecast includes a €380 million to €400 million impact from a French corporate surtax and excludes any contribution from the Collins Flight Controls acquisition.
The company maintained its forecast for LEAP engine deliveries to grow 15% to 20% for the year, following a 10% increase in the first half.
Guidance for spare parts and services growth was also revised upward to the mid-to-high teens, from earlier low-to-mid teens ranges.
Safran’s updated forecast is based on a €/$ spot rate of 1.10 and a hedge rate of 1.12. It excludes the impact of tariffs and reflects constant scope.