Safran Considers Options for its Identity and Security Businesses -- Update
2016年3月14日 - 9:01PM
Dow Jones News
By Robert Wall
LONDON--French aerospace supplier Safran SA on Monday said it is
reviewing the future of its identity and security businesses while
proceeding with efforts to unload an airport explosives detection
operation.
The review of what to do with its businesses that makes secure
identity cards and operates in biometrics would take a maximum of
six months, Chief Executive Philippe Petitcolin told reporters
ahead of an investor briefing. Options range from retaining the
activities to a sale.
The move comes as Safran focuses increasingly on its aerospace
and defense activities, where it is a major supplier of everything
from engines for Boeing Co. and Airbus Group SE planes to rockets.
Safran had about EUR1.85 billion ($2 billion) in sales last year in
its security businesses, Mr. Petitcolin said.
Safran is already in the process of trying to sell an explosive
detection business it acquired in 2009 from General Electric Co.
"We have never been able to find any kind of synergies with the
rest of the security businesses," Mr. Petitcolin said. The unit had
sales of around $350 million. Safran is talking with several
potential buyers, the CEO said.
As part of its heightened focus on the aircraft and defense
markets, Mr. Petitcolin said the company would consider adding to
its aircraft equipment business. No particular target has been
identified, he said, adding that any deal would only be done at the
right price.
"It is not a question of size, it is a question of sharing the
same DNA as Safran," Chief Financial Officer Bernard Delpit said.
The company has the financial resources for deals, he said.
The company, which reiterated its guidance for 2016, also laid
out financial objectives to 2020 and beyond. Free cash flow as a
share of adjusted recurring operating income should average 50%
through the end of the decade, higher than the 40% seen last year
and expected in 2016. Profitability of the aircraft equipment
business should rise.
In its key aircraft engine business, where Safran cooperates
with General Electric to power Boeing and Airbus single-aisle
planes, the operating margin should be in the mid-to-high teens,
the French company said, even with the introduction of the new Leap
engine. Aftermarket sales of commercial engines would bolster
results, it said.
Mr. Petitcolin said the Leap engine would meet fuel burn targets
for both the Airbus and Boeing planes at service entry.
The partnership with GE is due to build 100 of the Leap engines
this year. Production is set to jump to 500 units in 2017 and reach
more than 2,000 turbines in 2020. The company expects to reach
breakeven on the engine model in 2019, Mr. Delpit said.
The French engine maker also said it was open to partnering with
another company to eventually pursue future regional jetliner
engine business. "We are open to any cooperation creating value for
us," Mr. Petitcolin said.
Safran said it planned to exit the transition period in 2020
with adjusted consolidated sales in excess of EUR21 billion, with
an operating margin above 15%. Free cash should see "a very strong
increase" over 2015, it said.
Write to Robert Wall at robert.wall@wsj.com
(END) Dow Jones Newswires
March 14, 2016 07:46 ET (11:46 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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