(News Bulletin 247) – The designer of the Rafale and Falcon saw its adjusted operating profit drop by 39% in 2023. For 2024, the company intends to deliver 35 Falcon and 20 Rafale.

Dassault Aviation once again finds itself under pressure on the stock market this Wednesday. The stock had already suffered on January 15 (-6.4%) after the publication of disappointing order intake and deliveries for its business jets for 2023.

Rebelote therefore this Wednesday, the title losing 7% around 3:15 p.m. after the group published its annual results.

“Quite frankly, there haven’t really been any good or bad surprises. Dassault Aviation doesn’t deliver a lot of publications. The stock is falling because revenue and operating profit fell in 2023. is as simple as that”, judges a financial intermediary.

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Tensions on the supply chain

Last year, the aircraft manufacturer delivered slightly fewer Rafales than in 2022 (13 compared to 14) and especially fewer Falcons, its range of business jets, with 26 units compared to 32 in 2022. This is reflected in turnover

of the company, with revenues of 4.8 billion euros, down 30% year-on-year.

Dassault Aviation has suffered “from the fragility of the supplier chain which disrupts the ramp-up of business jets”, Yan Derocles, analyst at Oddo BHF, explained to News Bulletin 247 last month.

This was also recalled by the group’s CEO Eric Trappier this Wednesday. “The difficulties in supply chains that began with the Covid crisis are severely affecting subcontractors in the aeronautics industry who are not always able to deliver with the quality and within the required deadlines. The failures of certain suppliers, as well as “lack of capacity, mainly in aerostructure, has resulted in delays in production for the group,” the manager explained in a press release.

The company’s operating profit fell 39% year-on-year to 349 million euros. The corresponding margin increased from 8.3% to 7.3% in 2023. This decline in the margin is explained in particular by the intensification of R&D expenses, which, in relation to turnover, increased by 1. 8 percentage point to reach 10.1%, explains the company.

This reflects the group’s efforts on the Falcon 6X and Falcon 10X programs, the company’s two latest business jet models. The 6X entered service in November, and Dassault assures that prospecting is intensifying. The 10X must be delivered to it from 2027.

Strongest contribution from Thales

UBS writes in a note that Dassault Aviation’s revenues and operating profit are respectively 6% and 10% lower than the Visible Alpha consensus. The Swiss establishment notes, however, that this consensus did not include the slightest Falcon deliveries announced in January by the company.

Dassault Aviation’s net profit increased from 830 million euros to 886 million euros. This improvement is explained by a better financial result (210 million euros compared to 11 million euros in 2022), driven by financial products generated by the company’s cash flow in a context of rising interest rates. Dassault Aviation also benefited from a better contribution from Thales, in which it owns around 26% of the capital, with an impact of 453 million euros, compared to 386 million euros in 2022.

For 2024, Dassault Aviation is counting on better results. The aircraft manufacturer plans 20 deliveries of its Rafale fighter jet and 35 for the Falcon, compared to 13 Rafale and 26 Falcon last year. The company therefore anticipates an increase in turnover of around 6 billion euros.

These prospects correspond more or less to expectations, according to UBS, which cites a consensus of 6.1 billion euros for revenues, 21 units for Rafale deliveries and 36 for those of Falcon.