Dassault Aviation, the French aerospace giant, navigated a year of supply chain disruptions with impressive resilience. While falling short of analyst expectations on revenue and net profit, the company maintains a bullish outlook for 2024, projecting increased deliveries of both Rafale fighter jets and Falcon business jets.
Dassault has set ambitious delivery targets for 2024: 20 Rafale jets and 35 Falcon jets. This marks a significant step-up from 2023, where they delivered 13 Rafales and 26 Falcons, falling short of their initial goals. The culprit? Ongoing supply chain woes that have plagued the entire aircraft manufacturing industry for years. These challenges make it difficult to secure essential parts and raw materials, causing delays in production ramp-up.
While acknowledging the lingering effects of the pandemic on its subcontractors, Dassault remains optimistic. They recognize the "capacity shortages, mainly in aerostructure," that delayed production in the past year. However, the company is confident they can navigate these hurdles and achieve their ambitious delivery targets.
Dassault's financial performance in 2023 presented a mixed picture. Net sales dipped to €4.81 billion compared to €6.95 billion the previous year. Adjusted net sales, a key metric for investors, also fell from €6.93 billion to €4.8 billion. The defense unit contributed €2.98 billion in adjusted sales, while the Falcon business generated €1.82 billion.
Despite the sales dip, Dassault boasts a robust order backlog of €38.51 billion, indicating strong future demand. This backlog includes 211 Rafale jets and 84 Falcon jets, with the defense unit accounting for the lion's share of new orders (€6.52 billion) in 2023. Notably, Rafale order intake surged in 2023, with 60 new orders (42 from France and 18 from Indonesia) compared to 92 in 2022.
Despite missing analyst expectations in some areas, Dassault's commitment to higher sales in 2024 is encouraging. Additionally, the company plans to propose a dividend increase to €3.37 per share, demonstrating confidence in their financial health.
Dassault's story is one of resilience and ambition. By adapting to a challenging environment and focusing on delivery targets, they aim to capitalize on a strong order backlog and propel themselves to new heights in 2024. Investors will be watching closely to see if Dassault can overcome supply chain headwinds and achieve their ambitious growth projections.
