Safran reiterates 2012 sales target

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Safran has reiterated its 2012 full-year forecast of low double-digit revenue growth, after the French technology group registered sales worth €3.1 billion ($4 billion) during the third quarter.

Turnover between July and September was up nearly 15% in reported terms and 6.2% on an organic basis. For the first nine months of the year, revenues increased by 14.3% in reported terms and 5.5% organically - totalling €9.5 billion.

The group's propulsion division - comprising Snecma, Turbomeca, rocket engine maker Herakles and module specialist Techspace Aero - accounted for more than half of the group's custom at around €1.6 billion in the third quarter.

While its OEM activities showed "solid growth", Safran concedes that increases in the propulsion segment were largely driven by aftermarket support for CFM International and Turbomeca helicopter engines. Recent CFM56 powerplants, which came in for their first overhaul shop visit, were the main driver.

The manufacturer adds, however, that the cannibalisation of older CFM56 engines for spare parts combined with declining military aftermarket activities have "partially offset" the increases.

Jean-Paul Herteman, Safran's president and chief executive, says that the current CFM backlog - including 4,200 Leap engines - stands at seven years, with the company aiming to deliver 1,400 units a year.

The group's aircraft equipment segment registered sales worth €850 million, up 22% in reported terms or 9.6% on an organic basis over last year. The main driver was landing gear and wiring equipment for the Boeing 787, as deliveries of the new twinjet have increased.

Safran says revenue for its nacelle business have been flat, however. While there is more activity for Airbus A330 and regional jet engine nacelles, there has been a slowdown for the A380.

Third-quarter revenue for the military division was up 10% in reported terms and 5.2% organically to €276 million. While the manufacturer registered more guidance system deliveries for Mistral missile and "solid growth" for inertial navigation systems, this was partially offset by lower sales in the optronics segment.

Safran's security business grew 17% in reported and 2.2% in organic terms to €371 million in the third-quarter. Electronic document and detection technology activities were up, while biometric identification was "globally flat", the company says.

Safran expects that it will deduct around €25 million from its operating income next year due to a change in France's social security contribution regulations.