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Diehl cautions on 2018 sales slowdown

Diehl Aviation has warned that revenue growth is set to slow down in 2018 as the German interior equipment specialist sees limited scope for new aircraft programmes.

Sales grew by 16 % year on year to €1.53 billion ($1.78 billion) in 2017. The manufacturer says the increase was "strongly influenced" by the production ramp-up on the Airbus A350.

Diehl notes that demand for the A380 – for which the company supplies several packages – "has fallen short of expectations for several years". But the supplier insists that equipment deliveries for the A350 and single-aisle programmes have "compensated" for the shortfall on the superjumbo.

Despite a large order backlog, Diehl says that "the market in other segments is currently cooling down".

Aside from Boeing's potential New Mid-market Airplane "no new civil aviation programmes will be launched in the near future", Diehl says.

As new business prospects with airframers will be "very restricted in the years to come", Diehl sees particular importance in directly supplying airlines with interior equipment for retrofit projects.

With French maintenance specialist and Airbus maintenance, repair and overhaul partner Sabena Technics, Diehl arranged an "alliance" in 2017 to jointly provide cabin retrofit services for A350s. A similar partnership with Lufthansa Technik was disclosed at the Aircraft Interiors Expo in Hamburg earlier this year.

Meanwhile, Diehl says the market for its military products remains "rather sluggish".

The manufacturer says it intends to "further consolidate the [aviation] division and to concentrate its market presence".

Diehl Group's earnings before interest and taxes rose by just under €100 million to €274 million in 2017, on the back of 9.9% revenue growth, to €3.75 billion.

EBIT for 2016 included a one-off €49 million charge for pension reserves, the group notes.

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