Safran has reported that third-quarter 2018 adjusted revenue was €5,348 million, an increase of 45.4% on a reported basis, including a contribution of €1,200 million from Zodiac Aerospace. On an organic basis, adjusted revenue grew 11.4%.
First nine-month 2018 adjusted revenue was €14,854 million, up 30.9% on a reported basis year-on-year, including a seven-month contribution from Zodiac Aerospace of €2,716 million. Adjusted revenue increased 10.5% on an organic basis.
First nine-month 2018 civil aftermarket revenue was up 14.7% in USD terms, including an increase of 16.4% in Q1 2018, 8.8% in Q2 2018 and 19.2% increase in Q3 2018. Spare parts sales and quarterly variations in revenue recognition for services drove the growth year-to-date. Safran confirms its assumption for civil aftermarket to increase in the 10-12% range based upon the positive momentum of spare parts sales and a slow-down in revenue recognition for services in Q4 2018.
Compared to its estimated restated key metrics for the application of IFRS 15, Safran expects adjusted revenue to grow on an organic basis in the range 7% to 9%. At an estimated average spot rate of US$1.21 to the Euro in 2018, adjusted revenue is expected to grow in the mid-single digits. Adjusted recurring operating income to grow around 20% at a hedged rate of US$ 1.18 to the Euro.
Free cash flow to be comfortably above 50% of adjusted recurring operating income, an element of uncertainty being the rhythm of payments by state-clients.
The 2018 outlook notably benefits from a stronger civil aftermarket growth than the secular high single digits growth trend, from gross margin improvement of CFM56 OE and from advance payments of export contracts.
