French aircraft equipment company Zodiac Aerospace has posted a 1.8% first-half sales decline, triggering a response from aerospace giant Safran, which is planning to acquire Zodiac.
Zodiac’s first-half sales fell to €2.4 billion ($2.6 billion). A 2.6% drop in organic sales was offset by a 0.8% gain from exchange rate fluctuations, culminating in the 1.8% decline.
The company said the result was impacted by “continuing industrial disruptions” in its UK seating and cabin business, as well as “weak market conditions” for helicopters, business jets and regional aircraft.
Aerosystems sales rose 1%, while Zodiac’s aircraft interiors revenues fell 3.7% on a reported basis, or 4.5% at organic level.
However, Zodiac added it is on track with an action plan and still aims to return to historic profitability levels by its 2019-20 financial year.
Safran, which announced plans to acquire Zodiac in January, said this new information would be taken into account.
“This publication reflects new developments compared with the information available prior to the announcement on Jan. 19, 2017 of the intended acquisition of Zodiac Aerospace by Safran. Safran confirms the strategic interest for the acquisition of Zodiac. Safran confirms its confidence in its own ability to restore the operating profitability of the businesses currently in difficulty. Safran and Zodiac Aerospace are continuing their exclusive negotiations and will take into account the consequences of these developments in their discussions,” Safran said.
If the deal goes ahead, the combined companies would rank as the third largest aerospace company in the world, with around 92,000 employees, €21.2 billion in revenue and a €2.7 billion operating income. They will also rank as the second-largest aircraft equipment supplier, with revenues of around €10 billion.
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