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Saft sees little impact from Airbus dropping lithium-ion battery

PARIS (Reuters) - Saft said on Monday that the decision of Airbus to drop use of its lithium-ion batteries in the A350 jet would have limited financial impact on the French battery maker.

John Searle, the chief executive of Saft, said the decision announced by Airbus would have no impact on sales this year, and almost none in 2014.

"In reality the aerospace market is not what fills the factories of lithium-ion battery makers; each contract is worth a few million euros of sales a year," said Searle.

"It's clearly a business that it important for us in the medium term in terms of brand image, but represents only a minor part of our sales."

Airbus dropped lithium-ion batteries of the type that forced the grounding of Boeing's 787 Dreamliner and will use traditional nickel-cadmium batteries in its crucially important next passenger jet, the A350.

The European planemaker said on Friday it had taken the decision to adopt the batteries used on existing models in order to prevent delays in the A350's entry to service next year, amid uncertainty over the potential fallout of Boeing's problems.

Saft developed the lithium-ion battery for the A350 but is also expected to supply the fallback solution as Airbus's main supplier.

Lithium-ion batteries have been in consumer products such as phones and laptops for years but are relatively new to industrial applications such as back-up batteries for electrical systems in jets or energy storage on wind farms.

Their main advantage is that they are lighter and more powerful but they are sensitive to mishandling and can ignite.

Saft also posted 4.9 percent revenue growth for 2012, and 0.8 percent growth in operating profit to reach 102.2 million euros ($136.45 million).

The group will pay a dividend of 0.75 euros per share for 2012.

Saft expects that its lithium-ion business -- for electricity back-up storage, hybrid buses and trams -- will contribute nearly all of its growth this year.

It forecasts 3.6-6.9 percent growth in its top line in 2013, while operating profit will be either stable or up around 3.9 percent to 106 million euros.

Saft shares closed up 0.35 percent to 20.05 euros on Monday before results were announced, giving the group a market capitalization of 505 million euros.

($1 = 0.7490 euros)

(Reporting by Gilles Guillaume, writing by Leila Abboud; Editing by Marguerita Choy)

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