Safran Sa Ord

Welcome to the SAFRAN half-year 2025 results. At this time, I would like to turn the conference over to your hosts, Olivier Andries, SAFRAN's CEO, and Pascal Bontenis, Group CFO. Mr. Andries, please go ahead.

Good morning, everyone, and thank you for joining us for SAFRAN's first half 2025 results call. I will go through the presentation together with Pascal. First of all, we are pretty excited with the current trends in our markets. Those of you who attended the Paris Airshow were able to witness the renewed dynamism of our commercial and defense customers and their appetite for our new technologies. At the same time, NATO members have agreed on planned increase in defense spending. which will translate ultimately into new market opportunities for Safran. We are also pleased to report some improvements in the supply chain for the first time in a long time. We welcome the progress made on a transatlantic agreement to remove tariffs on aerospace products, which is a positive step for the industry. In parallel, we continue to implement targeted mitigation measures to manage any potential impact. Once again, Safran delivered a record performance this semester with double-digit growth across all key metrics. Note that we delivered a 17% operating margin, which exactly represents the midpoint of our 16 to 18% guidance provided back in December 2021. Civil aftermarket continues to perform very well across the board. In light of this momentum, we raise once again our full year guidance. Two additional information from July news flow. First, on July 21st, we succeeded to close the acquisition of calling saturation and flight control activities after a long journey. This is a key milestone in strengthening our flight control offering. The teams are now focused to deliver the expected cost synergies by 2028 and grow the commercial momentum. And at last, as you have seen this morning, We have announced the location of our fourth carbon brake factory. It will sustain the strong demand both in original equipment and MRO on this segment. Turning to slide four, Safran enjoyed a strong commercial momentum across its businesses. Ryanair ordered 30 LEAP 1B spare engines. to reinforce operational resilience and support its expanding 737 MAX fleet. This marks another step in CFM's long-standing partnership with Ryanair. We unveiled the Room FX with All Nippon Airways, a new business class seat for the 787-9. It combines privacy, comfort, and sustainability setting a new benchmark in premium cabin design. In line with our decarbonization roadmap to support aviation electrification and hybrid electric propulsion, we set up a major partnership with SAFT to develop a high voltage battery system for aviation, and we launched a technology program together with Dyer, Collins, and ascendance to design an hybrid electric propulsion architecture for light aircraft. On the defense side now, there is a clear commitment to increase investment with global military expenditure reaching levels not seen since the end of the Cold War, particularly in Europe. As an example, Members of the NATO Alliance have agreed, committed on a significant defense budget increase. We are significantly raising our production capacity to meet the new demand and serve our backlog. The export momentum for the Rafale remains very strong. We signed a new contract for 26 Rafale for the Indian Navy. In the meantime, we decided to engage into the development of a more powerful evolution of our M88 engine, powering the Rafale, and design for the future F5 standard. This should help to grab new customers. We also build our strategy on external growth and key partnership. We have announced several new partnerships at the Paris Airshow with key players, such as Bombardier from Canada, Diehl in Germany, Babcock in the UK, Kongsberg in Norway. To name a few, these collaborations span air-to-ground munitions, compact optronic systems for UAVs, multi-sensor artificial intelligence for persistent geospatial intelligence, and Naval Strike Missile Propulsion, for which we received an order of several hundreds of turbojets from Kongsberg in Norway. We expanded our partnership with AvioAero and MTU to jointly develop Europe's next-generation engine for military helicopters. Recent acquisitions include Aurelia in positioning, navigation, and timing, At the Paris Airshow, we have launched Black Note and Skylight, two cutting-edge systems delivering resilient P&T, resilient positioning, navigation, and timing, designed to operate in GPS-denied environments. Préligence, now Safran AI, our AI factory, is expanding quickly. In the end, We aim to double our revenue base in defense and space activities by 2030. We have the right technologies. We have a clear roadmap to access new markets. We are building on partnership and external growth, and we are expanding our production capacities. Pascal, I'll leave you the floor to discuss H1 performance.

Thank you, Olivier. Good morning, everyone. As usual, I'll be commenting on the adjusted accounts for which a bridge from the consolidated statements is presented on page seven. The adjustments relate to FX or PPA. The 4.8 billion euros change in mark-to-market of instruments edging future cash flows has been adjusted in financial income in H1 2025. This is purely an accounting entry, no cash impact, as our virilative instruments edging future USD cash inflows. On FX slide 8, in Q2 we have faced the fastest move in the euro-dollar since the 70s with more than 15 cents euro-dollar appreciation in a few weeks' time. Despite this, our team successfully managed to protect our edging portfolio. As you all know, Our strategy is notably based on options with knockout barriers. None of them has been triggered to date. As we speak, the dollar has returned to $1.14, a more comfortable level. I can confirm our target edge rate of $1.12 for 2025 and the coming years. We strive to maintain an attractive edge rate for as long as possible in a constantly evolving environment. Once we have a better view on the recently acquired business of Collins, we will factor in the aging needs for USD and British pounds. Turning to slide nine, revenue for the first half of 2025 reached 14.8 billion euros, up 13% on an organic basis. The impacts of currency and scope are fully balanced out over the semester. Currency reflects a marginal appreciation of the euro versus the dollar. and scope reflects the contribution of CRT, the engine repair business required early 2025. Overall, Safran continues to deliver consistent, broad-based growth supported by favorable momentum in both services and OE across commercial aerospace and defense. The profits increased twice as fast as revenue at a rate of 27%, recurring operating income reached 2.5 billion euros, It is worth noting that the historically high margin level achieved in H1 at 17% exactly at the midpoint of the range provided during the CMD21. This is an improvement of over seven points compared to 2021. And I'll come back on the main drivers per division. Looking at the summary of the income statements beyond sales and EBIT, let me comment on other P&L items. One of items amounted to a negative 37 million euros, which includes an impairment charge on one program within aircraft interiors, restructuring costs, and I would say the usual M&A expenses. Financial income is a positive 32 million euros. The return on cash investment exceeded the cost of debt and translated into 77 million euros in net financial interest. The apparent tax rate is 34%. This includes a one-time contribution of €261 million, resulting from the 2025 Finance Bill in France. You must expect a €380 to €400 million impact on a full year basis, meaning an additional €140 million in H2. Net income to the parent stands at €1.6 billion, representing €3.8 per share, up 11% from last year. Let's now take a closer look at our businesses, starting with propulsion. Revenue reached 7.5 billion euros in H1, up 17% year-over-year. This performance was primarily driven by civil aftermarket, with third-part revenues up 21.6% in dollars, driven by strong demand for all engine families, CFM56, wide-body engines, and LEAP. Services were up 21.1%, led by the ramp-up in LEAP RPFH contract revenue. On the OE side, LEAP deliveries were up 10% versus last year. After a drop of 13% in Q1, production accelerated sharply in the second quarter. Q2 was up 38% year-over-year and 29% sequentially. We also enjoy revenue growth in helicopter turbines, mostly in services, and military engines with a favorable customer mix. Recurring operating income came at 1.8 billion euros, representing a record 23.3% of sales, a margin improvement of 340 basis points. This is a lot to get excited with. The strongest performance was driven by civil aftermarket, both spares and services, The start of margin recognition of LIP1A RPFH contracts, including a one-time margin catch-up from previous years, and third, a significant number of LIP spare engines in H1, and that ratio is due to decrease in H2. Moving on to equipment and defense on slide 12. Revenue reached 5.6 billion euros in H1, 8% organic growth, The growth rate of this division is lower than in proportion due to its exposure to programs with a slower ramp-up at this time. The defense business growth was led by guidance systems, including AMER and strong demand for resilient P&T solutions. We see more opportunities along the road. On the aircraft equipment side, aftermarket services increased across the board, especially in landing system, Nacelles, avionics and electrical systems. OE volumes slightly grew, notably on the H320neo and 787 landing gear. Recurring operating income came in at €703 million, up 7%, with a margin of 12.5%, almost stable compared to 2024. This reflects a high comp base. Indeed, in H1 2024, we saw a one-time profit recognition when the Gulfstream 700 Nacelle entered into service. On a full year basis, we still expect margin expansion by at least 50 basis points in that division. That said, the solid level of margin was supported by aftermarket growth, notably on landing gear, carbon brakes, and aero safety system. Finally, turning on slide 13, aircraft interiors, We are staying on track with our roadmap for continuous margin improvement year after year. We posted a profit of 27 million euros in the first half, up 17 million euros, lifting the margin by 100 basis points. While this remains modest, it reflects a solid level of services, particularly in cabin, and continued progress in OE, notably business class seats, galleys, and IFEs. Revenue reached 1.6 billion euros, organic growth of 15%. Both OE and services contributed to this performance. In cabin, OE growth was notably supported by higher deliveries of 737 MAX galleys, while services increased across the board. In seats, OE volume saw a strong increase, with business class seat deliveries up 65%, and aftermarket sales also contributing to growth. We did burn some cash in H1, also much less than a year ago, and we continue to strive to reach cash break-even at some point. Turning to cash, free cash flow generation reached a record level of 1.8 billion euros, up 25% year-over-year. The strong performance was driven by a 25% increase in EBITDA, which reached 3.2 billion euros. Change in working cap remained stable, The rise in inventories was partly offset by higher customer advance payments, notably on Rafale. We continue to invest to support growth and prepare for the future. CAPEX totaled nearly 800 million euros, with spending focused on expanding engine and marrow capacity, as well as production capacity on landing gears, smart weapons, resilient P&T systems, and low-carbon projects. This result reflects SAFRAN's ongoing focus on operational excellence and cash discipline. SAFRAN's net cash position remained almost unchanged with a balance of 1.9 billion euros. The cash generation in the semester was used to pay the 2.8 euro per share dividend and to finance the share buyback program. In the first six months, we bought back 2.9 million shares for consolation purpose for a total of 713 million euros. We also proceeded with the early redemption of the convertible bond, name is OSEAN 2028, resulting in a decrease of the net debt. We had a net cash out impact from acquisition of 133 million euros related to the engine repair company called CRT. This net cash situation does not yet include the acquisition of Collins Actuation Business, for a total of 1.8 billion dollars which took place on July 21st with cash on end. These are the proceeds from the electromechanical actuation business that we sold to Woodwall. On the share buyback front, at the end of July, we have repurchased for cancellation purpose 3.4 million shares for a total of 850 million euros. These shares will be canceled at year end together with the 0.2 million treasury shares that we reallocated for consolation in April for a market value of 50 million euros. Olivier, back to you.

Thank you, Pascal. At last, on slide 17, we have completed the acquisition of Collins Assets within actuation and flight controls. This is a major milestone in our aircraft equipment strategy focused on mission-critical equipment and functions. I spent some time last week with our new colleagues in the UK, and I welcome these teams again from the UK, Italy, and France, as well as from many other countries. They are enthusiastic to join Safran. This business will be integrated within Safran Electronics and Defense. and be consolidated from August 1st. Our fuller guidance does not yet include their five-month contribution, which we expect to range from 600 to 700 million euros in revenues. This business fits very well with our Safran DNA, leading technology, mission-critical systems, recurring aftermarket revenue, and drives profitable growth. We expect the business to grow at attractive growth rates and deliver low double-digit EBIT margin through a combination of volume growth and cost synergies. In light of the H1 performance and the continued business momentum in both civil aerospace and defense, we are raising our 2025 outlook. Revenue should increase in the low teens, exceeding €30 billion. Recurring operating income guidance is improved by €200 million at midpoint to reflect better performance in civil aftermarket. Free cash flow guidance is improved by €400 million at midpoint, which reflects the improved business perspective and includes Indian Navy advance payment on the Rafale contract. The revenue growth outlook for our two key indicators has been raised. Spare parts and services revenues are expected to be up in the mid to high teens. Our guidance excludes the contribution of call-ins, as previously said, and any potential impact from tariffs. Thank you. We will now answer your question.

Thank you. To ask a question, you will need to press star 1 and 1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1 and 1 again. Thank you. First question today is from Olivier Prochet from Rothschild and Co. Redburn. Please go ahead.

Yes, good morning, Olivier and Pascal. I would have two questions for you, please. First of all, on aftermarket, civil aftermarket, could you give us a bit of color on how things have moved in widebodies, narrowbodies, content, price, volume, and the breakdown between services and spare in terms of overall contribution? And second, could you give us a bit of a sense of the catch-up in the margin in the LEAP CSAs? What sort of size are we talking about? Thank you.

Hello, Olivier. I will take the first one. On the CFM56 side, what we've seen is a slight growth in the number of shop visits So we are in the range of mid, low to mid single digit growth in terms of membership visits. And we are benefiting also compared to H1 2024, we are benefiting from the catalog price increase that has been decided and put in place in August 2024. What has been the main driver for the growth of our revenues on CFM56 per parts is the wear scope. In fact, the wear scope has increased compared to 2024. When we look at the IFREST engine, this is where the growth has been, let's say, the most significant. So higher than, even higher than on the CFM56. And here, this is really the impact of higher number of shop visits compared to 2024.

Good morning, Olivier, on your second question. We discussed during the last capital market day our methodology to recognize the profits on LEAP RPFH contracts. As you may remember, the trigger point was the introduction of the new HPT blade on the LIP1A. So if I were to sign the catch-up effect, given the fact that we have not recognized any margins before 2025, I would say that about 60% of the LIP RPFH profits were recognized in H1, and we expect another 40% in H2. So it was more H1 balance versus H2. But all in all, I would say it's quite marginal. Don't expect a huge amount of profits.

That's helpful. Thank you very much.

Thank you. Next question is from Milan Kerner from Barclays. Go ahead.

Thank you for taking my question. I also have two, please. The first one, could you please clarify what retirement rate assumption you're using for your CFM fleet through 2030? How might the current low level of retirement influence those assumptions? And then my second question, at your capital market day, you outlined a target of 6 to 6.5 billion in operating income by 2028. Following this morning, guidance are great. Now you're going to see a compound annual growth rate of about 8%. Should we interpret this as a conservative outlook or are they any underlying factor that might explain the trajectory? Thank you.

Hello, Mylène. I will take the first one and leave the second one to Pascal. The underlying assumptions on CFM, what we've seen, the growth in traffic on the narrow-body side compared to 2024, which is about 5%, just slightly above 5% of available seat kilometers growth compared to 2024. The level of storage of CFM56 fleet has basically decreased a bit. So we've reached something like slightly above 6% of fleet which is stored, which is a lower level than even before COVID, 2019, where it was 7% to 8%. And the level of retirement, the level of retirements has been very low. Basically, we were below 50 at the end of May of number of aircraft retired. So this is a very low level. This is even lower than pre-COVID again. So those are the underlying assumptions, which basically create a strong tailwind on the CFM56, flying hours, and therefore short visit wear scope and appetite for heavy well scope.

Good morning, Mylène, on your medium-term outlook question. We disclosed our 2028 ambition last December. It was based on our view, our medium-term plan that was built mid of last year. Given the strong start of 2025, and the comments made by our partner a week ago or two weeks ago on the aftermarket business on civil engines, we can only confirm that the spare part business is more promising than we had expected, with likely more activity by the end of the decade. Now our budget cycle calls for a review of our medium-term plan in the fall. So it is only then that we will be able to decide whether the 2028 guidance deserves to be revised or not. And as you know, there are also some uncertainty regarding tariffs or reduced domestic demand across the U.S. So we'll take our view and then we'll come back to you in due time if we need to revise or not our long-term view. But for sure, the civil aftermarket activity is much stronger than we expected and it should last longer than we had expected.

The trend is very positive.

Thank you. Thank you. Next question is from Chloe Le Marie from Jefferies. Please go ahead.

Yes, good morning, Olivier and Pascal. Thank you for taking my question. I have two, if I may. The first one would be on the guidance for propulsion margin. I think, Pascal, at the four-year, you mentioned 100 to 200 bps improvement. That was obviously much stronger in H1, so how should we think about the outlook for the year now? And the second one is still another dab at the 2028 outlook. I know it's a bit too early to give a proper updated view, Any reason why we think that the growth that GE now sees on the CFM56 revenues by 2028, I think now they kind of see a 20-ish percent increase from 2024 to 2028, wouldn't apply to you in full? Or is it something that you, a view that you share with them? Thank you.

Good morning, Chloe. Coming back to my comments on, you know, margin expansion in the three divisions. Let me start to confirm that in aircraft interiors, we expect at least 200 basis points margin improvement this year. In defense, as I said earlier, at least 50 basis points. So this is unchanged from what we say for equipment and defense on aircraft interiors. Now in propulsion, I can confirm that we can raise our ambition and expect now margin to expand by 250 basis points this year instead of 100 to 200 basis points. On your second question on the 2028 outlook, we can clearly think that what GE said on the revenue compound grace for the years to come should apply in full to SAFRAN on the propulsion business. Now, as you know, more globally, we have a different mix of businesses with equipment and defense and our aircraft interiors activity. But in proportion, despite that the comparison base could be slightly different from GE and Safran, but in the ballpark, I would say the same should apply.

Very clear. Thank you.

Thank you. Next question is from Benjamin Healan, Bank of America. Please go ahead.

Yeah, thank you. Morning, guys. Hope you're both well. I wanted to go a little bit more in detail on the propulsion margin and some of the comments. you made to Olivier because I'm not sure I'm fully on top of it so when you started recognizing profit on the leap 1a was there an accelerated recognition this year or is this just because you've started recognizing profit on the leap 1a and how do we think about that into 26 when you should start recognizing profit on the leap 1b how can we think about that morning

So we started to recognize LIP1A RPFH profit in H1 for the year 2025, but it also includes a one-time contribution for the margins that we should have recognized in the previous years, typically 2023, 2024, 2022, and so on. So there was a slight one-time contribution from the non-recognized margin in the previous years. Once again, as I answered to Olivier, but maybe I was not clear enough, if we expect $100 this year, we did recognize 60 in H1 and we expect 40 in H2. So you see that the one-time contribution is not that important. Then in 2026, as GE confirms, we plan to introduce a Maverick blade on the LEAP-1B at some point in time in H1 2026. This will be the trigger point. to recognize margin on LIP1D RPFH contracts, which will come on top of LIP1A. So you would expect higher profits in 2026.

Okay, and then if we think about the Leap 1A recognition X to catch up, are you able to give us some color as to what you've started recognizing that margin at? Is it roughly in line with the divisional margin in proportion? Is it a bit higher? Is it a bit lower? Is there any color there you can help us with?

No, I'm afraid we cannot disclose any details on that, Ben.

Okay. And then one for Olivier. Olivier, can you talk a little bit about the LEAP supply chain issue? Obviously, you've had the strike and resolved that now. Have you been able to catch up the flow of production in the facilities? How do you see that trending over the next couple of months and quarters into the end of the year? Thank you.

A little bit. No, as we skip, we have not completely catch up the impact of the strike. We had a low Q1, mainly driven by, let's say, supply chain issues. And then we had this strike. So the plan is to recover by somewhere like end of October. By the end of Q3, we should... mostly are recovered, not entirely recovered. The plan is to recover completely by the end of October in order not to, let's say, impact, let's say, the Airbus delivery plan. This is the goal. Our team and our partners team are fully engaged on that plan. uh and so we are going to continue to work very hard to recover this led backlog yeah okay great thank you both thank you next question is from christoph menard from deutsche bank please go ahead uh yes good morning thank you for taking my question i had two uh one to bounce on the

LEAP 1A ERP FH catch-up. Should we expect a higher contribution when it comes to the 1B ERP FH catch-up, or is it similar in terms of margin? Or will you also apply a 60-40 type of split? Second question is... You mentioned the new engine for the Rafale. I was wondering, the financing of this, is it something you will be paying out of your own funds, or will there be some funding coming from the government for that?

Good morning, Christophe. To be honest, I don't know yet what will be the catch-up on the LIP1B, because the LIP1B or PFS contracts may have different margin profile compared to LIP1A. So I've not yet looked at, you know, the unrecognized margin that we have had in the past years. So I don't have the answer to your question, but there will be a slight catch-up impact, a one-time contribution as soon as we start recognizing LIP1B profile next year, yes.

And Christophe, on your second question, as this, let's say, increased thrust engine development for the AFAL F5 standard. As it is part of the F5 standard, we are engaged in the discussion with the French MoD for the funding of it indeed.

Thank you very much.

Thank you. Next question is from Robert Stallard, Vertical Research. Please go ahead.

Thanks so much. Good morning. Good morning, Robert. I just wanted to follow up on Ben's question. You clearly had a lot of pressure from Airbus to ramp up those LEAP engine deliveries in the second half. I was wondering if you could comment on your confidence in hitting that Airbus delivery target. And then secondly, on defense, you commented that you expect the revenues to double by 2030. Do you see it as a straight line to getting to that number, or is it more back-end loaded? Thank you.

Hello, Robert.

Yeah, as I mentioned in my response to Ben, the goal is to recover our lead backlog on the leap deliveries to Airbus by the end of October. So we have a plan for that. So it's all now a matter of execution. This is a challenging but achievable plan. And once again, the team is fully, fully engaged. We'll take in due time the right decision also. with respect to allocation of spare versus installed engines to Airbus in due time. On your second question, when I mentioned that we expect to double our revenues on defense, more precisely it's on our defense electronics business. On the engine side, on the propulsion side, basically the growth is driven by the, let's say, very successful export dynamic of the Rafale. We have also a strong dynamic on military helicopter engines as well. But when I mentioned that we expect to double our revenues in defense, I was basically talking about our defense electronics. Yeah, we are really confident on that. By the way, we have decided to double the capacity of our navigation system production in Montluçon. basically decided to multiply by three, and probably even more, our production capacity for missile engines. So the dynamic is very strong in Europe, and it's not back-loaded. The growth is, we are talking about like a 20% growth, sort of, compounded annual growth. So the dynamic is very strong on navigation system, on what we call AMER. AMER is our air-to-ground strike missile, in fact, and on electronics as well.

Okay, that's great. Thank you very much.

Thank you. The next question is from Ken Herbert at RBCCM. Please go ahead.

Yes, hi, good morning, Olivier and Pascal. Two questions, if I could. The first is, on the full-year guidance for civil services or civil aftermarket, the guidance implies a bit of a step down in growth in the second half versus the 21% to 22% we saw in the first half to get to the mid to high teens. Anything in particular you'd call out there in terms of the decel in the rate of growth? or just general conservatism? And then second, for the increase in the full-year free cash flow guide, can you just comment how much of that is timing of M88 engine payments relative to strength across the business and specifically in the aftermarket?

Good morning, Ken. First, on the full year outlook for spares and services, so we are raising our guidance from mid-teens to mid to high-teens. True, in H2, we should see the growth rates lower than what we had in H1. But if I look in value, in dollar terms, we should have higher revenues in spare parts and services in H2 when I compare to H1. So it's purely as a comp base. And as you know now, we escalate prices for the catalog on spare parts on the 1st of August, meaning that the seasonality has changed compared to the previous years. Now, Q1, Q2, Q3, we see sequential growth for each and every quarter, and usually there is a bit of a step down in Q4. On your second question of the free cash flow guide, it's coming from strength of the business. purely, so there is no one-time effect. It's purely after market and the inclusion of the advance payment and rafale, which was not in our budget. And by the way, when we look to our 2028 free cash flow guide, it was very explicit at the last capital market day that we had not included any advance payments on the new rafale contract. So Indian Navy is a new contract. So we will receive advance payments, not only in 2025, but for the years to come as well.

Ken, on top of Pascal's comment, and I'd like to add that basically on the military propulsion, on the military propulsion which encompasses both military combat aircraft engines, and also helicopter engines, basically we are not back-loaded, meaning that H2 is going to be stronger than H1. So this is also another ingredient that makes us very confident that the H2 performance in propulsion will be similar than H1.

Thank you very much.

We'll take another couple of questions.

Thank you. Next question is from Alfred Rue from CIC Market Solutions. Please go ahead.

Yes, good morning, Olivier and Pascal. Two questions as well on my side. The first one is, could you, is it possible to be a bit more specific on the one-off you have booked, you know, for LEAP 1A, a profit booked, so 60% booked in H1, kind of order of magnitude will be useful. And the second question is the allocation of spare engines versus new engine. I understand there has been recent spare engines being delivered to airlines. I was wondering how are you allocating spare engines versus OEM? Is there any rule of thumb you can give us in the way you allocate those engines? Thank you.

Good morning, Hervé. I guess you should not overstate, you know, the contribution we benefited from this one-time contribution. Frankly, it's quite marginal. And as I responded to Chloe, with the 250 basis points improvement in margin for the propulsion segment, you'll see that the performance we will achieve in H2 should be quite similar to what we had in H1, meaning that this one-time contribution in H1 didn't play a lot of, did not have such a strong impact, so I would not quote more than I did on that, but don't overstate this one-time contribution.

And Hervé, on the allocation spares versus installs, our guidance really is And our direction is really to make sure that our airline customers keep flying. This has always been the brand of CFM. So we keep you flying. And so it's really making sure that we avoid aircraft on the ground. This is what is driving us mainly. And this is what the airline are asking us to ensure. because it is very frustrating for an airline to have an asset and not being able to fly it and use it because of an engine issue. So it's all about avoiding aircraft on the ground, making sure we keep airlines flying. So it's a weekly, it's a week-per-week decision with respect to allocations.

We'll take last question, if any.

Thank you.

Thank you. Last question is from David Perry, JP Morgan. Please go ahead.

Hi, Olivia and Pascal. Thanks for squeezing me in. Just a factual question, really. Nice to see the very bullish comments on defense. Can you tell me what are the actual sales in equipment and defense, in defense, and what percent of helicopters is defense, please? Thank you.

On the defense contribution to the electronics, the defense electronics contribution into our defense and equipment branch is today turning to Pascal, above 1.5. It's over 1.5 today, above 1.5 billion today. And so we expect that to double by 2030. We have a space contribution, space equipment contribution, which is close to half a billion as well. So 1.5 defense space close to close to half a billion. So this is expected to double. On the helicopter side, it's roughly 50-50 between commercial and military. It's roughly 50-50.

Okay. I'm just I think you said defense is about 18% of the group, and I just can't quite get there. I can follow up with Armel offline, but obviously with military aircraft, the numbers in defense electronics are about what I thought. I just wondered if helicopters was higher. I think it would just be, you know, you're talking about defense a lot, and it's an exciting part of the story. It would just be nice to have some audit trail of the numbers. It would just be a request, if I may. But thank you. It's helpful. Your answer is helpful.

David, good morning. Yes, we always say that defense represents more or less 20% of total group size. And I would split that into two parts. 10% is what I would call military propulsion, either for the Rafale, the A400M, military helicopters, and another 10% in defense electronics and space that Olivier was discussing. This is a broad split of what we call the broad defense space within the group.

Thank you very much. Have a lovely summer.

Thank you. On top of that, some of our equipment business is also directed towards military, such as landing gear for AFAL, landing gear for Eurofighter, landing gear for F-18, wiring for F-16, aero systems such as evacuation slide, pilot equipment on aero system are also directed towards military. So the 20% that Pascal has mentioned is taking into account all that. Thank you.

Thank you. Have a good day.