Safran Sa Ord

Welcome to the Saffron first quarter 2026 revenue. At this time, I would like to turn the conference over to your host, Olivier Andries, Saffron CFO, and Pascal Montigny, Group CFO. Mr. Andries, please go ahead.

Thank you. Good morning, everyone, and thank you for joining us. We had a very strong first quarter with revenue reaching 8.6 billion euros, up 23% organically. We continue to benefit from a solid momentum in both aerospace and defense, with little to no impact from the Middle East conflict so far. Once again, our main growth driver is aftermarket. We saw vigorous demand across the board, especially for commercial engines, and nacelles. Sales of spare parts for civil aircraft engines were up 29%, mostly thanks to the CF-156. Services for civil aircraft engines increased by 43%, with LEAP red-per-cylinder contracts leading the way. At the same time, Basing on our excellent industrial performance in the second half of 2025, we continued the deep ramp-up, with more than 500 deliveries this quarter, up 63% year-on-year, and marking the third consecutive quarter with deliveries above this level. Overall, the strength of our Q1 performance reinforces our confidence in reaching the high end of our full year 2026 guidance. That said, we remain cautious for the coming months, given the uncertainty around the scale, duration, and potential impact of the Middle East conflict, notably on air traffic. A few words on our portfolio management. In January, we completed the divestment of staff from Passenger Innovations, And more recently, we announced the acquisition of a partner, Symfony, leader in resident navigation technologies for complex and denied environments. Turning to slide four, we continue to raise our industrial capacity for the in both civil and defense activities. We recently announced two new facilities to support Airbus, and Boeing ramp-up, one in Morocco, dedicated to the A320 landing gear, and another one in Belgium for compressor components, which will equip the LEAP, the GenX, and the GE9X engines. In addition, we just announced a $150 million investment in GenVilliers for a new 30,000-ton forging press. This will support the leap ramp-up, as well as our military program, further reinforcing our resilience in forged paths. In defense, we signed an MOU with FEDGROUP in the UAE for the development, the production, the commercialization of advanced air-to-ground weapon systems. This is yet another example of the momentum in our defense activities and our ability to forge meaningful partnerships. On the commercial side, we were pleased to see our Arius 2D helicopter turbine selected to power GIMBA's new Grand Cab G5 helicopter. We are also keeping a strong focus on innovation and future technologies. The NGIN-AUC electric motor was recently honoured of the 2026 Aviation Week laureates, marking a significant achievement as the first electric motor to be certified for hybrid and electric aircraft. It was also selected to power the fully electric Bristol B23 energy aircraft. With that, I will now hand over to Pascal to walk you through the Q1 revenue in more detail.

Thank you, Olivier. Good morning, everyone. Let me give you a quick update on FX. Earlier in the quarter, we saw the euro to dollar rate jump up to almost 121, but it then settled back down into a more favorable range between 114 and 116 in March, before stabilizing around 117 this week, largely in the context of the Middle East crisis. We use this environment to keep building out our hedging positions for 2029, And I'm pleased to say we are now 80% hedged for that year. In this context, we are confirming our 2026 hedge rate at $112 per euro. As of March 2026, our hedge books stood at $59 billion, which continues to give us strong visibility and protection against currency movements. Looking further ahead for 2027 and 2028, we are still targeting a hedge rate of $112. And for 2029, We are aiming for a range between 112 and 114 based on the market needs today. Now moving on to slide seven. In Q1 2026, our revenue reached 8.6 billion euros, which is a 19% increase year over year, or 23% organic. Organically, that's almost 1.7 billion euros more than last year, driven by both our services and original equipment businesses. On the currency front, we did see a negative impact of 8.5%, mainly because the average euro-dollar rate was less favorable, 117 in Q126 compared to 105 a year ago. In concrete terms, that meant a hit of about 600 million euros on our revenue. Lastly, scope effects had hit around 4%, mainly thanks to the acquisition of Collins Actuation and Flight Control Business last July. which contributed nearly 400 million euros. And this was partly upset by the divestment of Safran passenger innovations for nearly 100 million euros. Turning to slide eight, let me give you a quick overview of our revenue by activity. Starting with proportion. Revenue reached 4.6 billion euros, which is a 33% organic increase. The civil engine Safran market delivered a particularly strong performance, spare parts were up 29%, and the main driver here was, again, the CFM56, which benefited from a favorable comparison against Q1 2025. This strong resource also builds on the momentum we saw in the second half of last year, where we experienced a significant increase in work scope. In addition, the LEAP third-party network kept growing. Also, its revenues are still modest compared to the CFM56. Looking now at services, we saw a 43% increase, mainly driven by the LEAP rate per flight hour contracts, with volume, work scope, and also favorable comparison base, since margin recognition for the LEAP 1A only started in the second quarter of last year. On the OE side, we delivered 520 LEAP engines this quarter, up 63% year over year. This substantial increase reflects both a ramp-up marking three quarters in a row with more than 500 deliveries, and again a favorable comparison base. Moving on to equipment and defense, revenue grew by 13.5% organically year over year, or 11.9% if we exclude the transfer of the Safran ventilation system from aircraft interiors. We continue to support the ramp-up at Airbus and Boeing with deliveries of critical equipment, such as the Nacelle for the A320neo, or electrical systems and wiring for the 737 MAX, landing gear for the A330neo and the 787. In defense, we benefited once again from strong global demand, especially for electronics, inertial navigation systems, and guidance systems. Aftermarket services also grew for the board, particularly nacelles for the A320 and A380, and also for electrical systems and wiring on the A380. Turning to aircraft interiors, we saw a 9.2% organic growth, or 14.8% before the transfer of Safran ventilation system. Growth in original equipment was led by very strong cabin deliveries and favorable pricing in business class seats, despite lower volumes. Aftermarket services also increased, mainly driven by cabin activities for airlines in North America, Asia, and the Middle East. Turning to slide 9, we are continuing to deliver on our €5 billion share buyback program. In the first quarter of 2026, we repurchased 1.6 million shares, totaling €500 million. These shares are set to be cancelled by the end of the year, and I would like to highlight that a new tranche of €375 million of the buyback will be launched in the coming days. On the debt side, we redeemed the 700 million euros bond issued back in March 2021, as it reached maturity this March. This redemption has no impact on our net debt position, and our long-term debt profile, as shown on the graph, is long-dated and now primarily made up of bonds and USPP. Finally, just as a reminder, Safran will propose to its shareholder a dividend of 3.35 euros per share. for the 2025 fiscal year. This represents a total payout of 1.4 billion euros, scheduled to be paid on May 28. Olivier, back to you.

Thank you, Pascal. Our Q1 performance and the strong momentum we continue to see across both civil aerospace and defense gives us strong confidence in our ability to reach the high end. of our full year 2026 target in guidance. Nevertheless, we remain cautious as the situation in the Middle East remains fluid and its potential effects, notably on air traffic, are still uncertain. In any case, the first half of the year should remain largely unaffected. Thank you, and we will now be happy to take your questions.

Thank you. As a reminder, to ask a question, please press star 1 1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1 1 again. Once again, it's star 1 1 to ask a question and wait for your name to be announced. To withdraw your question, please press star 1 1 again. We are now going to proceed with our first question. And the questions come from the line of Olivier Brochet from Rothschild & Co. Please ask a question.

Yes, good morning, Olivier and Pascal. I wanted to discuss the potential difficulties that airlines might see later in the year and if they decide to defer shop visits. Do you have signals that others might to take over the slots that would have been freed up. That would be the first question. The second one is on spare engines. If there is traffic slowdown, do you think that airlines will effectively reduce their spare engine purchase? And the last one is, you discussed in the press release missile propulsion. Can you maybe tell us how significant it is, the sort of growth that we should expect to the end of the decade and these sort of things, please?

Hello, Olivier. Airlines. Interestingly, I spent two days last week in Hambourg at what we call the aircraft interiors show. And that's interesting because this is an opportunity to meet many, many airlines. And during those two days, I met about 20 of them coming from everywhere. Americas, Europe, Middle East, Asia, India, China. And what's interesting is that I got no indication at all that there is any potential acceleration in the case of retirements of aircraft. As of today, if you look at Q1, there has been 44 CFM56 powered aircraft being retired, which is less than 2%. It's about 1.5%. And, you know, in the last three, four years, most of the airlines are mainly complaining about the shortage of capacity or fair half capacity. So, I mean, there is no, even nobody envisions to, as we speak, to accelerate the pace of retirement. So I'm confident that the pace of retirement will remain low. Lowest ever, by the way, lower than before COVID in 2026. And I don't expect that to pick up in 2027. That's one. Now, when we look at shop visits, in Q1, we've seen removals of the wings of engines in line with our expectations in Q1. meaning that in Q2, we will see induction into the shop in line with our expectation. And this will feed engine output, considering the turnaround time in the shop, this will feed the engine output in Q3 in line with our expectation. So, all in all, We are quite confident that, let's say, the volume of show visits this year will be nine with our expectation. And we have been positively surprised in Q1 by the high number of show visits with a heavier scope. In fact, higher than what we anticipated. And this is why, as we speak and as you've seen, we are indeed ahead of our trajectory in Q1. And so we still expect to be ahead of our trajectory in end of H1. And this is why this is fueling high confidence to meet the high end of our target. That's very clear. Spare engines. On the contrary, the appetite forced air engine is very, very significant, in fact. And we, I mean, we would be able to produce even more engine than what we have planned for in 2026. There would be an appetite for the airframers to take them, but there would be a strong appetite as well from the airline to take them. So no slowdown for forced air engines. You had a question on missile propulsion. As I think I mentioned it, we have decided 18 months ago to invest 100 million euros in our missile propulsion business to increase the capacity by five. So we see today On our missile propulsion business, we see an increase. We forecast an increase of 20% in 2026 versus 2025. And we think, I mean, we think this is what we see because we have a backlog of orders. We think that our production is going to be multiplied between now and 2030 by a factor of 4 to 5. There's a big appetite for what we call munition, and this indeed is feeding a strong backlog for missiles and also propulsion, but also seekers and guidance kits.

Thank you, Olivier. Could you give us a sense of how significant that business is in the missile for you?

Olivier, good morning. We won't provide such a detail, but the kind of growth rate we enjoy in 2026 is clearly in the 20s.

But I can at least give you just an indication, not a detail, but we are talking about a few hundred millions.

That's very helpful. Much appreciated.

Thank you very much.

We are now going to proceed with our next question. And the questions come from the line of Benjamin Eland from Bank of America. Please ask your question.

Yes. Morning, guys. Hope you're both well. Wanted to come back initially on the situation in the Middle East and, Olivier, your comments about being confident to reach the high end of the guide because there is clearly a scenario where this situation drags on and it does become quite difficult for a lot of airlines across the world. So, you know, you're confident on reaching the high end of the guidance, but can you help us understand from a conflict scenario, like how long are you anticipating within that guide that this situation drags on for? That will be the first question. The second question is that, you know, you mentioned little to no impact so far. So in terms of both March and April, have you seen requests for, you know, small reductions in scope or delays to some deliveries of spare parts? I'd just be interested over the kind of the last six, seven weeks, what you've actually kind of seen on the ground in terms of scope of shop visits and spare parts requests. And then on the LEAP, obviously a very strong improvement in deliveries. Can you talk a little bit about what you're seeing from a supply chain perspective? Have you seen any incremental tightness given what's going on in the Middle East on the LEAP supply chain in particular? And are you still on track with the LEAP 1B Maverick Blade introduction in the first half? Thank you.

Hello, Ben. A lot of questions. On the Middle East, frankly speaking, it's really early to comment or speculate on how long the Gulf crisis will last and how this will unfold. I mean, I don't have a crystal ball on that. Of course, It has lasted for now almost one month and half. Probably it will last more, so a few months, I hope, no more. But we'll see. We've not seen any indication yet of any slowdown. It's very clear. We've not seen any indication of any slowdown of... engine removals or engine induction. We have not seen any indication of reduction of wear scope. And as I said, we've been very positively surprised, in fact, by the higher number in the global mix of short visit, in the higher number of short visit with a heavy wear scope. So in terms of volume of show visit, we are in 9 with our expectation. In terms of price, we could anticipate we are in 9. The positive surprise has come from, let's say, a heavier wear scope in average than anticipated. So no indication of any slowdown. And again, in Q1, and again, we don't expect anything in Q2 as well. So we expect to have a strong H1. Supply chain. What we anticipate and what we've seen is, let's say, a significant price increase in some specific raw materials, which basically has a cost impact for us, indeed. And so we see that as potentially a consequence of the conflict or whatever. But I can give you two or three examples. Cobalt, tungsten are typical example where the prices are quite significant. So we, I mean, we manage that, of course, and we have the buffer and, you know, the the room to absorb that. Cost increase on specific raw materials.

Good morning, Ben, if I may add. I know that you sit in Dubai, so I hope all is well for you and your family. Interestingly, a year ago, you know, it was all about the tariff. If I may discuss a tailwind that we will have in 2026 that may I saw, you know, any headwind that could come up from the Middle East conflict is about tariff. For example, you know, in Feb, I mentioned that the impact or the expected impact of tariff in 2026 should be in the range of 100 million euros. Given the Supreme Court decision, you know, months ago, now our expectation is much less than that, below 50 million. Okay, so that's a tailwind. And in addition to that, since two days now, CBP has opened a platform to reclaim, you know, the paid salary for 2025, and we are claiming up to $100 million. So it is typically, you know, a tailwind that we could enjoy in 2026 to offset any impact, if any, during the second half of the year or in 2027.

Super clear. Thank you both.

We are now going to proceed with our next question. And the questions come from the line of Christophe Menard from Deutsche Bank. Please ask your question.

Christophe Menard Yes, good morning. Thank you for taking my question. I had two questions, one on aftermarket and the other one on defense. On aftermarket, you mentioned CFM 562 World Scope. What about Z90? Is it also strong, or where do you see World Scope evolving in, well, in the rest of the year? And on defense, can you comment on the LPM boost that we saw and the impact on your midterm guidance? Thank you very much.

Hello, Christophe. Yes, on what we call high thrust engine, especially G90, we've seen a significant growth, and this has contributed as well to our spare parts revenue growth in Q1. We've seen quite also an increase of as well on the G90, so it has contributed to the growth. Which, Again, it's good news because, as you know, when we look at the Gulf share of the global air traffic, it accounts for about 5% of narrow body but 20% of the wide body. So it's been good news. And we don't see – we see that continuing in Q2. On defense, yes, the LPM, as you call it in France, Valois de Programmation Militaire, basically is going to be, let's say, augmented with a decision to increase the spending between now and 2030 by $36 billion on top of the already decided 400 billion spending in this period and announcement has been made that a part of it would be dedicated to what is called munitions so munitions means missiles and other ingredients for missiles so as I said guidance kits, CQs, missile propulsion so yes it's a boost indeed And on top of that, just as a reminder, about 80% of our revenues in defense are related to export, so not France. And we see a big boost here as well, especially in Europe.

Okay, thank you. So the LPM boost is probably not enough for you to consider your lithium guidance just on the back of that 36 billion boost.

It's a good tailwind and a good contributor, but it reinforces our confidence, I would say. To me, the high end of our guidance.

Thank you very much.

We are now going to proceed with our next question. And the questions come from the land of Robert Stallard from Vertical Research.

Please ask the question. Hello, Robert Stallert. Your line is open.

You may ask your question.

Hello, can you hear me?

Yes, Robert.

Oh, sorry. I muted myself. Good morning, guys. A couple of questions from me. First of all, earlier this week, GE gave a new basis on airline activity for its forecast and its 2096 guidance. I was wondering if you'd done anything similar in your guidance. And then secondly, on interiors, Boeing was highlighting continued seat certification issues on the 787 yesterday. I was wondering if that had any impact on you in the first quarter. Thank you.

Hello, Bob. Airline activity, we have not gone through a detailed, let's say, exercise. of forecasting airline activities. Of course, we are studying various scenarios, depending on how long the crisis will last. Again, it's very early to... I don't want to speculate, so it's too early to comment on that. Again, we... believe that the wide body is more impacted than the narrow body by this crisis in terms of overall number of cycles for the full year 2026. So impact could be, let's say, higher on wide bodies than on narrow bodies. About CIT certification, yes. This is an industry-wide, let's say, issue. As we have already commented, the certification, the U.S. authorities have significantly tightened their interpretation of certification rules, and therefore, I mean, we are in a situation sometimes where we have delivered the seats to the aircraft and the aircraft is ready to be delivered, but we still wait for the green line of seat certification. So it happens. And again, it is one of the issues that as an industry, And it's really something that we work on with the Afremis. We need to find a way to unlock and to ease because it does have an impact on Afra deliveries. Now, interestingly, and again, I refer to my two days in Hambourg last week, have been again surprised by the level of the demand for new premium seats, new business class seats, and first class seats, which largely exceeds the supply. I mean, we are in a situation where seat suppliers are quite often in a position to no-bid, to request for proposal, just simply because the demand is largely exceeding the supply. The reason for that is that many airlines have launched big retrofit programs, and they're investing tens of millions for retrofitting their fleet of A380s, 787, 787, A350s, and this comes on top of, let's say, the line fit ramp up, especially on A350, 787, and 777. So we are in an interesting situation where we still need to unlock those certification issues. But the demand is incredibly strong.

That's great. Thanks so much, Olivier.

We are now going to proceed with our next question. And the questions come from from UBS. Please ask your question.

Thanks very much for taking my question. Yes, I have a few, please. So the first just on going back to the guidance this year. So Q1 has been, as you said, significantly ahead of your expectations. You sound extremely clear that we're not going to see an impact from the Middle East at least this year by the sounds of things. And even if we look back at past cycles, there's been a lag of 12 to 18 months between airline financials and your financials. Could you just help me understand why it is that you haven't increased your guidance on any metric this quarter, please? Secondly, on LEAP, just looking at the production rates that we've seen in Q1, am I correct in thinking that you're tracking ahead of your production targets for the year, or am I over-reading into one quarter's numbers? And then just finally on work scopes, can you just help us understand in absolute terms how to think about where work scopes are today. I mean, this has been a driver of kind of upgrades to your expectations, I think, over at least the last 18 months, if not longer. But can you help us understand in absolute terms how high they are and, you know, what scope, therefore, this has to increase further from here or decrease, you know, if these normalise, how should we think about that? I'm just struggling to size the absolute work scope effects. Thank you.

Good morning, yeah, this is Pascal. Okay, on your first question, as we only disclose, you know, the revenue for the first quarter, as we do as well for the third quarter, you do not have the market as no reference for the EBIT at the end of March or the cash at the end of March. So this is why, and given the uncertainty we have, this is why we decided just to reaffirm, you know, the current guidance. And we affirm as well the assumptions behind this guidance in terms of lead deliveries, spare parts, revenue growth, meetings, and services revenue growth, about 20%. As we clearly said, Q1 is well ahead of these numbers. We strongly believe that at the end of June, we will be largely ahead of these numbers. So there is clearly an upside opportunity when we will publish our have your results in July, that we will revise upwards at least the underlying assumptions behind the guidance, and then we'll see how it does translate in terms of numbers, in EBIT, or in cash. So it's not the right timing, and we usually never upgrade, you know, our guidance or revise our guidance when we only publish a revenue number.

Hello, Yann. On lead production, I can say we have guided cautiously at 15%. And we are in line with our production plan. We are in line. With our guidance, we would be above 2,000 engines being produced this year. So, you know, this quarter we are above 500, so we are in line. So it may well be that we do a little bit better, as again, we have guided coaches at 15.

And the work scope?

Work scope, yes. We, in fact, there's quite a high number of short visits with a full scope of work. addressing not only the core engine, as we say, the core engine being the hot section plus the HP compressor, but also the fan and the low-pressure turbine. So, basically, what we see is that we have an unprecedented number, I mean, proportion of shop visits with a full scope of work. And so we should not expect the World Scope to continue to increase. We should expect, at least this year, let's say we've reached this peak in terms of World Scope, and we expect that to continue along the year.

If I put that in different words, you know, if I split between share visit growth pricing, and work scope. When you look to the plus 29% revenue growth in Q1, there was no, at least for the CFM56, there was no sharp visit growth over Q1 last year. Pricing effects, which we had in August last year, was mid to high single digits, meaning that the rest of the performance is coming from the work scope. So it gives you an order of magnitude how huge is the impact coming from the work scope.

Could I just ask a follow-up there, and I hope it's quick. I mean, in the scenario that fuel prices stay structurally elevated and so airlines are forced to re-evaluate their maintenance plans going forward, is there any reason why that work scope cannot decline by a similar magnitude?

Yeah. Again, as a matter of fact, we don't have any indication of that following our discussion with many airlines as of today. We don't see any indication of that. Again, I mean, I don't have a crystal ball, so I don't know what's going to happen in 2027 or so, but The fact is that airlines have learned from the past use that it's wise for them to make sure they have aircraft capacity. And this is why, again, we don't see any, let's say, AI line envisioning accelerating pace of retirements or, let's say today, trending towards telling us that they are going to redo the warehouse scope. We don't see that today.

And if we look to the CFM 55th utilization, pre and post the conflict, it has remained stable so far. So we have no indication at all that there will be a reduction in scope for the months to come.

Thank you very much. Appreciate your help in uncertain times. Thank you. Thank you.

We are now going to proceed with our next question. And the questions come from the line of Chloe Lumari from Jefferies. Please ask your question.

Yes, good morning. Thank you, Lizzy and Pascal, for the interview on shop visit volume and WorldScope. If I could follow up on actually on pricing and how this works from your end. So, obviously, I guess the list pricing increase, you probably already, you know, set them and kind of made them known through airlines. But in terms of the pricing, The discounts that you grant them, when does the discussion happen? Have you already done that throughout the end of the year? Does that happen at the time of the show visit? It should help us understand how things could move versus your initial view on this. And my second question is on services. So we'll be seeing a very, very strong quarter again. I'm assuming lead contracts are the main driver. How should we think about the margin evolution there, given that you're now recording profitability on the 1B as well? Please, thank you.

Good morning, Clay, on pricing. We have not yet finalized and completed the discussion with GE for what we will do on the 1st of August. As you know, on our side, the intent is always to have a couple of points above inflation. So inflation may be the uncertain or the unknown parameter so far. So we would have to think twice about what we do. the next 1st of August for the catalog lease price for CFM 56 per part and for the LEED as well. Do we grant discounts today to airlines? First, we have not received any demand for that. So the discounts that airlines are benefiting from are the ones that are very usual depending on the size of their fleet, the importance they have for CFM. So there is nothing new at least related to the Middle East concept. On services, we did enjoy a very strong 43% year-over-year growth, which is well above our underlying assumption of 20% for the full year, so it bodes well for the rest of the year. In terms of margin, we started to recognize LIP1A, LIP4PFH margin last year, And our partner confirmed that they will introduce, you know, the Maverick HPT blade on the LIP1B during the summer months, you know, June, July. So it will trigger the recognition of margin on those contracts. So you will expect, let's say, in H2 that Safran will recognize not only the 2026 LIP1B RPFH margin, but the past margin, which was unrecognized so far. So there will be as we had last year, one-off, one-time effect, lower than what we had on the LIP1A, but still a one-time effect coming from this new margin recognition on the LIP or PFH contracts.

And that's on H2 that you've recognized it versus H1 for the 1A last year, right?

Last year, it started in Q2. Yeah, in Q2. We started to recognize margins in Q2.

Yeah. It will not happen in H1. Yes.

Perfect.

Thank you so much.

Thank you, Claire.

We are now going to proceed with our next question. And the question comes from the line of Ken Herbert from Albicic Aftermarket. Please ask your question.

Yes. Hi. Good morning, Olivier and Pascal. Two questions. Investors are very focused today on the uncertainty into 2027. I can appreciate services this year, you've got relatively good visibility and conversations with airlines remain very constructive. But is there anything you can provide around visibility into 2027, either in terms of backlog on the services side, any other indicators there because I think the primary risk today that's getting reflected or priced into the stocks isn't so much the 2026, but it's the potential downside or deceleration of growth in 2027. So, I know it's a ways out, but any comments on that would be appreciated. And then second, anything you can refine in terms of your assumptions on CFM 56, retirements this year, you called out one and a half percent of the fleet in the first quarter. Just remind us again the assumptions into the remainder of 26 and 27 on retirements on that engine. Thank you.

Hello, Ken. Again, I'm not able to comment or speculate. on how this crisis in the Gulf will unfold, and therefore on 2027, what I can say, what I can say is we've, as explained, we've been positively surprised on what we've seen, and that started in H2 2025, indeed, and it continued in Q1 and it will continue in Q2 2026, we've been positively surprised by the heavy weather scope, which basically is a driver for us being significantly ahead of our planned trajectory. So we are ahead of plan. And again, this basically fuels our confidence to meet this year, the high end of our target. But basically, this plant trajectory is the one that we had used for even our 2028 expectation. And so we were ahead of plan. We are ahead of plan. And so we have some room to absorb, let's say, some potential headwinds. And we have demonstrated in the past our ability to navigate through headwinds. That's what I can say. On CFM 56 retirements, we firmly believe that we will be below 2% this year. And that we don't see today that the number of retirements should be significantly different than what we saw in 2025. In 2025, it was 143 aircraft, and it was 1.5% of the fleet. Q144, so we believe we should be around 1.5 to 2%.

And keep in mind that the narrow-body fleet is owned 50% by lessors. They can redeploy aircraft from one area to another if needed. So we don't see the retirement to pick up even in 27.

Yeah, I should have mentioned I met last week also with the big list of companies and none of them today is seeing any impact on the dynamic of the leasing aircraft business. None of them. That's what I can say. Factually,

Thank you. Okay. The last question.

We are now going to proceed with one last question. And the questions come from the line of Ross Low from Morgan Stanley. Please ask your question.

Hi. Good morning, everyone. Thanks for the question. Just one final one on work scope. The question is really just around how much flexibility airlines actually have here. If we obviously baseline the current activity, let's say at 100, how far down, I guess, could this be dialed? And how much lead time do I actually need to provide you? So if I've got a short visit in the future, at what point do I need to give you some sort of anticipation or request for that scope? And just lastly, would you agree that this is the one variable most at risk going forward over, let's say, volumes or price? Thanks.

Flexibility on the world scope. The key point is basically what the airlines have to indicate to us when the engine is removed from the wing. What they have to indicate to us is basically do they want to focus on the core engine or do they want to extend the rotoscope also to the fan and to the LP turbine? So this comes basically typically when the engine is removed from the wing. This is why we have some visibility, you know, let's say two or three months ahead of induction, I would say. The turnaround time today on CFM56, and this is related to some attention on POPs and also on the global MRO capacity, which basically is in line with our anticipation in terms of volume of short visits, but is also a constraint. We have a turnaround time around, you know, 100 days now on CFM56 typically. And so this is why we have some visibility in what's going to happen in Q2 and Q3. No surprise on price. That would not be any surprise. We don't expect any surprise on the volume of short visit and wear scope. Again, we have some anticipation. Does it answer your question?

Yes. Thanks so much. Appreciate it.

If I may, because I understand that your concern, all of you, is more 27 and beyond. You know, we have updated our 2028 ambition for, it was the last Feb. As you know, we always guide cautiously. It was built with the appropriate buffer to overcome some risk. We have not factored in some opportunities as well. We do enjoy strong visibility, and frankly, we strongly believe in the durability of the earnings growth profile of the company. Now we have no crystal ball for the Middle East conflict, and we'll rediscuss that at the end of July when we can provide, you know, numbers for the end of this one. But so far, so good. We are running ahead of time. Thank you all for your questions.

Thank you.

So that concludes the question and answer session, so I hand back to you for closing remarks. We have no further questions now. Please go ahead for the closing remarks. Thank you.

This concludes today's conference call. Thank you all for your participation. You may now disconnect your lines. Thank you.