StandardAero (NYSE:SARO) 2026 Conference March 17, 2026 01:00 PM ET Company ParticipantsDan Satterfield - CFOSeth Seifman - Head of U.S. Aerospace and Defense Equity ResearchSeth SeifmanGood afternoon, everyone, and welcome back to the Aerospace and Defense Track here at the 2026 JPMorgan Industrials Conference. I'm Seth Seifman, the A&D analyst here, and we are very grateful to have StandardAero with us, and we have the company's CFO, Dan Satterfield. Dan, thanks very much for coming.Dan SatterfieldThanks, ...

Group 1 - FTAI Aviation Ltd. has acquired seven off-lease Airbus aircraft from Air France to modernize its narrow-body fleet [1][2] - The acquired aircraft include one A318-100, four A319-100, and two A321-200, highlighting the company's focus on asset value creation through innovative engine repair capabilities [2] - The company aims to deliver comprehensive fleet management solutions for global airline partners, with a growing demand for Maintenance, Repair, and Exchange (MRE) solutions [3][5] Group 2 - Research firm Citizens has raised FTAI Aviation's price target to $325 from $230, maintaining a Market Outperform rating due to the company's strong growth trajectory and solid free cash flow prospects [4] - FTAI specializes in the MRE of commercial jet engines, particularly the CFM56 and V2500 engines, providing engine leasing, repair services, and aftermarket components to airlines [5]

Core Insights - Safran is capitalizing on the aerospace recovery with record engine deliveries and a strong aftermarket, leading to a positive outlook for 2025 and 2026 [2][3] Financial Performance - The company reported a 15% increase in 2025 revenue to €31.3 billion (approximately $37 billion) and a 26% rise in recurring operating income to €5.2 billion [3] - Operating margin improved to 16.6%, an increase of 1.5 percentage points from the previous year, with free cash flow reaching €3.9 billion [3] Growth Drivers - Civil propulsion was the main growth driver, with LEAP engine deliveries reaching a record 1,802 units, a 28% year-over-year increase, particularly strong in the fourth quarter [4] - Services revenue for civil engines increased by 30% in US dollar terms, driven by high utilization of the global fleet and ongoing demand for maintenance and spare parts [4] Future Guidance - For 2026, Safran expects recurring operating income between €6.1 billion and €6.2 billion, with revenue growth projected in the low to mid-teens [5] - Free cash flow is anticipated to be between €4.4 billion and €4.6 billion, with LEAP deliveries forecasted to rise by around 15% [5] - The company has also raised its 2028 recurring operating income target to €7.0 billion to €7.5 billion, up from a previous target of €6.0 billion to €6.5 billion [5] Market Dynamics - The aerospace industry is experiencing robust demand, with airlines operating older aircraft longer due to delivery bottlenecks at Airbus and Boeing, which increases maintenance and repair activities [6] - The LEAP program is maturing, with higher volumes and improved supply chain stability reducing production friction, leading to increased installed base and cash flow from long-term service agreements [7] Profitability Factors - The aftermarket is becoming a significant source of profitability, with service revenue being less volatile and carrying higher margins compared to original equipment sales [8] - Increased shop visits due to constrained new aircraft supply provide engine makers with a unique combination of volume and pricing power [8]

Group 1 - FTAI Aviation and Hexcel are complementary stocks in the aviation sector, with Hexcel being a better long-term investment currently [1] - FTAI focuses on the aerospace aftermarket, while Hexcel specializes in advanced composite materials for the original equipment market [2] - Owning both stocks allows investors to benefit from strong aircraft production (Hexcel) and increased usage of older planes during manufacturing delays (FTAI) [2] Group 2 - GE Aerospace has performed well due to its relevance in both the OEM and aftermarket, similar to the dual roles of FTAI and Hexcel [3] - FTAI competes with GE Aerospace in engine maintenance and servicing after long-term service agreements expire, while also supporting GE's engine sales [4][5] - FTAI's recent stock surge is attributed to the launch of FTAI Power, which converts CFM56 engines into power turbines for data centers, capitalizing on AI demand [6] Group 3 - Hexcel's advanced composite materials are increasingly important for future aircraft, providing strength and weight advantages over traditional materials [9] - The use of composite materials helps airlines improve productivity and meet emissions goals, indicating long-term growth potential for Hexcel [9]

January 22, 2026 GE Aerospace fourth quarter & full year 2025 performance Financial results & company highlights Caution concerning forward-looking statements: This document contains "forward-looking statements" – that is, statements related to future events that by their nature address matters that are, to different degrees, uncertain. For details on the uncertainties that may cause our actual future results to be materially different than those expressed in our forward-looking statements, see www.geaerosp ...

Core Viewpoint - GE Aerospace has demonstrated significant stock appreciation, highlighting the effectiveness of a long-term buy-and-hold investment strategy [1][2]. Company Performance - In its first full year as a stand-alone entity, GE Aerospace's stock appreciated nearly 85%, emphasizing its critical role in the aerospace sector and potential for recurring income from servicing commercial aerospace engines [2]. - The company has transformed since 2018, moving away from the challenges faced by General Electric, and now holds a dominant position in commercial aerospace, powering 75% of commercial flights with its engines [3]. Market Position and Business Model - GE Aerospace's CFM International LEAP engine is the exclusive engine for the Boeing 737 MAX and one of two options for the Airbus A320neo family, ensuring a steady income stream from long-term service agreements [4][5]. - The business model operates on a "razor-and-blade" strategy, where engines are sold at low margins to generate substantial service revenue over decades [6]. Service Demand and Revenue Growth - The recovery in flight departures has led to increased service demand, resulting in higher-than-expected service revenue from legacy CFM56 engines, despite slower LEAP engine deliveries due to supply chain issues [8]. - Management anticipates annual revenue growth in the double-digit percentage range from 2025 to 2028, with earnings per share projected to rise from approximately $6.10 in 2025 to $8.40 in 2028 [11]. Future Outlook - Supply chain issues are easing, allowing GE Aerospace to increase LEAP engine deliveries and capitalize on growing commercial engine and services order growth [9]. - The ramp-up in LEAP deliveries may negatively impact margins in the short term but is expected to enhance long-term earnings growth estimates [11].

Core Viewpoint - FTAI Aviation Ltd. has launched FTAI Power, a platform aimed at converting CFM56 engines into power turbines to provide flexible and cost-efficient energy solutions for data centers globally, with production expected to start in 2026 [1][2]. Company Overview - FTAI Aviation Ltd. is a major player in the aftermarket maintenance sector, owning a significant number of CFM56 engines and possessing extensive maintenance facilities [1][2]. - The company operates over one million square feet of maintenance facilities and has billions of dollars worth of engines, positioning it uniquely in the market [2]. Product Development - FTAI Power will utilize a proprietary conversion architecture to adapt CFM56 engines into aeroderivative gas turbines, offering a 25-megawatt unit that provides grid operators with enhanced flexibility and output control [2][3]. - The company plans to produce over 100 power turbines annually, leveraging its existing fleet of over 1,000 engines and future engine pipeline [3]. Market Demand - There is an accelerating demand for electricity driven by AI hyperscalers, creating an urgent need for immediate power solutions [2]. - FTAI Power aims to address the unprecedented need for electricity, positioning itself as a critical partner for the AI economy [2][3].

Core Points - AOG Technics Ltd.'s director, Jose Alejandro Zamora Yrala, pleaded guilty to fraudulent trading related to the sale of counterfeit aircraft parts [1][2] - The fraudulent trading charge could result in a maximum sentence of 10 years imprisonment, with a sentencing hearing scheduled for February 23 [2] - The fraud involved falsifying documentation regarding the origin and condition of aircraft parts, impacting airlines and maintenance providers [3][5] Company Overview - AOG Technics Ltd. was established in Hove, England, in 2015, and operated under the direction of Zamora Yrala until 2023 [5] - The company supplied parts to various customers, including airlines and maintenance providers, which were affected by the counterfeit parts scandal [3][5] Industry Impact - The scandal raised significant concerns about trust and safety within the aviation industry, as counterfeit parts were found on older-generation Airbus A320 and Boeing 737 aircraft [2][5] - The discovery of the fraud was initiated by engineers at TAP Air Portugal's maintenance subsidiary, who identified forged paperwork on a replacement part [4]

Summary of GE Aerospace FY Conference Call Company Overview - **Company**: GE Aerospace (NYSE: GE) - **Industry**: Aerospace and Defense - **Key Segments**: Commercial engines and services, Defense propulsion technologies Core Points and Arguments 1. **Market Leadership**: GE Aerospace has the largest engine install base in the industry with 78,000 engines, powering three out of every four commercial aircraft and two out of three U.S. combat aircraft [4][5] 2. **Revenue Composition**: In 2025, approximately 70% of revenue is expected to come from services, supported by a $175 billion backlog, primarily driven by the install base [5][6] 3. **Growth Projections**: - Services orders growth has increased by over 30% year-to-date, leading to a 25% growth in commercial services revenue [5][6] - Full-year outlook for commercial services has been raised to low to mid-20s growth, translating to an additional $1 billion in services revenue [6] - Defense propulsion technologies (DPT) revenue expectations have been increased to high single digits from mid-single digits [6][12] 4. **Operational Improvements**: The implementation of the FlightDeck operating model has improved material flow by over 30% year-over-year, enhancing operational efficiency and supplier performance [6][7][29] 5. **Future Outlook for 2026**: - Anticipated growth in air traffic and engine shop visits, with a projected double-digit increase in shop visits over 2025 [10][11] - LEAP engine deliveries expected to grow by 15%-20%, reaching around 2,000 engines [12][13] - Services growth is expected to normalize to a double-digit growth rate between 2024 and 2028 [12][16] 6. **LEAP Engine Performance**: - LEAP engines are achieving performance levels comparable to CFM56 engines, with expectations for improved durability and profitability in the coming years [18][20] - External shop visits for LEAP engines are projected to increase significantly, unlocking spare parts revenue [20][39] Additional Important Insights 1. **Supply Chain Management**: GE Aerospace has focused on improving transparency and communication with suppliers, which has been crucial for meeting demand and resolving issues [36][38] 2. **Defense Propulsion Technologies Growth**: - DPT has seen an 80% increase in defense engine shipments year-over-year, with a $19 billion backlog driving future growth [42][43] - Growth opportunities are identified in international markets and classified projects, with expectations for mid-single digit growth in DPT [47][48] 3. **Cultural Shift**: The FlightDeck initiative has transformed the company culture towards greater transparency and accountability, enhancing overall operational performance [29][34] Conclusion - GE Aerospace is positioned for strong performance in 2025 and optimistic growth in 2026, with a solid backlog and operational improvements driving future revenue [48][49]

Financial Performance - Revenue for Q3 2025 reached $1498 million, a 204% increase year-over-year[15] - Adjusted EBITDA for Q3 2025 was $196 million, up 161% year-over-year[15] - The adjusted EBITDA margin was 131% in Q3 2025, a decrease of 40 bps year-over-year[15] - Free Cash Flow for Q3 2025 was $(4) million[32] - The company is raising its 2025 revenue guidance to $5970 - $6030 million, representing a 14% to 15% year-over-year increase[21] - The company is raising its 2025 Free Cash Flow guidance to $170 - $190 million[21] Segment Performance - Engine Services revenue grew by 213% year-over-year in Q3 2025[34] - Component Repair Services revenue grew by 139% year-over-year in Q3 2025[39] - Component Repair Services achieved an adjusted EBITDA margin of 307% in Q3 2025, an increase of 430 bps year-over-year[39] Balance Sheet - The Net Debt to Adjusted EBITDA leverage ratio improved to 29x[50]