Safran (SAF.PA)
CFM/LEAP engines earn twice: OE at 35.4% of Propulsion revenue, aftermarket at 64.6% and 23.0% margin, 1,802 LEAP deliveries, €3.9B FCF.
Educational analysis for professional use. This profile is not investment advice or a recommendation to buy or sell any security, and it is not personalised.
Snapshot
Business Overview
Safran is the European engine OEM and aftermarket counterpart to GE Aerospace through CFM International and the LEAP programme. Original equipment, OE, sales made up €5,546M of FY2025 Propulsion revenue (35.4%); aftermarket services made up €10,122M (64.6%). The division's recurring operating margin was 23.0%, a figure Safran does not split further between OE and aftermarket. LEAP deliveries reached 1,802 engines, up 28% year on year, with roughly +15% more guided for FY2026. Market capitalisation was roughly €121.9B (about $140.8B at EUR/USD 1.1549 on 10 June 2026, on 418.3M shares at €291.5). Safran reports in euros, so every dollar figure on this page carries that rate and date.
The OEM vs aftermarket guide pairs Safran's 64.6% aftermarket mix with GE's 71% services revenue as the filed engine-peer comparison. Propulsion's 23.0% margin sits between GE's Commercial Engines and Services (CES) segment at 26.6% and the IATA engine MRO, maintenance, repair and overhaul, gross range of 20-35%, though Safran's figure blends OE and services rather than isolating one.
Safran does not disclose a LEAP unit backlog or its group book-to-bill, the ratio of new orders taken to revenue billed, in FY2025 filings. Delivery throughput stands in as the filed proxy instead: 1,802 LEAP engines in FY2025. The installed-base guide treats LEAP ramp and LTSA, long-term service agreement, balance growth as the forward aftermarket driver even without a backlog headline to point to.
How the Numbers Read
Aftermarket cash flow is what funds Safran's balance sheet, more than the OE ramp does: FY2025 adjusted EBITDA of €6.3B converted to €3.9B FCF, leaving €1.7B of net cash even while LEAP volumes were still climbing. The valuation guide walks through how to compute an EV/EBITDA multiple for an engine and aftermarket business like Safran's, matching the EBITDA basis to the filer and stating the EUR/USD rate and date before comparing against a USD-reporting peer such as TransDigm.
LEAP volume growth (+28% YoY to 1,802; ~+15% planned FY2026) links directly to narrowbody delivery recovery at Airbus (607 A320 Family deliveries) and Boeing (447 737 deliveries). Each new engine adds future shop visits and spares to the installed base even when initial OE economics are discounted.
Valuation Framework
Safran's economics split into two annuities: LEAP OE engine sales, sold at a discount, and LEAP aftermarket revenue that builds for decades as each engine ages into shop visits. Because Safran reports in EUR, any USD comparison needs the FX rate and date stated first; this pass uses EUR/USD 1.1549 on 10 June 2026.
Propulsion margin holding above 20% and aftermarket mix moving further past 64.6% are the two levers that determine how much of the LEAP installed base converts into recurring services revenue as the fleet ages and OE volume steps up.
What to Watch in the Financials
LEAP delivery pace. Engines shipped hit 1,802 in FY2025, guided to rise about 15% more in FY2026. A shortfall at Airbus or Boeing feeds straight back into Safran's OE revenue and future aftermarket enrolment.
Aftermarket mix within Propulsion. Services were 64.6% of Propulsion revenue in FY2025; the read-through is whether mix clears 70% as the LEAP fleet ages and shop visits accelerate.
Propulsion recurring operating margin. The 23.0% figure blends OE and services into one number, so it moves for two different reasons. LEAP learning-curve costs on the OE side can dilute it while services pull-through lifts it, and Safran does not disclose which effect dominates in a given period.
FCF and net cash. €3.9B of FCF and €1.7B of net cash fund the dividend and CFM programme investment without the debt load carried by pure OE ramp names.
Key Risks
LEAP OE ramp costs. 35.4% OE revenue carries manufacturing and warranty load. Engine list-price discounts up to 80%+ mean near-term OE profit is thin until aftermarket matures.
CFM partnership dependency. LEAP economics are shared with GE via CFM International. Programme disputes or allocation shifts affect Safran-consolidated Propulsion results.
No filed backlog or book-to-bill. LEAP unit backlog and group book-to-bill are not disclosed. Demand visibility rests on delivery throughput and airline fleet plans, not a headline backlog number.
Narrowbody production risk. A320 and 737 rate caps at the airframers would slow LEAP OE deliveries and push out aftermarket enrolment on new builds.
Commercial Aerospace Sector Primer
Delivery rates and the aftermarket annuity are the inputs. This primer takes them to a dual-rate sum-of-the-parts and an EV/EBITDA you can defend.
The Excel model is the primer's two dual-rate sum-of-the-parts builds live across 12 sheets: original equipment capitalised at a cyclical rate, the installed-base aftermarket at a lower annuity rate, summed to enterprise value. Change the delivery rate, the aftermarket dollars per unit or either discount rate and the value per share moves.