Projects
![]()
No projects found
Investors
New
DAO Treasuries
DATs
Lend / Borrow APRs
Chains
Categories
Spaces
🇫🇷France - Luxury, Defence & Energy Champions (Wolf EU)
Recorded: March 17, 2026 Duration: 1:02:28Space Recording
Full Transcription
Thank you. Thank you. Good afternoon, everyone. Can you hear me?
Loud and clear.
Yes.
I can hear you. Yes.
Awesome. Well, good morning to those across the pond. Just trickling in
a couple of speakers. Is everyone asleep this morning? Seems very slow.
All right. Russ, rock and roll. So today we're going to be covering the French market. So
bonjour, everybody. Just adding a few more speakers here up
on the panel. Pretty excited to cover this because we don't really talk about the French market but
surprisingly we have some really juicy facts to cover. Alex I would love for you to kick off the
show for us. Well hello hello and good morning to everybody. So today we are covering what's going on in France, it's known for luxury.
And I'm going to start to cover a little bit of what's going on there.
Just going to bring up some of my documents.
So if you want to continue the introduction, Eva.
Yeah, so the French market, obviously most people know French for their luxury fashion ordinarily,
but they're not so great, I would say,
because we did talk about this in another show, some Hermes and LVMH, but the tickets weren't looking so hot.
However, obviously, with this global geopolitical tension going on,
they actually have a lot of aerospace and defense leaders and energy majors,
as well as some potential semiconductors and
tech infrastructure companies so we can cover a bit about that I'm sure they have a couple of
banks as well I know banks generally tend to lead the market as well we've got a couple of tickers
we can probably cover today we've got obviously total energies I just had a look at this chart
I was like oh my god and then there's's Thales as well, one of the largest
defense electronics company in Europe. Obviously, strongly over the last year's NATO and EU defense
spending ramps up. So here's the chart. STM Microelectrics, STM, another one that's significantly
up after announcing a multi-year supply agreement
with AWS for the AI chips as well.
So this changes the narrative from EV semiconductors
to AI infrastructure.
Is it a big bubble? Who knows?
And of course, your friendly favourite, Schneider Electric as well.
That could be another ticker we can cover as well.
I know it's a big name, which is one of the most interesting
infrastructure companies in Europe.
So every data centre requires power management, cooling and grid technology.
So if AI demand continues growing, does Schneider become one of the biggest infrastructure winners here?
We'll find out.
So I'd love to pass the mic around.
We have a couple of new guests here on Wolf Europe.
So I want to welcome and a couple of people welcoming back.
PIQ Sweep, haven't seen you in a while. How have you been?
Hello, my darling. Sorry, I feel like utter shit today, so I apologise.
I've got a severe case of man flu, so someone can have all my...
Someone can delete my hard drive if I die, then that would be much more...
One name you did miss off, which you should be ashamed about, isbus oh yes of course how can i yes it's like they are my god making boeing look like
a startup right now so come on let's really get involved with airbus um but no i think you i think
really cool that you mentioned total energies and schneider i think total energies you know as a
you know oil and gas kind of major,
because it is French maybe,
and for the wrong reasons,
it is slipping under the radar,
especially for a number of people on the other side of the pond.
But they're doing incredibly well at the moment.
And again, I think the European gas,
oil and gas story is one to watch full stop.
I know this is a French-centric show,
but you heard about eni yesterday discovering
a couple of trillion cubic meters or whatever it is they measure in um gas outside of well just off
of tripoli um and again this all feeds through to the energy story in in europe okay you know i'm
sitting here in london and our energy policy is awful to say the least but yeah i think there's a
lot of a lot of growth story and a lot of like a lot of upside
to ended to um europe and in particular france i think the only concern we have with france and i
am the worst for this because i commented on this on nearly every morning when i do my morning blast
podcast michael brown is they're politically completely broken the french um so it does
feel like if they can sort that side of the equation out, then there's no real reason why France can't fly.
However, see what I did there? Nice pun with Airbus. However, they are in a political mess.
So I think we need to caveat anything we talk about on this show today about France.
We need to caveat the fact that they really struggle to get budgets through the net when Macron's leaving soon.
Is Lagarde going to come in?
Is that why she's leaving the ECB early so she can take Macron's role?
There's a lot going on.
There's a lot of risk that needs to be priced into the French markets at the moment for the next year or two until we see how this political landscape evolves and does it improve.
But that's that's what you know, I'd hate to be the doomsayer, but it is the French and obviously I'm British.
So I've got to kind of tap them on the head a little bit.
So what do they say? Je ne sais pas en français.
Yeah, I some really interesting names that we can definitely deeper dive in that.
And of course, it's not restricted just to France itself.
We're covering all kinds of names as well that could affect some of these names, even in the U.S., a commodity side.
I would love to welcome brand new onto the stage to WolfEU is Laurie Dalio.
Welcome.
Bienvenue.
Merci.
So my name is Laurie, but it's okay.
So can you hear me?
It's fine?
Yep.
Yep.
So I need presentation or?
Yeah, if you want to give yourself a little intro and generally what kind of trends you might be seeing.
Yeah, so I started my career as a financial analyst in asset management, but I move on pretty quickly to start my own project.
So today I'm the co-founder of a club of 800 passionate clients.
I'm the co-founder of a club of 800 passionate clients.
So our core focus is pure fundamental analysis,
looking for high-quality companies across both North America and Europe.
So maybe before we dive into the specific stocks,
I'd like to quickly define my framework.
So right now, I'm focusing on four major themes so first
the AI roadmap featuring players like a SML or Google second the surging demand
for energy which will definitely touch on with Schneider Electric I think then
there is what I call the convenience economy like Uber, DoorDash, Netflix.
In my view, people will work less in the future and spend a massive amount of time on entertainment and media.
And finally, what I call digital toll bridges like critical infrastructure like Amazon or Visa. But if we're moving on the French market,
I see two companies in particular that perfectly fit this vision.
So we have Estillard Luxottica and Schneider Electric.
Awesome. I love those insights.
Je dorser perspectives, I would say.
My French is actually terrible.
I need to relearn it.
Awesome intro.
Yeah, we can definitely deep dive into some of those names there. I want to welcome back on the show our lovely Quant, Quant Joe. Good morning to you. Good morning, good morning. Daylight
savings absolutely took me out. Yeah, there's a few things that I think that's good to cover in the French space, especially in the aerospace sector.
Two companies I stick at are, of course, Airbus and Dassault as well.
With the European, I don't know if it's the European unions or Europe as a whole.
I don't know what the specific wording for that is, but Europe's future combat air system, that whole program is definitely something interesting to pay attention to we can get more into the details on that
i'll be very honest i don't think the eu or non-eu states know what the correct term for this
is yet so i don't think it seems to be very very messy at the moment i thought we were in a mess in
the uk but hey ho uh yeah we were well there was a reason why I didn't do a British
country uh European show you know I've grown up in person with me bulldog and me American with me
uh with me great great flag and I'll be singing you know that's why yeah I know right all right
I want to welcome back onto the show Tiltfolfolio. Welcome back, sir. How are you doing?
Good, thank you.
It's good to be here.
And if you can't hear me, just like let me know.
For sure.
What I was going to say is that, you know, not just in France, but one of the things I was looking at this morning were all the,
a lot of the names that you mentioned,
but just the dramatic outperformance of energy
versus just about every other sector.
So this morning, looking at XLE, which is US energy stocks, at all time highs here in
pre-market.
If you look at IXC, global energy producers, again, all time highs here in pre-market.
So Total Energies, which you mentioned, you know, is an extremely interesting name and potentially other smaller French energy companies that I'm just not aware of.
But I think what we're going to see or what the market is kind of suggesting is just
energy for the time being overshadowing a whole bunch of other stuff. So I think that's worth
looking into. Yeah, absolutely. I think Total Energy just really sticks out for me like a sore thumb there.
Another name I totally forgot to mention, actually, speaking of Airbus, is Safran, S-A-F, the aerospace and defense supplier tied to aircraft engines and avionics.
Obviously, they benefit from both the recovery and aviation and increased defence spending as well. So that could be another one we could watch out for.
And of course, I have to read a very, very quick disclaimer here on the show.
There's nothing we share in this space is professional financial advice. This is purely
for educational purposes, to help you and to do your own research. And investors should always carefully consider funds, objectives,
risks, charges and expenses before investing.
A funds prospectus and summary prospectus contain all this information
about their income shares, ETPs from leveraged shares
and to obtain a funds prospectus and key information document,
please visit their website at incomeshares.com.
And a funds prospectus and key information document
should always be read carefully before investing,
or any fund for that matter.
I would like to welcome on the stage again,
Sandeep, good afternoon to you.
How are you doing?
Well, it is the evening, but no worries.
It's still bright out.
So yes, we are talking about France,
and France is an interesting,
French stocks are quite interesting.
On the one hand, you have the likes of LVMH and Hermes,
which are essentially cultural asset champions
with a multi-year waiting list for people willing to buy things
that are frankly available everywhere else.
But people care about the label.
On the other hand, you have cutting-edge companies such as Schneider Electric,
which despite its Germanic name is a French company, all the label on the other hand you have cutting edge companies such as schneider electric which
despite its germanic name is a french company and your total energies but despite its generic name
is a french company and as you mentioned saffron which is running high on a seven billion dollar
deal it's signed with india wherein india will get to build a fifth generation fighter jet engine
and own a fifth generation fighter jet engine and own a fifth generation fighter jet
engine across the entire value chain and which Safran will help build out for which it got paid
a princely sum of seven billion dollars for not delivering an engine instead you have to teach
how to build an engine which is quite an interesting deal and this sort of highlights how strategic industries have the french government as its
major salesmen and this was made possible through a g2g a government to government deal
that macron has come to do uh unfortunately it did not seem to have worked out very well for
another french company known as dasau which is hoping for 114 fighter jet deal with india which
So we're just hoping for a 114 fighter jet deal with India,
which there's a drag on for various reasons.
We can get into that later on in the show.
Yeah, for sure.
We definitely have to talk a lot about defence, I'm sure,
with a lot of tension going on.
And that's also following the show I'll be doing on Thursday,
all about the oil volatility as well.
I'd love to welcome back one of our Wolf family here.
Monitiv, I know you know so much about Schneider
and all these other energy names.
Welcome on the stage on Wolf EU.
We'd love to see what you're looking at
and any trends or changes even.
Well, I think when we talk about, you know, France,
I think it's important to understand that you know they've been
stubbornly independent and they've kept their industry growth going in spite of really really
troublesome and lean times and uh you know holding on to their their defense uh you know superstars
when things were really bleak and now finally it's paying off because they have probably after the US, they have the most mature defense industry and the ability to cover almost everything. uniquely placed, though this problem with the next generation jet between Dossau and
Airbus is creating quite the mess.
France can run a little while on the backlog on Rafale, but that's a problem they have
to address.
So, you know, I mean the the big players in france
obviously you you talked about this so you talked about safran uh talus talus is really a you know
a mega star even a big player within the u.s supply chain for uh for electronics and um
for electronics and electrical systems and subsystems.
So that's a huge player and they have a lot of,
you know, ownership of private enterprises, you know,
as a core stockholder in many companies that are not listed.
And then the Naval Group, which is, you know,
which is seeing a resurgence in shipbuilding, submarine business across
the world for countries looking for alternative to US submarines and ships.
That's primarily, I mean, it's these four large companies that anchor the entire French defense group.
Saffron is very interesting.
I think people downplay the importance of engines,
don't understand that engine is a consumable.
In the life of an aircraft, you go through multiple engines,
and it's even worse in case of defense. The life cycle of an engine in hours is much smaller than commercial. So
Saffron has two large businesses. The commercial side is their 50-50 ownership of CFM. So they supply single-line engines to Airbus,
and they have a whole bunch of other engines,
and they have a big MRO business, maintenance, repair,
overhaul.
And then they are the only supplier to Dassault
for their entire defense um aircraft program uh
so those the safran um engines their leap engines also um supply boeing for the 737 max as well so
then their deliveries are like insane in um so that that's yes and no. So the agreement is it splits responsibilities.
GE is primarily responsible for supporting Boeing.
But what is interesting is in every engine,
there's a few parts that come exclusively from Safran.
There's a few parts that come exclusively from boeing and
then both of them assemble it in different places ah got you understood good knowledge
yeah yeah so that's that's how it works i mean effectively boeing has larger number
of or value of parts going into an engine but they couldn't do a damn thing without
saffron because they just do not have the capacity or the
ability to produce everything for a you know smaller engine uh when it becomes larger right
the multi-isle engines they they do it on their own and there they compete obviously with uh with
with Rolls-Royce so you mentioned you mentioned like capacity constraints there so i've got a
question for you because you're
one of the most knowledgeable people I know on this and also anyone else on the floor
that can answer this. So when we talk about defence spending and defence order books and
whatnot, you've got Falaise, you've got Saffron, order books, they're at record levels as we know,
but we also know that production capacity is
a constraint right whether we like or not it's something we want to bear in mind so how do you
distinguish between companies that can actually execute on these mega orders that we're seeing
um and those that will disappoint later on on delivery schedules and stuff and is that something
as an investor you are actively looking can they fulfill the the order book that they've got in a
in a timely manner or do you just
take the headline number so uh that that's actually a great question so if you if you look at the
entire aerospace and defense industry both commercial side and defense side you do not you
do not ever value the backlog in the same sense that you would value the backlog
for example in a semiconductor industry because most of those are contracted backlogs meaning
there is a contractual obligation to take those deals to take those to start making payments, but it's just around the corner, not in this year, maybe.
So, so those, the likelihood that backlog turns into an actual order that, that, that can be,
you know, that, that, that you can get advance against and start a production is very high outside of aerospace and defense.
startup production is very high outside of aerospace and defense.
When it comes to aerospace and defense, a backlog is an intention to purchase that's,
you know, discussed between, you know, countries rather than, you know, or airlines for commercial,
right?
And those just got get added to the back of the line.
It means nothing more than you know what
will come back to you when it's your turn or when it's two years before your turn so
you got to kind of rely on the political will still be in there when it's time to start
fulfilling the orders right because one government 100 right look at look at what's happening with
f-35 the europeans are starting to back off so So some of those FMS orders might actually fall off the books.
So that's always a problem in aerospace and defense.
You never, I mean, if you think about it,
the big five in US have more than a trillion dollars in backlog now.
They don't have, they just have barely a trillion dollars in valuation, right? The backlog
is not being valued as an actual future revenue. It's just a, you know, it's just a guide to what
they are, you know, what they have handshake agreement with their customers and nothing more.
As you get closer to it for the next two years orders
yeah that there is a there's a contractual delivery there and you're starting to procure
parts and supplies and you're giving sub assembly orders to your supply chain so so it's a great
question most people don't look at it right people see huge backlogs in defense it's actually meaningless
right which is why when a defense company receives a 20 billion dollar 30 billion dollar order
the stock doesn't move all that much because it's just something you know in the back somewhere
there right so but it's a great question well's literally going to be my one good question of the day. So I'm glad I got that out nice and early.
No, no, no.
People don't think about it, right?
You certainly have to value backlogs and defense very differently than almost any other.
It feels like it's just letters of intent all the way down.
But let's go back to the other part of your question.
So it is a huge problem.
The ability of a company to sell versus actually deliver on the backlog, two completely different
stories.
There's no connection between them.
A lot of these companies, all of them, right, whether it's a US company, whether you take
BAE Systems, the British, you know, giant Airbus or any of the French companies,
the problem is the same. For the longest time, until maybe a year and a half, two years ago,
they were content with maxing out their existing
capacity and producing the best they could and delivering in a steady and a slightly growing
pace, right? Maybe, you know, 10% a year or so, single digit growth every year.
But their order books are growing really fast. So you could potentially have a situation or
there's plenty of situations where you had seven, eight, 10 years worth of order books and, you know, people that
are going to buy were just, just sitting and waiting while the technology was rapidly evolving.
Right. And part of the problem was how certainly in defense was how the countries released orders.
And part of the problem was just the risk taking based on,
you know, what their ability to raise capital
and employ capital to produce against future orders
was also limited, right?
So most countries release annual orders.
They don't guarantee anything beyond that
because defense is typically a separate budget item
in every country's larger budget, larger annual spend.
So only now, starting primarily with NATO countries first
because of their internal needs,
and more recently with the U.S., primarily after Trump took over,
that multi-year orders are becoming more common, especially in munitions.
So they're starting to put up larger capacity just to build up you know that that that
that plan to you know to to deliver much larger numbers right from a few hundred to a few thousand
a year um so so that's a very new thing and it's it's it's a it's a good sign except if things all
settle you know that first multi-year order will be the last multi-year order they get.
And, you know, they'll go back to, you know, single digit growth rates and, you know, screaming at their senators that they're not getting the orders they were promised.
Right. It's unfortunately that situation, you know, for people that can go back and look at the numbers from the drawdown from the Gulf War,
we had a terrible four or five years of defense growing at like 2-3% a year, right? Far below
even inflation at that time. Yeah, some really important things to really remember about backlogs.
That's a really nice way to identify between what's real and what isn't or what's promised.
Something about the Europe, at least with the arms, you know, European spend, what, 800 billion is committed by the EU governments because NATO spending targets our policy and not really an aspiration.
Obviously, you know, they have to, especially in this time.
The company supplying radar, avionics, missile systems,
satellite, cybersecurity, they're all booked multi-year,
if you all look at the numbers as well.
I guess the debate is whether the price has run too far right now
because you've got Phallus up what 66% in the last 12 months,
you've got Saffron up 41%. What do you guys think, Laurie and Tiltfolio?
So about Airbus, firstly, I think this is a great company. You talk about Saffron,
I think this is a great company. You talk about Saffron, it's also nice.
It's very important to understand that with Airbus, obviously you have a backlog that we'll be doing until 2035.
Of course, it will all depend on our ability to ramp up production, but the availability is unique.
But the visibility is unique.
And you have also three customers.
You have the French state, the German state, and you have Spain state.
This is great because you have visibility.
You have the next project about space.
So we have a fusion acquisition M&A between Leonardo Italian company and
Thales and Airbus so I think Europe they want to be great about space for the
moment we are so bad in Europe about space if you compare to SpaceX and other
companies so with Air, you are fully benefiting
from the recovery in air travel.
And let's be honest, they are pulling ahead of Boeing,
which has been facing a crisis.
Airbus has become the ultimate benchmark for me
for reliability in industrial execution.
So about the valuation, the P-E ratio is quite good if we are looking at the
charts. For me, you can wait. So now we are at 170 euros, maybe a bit less, maybe 160, 65, it can be great. But you have visibility, you just have to wait.
And if you are a bit, if you are patient, for me, it's okay.
About saffron, it's a bit different because invest in saffron,
it's like to, it's not the same as Airbus because the genus of Safran is that they are platform agnostic.
They supply both Airbus and Boeing.
Their Leap Engine Power, the A320 Neo, but also the 737 Max.
So no matter who wins the delivery war,
Safran wins.
So it's literally,
it's a literal royalty on global air travel.
They don't just sell engines.
They sell spare parts and maintenance
for the next 20 years.
So for me, it's a very hard margin aftermarket businesses
and you just have to wait.
So for me, the price is great today.
Yeah, absolutely.
And especially with the oil prices going up now.
So I guess air travel demand has gotten a massive shock right now
with everyone inflating their flight prices.
So that's something to also bear in mind as well. It should be a very interesting case.
Love your insights on there. Thank you. Tiltfolio, how about you? What do you think about what
Monitiv has said? I'll skip out for now because I've got a bunch of construction work happening
outside. So why don't you choose someone else? No worries there. Joe, I know you had a couple of names you wanted
to talk about too. Yeah, definitely. Nailed the conversation about backlog too. Very, very good
information there. A few things that I wanted to bring up, this ended up being a defense episode,
which is kind of funny. I was going to keep it way i was thinking to myself oh cool they'll talk about energy and i'll bring it back with
airbus and uh and assault um we can talk about energy too we're short on that but um one thing
i did want to uh bring up though with the salt is that their output has just seemed pretty dang
stellar um their new they unveiled their new new Falcon 10X business jet recently,
which seemed to be received quite well by the market.
Not by the market, but by their customers.
The unveil went well.
A few things that are interesting is I'm currently looking at
who's going to be making the sixth generation fighter jets
and how they're positioned.
The main differences in the fifth and sixth fighter jets and how they're positioned. The main differences in the
fifth and sixth fighter jets are really going to be distance that they can go without being
refueled, the drone capacity, and everything else just seem to be improved. Of course,
they're going to over-inflate the metrics in a defense context, right? But Dassault is positioned better,
I think, to literally make the jet than Airbus. The way that I think about it is,
I'm going to talk about something on my side of the water in America, and then I'll wrap it back,
is this recent contract with Anduril and Palantir. Not with Anduril and Palantir,
just the recent contract with the Army and Anduril. Anduril is Palantir. Not with Anduril and Palantir, just the recent contract with the Army and Anduril.
Anduril is a private company, so I was thinking, okay, what kind of public company would be
getting some sort of exposure from that?
And the conclusion I came to was Palantir because of where they sit in the tech stack.
Beforehand, before a company like Palantir even existed, the layers of defense was like
the administrative layer, people making decisions, and then that literal machine and your infantry like your soldiers it was there was nothing in between
that but now with companies like palantir with thalas there is that um layer of almost like glue
in between to help with decision making and consolidate information and stuff like that. That's where I see Airbus falling more so than literally making the 6th Gen fighter jet.
I think that the tech stack in terms of this kind of defense would be Dassault's Rafale,
I might be mispronouncing that division, literally making that fighter jet in the hardware.
And then the companies like Thales, Airbus, even Leonardo sitting in the middle,
connecting that layer with the administrative layer.
Yeah, that's all. That's what I got.
No worries. Awesome.
Just quickly want to call out since since we're talking about
collaborations here uh airbus is actually working with kratos to to market uh you know
drones to cpa right collaborative combat aircraft to to european customers so i don't know where
how far it's going, but that's a
very interesting collaboration there.
Definitely something to watch out for
on the other side of the water as well.
Spread yourself
out there in terms of diversity.
Good shout. Sandeep,
what are your thoughts on this? I know
you have much to say, Parabith, in your research.
Sure.
I mean, I've covered Safran and Daso from a defence,
from the India deal perspective
and the EU-India free trade agreement perspective
earlier on in January.
I'll share with you guys this article that I wrote about it.
But yes, the Airbus deal is that essentially
Safran is saying
i don't want to i don't want to supply uh these new engines so as to match your aggressive growth
outlook and the argument that most analysts are sort of saying is that safran makes more money
from servicing older engines than it does from manufacturing new engines. And that is what Safran wants to hold on to.
There is a vast universe of Safran-built engines out there in the world,
and it is making quite enough from that.
And lately, it has been sourcing parts from new suppliers in India,
which means there were at least around a 4% to 5% margin improvement,
in terms of profits at least.
And they've been making rip-roaring business on that.
It's also the reason why Airbus sort of came over to India and said,
I'll try to leverage some infrastructure here to make it a little bit cheaper.
But all of this sort of ties into the fact that they're being very conscious of their margins,
which is good for Sopran actually actually because it is in the driving seat uh engines aren't necessarily generic they're built
with an aircraft in mind and the aircraft in turn is built with an engine in mind
so it knows it is in the driving seat of this it is raising sapran is quite reasonably asking whether
seat of this it is raising safran is quite reasonably asking whether so many new aircraft
are required when you consider the fact that any of these large aircraft can be serviced basically
for about 40 50 years if you take a look at layer jets or even if you look at the original
lineup of falcon jets there are 50 year old falcon jets out there there are 50 year old leaders out there
in fact there are over a thousand dc3s that were manufactured during world war ii that are still
operational even now a thousand and it's nearly 100 years old there are a thousand of them flying
all across africa and latin america and they work just fine so essentially Safran is kind of calling
airbus bluff it's saying that airbus says that it intends to be a sort of like this this big
almost uh you know almost uh global monopoly on the supply of uh large jets and safran is saying man that's not how it's going to happen each of
these just cost about 300 to 350 million dollars each nobody's going to be spending that much money
buying new new airliners just because you make this it is much more interesting for me to go look at
military jets which as monitor mentioned uh are do go through a lot of engines again here it is here also it's
the same thing aircraft are built around engines and engines are built for aircraft uh it is for
so they're looking at India and saying like I will build you a complete clean sheet engine
in 10 years and we will collectively make money over uh in terms over in terms of MRO, maintenance, repairs and overhauls for the next 50 years.
And it's not a small air force that they're going to.
The Indian Air Force and the Indian Navy together have the authorization to operate close to 2,500 aircraft.
So 2,500 aircraft, that basically makes it either the third or the fourth largest
air force in the world and by getting in on the ground floor they're essentially ensuring that
the next 50 to 60 years of aerospace engine development will have some sort of parallel
that would be beneficial to safran so for example if you build a six generation fighter jet if a
six generation fighter jet is being built in India as a Safran layer door a Safran
uh Safran led fighter jet for a six generation fighter jet pro engine will have many parallels
which means there are potential for margin improvements when mro happens again maintenance repair and overall uh so uh it's
improved in in for profits i mean so they're all suffering is taking a very long-term view on this
and saying like yeah i mean i might be creating a rival in india by giving them basically an engine
that they have total ip control over in everything from manufacturing to algorithms. But I'm also creating a partner with
which I will basically rule a particular niche within the aerospace engine industry for 50,
60, or maybe 70 years. So Airbus's concerns are interesting, but it may be a too aggressive
a growth target, especially if you consider that there are entire boneyards filled with aircraft.
Boneyards, by the way, are places, giant spaces, particularly in the United States, particularly in the Moab Desert in Utah and Nevada, where hundreds and thousands of airplanes are kept in cold storage, so to speak, for utilization.
A lot of air buses and a lot of boeing passengers are lying
there beautifully saran wrapped if you will waiting to be used all over again and that's basically
because there is a glut in the supply of airliners it is not about profits it's about uh sort of
geopolitical advantages or strategic in the industry reshoring and stuff like that.
So Airbus's demand is a little bit about sort of asserting that Europe will continue to
be relevant while you have an administration that's going in the United States that's basically
going hog wild all over the world.
But the reality, market reality kicks in.
I mean, it's hard to say if there is that much demand
available for airbus jets right now interesting i see a question from piq go for it hello and thank
you um yeah obviously we've spent a lot of time so far just talking um about individual stock names
you know primarily in aerospace and defense and so i was going to try and open it up more to more kind of French global issues and stuff,
which at the end of the day, you know, underpins pretty much any investment you make with in a French company.
You take you look at the AI space for the French, obviously slower to get off the ground than say Ireland,
obviously Dublin in particular, Germany and UK.
Primarily the reason for that was that they were
getting the house in order regarding rules and regs and whatnot you know one thing that France
does have that Germany especially and the UK and Ireland don't have is reliable nuclear power which
obviously will hopefully make them you know potentially a great place to be for AIs going
forward obviously we've already seen that Dublin and Frankfurt have had to postpone AI projects because of the lack of power. But looking at, you know,
I know I mentioned it a little bit before, but, you know, politics is one of the things
I'm quite interested in and interesting to hear what other people say. So my kind of,
my question to the floor, as it were, was that, you know, the French political discount
is definitely in the CAC, okay? YouAC. The CAC 40 has underperformed
the DAX by a significant margin over the last three years. A lot of reasons behind this,
but mainly due to the fact that the political uncertainty is run by a minority government,
it's budget crisis after budget crisis, they can't get any reforms through, they had a prime
minister, was it last year, that lasted 91 days. Yeah, and I think this is why a lot of the number of these
companies are owning their crust abroad. Yes, the risk is regulation and regulatory uncertainty,
but we can see with what's going on with AI that they are trying to get their ship in order,
because otherwise they do realise they're going to be left behind. Yeah, we've got the potential
of a significant wealth tax overhang as well. So that's impacting maybe direct investment and
whatnot. And also, especially people looking to move into the area. So I guess my question to
the floor, and I guess I'm looking at Loris and anyone else that specialises in the French markets
and is indeed French. Is there a contrarian case to be made now against the French political
dysfunction in the sense that is it already priced in? Is the worst priced in and now
there's room for it to be sorted out? Or because we've got the elections coming up and Macron
leaving office soon, is it still early to discount this? Sorry if that was a bit of
a long-winded question, but I think you get what I'm getting at.
Great question.
That's two, that's two, right? I'm retiring. I'm retiring.
Laurie, what do you think, or do you feel like?
It's hard to answer. I mean, next year we have an election in France.
Obviously, it will be determined because we know that Macron is a bit pro-business.
So it was, we can say, great for France economy and the image we have with other countries.
countries but but I think that for the defense industry except left right party everybody is
okay to spend more so the trend can be can be great for the next decade and for for others companies, it can be different, but I don't think so that it will be so important for most of the companies
because they don't make revenues a lot in France.
In fact, if you take luxury, defense and energy, they do a lot outside Europe.
So for me, in my opinion, you don't need to wait.
But the biggest issue today is the issue of debt,
because in 2025, the government said that big companies, they need to pay more taxes.
So it was an issue because Hermès, LVMH, etc., they pay, I don't remember the exact number, but maybe 34% of taxes before it was 25.
It's 25 in France.
So the impact of the decision of government was terrible.
And it can continue like this, I think, because it's so easy for government to tax companies before people like us, I think.
So this is my answer. I don't know if I answer to your question.
It seems a little bit like France is running some kind of industrial Darwinism because they aren't really, you know,
stopping or stepping in to help insolvencies.
They're just focusing on building out
energy grid infrastructure
to sort of attract more and more foreign investment,
more and more foreign data centers.
It's just what it looks like
looking at the numbers over here.
I don't know what you guys think.
Interesting. Yeah, Tilfoglu, I see your hand up there go for it yeah so I was just gonna I mean I'm not
in a position to talk about um the French political system I'm you know Canadian living in Switzerland
so uh hardly my area of expertise but what I was gonna say about France um is you know the country
as someone else mentioned earlier on this call,
has a big industrial base, right? It has a ton of energy. And if you look at the last 15 years,
we've been in an environment that's been really rewarding for growth stocks, and especially as we
all know, U.S. growth stocks. And we're now moving into a different environment where,
you know, investors are looking at value, right? So industrials, aerospace, you know, all the stuff that France
is very good at, you know, I think will do well in the future. Now, to be, you know, objective
and realistic, yes, you know, France has underperformed Europe. So if you look at, you know,
EWQ, which is the French ETF, compared to IEV, which is MSCI Europe,
it has underperformed in the past few years. And certainly compared to, say, Germany, the Netherlands, I want to say even Italy is what I saw recently. So again, to be objective, yes,
I think there's a big political kind of question overhang on France. And, you know, I'm not really
in a position to comment on that because I'm certainly no expert in French domestic politics.
But if you look at what investors are looking for into the future and if you have a little bit of patience and if you don't mind,
you know, some of these upcoming drawdowns, you know, that are probably coming because of the war in Iran and just a turbulent year,
I think this year is what it looks like to me.
Then I think France is, you know, there is kind of a growth story there.
Maybe not as clean to be objective compared to other European countries that we talked about last week.
Some great perspectives there.
For sure, we always welcome, you know, outside values and through a different lens.
It's always nice to see outside of its own countries, you know outside values and and through a different lens it's always nice to see outside
of its own countries you know views it can be quite frustrating when you're in living in that
country um certainly similar cases in the uk where they were trying to increase corporation tax and
that's certainly no favor as as you know the effects of of that was the UK got the world's most largest exodus in millionaires and billionaires over the last, what, even year or five years for sure.
It was absolutely staggering numbers, you know, close to 17,000 people leaving.
That's a big, you know, bill to be filled, you know.
They're obviously leaving for greener grass where they can
do better business at a lower cost and that's something we definitely covered on our last show
here too we'd love to invite up here on stage wise one um you have been an incredible listener for the
last past few shows we'd love your perspectives on the French market or defense and energy, whatever trends you're looking at.
Hi, Ava. Yeah, I can't really comment much on individual stocks or just more on the general realpolitik of France.
But it's more the situation in France, I think, is quite optimistic, I would say.
They have a couple of things that work in favor of them.
They've got Station F, which is a massive startup village.
And they can also provide capital really quickly through BPI versus other countries where they're going to private capital.
But also they've got the backdrop of the energy situation where you've got that reliable nuclear.
I know this year they're going to have a few outages, so their output's going to be down a little bit. But compared to other people,
if you're looking somewhere to put a data centre or anything, are you going to look to the UK where
energy is significantly more expensive, or are you going to be looking more towards France where
you could make it much, much more affordable. Yeah, fantastic views there.
Our energy bills, just for the listeners,
we pay the world's highest rate in electricity by miles.
If you ever do your research, you might be quite in for a shock.
And unfortunately, I think it might be increasing for us
in the next quarter, sadly.
Awesome insights there.
Sandeep, do you have any other insights you're looking at?
Well, if you're talking about data centers, again, Schneider,
I find it very interesting that Schneider Electric,
despite the whole AI data center boom that we have been talking about,
Schneider Electric's revenue only has a 9% to 10% increase over the year,
has a 9% to 10% increase over the year,
which lends some suspicion to me, in my mind at least,
that the AI data center boom is slightly overrated.
I get that a lot of people are being a little more cautious with their money
and a lot of governments are also being very cautious with their money,
especially when it comes to Europe.
There are demands for uh investments in two
different directions one is that they need to spend more and more money on uh defense needs
uh which under the deal may enacted between the eu and the us means that a lion's share that
actually goes to american companies and not french companies or European companies for that matter.
And at the same time, they have to make it attractive to build data centers now,
which becomes all the more important.
Because I think about a week ago, data centers in the Middle East,
which were heavily subsidized by the Middle Eastern governments
and which European companies were leveraging to extend
their capabilities as did india for that matter uh were hit by attacks and by attacks ostensibly
from iran and while iran basically says i didn't do it maybe somebody else did it which may or may
not be part of the fog of war here but But essentially, if you need to spend that much money
and you need government backing for that,
European governments are being a little bit cashed up.
So I was looking at Schneider Electric's revenue outlook
and I was wondering why they're only posting a 10% revenue boost
over the next year.
And I think that this might be what Schneider is indirectly implying.
For those of you who don't't know Schneider Electric is deep into the in the whole electrification and the AI
data center infrastructure build uh it's deep in the midst of that and it's basically a
cornerstone of AI data center builds at least in Europe if not world worldwide so uh I'm
taking that as a bit of a warning signal that the AI may not be all that it is.
A lot of people are sort of pulling back and saying this may not be the growth engine you're looking for right now.
So that's something to keep in mind.
Very interesting there.
I want to give all of our guests, please do give them a follow.
They've got incredible information and very interesting posts as well on their accounts.
Monitiv, what do you think about that?
I know you know a lot about Schneider too.
Monitiv, are you there?
Give me a couple of minutes.
I have something to take care of.
I'll be back.
No worries there.
Alex, what do you think about the whole
Schneider warning there
I can't say
too much about Schneider to be honest
I'm more looking at this
from a big picture
lens and
yeah I just thought it was so
interesting to see sort of
how well where
money's flowing in and where money is disappearing and
to me that's like how i mentioned earlier it seems like i mean they they aren't that interested in
in stopping uh insolvencies they aren't that interesting interested in sort of helping out the businesses
that are already there they're more interested in just building out a flans francis a platform
where these kind of futures in future investments can come because otherwise why would they put so much focus on on these sectors like
nuclear infrastructure and they're not really do much about the rest of the situation in the
country so that's kind of what i'm looking at yeah that's such a good point um so france is
i know we talked a bit about the debt as well. Like every country has a massive debt, looking at you, America. But France's debt
interest costs now exceed its entire pre-2024 defence budget. So the money paying for the past
is basically growing faster than the money directed at the future. So France is currently spending 56.6% of GDP through the
state, so running a 5% deficit and issuing 310 billion euros in a new debt and paying
near Italian borrowing rates, basically. So while simultaneously funding the most ambitious,
obviously, defense and nuclear programs in the generation, so the money flowing in and the money
disappearing will tell completely different stories there.
So we talked a lot about the defense stuff today.
And yeah, I think we've got some great names
that we can definitely look at.
I think for those guys who are looking at Saffron,
that's ticker symbol SAF, if you missed that earlier on.
And we talked about TTM, so Total Energies.
We also did have Shell and Total Energies did declare like a force majeure on Qatar with LNG.
That supply disruption is pretty real there.
So they declared basically on clients receiving Qatari LNG following the Iran conflict.
So production shutdown or shutting down.
So that's affected their Goldman Sachs basically raised price targets for the European oil and gas names.
So citing the revised commodity outlook there.
And we'll definitely be diving deeper into oil and the volatility and obviously a lot of geopolitical tension
and see what names are affected there this Thursday
at 12 p.m. UK time.
I know the US has daylight savings,
so it has shifted forward to 8 a.m. for you guys,
which normally is 7 a.m. here for WolfEU.
Sandeep, any other words from you?
Yeah, I guess we can say that we didn't even talk about luxury names which is a
damn shame uh lbm and hermes was in the midst of a giant crisis uh about a year ago when a bunch of
chinese accounts on tiktok went viral showing that actually we make hermes bags which is not true
they don't make heres bags but they do make
bags with the same kind of quality of the same kind of material that Hermes makes for about a
15th of the price a couple of years ago I picked up one of those so-called Hermes bags in Vietnam
and nobody could tell the difference and I paid only 50 bucks for it wow Wow. Yeah. So in Asia, I'll low key, I'll tell you, they're called triple A's,
triple A fakes. Just so you guys know. I took it to, well, I gave it to someone of the feminine
persuasion and her friends of the feminine persuasion were also big time consumers of
luxury goods and none of them apparently could tell the difference and none of them were,
None of them apparently could tell the difference and none of them would.
And they were none the wiser.
Amazing.
Yeah.
So Hermes ticker symbol RMS on the weekly is actually pulling into the 200 EMAs, just
ticking shy under.
So do watch out for that one for possibly a discount if you are looking to sort of research
into that area.
I know there's a lot of names to cover in the French market,
and I'm afraid that's all we have time for for today.
Tiltfelo, do you have any other last words or monotiv?
No, thank you.
I'm sorry, I just came back.
A couple of things that I've not heard that I want to add,
you know, a lot of mentions of Schneider,
but I did not hear any mentions of legrand like grant is actually growing even faster uh in a lot of
overlap there but lots of uniqueness too so the grants data center business is growing at 26
so that's another one to keep an eye on. And last week when we are two weeks ago,
when we talked about Italy, we mentioned their, you know, cable company, I'm blanking out here,
but but one of the largest cable providers to utilities in the world is Nexans, which is a French company.
And they are growing dramatically too.
So that's another company to keep an eye on.
And there's a whole bunch of small companies that I will send you a list and you can put
that out.
Perfect.
Yeah.
So Nexan for ticker symbol NXS there,
currently trading around a 50 MA on the weekly there.
Not a bad pullback, healthy chart there.
Definitely an interesting name to do some research on
in the manufacturing producer space for electronics.
Yeah, some great, fantastic guests.
Please do give them a follow.
Do welcome everyone and appreciate your time, especially you, Loris, Tiltfolio, Monitiv, fantastic guests. Please do give them a follow. Do welcome everyone and appreciate your time,
especially you, Loris, Tiltfolio, Monitiv, as always.
Joe, Sandeep, Alex, Wise One, thank you for coming on stage here today.
Until then, till the next show on Thursday at...
Yeah, do you have one more question, Wise One?
Do you want to...
I can just jump in. if um regarding the luxury sector so if china
decides to boost spending that can absolutely be good for the luxury sector so something to keep an
eye on yeah if they're given a run for their money, do be careful in the sort of more retail names. And I think even AI, you know, we can, time will only tell if AI is going to be a massive bubble.
But I personally think just from experiencing on a business level, we're really just at the beginning and just scratching the surface level.
I think the issue is obviously the power supply chain issue.
It's just these companies are just not able to handle that much at any one time.
We just need more people to be producing to power this new generation of workforce.
But we are basically back with trading right now over at Wolf Trading Account.
The boys have started here at 9am
and we are trading with the crew on NASDAQ Futures.
And later on today,
we are going to be exploring perpetual futures.
And then if you want to,
for those Tesla fans,
we have that at 12pm Eastern as well.
And then followed by stocks on market analysis
later on at 3pm Eastern.
And Monotiff will also be there and our friends as well here at Wolf.
And I want to thank you all for listening and for supporting us.
And have a fantastic day, everybody.
Thanks, everybody.
See you guys on Thursday.
Thank you guys so much.
Bye.
Bye.
