Story ID: 121
Thales Reports Mixed 2018 Financial Results
By: Guillaume Lecompte-Boinet
Caption: The French industrial group reported strong growth in defense and security, but mediocre aerospace results.
Word Count: 289
In 2018, France’s Thales group performed very well in its defense and security sectors but was a bit less prosperous in aerospace. Total sales amounted to €15.86 billion ($17.97 billion), compared to €15.23 billion in 2017, up 4.1 percent. The organic change (at constant scope and currency) came in at +5.3 percent, thanks to strong growth numbers in defense and security sales, which increased 4.3 percent to €8.02 billion. Many different business units contributed to this gain, including surface radars; optronics; systems for fighter aircraft; systems and services for military ships; military radiocommunications; and cybersecurity, among others.

In the aerospace sector, sales totaled €5.78 billion, up 0.6 percent compared to 2017 (+1.4 percent at constant scope and currency). This limited growth reflects the slowdown of the commercial telecom satellite market (Thales’s Alenia space subsidiary), along with a high basis of comparison in in-flight entertainment. The slowdown was partly offset by good momentum in other aeronautical businesses.

Order intake last year amounted to €16.03 billion, up 7 percent from that of 2017 (+9 percent at constant scope and currency). Once again, order momentum was particularly strong in the defense and security segments. As of December 31, 2018, the Group’s order book stood at €32.3 billion. In 2018, consolidated EBIT amounted to €1.68 billion, or 10.6 percent of sales, compared to €1.36 billion in 2017. The aerospace segment posted EBIT of €580 million (10.0 percent of sales). The margin in this segment improved slightly, with competitiveness initiatives and lower restructuring costs offsetting the acceleration of R&D expenses.

Patrice Caine, chairman and CEO of Thales, said, "Our action plan until 2021 is clear: to support profitable growth in the long term, we will continue to roll out our operational performance initiatives and to strengthen our customer-centric culture while also continuing to step up our investments in innovation."