After a second quarter disrupted by the consequences of the Covid-19 crisis, Thales raised the bar in the third quarter.
This, despite the collapse (-50%) in demand and turnover (-45%) in the civil aeronautics sector.
As spectacular as it is, this drop in activity is completely in line with the sharp contraction observed by aircraft manufacturers and airlines since the surge of the Covid-19 crisis.
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“
It's no surprise.
I would remind you that the group's exposure to civil aeronautics represents a little over 10% of its turnover.
Excluding the latter, Thales turnover increased by nearly 2% in the 3rd quarter compared to the same period in 2019,
”explains Pascal Bouchiat, CFO of the French defense and high technology group.
Future contract with the German Navy
The diversity of the portfolio - defense, aerospace, transport, identity and digital security - and the dynamism of the military activity, which represented almost half of turnover, enabled Thales to limit the decline (-4, 3%) of sales in the 3rd quarter, at 3.9 billion euros.
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In defense, turnover declined slightly (-3.3%), to 5.46 billion compared to 2019. But a catching-up phenomenon (sales up 5.4%) was observed during of the 3rd trimester.
Order intake has certainly declined in the military sector (-27%).
“
Our customers still have the same level of demand but they have been affected, particularly in their ability to notify contracts, by the Covid-19 crisis.
We expect a strong recovery during the 4th quarter
”, explains Pascal Bouchiat.
Thales is awaiting the entry into force of the contract to equip future frigates (MSK 180), worth 1.5 billion, from the German Navy, by the end of 2020.
By the end of the year, Greece, which announced in mid-September its intention to buy 18 Rafale fighter jets from France, is expected to sign the contract in due form.
“
Most of the planes will be taken from the French army fleet, but the defense ministry has announced its intention to compensate with acquisitions of new planes from manufacturers.
It's good news!
Says the CFO.
Australia, second largest customer in the military
In the military sector, Thales anticipates a significant development in its activity in the coming years.
This, thanks to the confirmation of the upward trajectory of credits in several key countries.
This is the case of France, which confirmed a 4.7% increase in the defense budget in 2021, or even Australia (+ 7% per year on average) or Germany.
“
Australia has become our second market, after France.
As part of the contract for the supply of oceanic submarines won by Naval Group, we are in competition to supply the acoustic systems.
It is Lockheed Martin which was selected to provide the "combat system" which must select its future partner in this field
", underlines the financial director of Thales.
For 2020, “
on the basis of the current health and economic context
” Thales confirms targeting a turnover of between 16.5 and 17.2 billion, an operating result (Ebit) of 1.3 to 1.4 billion, ie a margin of 8%, thanks to the effects of the adaptation plan which involves savings of 800 million, the elimination of a few hundred jobs in the United States and Singapore as well as an internal mobility plan set up to some thousand employees of aeronautical activities.
