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In 2023, Thales records a “new record year” but disappointments in space

Driven by defense, civil aeronautics and even digital security, Thales experienced a “new record year” in 2023 but announced a restructuring of its space activity, weakened by a drop in demand for its commercial telecommunications satellites.

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In 2023, Thales records a “new record year” but disappointments in space

Driven by defense, civil aeronautics and even digital security, Thales experienced a “new record year” in 2023 but announced a restructuring of its space activity, weakened by a drop in demand for its commercial telecommunications satellites. The defense and technology group generated a turnover of 18.4 billion euros last year, up 4.9%, or 7.9% at constant scope and exchange rates, announced the company on Tuesday. Net profit, however, fell by 9% to 1.02 billion euros due to an exceptional charge linked to the establishment of insurance coverage for its commitments under the British pension scheme, explains Thales in a press release. Adjusted for this charge, net profit came to 1.7 billion euros, an increase of 14%.

Its order book reached 45.3 billion euros in 2023, up 10%, reaching “a historic high”. “This is another record year in almost all economic indicators, which reflects the good health of the group, its good positioning on the markets and the good dynamism of the markets,” welcomed its CEO Patrice Caine during a conference call. At constant scope and exchange rates, order intake was stable (0.2%) in 2023, at 23.1 billion euros, after being boosted the previous year by the giant order for 80 combat aircraft. Burst by the United Arab Emirates. They were driven by defense, which benefits from the increase in military budgets around the world, as well as by civil aeronautics, which had been devastated during the pandemic. Of the 25 “major contracts”, those worth more than 100 million euros, won by Thales in 2023, 18 concern the defense sector, seven the Aerospace division, bringing together civil aeronautics and space activities.

In total, the turnover of the Defense activity, which represents half of Thales' revenues, is up organically by 7.5%, that of the Aerospace division climbs by 11.7%, while the activities of digital identity and security (DIS, bringing together cybersecurity, SIM cards and even biometrics) increased by 4.1%. In this sector, Thales notably finalized the acquisition of the American Imperva in November, making the group “one of the five world leaders” in cybersecurity. The situation is more contrasted in space: if Thales says it benefits from “favorable growth prospects in most of its activities”, particularly with regard to Earth observation, exploration and navigation as well as telecommunications. military and services, the situation is more complicated for civilian telecoms.

As a result, Thales will eliminate and redeploy 1,300 positions within the group, including 1,000 in France, within its space branch Thales Alenia Space. “There will be zero forced departures, these are people who will continue to work for Thales, simply on other activities,” affirmed Patrice Caine, highlighting the need “not to lose our skills”. Thales Alenia Space, a joint venture with the Italian group Leonardo of which Thales holds two thirds, currently employs 8,600 people, mainly in France and Italy.

The civil telecommunications activity represents around 700 million euros, or a third of Thales Alenia Space's turnover. “The main explanation is the reduction in the geostationary satellite market which, on average, was around twenty satellites per year in the recent past and which is now stabilizing at around ten geostationary satellites per year (.. .) so we have to adapt,” according to him. For 2024, Thales expects a turnover of between 19.7 and 20.1 billion euros, i.e. organic growth of 4 to 6%, on an operating margin of between 11.7 and 12%, compared to 11 .6% in 2023.

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